Midas’ golden dreams for Golden Meadows

Midas Gold (MAX-T) has outlined a positive preliminary economic assessment (PEA) for its Golden Meadows gold project in Idaho, 153 km northeast of Boise.

“It’s a very mining-friendly jurisdiction,” Stephen Quin, Midas’ president and CEO, commented during a conference call.

In the north lies the Coeur d’Alene district, which hosts silver-lead-zinc mineralization and an extensive production history. In the southeast, there’s a phosphate-mining district with large-s cale operations. In the centre, there’s a copper-gold-molybdenum belt, where the Golden Meadows ­property is located.

The Golden Meadows property has been mined primarily for gold from surface and underground for nearly 100 years, and has seen noticeable disturbance and environmental impact. Quin emphasized that the PEA looks at ways to reduce the effects of its proposed mining activities, and leave the site with better fisheries and wetlands.

The study envisages the conventional open-pit mining of three deposits named Yellow Pine, Hangar Flats and West End — all located within 3 km of each other.
The deposits contain gold with zones of antimony and silver mineralization.

Midas is considering employing different metallurgical processes to treat the deposits’ oxide and sulphide mineralization that would feed a 20,000-tonne-per-day plant.

The oxide material is amenable to milling, followed by vat leaching to extract gold and silver.

The study recommends treating the milled sulphide mineralization with sequential flotation to generate two products: an antimony concentrate that would be shipped to a third-party smelter, and a gold concentrate that would be further processed to produce gold-silver doré.  

“The bottom line is that it’s a 20,000-tonne-a-day operation, with a single-circuit gyratory-SAG-ball mill with flotation of sulphides producing — when the [antimony] grade is high enough — an antimony concentrate first, and a gold-flotation concentrate for the entire life of the project,” Quin explained on the call. “The antimony will be shipped off-site and the gold concentrate will be processed on-site, with a concentrate-only autoclave facility.”  

The cost to take Golden Meadows into production is US$1.18 billion, including initial capital costs of US$879 million and US$303 million in sustaining capital.

The PEA envisions recovering 101 million tonnes grading 1.72 grams gold and 0.08% antimony to produce on average 348,000 oz. gold and 6.4 million lb. antimony per year throughout the mine’s 14.2-year life.

Life-of-mine cash costs come in at US$425 per oz. gold net of by-product credits.

However, during the first eight years, the company expects to see higher annual production and lower cash costs. It plans to begin with mining the larger and higher-grade Yellow Pine deposit.

Commenting on the open-pit sequence, Quin said, the Yellow Pine ore would be mined first because it presents the highest grade, lowest strip ratio and the best metallurgy, plus the highest by-product credits out of the three deposits.

Sulphide gold grades average 1.65 grams gold at Yellow Pine, 1.61 grams gold at Hanger Flats and 1.44 grams at West End.

Midas plans to process some ore from Hanger Flats in years three to five, but will defer mining most of that deposit until the last two to three years, because it has the highest strip ratio, Quin noted. The majority of West End — the lowest-grade deposit — would be mined towards the tail end, from years nine to 13.

Using a 5% discount rate and US$1,400 per oz. gold price, Golden Meadows has a post-tax net present value of US$1.48 billion and internal rate of return of 27.2%, with payback expected within three years.

The project will also largely benefit the local community, Quin said, underscoring that the company is already Valley County’s largest private employer.

“The PEA really illustrates the importance of this project to the local area, which are two of the highest unemployment counties in Idaho: Valley County, and neighbouring Adams County,” Quin noted, adding that both have jobless rates hitting nearly 17%.

The proposed mine should create 400 direct jobs over its 14-year life. Once up and running, Golden Meadows could generate US$1.2 billion in taxes. “This is a significant project on an Idaho-scale,” Quin commented.

Midas aims to update the project’s resource early next year, before putting out an updated PEA or a prefeasibility study.

Whatever the document ends up being, it should support the permit process in the latter half of next year, Quin said.

The company expects that it will need 50 permits or more before it can begin.

On the PEA news, Midas gained 5% to close Sept. 5 at $3 apiece.