Miramar tables Doris North study

Vancouver An independent feasibility study for high-grade Doris North deposit on the Hope Bay project in Nunavut envisions a 668-tonne-per-day operation cranking out 311,693 oz over a 2-year mine life.

Owner Miramar Mining (MAE-T) is aiming to bring the mine online by early 2005.

“The building of a mine on the Doris North deposit would be a major milestone in the advancement of the Hope Bay project,” says Miramar’s President Tony Walsh. “We believe Doris North provides potential for high grade, high return, and low risk gold production commencing approximately two years from now. We further believe this operation would generate significant cash flow at current gold prices, which we plan to use to continue the exploration and development of the Hope Bay belt.”

Using a base case gold price of US$325 per oz., the study sees a total of 467,157 tonnes grading 21.9 grams gold being mines with capital costs hitting US$39.3 million and cash operating costs ringing in at US$109 per oz. The pre tax rate of return on investment would be 136% with a payback period of 6.6 months.

The underground operation would begin with the development of ramp access and mine the Doris Hinge and portions of the Central and Lakeshore veins in the limbs of the Doris Hinge. Also, some 9,000 tonnes grading 19.5 grams gold stockpiled at the Boston deposit will be hauled to the mill for processing.

A combination of mechanized cut and fill and open stoping, assuming a minimum mining width of 2.5m and external dilution averaging 17% at zero grade is envisioned. Ore is slated to be hauled from underground by truck to a crusher located adjacent to the portal that would feed a modular mill pre-constructed off site and transported to site in assembled units.

Using conventional crushing and grinding with an integrated gravity gold recovery circuit followed by flotation and cyanidation of flotation concentrates, the gold dore would be produced on site.

“This mine would be the first in Canada built on wholly Inuit owned surface and mineral rights, and so is a significant development in Nunavut’s effort to encourage mining in the North,” adds Walsh. “We look forward to working with the various stakeholders in Nunavut affected by this project and believe this could be the beginning of a productive relationship built around the Hope Bay belt.”

With a number of other advanced prospects on the property, Miramar is planning to develop the mine facilities with a longer-term operation in mind. This results in an increase in capital cost because Miramar plans on purchasing rather than renting the power plant and mining equipment. The company has also elected not to use contract mining. The mill has been designed for a maximum throughput of 800 tonnes per day to accommodate possible future increases in throughput.

“Miramar’s objective is to use the development of the Doris North area as a springboard for the development of the substantial additional resources already defined on the rest of the Hope Bay belt,” said Mr. Walsh. “We have a healthy balance sheet and have strong expressions of interest for project financing of this development, should we elect to go that way.”

The most likely candidate for additional tonnage comes from the balance of the Doris deposit, primarily in the Doris Connector and Doris Central areas. Miramar aims to launch a preliminary assessment for the development of the Doris Central and Doris Connector areas, targeting production of approximately 250,000 to 300,000 oz of gold over a three year period at cash costs of under US$200 per oz.

The mill and facilities are designed for a 10-year life and therefore allow for an extension of operations beyond the two-year life of the Doris North Zone.

Miramar anticipates permits could be issued by the third quarter of 2003, allowing construction to commence and major equipment to be ordered by year-end, and operations to commence in early 2005.