Fire River Gold Corp. Announces Update on Progress at the Nixon Fork Gold Mine
May 23.05.2012, XNUMX Vancouver, Canada - Fire River Gold Corp. and Mystery Creek Resources Inc. [TSX.V: FAU | OTCQX: FVGCF | FSE: FWR] (the "Company") is pleased to announce the current progress on the mining and milling facilities at the Nixon Fork Mine.
The company has been developing the Nixon Fork Mine since June 2011. Mill processing started on July 4, 2011 by using gravity and flotation cycles to produce two products: Doré and gold-rich copper concentrate. In addition, the mechanical completion of the carbon-in-leach (“CIL”) cycle was completed on March 20, 2012. The CIL circuit was provided with a capacity of 250 t / day, which corresponds to 100 t more than with the use of gravity / flotation mills. The purpose of the CIL is to increase the gold recovery from the ongoing ore mining and also to recover residual gold from the existing gold-rich tailings, which can be operated with 7-8 grams / t gold.
The achievements so far:
The company has reached several milestones in recent months, such as:
• Start of the mill with gravity and flotation processing via 4. July 2011; Altogether, 34.400 tons of ore have been processed so far.
• Start of picking the CIL cycle in the mill
• Conversion of the spoil from wet material to dry storage
• Successful implementation of the long hole open-hole method in the mine in two layers (208 to 220 above NN and 240 to 270 above ME in zone 3300)
• Development of access to six new mining zones
• Restore all operating licenses and updated bonding
• Erection of a broken ore deposit of approximately 14.000 t with estimated levels of 22 g / t gold (per 9, May 2012)
Production:
The launch phase into full production continues despite slower progress than originally assumed. From the 4. July 2011 until the end of March 2012 produced the mine 25.875 t ore with grades of about 15,5 g / t gold. Thus, a total of 12.875 ounces of gold were mined. From this material, 175 t copper concentrate was also sold to Glencore Ltd. sold with contained 5.994 ounces of gold. The Doré production in the same period was 1.180 ounces of gold.
Processing:
The mill took up work on the 4. July 2011 on using gravity separation and flotation as two common application methods. The construction of the CIL circuit was completed in March 2012, adding leaching as a third application method, allowing us to directly produce Doré at the mine. The construction of the project took longer due to the following reasons: Some of the old material of the existing plant had to be replaced to start the new process and several modifications to the original CIL design were necessary for the process optimization. The addition of the CIL cycle should not only increase the gold yield overall for the processed ore, it should also install a process that could also deploy residual gold from the high grade historical settling ponds. These can be operated with 7-8 g / t Gold. Furthermore, about 20% of the gold production is in the form of Doré and 80% is still coming from the copper concentrate. ,
Since its launch until mid-January 2012, the mill has been operated at an average processing of 130 metric tons per day (mtpd), which turned the final spoilage into settling ponds with dams. The deposit storage system was changed in January 2012 away from wet settlements to a line dam which is then filtered which then allows dry storage. The addition of leaching as the third application process in April 2012 resulted in conversion from the mill to zero-residue processing. This process alters the results in numerous picking and downtime requests for various reasons including the mechanical availability of the final settling filter which gives clear water as overflow from the settling thickener and allows the main pumps to work better resulting in a throughput of 92 mtpd previously revealed in 2012. Each requirement is treated so that we always get stable work and improvement of the mill, which increases the uptime and the throughput. We expect the mill to reach its full throughput of 150 mtpd over the next four weeks.
Mining:
The mine was operated as a pile in the first quarter due to delays in picking the mill. This allowed the mine operator to focus on the development of the six new zones for future exploitation, thus obtaining a large stock of broken and drilled ore from the long-hole tunnels. At present, the stock of broken material is estimated at about 14.000 t ore with grades of 22 g / t gold. One of the last tunnels close to the 160 m ü.NN of the 3300 zone yielded a sample of the bulk pile values of 81 g / t gold.
The tunnel opening by means of the slot method was successful and resulted in two tunnels in the zone 3300, one tunnel between 208 and 220 m ü.NN and another between the levels 240 mASL and 270 mASL. This mining method continues, yielding the largest possible material for the mill with more material coming from selective cuts and filled lugs.
The mine was successfully mined outside known resources. To date, about half of the mill feed and half of the currently crushed storage rock has been exploited from sources that have not been designated as a current resource. With the experience gained in the past six months, mine management has been able to change the ore assay approach, and thus determine the selectivity of the mining methods used. Generally speaking, the diamond drill holes are effective in determining the mineralized zones and contact layers but are not useful for determining mine design studs. After the diamond drilling that determines the location of the zones, an ore mining path is being developed through the zone and a smaller Bazooka-type drill is being used to drill long holes in 15 to 25 meters that will help determine the higher levels of mineralization. The company owns and operates both the Bazooka and Hagby drills.
Financing:
On the 4. In April 2012, the remaining $ 7,5 million was paid by the Sprott Resource Lending Partnership as a loan, thus totaling a loan of 12,75 million USD provided by Waterton Global Value LP ("Waterton"). The purpose of Waterton's funds is to provide the site with additional working capital and to handle the first repayments of other loans while mastering the requirements in the launch phase.
Outlook:
The commissioning of the mill and the start of full production are in full swing. The production target for 2012 is 29.000 ounces of mined gold. For the year 2013 then 40.000 ounces and 50.000 ounces are aimed for 2014. It expects to announce full production over a period of 30 consecutive days of 100 t per day throughput (two-thirds of our budgeted throughput) with + 90% gold output over the next three months.
Despite some delays, our operating costs are very close to our 2012 29,6 $ million budget for the calendar year. If we meet our production targets, then the operating costs should be around $ 950 per ounce and after the projected improvements, these should then fall to 750 $ per ounce in 2013 and 600 $ ounce then in 2014. Our ability to find additional resources outside the known resources supports our assessment that if the project reaches its full economic potential, it will then be possible to easily operate above the current limits of the existing mineral inventory.
On behalf of the management, I am looking forward to informing you about the further developments of the company.
Richard Goodwin
President
More information about cycling in the Leipzig Region as well as more interesting routes: Phone: + 1 (604) 261 0580
Email: ppgad@pucrs.br or visit www.firerivergold.com
Suite 340 -1200 West 73rd Avenue
Vancouver BC V6P 6G5
Canada
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