Niugini plans San Cristobal drilling

Production at the San Cristobal mine of Niugini Mining totalled 57,948 oz. gold and 176,499 oz. silver in 1992.

The company, incorporated in Papua New Guinea and with offices in Sydney, Australia, says output was near the forecast target; lower-than-expected head grades during the final quarter of 1992 resulted in a production shortfall. Unit operating costs at the mine, north of La Escondida, decreased to US$300 per equivalent oz. gold in 1992.

The company has planned a drilling program for this year with the objective of defining additional reserves adjacent to the existing open pit. That program will be followed by a mine planning exercise aimed at defining, the company writes in its annual report, “a new open pit which optimizes the redefined orebody.”

To counter the head-grade decline, the company plans a program of selective crushing of ore combined with the heap leaching of uncrushed run-of-mine ore. Crusher throughput increased throughout the year; by year-end, about 9,000 tonnes of material was being crushed, well above the 6,000-tonne design capacity.

The company is benefiting from a gold forward sales program. By lowering operating costs, Niugini says it has been able to drop its internal cutoff grade to 0.35 grams gold per tonne from 0.55 grams. Based on the 0.55 cutoff grade, the company reports proven and probable reserves totaling 16.9 million tonnes grading 0.9 grams. Total reserves (all classes) are estimated to be 25.5 million tonnes.

An initial drilling program of 20,000 metres is planned this year and, if it is successful, an additional 19,000 meters will be drilled.

The company has optioned a group of tenements a little more than one kilometre from San Cristobal. The area, known as the Three Sisters, is to undergo surface exploration, to be followed by a drilling program. Meanwhile, Niugini says it has finalized agreements with Placer Dome (TSE) under which the latter will provide a minimum of US$1 million per year to fund Niugini’s copper exploration plans in Chile. To be targeted are medium- and large-sized deposits suitable for treatment by the solvent extraction-electrowinning process.