Custom milling can make the difference for some new mines

Mining is a capital intensive industry. One major concern for any project hoping to enter commercial production is a milling facility, for which the cost may or may not be a determining factor.

The owners of three developing gold-mining projects, Francoeur and Duquesne in northwestern Quebec and Cheminis in northeastern Ontario, will probably take a long, hard look at their future milling needs and may decide custom milling is the answer.

Francoeur, owned on a 50-50 basis by Richmont Mines (TSE) and LAC Minerals (TSE) and situated just west of Rouyn-Noranda, Que., is currently undertaking a feasibility study on the construction of a mill. The federal and Quebec governments have each put $25,000 into the study, which is expected to be completed this autumn.

Treatment of development ore to date has taken place at LAC’s East Malartic mill, more than 60 miles distant, and at the old Kerr mill, now owned by Deak Resources (TSE), at Virginiatown, Ont., about 20 miles west of the project. Shipment of ore to East Malartic proved expensive, in the $9-10-per-ton range, but LAC also required the mill for treatment of ore from its Bousquet No. 2 mine which, because of the metallurgy involved, had different processing needs.

In October, 1990, a move was made to the Deak mill for the processing of 12,000 tons. A new agreement has Deak processing 84,000 tons of Francoeur ore in 1991.

Plans call for Francoeur development to proceed in order to reach a production rate of 1,000 tons per day at the start of 1992, with annual forecast production of 45,000 oz. Richmont’s Jean-Yves Laliberte said an on-site mill would not influence the production decision, but would influence the tonnage.

Radisson Mining Resources (ME), the owner of Duquesne, a former producer 20 miles north of Rouyn-Noranda, completed a bulk-sampling program in May of this year and is currently planning a major exploration program. Guy Parent, vice-president of exploration, said the company’s objective is to prove up more than one million tons of reserves.

In its search for milling facilities, Radisson negotiated unsuccessfully to acquire an interest in the incomplete mill then being constructed at the Beauchastel gold project of Augmitto Explorations near Rouyn-Noranda. Radisson did make a deal to ship ore (beginning in 1989) to the Sleeping Giant mill of Aurizon Mines north of Amos, Que. (about 100 miles way), and a second deal to ship ore to the Deak mill.

In all, the Sleeping Giant mill treated about 88,000 tons and the Deak mill the balance. Gross revenue from the 26,629 oz. gold produced was about $11.6 million; Parent said revenue would have been larger had the originally scheduled amount of ore (about twice as much) been extracted. The cost of shipping the ore to the Amos area also affected earnings.

Depending on the final reserve figure for Duquesne, Radisson could still build its own mill. But Parent said the company will also likely consider custom-milling opportunities in the Rouyn-Noranda area.

Cheminis is owned by Northfield Minerals and situated about four miles west of the Deak mill. It currently has a deal with Deak for the custom milling of a 20,000-ton bulk sample, a project President Tom Pladsen said should be finished by Nov. 1. Further exploration and development work awaits the results of the bulk sample.

A Cheminis mill is an option, Pladsen said. Cost and the permitting required to build such a mill, he said, are two factors the company will have to investigate. Northfield has an excellent relationship with Deak and custom milling may prove to be the answer if and when Cheminis is placed into production, he said.