Grouse Creek up and running

Despite the increasingly complex regulatory environment, it is still possible, after considerable patience and perseverence, to permit a new mining operation in the U.S. For proof, one need look no further than the new Grouse Creek gold mine here in central Idaho, the site of a recent visit by The Northern Miner.

Hecla Mining (NYSE) originally acquired the property through a merger with CoCa Mines in 1991 and subsequently, in 1993, sold a 20% interest to TSE-listed Great Lakes Minerals. (Great Lakes recently arranged financing to acquire an additional 10% interest.)

Permitting at Grouse Creek has been ongoing since the early 1980s, and CoCa submitted a revised plan of operations in February, 1990. Final approval for the supplemental environmental impact statement was received in July, 1992, but a construction decision was delayed until June, 1993, as a result of low metal prices.

Though relatively fast by American standards, the permitting time compares poorly with Hecla’s experience at its La Choya gold mine in Mexico’s Sonora state. La Choya’s final permits were in hand within a few months of a positive production decision.

That is not to say La Choya skimped on environmental responsibilities. Hecla is quick to point out that the Mexican project is designed to North American environmental standards, including a closed-circuit system with no discharge into the local environment.

Meanwhile, back in the U.S., environmental matters are more complex. Hecla reports that a lawsuit filed by two environmental groups threatened to halt timber, grazing, mining and road-building projects in six national forests in Idaho. The suit alleges that the U.S. Forest Service (USFS) failed to consult the National Marine Fisheries Services (NMFS) regarding endangered salmon. Last month, a court ordered a halt to certain resource activities in the national forests. But the parties affected moved to stay the decision, and this was granted until March 16, in order to allow consultations between the USFS and NMFS to continue.

Hecla, which has court approval to continue operations, does not expect to be affected by the outcome as the mine was previously determined as “not likely to adversely affect” salmon habitat.

Construction at Grouse Creek started in June, 1993, and was completed last year, with mining and stockpiling of ore beginning in mid-1994. The project includes two disseminated open-pit deposits and a small underground operation consisting of two adjacent and flat-lying pods of high-grade ore.

The two open-pit deposits are next to one another in the mountain-side, above the mill site. Open-pit mining started in the Sunbeam deposit (immediately above the mill), and the final pit floor is expected to extend slightly below the level of the mill site. Open-pit mining will then move to the adjacent Grouse deposit, a few hundred feet to the west, with waste material back-filled into the depleted Sunbeam pit.

The Sunbeam deposit contains proven and probable reserves totalling 6.9 million tons grading 0.048 oz. gold and 0.35 oz. silver per ton at a stripping ratio of 3.5-to-1. Proven and probable reserves in Grouse are calculated at 8 million tons grading 0.05 oz. gold and 1.66 oz. silver, with a stripping ratio of 5.1-to-1.

The two pods of underground ore are immediately below Grouse deposit and have been developed with two 1,500-ft.-long adits into the side of the mountain. The B3 deposit is about 150 ft. long, 30 ft. high and 50 ft. wide, while the adjacent A3 deposit measures 200 by 100 ft. and is about 30 ft. high. The two deposits contain an estimated 183,000 tons grading 0.55 oz. gold and 2.25 oz. silver.

Hecla is mining the two small pods using trackless equipment and back-filling with a cemented alluvial fill.

The company recently launched a 2,000-ft. underground drilling program in an attempt to locate other pods of high-grade material.

Chief Geologist Art Dahl told The Northern Miner that in addition to the immediate potential to find more small but high-grade deposits, there is a good chance that other high-grade pods will be discovered as the Grouse pit extends to depth and reveals more about the geology in the immediate area. The final floor of the Grouse pit will extend to the level of the underground mining.

Dahl said much of last year’s US$1.5-million budget was spent inside the immediate mine area, with only about US$100,000 spent on other targets. With the mine now up and running, Hecla expects to spend another US$1.5 million on exploration this year, the bulk of which is earmarked for exploration outside the mine area. The joint venture holds about 22 square miles of exploration claims in the area.

Sunbeam and part of Grouse are on patented ground, and Hecla is applying for patents covering the rest of Grouse.

This year’s work will include drilling on several targets, including Estes Mountain where the company sees potential for the discovery of high-grade, vein-type deposits.

Startup of the mine is going smoothly, according to Production Manager Alan Frank. Indeed, considering that the mine is about 8,000 ft. above sea-level and that the commissioning is being done in the winter, Frank is surprised at just how successful the startup phase has been.

At the time of The Northern Miner’s visit to the property, a series of recent snowfalls had left a deep blanket of the white stuff over the operation. The weather had recently forced the company to shut down the pit for a few days, but, other than that, mining operations were going very well. The only major problem has been freezing and plugging in both the primary crusher and the reclaim feeders below the live ore stockpile. The problem with the crusher was solved with the addition of heaters, and the reclaim feeders are in the process of being enlarged and heated.

The 6,600-ton-per-day Grouse Creek mill uses both a gravity circuit and a standard carbon-in-pulp circuit, with gold recovered by means of the Merrill-Crowe process.

About half the gold is coarse enough to be recovered in the gravity circuit, which includes a Reichert Cone separator followed by spirals. The plant has operated at capacity during startup and Frank expects the mill to be up to its name-plate tonnage by late February.

Recoveries are running at more than 90% for gold and up to 70% for silver. Blast-hole assays have corresponded well with reserve expectations, but Frank said the company has not yet run enough material through the mill to determine head grades. About 100,000 tons of ore have been milled in the past two months.

The Grouse Creek operation will use very little fresh water during its operation, with much of the supply being recycled from the tailings pond. The tailings pond design includes two lifts, and room for more in the event additional reserves are found. The pond is plastic-lined in addition to having a layer of compacted clay. Reclamation will include a top plastic liner, effectively sealing the tailings in what Daniel Anderson, environmental manager, likened to “a giant baggie.” The top liner will then be covered and vegetated.

Anderson described the tailings pond as “state-of-the-art,” adding that it far supercedes the minimum requirements of permits.

Hecla has done considerable work on the environmental front, including the creation of a wetland area downstream from the mine on Jordan Creek. Anderson said the wetland construction worked out better than the company could have hoped, prompting a letter of commendation from the Fish and Wildlife Service. In addition, a number of universities, which in the past showed no interest in the new wetland, are looking at researching the project.

The joint venture spent a hefty US$1.5 million on the wetland, but Anderson pointed out that the company will get a lot of mileage out of the feature, quipping, “it will be worth its weight in gold if we permit another operation in this area.”

Development and construction costs at Grouse Creek totalled just over US$100 million, and the project is expected to produce 130,000 oz. gold and 970,000 oz. silver in 1995.
Cash costs are projected at US$175 per oz. gold after silver credits.