U.S.PEPORT Santa Fe sets Lone Tree reservers

Based on 175 holes, Santa Fe Pacific Minerals says it has outlined in-place reserves of more than two million ounces of gold at the Lone Tree project in Nevada. The company is a unit of Santa Fe Southern Pacific (NYSE). Half of the mineralization is contained in shallow oxides, the company said, and engineering studies indicate that a first-phase project to establish oxide gold production is feasible. Further studies to confirm the viability of gold production from the sulphide mineralization continue.

“If things go as expected, we should have a financial commitment for development,” said a company spokesman. But the deposit requires “a lot more drilling and engineering feasibility study” before a final production decision is made, he said.

The Lone Tree deposit lies at the northwest edge of the Marigold mine property, which was brought to production in September, 1989. Annual production from the Marigold mine, in which Santa Fe has a 30% stake, is expected to reach 15,000 oz. at a direct operating cost of US$180 per oz.

The company believes operations at Lone Tree will be similar to those at the company’s Rabbit Creek mine, also in Nevada, which is expected to pour its first gold this year from proven and probable reserves of 2.1 million oz. The Lone Tree operation will probably include an oxide mill and heap leach, in addition to a sulphide mill at a later date.