50,000 initially Granges, Abermin getting up steam on Manitoba’s

Construction work on surface facilities continues uninterrupted as underground development nears the Main zone deposit at Granges Exploration’s Tartan Lake project near Flin Flon, Man. The drive into this major ore horizon is designed to establish the continuity of the zone and the results will be incorporated into an existing feasibility study.

Previous exploration work was very thorough and it’s highly unlikely there will be any major surprises. Abermin Corp., which will have a 50% interest in the project, requires a more definitive feasibility study to debt-finance its portion of development costs.

Abermin President Roger Taylor tells The Northern Miner that approximately $6 million had been spent on the project by year-end. Total capital cost should be about $17 million and he expects Abermin will have to contribute about $6 million of its own money to meet its commitments.

Granges President Mike Muzylowski confirms they are now drifting in the South zone which has not been included in reserves. A crosscut is advancing towards the Main zone and ore-grade material is being stockpiled for mill tuneup and flow sheet refinement.

Proven and probable reserves are 582,000 tons grading 0.31 oz gold (excluding the South zone) and independent calculations suggest that figure might be conservative. In any event, there is plenty of good structure in the region with additional reserve potential in and around the mine site.

Design capacity for the modular- type mill is 250-300 tonnes per day but it will be expandable to 500 tonnes. First-year gold output should be approximately 50,000 oz and gold production is expected to begin in the first quarter. The plant will include a gravity circuit and a small flotation section. The gold is associated with pyrite which will be tabled and sent to the flotation section. Jig concentrate containing free gold will go to the refinery. Arsenopyrite is not a problem because there are only traces of the mineral in the ore.

The gravity and flotation sections each came in one piece and they were all pre-wired to control on-site construction costs. About 6% of mill throughput will be recovered as concentrate which should contain 2-4 oz gold per ton.The concentrate will be leached and the gold recovered by zinc precipitation (Merrill Crowe).

Permits have been received to deposit mine tailings in a small lake near the plant.The tailings line is mounted on a trestle which traverses the one-mile distance. There are no fish in the lake, which was a condition of the permit, and the tailings will be submerged.

Hydrogen peroxide will be used to destroy residual cyanide which the company claims is more expensive than other systems but more reliable. Monitoring systems will be established to ensure none escapes into the environment.

Underground mining is cut and fill and the coarse fraction from the plant will be used for hydraulic back fill. Development crews are taking the first undercut at this moment. The company is optimistic it will be able to achieve a fill rate of 200 tonnes of solids per hour. This is being done at the nearby Trout Lake mine (Hudson Bay Mining & Smelting) in which Granges has a 19.8% interest. Ground conditions at Tartan appear to be excellent but some water was encountered which Granges says has been controlled by grouting.

Metal culverts will be installed in the stopes and drainage towers will be extended upward from these culverts as mining progresses. These towers will also be used for ventilation purposes and also as escape routes. Normal stope access will be from the decline which also makes the mine workings easier to ventilate.

Mining equipment will be similar to that used at Trout Lake. Haulage vehicles will include R35 Finnish Toros which can haul 30 tonnes on a 15% decline. Purchasing the same type equipment will allow Granges to rationalize its spare parts inventory. There will only be two haulage vehicles which will be sufficient to handle 500-600 tons of ore and waste per day. They will also purchase one Toro 400D loader (5-yd) and two 150D (2.5-yd) loaders. For development drilling they will be using a 2-boom hydraulic jumbo (Tamrock) and a one- boom prototype on a test basis. The mine will employ about 35 people. Electricians and mechanics will be trained to work in the mill so they can repair equipment the minute it breaks down. Workers will be interchangeable and they will also have radio transmitters and receivers to keep in close contact.

Granges is becoming a significant force in the United States heap leach sector. The company recently took an option on — Ican Minerals’ Almaden property in Idaho. Granges recently agreed to take down 200,000 Ican units at $2.10 each and the funds will be spent on the property.

All previous data from the property will be reviewed and some metallurgical test work will be done. Ican had little success with the metallurgy at Almaden. More drilling is planned in an attempt to “twin” about 15 random holes. Granges vice-president, Doug McRae, confirms they have an option on the control position in Ican. Noting there is one million ounces of gold at Almaden, he claims that Hycroft Resources & Development, a subsidiary, had similar problems at its Crofoot property in Nevada which were resolved satisfactorily.

Earlier this year, Granges finalized the purchase of the operating Lewis mine property near its Crofoot project. The deal was subject to the “reasonable consent of the lessor” who subsequently proved to be quite unreasonable. Granges says the dispute will go to arbitration this April and doesn’t view it as a problem. Total gold production from the properties could be around 80,000 oz and 57% of it would be net to Granges.

Mr McRae says Granges currently has a working capital of $36 million and is looking for an acquisition. He also notes the company’s shareholding in Hycroft Resources is worth about $60 million.