Rea projects highlighted by Mt. Hamilton, Bissett

The initial phase of a US$1-million exploration program is under way at the Mt. Hamilton gold mine on Nevada’s Battle Mountain trend.

The work, which involves 35,000 ft. of infill drilling in and around the NE Seligman deposit, is designed to boost reserves at the open-pit, heap-leach operation.

Vancouver-based Rea Gold (TSE) acquired the project about a year ago and poured its first gold bar just five months after construction began. Output for 1995 is expected to reach 54,000 oz.

When production began, two adjoining deposits, the NE Seligman and the Centennial, were estimated to contain minable reserves of 9.04 million tons grading 0.052 oz. gold and 0.38 oz. silver per ton. The mine model for NE Seligman calls for five separate open pits, whereas Centennial will consist of only one.

Head grades at NE Seligman have averaged 0.08 oz., which is double what was anticipated. The improvement is attributed to high-grade vertical feeder veins.

To date, infill drilling in pit areas NES-1 through NES-3 consists of 10,130 ft. in 55 holes. A further 20 holes, totalling 5,050 ft., were drilled in the NES-4 pit area, expanding the mineralization toward the NES-2 pit. Eighteen holes yielded a weighted grade of 0.072 oz. over an average thickness of 15.6 ft.

Drilling is continuing south of the NES-4 and five pits, and also between the NES-5 pit and the Centennial deposit.

Meanwhile, Rea has boosted gold reserves at its Bissett project 160 miles northeast of Winnipeg, Man.

Geological reserves now stand at 3 million tons grading 0.274 oz. gold per ton, or 818,257 contained ounces. The reserves are based on a cutoff grade of 0.15 oz. per ton and a minimum 5-ft. mining width. All gold grades above 1 oz. per ton were cut to 1 oz. per ton.

The company spent $3 million on exploration and development, which involved not only reopening and dewatering the mine (formerly known as the San Antonio), but drilling out another 378,000 tons of reserves grading 0.312 oz. per ton. Rea then commissioned an independent feasibility study and undertook to remap and reinterpret geological reserves on all developed lower levels (20 to 33). Results from this work are expected by mid-July, as is the feasibility study.

Minable reserves, as defined in the feasibility study, are projected to exceed 650,000 oz. at a head grade of 0.25 oz. gold per ton. The mine should produce about 70,000 oz. per year at a cash cost of US$220 per oz.

The capital cost of returning the mine to production, at 1,000 tons per day, is estimated at $30 million.

Once the Bissett project is up and running, possibly by early 1996, Rea’s annual gold production should reach 125,000 oz.