U.S. REPORT Denton-Rawhide to produce 80,000 oz. annually

The Denton- Rawhide mine is named after the town of Rawhide, a turn-of-the- century Nevada boom town which at its peak had over 10,000 inhabitants. The real money was likely made in the brothels and bars, however, as relatively little gold was actually found in the area. The only reminder of those boom times are some crumbling foundations, but the quest for gold has been revived with miners using modern mining techniques. The Denton-Rawhide mine, about 40 miles southeast of Fallon, is owned 51% by Kennecott, the operator, and 49% by Kiewit Mining Group. In return for providing 49% of Kiewit’s project costs, Plexus Resources (TSE) earned a 49% interest in Kiewit’s share. Plexus also has a 2.45% net smelter return royalty.

Mineralization occurs in several pod-type ore zones along a northwest trending area about 8,000 ft. long and 1,200 ft. wide. The ore zones are in intensely altered andesite along the hangingwall of a rhyolite intrusion and are characterized by abundant closely spaced veining. Ore also occurs in porous tuffs and volcaniclastic sedimentary rocks with pervasive silicification but little or no veining. Oxidation in the area extends to depths of up to 700 ft.

Currently defined minable reserves are estimated at 29.4 million tons grading 0.04 oz. gold and 0.36 oz. silver per ton. There is an additional 29.9 million tons of material categorized as “lean ore,” which grades 0.015 oz. gold and 0.23 oz. silver. Lean ore will not be crushed, but put straight on to the leach pads. The stripping ratio, including minable reserves and lean ore, is about 0.74-to-1.

The reserves are in two deposits; the Crazy Hill and the Murray Hill. The Crazy Hill deposit’s ore zone — now being mined — is about 1,000 ft. long, 500 ft. wide and 350 ft. deep. Sulphide mineralization extends to depth below the ore zone.

Some sulphide ore is encountered during the mining operations and is stockpiled for possible milling at a later date. The joint venture does not presently have any plans to build a sulphide mill.

Mineralization in the Murray Hill deposit dips to the southwest, is 500-1,000 ft. in width and has a strike length of about a mile.

The main exploration target on the property is the Hooligan Hill, which Thomas (Toby) Mancuso, chief geologist, said could end up merging with the Murray Hill pit.

A 42,500-ft. drilling program is planned for 1991. The drilling will further delineate the Murray Hill reserves and include stepout drilling in the Hooligan area. Mancuso said there was also an additional 5,000 ft. of drilling set aside for other exploration targets.

Mining of the Crazy Hill began in January of this year with the first gold poured in April. Capital cost of the mine and leach facilities was about US$15 million. Dennis Kerstiens, general manager, expects the mine to produce about 38,000 oz. of gold this year, rising to a projected yearly output of about 80,000 oz.

Operating costs are estimated at US$200-225 per oz. gold including silver credits. Typically, Kerstiens said the mine produces about four times as much silver as gold.

Although ore contains up to 10 times as much silver as gold, silver recoveries are very low at about 25% while gold recoveries have been averaging about 80%.

The mining fleet consists of a 13-cu.-yd. loader and four 85-ton trucks. Ore is hauled a short distance either to an ore stockpile or directly to a dump pocket which feeds a jaw crusher and cone crusher. During The Northern Miner’s visit, the mining loader was down for maintenance, so the stockpile loader was being used for mining operations.

The mining operation has encountered some problems with clay causing sloughing of the pit walls, although it is relatively minor. Mancuso pointed out that the clay actually proved to be something of a blessing in disguise because it could be used for leach pad construction.

After crushing, the material is run through a sampling tower, lime is added and it is conveyed to a radial stacker on the leach pad. The material does not require agglomeration, which is unusual for a heap leach operation. Mancuso said tests done on the ore showed that the recoveries were higher without agglomeration.

Gold is recovered from the pregnant solution using a standard Merrill-Crowe plant.

Water, a valuable commodity in this extremely arid environment, must be pumped from a 250-ft. deep water well four miles away in the valley below the mine site.

Ultimately, the mine will have 14 million sq. ft. of pad space, all of which is now permitted. There is currently about 1.2 million sq. ft. of pad space developed with more being constructed to bring the total up to about 3 million sq. ft.

The mining rate is presently about 2.5 million tons per year and the joint venture is looking at increasing the production to three million tons per year. Mancuso said the increase would not require any expansion of the crushing capacity, although as many as two additional haul trucks might be needed for a short period. If required, the trucks would be leased.