Treminco’s Ptarmigan Mine Poised for Expansion

The Ptarmigan gold mine near Yellowknife, N.W.T., is proving to be a solid source of cash flow for Treminco Resources (TSE), a company managed by a board of directors almost entirely made up of former Cominco Ltd. (TSE) executives and mine managers.

For the six months since commercial production began in April, 1988, the mine produced 8,300 oz of gold and generated revenue of $3,780,000 from the milling of 20,350 tons of ore grading on average 0.41 oz gold per ton. The past producer (34,000 tons of 0.35 oz gold during 11 months in the early 1940s) was acquired in late 1986 from Cominco Ltd. which had developed the mine by sinking a 900-ft shaft and opening six levels.

Although a modest operation at this stage, Treminco expects to increase production to about 25,000 oz per year from the Ptarmigan deposit and the nearby Tom property after it finishes re-equipping the shaft with a new headframe and hoist and brings on stream its own mill. While ore is now being processed under contract at the nearby mill owned and operated by Giant Yellowknife Mines (TSE), the company is already pouring the foundations for a 200-ton-per-day mill to be built on site.

William Trenaman, vice-president, said the company hopes to have the mill ready by mid-1989, about the time the contract with Giant Yellowknife runs out. Capital costs are expected to be in the range of $1.2-$1.5 million; unusually low for a northern operation. “We’re good at scrounging equipment and doing most of the work ourselves,” Trenaman explained.

Trenaman said there were two main reasons why the company decided to build its own mill. “First of all we want to enhance recoveries as we are now getting only about 85% of the gold from custom milling (process circuits are attuned to the nature of Giant’s ore, while Treminco’s is free-milling), plus we want to reduce costs. We think by the time we are running at full speed we can reduce our milling costs by nearly half, based on our experience in northern British Columbia.”

For many years manager of mines for Cominco including the Sullivan mine at Kimberley, Trenaman spent six years developing, constructing and managing small underground gold mines in British Columbia among them the Erickson and United Hearne- Taurus operations near Cassiar.

By the time the company gets the mill up to capacity it hopes to put through 6,000 tons per month, with 80% of the ore to come from the Ptarmigan deposit and 20% to be trucked during the summer from the nearby Tom deposit.

When the company began work on the Ptarmigan it had proven reserves of 140,000 tons of 0.38 oz gold, but after milling about 25,000 tons, reserves were maintained at the 140,000 to 150,000 tons range from underground drill programs and exploration. (The project has reserves in other categories.)

An exploratory surface drill program was carried out during the summer which intersected a 2-ft section of the Ptarmigan vein containing abundant visible gold. The company said the intersection is particularly significant as it was drilled 1,700 ft west of the previously delineated ore zones at the Ptarmigan mine.

The Ptarmigan vein structure has now been identified some 2,500 ft to the west and 600 ft to the east of the mine shaft. In addition, deep- hole diamond drilling conducted this past summer intersected the vein at a depth of 1,500 ft, some 600 ft below the lowest level of the present mine workings, increasing the company’s optimism the mine may have depth potential. (The new hoist will have the capability of going down to 2,300 ft.)

The company is continuing work on its adjacent Tom gold project where a decline is being driven to the second level. Proven reserves at the Tom deposit stand at 20,000 tons at 0.35 oz gold. “It’s a lot smaller than the Ptarmigan but we haven’t put the money in to explore it,” Trenaman said.

“While most of our cash flow over the next six months is earmarked for current capital projects; the hoist, the headframe and the mill, after that we will be aggressively looking for other development projects that have proven reserves with potential to increase them further.”