Bissett Gold Project

The results of the amended February
1988 Kilborn feasibility study are
summarized in the following sections.

Reserves

Mineable reserves, after allowing for dilu-
tion and mining recovery, have been
calculated by Kilborn to be 1,320,000 tons
containing .223 ounces of gold per ton.

Mineable reserves are based on drilling
carried out between the 26th and the
37th level. Since the deposit is open at
depth and has not been geologically
terminated, there is potential for
increasing the mineable reserves. The
diagram below shows the schematic
relationship between reserves and the
mine cross-section.

Mining plan

Based on Kilborn’s recommended mine
development plan, the mine would be
placed into production at a rate of
175,000 tons per year within a period of
ten months after a production decision
is made. Pre-production work would
include the extension of the A shaft by
approximately 900 feet to the 16th level,
thus eliminating the requirement to use
B shaft. Also, D shaft would be deepened
to facilitate access to the ore below the
26th level. Development of stopes in the
D shaft area is required to permit
sustained production (see diagram).

Milling
The existing 500 ton per day capacity

mill built in 1982 is available to treat the
ore. The flotation concentrate from the

from the mill would be treated in a new
cyanidation plant.

The overall recovery of gold to dore bar
is anticipated to be 91%.

Capital costs

A summary of the estimated capital
costs to bring the mine into production,
as derived from Kilborn’s report are:

$ millions
Mine Development .......... $ 8.6
Process'plant gs. i idee on oo 1.5
Contingency..............5- AD
TOTAL os cert eee et weet $ 11.2

These costs may be significantly reduced
by acquisition of good quality recondi-
tioned equipment. The pre-production
work is expected to take ten months.

Operating costs

The annual average cash operating costs
for the first three years of operation, based
on current labour rates and material
costs, are estimated as follows:

Cost per

Unit Cost oz. gold

Annual Per ton produced
Cost milled US.
$11.7 millions $67 $230

It is anticipated that a mining grade of
.25 oz. per ton can be sustained for the
first three years of operations, resulting
in gold production of approximately
40,000 oz. per year. Subsequently, the
grade is anticipated to decrease and
production will reduce to 32,600 ounces
per year.

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400 500 600
Thousands Tons