Blackdome grade pays bills; expect improved recoveries

Whether you are mining gold or base metals there is simply no substitute for grade. To a large extent that explains the phenomenal success of Blackdome Mining’s gold project, 140 miles north of Vancouver.

The company’s average head grade during the first 7.5 months of operation was 0.86 oz and recoveries were 91% for gold and 65% for silver. In the annual report, Carl Ashenhurst, president, said additional equipment will be installed to improve recoveries in the clay fraction and also from gravity separation. Mill throughput averaged 174 tons per day for the period and 29,807 oz gold were recovered and 78,860 oz silver in dore and concentr ate form. About 58% of the gold was recovered in dore form and 10.5% of the silver.

The Blackdome project is probably a textbook example of how a mine should be developed. Start-up operations went smoothly and facilities were completed on time and under budget. Understandably, these operational successes have been reflected in the company’s financial results. Net earnings for the period May 16 to Dec 31, 1987, were $4.5 million or 55 cents per share on revenues of $16.5 million.

The company had paid 35 cents in dividends by March 23 and year- end working capital was a hefty $7.4 million with no debt. Since production began, the price of gold increased from $325 to $390(US) so earnings this year could reflect even higher prices, assuming stability in precious metal markets.

At the beginning of 1986, ore reserves were 203,000 tons (cut and undiluted) grading 0.79 oz gold and 3.76 oz silver per ton using a 0.25-oz gold equivalent cutoff. Reserves at year-end (cut and diluted) totalled some 276,000 tons averaging 0.72 oz gold and 2.58 silver at the same cutoff.

Mr. Ashenhurst said plans are being formulated to create a new level beneath the 1,920-m level to reach reserves below that horizon. How and where the level will be opened up is still the subject of engineering studies. A new adit is planned for the north mine at about the 2,050-m elevation to gain access to reserves above the north adit on the 1,960-m level.

Although the exact amount of exploration and development will depend on results, Mr Ashenhurst said 1987 plans include 20,000 ft of surface diamond drilling, 4,700 ft of drifting and crosscutting, and 2,670 ft of raising.