A CAMP EVOLVES; Our west coast correspondent surveys northwes

“The mineral potential exists for this to be a major mining camp,” says Jack Patterson, manager of the British Columbia & Yukon Chamber of Mines. “But road access will be the key to realizing this potential.” An all-weather, industrial road is considered likely for the Iskut River area in 1990. In the meantime, this emerging mining camp has become a case study of high hopes and high-grade gold versus the uncompromising realities of high-cost mining.

As the first mine-maker in the Iskut River, Skyline Gold Corp. (formerly Skyline Explorations) took on more than the usual set of risks when it brought on-stream in 1988 its 100%-owned Johnny Mountain gold mine. Some 3,600 ft (1,080 m) above sea level on a plateau atop Johnny Mountain, the minesite is only accessible by air from either Wrangell, Alaska (50 air miles away), or from Terrace, B.C. (175 air miles). The location and weather posed some setbacks during construction, but these were soon overshadowed by more serious operating and cash flow problems that developed after mining and milling began.

In October, 1988, Ronald Shon, Skyline’s current chairman, took control of the exploration-oriented junior and brought in William Price to head up operations. Because of the high costs of mining in this remote area, geological reserves were downgraded (by using a 0.3-oz cutoff) to 686,000 tons grading 0.57 oz gold per ton (624,000 tonnes grading 19.5 g per tonne). Price, a no-nonsense mining engineer, then tackled operating problems on the milling side.

The mill incorporated a conventional process consisting of crushing, grinding, gravity separation, flotation and cyanidation of the floating tails. When Price took over operations, the jig/table circuit installed for gravity gold recovery wasn’t being used because of water balance problems. Poor filtration efficiencies, pulp dilution problems and excess cyanide consumptions (due to the high copper content in the cyanide mill) also contributed to start-up difficulties.

Skyline engaged Melis Engineering to implement the recommendations for improving operations. It became evident which direction to take when ore samples sent to Coastech Research for metallurgical testwork showed that improved recoveries (+90%) could be obtained with a simple gravity and flotation circuit using an 80% minus 200 mesh grind. The milling process was then modified to recover gold in a gravity concentrate followed by recovery of copper and additional gold in a copper flotation concentrate. The cyanide circuit and associated cyanide destruction circuit were shut down.

Skyline moved quickly to upgrade and operate the gravity circuit as front- end operations, for recovery of free gold is essential in an efficient, high- grade gold plant. It not only provides the obvious benefit of immediate production and cash flow, but lowers the downstream leach circuit solution loading, which can result in gold losses. Because the originally installed cleaner flotation cells proved unsuitable for production of saleable copper concentrate, a refurbished bank of four Denver No. 18 Specials was installed to provide control over final copper concentrate grade.

When The Northern Miner Magazine visited the property, after these improvements had been completed, the mill was operating at more than 300 tons (270 tonnes) per day. Some 9,993 tons (9,084 tonnes) were milled during the month at an average head grade of 0.52 oz gold to produce 4,495 oz gold, 6,887 oz silver and 151,633 lb copper (140 kg gold, 214 kg silver and 68,780 kg copper). Copper recoveries were in excess of 93%, with the flotation concentrate assaying 20% copper and typically 10.0 oz gold and 20.0 oz silver per ton. Gold recoveries were in the 86%-to-87% range (from 61% in October, 1988) as the mesh-of-grind achieved was only 60% minus 200 mesh instead of the required 80% minus 200 mesh.

“When we made these changes, we could foresee a profit,” says Price, now president of Skyline. “But the price of gold declined and has continued to do so since that time.” To offset lower gold prices and make the final leap to profitability, Skyline is expanding throughput to 350 tons (318 tonnes) per day by incorporating the ability to produce a finer grind than is now achievable with a single-stage ball mill.

Increased capacity and finer grind will be achieved by installing a closed circuit 300-hp secondary regrind mill that is also expected to boost recoveries to 90% by liberating free gold still locked in coarse particles. A prototype Falcon concentrator, the first capable of taking the full flow of the mill, is also being incorporated to optimize the gravity recovery of the fine, liberated gold. The company hopes to boost to 40% from 30% the amount of gold recovered from the gravity circuit.

Gold, silver and copper mineralization at Johnny Mountain is associated with quartz/sulphide veins that occupy a series of northeast-trending fracture zones. Having good ground conditions, Skyline relies on shrinkage stoping, considered the most economical method for mining narrow vein-type deposits. Trackless mining is carried out on four developed levels with three 10-ton trucks and five load-haul-dump machines.

“It’s a difficult deposit to mine because of the various flat-faults and other faults that chop up the structure,” says Price, adding that a lot of infill drilling and “nose-to-the-rock” geological manhours are required to overcome this. The old mining adage “drill for structure, drive for grade” is the rule of thumb at Johnny Mountain, so the direction of mining is largely determined by the information gathered by skilled underground geologists. Skyline cut production costs to $202 (us) per oz in its latest quarter, but this includes copper and gold credits and excludes costs for transporting concentrates. These are transported by air to Wrangell and then shipped to Japan for refining.

At the base of Johnny Mountain, 60/40 partners Cominco Ltd. and Prime Resources are at the feasibility stage with the Snip gold deposit. This property has an exploration history going back to the turn of the century, with Cominco staking the claims in 1929, 1964 and again in the early 1980s. Extensively developed, the deposit contains diluted reserves of 1.58 million tons with a cut grade of 0.639 oz gold per ton in the Twin zone (equivalent to 1.4 million tonnes with a cut grade of 22 g gold per tonne). A revised reserve estimate and feasibility study is expected by year-end. If road access becomes a reality, a positive production decision is believed probable next year.

If achieving profitability has been a blood, sweat and tears proposition for Skyline, the 2,018-tonne-per-day Premier Gold mine near Stewart, B.C., has been a tough technical challenge for operator and 50.1%-owner Westmin Resources. Although the mine is readily accessible by road, capital costs of $92 million were higher than anticipated. This strained the financial resources of junior partner (40%) Pioneer Metals Corp.

Open pit mining is several months behind schedule, which Westmin says is due, in part, to equipment and operational difficulties in the first few months of operation. These early production shortfalls adversely affected grade control, and dilution levels and production costs were higher than anticipated. But Westmin plans to supplement open pit ore with feed from higher-grade underground reserves that it is currently ou
tlining on the Premier Gold properties. The company also secured an agreement to mine higher-grade reserves from Tenajon Resources’ nearby sb gold deposit.

Mill commissioning began in May and the first dore bar was poured in June. Dore production to the end of September totalled 6,119 oz gold and 104,169 oz silver (190 kg gold and 3,240 kg silver), with nearly half this credited to September. Fourth-quarter production is continuing to show improvement; as of Oct 11, 1,446 oz gold and 10,022 oz silver were recovered from 20,823 tons of ore. The mill is now running at 93% capacity, with recoveries averaging 90% for gold and 49% for silver (August to September).

With gold prices still in a slump and in view of logistical problems, Newhawk Gold Mines and partner Granduc Mines haven’t rushed to judgment with their 60/40 joint-ventured Sulphurets gold-silver project. But a methodical approach to exploration appears to be paying off. Newhawk recently discovered several high-grade zones near existing underground workings. It expects the new zones could be the deciding factor in a positive production decision. An updated reserve and feasibility study is in the works.

Further to the north in the Telegraph Creek area, North American Metals (73%-owned by Homestake Mining) and partner Chevron Minerals recently brought to production the Golden Bear Mine. Sized at 360 tonnes per day, the plant will use dry grinding, fluidized bed roasting and carbon-in-pulp leaching to produce about 60,000 oz (1,866 kg) of gold each year. Reserves are sufficient for at least five years at an average head grade of 0.54 oz (18.5 g) gold. The property is considered to have excellent potential for reserve expansion. Although accessible by road, this project has been plagued by cost overruns in the construction phase. Capital costs were more than double the original estimate and operating costs are considerably higher than anticipated. On a positive note, open pit mining is ahead of schedule at a higher grade than anticipated.

The new kid on the block is the Eskay Creek gold deposit being outlined by Prime Explorations in the Unuk River region. Work to date has focused on the 21 zone, which contains stratabound gold, silver and base metal mineralization. This project has emerged as one of the more geologically interesting discoveries this year. Now that may seem a bit of understatement what with such mind-boggling intersections as 205 m averaging 0.875 oz gold per ton (30 g per tonne). However, two caveats should be noted: portions of the zone contain refractory mineralization and the property is accessible only by air. As well, it is still early in the program. But assuming continuing positive results, this project appears to be mineable by low-cost open pit methods.

Today, B.C.’s Golden Triangle is something of a misnomer — a growing number of companies have changed their exploration focus to properties with base metal potential. Typically, these are either volcanogenic polymetallic massive sulphide deposits or copper-gold porphyry deposits. One such recent discovery — the Kerr copper-gold deposit in the Sulphurets camp — was recently acquired by Placer Dome. The major gobbled up a junior company, Sulphurets Gold, to gain the Kerr interest.

Now that seems downright Darwinian, doesn’t it?

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