U.S. REPORT Wounded Bull completes Newsboy feasibility

With a positive feasibility study in hand, Wounded Bull Resources (Sydney) is now seeking financing to bring its Newsboy gold mine in west-central Arizona into production. Capital cost for a 600,000-ton-per-year heap leach mine is estimated at about US$5.5 million.

Reserves in all categories are calculated at two million tons grading 0.05 oz. gold and 1.0 oz. silver per ton, with the initial mine plan covering a smaller minable reserve of 1.5 million tons grading 0.05 oz. gold and 1.2 oz. silver within two pits.

The deposit is essential tabular, about 50 ft. thick, and ranges in depth from 30 to 200 ft. below surface. The stripping ratio for the two pits averages 3.6-to-1.

Mining and processing costs are estimated at US$6.40 per ton with waste mining costs estimated at US90 cents per ton.

With metallurgical recoveries of 90% for gold and 19% for silver, cash cost per oz. of gold produced is estimated at US$225. The company noted further test work may increase silver recoveries.

Given production rates and recoveries, the mine would produce about 25,000 oz. gold per year.

Dale Smith, chief financial officer, said the payback on the project is about 16 months based on a 100% equity financing and under two years on a 50%-debt financing. Wounded Bull is presently studying financing options for the project.

Smith hopes to start construction by July, 1991, and does not anticipate problems with the permitting process which is under way.

He also noted the deposit remains open on three sides and is optimistic further reserves can be identified in the immediate area once the mine begins production.