Wharf sees 50% jump in Dakota gold output

A much improved operating performance at Wharf Resources’ South Dakota gold properties could precipitate a 50% increase in production next year, according to Alan Farmer, president.

Leaching operations are expected to terminate by mid- November and he predicts gold production will be approximately 26,000 oz this year. Leach solutions will be heated next year which might add a few weeks to the operating season. Also, an operating plan is in place to increase gold production next season, he states, claiming total output could reach 40,000 oz.

The company is finally beginning to make some real money; 9-month net income of $1.3 million(US) was double that for the comparable period last year. Gold production during the recent 9- month period was 21,361 oz, almost half of which was recovered in the third quarter.

Wharf has had its share of troubles in the past few years but Mr Farmer has managed to overcome the difficulties and put together a sound business plan for the years ahead.

Mining operations are being conducted at Annie Creek and Foley Ridge which represent one contiguous property. These properties constitute a 13-year mine life based on 16.2 million tons of reserves grading 0.045 oz gold. Within that reserve inventory is a higher grade portion of 1.4 million tons averaging 0.089 oz; and the mineable reserves are still open on two sides and to depth. Mr Farmer tells The Northern Miner that Wharf is looking seriously at a method of treating the high grade material, noting that several alternatives are available including vat leaching.

Next year’s ore production is expected to be 1.2 million tons when material size will be reduced from 1.25 to 0.5 in. This will speed up recoveries and ensure a 72% extraction rate in 90 days giving Wharf a “big bump in production for a reasonable capital cost,” he says.

The plant can meet that production rate but probably not much more. It operates smoothly at grades of 0.04 oz to-0.06 oz and at maximum capacity could produce from 38,000 to 40,000 oz gold per year, he points out.

Unlike many other U.S. heap leach operations, Wharf does not contract out its mining. Rather,the company has its own mining equipment and personn el. Wharf recently switched to 50-ton trucks and the company is also planning to utilize a load-unload system rather than construct new leach pads. This allows it to preserve capital at a modest increase in operating costs.

Wharf has arranged a $4-million private placement which will be used for working capital during the winter months. The debentures, which mature in January, 1988 and 1989, are accompanied by 500,000 share-purchase warrants which will entitle the holder to purchase an equivalent number of shares at $3.35 each on or before Jan 2, 1989.