Barrick brings Ruby Hill back to life (March 12, 2007)

Following a successful restart of operations, Barrick Gold’s (ABX-T, ABX-N) Ruby Hill mine in Nevada poured its first gold in February.

Barrick 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 open-pit, heap-leach operation, 5 km southeast of Eureka, 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-US$250 per oz.

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

Situated at the southern tail end of the Battle Mountain-Cortez trend, Ruby Hill operated from 1997 until 2002, when low gold prices forced Homestake to close the mine. The company spent US$65 million to build the original 3,175-tonne-per-day operation after proving up 755,000 oz. gold grading 3.39 grams in the West Archimedes deposit alone. The mine employed conventional milling and carbon-in-pulp recovery on the higher-grade oxide ore and heap leaching on the lower-grade oxidized ore.

The 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 grading 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 Ruby Hill, 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 restart Ruby Hill and mine the East Archimedes orebody, 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 Barrick’s Goldstrike roaster.