U.S. Gold reports favorable feasibility study; gold production targeted for 1995.
The study, conducted by Lynteck Inc., Denver, confirms the economic viability of gold production from presently defined gold mineralization at the Tonkin Springs Gold Mine located on the Battle Mountain-Eureka Gold Trend in Eureka County, Nev.
U.S. Gold holds, through subsidiaries, a 40% working interest in Tonkin Springs and further holds preferred stock in Gold Capital which can be converted through June 30, 1996, into 20% of the outstanding common stock of Gold Capital, resulting in an effective economic interest of 52% in the Project. Gold Capital is manager of the Project and is responsible for funding all costs until commencement of commercial production.
The feasibility study represents an estimate of the economic viability of producing gold from a milling and heap leach operation at the Tonkin Springs Project and, subject to certain conditions and assumptions set forth therein, concludes that gold can be successfully mined over the estimated five-year life of the initial phase of the Project.
Assuming Gold Capital is successful in raising the necessary additional funding to place the Project into production, and that permitting goes as anticipated, gold production from Tonkin Springs could begin by the fourth quarter of 1995. U.S. Gold is of the opinion that the Project can be extended several more years beyond the estimated 5 year life.
"We are very pleased with the results of this independent feasibility study that shows a targeted rate of about 80,000 ounces per year for the Project at full production. Based on a gold price of $375 per ounce, and other economic and operational assumptions included in the study, the company's effective economic interest in net cash flow from the Project would approximate up to $5 million per year," said William W. Reid, president of U.S. Gold.
"We look forward to again joining the ranks as a gold producer."
CONTACT: U.S. Gold Corp., Denver
William W. Reid, 303/322-8002
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|Date:||Feb 9, 1995|
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