NEVADA — Cortez joint venture reaches commercial production levels

Partners Placer Dome (PDG-N) and Kennecott are producing commercial quantities of gold at the Pipeline deposit in central Nevada.

The project is part of the Cortez joint-Venture, which includes three distinct gold properties; the Cortez open-pit mine, which began production in 1969, and the Pipeline property, consisting of the Pipeline and South Pipeline deposits.

In early March of this year, the first production gold dore was poured at the new gold processing plant for the Pipeline property. The partners had plenty of cause to celebrate as the cost of the project was US$250 million, which is US$69 million less than originally estimated.

The 7,200-Tonne-per-day project is also operating three months ahead of schedule.

Hugh Leggatt, spokesman for Placer Dome, concedes that the company gambled on the timing of the approval of permits at Pipeline. “We ordered all the equipment before the final permits were awarded,” he says.

Those permits, which were awarded in March 1996, took 41 months to be received, and construction began immediately afterwards. Construction was completed in March 1997.

In an attempt to keep costs low, the partners agreed to strip the open-pit deposit themselves rather than contract the work out. The stripping ratio for the Pipeline deposit, however, is high. The partners must mine 6.8 tonnes of waste for every tonne of ore. Included in the waste rock are 150 metres of alluvial gravels, which overlie the deposit.

The Pipeline deposit was discovered in 1991 during deep condemnation drilling for heap-leach pads at the nearby Gold Acres deposit. Although the first hole returned no significant values, the second returned 35 metres of mineralization averaging 10.5 grams gold per tonne starting at a depth of 180 metres.

The discovery sparked a renewed interest in the Crescent Valley area, which is near the Battle Mountain trend, attracting major and junior companies from across North America. The area remains the state’s number-one prospecting hot spot.

Reserves at the Pipeline stand at 82.7 million tonnes grading 2.7 grams gold, equivalent to 5.9 million ounces. Gold recovery is about 84%, and the operation has a mine life of 15 years.

The partners expect to produce 310,000 oz. gold per year, much of which will be processed through a new carbon-in-leach (CIL) mill. Based on a capacity of 7,200 tonnes per day, a throughput of 10,000 tonnes per day is possible. The average cash cost of production over the life of the Pipeline property is estimated at US$135 per oz.

The Pipeline deposits are classified as Carlin-Type disseminated gold deposits. Mineralization is primarily micron-sized free gold particles disseminated through the host rock, often associated with secondary silica, iron oxides or pyrite. Silver is not present in economic amounts.

Geochemically anomalous mercury, arsenic and antimony often accompany gold mineralization.

Placer Dome is operator of the Cortez joint venture and holds a 60% interest, with Kennecott holding the remainder. The partners began operations in 1969 from open-pit mineralization and Cortez was the first Nevada gold producer to successfully employ heap-leaching as a stand-Alone method of ore treatment.

In 1981, the mill process was converted to a CIL plant from a standard Merrill-Crowe plant. In 1990, a dry grinding plant and a circulating fluid-bed roaster were constructed for the oxidation of refractory ores prior to processing in the CIL mill. In 1994, the Cresent pit, a shallow oxide portion of the South Pipeline deposit, was placed into production.

Last year, the Cortez project turned out 160,782 oz. gold at a cash cost of US$191 per oz.