Rea Gold (REO-T) is celebrating its first gold pour — ahead of schedule — at the San Gregorio open-pit mine in northern Uruguay.
During a 6-day test in early February, the plant operated at 20% above capacity. Rea now expects the mine to produce 66,000 oz. gold in 1997, rising to 70,000 oz. at full production, with operating costs pegged at US$200 per oz.
Reserves stand at 5 million tonnes grading 2.6 grams gold per tonne. The gold is held in a shear structure in dioritic-to-granodioritic rocks, with strong silicification and feldspar alteration in the mineralized zones.
The two pits — Main and Este — have a composite stripping ratio of 4.4-to-1, and mining costs are estimated at US$4.81 per tonne.
Cash flow from the mine should help Rea recover from a $27.4-million writedown in the third quarter of 1996. The writedown stemmed from poor operating results at the Seligman pit, part of the company’s Mt. Hamilton operation in Nevada. The pit is expected to yield 25,000 oz. in 1997.
Meanwhile, a confirmation drill program at Mt. Hamilton’s Centennial deposit is ongoing, and reserve estimates are expected by April. Startup is slated for December at an annual rate of 50,000 oz.
In Manitoba, Rea is working to refurbish the Bisset gold mine, with startup scheduled for late June. Production for the current year is projected at 34,000 oz., rising to 80,000 in 1998.
Rea has increased its total gold production target for 1997 by 15,000 oz., to 125,000 oz.
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