Letters to the Editor Mascot’s open pit ore grade seems low

The Northern Miner states that Mascot’s Nickel Plate open pit produced 24,000 oz of gold to the end of September, 1987, from 317,000 tons milled (N.M., Jan 25/88). Assuming 87% recovery, this gives an average millhead grade of 0.085 oz gold per ton for this production. This is about half the average assigned reserve grade for open pit ore.

The same article reported that some unnamed company official has predicted 130,000 to 150,000 oz of gold would be produced during the open pit’s first year. To do so would mean that future millhead grades would be more than double the above average production millhead grade to Sept 30. That kind of future millhead grade would be more than 30% higher than the average grade assigned to the ore reserves.

At 0.085 oz gold per ton production grade and assumed recovery of 87% a total of about 73,000 oz (not 150,000 oz) would be produced in the first year of operation.

None of these ounces can be classed as revenue because all production gold (to 100,000 oz) in the first year must be turned over to the bank on or before April 28. This means that effectively the mine will operate for more than one year at about $200-per-oz costs with no production revenue.

The Northern Miner does perform many useful functions for the Canadian mining industry (or I would not subscribe to it) but critical review or overly optimistic forecasts by mining companies is obviously not one of them. In the last analysis it is really up to management. If the future really is bleak for the Nickel Place open pit, surely management should say so. Martin Kierans Vancouver, B.C.