Wheaton River put to test at Golden Bear

Despite a stormy past, the Golden Bear mine in northwestern British Columbia is being given a second chance by Wheaton River Minerals (TSE).

Wheaton reached an agreement with Homestake Mining (NYSE) this summer to buy the major’s 85% interest in North American Metals (VSE), the owner of the mine. The price: $1.45 million.

The purchase included all loans owed to Homestake, giving Wheaton more than $56 million in North American Metals debt (115,886 oz. gold loan) on top of the majority shareholding.

Stockpiled ore at Golden Bear is currently being milled and Wheaton expects underground operations to be up and running before the surface pile is depleted.

All material mined to date has come from the Bear Main deposit, a shear-hosted epithermal vein system. It occurs on a north-trending and steeply east-dipping subordinate structure of the Ophir Break, a major regional fault which has been traced for about 20 km.

The mine lies at the base of a steep, near-alpine valley. The deposit itself strikes into the north side of the valley, about 500 vertical metres directly above Muddy Lake and the adjacent mill site.

Previously, ore was mined using open-pit techniques and underground, underhand cut-and-fill (initially using tailings sand fill and later reverting to waste-rock fill), with ore transported down the mountainside by a tramway.

A subsequent expansion of the original pit limit in 1991 prompted the company to dismantle the tramway, and ore is now hauled by 30-tonne truck down the mountain.

Remaining reserves in the Main Bear deposit total about 275,000 tonnes grading 15.8 grams gold per tonne.

Vic Jutronich, president of Wheaton River, estimates current minable reserves at about 165,000 tonnes grading between 20 and 23 grams gold. The steeply dipping deposit varies in width, ranging up to 14 metres and averaging about six metres over its 175-metre strike length within the remaining Main Bear reserve area. The vertical extent of the reserve is about 46 metres, extending from the 1,400-metre elevation to the 1,446 level at the top of the deposit.

Wheaton River is developing the Main Bear reserve with sub-levels at 10-metre intervals and longhole stoping should be in full swing by the end of September. Stope ore extraction will occur at draw points on the 1,411 level, with stope drilling and blasting starting in the upper north end of the zone and proceeding downward and to the south.

Although Homestake cited bad ground conditions as one of the reasons for suspending underground mining operations earlier this year, rock falls have not been a problem, mine captain John Lanteigne told The Northern Miner on a recent visit.

The hangingwall can be blocky, Lanteigne explained, and as a result all waste development is done in the footwall. Strapping is used extensively underground and, if it’s put up right away, the ground holds up well, although some areas do require screening, he added

Based on current reserves in Bear Main and a milling rate of 400 tonnes per day, the mill has sufficient feed to last into late next year. Other reserve areas on the property include the Bear North (an underground zone on-strike to the north of Bear Main) and the Fleece Bowl zone (an open-pit target about two kilometres north of Bear Main).

Undiluted reserves in all categories in Bear North are estimated at 121,500 tonnes grading 14.2 grams gold.

Undiluted total reserves in Fleece Bowl are estimated at 191,000 tonnes grading 13.6 grams gold. A strip ratio figure was unavailable. Jutronich said the company is evaluating the Bear North and the Fleece zones for future mining potential as well as the area below the 1350 level on the Bear Main zone.

In addition, the company is drilling the second of three holes on the Bear South Deep target, now known as the Grizzly, which lies a few hundred metres below and to the south of Bear Main. Drilling in 1992 returned two holes at what is hoped is the top of a larger zone. Hole 92-162 intersected 14.37 grams gold and 23.48 grams silver while Hole 92-166 intersected 11.33 grams gold and 22.96 grams silver, each over a diluted mining width of 1.8 metres. The talus slope of a rock slide renders drilling down to the zone difficult and resulted in the first hole being lost. If the drilling returns even one good hole below 92-162 and 92-166, Jutronich said he would like to drive a 550-metre-long decline down to the area from the side of the mountain to evaluate the zone further.

Kent Morton, mill manager, said operations in the mill are running smoothly. Shortly after opening, the mine had problems with the roaster feed, and this was followed by the failure of a major component in the roaster itself. More than half the Golden Bear ore is refractory. The gold is tied up in submicroscopic arsenide minerals (primarily arsenopyrite) and, as a result, the ore requires roasting.

The Golden Bear mill utilizes dry grinding with an air-swept, semi-autogenous grinding mill and an open-circuit ball mill. Ground ore is roasted at 500C, quenched and pumped to a thickener. Off-gases from the roasting process enter a scrubber which removes 99.98% of the sulphur dioxide. A

continuous-emission-monitoring system was put in place in February, 1992, and sulphur dioxide levels are now running at about 10% of permit levels. Following thickening, gold is removed using conventional carbon-in-pulp technology and pressure Zadra stripping.

When The Northern Miner visited the site, Wheaton River completed a gold pour, netting a dore bar weighing about 25.5 kg.

Morton said gold recoveries are averaging about 91-92% and availability has been pushing 95%, a far cry from a few years ago when the mill was lucky to achieve a 70% availability.

Turning to costs, Wheaton expects to do well with the operation. Cash operating costs are estimated at $123.27 per tonne including mining, milling, maintenance and administration (equivalent to about US$260 per oz.). Gold output to the end of July totaled about one million grams (33,000 oz.) at a cash cost of about US$7.33 per gram (US$228 per oz.) and the company expects to meet its production target of 1.87 million grams (60,000 oz.) per year without difficulty.

Wheaton River is evaluating how it will realize a return on its investment in North American Metals. One option is for North American to begin paying off the old Homestake loans it now owes Wheaton. However, since Wheaton paid only $1.45 million to acquire the shares and the loan, any money flowing into Wheaton would likely be taxable.

In the event additional economic reserves cannot be outlined beyond the Bear Main tonnage, the company has formulated a closure plan. The total cost, including reclamation of the road and employee severance, is estimated at $3.7 million. The estimate does not take into account the salvage value of the mine equipment and Jutronich noted that local natives would likely want the road to be left as is were the mine to be shut down.

North American has about $3.1 million in various reclamation and closure bonds.

Repadre Capital (VSE) holds a 7.5% royalty on production from the mine, up to a total payment of $1 million, at which time the royalty drops to 2%.