Predict 50% increase in Wharf gold output for 1987

Chronically under-financed, Wharf Resources has struggled to maintain production at its Annie Creek gold mine near Lead, S.D. But the company appears to have turned the corner and with record precious metals output — and the prospects of even higher production in the next few years — people are starting to take notice again.

Equally as important, Wharf recently concluded a $15-million financing, part of which was used to retire some short-term senior debentures, says the new president, Fred H. Lightner. A portion of it will be used to optimize production at the mine and this work is currently under way, he says.

Last year, gold production totalled approximately 26,000 oz and a 50% increase is projected for 1987, partly because a heating system has been installed to raise the ambient temperature of cyanide solutions sprayed on ore heaps. Winter conditions preclude actual spraying of the heaps so the spray mechanisms are simply turned upside down and the solutions are allowed to circulate at random.

The company has been circulating solutions through these ore heaps since the beginning of the year and gold is being recovered, albeit not to the extent it is during summer months. He confirms that Wharf will also be going to a “load- unload” system which will save money on leach pad construction and he speculates this method could yield higher recoveries, but admits that possibility is “difficult to quantify.” The company is now crushing to one-half inch which gives a good leach time and there is no agglomeration. Mining year-round

Wharf has its own equipment and mining is possible on a year- round basis which will allow it to build up sufficient feed stock for spring. To achieve the higher production rate, money will have to be spent on new equipment but the company is adequately financed to meet these commitments, he confirms.

Mr Lightner says that Wharf has 10-12 years of ore in front of it and with a strong working capital he argues the company is in a “much more flexible financial position.” Optimization studies are under way to raise produc tion further from the Foley Ridge property and the work will include metallurgical testing, preliminary engineering, and cost estimating.

He confirms that the objective of this program is to determine the viability of increasing production to 60,000 oz per year. “We don’t want to sit there with a 40,000-oz mine when our reserves will support a higher production rate,” he states. At present, the company has about 500,000 oz of recoverable gold reserves.

Mineable reserves at Foley Ridge are estimated to be 16 million tons grading 0.045 oz and the initial strip ratio will average about 2:1, dropping to 1.5:1 later on. The company has been mining there all year and he confirms that at today’s prices there might be room for another “push back” at the main Annie Creek property which is nearby. There is still plenty of prospective ground left to explore including the Portland area which could be higher grade than the present mine average, he points out.