A decision to go ahead with production at Energex Resources’ Al property in the Toodoggone area of north- central British Columbia will depend on results of a feasibility study to be completed mid-February, according to President A. Birkeland.
“Assuming a production decision is made and capital requirements are in place, we could see production in the latter part of 1988 or early ’89,” Birkeland said.
He added that production will probably be around 200 tons per day. If the green light is given, extension of the access road will start early spring. A modular mill would be moved on site and tailings, stripping and stockpiling ore in the open pits would take place late in summer.
Timing of the project will depend on how quickly financing could be arranged, Birkeland said.
The company completed a $2.3-million exploration program in 1987 which increased ore reserves to 1.9 million tons grading 0.57 oz gold in the combined drill proven, probable and possible categories. Geological reserves in the drill- proven category (uncut and undiluted) are estimated at 809,000 tons grading 0.175 oz for the Bonanza, Thesis and bv deposits. Most of these shallow reserves are amenable to low-cost open pit mining methods.
A Stage One prospectus has been filed with the provincial government and the company is conducting ongoing metallurgical tests to determine mill design.
Consideration is also being given to having a heap leach operation on site to process the large tonnages of low grade mineralization currently classified as waste rock.
“The low capital and operating costs of heap leaching may make it possible to enhance the project’s economics by leaching low grade pit rock removed during the mining of higher grade milling ore,” Birkeland said.
Initial metallurgical leach tests performed on Al project ore have demonstrated good recoveries.
On site exploration will start again in June. Energex expects to spend around $2 million on 25,000 ft of drilling aimed at increasing known reserves.
At the close of the quarter ended Nov 30 the company had a cash position of $3.5 million and working capital of $3.3 million.
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