Giant Bay will start process test in N.W.T.

The first large- scale test of Giant Bay Resources’ biotankleach process should commence this April in the Northwest Territories. The company recently concluded a joint venture agreement with Giant Yellowknife Mines to construct a 10-ton- per-day demonstration plant at the latter’s Salmita operation north of Yellowknife.

Giant is a member of the Pamour Group which is planning to process mine tailings in the Timmins camp.

Under the agreement, Giant will purchase 100,000 shares of Giant Bay at $1.10 per share on a private placement basis. There are an equal number of warrants attached which are exercisable at $1.75 within a year. Assuming the demonstration project is a success, Giant will be able to purchase an additional three million shares below market by 1990.

The demonstration plant will be added on to the Salmita mill at a cost of less than $450,000. Giant will mine 500 tons of refractory gold ore for test purposes from its Red-24 deposit which is located near the mill. It will provide the crushing, grinding, and gold recovery circuits plus operating necessities such as power, reagents and ancillary services. The company will receive a net smelter royalty for its efforts. Negotiations with other major mining companies are under way so exact details of the royalty agreement can not be divulged.

The process was developed specifically for refractory ores and concentrates. In the mine-milling process, preparation of the concentrate separates the sulphide minerals containing the precious metals.

In some cases, these concentrates grade as high as 40% sulphur. The slurried concentrate is passed through a series of stirred tanks inoculated with specially adapted strains of bacteria developed in the laboratory. The bacteria quickly destroy the sulphide minerals, liberating the precious metals for cyanidation recovery.

Waste products include solids containing oxidized,inert forms of iron, arsenic and sulphur. It is a very fast process when compared to conventional roasting.

Giant Bay is developing its Gordon Lake property east of Yellowknife. A letter of intent has been filed with an investor who will fund an exploration and bulk sampling program on the property. The investor will acquire preferred shares in a subsidiary in exchange for the funding. At a later date, Giant Bay plans to purchase the shares from the investor at a discount to the issue price.

The cost of the Gordon Lake program will be $750,000 to $1.5 million but Giant Bay’s outlay will probably only be about $200,000. The company announced plans to test mine several high grade ore shoots in December but contract bids were higher than anticipated so it cancelled the plan. The new bulk sampling program should begin early this summer.