Asamera’s Cannon mine is largest North American underground gold mine to become operational this year

Introduction On the banks of the Columbia River, about halfway between Seattle and Spokane, sits Wenatchee, WA. It calls itself "the apple capital of the world." And it has a gold mining history that dates back to the 1880s. It was just outside Wenatchee - three blocks outside, to be exact-that Asamera recently dedicated its $60 million Cannon underground gold mine. At full production, it is estimated the Cannon mine will yield between 5 and 5.6 t/a (160,000 and 180,000 oz per year) of gold. That would make Cannon the largest North American underground gold mine to be brought into production this year. Cannon should also be among the top 10 of all North American gold producers. Asamera officials project Cannon's operating costs at about $4.8019 ($150 per oz). At that rate, the mine should also be one of the lower cost and most profitable gold mining operations in North America. One reason for low operating costs is low electric power costs. The Cannon operation will be paying about 2.5 cents per kWh for hydroelectric power supplied by the Bonneville Power Authority. Proven and probable ore reserves at Cannon are in excess of 4.7 Mt (5.2 million st). Reserve grades average 7.29 g/t (0.21 oz per st) of gold in three ore zones, in order of discovery - B, B West, and B North. The ore bodies could have been mined by open-pit methods. But underground mining was chosen for environmental reasons. In addition, the rich B North ore body extends beneath a nearby horse stable and arena. The Cannon mine area comprises some 20 km2 (5000 acres) in Chelan County. The mine site is located at the 305 m (1000 ft) elevation in Dry Gulch at the base of the Cascade Mountains. The initial estimate of mine life for the Cannon operation is eight years, depending on gold prices. But Asamera officials believe the Wenatchee area has excellent potential for future gold discoveries. Asamera, Inc. of Calgary, Alberta, owns 51% of the Cannon property, through its wholly-owned Asamera Minerals (US). Breakwater Resources Ltd. of Vancouver, British Columbia owns 49% of the operation. The Cannon mine is named in honor of longtime Asamera, Inc. executive and current company director, geologist Donald G. Can¬non. It was he who first brought the Wenatchee property to Asamera's attention and urged the company to pursue it. Asamera is a major explorer and producer of oil and gas. Its Cannon operation is the largest and most significant to date in its mining division, according to Rob¬ert G. Welty. He is Asamera's chairman and chief executive officer. It should be noted there was an element of serendipity involved in Cannon's development. The development program be¬gan when geologist Cannon visited the Wenatchee area. He was visit¬ing old mining districts. He liked what he saw. The Cannon property was eventually optioned for ex¬ploration, including a modest drilling program.