ASIAN EXPLORATION — Echo Bay and TVI make headway at Kingking project

Initial results of an ongoing feasibility study at the Kingking copper-gold project in the Philippines indicate the deposit could yield 4.5 million oz.

gold and 2.3 billion lb. copper.

The property, which is in the southeastern portion of the island of Mindanao, is owned 75% by Echo Bay Mines (ECO-T), which also acts as operator, and 25% by TVI Pacific (TVI-T). Recently, however, Echo Bay announced that it is entertaining the idea of selling its interest. The property’s former owner, Benguet (BE-N), retains a 20% back-in right, which is exercisable for US$20 million.

The study, which is evaluating capital and operating costs, is based on a 1996 resource estimate of 398 million tonnes averaging 0.34% copper and 0.51 gram gold per tonne. Of that resource, 87.6 million tonnes averaging 0.48% copper and 0.74 gram gold are oxide-hosted, whereas 310.5 million tonnes averaging 0.3% copper and 0.45 gram gold are sulphide-based. Cutoff grades used in resource calculations varied as a result of different grades within the deposit’s three contiguous zones.

The new production calculations are based on an open-pit design with a stripping ratio of 1.12-To-1 and a mine life of 16 years. With a milling rate of 70,000 tonnes per day, the mine could produce 70,000 tonnes of copper-in-Concentrate and 296,000 oz. gold per year. Production during the first five years, however, could recover as much as 87,000 tonnes of copper in concentrate and 400,000 oz. gold as a result of near-surface, higher-grade material.

Operating costs are estimated at US69 cents per lb. copper and US$257 per oz.

gold, including transportation, treatment and refining. The capital cost of the project, however, depends on whether the companies employ a land- or submarine-based system for disposing of tailings. The former would incur a capital cost of about US$642 million, while the latter would cost roughly US$607 million. At present, the ocean-based system is being investigated.

“At Kingking, we have the opportunity to put the tailings right down in the bottom of the Gulf of Davao,” explains Neil Westoll, senior vice-president of exploration for TVI. “This is by far the most technically advantageous way of doing it, but we have yet to convince the local people that this will not affect their fisheries and other activities.”

The ocean-based disposal method is preferable also from an environmental perspective. A land-based system would be vulnerable to the region’s heavy rainfall (21 cm per year), and also to earthquake activity. Westoll cites the technique’s successful application at Placer Dome’s (PDG-T) 80%-owned Misima gold mine in Papua New Guinea and Australian-listed BHP’s recently closed Island Copper mine on Vancouver Island, B.C.

.SThree zones

Resources at Kingking are contained in three contiguous, elongated zones: Tiogdan, Casagumayan and Lumanggang. Together, these strike for 2.5 km in a northwesterly direction and average 600 metres in width. The deposit remains open along strike to the west.

The topography at Kingking is described as undulating, with an overall west-To-east slope, which peaks at 760 metres above sea level and bottoms out at 280 metres. A computerized design evaluated a pit from which 480 metres were excavated from the deposit’s western area and 200 metres from the eastern side.

Kingking is described as a low-pyrite, porphyry copper-gold system near the southwestern end of a northeast-Trending belt of polyphase, dioritic intrusives measuring 6 km long by 3 km wide. Those intrusives are hosted by a late-Cretaceous-To-Paleocene sequence of volcanic and sedimentary rocks (from 58 to 97 million years in age).

Primary sulphide mineralization is predominately chalcopyrite and, to a lesser degree, bornite, chalcocite, covellite and cuprite, with gold occurring in free form and in association with the sulphides. In the oxide zone, copper mineralization occurs in the form of malachite, chrysocolla, cuprite, chalcopyrite, chalcocite, bornite and covellite. Gold here also occurs freely and in association with sulphide mineralization.

Metallurgical testing continues in an effort to increase recovery rates.

Previous recoveries from sulphide mineralization topped 80% for gold and 85% for copper. From oxide mineralization, the recoveries were 70% for gold and 80% for copper.

.STwo processes

Sulphide material will be processed through grinding and flotation, while oxidized material will be subjected to conventional sulphide flotation for gold followed by a partial sulphuric acid leach, iron precipitation and flotation for the copper precipitate.

Of the 263 holes drilled in the deposit to date, 153 were sunk by Benguet before 1995, when the company optioned the property to Echo Bay and TVI.

Of the 125 holes drilled by the partners, 110 were used in the resource estimate. Also included in the estimate are data accrued from Benguet’s holes. Overall, more than 80,000 metres of diamond drilling were completed, 63,500 metres of which were incorporated into the resource model.

The best results from recent drilling include: 96 metres (from 225 to 321 metres) grading 1.33 grams gold and 0.26% copper in hole 77 on the Tiogdan zone; 84 metres (from surface) of 2.17 grams gold and 0.19% copper in hole 75 of the Casagumayan-Tiogdan stockwork zone; and 60 metres (from 168 to 228 metres) grading 0.08 gram gold and 0.86% copper in hole 65 of the western Lumanggang zone (T.M.N, Jan. 27/97).

“What we are doing with the study right now is tearing it apart so as to understand where we can improve [the project] in terms of cutting costs, metallurgy, and so on,” says Westoll.

The installation of a solvent extraction-electrowinning circuit is being considered, as is a molybdenum recovery circuit and various infrastructure requirements. A decision on whether to proceed with a bankable feasibility study is expected within the next three months.

“One of our problems is that although we have a good handle on were the copper is, we don’t yet have sufficient information to define exactly where the gold is,” says Westoll. “This is because the gold is distributed less consistently.”