A proposed gold mine southeast of Eureka appears to make economic sense, says a study completed for Midway Gold Corp. of Vancouver, British Columbia.
The preliminary economic assessment of the Pan project in White Pine County estimates a 3.25-year payback period for the mine, assuming that gold prices average $950 an ounce.
The economic assessment was completed by Gustavson Associates of Boulder, Colo.
The consultants estimated that reserves currently identified at the property would support seven years of mining, producing an average of 44,000 ounces of gold a year. The study estimated Midway Gold's initial investment at $59 million.
The mine's cash costs of production would be $453 an ounce, the assessment projected. It's projected as an open-pit mine with a heap leach operation.
Midway Gold said it plans to continue exploration drilling on the property 50 miles west of Ely this year, expects to complete a feasibility study by 2011 and will seek the permits it needs to begin production in 2013.
Publicly held Midway Gold has been working on the Pan project since 2007, when it acquire the project's previous owner,Pan-Nevada Gold Corp.