Friday March 30, 8:10 am ET
DENVER, March 30 /PRNewswire-FirstCall/ -- Queenstake Resources Ltd. (TSX: QRL - News; Amex: QEE - News) reported that estimated measured and indicated resources(1),(2), including reserves, totaled 1.9 million ounces of gold contained in 8.2 million tons grading 0.23 ounce of gold per ton (opt) at year-end 2006. Proven and probable reserves of gold totaled 485,700 ounces contained in 2.0 million tons at a grade of 0.25 opt at year-end 2006, using a three-year average gold price of $485 per ounce.
For year-end 2005, measured and indicated resources were 8.8 million tons grading 0.24 opt totaling 2.1 million contained ounces while proven and probable reserves were 3.7 million tons at a grade of 0.24 opt for 877,900 contained ounces.
The reduction in reserves in 2006 was primarily due to higher mining unit costs, resulting in an increase in cutoff grade, some remnant ounces condemned with the shutdown of the Murray Mine and elimination from reserves of ounces below the water table at the Smith Mine. Measured and indicated resources were slightly lower, due to the above factors as well as depletion from production at the SSX-Steer Complex and Smith Mine during the year.
In addition, inferred resources of 2.4 million tons at 0.23 opt totaled 545,200 contained ounces at year-end 2006, compared to 2.6 million tons at 0.23 opt for 605,600 contained ounces a year ago. Queenstake's proven and probable reserves, and measured, indicated and inferred resources were audited and verified by SRK Consulting (U.S.), Inc.(3) in accordance with the standards of Canadian National Instrument 43-101.
The Starvation Canyon project maintained its reserves and measured and indicated resources in 2006, while enhancing the definition of the two known resource zones. Queenstake estimated Starvation Canyon's measured and indicated resources totaled approximately 636,500 tons at 0.29 opt for 184,300 contained ounces, including probable reserves of 112,900 contained ounces, at year-end 2006. The drilling program conducted during 2006 began testing targets of up to a mile away, which will be followed up in 2007.
Queenstake invested $4.9 million in exploration during the full-year 2006 with five surface drill rigs working at the Jerritt Canyon District, at Starvation Canyon and other targets. Exploration expenditures for 2006 were constrained by reduced cash being available from operations and access to drill rigs.