Canyon Completes Briggs Mine Feasibility Study
06 Février 2007 - 10:59PM
PR Newswire (US)
GOLDEN, Colo., Feb. 6 /PRNewswire/ -- Canyon Resources Corporation
(AMEX:CAU), a Colorado-based mining company is pleased to announce
the results of its open pit and underground feasibility studies to
re-start mining operations at its Briggs Mine located in Inyo
County, California. The Briggs Mine is a permitted mining facility
with ongoing residual gold production from its existing leach pad
and has produced over 555,000 ounces of gold since 1996. The
feasibility studies were designed to develop an accelerated
approach to putting the mine back into operation. This plan
utilizes the current robust gold markets by initially starting as a
small scale low-grade open pit operation with concurrent
development of a small scale underground mining operation. This
re-start plan is contingent on the closing of appropriate
financing. The combined underground and open pit operation, based
on the feasibility studies, would produce gold at a rate of 30,000
ounces in year one of operation, 45,000 ounces in year two, 33,000
ounces in year three and 4,500 ounces in year four. Project cash
operating cost, including offsite refining, through the projected
mine life is estimated to be $430 per ounce of gold produced. Total
capital cost is $8.25 million to initiate open pit gold production
spent over a five month period. In addition, $4.6 million will be
required in the next year to develop and initiate underground
mining. The total project develops an IRR of 15% and a net return
of $4.7 million at a gold price of $600 per ounce. A ten dollar
change in gold price will impact net return by $1.1 million.
Reserves developed from these studies are shown in the following
table: Proven & Probable Reserves Tons Gold Grade (opt) Gold
Ounces Open-Pit 4,160,000 0.026 108,500 Underground 183,000 0.118
21,500 Total Proven & Probable 4,343,000 0.030 130,000 An
additional 100,500 tons of in-situ mineralized material at an
average grade of 0.116 ounces per ton is contained in the
underground mine designs and has been included in the production
schedule. In-fill drilling has been completed on this material,
however, the results were not available to meet the deadline for
this study. A gold cutoff grade of 0.08 ounces per ton was used for
underground stope designs and a cutoff grade of 0.013 ounces per
ton was utilized for open pit estimation and underground
development material which must be mined regardless of grade. A
$500 gold price was utilized for mine design purposes. "The Company
is excited about the re-start of the Briggs Mine. This project will
provide cash flow, take advantage of the strong and improving gold
price, and be the first step in rebuilding the Company as a gold
producer. We look forward to continuing progress at our Reward
Property in Nevada which is currently undergoing permitting and
feasibility, and in the future, at our 7-Up Pete deposit in
Montana," states James Hesketh, President & CEO. "It is
estimated that gold production at Briggs may commence as early as
five months from the receipt of funding. The initial re-start plan
will utilize approximately 50% of our plant capacity. Therefore,
its our plan to add additional reserves to increase production and
reduce overall operating costs, thereby increasing profitability.
Due to the high cost of proving underground reserve with surface
drilling, we have only drilled sufficient mineralization at this
time to justify the initiation of underground mining. The Goldtooth
mineralization remains open for extension along strike in both
directions and possibly at depth. Once underground mining has
commenced, we intend to continue to develop reserves from more cost
effective underground drill positions. In addition, the studies did
not include any of the underground potential demonstrated by
drilled mineralization on the high grade Briggs North structure or
from any of our four satellite deposits to the Brigg Mine.
Ultimately, we believe that the reserve potential at Briggs is
larger than what we have indicated in these initial studies." The
open pit study developed a combined reserve for three pits at an
average strip ratio of 3.4 tons of waste per ton of ore. The costs
utilized to develop these designs were based on new mine designs
and past operating parameters adjusted for current fuel, consumable
and labor costs. Cash cost of operation for the open pit case on a
stand alone basis, with no contribution from the underground, is
$449 per ounce produced. Total capital cost for this project is
$8.25 million. The stand-alone open pit project economics include
pre-development costs, site refurbishment and capital costs, with
the exception of underground development cost, and all site
reclamation and closure costs, including existing closure
liabilities. This case generates an IRR of 16% and a net return of
$3.8 million over a three year mine life and four year leaching
period using a gold price of $600 per ounce. A final underground
study will be completed in the first quarter 2007 when final assays
have been received. Underground mining at Goldtooth will utilize a
contract miner and any ore mined will be commingled at the crusher
with surface ores from the open pit for both crushing and leaching.
Leach pad gold recovery on crushed underground ore is expected to
exceed 80%, which is consistent with past metallurgical experience
and results from current test-work. The structure of the Goldtooth
orebody ranges from 6 to 25 feet in true width at a dip of between
60 and 80 degrees. This mineralization has been drilled over a
strike length of 3,200 feet with the last fences of drilling
remaining in ore grade material. The mining method in the stopes
will be mechanized longhole stoping with backfill. Incremental cost
of production for the underground is estimated to average $384 per
ounce. The following team of highly experienced independent
contractors and consultants were involved in developing these
studies and final results were compiled and summarized by Canyon:
Mr. Bill Fleshman, P. Geo AUSIMM, Reno, Nevada - Drilling
Operations Mr. John Taylor, P E Arizona, Reno, Nevada - Resource
Estimation WLR Consulting Inc., Lakewood, Colorado - Open Pit Mine
Reserves & Costing Golder Associates, Lakewood, Colorado -
Leach Pad Expansion Design & Costing Practical Mining LLC,
Spring Creek, Nevada - Underground Mine Reserves & Costing For
additional information on Canyon Resources and to access the full
content of this Technical Report, please visit our website at
http://www.canyonresources.com/. This press release includes
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934 as amended. Such forward-looking
statements include, among others, feasibility studies for the
Briggs and Reward projects, mineralized material estimates,
drilling capability and the potential reopening or expansion of the
Briggs Mine. Factors that could cause actual results to differ
materially from these forward-looking statements include, among
others: the volatility of gold prices; potential operating risks of
mining, development and expansion; the uncertainty of estimates of
mineralized material and gold deposits; and environmental and
governmental regulations; availability of financing; the outcome of
litigation, as well as judicial proceedings and force majeure
events and other risk factors as described from time to time in the
Company's filings with the Securities and Exchange Commission. Most
of these factors are beyond the Company's ability to control or
predict. FOR FURTHER INFORMATION, CONTACT: James Hesketh, President
and CEO (303) 278-8464 Valerie Kimball, Investor Relations (303)
278-8464 http://www.canyonresources.com/ DATASOURCE: Canyon
Resources Corporation CONTACT: James Hesketh, President and CEO, or
Valerie Kimball, Investor Relations, both of Canyon Resources
Corporation, +1-303-278-8464 Web site:
http://www.canyonresources.com/
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