Golden Goose sees heap-leach potential at Magino

The past-producing Magino gold mine near Wawa, Ont., has the potential to become an economic heap-leach operation, says Irwin Miller, president of Golden Goose Resources (GGR-T).

But Miller’s opinion isn’t based on the optimism inherent to most mining executives. In explaining his view, he cites metallurgical work carried out in the 1980s by Witteck Development, and more recent tests conducted by Lakefield Research. Both studies indicated that gold recoveries of 70-75% are attainable.

Golden Goose now plans to proceed with a more comprehensive test program, headed by a renowned research facility based in Reno, Nev. Results are expected this fall.

In the meantime, the junior company retained BLM Bharti Engineering to carry out a preliminary scoping study on the heap-leach option. At the end of the exercise, Golden Goose was even more convinced that heap-leaching would significantly enhance the economics of the Magino open-pit project.

The scoping study was based on processing proven and probable reserves of 20.5 million tons grading 0.05 oz. gold per ton (about 1 million contained ounces) over eight years.

Capital costs for a heap-leach operation would be $69.9 million, compared with $110.6 million for conventional milling. Operating costs are estimated at US$191 per oz. for conventional milling with gold recoveries of 95%. The costs for a heap-leach operation would be similar, based on 75% recoveries for gold. Costs would edge up to US$206 if recoveries came in at 70%.

“We think the heap-leach option could turn the corner here,” Miller says, adding that lower capital costs would reduce the payback period to 3.9 years (assuming 75% recoveries), compared with 5.3 years using conventional milling.

Golden Goose views Magino as having potential to produce 100,000 oz. gold annually using heap-leach processing. The company also notes that the property has substantial potential for reserves to increase through ongoing exploration.