New Jersey Mining Company (“NJMC” or the “Company”) announced today that efforts to widen the open pit at its Golden Chest Mine project have resulted in a significant expansion, including a 14-fold increase in tonnage and a 12-fold increase in mineable ounces of gold.
As detailed in NJMC’s press release dated April 13, 2017, the Company used blast hole assays, and geologic modeling to test the viability of expanding its open pit mine. Approximately 450 blasthole assays from the current mining operation were used to supplement previous core drilling data to update the block model. The study used current operating costs, metallurgical recoveries achieved at its New Jersey Mill, current concentrate contract terms, and a gold price of $1,200 per ounce.
The study concluded that the pit can be widened further to the west and deepened, with the expanded pit design containing 180,000 tonnes of ore at a gold grade of 4.26 grams per tonne (gpt), totaling 24,600 ounces of gold, with an overall stripping ratio of 5.1 to 1.
An environmental permit for the pit expansion was submitted to the Idaho Department of Lands (IDL) and the Company anticipates approval within the next 30 to 60 days.
The pit expansion study also showed the potential for an additional “starter pit” near the surface expression of the Klondike-Katie Dora area, about 370 meters north of the current operations. This area has not seen significant drill testing as previous campaigns targeted the Idaho Vein within the more southerly ore shoots and/or at depth. This underexplored area, just north of the starter pit target, was the site of a recent trenching program to assess its potential at-surface.
NJMC President John Swallow stated:
We have clearly moved beyond our initial business plan, which was confined to the limits of existing data and ore already blocked out by prior operators. The over 10-fold increase in the size of our open pit provides a great start to our mine-life expansion efforts and our objective to perpetually have 3 to 5 years of production ahead of us. Early this year, we refocused our on-site manpower (and capital) towards supporting surface operations while taking a more measured approach to restarting production from the underground mine.
Mr. Swallow continued:
We continue to gain knowledge of the Golden Chest vein systems and are in the early stages of scaling-up our resource base, extending the overall mine-life and adding greater predictability to cash flows. We are evaluating the potential for additional open pits on ore shoots to the north, as many of these ore shoots have not been tested at depth, and further test our vertical continuity hypothesis as we begin mining underground, which is now expected to ramp-up in July.
Modern exploration, including nearly 30,000 meters of drilling, reveals seven northwest-trending ore shoots at Golden Chest that demonstrate strong periodicity, consistent width and spacing, along the Idaho Fault. The current open pit is located at the surface expression of the Golden Chest Shoot, just northeast of the Skookum Shoot, the location of the underground mine. The Company began ore shipments to its New Jersey Mill in late-2016.