Pegasus opens Montana mine

The Montana Tunnels project of Pegasus Gold was officially opened last week. Over 500 guests attended the commissioning of one of the lowest grade, conventional gold mining operations in the world near Helena, Mont.

The mine should be operating at full capacity by month end, Alan Richardson, general manager, tells The Northern Miner. The mill is currently processing 8-10,000 tons per day and “head grades are as expected,” he confirms. Some startup problems were encountered in the mill which have been identified and are currently being resolved, he adds. Design capacity for the plant is approximately 12,500 tons which he feels will be reached in several weeks.

Pegasus acquired a 100% working interest in the mine from U.S. Minerals Exploration in exchange for financing the project into production. USMX will be entitled to a 5% net profits interest during payback and 50% thereafter.

At the current production rate, mine reserves are sufficient for at least 10 years with annual production forecasted to be 106,000 oz gold, 1.7 million oz silver, 26,000 tons of zinc and 5,700 tons of lead. Reserves are approximately 41.2 million tons averaging 0.027 oz gold, 0.52 oz silver, 0.72% zinc and 0.27% lead at a stripping ratio (waste to ore) of around 2.7:1. In terms of gold equivalent, the grade averages around 0.042 oz.

The orebody is located in the central part of a large diatreme, a volcanic vent which has intruded older rocks. Economic sulphide mineralization in the diatreme occurs as disseminations in the breccia matrix.

An open pit mining method is employed with conventional loading and haulage equipment. Mining is done on a contract basis by N. A. Degerstrom of Spokane, Wash. which also has the contract for Pegasus’ mining operations at Zortman/Landusky in Montana and Florida Canyon in Nevada. This helped reduce the capital cost of the project which was budgeted at $53 million (US).

Ore is treated by conventional crushing, then by a semi-autogenous and ball mill grading circuit followed by bulk flotation to produce sulphide concentrate. This concentrate is then leached with cyanide and the Merrill Crowe process to recover gold and silver in dore bullion. Tailings from the cyanide operation will feed to a second flotation step to produce separate lead and zinc concentrates. These concentrates will be shipped to smelters and the dore bullion to a commercial refiner.