Rea Gold brings San Antonio into the 1990s

One thing better than learning from your own setbacks is learning from other people’s. Rea Gold (TSE), now readying its Bissett project in eastern Manitoba for production, is taking history’s lessons seriously.

The gold deposit at Bissett, also called the San Antonio deposit, was first discovered in 1911. San Antonio Gold Mines brought the original mine into production in 1932. The mine continued to exploit deeper mineralization by sinking a series of three winzes — called the B, C and D shafts — to follow the downdip extension of the main host unit. By the 1960s, with costs catching up to the US$35-per-oz. gold price and government gold mining subsidies gone, the operation was in trouble. When a 1968 fire in the hoist room put San Antonio Gold Mines into receivership, the mine had produced just under 1.4 million oz. of gold.

New Forty Four Mines, a company formed by some San Antonio directors, took over ownership and optioned the property to several companies, but went no further. In 1980, New Forty Four dealt Brinco an option, and the major put San Antonio back into production with a new 450-tonne-per-day mill — just as gold retreated from its historic 1980 price spike.

Dilution

Rea Gold’s president, James Hogan, was there in the Brinco days and recalled grade problems as well: “You know how it is when you’re mining remnant reserves. You only know you’re out [of the ore] when you’re out, and then you have to muck out one round of waste.” That dilution cost Brinco dearly, bringing grades down to the 5-gram-per-tonne level, less than two-thirds of San Antonio’s estimated historic grade of 9.3 to 9.8 grams per tonne.

Faced with mounting losses, and finding that the 4-shaft mine layout was costly and made production scheduling a nightmare, Brinco shut the mine down in 1983. Brinco later dealt options to Lathwell Resources and Inco Gold, both of which ran large drill programs from the deep workings of the mine. The exploration programs built up resources, but did not solve the production difficulties that were the main problem all along.

Rea Gold bought the property from Brinco’s successor, Cassiar Mining, in 1989. By 1993, several different production plans had been drawn up, but all the prefeasibility work came to the same conclusion — to produce gold economically, the mine needed a new shaft, and the capital cost could only be justified by proving more reserves.

Rea staff spent much of 1994 working over San Antonio’s old records, and drill cores from the Lathwell and Inco programs; another 7,000 metres of drilling was done from the lower workings of the mine. “We cut and spliced the old assay data,” says mine geologist Glen Kuntz, “and entered it [on computer] to work out a composite grade.” By the beginning of 1995, the company thought it had enough reserves to merit a feasibility study.

The feasibility work, by consulting firm H.A. Simons, concluded a 900-tonne-per-day operation was feasible, and Rea Gold announced last November that it was going ahead with production.

10.5-year mine life

Today, gross reserves are 3.4 million tonnes grading 9.5 grams gold per tonne, with 3 million tonnes minable at 8.6 grams per tonne. The contained gold reserve of about 830,000 oz. will support a mine life of 10.5 years at the planned production rate.

Rea has been conservative about reserve calculation, projecting grades over short distances only and cutting assays to 1 oz. per ton (34.3 grams per tonne), even though statistical inference-testing on the assays indicates that grades four times as high may be reliable.

The host rock is a gabbro body, the San Antonio sill, intruding a volcanic-sedimentary sequence in the 2.8-billion-year-old Rice Lake greenstone belt. The sill has an average 48! dip to the northeast, and a “bulge” of about 600 metres strike length, where it is crossed by quartz veins and stockwork systems, two of them mineralized. The “38-type” zones are stockwork veins, striking roughly parallel to the sill and either vertical or steeply dipping. The smaller “16-type” shear veins crosscut the stockworks, and where the two types of vein intersect, they produce a plunging zone of unusually high-grade material. The stockworks are much bigger than the shear veins — 10 stockworks account for slightly more than half the historic production, and about 60 shear veins produced the rest.

Extended shaft

Rea’s plans for the mine show a recognition of the problems that made San Antonio difficult to mine in the past. The cornerstone of the program is the extension of the existing A shaft, now 498 metres deep, to a depth of 1,235 metres. The new shaft is being raised in two stages, first from the 16 level, which has been extended 248 metres southwest to a raise station, then from the 26 level, which is now being driven an additional 235 metres. The company expects to have the main drifting and shaft-raising work done by the end of 1996.

The newly extended 26 level will become the main haulageway, with a new 36-inch (91-cm) track replacing the old 18-inch one. The new haulageway will also be widened and straightened, allowing faster tramming and a far greater haulage capacity.

The existing D shaft, a winze from the 26 level to a depth of 1,725 metres, will be deepened to 1,908 metres and serve as an internal production winze. Both the A and D shafts will get larger capacity hoists — Rea hopes to buy used ones — and the old B and C shafts will be bypassed completely.

Rea plans to have more than 110,000 tonnes of ore broken by the end of the year and 20 stopes ready for the start of commercial production in the first quarter of 1997.

The rocks at Bissett are extremely competent and hydraulically tight; neither poor ground nor water has ever been a problem at the mine. Rea plans to improve ventilation with about 750 metres of new raises. The stopes themselves will be shrinkage-type.

Expanded mill

The Brinco mill will be expanded to a 900-tonne-per-day capacity. It will keep its gravity concentration circuit, which is expected to recover 50-60% of the gold, and it will also get some upgrades, including higher-capacity crushing and grinding equipment. Its flotation capacity will be doubled (to 60 cubic metres from 30) and Rea will add a circuit for cyanidation and zinc precipitation, and a furnace to produce gold from the gravity and flotation concentrates.

The mill will have a sulphate-and-air circuit to destroy cyanide, and tail water will be returned to the mill for another cycle through the process. The tailings pond can hold six years’ worth of waste water, although Rea is leaving the option open to apply for regulatory permission to decant the water after three years if it meets water quality guidelines. Permits are now in place for all of Bissett’s operations except the tailings pond.

Because the central task at Bissett has been to prove up minable reserves, there has been comparatively little exploration for new mineralized zones. That state of affairs will change when the mine begins generating cash flow. Rea’s geological staff, drawing in part on the experience of the Geological Survey

of Canada’s redoubtable Howard Poulsen, has nailed down several useful structural criteria for use in future exploration. The productive “bulge” in the San Antonio gabbro plunges northeast, and the stockwork veins themselves appear to plunge about 10! away from the bulge, suggesting that there could be more mineralization both sideways and downdip from the known reserves.