*** QEE replaces Au reserves @ Jerritt Canyon ***
Queenstake Replaces Gold Reserves at Jerritt Canyon; Starvation Canyon Advances Into Reserves
Sunday March 5, 9:01 am ET
DENVER, March 5 /CNW/ -- Queenstake Resources Ltd. (TSX: QRL - News; Amex: QEE - News) met its goal of replacing gold reserves at the Jerritt Canyon operations in Nevada, after production, and identified the first gold reserves at the Starvation Canyon Project in 2005.
Proven and probable reserves(1,2) totaled 877,900 ounces of gold contained in 3.7 million tons (3.4 million tonnes) at an average grade of 0.24 ounce of gold per ton (opt) or 8.1 grams per tonne (gpt) at year-end 2005, based on a three-year average gold price of $410 per ounce. Measured and indicated resources(1,2), including reserves, were estimated at 2.1 million ounces of gold contained in 8.8 million tons (8.0 million tonnes) at an average grade of 0.24 opt (8.1 gpt). Queenstake also estimated inferred resources(1,2) of 2.7 million tons (2.4 million tonnes) at 0.23 opt (7.9 gpt) for 605,600 ounces. Queenstake's proven and probable reserves, and measured and indicated resources were audited and verified by SRK Consulting (U.S.), Inc.(3) as satisfying the standards of Canadian National Instrument 43-101.
Dorian L. (Dusty) Nicol, President and Chief Executive Officer said, "The exploration accomplishments during 2005 were impressive in light of our modest exploration expenditures in 2005. When Queenstake acquired the Jerritt Canyon operations in June 2003, Jerritt Canyon had 524,100 ounces in reserves. From then through year-end 2005, Jerritt Canyon produced approximately 597,400 ounces and still had 877,900 ounces in reserves. With this history of reserve replacement under Queenstake's ownership, we believe the Jerritt Canyon District should continue to add gold resources and remain in production for years to come."
The Starvation Canyon project advanced into probable reserves of 121,100 ounces contained in 400,500 tons at an average grade of 0.30 ounce per ton. In addition, measured and indicated resources, including reserves, at Starvation Canyon increased 22% from year-end 2004 to 190,700 ounces (contained in 676,400 tons), while the grade improved 4% to 0.28 ounce per ton. The improvement of continuity, grade and size of the resource and delineation of initial reserves during 2005, coupled with the large favorable untested area surrounding this new resource, raises the Company's expectations for the 2006 exploration program.
For year-end 2005, the new reserves at Starvation Canyon and reserve additions at the Murray and Smith mines offset reserve depletion from production at the combined SSX-Steer Mine Complex. Mineralization remains open at SSX and Steer with new targets in the greater SSX area to be drilled in 2006. The improvement in the Smith Mine reserves was attributable to the expansion of the high-grade Mahala and West Dash deposits. Mahala, which began commercial production in the fourth quarter of 2005, had 223,600 tons (202,800 tonnes) at 0.33 opt (11.2 gpt) for approximately 73,300 contained ounces in reserves. West Dash added 37,800 contained ounces to reserves and tripled its measured and indicated resources, including reserves, to 70,300 ounces in 2005. A drift being developed from the main decline for the Smith Mine is anticipated to reach West Dash for initial production by mid 2006.
Measured and indicated resources in 2005 were lower than in 2004 largely due to a refinement of the geologic models used in the redevelopment initiative implemented in August 2005. The application of smaller, narrower blocks in mine planning enhanced the overall quality of the resources and reserves. In fact, the proven reserve component of total proven and probable reserves improved from 24% to 36% in 2005.
Mr. Nicol added, "The exploration potential continues to be significant in the Jerritt Canyon District as we added almost two ounces of reserves for every meter drilled in 2005. Additionally, Starvation Canyon represents some of the lowest discovery costs at Jerritt Canyon at approximately $16 per resource ounce."
In 2005, expenditures on district exploration and surface drilling were $3.9 million, compared to $6.6 million in 2004. There was also approximately $2.6 million of capitalized resource conversion drilling for near-mine exploration in 2005, which is reflected in the capital expenditures for the Company.
Outlook
For 2006, the expected exploration investment will be approximately $6 million for district and surface programs, including $2 million for the Starvation Canyon Project, with a capitalized resource conversion drilling program for a similar amount as in 2005.
In 2005, the development of the drift connecting SSX and Steer mines unexpectedly encountered gold mineralization. During 2006, drill platforms along the drift will explore this prospective corridor. The Company has acquired a third underground reverse-circulation drill to augment drilling in this area.
During 2006, the district exploration program will pursue extensions of the Starvation Canyon Project and test some new targets such as Snow Canyon, Mahala Basin and North Steer. The near-mine program will focus on step-out surface drilling at West Dash, Mahala and the greater SSX area as well as underground drilling in the SSX-Steer corridor, West Dash and East Mahala.
The Company's goal is to replace reserves, net of depletion, and show a year-over-year increase in resources at the end of 2006.
Queenstake Resources Ltd. is a gold mining and exploration company based in Denver, Colorado. Its principal asset is the wholly owned Jerritt Canyon District in Nevada. Jerritt Canyon has produced over seven million ounces of gold from open pit and underground mines since 1981. Current production at the property is from underground mines. The Jerritt Canyon district comprises 119 square miles (308 square kilometers) of geologically prospective ground and represents one of the largest contiguous exploration properties in Nevada.
Chart 1: Queenstake Proven and Probable Reserves at Jerritt Canyon Operations, Nevada
For chart, please visit our website at www.queenstake.com
Notes:
(1) "Resources" or "resources" used in this news release are as defined in National Instrument 43-101 of the Canadian Securities Administrators and are not terms recognized or defined by the U.S. Securities and Exchange Commission (SEC). Mineral resources are not reserves and do not have demonstrated economic viability. For further information, please refer to the risk factors and definitions of reserves and resources in the Company's filings on SEDAR and with the SEC on the Company's website, www.queenstake.com. Refer also to the Cautionary Statement at the end of this news release. Key assumptions and methods used in deriving proven and probable reserves, and measured and indicated resources will be described in the 43-101 report to be filed soon on SEDAR.
(2) For Queenstake, the Qualified Persons for the technical information contained in this news release are Messrs. Dorian L. (Dusty) Nicol, President and Chief Executive Officer, Robert Todd, Manager of Technical Services, and Donald G. Colli, Manager of Mineral Resources.
(3) For SRK Consulting (U.S.) , Inc., the Qualified Person is Mr. Landy Stinnet, Associate Mining Engineer.
For further information call:
Wendy Yang, 303-297-1557 ext. 105
800-276-6070
Email -- info@queenstake.com Web -- www.queenstake.com
Click on link to view tables on: JERRITT CANYON PROVEN & PROBABLE GOLD RESERVES and JERRITT CANYON GOLD MINERAL RESOURCES
biz.yahoo.com |
