Triumphant Golden Bear back in business — Production ahead of schedule and under budget

After a 3-year production hiatus, the Golden Bear

open-pit mine, situated 130 km north of here, is once again producing gold.

Production levels are exceeding expectations and, by the time the heap-leach project shuts down for the winter, costs are projected to be within 5% of budget.

Wheaton River Minerals (WRM-T) marked the reopening by pouring a further 2,000 oz. of gold dore, raising output over the first six weeks to 19,700 oz. — just 6,000 oz. shy of projections.

Addressing a group of government officials, investors, analysts, local native peoples and Golden Bear employees, Wheaton River Chairman Ian McDonald credited his company’s success to the professionalism of its employees and the successful collaboration with all groups involved.

“This opening today is a result of the perseverance and dedication of our operating team,” he said. “It was also made possible through the spirit of co-operation from the local communities, all the various levels of government, our contractors and bankers. We have demonstrated a will-to-succeed type of attitude,” McDonald continued. “Given our short construction and operating season, this was — and remains — absolutely crucial.”

“This is the sweetest ore I have ever worked with,” Golden Bear’s general manager, Raymond Gagnon, told The Northern Miner during the ribbon-cutting ceremony. “We are definitely going to surpass our target.”

So far, about 385,000 tonnes have been mined from the Kodiak A pit (one of three deposits to be mined over a 6-year life), at a stripping ratio of 1-to-1. The deposit has remaining reserves of 759,000 tonnes grading 3.3 grams gold per tonne.

Daily crushing rates are 1,500 tonnes higher than the projected capacity of 5,000 tonnes. To date, 360,000 tonnes have been crushed, with head grades averaging 3.47 grams gold. “When you’re a seasonal operation, you have to drive hard while you can,” said Gagnon.

Recovery rates exceed 90%, and production this year is expected to be in the neighborhood of 30,000 oz.

Over the life of the project, cash costs are estimated at US$232 per oz., with operating costs pegged at US$266 per oz.

Wheaton acquired the property in mid-1993 through the takeover of North American Metals (NAM-V), then a subsidiary of Homestake Mining (HM-N). The facilities include a 365-tonne-per-day mill, roaster, solvent extraction-electrowinning circuit, office, lab and warehouse. Wheaton now holds 86% of NAM.

At the time of the takeover, the mine was processing refractory reserves from the high-grade Main Bear deposit, which had entered production in January 1990. However, only a year’s worth of reserves remained, forcing Wheaton geologists to scour the countryside in search of new feed.

A few months later saw the discovery of the heap-leachable Kodiak A zone, situated north of the Main Bear, as well as the refractory Grizzly zone, which underlies the Main Bear.

An aggressive exploration program outlined sufficient tonnage at Kodiak A to warrant production, and, in early August 1994, the company received its heap-leach and mining permits.

By the end of September, development had started on the

528,000-tonne-capacity Fleece Bowl leach pad. However, heavy rains thwarted startup, setting the stage for several subsequent drawbacks. Meanwhile, production of the Main Bear had ceased.

Ursa zone

While frustrated by the setbacks, the company persevered with exploration and development plans. Their persistence was rewarded when, in October of that year, the Ursa zone was discovered 800 metres north of Kodiak A. Drill results indicated an oxidized zone of potentially economic grades, which was later confirmed by additional drilling. By year-end, the company had also succeeded in driving a decline into the Grizzly zone.

Exploration drilling over the next year led to the discovery of the Kodiak B and C zones, and, near the end of 1995, a second feasibility study was initiated on the Kodiak A and Ursa zones. The study concluded that the mine could yield 176,000 oz. gold over five years at a cash cost of $US224 per oz. and a total operating cost of US$258 per oz. The total capital cost for the mine was pegged at $33 million.

Reserves for the Kodiak A deposit were estimated at 824,000 tonnes grading 3.3 grams gold per tonne, whereas those for Ursa were pegged at 519,000 tonnes of 7 grams gold. Stripping ratios were estimated at 1-to-1 and 6.6-to-1, respectively.

In early 1997, Wheaton arranged financing to the tune of $11 million in the form of a loan from Barclays Bank of London. At about the same time, an updated feasibility study concluded that the underground Kodiak B deposit contained about 184,000 tonnes grading 8.7 grams gold. This deposit, which is scheduled to enter production in 1999, boosted the overall mineral base to 255,696 oz.

In April of this year, the project faced its final challenge when locals members of the Tahltan Nation attempted to block the mine’s access road.

Several grievances were expressed, but a mediator helped the two parties come to a quick agreement.

A third of the Golden Bear’s 134-man workforce are members of the First Nations.

Waster removal

With winter shutdown approaching, miners have switched to removing waste material, to allow for quicker access to ore when operations resume next May.

Although mining this year has focused on Kodiak A, waste has been removed from the Ursa deposit. Reserves for that deposit are pegged at 519,000 tonnes grading 7 grams gold.

Next year (the first full year of production), mining at Kodiak A and Ursa is expected to boost production to 39,500 oz. Output will rise to 44,800 oz.

and 51,000 oz., respectively, in years 2 and 3. And, in the remaining two years, the figure is expected to fall to 44,800 oz. and 9,600 oz.

Mineralization at Golden Bear occurs in the eastern end of a wedge of Permian carbonates juxtaposed against Tertiary mafic volcanics. To the east, the regional Ophir Fault separates the carbonates from the volcanics, whereas, to the west, the carbonates are separated from the volcanics by the Limestone Creek fault.

With the exception of the Grizzly, all the zones at Golden Bear are oxidized. Mineralization is hosted by hydrothermally brecciated and silicified dolomites. While three deposits are only included in the mine plan, others are known. The most advanced of these is Kodiak C, which hosts about 276,000 tonnes grading 7.8 grams gold.