American Gem producing sapphires in Montana

From 1906 to 1943, this state was the world’s largest supplier of commercial-grade sapphires. Now, some 50 years later, with the commissioning of its first sapphire processing plant, American Gem (TSE) is poised to put Montana back on the map as “America’s gemstone state.”

The Moffat Gulch operation, situated on the company’s Gem Mountain property southwest of Helena and recently visited by The Northern Miner, will be the first in a series of plants to be put into production within the next year. Over the past two years, American Gem has acquired nearly 75,000 acres of patented, state and federally owned lands, and it now controls most of the historic sapphire-producing regions in Montana. The past-producing areas include Eldorado Bar, Dry Cottonwood Creek and Gem Mountain. Sapphires were first discovered on Gem Mountain in 1892, at Rock Creek. During the period 1899 to 1943, several deposits were mined, and it is estimated that the property yielded some 2.2 billion carats of stones. Most of the stones were used for industrial purposes, primarily as jewel bearings in watches and other precision instruments. Only a negligible portion of these sapphires were sold for jewelry use because of their pale, rather unspectacular natural colors. Until John Emmett and Troy Douthit, of Crystal Research in California, developed sophisticated heat-treatment technology for Montana sapphires several years ago, there

was little interest in commercially mining the Gem Mountain, or for that matter any other Montana sapphire deposits.

The Moffat plant is processing alluvial material from the Moffat Gulch drainage system, where, over long periods of time, sapphires (eroded from felsic intrusive rocks) were concentrated in erratically distributed channels or “streaks” at the bottom of the stream bed. As witnessed on our recent site visit, Moffat Gulch is just one of several sapphire-bearing stream courses on the 50,000-acre Gem Mountain property.

“Our testing reveals that large tracts of high-grade virgin ground still remain,” American Gem Chairman Gregory Dahl said. Apparently previous operators only tested and worked the modern day drainage systems, and initial testing indicates the widespread occurrence of sapphires outside the modern drainages.

A preliminary testing program was carried out earlier this summer by Watts Griffis and McOuat (WGM), a Toronto-based geological consulting firm, to delineate potential reserves of sapphire-rich gravel.

During the first part of the program, 94 test pits were excavated across the bottom of several modern drainages at intervals of between 1,000 and 2,000 ft. The average sapphire grade of the 206 samples collected from the pits was 21.59 carats per cubic yards, with an average depth to bedrock of 8 ft. WGM estimated that the test area, which covers 74 acres, contained an inferred resource of 15.1 million carats.

To test the potential of hilltop areas peripheral to the drainages, WGM hand-excavated 385 pits to a depth of 2.5 ft. Of the pits excavated, 127 contained sapphires. The average grade of these pits, based on 148 samples, was 27.77 carats per cubic yard. WGM calculated that the mineralized area, which covers 486 acres, contains an inferred resource of 15.4 million carats in just the first 2.5 ft. of gravels.

The total inferred and potential resource estimated by WGM for the initial testing program on just a small portion of the 50,000-acre Gem Mountain property is 35.5 million carats in 3.7 million bank cubic yards of gravel. Additional bulk sampling is being carried out to upgrade the resources from an inferred to indicated category.

In the meantime, sapphire-bearing gravels are being excavated from Moffat Gulch and processed on-site in a 125 cubic-yard-per-hour wash plant. Dahl said that a typical wash plant operation, including heavy equipment and a generator, costs about US$400,000 to set up.

During the initial start-up period, Dahl expects that the plant will operate only at about two-thirds capacity.

The processing cycle involves the following steps:

n Mineralized gravels are extracted with a 2-yd. excavator and then trucked a short distance to the wash plant.

n The gravel is dumped into a wet vibrating grizzly that reduces the material to four inches in size. The gravels are then passed through a second grizzly that removes the two-inch-plus material, while material fewer than two inches in size is passed across a nugget trap to collect any potential coarse gold. n The two-inch-minus fraction then goes through a 5-by-30 ft. trommel which screens the material into 1-inch-plus and 1-inch-minus fractions. The trommel is used because of the