Gray Eagle Mine
Located in Siskiyou County, California
History
Found in 1890’s and had small historic production of copper and gold. Major exploration during WWI resulted in large tonnage of copper being outlined. Idle until WWII when mined by Newmont Mining.This was an underground operation and produced 462,000 tons of ore at 3.17% Cu and 0.027 opt Au. Shut down at the end of the war. SiskonCorp. acquired in mid-1950’s and leased to several explorers who outlined an open-pit resource. Noranda explored in late 70’sand put in to production in early 80’s and produced gold from a leached breccia amounting to 120,000 ounces. Noranda ceased operations in 1987. Siskonre evaluated the remaining copper resource and did a drilling program in 1989 to outline the current resource blocks. Senetek has acquired the project from a mining entrepreneur.
Geology
This is a Volcanogenic Massive Sulfide deposit or “VMS” deposit and is stratiform in the Galice formation. These types of deposits are common regionally and were formed originally on the seabed. Mineralization includes chalcopyrite and gold-bearing pyrite as well as minor amounts of sphalerite, covellite, and chalcocite. The most important ore host for our purposes are two massive pyrite-chalcopyrite zones which contain the known ore resource and known as the North and South Block. The structural geology of the ore body is well understood aiding continued definition drilling and resource expansion potential.
Project Parameters
Based on past work of Siskon Corporation as well as Feasibility Study reviewed by Pincock, Allen and Holt completed in May, 1990. Metal Prices used were $400 gold and $1.00 per pound copper. The Pincock Study projected an ore body of 1,130,000 tons would be mined at a cutoff grade of 1.0%. The average grade of ore mined was projected to be 2.59% Cu and 0.021 opt Au with 90% Cu recovery and 25% Au recovery using a flotation milling process. Capex in 1990 dollars for a 1,000 ton per day operation was approximately $10 million. Project was to be a small open pit with a strip ratio of 3.3:1. At prevailing historic base metal prices the project would make nearly $4 million over the five year project life. Importantly, the Pincock Study noted the project would make an additional $3.1 million over its mine life for every $0.10 rise in the copper price.