BLACK HAWK MINING INC. (TSE-BHK) is pleased to announce
encouraging study results on its Hoyle Township property in the
Timmins region of northern Ontario.
A recent study was completed by A.C.A. Howe International Limited
("Howe"), independent mining and geological consultants. This
study was undertaken to examine economics and identify the most
attractive development strategy for the Company's Hoyle Township
property in the Timmins "gold camp". Howe indicates development
of the project is potentially economic with gold prices in excess
of US $300 per ounce. Geotechnical work, additional drilling and
a bulk sampling program are part of a recommended program to
advance development of the property.
Included as part of the Howe, study was a re-calculation of the
resource, based on the existing database comprised of information
from 134 diamond drill holes totalling 43,797 metres completed by
Black Hawk, Kinross Gold Corporation ("Kinross") and Canamax
Resources Inc., in three major programs. Howe reviewed the
geological interpretation, sampling and assay quality control
procedures, and spot checked the database. No verification
sampling was possible because of the practice of whole core
sampling by the various operators of this project. Resources
were estimated using the traditional polygonal approach on
vertical long sections for each vein; high-grade assays were
capped at 100 grams per tonne gold.
The resources reported by Howe, that could be potentially mined,
were calculated using cut-off grades of 6.0 grams per tonne at a
gold price of US $300 and 5.5 grams per tonne for gold prices in
the US $320 to $350 range. Mining dilution was estimated at
12.5% average, mining recovery at 92.5% of diluted tonnes and
mill recovery at 95%. Results using the foregoing estimates were
as follows:
Resources
5.5 g/t Cut-off
Diluted
Mining Level Recovered Diluted Recovered
Tonnes Au g/t Au ozs.
-------------------------------------------------
Indicated
---------
To 140 m Level 390,000 11.0 131,045
140 to 320 m Level 368,700 8.2 92,353
Inferred
--------
320 to 720 m Level 1,103,500 9.6 323,599
Total Resource 1,862,200 9.6 546,997(1)
6.0 g/t Cut-off
Diluted
Mining Level Recovered Diluted Recovered
Tonnes Au g/t Au ozs.
--------------------------------------------------
Indicated
---------
To 140 m Level 353,000 11.6 125,082
140 to 320 m Level 315,700 8.6 82,935
Inferred
--------
320 to 720 m Level 972,700 10.2 303,070
Total Resource 1,641,500 10.2 511,086(1)
1 The total resource estimate reported by Black Hawk at year end
1998 was 459,700 ounces. The resource increase results primarily
from Howe's estimation of a larger inferred resource between the
320 and 720 metre levels and secondarily from an increase in the
cutting grade to 100 grams per tonne from 34.28 grams per tonne
(one ounce per ton) based on a statistical review of the gold
assays by Howe.
In future, when the gold price stabilizes in the US $320 range,
Howe recommends driving a ramp to allow bulk sampling and
production to the 140 m level, followed by phased completion of
a vertical shaft from surface to the 720 metre level as the
lowest operating level, and utilization of custom milling
facilities in the region.
Howe's economic analysis indicates a 6.2 year payback with
internal rate of return of 12.6% and an 8 year mine life using a
gold price of US $300 per ounce and a payback in 5.4 years with
an internal rate of return of 24% and a 9 year mine life at a
gold price of US $350 per ounce.
The project is located between the Bell Creek and Hoyle Pond
Mines owned by Kinross. The gold mineralization on the Hoyle
Township property occurs as structurally controlled quartz
stringer zones within altered komatiitic to mafic volcanic rocks.
The mineralized zones strike approximately east-west and dip
steeply to the south and are sub-parallel to the strike and dip
of the volcanic rocks. The average true width of the six zones
included in these resources is approximately 2.8 metres, ranging
between 3.5 metres to 1.5 metres. The mineralization is similar
in character to the adjacent mining properties in Hoyle Township
which have produced in excess of 1,600,000 ounces of gold and
have a remaining in-situ resource of approximately 2.0 million
ounces. The property is completely covered with overburden
ranging in thickness from 16 to 80 metres. Black Hawk holds a
100% interest in the development rights on the property, subject
to certain conditions, advanced royalty payments, and a 2% Net
Smelter Royalty that increases to 3% after payback of capital.
The property lease provides for a ten year development period to
allow for favourable economic conditions to prevail.
Black Hawk Mining Inc. is a Toronto-based natural resource
company engaged in mining, exploration and development of mineral
resource properties in North, Central and South America.
For further information please contact:
Mr. C. Thomas Ogryzlo
President and Chief Executive Officer
(416) 363-4810 |
