Cusac Gold Mines Ltd.: Taurus Project and Table Mountain Mine Update
Friday March 23, 2007 16:19:26 EDT
VANCOUVER, BRITISH COLUMBIA, Mar 23, 2007 (CCNMatthews via COMTEX News Network) --
David H. Brett, President, Cusac Gold Mines Ltd. (TSX: CQC)(OTCBB: CUSIF)(FRANKFURT: DCB) the "Company"), provides the following update on the Taurus Project and gold production at the Company's adjoining Table Mountain Gold Mine, both located in Northern BC. The Company is the 100% owner and operator of the Table Mountain Gold Mine and recently signed an agreement in principle to acquire 100% of the Taurus Project, subject to a definitive agreement and TSX approval now in process.
The Company has retained Wardrop Engineering Inc. to prepare a NI 43-101 report covering the Taurus Project. A site visit is currently underway. An earlier (2006) 43-101 report prepared by Wardrop on behalf of American Bonanza Gold Corp. estimated an open-pit, bulk tonnage inferred resource of 1.04 million ounces at a grade of 1.0 g/t Au on the entire Taurus Project, taking into consideration both the American Bonanza portion (70%) and the Cusac portion (30%). A revised version of this report excluding Cusac's 30% portion of the deposit is currently available on American Bonanza's Sedar web site. The new report when completed will cover the entire Taurus Deposit and will be posted on Cusac's Sedar web page. Investors are encouraged to read the February 2006 Wardrop Engineering Inc. report that is available at American Bonanza's www.sedar.com web page.
The February 2006 Wardrop report concludes that, based upon a very preliminary economic analysis, an operating profit could be achieved even at a gold price of US$450/oz. The Waldrop report gives clear and positive recommendations for further work to upgrade and expand the Taurus resource via a pre-feasibility study focusing on better understanding the metallurgy and the geologic model.
"The Taurus Deposit is an advanced stage project that Cusac believes can quickly be advanced to pre-feasibility stage," said Cusac CEO David Brett. "We are now developing a detailed Taurus drilling, geological and metallurgical program for 2007 with the first step being the commissioning of the new Wardrop Report."
Table Mountain Gold Mine
The Company has experienced two challenges in the 1st quarter of 2007 that have impacted gold production. Firstly, the Rory Vein, has demonstrated unexpected structural complexity between drill holes, slowing the Company's ability to develop consistent ore blocks for mining. Initial underground development delineated quartz veins and stringer zones much wider than expected, but containing lower grades. As a result, significantly lower tonnage and lower grades have been processed than the Company had hoped for.
However, recent developments have been more encouraging. The unforeseen structural complexities have predominantly been in the north end of the vein, with the south end of the Rory Vein becoming much more typical of Table Mountain quartz veins. The "South Panel", one of the ore blocks now being mined, assayed 0.39 ounces per ton over a 20 meter strike length of vein averaging 2.52 meters true width. This ore, as well as other higher grade material, will be milled in April.
Secondly, the Company's 300 ton per day mill had to be temporarily shut down due to a problem with the conveyer system that feeds the crushing circuit. A work-around solution was put in place and milling resumed. The mill and crushing systems themselves are not impaired in any way; rather, the method for feeding ore into the crusher is impaired. A portable crushing and conveyor system has been put in place to bypass the impaired conveyor system until spring thaw, when re-building and reinforcement of the ramp, conveyor and associated structures will be undertaken. The Company does not expect any ongoing impairment to its ability to process ore or substantial repair cost for the conveyor system.
The Company's projected gold production for 2007 is based on probable reserves of 44,000 tons grading 0.49 opt in the Rory Vein (16,000 tons grading 0.46 opt) and the East Bain Vein (28,000 tons grading 0.50 otp). The Rory Vein differs from previously mined structures at Table Mountain in that it strikes north-south. This vein orientation has displayed unexpected complexities that will likely slow the rate of production from this vein. The East Bain is a normal east-west structure and is not expected to display similar mining complexities.
The Company's initial plan in 2006 was to commence mining at Rory because the amount of advance development was significantly less than the East Bain. Upon achievement of positive cash flow, development of the East Bain was to commence. As a result of the difficulties described above, development of the East Bain was delayed. The Company plans to continue mining the Rory Vein during the second quarter and start development of the East Bain in early April. This will result in ore from the East Bain Vein being processed mainly in the third quarter of 2007.
The Company believes it is still on track to process the 44,000 tons of reserves outlined in 2007, but the bulk of this gold production is now expected in the second half of 2007.
"The Cusac mining and geological team has been working hard to overcome the start-up challenges we have been facing," said Cusac CEO David Brett. "I am confident that 2007 will be a good year for Cusac with the production challenges behind us and the Taurus Project advancing rapidly." George Sanders, P.Geo is the Qualified Person responsible for the technical portion of this news release under National Instrument 43-101.