Midway through a US$10-million exploration campaign at the Cortez gold mine in Nevada,
The mine is in the Battle Mountain trend of north-central Nevada, 100 km southwest of Elko. Placer Dome is the operator and owns a 60% interest in the mine;
For the first half of 2004, the open-pit operation produced 571,000 oz. (48% by milling, 46% by heap-leaching, and 6% by carbonaceous ore sale) as a result of processing 18.1 million tonnes averaging 1.3 grams gold per tonne at a cash cost of US$152 per oz. and a total cost of US$188 per oz. In the comparable period of 2003, Placer produced 572,000 oz. (65% by milling, 25% by heap-leaching, and 10% by carbonaceous ore sale) as a result of treating 9.2 million tonnes grading 2.4 grams at cash and total costs of US$124 and US$160 per oz., respectively.
Cortez is expected to produce more than 1 million oz. in 2004 (its seventh-consecutive year of doing so) at costs of around US$160 per oz. The mine uses integrated milling and heap-leach processing to recover gold from oxide mineralization. A minor portion of production comes from the sale of preg-robbing refractory carbonaceous ore to third-party roasters.
The mine contains an estimated 15.1 million oz. in proven and probable reserves of 241 million tonnes grading 1.9 grams gold, based on a US$350-per-oz. pit model that includes the Cortez Hills discovery. Additional measured and indicated resources hold an extra 8.1 million oz. in 270 million tonnes grading 0.9 gram. A further 800,000 oz. in 31.7 million tonnes of 0.8 gram are inferred.
Cortez Hills was discovered near the end of 2002 during an initial reverse-circulation (RC) drill program north of the 1.2-million-oz. Pediment deposit, more than 5 km southeast of the Pipeline and South Pipeline complex. The discovery came in the sixth hole of a 7-hole program that intersected 36.6 metres of 9.5 grams gold. Placer waited until April 2003 to announce the discovery of a 3-million-oz. resource grading 2.98 grams.
With the recent update, Cortez Hills is now estimated to contain proven and probable reserves of 42.9 million tonnes grading 5.4 grams, equivalent to 7.5 million oz. An additional 2 million tonnes grading 3.7 grams, representing 240,000 oz., are categorized as measured and indicated, and another 378,000 oz., or 8.3 million tonnes grading 1.4 grams, are inferred. Placer has assigned a 75% overall recovery for Cortez Hills.
Cortez fault
Cortez Hills is hosted in the hanging wall of the Cortez fault system in the upper portion of the Devonian carbonate sequence of chert and laminated siltstone units. The top of the deposit starts 100 metres below surface and is covered by colluvium and landslide debris. Based on drilling completed to the end of 2003, the mineralization extends downward at least 430 metres, following the nose of a marble zone in the Wenban limestone unit across an area measuring 550 metres north-south and 245 metres east-west. A 152-metre-long intercept averaging 26.3 grams through the deposit’s core was reported.
By the end June, 94 holes had been completed so far this year, and assays had been received for 72. The highlight of the first half-year’s drilling is the discovery of a high-grade zone downdip and west of the area drilled-off in 2003. The delineation of this zone, combined with the closing off of Cortez Hills to the north and east, resulted in the 2-million-oz. increase. This new high-grade zone, as currently defined, measures 550 by 300 metres and averages 120 metres thick, extending to 610 metres below surface.
“This deposit has some spectacular individual drilled intercepts,” says Jay Taylor, Placer’s outgoing president. “When I say spectacular, I mean plus-one ounce in certain areas. I think the overall quantum increase from about the mid-three-gram range to 5.5 grams in a rather short period of time attests to the quality of mineralization. It’s going to be a terrific orebody. The pit optimization program pretty well blows out all the resources. There are very little resources, and the whole thing optimizes, which just tells you how lucrative the new orebody is.”
Infill and stepout drilling will continue in an attempt to define and extend the zone. Drilling during the second half of the year will focus on expanding the mineral resource, which remains down-plunge and along strike to the south toward Pediment.
“Our objective is to try to connect Cortez Hills with Pediment,” says William Hayes, Placer’s executive vice-president of U.S. operations.
‘Distinct geology’
Adds Taylor: “We’re reasonably certain the geology is quite distinct, we don’t know if there is an unconformity underneath Pediment, and we may be into the same assemblage of rocks that hold Cortez Hills.”
Pediment is a unique landslide deposit derived from an in situ, sediment-hosted deposit. Covered by unaltered colluvium, the top of the deposit ranges from 45 to 170 metres below surface.
The discovery of deep high-grade mineralization has caused Placer to re-examine the joint venture’s holdings, which directly cover 825 sq. km along the Cortez-Battle Mountain trend. “Based on the knowledge we have gained from Cortez Hills, we have identified additional interesting exploration targets,” says Taylor. “We’re currently pretty excited about going back into some areas where we had exhausted upper level resources, and we’re wondering if there might be ancillary systems underneath them.”
Over the coming months, a feasibility study on Cortez Hills will examine issues pertaining to pit development and optimal processing arrangements for the property, considering both the existing Pipeline-South Pipeline complex and the Cortez Hills-Pediment complex in order to increase value. “We’ve got all the processing facilities in place to handle just about anything we can expect from Cortez Hills, and so there’s going to be very little capital,” says Taylor.
Information gained from the feasibility work will be used to resume the permitting process, which, according to Hayes, should last at least two years.
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