The Graduating Class 1987 GOLD REPORT HOPE BROOK GOLD

A temporary dock has been completed at Couteau Bay, on the southwest coast of Newfoundland. Over the coming months, it will be used to dock a $3- million supply vessel, Couteau Supplier, which will be ferrying personn el and supp lies from Port aux Basques to the province’s first primary gold producer — the Hope Brook mine.

Strong support in the form of $14 million from the federal government’s Industrial and Regional Development Program and an additional $6 million from the Newf oundland government will help pay the $144 million required to develop an open p it, an underground mine and a modern milling facility at the isolated Chetwynd p roperty. It is held by Hope Brook Gold which is 76% held by bp Canada’s Selco Mi ning and Minerals Division.

Hope Brook is heap leaching some 754,000 tons of ore from the open pit and will start stripping in April. It is hoped that revenues will begin being generated by August, when dilute cyanide solutions are sprayed on the ore pad. Some 170 workers are on site, preparing the heap leaching pad site, roads, the permanent c amp and the gold mill. An access road from the dock to the mine site has already been completed.

Contracts for the open pit mining are expected to be awarded soon. This work is expected to progress at a rate of 1,750 tons per day with the first ore going to the pads in July. Stripping ratios have been calculated to be in the order of 4.31:1 and ore from the open pit will be leached for 17 months. Hope Brook is working closely with the provincial and federal governments on environmental matt ers and permits.

Gold extracted from the 0.13-oz- gold-per-ton material should total about 23,000 oz this year and about 52,000 oz next year. At recovery rates of 70%, antic ipated by Witteck Development, and current gold prices, this translates into rev enues of about $12 million(US) this year and $41 million next year. Total operat ing costs are expected to be $162(US) for every ounce of the yellow metal recove red, leaving the company with estimated net income (based on current gold prices ) of $2.7 million this year and $6.1 million next year.

At the end of January, Hope Brook crews started driving a ramp that will access underground workings from which ore is expected to be flowing in about two yea rs. By late 1988 Hope Brook should have underground stopes developed, ready for production.

Ore below the pit totals 10.6 million tons at about the same grade — enough to last another eight years at a planned mining rate of 3,000 tons per day. Avera ge widths of 25 m (varying from 5-60 m) will enable the company to use efficient , low-cost, sublevel, open-stoping methods. Preliminary mining plans call for pl acing cemented backfill in the primary stopes and un-cemented fill in the pillar s.

Preliminary studies suggest ore will be loaded by continuous loading machines and hauled by 50-tonne electric trolley trucks up a 12% ramp. Company executives have visited mines in Sweden where electric trolley trucks are used extensively ; and close attention is being paid to the development, at Inco Ltd. in Sudbury, Ont., of a 70-ton, manless, electric truck.

Some 86,000 tons of ore from underground development work will be added to pads to be heap leached this year and next. Gold production in 1988-89 is expected to be 126,000 oz from a conventional cyanide, carbon-in-pulp mill planned by To ronto-based Bechtel Canada Engineering. Together with the bae Group, an engineer ing company in St. John’s, Bechtel has so far completed about 40% of the enginee ring work on the mill. Construction crews, which are preparing for the building of the mill, are expected to swell to a total of 330 by August. The mill should be up and running in October, 1988.

Gold recoveries in the mill are expected to be in the order of 91% and total production costs from underground mining are expected to be $190(US) for every ou nce of gold poured.

To supply electric power to the isolated site, the Newfoundland government will build a $20-million powerline from Bottom Brook to Burgeo and the company will build a 31-km spurline to the mine.

The mine is expected to employ about 270 people full-time and crews will be housed in a 152-person permanent camp facility at the site.