Bema officially opens first gold mine

The opening of the mine is the first for Bema Gold (TSE), a Vancouver-based junior that brought the heap leach mine into production 15 months after acquiring the property from Glamis Gold (TSE). More surprisingly, mine construction was co mpleted on budget at a total capital cost of only $2 million(US).

The Champagne mine is owned and operated by Idaho Gold, which is held 85% by Bema and 15% by Glamis. This year the mine is expected to produce 17,50 0 oz gold equivalent at an estimated operating cost of $150(US) per oz.

“It’s not the biggest mine in the world but we’ve accomplished what we set out to do by a lot of careful planning and by putting together a good technical team,” Bema President Clive Johnson told an audience largely made up of brokers and institutional fund managers.

Johnson also said the Champagne mine is a “stepping stone” to the development of other heap leach mine projects in Idaho, and also to a larger-scale gold mini ng operation it plans to develop in Chile.

A tour of the Champagne mine revealed a small, simple but efficient mining operation. The oxidized deposit is blasted and mined at a rate of about 4,200 tons of ore in each of two 10-hour shifts, four days a week.

The waste-to-ore ratio is low at 0.9:1.0 and mining takes place with a loader and a fleet of four 35-ton trucks that haul ore a short distance down a hill to the leach pads.

With mineable reserves of 3.3 million tons grading 0.033 oz gold equivalent per ton, the Champagne deposit is considered relatively low grade for a small-scal e mining operation. But because no crushing or agglomerating is required before the ore is stacked on pads, the company is able to keep costs to a minimum even before heap leaching begins.

The ore is stacked in 20-ft benches (to a maximum of 80 ft), and a weak cyanide solution is pumped from the barren pond to be dripped and, to a lesser extent, sprinkled onto the stacked ore.

The mine operates year-round. In winter only the drippers are used as they work better in lower temperatures, particularly when covered and insula ted by a lay er of snow.

Champagne ore contains some clay, but it is porous and metallurgically clean, so cyanide consumption is lower and recoveries higher than norma l for most hea p leach mines. Bema estimates that currently the mine consumes about 0.3 lb of c yanide per ton of ore.

The gold and silver-bearing cyanide solution leaves the heaps and flows into the pregnant pond where it is pumped at a rate of 680 gallons per minut e to two m obile Merrill Crowe recovery units that operate 24-hours per day, seven days a w eek.

The tour of the plant was given by Tom Nimsic of American Gold Silver Associates of Reno, Nev., who designed and built the recovery system fo r Idaho Gold.

Gold and silver are recovered by a zinc precipitation system. The remaining barren solution is then pumped into the barren pond. The gold/silver precipitate i s retorted in an oven to remove water and mercury and then smelted to produce 1, 000-oz bars of gold/silver dore containing 10-13% gold and 86-89% silver.

Sophisticated solution management on the heaps to maximize recoveries and the efficiency of the Merrill Crowe recovery plant appear to be the technical keys t o the operating success at Champagne.

Barry Rayment, who heads up Bema Gold’s U.S. subsidiary, said total metal recovery in the plant, including mercury which is collected and sold, i s about 90%, an unusually high number for the Merrill Crowe process. Rayment estimates life-o f-mine recoveries will approach 80% for gold and 40% for silver.

The mine is turning out about 3,000 gold equivalent oz per month, but this is expected to increase to an average of 3,500 oz per month within the next several weeks as the company enlarges its pumping system.

Next year the company expects to reach an annual production rate of about 23,000 oz gold equivalent. Production costs are expected to average $18 5 per oz gold equivalent over the life of the mine.

“It’s part of our philosophy not to have projects that are so sensitive to metal prices we would stay awake nights wondering if we’re still in business,” said Rayment.

At the opening ceremonies, mine manager Collin Fay said local residents support the mine which draws most of its work force from nearby Arco.

That’s good news for Bema which plans to bring on stream two other modest-size d heap leach mines further north in Idaho, the Buffalo Gulch and Erickson Reef, within the next several years.

But Bema is also looking to develop a much larger-scale mining operation in the Maricunga District of Chile, a prolific mining camp dominated by ma jor mining companies.

The company recently signed an agreement with a Chilean company for a 50/50 joint venture to explore and develop the Refugio gold property which is accessibl e by good gravel roads.

The property is believed to have potential to host a porphyry gold- copper deposit in the order of 130 million tons grading between 0.03 to 0.044 oz gold per ton and between 0.2% to 0.3% copper.

Bema President Clive Johnson said the company beat out competitors by using the Champagne mine as a model to convince its partner that it was capab le of bring ing the property to production faster than a major.

Bema’s strategy is to outline an open-pittable oxide reserve of about 30 million tons that would be amenable to heap leaching. An extensive dril ling, metallur gical and engineering program is slated to begin in mid-October.

The company is aiming to earn its interest in the project by funding explorati on to the completion of a feasibility study scheduled for 1991.

A $1.5-million work program is planned for 1990, and a $2-million program for 1991.

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