Tremincop sets sights on production at old Ptarmigan mine

In general, mining people are quite adaptable to changing conditions even if the transition involves leaving a major company for a junior. As an example, Vancouver-based Treminco Resources has four ex- Cominco executives on its board and a gold property previously owned by that company just outside Yellowknife.

Treminco is operating in what was once Cominco’s own back yard. (The latter’s Con mine operation was sold recently to Nerco Minerals, a U.S. mining concern, which is attempting to optimize production from the historically profitable operation.)

And many of Treminco’s board members have extensive experience in the region which it emphasizes will be a major plus in the years ahead. President Roland Trenaman, who among other things managed Cominco’s Sullivan mine at Kimberley, is one of these.

After protracted negotiations, Treminco managed to purchase Cominco’s old Ptarmigan mine which will be the focal point of its activities in the region — for the time being at least. Mr Trenaman concedes that negotiations with his former employer were difficult at times but he said they moved much more rapidly when Teck Corp. took over the company.

To acquire the property, Treminco agreed to purchase control of Ptarmigan Mines from Cominco for $1.4 million in staged payments. The purchase was conditional upon Treminco buying out minority shareholders as well for $140,000 and efforts are under way to contact these people, he says. Ptarmigan owes Cominco $1 million which is payable by Treminco through a net smelter return capped at $2 million. At present, Treminco has a 93% interest in Ptarmigan.

Treminco has been producing gold from its Tom claims near the Ptarmigan mine since September, 1986, although its main interest has always been Ptarmigan. Over 21,000 tons of ore were shipped to the nearby Giant Yellowknife mill which yielded 4,687 oz gold. The company is looking at an aggressive exploration program in the next 3-4 months and is forecasting 60,000 tons of ore production from the two properties in 1988.

A decline has been put down to reach the 150 level at Ptarmigan where proven reserves are 35,800 tons grading 0.42 oz gold. Treminco expects to ship 4,000 tons per month to Giant Yellowknife starting this September but the company wants to install its own mill eventually near the Tom mine. Treminco anticipates improved recoveries with its own plant and a payback period of around eight months.

He says construction of a 200-300-ton-per-day gravity flotation mill can be justified with present reserves, noting it would cost around $2.1 million and include tailings, infrastructure and other charges. At the lower throughput they would be looking at operating costs of less than $70 per ton compared to $75 by custom milling. With the plant, the company would be looking at an operating profit of $500,000 per month, he estimates.

Approximately 150,000 tons of reserves are available at the 900 level at Ptarmigan but the mine has never been explored below this horizon. So the reserve potential is probably much higher, he argues. The purpose of the decline is to reach an estimated 50,000 tons of ore on the first level which will be mined by shrinkage. The veins are discreet and the reserve potential is excellent both laterally and to depth. The previous cutoff was 0.25 oz gold so many reserve blocks were probably not mined out. The 900-ft shaft is plugged, probably with waste material, and Treminco might install a new headframe over the mine entry. In any event, by year-end Mr Trenaman says they will probably have to declare the operation a producer.