NEVADA SPECIAL — Newmont looks underground at Carlin

Open-pit mining has been a staple of the Carlin trend for 30 years, but Newmont Gold (NEM-N) is quietly introducing underground methods to the region.

The move toward underground mining was spurred by discoveries of high-grade mineralization at depth in many places along the trend.

Newmont has four underground mines operating in the trend, two of which — Carlin East and Deep Star — The Northern Miner recently visited.

Newmont started its underground operations in September 1993, when the underground group consisted of only six employees. Now, with four mines operating near capacity, the group has expanded to include 240 permanent employees plus 55 contract miners.

Carlin East is Newmont’s first underground operation. Construction of the portal began in late 1993, followed by production in 1995. Capital expenditures for the project exceeded US$20 million.

The mine produced 45,300 oz. gold in 1995, and production this year is projected at 95,500 oz. Grades are expected to average 0.42 oz. gold per ton.

Construction of the Deep Star mine began in February 1994. Newmont intended to sink a vertical shaft to gain access to the deposit but later opted to drive a ramp from the bottom of the Genesis pit down to the deposit “The decision cut about 500 ft. of elevation and saved the company US$25 million in capital costs,” said Douglas Jones, the mine’s superintendent.

Newmont completed construction on budget, with capital costs revised to US$40 million.

The Deep Star orebody is bounded on two sides by fault zones and lies 800 ft.

below the surface. Only the upper part has been mined, where a grade of 1 oz.

per ton was encountered. The extent of the mineralization at Deep Star has not been determined. The mine produced more than 51,400 oz. gold in 1995, and Newmont hopes to double that amount this year.

In 1993, reserves were calculated as being 798,400 tons grading 1.13 oz. (or 900,421 contained ounces). According to Scott Santti, Newmont’s general superintendent of underground operations, the minable reserves will grade about 0.9 oz. and last more than six years.

Newmont is also operating the Rain and the Carlin Main underground mines.

In 1995, the four underground operations produced 122,500 oz. gold, and production is expected to increase to 250,000 oz. this year.

Production levels topped 1,350 tons per day in 1995, and rose to 1,800 tons in 1996.

In the next few years, Newmont’s operation at Carlin will be transformed to an underground from an open-pit project.

Exploration programs

The company is also conducting several exploration programs.

Newmont spent US$38 million on exploration in North America in 1995, 70% of it on the Carlin Trend.

Drilling at the Leeville corridor is returning mineralization from a 30-70-ft. zone, which contains a minable grade of 0.34 oz. at a depth of 1,600 ft. Most of the deposit exists on Newmont’s 60%-owned property. Barrick Gold (ABX-T) holds the remaining 40%, which it acquired with the recent purchase of High Desert Mineral Resources of Nevada.

Newmont is also drilling on the Turf deposit, which is adjacent to Leeville.

Four of seven deep holes drilled there last year intersected mineralization grading 0.4 oz per ton.

In addition, significant deep mineralization has been encountered in the northern part of the trend, west of the Goldbug deposit. Goldbug contains about 800,000 oz. at a grade of 0.31 oz.

“Who knows? The Carlin Trend could be known as an underground district in the near future,” said Christian Clode, senior underground geologist.