Snip bucks trend, trouble-free start beats expectations

The Canadian mining industry has suffered a few black eyes in the past several years because a number of high-profile projects failed to live up to expectations and were either written down in value or closed.

So it has come as a surprise to some that the newly opened Snip gold mine in northwestern British Columbia’s remote Iskut River Valley appears to have bucked this unfortunate trend.

Project operator and 60% owner Cominco (TSE) is not only reporting an extraordinarily successful startup, but also the production of over 40,000 oz. gold since commissioning the mill in late January of this year. British Columbia’s newest gold mining operation was declared officially opened July 25 by Robert Hallbauer, president of Cominco, and John Ivany, president of Prime Resources Group, (TSE) which holds a 40% interest. Cominco contributed its considerable technical expertise in northern mine development to the project. But it also played a role in exploration, and the Snip deposit discovery is the culmination of efforts by numerous Cominco geologists who worked on the property as early as 1929.

At the opening ceremonies, Ted Muraro was recognized for his original discovery in the mid-1960s. Also recognized were Lawrence Nagy, Bill Wolfe and Ron Nichols, all of whom played important roles in subsequent exploration. Prime and predecessor Delaware were recognized for bringing “ambition and money to the party” at a time (1986-1988) when most majors, including Cominco, were somewhat financially hard pressed.

“At 300 tonnes per day, Snip is a small mine,” Hallbauer told guests gathered on site for the opening ceremonies. “But we think it’s going to be successful, and the mining industry needs this. Investors are turned off because too many promises were made and not kept.”

Hallbauer also warned that Canada’s mining industry is in danger of losing its competitive position because foreign countries are now offering a much better climate in which to do business. And he said politicians are slow to recognize this, and to face the fact that 12 mines are slated to cease operations in the province by the year 2000.

“There has been a tremendous outflow of money to other countries and this will be at the expense of Canadian mining and the Canadian economy,” Hallbauer said.

As for the Snip mine, it is expected to produce for at least a decade based on a diluted (at 20%) reserve at the end of 1990 of 940,000 tonnes grading 28.5 grams (0.87 oz.) gold per tonne. Annual gold production is targeted at 93,000 oz.

Dave Johnston, Cominco’s vice-president of mine operations, told guests that although the mine was originally sized at 300 tonnes per day, it is currently operating about 20% higher at 360 tonnes per day.

The mill was purchased used and refurbished and assembled on site. Mill availability has been good at 98%, Johnston said, and more importantly “grades have been right on target.”

It cost $65 million to build the Snip mining operation, not taking into account about $13 million spent on exploration to prove up the orebody. The operation’s current success owes much to Cominco’s decision to spend more time and money in order to base minable reserves on 12.5-metre spaced drilling and development in ore on four mining levels.

The capital costs reflect an estimated 15% spent on environmental considerations, and also reflect the lack of infrastructure. Everything on site has to be either flown in, or brought in on Cominco’s hovercraft, Hover Freighter.

“The lack of infrastructure was a big factor in capital costs,” Hallbauer said. “You need high grade to operate in this kind of climate.” Cominco’s hovercraft, which can travel over both land and water, is doing its bit to reduce expensive air transport costs. The craft is used to transport concentrates down the Iskut and Stikine Rivers to Wrangell, Alaska, and backhaul fuel and other supplies. So far this season, it is estimated to have carried in excess of five million pounds. Bristol aircraft (some of the few remaining ones in the world) are also used to haul concentrates. Gold at Snip is recovered by two methods. About 20% reports to a gravity circuit and is made into bullion on site. This is lower than originally hoped: about 80% is recovered as a sulphide-rich flotation concentrate that goes to Japan for final refining. Recovery is 91.5%, marginally higher than the 91% original estimate. Cominco had originally thought it might recover some copper from the concentrates. This, however, has not proven to be case. Because so much development work had been done in advance, and because of the tight drill spacings, there have been few surprises underground and no trouble feeding the mill. Ground conditions are described as good, although support is required in a number of areas.

Mining is focused on the Twin zone, described as a 0.5-152Dmetre-wide, sheared, quartz-carbonate-sulphide vein. It has been traced by drilling over 1,000 metres and has a vertical range of 500 metres. (A drill program is planned to test its depth potential later this year.)

The shear-hosted vein strikes at 120 degrees and dips southwest at 30-90 degrees. During an underground tour, it was easy to see the post-mineralized dyke which divides the vein into two parts for most of its length. The deposit is mined by mechanized cut-and-fill (about 40%) in the wider, upper portions, and by conventional cut-and-fill and shrinkage (about 60%) in the narrower, lower parts. Backfill is used to fill the mined out areas, using both waste from mine development and hydraulic backfill from classified mill tailings and the mill waste grinding circuit.

The Snip mine employs 130 people and makes an important contribution to northern communities such as Smithers and Terrace.

In the hopes of making more discoveries of “Snip-type” targets, Cominco will be continuing surface exploration on its property holdings in the Iskut River area, a region described by Hallbauer as “Canada’s exploration hotspot.” A number of other companies are working nearby, and several recent discoveries are reported to have been made on nearby properties. “We need more discoveries in this area,” Hallbauer said, adding that more deposits might spur the provincial government to extend its access road all the way, instead of just part way, into the Iskut River camp. Failing that, he said, “we may have to look to Alaska for infrastructure.” Hallbauer also warned that Canada’s mining industry is in danger of losing its competitive position because foreign countries are now offering a much better climate in which to do business. And he said politicians are slow to recognize this, and to face the fact that 12 mines are slated to cease operations in the province by the year 2000.

“There has been a tremendous outflow of money to other countries and this will be at the expense of Canadian mining and the Canadian economy,” Hallbauer said.

As for the Snip mine, it is expected to produce for at least a decade based on a diluted (at 20%) reserve at the end of 1990 of 940,000 tonnes grading 28.5 grams (0.87 oz.) gold per tonne. Annual gold production is targeted at 93,000 oz.

Dave Johnston, Cominco’s vice-president of mine operations, told guests that although the mine was originally sized at 300 tonnes per day, it is currently operating about 20% higher at 360 tonnes per day.

The mill was purchased used and refurbished and assembled on site. Mill availability has been good at 98%, Johnston said, and more importantly “grades have been right on target.”

It cost $65 million to build the Snip mining operation, not taking into account about $13 million spent on exploration to prove up the orebody. The operation’s current success owes much to Cominco’s decision to spend more time and money in order to base minable reserves on 12.5-metre spaced drilling and development in ore on four mining levels.

The capital costs reflect an estimated 15% spent on environmental considerations, and also reflect the lack of infrastructure. Everything on site has to be either flown in, or brought in on Cominco’s hovercraft, Hover
Freighter.

“The lack of infrastructure was a big factor in capital costs,” Hallbauer said. “You need high grade to operate in this kind of climate.” Cominco’s hovercraft, which can travel over both land and water, is doing its bit to reduce expensive air transport costs. The craft is used to transport concentrates down the Iskut and Stikine Rivers to Wrangell, Alaska, and backhaul fuel and other supplies. So far this season, it is estimated to have carried in excess of five million pounds. Bristol aircraft (some of the few remaining ones in the world) are also used to haul concentrates. Gold at Snip is recovered by two methods. About 20% reports to a gravity circuit and is made into bullion on site. This is lower than originally hoped: about 80% is recovered as a sulphide-rich flotation concentrate that goes to Japan for final refining. Recovery is 91.5%, marginally higher than the 91% original estimate. Cominco had originally thought it might recover some copper from the concentrates. This, however, has not proven to be the Because so much development work had been done in advance, and because of the tight drill spacings, there have been few surprises underground and no trouble feeding the mill. Ground conditions are described as good, although support is required in a number of areas.

Mining is focused on the Twin zone, described as a 0.5-15″Dmetre-wide, sheared, quartz-carbonate-sulphide vein. It has been traced by drilling over 1,000 metres and has a vertical range of 500 metres. (A drill program is planned to test its depth potential later this year.)

The shear-hosted vein strikes at 120 degrees and dips southwest at 30-90 degrees. During an underground tour, it was easy to see the post-mineralized dyke which divides the vein into two parts for most of its length. The deposit is mined by mechanized cut-and-fill (about 40%) in the wider, upper portions, and by conventional cut-and-fill and shrinkage (about 60%) in the narrower, lower parts. Backfill is used to fill the mined out areas, using both waste from mine development and hydraulic backfill from classified mill tailings and the mill waste grinding circuit.

The Snip mine employs 130 people and makes an important contribution to northern communities such as Smithers and Terrace.

In the hopes of making more discoveries of “Snip-type” targets, Cominco will be continuing surface exploration on its property holdings in the Iskut River area, a region described by Hallbauer as “Canada’s exploration hotspot.” A number of other companies are working nearby, and several recent discoveries are reported to have been made on nearby properties. “We need more discoveries in this area,” Hallbauer said, adding that more deposits might spur the provincial government to extend its access road all the way, instead of just part way, into the Iskut River camp. Failing that, he said, “we may have to look to Alaska for infrastructure.”