Battle Mountain upgrades Phoenix

Houston, Tex.-based Battle Mountain Gold (BMG-N) plans to expand the mining rate for its proposed Phoenix project by 40% to 30,000 tons per day.

Average production at the project, situated in northern Nevada, is expected to grow to 385,000 oz. gold annually over a mine life of 13 years. Significant quantities of silver and copper will also be mined.

Also, the pretax internal rate-of-return is to climb to more than 18%, based on a gold price of US$300 per oz. The higher rate-of-return will reduce the payback period to five years.

Cash operating costs will fall to US$175 per oz., from earlier estimates of US$185 per oz., and total production costs are now pegged at US$236 per oz.

Under the improved mine plan, Battle Mountain will incorporate new technology to improve mill recovery. Previous mill plans eschewed the use of cyanide, and high copper values rendered a conventional process uneconomic.

The new technology, developed by Lakefield Research and Teck Resources, is a cyanide recovery system known as SART, which stands for sulphidization, acidification, recirculation and thickening.

Ore is ground and sent through a primary gravity circuit to collect coarse gold, after which it is sent through a flotation circuit. The flotation concentrate is then reground and put through a copper circuit. The copper cleaner tails, representing roughly 22% of the original material, are then leached in a cyanidization process. The pregnant cyanide solution then goes through the SART process, in which sulphuric acid is added to drop the pH level to 5. Sodium hydrogen sulphide is added to precipitate the copper and silver in a synthetic chalcocite sludge, which is sold as a marketable product.

The remaining gold-bearing solution goes to carbon columns for stripping. The leftover solution is neutralized with lime, and returned to the beginning of the leach circuit.

In all, the SART process improves gold recovery by 6%, to 85%; silver recovery by 13%, to 52%; and copper recovery by 4%. to 84%.

Heap leaching is to play a minor role at Phoenix, representing 10% of production over the projected mine life.

In 1999, Battle Mountain completed 150,000 ft. of drilling at Phoenix. As a result, proven and probable reserves grew to 156 million tons averaging 0.039 oz. per ton, equivalent to 6.2 million oz. gold. Also, the stripping ratio fell to 2.1-to-1 from 2.4-to-1.

Battle Mountain believes the reserves could potentially be increased by additional drilling, particularly in the Copper Basin area, 7 miles north of Phoenix.

Expanding the mining rate increases the estimated capital costs for the mine to US$189 million, up from US$162 million. But, at the same time, Battle Mountain has doubled the net asset value of Phoenix.

The company expects to complete the final feasibility study during the second quarter. Permitting continues, with a draft environmental impact statement anticipated during the summer. Assuming timely completion of permitting and construction, Battle Mountain envisions commissioning the operation during the first quarter of 2002.