Jacobina returns to production by going big

Jacobina, Brazil — In the Candombl beliefs of Bahia, the goddess Nan represents both death and rebirth. It’s unlikely she handled the fate of the Jacobina mine personally, since Jacobina’s rebirth, at the hands of Desert Sun Mining (DSM-T), owes more to practical mine development than to mysticism.

While Desert Sun has yet to book any revenue from the reborn Jacobina, the mine is back in production and pouring gold thanks to the fall in the exchange rate of the Brazilian real, an improved gold market, and Desert Sun’s own willingness to put money into an operation that had been starved for it.

Jacobina left the Anglo American (AAUK-Q) fold in 1996 in a deal between William Resources and Minorco, then Anglo’s foreign-investment vehicle. (AngloGold was not formed until 1998 and never owned Jacobina.) William tried to bring Jacobina back into production, but by 1999 had closed the mine and written off the purchase.

The problems that forced Jacobina to close can be condensed to one: when it was first built, it wasn’t seen as a low-grade, move-the-tons operation. It started as a tracked mine, with an underground crusher and a 3,000-tonne-per-day mill that wasn’t always getting all the ore it could handle. The mismatch between orebody, mine and mill caused bottlenecks and slowed production, so that Jacobina didn’t earn its way as an Anglo mine. The consequence for Jacobina was that the poorly performing mine ultimately was starved for capital.

It is a truth universally acknowledged that a mine in possession of too little capital must be in want of maintenance. At Jacobina, the mill had come to a point where it desperately needed refurbishment, and the underground crusher was a nearly constant problem.

Restoring the mill and redesigning the mine hinged, in the end, on a change in the economic climate of the Brazilian gold industry. A strong-currency policy from the mid-1990s that defended the Brazilian real’s parity with the U.S. dollar simply could not be maintained after the global recession began. Brazil let its currency fall against the greenback, finally landing near US33. That made Brazilian production far more competitive, simply because cash costs could come down. Brazilian economic protectionism and a policy of industrial self-sufficiency — a policy that often creates far more problems than it solves — also worked in Jacobina’s favour, because much of the capital equipment that Jacobina needed could be sourced in Brazil; there is, for example, a high tariff on imported trucks, but locally made Volvos are available and reliable.

Thus in 2002 Desert Sun took over William’s interest in Jacobina and, cashed up in a financing that caught the early wave of interest in gold, set about rebuilding a mine. Putting US$30 million and a couple of years into the mine, Desert Sun went into production early this year.

But bringing Jacobina back still meant shedding employees. The new mine, much more efficiently mechanized throughout, employs 170 people in the mine, 60 in the plant, and about 70 above ground in administrative, logistical, and exploration roles. The old Jacobina employed about 2,000 — but then, the old Jacobina shut down.

Another trait of the old Jacobina is gone. “You can tell when mines are in trouble,” says Stan Bharti, who managed William when it bought Jacobina and is now president of Desert Sun. “The first thing you see is accidents.” Safety, and consequently labour relations, had reached a low, because the operation placed little importance on either safety or working conditions. The miners didn’t have steel-toed boots or reflective coveralls, essential to safe working around underground vehicles. Up on the surface, the dry had no hot showers, and meals weren’t provided. Desert Sun installed showers, and brought in contractor GR Servios de Alimentaao as caterers to provide one meal per shift.

Changing attitudes at the top of the organizational chart changed attitudes everywhere else, eliminating disputes about working conditions and safety. “Labour relations come down to ‘what salary increase can we get?'” says Peter Tagliamonte, the mine’s general manager. Accident rates have fallen significantly, to North American levels, even though the new operation keeps closer tabs on incidents.

The union accepted a change to the work day; it is structured now as three 6-hour shifts with 2-hour intervals between them for overtime or blasting, which gives the operation much more flexibility in making the mining cycle fit the day.

The next few months will see whether Jacobina can make its cost target of less than US$200 per oz. The operation is now mining the Joao Belo deposit, from an old decline ramp that Desert Sun slashed out to provide access for large equipment. Joao Belo provides about 4,200 tonnes in a typical round. Production is on the older upper levels of the mine now, largely on the 640 Level. A new ramp from the 670 Level to the 510 Level will provide access into the Joao Belo II zone, where most of the present reserves are situated.

Reserves at Joao Belo were increased to 11 million tonnes with an average gold grade of 2 grams per tonne earlier this year.

The next deposit in line for development is Morro do Vento, about 600 metres from the plant and 3 km north of Joao Belo, where there is already some underground access from the existing Itapicuru decline. Resources in Morro do Vento and the nearby Basal Reef zone stand at 9.6 million tonnes grading 2.7 grams gold per tonne. Like many of the Jacobina deposits, Morro do Vento occupies the side of a hill, and would be mined from the bottom up, with ore sent down ore passes to a main haulage level below.

The metallurgical plant at Jacobina got more than cleaner plumbing and new liners for its mills in the renovation. A new process control system — operated from a couple of computer workstations in the control room — allows most of the mill to be operated automatically. Primary crushing has been moved entirely above-ground, feeding two ore bins that in turn feed a main ball mill able to handle 130 tonnes per hour, and a second mill with half that capacity. Milling characteristics of the quartzite ore mean that the mills operate with little steel, almost as semi-autogenous grinders.

The grind is to 0.075 mm, with a system of backward flows assuring that 80% of the material passes that size. A 24-hour leach recovers about 97% of the gold, which is recovered through carbon-in-pulp and smelted.

At the time of The Northern Miner’s visit, Desert Sun had only started pouring gold, but dor bars will go to Umicore‘s refinery in Sao Paulo.

There is a large resource base for Jacobina, including a significant zone at the Canavieiras decline, about 3 km north of the plant. There, a 900,000-tonne measured and indicated resource grades 3.8 grams gold per tonne, and a further 3.7 million tonnes of inferred mineralization grades 2.4 grams per tonne. Recent underground drilling at Canavieiras tested extensions of a previously mined ore zone, the Piritoso and Liberino reefs, plus areas stratigraphically above and below them.

Four holes on the previously mined reefs intersected significant gold mineralization in the latest round of drilling. One hole cut a 7-metre intersection grading 3.4 grams gold per tonne, while another cut 3 metres grading 4.5 grams. Two others encountered narrower zones of higher grade: 1.1 metres of 7.6 grams and 1.2 metres of 4.7 grams per tonne.

Two holes drilled into the Middle Unit and Lower Unit reefs, 60 to 100 metres stratigraphically below the Piritoso-Liberino strata, also intersected gold mineralization. One hole, CAN-79, found 15.2 metres of mineralization in the Middle Unit that averaged 8.4 grams gold per tonne (7.8 grams after high grades were cut to 30 grams). It also cut a 6.4-metre interval in the Lower Unit that averaged 9.3 grams per tonne, or 7.8 grams after cutting.

The second hole, 55 metres to the south of CAN-79, intersected two zones, one gr
ading 1.7 grams per tonne over 6.8 metres and the other, 2.4 grams over 4.4 metres.

The result points up one of the paradoxes of exploration at Jacobina, which had been seen as a stratabound gold deposit in quartzite and quartz-pebble conglomerate, much like the Witswatersrand deposits of South Africa. New interpretations, based on field observation of mineralized quartz veins and alteration, argue for a strong element of structural control in the Jacobina deposits, but exploration success at Canavieiras has relied on the old reliable mineralized-reef model.

That, however, may be a circle that doesn’t need much squaring. The structural picture in the immediate Jacobina area is of a series of north-striking thrusts that dip off to the east, nearly parallel to the bedding of the main sedimentary sequence. These, in turn, are crosscut by later faults that divide the sequence into blocks a kilometre or two in length. Structural plumbing parallel to the bedding planes of the host rock, and at the edges of the blocks, may be enough to explain the location of the gold at Jacobina.