Timmins, Habsburg test mills for taking Dome Mountain ore

The Dome Mountain gold mine near Smithers, B.C., recently completed deliveries of 5,600 tons of ore. Timmins Nickel (TSE) is earning a 60% interest in the mine from Habsburg Resources (VSE) by bringing the project into production at a minimum rate of 250 tons per day.

Timmins, the operator, is currently in negotiations with both Westmin Resources and Equity Silver Mines to provide custom milling services. Westmin has received 4,000 tons of ore while Equity has milled about 1,600 tons. The grade of the Westmin run was 0.76 oz. gold per ton with recoveries averaging 93%. The average grade of the Equity run was 0.46 oz. gold while recoveries averaged only 85%.

Although recoveries are lower at the Equity mill, 43 miles away, it is about half the haulage distance to Westmin’s mill at Stewart.

Timmins anticipates producing 5,000 to 6,000 tons of ore per month in the new year at an average grade of about 0.5 oz. gold.

The projected grade represents an increase over published reserves, estimated at 325,000 tons (proven and probable) grading 0.36 oz. gold plus an additional preliminary reserve of about 100,000 tons grading 0.52 oz. gold. Stephen McIntyre, president of Timmins Nickel, said the higher than anticipated grades were the result of lower mining dilution and better grade control.

McIntyre added that the emphasis on minimizing dilution and maximizing grade may lead Timmins and Habsburg to renegotiate their option agreement to represent gold production rather than ore production.

Under the present agreement, Timmins must fund all cost including capital and operating costs until the mine is producing an average of 250 tons of ore per day based on 30 consecutive days.

According to the option agreement, Habsburg retains a 20% interest in the project until a total of 325,000 tons of ore are processed after which its interest increases to 40%.