Picture brightens at Keystone gold project

Record pit and mill production has secured an operating profit for the Keystone gold project, near Lynn Lake, Man., operated by Granduc Mining (TSE) and 50%-owned by Black Hawk Mining (TSE).

A new ball mill, in operation since March of this year, and changes to the drilling operation at the Burnt Timber (“BT”) open pit have meant a 21% increase in mill throughput. Recovery has also improved marginally to 89.5% from 88.8%, and millhead grades were slightly higher.

The rod mill at Keystone was shut down for scheduled maintenance in late summer, but all facilities are back up and running. The project is now mining from Stage 3 of the BT pit, where grades are slightly lower (2.4 grams gold per tonne, compared with 2.7 grams in other parts of the pit).

Stripping has started at the Farley pit, where reserves total 1.6 million tonnes grading 3.5 grams. Higher grades and a lower waste ratio are expected to improve production rates and lower costs. Recent infill drilling at Farley confirmed grades and continuity of ores in the planned pit.

A prefeasibility study has been completed on the Nisku deposit, part of the MacLellan underground mine operated by Sherritt in the 1980s.

Granduc describes Nisku as “the one area of the MacLellan mine that lived up to expectations when mined by previous operators.”

The prefeasibility study concluded that the deposit could be mined profitably at about 200 tonnes per day.

The partners will be making a final decision on production from the deposit this year; if it goes ahead, the project will contract out the underground work and process the ore at the Lynn Lake mill.

The project has five years of reserves at Farley and BT, plus geological reserves on other prospects in the immediate area. Land holdings total 400 sq. km, and exploration on the Lynn Lake greenstone belt is continuing.

Granduc is looking for additional financing to pay down debt and provide working capital for the project, and may make a rights offering to its shareholders.