Through a period in the late 1980s when too many new domestic gold projects failed because the operators did not adhere to even elementary principles in proving up reserves and developing mines, operators at the Casa Berardi followed the rules of development to the letter. The co-owners, Golden Knight Resources and Inco Ltd.’s ambitious gold unit Inco Gold, have built two underground, ramp-access mines in northwestern Quebec. The first one, Casa Berardi East, was commissioned in 1988. The nearby West mine was declared a commercial producer on April 1 of this year. Only a few months ago, the co-owners upped reserves at the West mine. They then announced, without fanfare, that the 1,200-tonne-per-day capacity might be expanded to 1,800. While the output goal this year remains 90,000 oz. (2,800 kg), this operation probably will join the 100,000-oz. (3,100-kg) club next year.
What Inco did in bringing this property to production was to assume that it did not have an orebody; at least, not until hard evidence to the contrary came from underground. It appears other would-be producers had it backwards. They announced production decisions and then went underground only to find they were lacking an orebody of the dimensions or grade predicted from surface work. Wishful thinking, a flow-through-fueled gold equity market, inexperienced geologists — all these factors entered into the many failures too. Now, pitting the performance of the upstarts against that of the experienced and mighty Inco isn’t altogether fair. The people who were running Inco Gold certainly did not want to disgrace the parent by fumbling its first start-up attempt. You can imagine they were cautious, extremely cautious. But that’s as it should be for every development project.
Aurelio Petracchi, the Casa Berardi mine manager during development of the East mine and now Inco Gold’s vice-president of production, told us that plenty of verification work was done before Inco Gold entertained thoughts of commercial production. He had seen optimism turn to despair at other projects. For example, in 1986 and 1987, Inco was custom-milling ore for clients at its McBean mill near Kirkland Lake, Ont. Several exploration customers brought in bulk samples to confirm grades from surface drilling. In two or three cases, the sampled gold grade was only 50% to 60% of what had been expected. “That opened our eyes considerably,” Petracchi said.
Inco Gold took precautionary measures at Casa Berardi East, silling on the 100-metre level and blasting out a 40,000-tonne bulk sample for tests in a sampling tower. And following the basic rules of pre-feasibility work, it ran bulk density tests, cut high assays, submitted its development and production plans to an outside consultant for independent analysis, and exercised caution in dilution estimates, geostatistical reserve calculations and long-term mine planning.
Such are the abcs of mine development.
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