Past may be prologue if A-J mine revives

If this historic mining town once again becomes an active mining centre, Echo Bay Mines (TSE) will have led the way. The company has taken on two former producing projects just outside this picturesque community, A-J and Treadwell, and a third project, Kensington, in the Berners Bay area, some 45 miles to the north.

Treadwell is still in the early stages of exploration, but Kensington and A-J are both advanced projects moving into their final permitting stages. Echo Bay hasn’t made a formal production decision for either project, however, and doesn’t expect to do so until all permits are in place.

The company also won’t predict which operation is likely to begin production first, although some local industry observers appear to be placing their bets on Kensington which has higher gold grades. This project is operated and owned 50% by Echo Bay, with a unit of Coeur d’Alene Mines (NYSE) holding the remainder.

Capital costs for the easily accessible A-J, owned 85% by Echo Bay, are projected at US$275 million, which includes construction of an underground mill. Including contingencies, Kensington’s projected costs are a more modest US$170-180 million which would be shared equally by the two partners.

All Echo Bay’s projects were featured prominently during the recent Conference Juneau, 1991, sponsored by the Juneau branch of the Alaska Miners Association. The A-J and Treadwell mines, in particular, provided for a fascinating glimpse of mining in days long past.

A-J produced over three million ounces gold in 1901-44, and is believed to have been the lowest-grade underground gold mine ever operated to make a profit. As for Treadwell, it churned out 3.2 million oz. during 1882-1917 when a cave-in flooded most of the mining operation.

Echo Bay took on A-J in 1985, and exploration work since then has resulted in expansion of minable reserves and mine development plans. Drilling to date is reported to total over 158,600 ft. in 315 holes.

The 1990 program was successful in increasing proven and probable reserves by 30%, and these now total 63.6 million tons averaging 0.052 oz. gold per ton. The deposit also contains possible reserves of 42.1 million tons averaging 0.051 oz. gold, and is still considered to have plenty of unexplored potential.

The A-J deposit, which consists of swarms of northwest striking and steeply northeast dipping quartz-carbonate veins, is about three miles long and ranges from about 50-650 ft. wide. The deposit is localized along the sheared contact of volcanic rocks and an overlying slate. Grade is reported to be dependent upon the density of the veining.

Echo Bay is proposing to underground mine and mill 22,500 tons per day to produce 367,000 oz. gold annually. Current initial cash production costs are US$225 per oz. gold produced. The mill will incorporate both gravity and flotation circuits.

The A-J mine project incorporates a number of special features. For example, the majority of processing will take place underground although some facilities such as the refinery and flotation circuit would be located on surface. The objective is to minimize haulage distances, noise and dust.

The underground mill would be 8,000 ft. from the portal of a new production adit which would extend from tidewater for a distance of 20,000 ft. to the deposit.

A tailings impoundment will involve construction of a tailings impoundment across the Sheep Creek valley which will be capable of holding over 100 million tons of tailings and waste rock.

Delegates to the conference were told that the proposed mining method would involve a modified form of blasthole open stoping, which would result in the deposit being mined by mass blasts from top to bottom.

Environmental considerations are also being given a high priority at A-J in view of the site’s proximity to Juneau, a popular tourist destination. Even though Juneau began life as a mining town parts of the city were built on old tailings and waste rock (which are not acid-generating) some residents have expressed concern about the operation’s environmental and socio-economic impacts.

Juneau’s mining history is an integral part of various tourist attractions, and Echo Bay is proposing to incorporate tourism opportunities into its A-J mine facilities. It’s also committed to local hire, so much of the operation’s 450-person workforce would likely be from the Alaskan Panhandle.

Echo Bay also owns 85% of Treadwell, a mile away across the Gastineau Channel. In 1990, four exploratory holes were drilled beneath the former producer by drilling one master hole from which four pierce points were obtained by directional drilling techniques. The holes averaged 4,890 ft. in length.

The first three holes encountered the diorite formation that hosts the Treadwell zone, but showed scant gold.

The fourth encountered 600 ft. of diorite, of which 186 ft. graded 0.10 oz. gold, including 40 ft. of 0.22 oz. gold per ton (the historic grade is about 0.12 oz.). Echo Bay is developing plans for further exploration of this mineralization.

As an interesting aside, the master hole was drilled through the Coast Range Megalineament which was manifested by over 2,800 ft. of intense shearing. The drilling provided academically oriented geologists with a rare look at a geologic feature along which are located the gold-bearing quartz vein deposits of the Juneau gold belt.