Florida Canyon starts up first of three for Pegasus

With the startup of the Florida Canyon mine, the first of three new mines planned within the next several months, Pegasus Gold is well on its way to meeting its scheduled annual production rate of 270,000 oz of gold by mid-1987.

Mining started at the Florida Canyon heap leach project, located in northwestern Nevada on Sept 10, less than a year following the completi on of a feasibility study. The leaching process began early this month.

The company was orginally looking at a 3-million-ton-per year production rate from this property where reserves now stand at 17.8 million tons grading 0.025 oz gold per ton. However, during the next two months production will be bumped up 33% to a new rate of 4-million-tons-per-year.

The recent rise in the price of gold is one of the reasons for this increase says vice-president Douglas Belanger, as it means the company will be able to drop its present cut-off grade of 0.02 oz gold per ton to roughly 0.17 or 0.18 oz of gold per ton.

About 15,000 oz of gold are expected to be produced from the mine this year and 70,000 oz of gold are slotted for production next year, up from an earlier estimate of 53,000 oz of gold per year.

Next month the company expects to start operations at its second planned mine, the nearby Relief Canyon mine, recently purchased from Lacana Mining. Not only is the start-up a few months earlier than anticipated, but production is also expected to be higher than expected. Originally, the annual production was expected to be 20,000 oz of gold, but that figure has been upwardly revised to an annual rate of 30,000 oz.

Relief Canyon will operate at a production rate of 1.5 million-tons- per-year, says Mr Belanger, and adds the system has the capacity to go up to 2 million-tons-per-year.

The company’s third planned mine, the Montana Tunnels project, is expected to achieve full startup in April 1987. Right now work is about seven weeks ahead of schedule and about $6 million under budget at $52.9 million notes Mr Belanger. With mineable reserves of 41.2 million tons grading 0.043 oz gold per ton, the mine will produce an average of 106,000 oz of gold per year. For the eight months it will be in operation in 1987, some 50,000 oz of gold are expected to be produced.

Unlike the two Nevada mines which are both heap leach operations, Montana Tunnels will use conventional recovery methods.

Once these three projects are all onstream, Pegasus will have four operating mines. Its Zortman/Landusky heap leach operation in north central Montana has been in continuous operation since 1979.

Production at Zortman/Landusky is expected to hit a record level of 85,000 oz of gold this year. It would have been about 10,000 oz higher had it not been for a torrential rainfall late last month which created flood conditions at the mine.

In an 18-hour period on Sept 26, some 9.5 inches of rain was dumped on the mine. That amount is over half of the average rainfall of 18 inches which is expected to fall in the mine area over an entire year.

The effect of so much rain in such a short period of time not only increased record flood conditions but also increased the amount of solution in the mine’s heap leach system by 50% to 35 million gallons, which is slightly less than the capacity at the mine.

Leaching operations are continuing with diluted solutions, but Mr Belanger says solution levels are now being reduced and adjusted to resume normal operations. However, at no time did any solution escape into the environment and no long-term effects are expected.