Supplier News (May 25, 2007)

Glencairn gives AMEC greenlight, buys old mill

Glencairn Gold (GGG-T, GLE-X) has hired London-based engineering firm AMEC to study the best way to convert to conventional milling or expand the companys Libertad gold mine in Nicaragua.

Glencairn has shut La Libertad down for two years while it redevelops the operation as a conventional mine and mill.

Glencairn suspended operations at the end of the first quarter of 2007 following metallurgical tests that showed the average 40% gold recoveries from heap leaching could be significantly increased to more than 90% with conventional milling.

The decision to move to a feasibility study was made after Glencairn received AMECs scoping study on the troubled mine.

The feasibility study will include updated estimates of the mineral resources and mineral reserves by Scott Wilson RPA, an independent geological consultant.

In another move, Glencairn bought a mill in northern Nevada that operated for years until it was placed on care and maintenance in 2002.

“In opting for a refurbished mill as opposed to a new one, Glencairn will return the La Libertad mine to production in a considerably shorter timeframe than originally planned,” says Peter Tagliamonte, Glencairns president and CEO.

The deal for the mill includes a semi-autogenous grinding mill, ball mill, vertical mill, tailings pumps, a thickener system, leach and carbon-in-pulp tanks, as well as all the structural steel needed to house the mill.

Glencairn will dismantle it in Nevada and reassemble the mill at La Libertad.

La Libertad is a 5,000-tonne-per-day heap leach operation in production since mid-1997, except for a brief shutdown in 2000-2001. It produced 8.1 million tonnes grading 1.77 grams gold per tonne containing 461,300 oz. gold before it was bought by Glencairn in July 2006.

La Libertad, an open-pit mine with a heap-leach plant, produced less than 6,000 oz. gold in the third quarter of 2006, at a cash cost of US$884 per oz., making a US$2.6-million operating loss on revenue of US$3.6 million.

Recoveries from the heap-leach system were 41% to 45%, and pit stripping, none of which was capitalized, added to the operating cost.

Upgrades to the crushing and screening circuit did not turn the operation around, so Glencairn is now looking to a more radical solution.

A recent study on La Libertad put the project’s indicated resource at 16.3 million tonnes grading 1.5 grams gold per tonne, plus an inferred resource at 4.2 million tonnes grading 1.7 grams.

That resource assumed recovery of 61% and a US$500-per-oz. gold price to arrive at a cutoff grade of 0.6 gram gold per tonne, assumptions that would be conservative given the higher recovery in a conventional mill.

Glencairn is looking at production of about 100,000 oz. gold in 2007, at a cash cost between US$385 and US$425 per oz., almost all of it now to come from Limon and from the Bellavista mine in Costa Rica.

Glencairn holds a 60% interest in the Cerro Quema advanced gold project in Panama, and all of the Mestiza gold property, 70 km from Limon.

CVRD to develop a dedicated Brazil-China ore shipments

Companhia Vale do Rio Doce (RIO-N) will spend the next 25 years shipping ore with Bergesen Worldwide (B.W. Bulk), owner of some the worlds largest ore carriers.

The 25-year agreement is part of an overall effort to develop a dedicated shuttle service carrying iron ore from Brazil to China.

Under the deal, CVRD and B.W. Bulk will build four of the largest ore carriers on the planet, each with a capacity of 388,000 deadweight tons.

The first of which should be headed for China sometime in 2011. The larger ships will reduce landing costs because they will need fewer trips.

In 1986, CVRD teamed with B.W. Bulk to introduce the 364,000-deadweight-ton Berge Stahl and it remains the worlds largest ore carrier.

In a separate deal, BW Bulk will convert a large crude oil carrier into an ore carrier. The converted ship will enter service in 2008.

Expanding its capacity even further, CVRD signed a 20-year contract with Japanese ship builder, Nippon Yusen Kaisha, for a new generation of 300,000-deadwweight-ton ore carriers. The first of these should arrive in 2011.

Meanwhile, CVRD backpedalled on its plan to sell its fleet of three reclaimed capsized vessels.

Moly Mines orders equipment for moly mine

Moly Mines (MOL-T) will spend US$36-million for a plant and other equipment needed for the 15-million-tonne-per-year Spinifex Ridge moly-copper project in Western Australia’s Pilbara region.

Engineering firm ThyssenKrupp, through subsidiary Polysius, will supply Moly Mines with a crusher, two high-pressure grinding roll units and two 11.5-megawatt ball mills. All of the items must be ordered well in advance to make production deadlines.

Operations are expected to start sometime in early 2009.

“This, large order gives us the advantage of securing equipment that has proven its reliability in similar operations around the world, but also guarantees a relatively short delivery date in a very competitive market,” says Derek Fisher, Moly Mines managing director.

Fisher adds that the ThyssenKrupp agreement demonstrates his company’s confidence in the world molybdenum price and Spinifex Ridge.

The same tertiary crusher selected for Spinifex Ridge was recently installed at Phelps Dodge’s (now Freeport-McMoRan (FCX-N) Cerro Verde copper operation in Peru and was chosen for the large Boddington gold mine near Perth, Australia. Newmont Mining (NMC-T, NEM-N) plans to install four such crushers there.

ThyssenKrupp was selected after Sydney, Australia-based project engineers WorleyParsons studied proposals from several firms for Spinifex Ridge.

Deister concentrators slated for tour of duty in Vietnam

Fort Wayne, Ind.-based Deister Concentrator will be paid US$7.4 million to supply concentrating tables to Nuiphaovica, a joint-venture company held by Nui Phao Mining and other partners.

The tables will be used at the Nui Phao tungsten-fluorspar project in Vietnam.Deister will ship 95 triple-deck (999) tables and 16 double-deck (99) tables to Vietnam. The first shipments should leave Indiana around July 1.

The Nui Phao mine will be the largest mineral separation table plant in the world, when it reaches full production.

Nui Phao mine will be an open-pit operation, located 80 km north of Hanoi. The mine is expected to enter production by the middle of 2009.

Deister Concentrator is owned by the Sherman Group, an investment firm based in northeastern Indiana.