Underground Mine Design Study For Briggs Mine
GOLDEN, CO - Canyon Resources Corporation reported the results of a new technical report that expands on the underground mining potential at its Briggs Mine in Inyo County, California.
This new study expands underground mineral reserves previously and was based on additional drilling on the Goldtooth structure at Briggs in the first half 2007.
The following table displays the new mineral reserve estimate for the
Briggs Mine:
Gold Grade Gold Ounces
Proven & Probable Reserves Tons (opt) Contained
Open-Pit * 4,160,000 0.026 108,500
Underground (Probable only)** 259,000 0.164 42,500
Total Proven & Probable 4,419,000 0.034 151,000
* Estimated using a $500 gold price (February 2007)
** Estimated using a $600 gold price (January 2008)
Not included in the above estimate is 142,200 tons of in-place
mineralized material at a grade of 0.133 ounces of gold per ton ("opt")
that does not meet mineral reserve criteria contained within the
underground mine design. A combination of the open pit and underground
mining would recover approximately 140,000 ounces of gold over a four and a
half year life assuming that underground production commences nine months
after the start of open pit mining. The Briggs Mine is a permitted mining
facility with ongoing residual gold production from its existing leach pad.
The mine has produced over 555,000 ounces of gold from open pit and
underground mining since 1996.
"This study confirms our ability to improve project economics and mine
life at Briggs with additional drilling and underground development.
Leverage to the increased gold price is clearly evident. This analysis is
based on surface drilling only, so underground drifting and test mining
will be required to prove continuity, potential, and mineability," states
James Hesketh, President and CEO.
The underground mine design report was prepared by Practical Mining LLC
of Spring Creek, Nevada, dated January 14, 2008. The base case was
generated utilizing a three year average gold price of $600 for mineral
reserve declaration purposes and a second case was completed utilizing a
$700 gold price and drilled mineralization in all categories to demonstrate
upside project potential from known resources. Both design studies included
only material located along the Goldtooth structure outside of existing
open pit mine designs.
Underground mine designs were developed using a cutoff grade of 0.08
ounces per ton (opt) for stopes and 0.01 opt for development material which
must be mined regardless of grade. Mine designs were based on the
mechanical longhole stoping mining method with access by adit from outside
existing and future open pit design limits. Ore mined by underground
operation would be commingled with open pit ore at the crusher and placed
on a lined pad for gold leaching. Plant and overhead costs developed in the
February 2007 open pit feasibility study were updated in this study, which
included estimated costs for contract underground mining.
A second underground mining case was developed to demonstrate the
potential for improved project economics and underground mine life with
additional drilling along the Goldtooth fault. The Goldtooth structure is a
major north-south trending high-angle structure that has been mapped for
more than 10,000 feet of strike length within the Briggs project permit
area. Approximately 4,900 feet of this structure has been tested by
drilling and the zone remains open for extension both along strike and down
dip.
This scenario incorporated all drill information on the Goldtooth
structure, including mineralization that does not currently meet reserve
criteria, and a $700 gold price. In-situ mineralized material contained
within these designs total 855,000 tons at a grade of 0.136 opt using
cutoff grades mentioned above. Potential gold recoverable from only
underground operations in this "what-if" study would be approximately
116,000 ounces (versus 42,500 ounces) over a five year mine life at cash
costs of approximately $405 per ounce. This case would require an
additional $7.9 million of capital, if mined in conjunction with the open
pit development and provide an incremental project IRR of 77%.
The stand alone open pit feasibility study for Briggs was developed in
late 2006. This study showed a combined reserve in three pits of 4.16
million tons at a grade of 0.026 opt totaling 108,500 ounces at an average
strip ratio of 3.4 tons of waste per ton of ore. Costs utilized to develop
these plans were based on new mine designs, past operating parameters, late
2006 fuel price, consumable prices and labor costs. Cash cost of operation
for the open pit case on a stand alone basis, with no contribution from the
underground, is approximately $449 per ounce produced and an initial
capital cost of $8.25 million. Stand-alone open pit project economics
include pre-development costs, site refurbishment capital costs and all
site reclamation and closure costs, including existing closure liability
cost. The open pit case is expected to produce 89,100 ounces of gold over a
four year life to generate a pre-tax IRR of 16% and a net return of $3.8
million using a gold price of $600 per ounce. Cash flow for a combined open
pit and underground operation would improve by nearly $14.0 million per
every $100 increase in gold price.
The company's address is 14142 Denver West Parkway, Suite 250, Golden, CO 80401, (303) 278-8464, fax: (303) 279-3772.