Barrick brings Ruby Hill back to life (February 27, 2007)

Following a successful re-start of operations, the Ruby Hill mine in Nevada poured its first gold in February.

Barrick Gold (ABX-T, ABX-N) has brought the past-producer back into production at a capital cost of under US$75 million, including almost US$30 million in new mining equipment and processing upgrades.

The mine is an open-pit, heap-leach operation that is 5 km southeast of Eureka and employs about 110 people. It is expected to produce in the neighbourhood of 120,000 oz. gold in 2007 at cash costs of US$240-250 per oz.

The mine is exploiting the East Archimedes deposit, a deeper continuation of the ore mined previously. Proven and probable reserves are estimated to contain close to 1.1 million oz. in 17.7 million tonnes grading 1.89 grams gold per tonne. Another 53,000 oz. averaging a grade of 3 grams is categorized as measured and indicated.

“It’s great to see new life at Ruby Hill,” said Greg Lang, president of Barrick’s North America region, in a prepared statement.

“Eureka has seen many ups and downs over the years,” added Randy Buffington, the mine’s general manager. “Thanks to a lot of hard work by our people, we’ve brought steady jobs and other economic benefits to this community while maintaining an excellent safety record. We really appreciate the support of our neighbours over the past several years.”

Situated at the southern tail end of the Battle Mountain-Cortez trend, Ruby Hills operated from 1997 until 2002, when low gold prices forced Homestake Mining to close the mine.

Homestake spent US$65 million in constructing the original 3,175-tonne-per-day operation after proving up 755,000 oz. grading 3.39 grams in the West Archimedes deposit alone.

The mine utilized conventional milling and carbon-in-pulp recovery on the higher-grade oxide ore and heap-leaching on lower-grade oxidized ore.

The Ruby Hills mine was a 1992 grassroots discovery. While exploring the historic Ruby Hill mining district, where past mining had focused on base metal deposits rich in precious metals, Homestake geologists discovered oxide gold while drilling what turned out to be the West Archimedes zone.

Intercepts from the new discovery, hidden under alluvial cover, included 133 metres of 5 grams gold.

Homestake drilled off the West Archimedes zone and discovered deeper oxide mineralization in the East Archimedes zone.

East Archimedes consists of Tertiary-age disseminated gold mineralization hosted primarily in Upper Cambrian to Lower Ordovician miogeoclinal rocks.

This sequence is dominated by fine-grained, impure carbonate rocks and silty to shaly limestone units.

Post-mineral uplift exposed portions of East Archimedes resulting in a relatively deep level of oxidation, with minor sulphides at depth. In subsequent basin and range faulting, the East Archimedes deposit was buried under as much as 150 metres of Quaternary alluvium cover.

Deeper drilling by Homestake also resulted in the discovery of higher-grade sulphide mineralization in the East Deep Archimedes zone, in which gold is associated with massive sulphides, as well as skarn and replacement alteration.

Barrick merged with Homestake in late 2001 and acquired the Ruby Hill mine, which was scheduled to close in 2002 after the West Archimedes deposit was mined out.

Plans to mine the adjacent East Archimedes zone were temporarily shelved. With rising gold prices, Barrick reached a decision in 2004 to re-start Ruby Hill and mine the East Archimedes ore body, located under and just to the east of the original open pit.

Oxide ores will be processed at the existing heap-leach facility, with plans to treat higher-grade sulphide ores at the Goldstrike roaster.