Treminco targets mill start-up for May

The new mill’s gravity and flotation circuits will enable the processing of gold ore that now has to be trucked to nearby Giant Yellowknife Mines for custom milling.

Treminco, a technically-oriented junior directed by several former Cominco Ltd. executives and mine mangers, began commercial production from the road-accessed Ptarmigan mine in April, 1988. The mine had been developed by Cominco in the early 1940s to a depth of 900 ft with six levels established at 150-ft intervals.

According to William Trenaman, vice-president construction of the concentrator and re-equipping of the Ptarmigan shaft (for increased hoisting capacity and for eventual access of lower levels) are progressing well and on schedule, with all necessary permitting in place. The company hopes to have the mill running at full capacity before its custom milling contract expires in July.

For the 6-month production period ended Jan 31, a total of 21,388 tons was custom milled containing about 10,000 oz gold for an average head grade of 0.467 oz gold per ton, a higher grade than anticipated.

“Our grade is better because I think we are mining more selectively,” said Trenaman, adding that over-all grade estimates were based on conservative calculations by Cominco.

“While we don’t anticipate the current grade to be maintained over the life of the mine, we’re not seeing them drop yet. Our average for February was close to 0.5 oz.”

Total operating costs for the period were about $117 per ton milled, or $250 per oz of gold produced. With its own milling facility (which will be better suited to its free-milling ores), Treminco estimates it would benefit by an estimated 15% improvement in gold recoveries, and by an $18 per ton drop in total operating costs. Payback of capital costs for the $1.5 million mill is anticipated about eight months after mill start-up.

For the six-month period, the company reported a profit of $472,000 on revenues of $4,345,000 and earnings per share of 8 cents . Cash flow from operations was $1,574,000 or 26 cents per share.

Through ongoing exploration, Treminco has been able to maintain Ptarmigan mine reserves at 151,000 tons of 0.35 oz gold in the measured and drill-indicated category (sufficient for a further three year mine life), and 125,000 tons grading 0.32 oz gold in the inferred category.

In 1989, the company hopes to produce between 22,000 to 25,000 oz gold from its Ptarmigan mine and from limited production at the nearby Tom deposit. Trenaman said the Tom deposit (where the company has identified a 10,000 to 15,000 ore block grading 0.35 oz gold) would play a back up role to supply extra stockpiled feed for the Ptarmigan mill.

Treminco is also planning to undertake an aggressive exploration program this season, including underground work, to follow up a number of targets identified on the Ptarmigan and Tom properties in the ’88 program. The company also has two smaller properties near Yellowknife which have limited drill- indicated reserves, but which are still classified as exploration projects.

The company’s future plans are to use cash flow from operations to acquire other properties and/or companies which offer expansion potential.

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