FOR FURTHER INFORMATION PLEASE CONTACT:
Holmer Gold Mines Limited
Mr. Doug Baird
Investor Relations
(416) 360-7773
E-mail:info@holmergold.com
or
Holmer Gold Mines Limited
K. Sethu Raman
President
(416) 360-7773
E-mail:info@holmergold.com
www.holmergold.com
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: HOLMER GOLD MINES LIMITED
TSE SYMBOL: HGM
OCTOBER 5, 1999
Holmer Enters J.V. With St Andrew Goldfields To Bring
Timmins Gold Project To Production
TORONTO, ONTARIO--Dr. K. Sethu Raman, President of Holmer Gold
Mines Limited (HGM-TSE) is pleased to announce that the company
has entered into a four year joint venture agreement with St
Andrew Goldfields Ltd. (SAS-TSE) of Toronto to bring its 100%
owned Timmins Gold property into production.
St Andrew will finance all in-fill development drilling and
complete the required pre-production development work, including a
final feasibility study to determine the optimal mine plan i.e. an
open-pit or a decline operation to vertical depth of 100 meters.
Total pre-production expenditure is expected at $1 million
dollars, of which $500,000 will be spent in the first 12 months.
If the feasibility study confirms that an operating profit of at
least $10 per ton can be achieved, ore will be trucked 70 km along
Highway 101 to the St Andrew's wholly owned Stock Mill for
milling, smelting and refining.
Operating profits will be divided 60% to Holmer and 40 % to St
Andrew.
Details of the agreement call for generating a minimum net
operating profit of $10 per ton, with at least $6 per ton of
operating profits to Holmer Gold over the mine life. Ore from the
property will be milled at cost at Stock Mill. St Andrew will also
have the first right of refusal to develop an underground mine
below the 100m level during the option period in return for
completing a drill program to test other targets at an estimated
cost of $100,000. Environmental studies and other work for the
permitting of the mine are underway.
St Andrew Goldfields Ltd. is a gold mining company with an
extensive land position east of Timmins, Ontario, with 3 mine
sites and an operating 1300 tpd mill.
In February, 1999 Holmer announced a resource estimate of 1.96
million tonnes grading 7.97 gm gold per tonne (2.14 million tons
grading 0.23 ounces gold per ton), for a total of 500,000 ounces
of contained gold. This estimate was calculated by Babu Gajaria
and David Beilhartz, consulting geologists to Holmer, and was
based on 68 drill holes spaced 25 to 50 metres and a cut off of 3
gram gold per tonne over a minimum width of 1 metre. They include
high-grade and low grade (open-pit) resources to a vertical depth
of 350 and 100 meters respectively:
High-Grade resource 176,000 tonnes at 28.17 gram gold per tonne
Potential open-pittable resource: 720,000 tonnes at 2.57 gram
gold per tonne
"This joint venture agreement with St Andrew marks the first step
in a transition from a successful exploration company to a gold
producer with a positive cash flow in the near future", says Sethu
Raman. "Potential for substantially increasing gold resources on
the Timmins Gold project is excellent."
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