Victor – The Cripple Creek and Victor Gold Mining Co. hit a milestone this month – after 13 years of operation, the company has extracted 3 million ounces of gold from its Cresson Mine near Victor.
And based on recent results of a preliminary internal study on the mine’s life span, owners are banking on the mine yielding as much as 3 million more ounces. That’s 102 tons, or about a 5.5-foot solid cube of gold, which would be worth up to an estimated $1.7 billion, according to company officials.
“This is not an overnight discovery; this is the result of several years of exploration. We always thought there might be an opportunity but weren’t sure until we started studying it closely,” said Jane Mannon, the mine’s manager of community affairs.
The company is spending $21 million to locate additional gold deposits and examine environmental and engineering needs, and the final study should be completed by the end of next year, Mannon said.
Joint-venture partners Golden Cycle Gold Corp. of Colorado Springs and AngloGold Ashanti Colorado Corp. then will determine whether it’s financially feasible to extend surface gold-ore mining four to 10 years beyond the current projected shutdown of 2012, she said.
Leaching gold deposits from the mined ore would continue up to another eight years to 2030, according to the study. To accommodate the additional mining, the study recommends expanding the leach pit.
Costs to extend mining would range from $148 million to retrieve an extra 94 million tons of gold ore to $281 million to mine up to 212 million tons of gold ore, according to Golden Cycle. That places operating costs at $334 per ounce of recoverable gold, with a sales price of $550 per ounce, the company said.
The mining partnership spent $200 million to expand the mine in 2004 to boost annual production, but last year’s output declined to a three-year low of 285,000 ounces. Mine officials blamed equipment problems and drought for hampering production.
During a shareholders presentation in June, company officials reported a $1.1 million loss in 2006, or 11 cents per share.
Obtaining approval and permits from governmental agencies including the state and Teller County, along with public hearings, would be part of the process to tap into additional gold deposits, Mannon said.
The 5,847-acre open-pit mine employs 325, which would not change if operations are extended, Mannon said.
