Hemlo into higher grade ore

Higher grades of ore are being mined in the Hemlo area of northern Ontario, the three gold-producing mines there report.

Hemlo Gold Mines’ Golden Giant mine is currently milling ore in the 0.41-oz-gold-per-ton range, up about 41.5% from the reserve grade.

The Williams mine is processing ore in the 0.2-oz range from the A zone, up 11% from the expected grade, and in the 0.18-oz range from the deeper B zone, up 12.5%.

And the David Bell mine is averaging 0.34 oz, up 26% from what is currently anticipated and 3% from overall reserve figures published in the 1986 annual report.

“We’re getting a higher grade than we expected,” John Gordon, vice-president of Noranda Minerals, told The Northern Miner when asked about the Golden Giant project which is operated by Noranda. The higher grade is not expected to last, however; in 1988, he said, grades are expected to average 0.32 oz, still about 10% above the reserve grade.

About one million tons of ore have been mined since the Golden Giant went into production in 1985, he said, leaving reserves of 21 million tons.

In addition to higher grades, Hemlo Gold is showing a healthy balance sheet. Third-quarter earnings of $20.5 million (23 cents per share) have been recorded by the company, which is predicting gold production this year of 350,000 oz.

Hemlo Gold, which came into being in February of this year following a reorganization by the mine’s owners, reports 8-month earnings of $39.1 million (40 cents per share) from its property located near Marathon. Low operating cost

During the third quarter, the company produced 115,181 oz gold. Average grade of ore mined for the year to date is 0.39 oz. Operating cost was $104.55(C) for the quarter and stands at $126.10 for the year to date.

The average daily production rate of about 2,540 tons is below planned levels, and the company says ore production will remain at this level until additional active working places are developed during the first quarter of 1988. Thereafter, production will increase to design levels of about 3,300 tons per day by the final quarter of 1988, the company says.

Although grade is expected to decline during the next couple of years, the company says it will attempt to maintain gold production of at least 350,000 oz in each of 1988 and 1989, with increased tonnage.

At the Williams mine, which last year was awarded to International Corona Resources by the Supreme Court of Ontario in a property dispute with Lac Minerals, the production cost for the year is running in the $215-$220-per-oz range. Output of 265,000 oz gold is projected for the calendar year 1987. (Corona’s fiscal year runs to Sept 30, and for the 12 months preceding that date, production from the Williams mine amounted to 235,000 oz gold.) Proven, probable and possible reserves from the A, B and C zones (the C zone is not yet developed) stand at about 48 million tons.

While Corona was awarded the Williams mine and had that decision upheld by the Ontario Court of Appeal, Lac continues to operate the mine pending an application for leave to appeal to the Supreme Court of Canada, which is expected to rule on the leave to appeal in early December. Higher grades

The David Bell mine, operated on a 50/50 basis by Corona and Teck Corp., is finding its higher grade ore at the lower levels. During the last three months, grades at those levels have reached as high as 0.64 oz. Grades in the upper levels have matched expectations.

The production cost for the year averaged $187 and, during the last three months, $140. Teck, which acts as operator, mined almost 400,000 tons ore during the past year, leaving reserves of about 6.3 million tons.

Grades of drill-indicated reserves have been known to differ from actual results. Mining higher grades than anticipated was a common occurrence at the Dome mine in Timmins. Third-quarter earnings of $20.5 million (23 cents per share) have been recorded by Hemlo Gold Mines, which is predicting gold production this year of 350,000 oz.

Hemlo Gold, which began operating in February of this year, reports 8-month earnings of $39.1 million (40 cents per share) from its Golden Giant mine project near Marathon in northern Ontario.

During the third quarter, the company produced 115,181 oz gold. Average grade of ore mined during the quarter was 16.4 g gold per tonne (0.48 oz per ton); average grade encountered for the year to date is 13.3 g (0.39 oz). Operating cost was $104.55 for the quarter and stands at $126.10 for the year to date.

The average daily production rate of 2,302 tonnes is below planned levels, and the company says ore production will remain at this level until additional active working places are developed during the first quarter of 1988. Thereafter, production will increase to design levels of 3,000 tonnes per day by the final quarter of 1988, the company says.

Although grade is expected to decline during the next couple of years, the company says it will attempt to maintain production of at least 350,000 oz in each of 1988 and 1989, with increased tonnage.

The company’s board of directors has declared a share dividend of 20 cents per year.

On the exploration side, Hemlo Gold says stratigraphic drilling continues in the immediate vicinity of the mine. Exploration also continues on the north limb of the Hemlo basin and to the west at Heron Bay.