LATIN AMERICA — Gross Rosebel sits and waits for gold’s rebound

Although the Omai gold mine in Guyana is up and running, the comparable Gross Rosebel project in neighboring Surinam sits idle — a situation that can only be explained by bad timing.

“We missed a window of opportunity by six months,” laments David Fennell, president of Golden Star Resources (GSC-T), which shares ownership of Gross Rosebel with Cambior (CBJ-T). He explains that by the time the feasibility study for Gross Rosebel had been completed and submitted to the Surinamese government, in May 1997, the gold price had already slid out of the critical US$380-per-oz. range that gave the project an acceptable rate of return.

Fennell says only one of two situations will get the project moving again — a higher gold price, or an indication (from a reworked feasibility study) that heap-leach processing would be more economic than conventional milling.

Situated 80 km south of the capital, Paramaribo, the project is an equal joint venture between Cambior, the operator, and Golden

Star. The state mining company Grasshopper Aluminum Co. (Grassalco) has an option to buy, at cost, a 20% interest in the operating company that would hold the exploitation rights, and is entitled to buy another 20% eight years into production. Grassalco would also receive a 2% royalty from production.

Cambior and Golden Star have spent roughly US$16 million and US$14 million, respectively, on the 17,000-ha property, defining proven and probable reserves of 35.5 million tonnes grading 1.8 grams gold per tonne, equivalent to 2 million contained ounces gold. The calculation was based on a gold price of US$350 per oz. About 65% of these reserves are in soft rock (saprolite and laterite), whereas hard-rock and transitional reserves account for 10% and 25%, respectively. The stripping a ratio, using a 40 pit slope, is 2.8-to-1.

With a milling rate varying between 14,000 and 16,000 tonnes per day, Gross Rosebel would produce 230,000 to 280,000 oz. gold annually for nine years at an average cash cost of US$230 per oz. A capital investment of US$175 million is estimated for mine construction.

Based on a gold price of US$400 per oz., the reserves stand at 49 million tonnes grading 1.6 grams gold, equivalent to 2.4 million contained ounces. Overall, the geologic inventory at Gross Rosebel is 77 million tonnes grading 1.5 grams gold, or more than 4 million contained ounces.

The reserve estimates are based on 1,045 core holes totalling 108,000 metres, 5,054 auger holes totalling 35,000 metres, and 45 km of trenches.

The partners have defined reserves in the North Block, which contains the Pay Caro, East Pay Caro and Koolhoven deposits, and in the South Block, which contains the Mayo, Royal Hill and Rosebel deposits. These deposits occur along the limbs of greenstone units that have been folded to form a broad, east-westerly trending syncline that plunges to the west.

Gold mineralization occurs mostly as free gold in quartz and quartz-carbonate veins that are restricted to lithological contacts, fold closures and near-vertical shear corridors.

“With all these structures plunging, you lose the surface geochemical signature, so there are lots of future targets,” says Peter Donald, Golden Star’s general manager in Suriname. “We’ve just scratched the surface.”

Metallurgical tests are evaluating the potential for processing alternatives, such as heap leaching. “We feel leaching will work within the saprolite layer and the transition zone, but how it works with the hard rock is the big question,” says Donald. “If this project is to develop into something larger, we need to go into the rock — it’s much more problematic.”

Searching for another way to improve the project’s economics, the partners have held discussions with the government regarding power supply, fuel costs and taxation levels.

The partners are maintaining their presence at the site, both to keep pork-knockers at bay and to demonstrate to the Surinamese government their commitment to the project.