Cheni’s Lawyers mine pours gold at opening

The opening of the 550-ton-per- day mining operation took place two decades after gold and silver occurrences were first discovered on the Lawyers property, and one decade after Cheni’s predecessor company secured an option on the ground.

But as President Paul Girard told invited guests, the most important development in bringing the project to fruition was the assistance of the British Columbia government in the construction of a 100-km access road into the Toodoggone region.

“Without the road the project wouldn’t have been viable,” Girard stressed.

It cost Cheni $57.4 million to bring its Lawyers mine on stream, about $14 million more than originally projected. But a tour of the large, modern mill complex impressed visitors to the mine site, as did the spacious camp facilities built on a plateau at an elevation of about 4,000 ft.

As Girard pointed out, Cheni Gold and its parent company, Cheni S.A. of France, view the $57.4 million as a long-term investment in the potential of the Lawyers property and the Toodoggone district.

Girard also told guests the mine is profitable and running at full capacity. During the first four months of commercial production (March to June), the Lawyers mine turned out 4,000 oz of gold and 65,000 oz of silver each month.

Production for 1989 is estimated at 40,000 oz gold and one million oz silver. The mine is expected to operate for at least ten years based on reserves of 1.93 million tons grading 0.198 oz gold and 7.08 oz silver per ton.

Two mining methods are being used to pull ore from the Amethyst Gold Breccia zone, the first of several zones to be developed on the Lawyers property. The zone is accessed by flat adit entry on five levels.

About 50% of the ore is currently being extracted from one large blasthole stope. The remainder is drawn from four shrinkage stopes, however, several other stopes are currently being prepared for production to bring the total to ten.

“It is the configuration of the ore zone that forces us to use the two different mining methods,” Girard said.

To lower mining costs, Girard said blasthole stoping is used in places where the ore zone is wide (up to 60 ft in places), and to minimize dilution. Shrinkage stoping is used where the zone narrows to an average of 15 ft (to a minimum of 5 ft).

An underground tour of the blasthole stope revealed good ground conditions which The Northern Miner learned prevail throughout most of the orebody.

The tour also revealed the necessity of assaying on-site for grade control as ore is not readily distinguishable. But mine superintendent Ned Reid said miners are usually able to visually recognize ore after several months’ experience.

Mineralization is found in the form of free gold and electrum in combination with native silver and argentite, occurring in quartz vein stockwork bodies and chalcedony breccia zones.

Actual mucking operations underground use trackless equipment, except from the AGB zone main haulage to the coarse ore bin.

The mill uses a conventional cyanide leach circuit and a Merrill- Crowe recovery process as the ore is clean and contains only minor amounts of base metal sulphide minerals. The solid tailings are then conditioned and passed through a flotation circuit to recover additional silver and gold values.

During the first four months of commercial production the Lawyers mill processed 58,974 tons, with metal recoveries averaging 92% for gold and 77% for silver.

Recoveries improved in June to 95% for gold and 79% for silver. Because seven days of production were lost due to strikes in April and May, cash operating costs per oz of gold equivalent increased to $268(US) per oz from $260.

One of the highlights of the mine visit was the pouring of a number of silver-gold dore bars, with the bars averaging 93% silver and 4%-5% gold.

During a celebration at the camp facilities, Girard and Cheni Chairman Malcolm Tascherau commended employees for their hard work to bring the mine on stream during one of the most severe winters in British Columbian history. The first dore bar was poured in early January.

But a 2-month delay in scheduled start-up (because of electrical problems in the ball mill and accelerated pre-production development in the AGB zone) resulted in a $7.8-million cost over-run. Another $2.4 million was added from increased costs in constructing the tailings dam and access road and a further $4 million from a variety of unforeseen contingencies.

To finance these additional costs, Cheni arranged a $6 million(US) gold loan and a loan equivalent to $5.3 million with its principal shareholder, Cheni S.A.

Operations manager Vernon Smith said the company still has a few challenges ahead, albeit minor ones.

The company hopes to get a better handle on its secondary blasting in order to move ore more efficiently to the coarse ore bin, and it intends to ensure that all mill buildings and components are ready for smooth operation this winter.

Cheni expects to produce ore from its AGB zone for another 2 1/2 years. A minimum of seven years of production is expected from the nearby Cliff Creek zone.

This zone will also be mined by two mining methods after being developed on three or four levels, with development work to be financed from cash flow. Exploration work will also continue on other known zones on the property, and possibly on other properties in the area in the future.

On the financial front, Cheni expects to repay its gold loan by the end of February, 1990, and to be debt free by about the middle of 1991.

]]>