Cameco pushes ahead with second gold mine

Concrete will start pouring later this month on the foundation of Cameco’s (TSE) second gold mill in northern Saskatchewan.

Situated in La Ronge Provincial Park, a popular canoeing and fishing area, the Contact Lake project is an unusual development by gold mining standards. For example, considerable priority was placed on protecting the forest cover (as reflected in extensive emergency procedures for forest fires and a narrow, winding road leading into the site). Other features include on-site power generation (costing about 10 cents per kW-hour, compared with 3 cents for other commercial customers in the province) and noise abatement designs for ventilation fans, diesel generators and the mill building (which is being constructed 3-6 metres below natural ground level).

Situated 60 km north of the town of La Ronge, the 700-tonne-per-day operation is part of a $35-million project. The joint owners are Cameco (66.67%) and Saskatoon-based Uranerz Exploration & Mining (33.3%), a wholly owned subsidiary of Uranerzbergbau GmbH of Germany.

Production of the yellow metal is scheduled to start in the first quarter of 1995 and total output for that year is projected to be 56,000 oz. The company’s first gold mill in northern Saskatchewan was constructed at Star Lake in 1986 and closed in 1989.

With initial reserves of about 1.5 million tonnes grading 0.23 oz. gold per tonne (good for six years of production), Contact Lake will be longer-lived than Star Lake and will enable Cameco to generate a quarter of its annual revenues from gold by 2010. (The Kumtor gold project in Kyrgyzstan will play a major role in this objective.)

During a site visit, The Northern Miner found that, as yet, no unusual problems have been encountered in underground development.

About 30 contract miners are on site at any one time, working around the clock to prepare the mine for full production. Crews were within about 150 metres of completing the 1,000-metre-long access ramp. Collared in September, 1993, it measures 5 by 3.5 metres and is being driven at a grade of about 15%. The total depth is about 300 metres.

On one level, in a development heading driven in ore, The Northern Miner was shown the very sharp contact between the ore in granite and the competent hangingwall granodiorites. The footwall contact, however, is more diffuse, said mine geologist Gregory Leniuk.

The Contact Lake deposit occurs in a highly foliated structure containing sericite with varying degrees of silica within a fine-grained, pink granite. Gold occurs predominantly with pyrite and pyrrhotite within the structure with trace amounts of chalcopyrite and sphalerite. No arsenopyrite is present. The deposit is relatively flat-lying (dipping at just 60) and plunges to the southwest at about 50. Exploration potential exists both downplunge and along strike to the east, Leniuk explained.

Studies conducted by the University of Saskatoon have distinguished four distinct phases of quartz vein mineralization.

Cameco plans to carry out 2,600 metres of drifting this year on two levels, which are 40 metres apart. By year-end, one shrinkage and one blasthole stope will be fully developed. The blasthole stope, which will be the largest in the mine, contains about 150,000 tonnes of ore.

Stopes will be mined longitudinally for 45-50 metres between pillars. Holes will be 4.5 inches in diameter, but a drill rig has not been selected as yet. Blasting costs will depend on the amount of water infiltrated into the deposit.

“Hopefully, we can get away with using just Amex, but we will probably need some stick powder because there is some water present,” said Project Manager Robert Wyka.

Stopes will be backfilled with uncemented tailings from the mill. “We hope to blast within 2-3 metres of the backfill,” he added. No plans have been made to use paste fill, but Wyka said it may be possible to pump tailings at 60-65% solids without special (i.e. expensive) pumping equipment. Backfill will consume about half of the tailings produced by the mill, thereby reducing the size of the tailings empoundment area required on surface.

Mineable ore widths vary from 1.5 to 15 metres, with about 75% of the reserve tonnage amenable to blasthole mining. The remaining (narrower) reserves will be mined by shrinkage stoping.

At the time of our visit, a ventilation raise, measuring 5 by 4 ft., was being driven by Alimak from the bottom level of the mine to surface. The first three years of mining have been contracted to Procon mine contractors of Burnaby, B.C. Currently, 26-tonne Eimco Jarvis Clark trucks are used to haul muck to surface, but Cameco plans to acquire 40-tonne Toro units, said Mine Foreman James Bondesen.

By year-end, contractors will have about 1.5 months of ore stockpiled on surface for mill startup.

There are two other positive aspects of this project:

* The orebody is geometrically simple, shallow, hosted in very competent rocks and sufficiently wide to allow for low-cost mining;

* Ore is medium-grade and much of the gold occurs in quartz and is “free” milling.

Metallurgical testing performed at Lakefield Research in Ontario, on about 45 tonnes of ore, showed that about 60-80% of the gold can be recovered by gravity methods. Detailed engineering and design of the mill was done by Kilborn Engineering.

An unusually wet spring in Saskatchewan has delayed site preparation work somewhat and this could have an effect on the original milling schedule. The construction contract for the mill had not been let at the time of the site visit on June 22.

“It’s going to be tight to have the mill constructed on time,” Wyka acknowledged. “The guys will have to hustle.”

Westward Explorations (VSE), recently sold its 20% interest in the Contact Lake project to Cameco and Uranerz for an undetermined amount. Payments, which could total $4.3 million, are to be made in five equal instalments, 60 days after commercial production commences.

— Patrick Whiteway is editor of “Canadian Mining Journal” and “Mining Explained.”