U.S. REPORT (January 20, 1992)

The latest update of reserves at the Alligator Ridge property owned by USMX (NASDAQ) has boosted reserves by 57% from the previous estimate in mid-1991.

Proven and probable oxide reserves at the Nevada property are estimated at 11.5 million tons grading 0.046 oz. gold per ton. In addition to the proven and probable reserves, USMX estimates a further inferred resource of about 3.3 million tons grading 0.042 oz. gold.

The company noted that the reserve estimates include only near-surface, oxidized gold mineralization recoverable by open pit heap leaching. USMX is also evaluating what it describes as significant deep and/or carbonaceous gold mineralization in the Vantage Basin area of the property. USMX expects to produce about 53,000 oz. gold in 1992 from various areas at its Alligator Ridge operations.

The production figure includes about 25,900 oz. of gold production from the Casino/Winrock operation at the north end of the property, while residual leaching is expected to produce about 11,700 oz. from the old Alligator Ridge mine and Green Springs operations.

Installation of pad liners at the new Yankee mine at the south end of the property package was delayed and the company does not expect to begin heap leaching until the second quarter. John Haigh, manager of investor relations, said crushed ore is currently being stockpiled beside the pad site. The Yankee operation is expected to produce about 15,400 oz. of gold this year. Proven reserves in the Yankee are estimated at 2.13 million tons grading 0.044 oz. gold at a strip ratio of 1.9-to-1. The remaining 2.8 million tons of proven ore is in the Winrock mine.

The property’s 6.62 million tons of probable reserves (grading 0.049 oz. gold) are split between three areas; Poker Flats, Horseshoe, and East Top. Haigh said USMX’s objective is to bring one new area on stream each year, and although an official decision will not be made until midyear, he said the most likely area for development this year will be Poker Flats.