300,000 oz gold a year Giant production target

Nothing if not ambitious, Giant Yellowknife Mines is embarking on a 5-year program which it expects will see gold production soar from the present level of about 200,000 oz per year, to 300,000 oz.

That was the word given shareholders at the annual meeting by President D. J. Emery, who said cost of the entire program to achieve that expansion objective could run close to $100 million.

Gold production currently comes from the company’s mines in the Northwest Territories, and from mines in the Timmins area of Ontario which it acquired earlier this year from Pamour Inc.. (Pamour holds a 50.2% interest in Giant).

The major thrust in the expansion program, Mr Emery said, will be through greater underground development at Yellowknife, and by increasing open pit production and introducing heap leaching, at Timmins.

To help finance the program, Giant is currently negotiating a credit agreement involving a gold loan facility of $50 million.

Following the meeting, Mr Emery told The Northern Miner another major element in the 5-year plan will be re-treatment of mill tailings at Yellowknife (about $25 million), as well as the heap leaching program at Timmins ($2.8 million), deepening of the Ross mine shaft at Timmins ($20 million), and mill expansion and expansion of the No 3 pit at Timmins (close to $18 million).

He emphasized that while not all of the projects in the 5-year plan are as yet firm, several are in a definite “go” mode, such as the tailings retreatment plant at Yellowknife, and the heap leach program at Timmins.

On the latter, which the Giant president said could be one of the first, if not the first heap leach operations of a commercial size in Canada, the meeting was told by Peter Rowlandson, general manager of the Timmins division, that some two million tons, at a grade of 0.03 oz gold per ton, will be treated to yield annually about 40,000 oz gold.

And at Yellowknife, there is the potential to add about 37,000 oz gold per year through the retreatment of mill tailings, for which Mr Emery said pilot plant work is going ahead.

We’re very confident of the technology for this,” he said. Salmita going

Mr Emery told the meeting that the Salmita, northeast of Yellowknife, one of Canada’s biggest-little gold mines and a major contributor over the past few years to Giant’s N.W.T. operations, has run out of ore and the mine has been allowed to flood.

He said exploration drilling below the bottom or 10th level didn’t outline sufficient ore to permit deepening of the internal shaft, and drilling from surface has not yet delineated any new orebodies.

He said while Salmita produced 15,000 oz gold in the first five months of this year, no further gold production is expected other than from the treatment of about 600 tons in the bioleach test plant.

Combining all properties (Yellowknife and Timmins), he said total throughput to the end of May this year has been 956,788 tons at a grade of 0.117 oz gold per ton for a recovery of 98,133 oz.

To a question from the floor, Mr Emery said Giant this year is selling about 115,000 oz gold forward, over the next 12-13 months, at a price of $540 per oz.

“We are being more aggressive in selling forward this time around,” he said, referring to 1986, when the company sold a total of 39,000 oz forward, at an average price of $344(US) per oz.

Mr Emery said 1987 “is shaping up as a profitable year” for Giant, which in the first quarter reported earnings of $3.5 million, compared with earnings of $470,000 in the comparable period in 1986.