Early 1988 production Canamax Ketza R. target

With sufficient oxide reserves for a 5-year mine life, Canamax Resources is completing a feasibility study on its Ketza River project where production could begin in early 1988. Located south of Ross River, Yukon, the property is jointly owned by Canamax and Pacific Trans-Ocean Resources.

Last year the joint venture completed a $5.1-million underground and surface exploration program which Vice-president J. Walter Sellmar notes was “aimed primarily at determining the mineability and better definition of the high grade oxides.” Those reserves now total some 550,000 tons averaging 0.53 oz gold (undiluted), which he claims is conservative.

A number of other oxide zones are known to exist including the Break zone which was discovered last summer and is still open to extension at depth. The zone will be evaluated in more detail this year along with three new surface oxide zones where values have reached in excess of 0.5 oz gold.

Sulphide reserves in the Peel zone, which total some 550,000 tons at 0.26 oz gold, will not be a significant factor in a production decision, although they might be important later in the mine’s life. In total, the oxide and sulphide reserves represent a mineral inventory of 1.1 million tons grading 0.4 oz gold per ton and he says the potential for expanding both these categories is “excellent.”

Mr Sellmer says another $1 million will probably be spent on exploration this year which will be over and above the $20 million capital cost for production. If all goes according to schedule, site preparation could begin in April and construction work sometime in July. The exploration program would run in concert with mine construction which would be completed in early 1988.

An in-house feasibility study is nearing completion and Mr Sellmer confirms it will be reviewed by Wright Engineers of Vancouver. That consulting firm has already checked out Canamax’s estimate of oxide reserves and he says verbal assurances have been given that they are conservative.

Metallurgical studies have demonstrated that recoveries for sulphide material will be lower (70%-75%) but the mill flow sheet will be designed to accommodate these type reserves. From the mining standpoint, the sulphide reserves are more competent so there might be some cost savings there which would partially offset the lower recoveries, he points out. In any event, it will probably be a few years before any decision is made on those reserves, he adds.

Three mining methods are being considered: drift and fill, cut and fill, and square set. The first and last methods would allow almost 100% extraction of ore resrves.

Mill rate will probably be about 350 tons per day initially, expandable to 500 tons with minor modifications. It will be a cyanide plant with carbon-in-pulp extraction and electrowinning. Total operating costs will be around $120 per ton and the mine would produce around 50,000 oz of gold per year.

The joint venture has submitted information for its water licence and a public hearing will be held in March. Canamax’s share of costs could be funded either by equity or debt, but regardless of the method, a “bankable” feasibility study will be required, Mr Sellmer says.