San Gold samples 16.9 g/t Au development at Hinge
2009-07-14 05:08 PT - News Release
Mr. Dale Ginn reports
SAN GOLD HINGE BULK SAMPLE COMBINES HIGH GRADES WITH LOW COSTS
San Gold Corp. has released the results of the 11,762-ton Hinge zone bulk sampling program that was carried out during the second quarter of 2009. The high-grade nature of the Hinge zones were validated as the stope mining grade reconciled to the mill at 21.7 g/tonne (0.63 oz/ton) with the main #1 lens stope contributing 26.3 g/tonne (0.77 oz/ton). Low total operating costs (mine and mill) of Cdn $184 ($US 158) per ounce were realized as well as high mill recoveries of 96%. Total expenditures (operating and capital) to date in order to build and develop the Hinge Mine are approximately Cdn $6.5 million with nearly 6,000 ounces recovered to June 30th. A table containing the detailed breakdown of stoping, development, mill and cost data follows the written portion of this press release.
Highlights and Observations of the Hinge Zone Bulk Sampling Program include:
- 5,938 ounces recovered from 11,762 tons mined and processed;
- Stoping grades of 21.7 grams per tonne (0.63 ounce per ton) and development grades of 16.9 grams per tonne (0.49 ounce per ton);
- Main Hinge lens No. 1 grades 26.3 grams per tonne (0.77 ounce per ton) in stoping and 21.2 grams per tonne (0.62 ounce per ton) in development;
- Bulk sample operating costs averaged $59 per ton for mining and $19 per ton for milling, for a total direct operating cost of $78 per ton, excluding capital expenditures and exploration drilling;
- Total direct bulk sample operating cost per ounce of gold produced is $184 per ounce or approximately $158 (U.S.) as at June 30, 2009;
- Total expenditures of $6.5-million to develop the Hinge mine;
- Total decline, lateral and raise development of over 8,000 feet completed to June 30.
The bulk sampling program was segmented into stope (i.e. production mining) and development segments. The two stope segments averaged 20.6 g/t (0.63 oz/t) over 2,738 tons. Four development ore segments averaged 16.0 g/t (0.49 oz/t) over 9,024 tons. The entire 11,762 ton bulk sample averaged 18.0 g/t (0.53 oz/t) recovered. It is anticipated that the majority of future ore will be derived from the stoping category versus the development category as the Hinge Mine progresses to steady-state production. Waste dilution in the development headings averaged approximately 40% and approximately 15% in the stope or bench headings.
The Hinge bulk sample program began in late March with initial sill or level development of the #1 and #2 lenses at the 9650 level or 100 meter level. Development was conducted using a combination of jackleg and jumbo drilling depending on vein width. The discovery of the #3 lens during this phase led to its subsequent development at the same elevation in the footwall of the #2 lens. The #1 and #2 lenses at this elevation were then benched (stope ore) in preparation for mechanized cut-and-fill mining. During this period, the #1 lens was accessed at a higher elevation known as the 9710 level or 75 meter level. Sill or level development at this elevation commenced and is currently ongoing, however a portion of this ore was able to be processed and included in this bulk sample for the June 30th cutoff date. The Hinge Zone underground mine conditions are excellent and presently include a portal (decline entrance) located 500 m (about 1500 feet) to the north-east of the Rice Lake mill, a 1000 m decline connecting the portal and the Hinge Zone, a ventilation raise and the initiation of a ramp system for access to additional levels.
The Hinge Zone ore has excellent gold liberating qualities being especially clean, dry and free of gangue minerals. This led to an increase in mill throughput to a maximum of 80 tons per hour, nearly double the historical average rate, during the period of the bulk sample. Further mill tests will be required to determine if this is a sustainable rate for the full mill circuit.
Ore development, benching and milling summary March 20 to June 30, 2009
Source/Heading Tons Grade g/tonne (oz/ton) Ounces
(mill reconciled)
9650 01 bench 1389 26.3 (0.77) 1066
9650 02 bench 1349 17.0 (0.50) 671
stope subtotal 2738 21.7 (0.63) 1737
9650 01 sill 1634 20.6 (0.60) 984
9650 02 sill 2122 15.2 (0.44) 939
9710 01 sill 3142 21.6 (0.63) 1986
9650 03 sill 2126 8.7 (0.25) 539
development subtotal 9024 16.9 (0.49) 4448
Total bulk sample 11762 18.0 (0.53) 6185
Mill
Gold ounces recovered 5,938
Overall Mill Recovery % 96%
% Recovered by Gravity 37%
Average throughput per hour 50 tons
Max throughput achieved 80 tons
Cost data ($ Cdn)
Cost/ton mill $19
Cost/ton mine $59 Includes definition drilling, access development, pro-rata supervision and overheads.
Total cost/ton $78 Not including capex and surface exploration drilling
Total cost/oz $184
Total expenditure on Hinge project to June 30, 2009 Cdn $6,500,000
Total development footage achieved to June 30, 2009 8000 ft
Dale Ginn, CEO of San Gold stated, "It is very rewarding to have completed a successful bulk sample program on this new ore body, but to return nearly enough gold to cover all of the costs of developing the new mine is remarkable. These results confirm the high grade nature of Hinge Zone and the practicality of mining and processing this ore at very low cost. The results also clearly demonstrate the advantage we possess in having a full compliment of miners and a fully permitted processing facility in proximity to an aggressive and potent exploration program. I am proud to be part of the San Gold team that has achieved so much over such a short time-span, eighteen months from the discovery drill intersection to initial and very profitable production. I would especially like to single out the head of the exploration team, Bill Ferreira and our COO and head of the development team, Ian Berzins for their dedication and persistence."
Exploration at the Hinge Zone, the newly discovered Cohiba zone, other areas in the hanging wall volcanics, and underground at the Rice Lake Mine is ongoing with 8 drills working continuously. Exploration results will be announced on an ongoing basis as they become available. The currently known Hinge and Cohiba zones are located approximately 1.5 kms to the north-east of San Gold's operating Rice Lake and mine and mill, and are fully accessible by San Gold's private road, and all lie within San Gold's fully permitted mine lease.
Location plans are available in the graphical version of this press release at San Gold's website: www.sangoldcorp.com.
This program was carried out under the supervision D. Ginn, P.Geo., the Qualified Person for this project under National Instrument 43-101. The analytical work for the Hinge Zone bulk sampling program was performed at San Gold's onsite laboratory under the supervision of qualified San Gold personnel. All samples were assayed using standard fire assay methods with AA and gravimetric finishes. The quality control and assurance program includes the insertion of standards and the retention of pulps and rejects. The production of gold dore bars was performed under the joint supervision of San Gold's mill and security departments, with final refining of dore bars completed at a commercial refiner with final ounces reconciled under a joint referee program.
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