Heap leach paying off for Grandview

The economy of California is larger than many industrialized nations including Canada’s. And in recent years, gold mining has once again become an integral part of the state economy which for a time was closely allied to the yellow metal.

Vancouver-based Grandview Resources, a conservative company in many respects, has developed what should become a profitable heap leach operation in California’s legendary Mother Lode district. Leaching began last October on a small-scale basis and full production of 5,500 oz to 6,000 oz gold per month should begin this July or August.

That’s quite an accomplishment for a company that only acquired the property in the spring of 1984 and has been working diligently towards production ever since. You certainly can’t argue with the timing either, given the present gold price. The average operating cost is expected to be approximately $208 (US) per oz about $12 lower than the national average.

Although gold generally occurs in small quantities at the Carson Hill mine (0.046 oz gold per ton), one nugget found there weighed 195 troy pounds, the largest ever discovered in North America. In any event, it was melted down after being exhibited at the Paris exhibition of 1856.

At full capacity, the mine should produce around 72,000 oz gold per year and Grandview President, Olaf Tolpinrud predicted the final capital cost will be approximately $13.5 million (US). The mine was financed mostly by equity (primarily out of Europe) for the simple reason that European investors stay with their investments longer, he added.

On a visit to the property, The Northern Miner talked to several American investors who had also been involved from an early stage and they too had the same philosophy; obviously they were betting on sound management which Grandview and its operating subsidiary have in abundance. The Bank of America demonstrated its faith in the project by loaning Grandview $6 million of which $4.7 million has been drawn down; but that debt is offset by working capital.

Last year, the company raised approximately $17 million (US) for the project including the bank loan.”One result of this successful funding activity has been our ability to retain 100% control of the marson Hill mine-without incurring a massive debt load,” said Mr Tolpinrud.

Mining is under way at 26,000 tons per day which includes 7,000 tons of ore on a five day per week basis. The strip ratio is about 2:1 and mine run material has been averaging about 0.052 oz gold per ton, said W. (Bill) Williams, general manager. Mining is done on a contract basis, in this case by N.A. Degerstrom which is also under contract to Pegasus Gold, one of the most successful heap leach producers in the United States.

One leach pad (1.2 million ton capacity) is currently being sprayed and a second (4 million tons) is under construction which will allow the plant to operate at full capacity. At the moment, the recovery plant is functioning at about one-third of capacity which is 1,200 gallons of solution per minute.

Mine reserves total some 16.1 million tons averaging 0.046 oz gold and within that inventory is a higher grade portion of 11.5 million tons grading 0.057 oz. Further exploration is planned in 1988 and the company is optimistic it will be able to increase mine life to more than 15 years. New acquisitions are being sought in the area and regulatory authorities complimented the company on being such a good corporate citizen at the official opening. This will certainly make it easier to develop other properties in the region.

All waste material is directed towards leach pad construction and about four specific types are required to build embankments for the pads. The ore has a fairly high carbon content, which impacts on leaching time, and the gold is relatively coarse for this grade orebody. Some of the gold occurs in pyrite. The leach cycle is fairly slow (about 1.5 years), however, about 60% of the gold comes out within 90 days then the recovery curve flattens out. Most of the gold should come out within a year but cleanup takes extra time.

Because of the topography, leach pad construction is expensive and site selection limited. So the pads will be heaped in 15-20 ft benches to possibly 100 ft or more. Fifteen ton trucks are used to dump material on leach pads to avoid compaction and the top six feet is ripped to ensure adequate percolation. The ore does not consume much cyanide and Mr. Williams noted that the pH (a measure of the acidity of a solution) is much more alkaline in nature than acidic. Ore is crushed to minus 1.5 in. and no agglomeration is required because there is no clay fraction.

There is no arsenic in the ore and the pyrite content averages about 1/2% although some runs higher. About four pounds of pebble lime is added per ton of ore at the crusher which keeps the pH between 10.5 and 11.5. This prevents the formation of potentially hazardous cyanide gases and lowers cyanide consumption. Incidentally, cyanide consumption is an important element in the economics of a heap leach operation because sodium cyanide costs about 70c per lb.

Pregnant solution from the leach pad is collected and pumped to the carbon plant where the precious metals are extracted. Gold and silver are recovered by adsorption onto activated carbon columns which are stripped. The pregnant strip solution flows through a series of electrolytic cells and the gold and silver are deposited onto cathodes of steel wool which are melted down into dore bars and then refined.

Grandview has a 100% interest in the mine subject to a floating rate net smelter return of from 2.5% to 5%.