Equity may monitor tailings for 100 years

Closure of the Equity Silver (TSE) mining operation in British Columbia, forecast for the fourth quarter of 1992, will not herald the end of activity there, not by a long shot. Monitoring of the acidic seepage from the dumps will take years and years.

Equity has operated a low-grade, silver-copper open pit in the Houston area of the province since 1981 and few of the high expectations for the property have been realized. It may be more accurate to say the operation has been dogged by bad luck from the word go.

Placer Dome (TSE) is operator and majority owner of Equity with a 58.8% interest. The decision to bring the property into production was made (in 1979) with silver at US$11 per oz. The price averaged US$20 the following year. It then started on a long, unbroken decline from the beginning of milling in late 1981, when it was a respectable US$10.50 per oz., to the present level of under US$4. To aggravate the decline, there has also been the high exchange rate on the Canadian dollar and the inevitable leakage of earnings through inflation.

Equity came into production with a prospective life of more than 14 years and an ore reserve of 30.8 million tons grading 3.1 oz. silver and 0.028 oz. gold per ton and 0.384% copper. Initial milling capacity was 5,000 tons per day, peaking at 11,000 tons in 1987 (after plant expansions) and settling to 9,500 tons per day in 1990.

Soon after coming into production (at a capital cost estimated at $85 million), the silver-copper concentrate was found to be contaminated by undesirable elements to a much higher degree than anticipated. This meant that the company received far less revenue than expected because of smelter penalties. In addition, the smelters were unable to accept all of the concentrate that was being produced because of the high content of undesirables antimony and arsenic.

Equity and Placer were thus compelled to invest a further $22 million in expanding their chemical leaching facilities. This plant removed the impurities and came on stream in late 1981. Full capacity came 10 months later after many technical difficulties, only to be suspended indefinitely early in 1984.

The ultimate irony was that the nature of the ore had changed as the open pit deepened and the mineralogical character of the ore altered to a species that produced clean, readily salable concentrate; the concentrate no longer needed to be leached

While the changing character of the ore eliminated one problem, it created another. The ore’s gold and silver was initially recovered satisfactorily by flotation, but by early 1984 it was found that up to 50% of the gold values and 30% of the silver were bypassing the flotation circuit and passing out with the tailings. This necessitated another investment by Equity and Placer, this time to the tune of $12.5 million for a cyanidation and CIP circuit. The scavenger circuit, as it is called, came on line in January, 1985, and overall gold and silver recoveries are now 60% and 63%, respectively. These recoveries are not high by some standards but as high as can be expected from a complex, low-grade ore.

Had Equity and Placer been blessed with a 50-million-ton orebody and a better than US$4 silver price, then the companies could have looked back on their teething problems with equanimity. Unfortunately, that is far from the case; the mine’s final reserves will be exhausted within the next 12 months and the silver price is not only at distress levels, but it is unlikely to see an improvement in the near term.

As noted earlier, Equity’s troubles will be far from over when milling ceases in 1992. The ore deposit is of volcanogenic origin and is bounded by rocks impregnated with acid-generating pyrite.

The 88 million tons of waste rock containing 3-4% pyrite have been terraced to reduce their original 30-degree slope. The resculptered dumps are now being blanketed with three feet of compacted clay and an additional 18 inches of soil to support the growth of selected shrubs and grasses. Already 790,000 cu. yd. have been placed and 185 acres of the total 225 acres have been covered. Acidic seepage from the dumps will be neutralized with lime and the resulting sludge impounded in one of the water-filled pits.

According to mine manager Brian Robertson, the dumps will be monitored and the neutralizing system operated by a full-time staff of four people for perhaps as long as 100 years.

How much all of this is going to cost is being negotiated by a committee composed of representatives from government, the company and independant consultants. The committee has been wrestling with the problem for more than two years and a final figure has yet to be agreed upon. Figures ranging from $22 to $32 million are those most recently quoted by the company. All in all, the Equity story emphasizes with razor-sharp clarity the high risks that any mining company accepts when it undertakes to develop a mine: tackling mother nature’s eccentricities in addition to the normal business hazards of unpredictable costs and unpredictable prices.

If that was not enough, governments are adding yet another hurdle with a host of new, and open-ended environmental regulations.