AMERICAN BARRICK BONANZA

When the Spaniards discovered the high-grade orebo Peru and Bolivia they had a name for them — bonanzas — a word that conjures up the prospect of untold riches. The language of their cooler-blooded cousins to the north is less dramatic. If it weren’t, there would be a comparable term to capture what American Barrick is accomplishing in the semi-desert of northeastern Nevada. Not in the Spanish sense of finding high-grade orebodies, though the Meikle orebody is arguably in that category, but of pulling off a gamble, and having a glittering prize to show for it.

So what makes up the prize?

First, when Barrick purchased the Carlin property in 1986, gold reserves were 600,000 oz.; today the figure is 23.5 million oz., an increase of 3,800%. Second, production has increased from 40,144 oz. in 1987 to 546,146 oz. in 1991. The target for 1992 is 920,000 oz. The possibility for the late 1990s is 2.0 million oz. These figures are for the Carlin properties alone. In addition, there is the Mercur mine, Utah, (127,000 oz.); Pinson, Nevada, (15,000 oz.); Holt-McDermott, Ontario, (61,000 oz.); Camflo, Quebec, due to close in 1992 (25,000 oz.). These figures represent 1991 production.

Third, the investment community reduces all the realities and cumulative potential of any endeavor to a single denominator, the stock price. American Barrick shares have risen from a low of $10.50 in 1987 to a high of $37.75 (so far) in 1992. When 2-for-1 stock splits in each of 1987 and 1989 are taken into account, it is evident that an investment of $100 in 1987 would be worth over $1,400 today.

Barrick has become one of the leading, low-cost, North American gold producers from virtually a standing start, and it has achieved this position in a handful of years.

American Barrick was a latecomer into the Carlin field. Newmont was the first. That company staked its first claims in 1961, initiated production in 1965 and simultaneously acquired a major land position. Today it owns/controls approximately 380 square miles along a 38-mile stretch of the Carlin Trend and holds conditional rights on another 2,300 square miles.

Despite these huge holdings by a single company, there was still ground for others to buy. One such property was mined as a heap-leach operation by a joint venture comprising Pancana Industries of Calgary and Denver-based Western States Minerals. The two juniors and their predecessors had extracted 300,000 oz. of gold from 14 orebodies ranging in size from 5,000 to 800,000 tons.

But the property was for sale and Barrick was in the market. So in December, 1986, it laid down US$62 million. What drew Barrick to the property was its central location with reference to the Carlin Trend as a whole, its close proximity to Newmont’s operating mines, and the clincher, an exploration hole drilled by Pancana/Western States five years earlier.

The hole returned 0.28 oz. per ton over 120 ft. It penetrated the oxide portion of what would later be known as the Betze orebody. From this hole and others, the two companies estimated a reserve of approximately 600,000 oz. gold.

Barrick’s acquisition cost it just a shade over US$100 per oz.

Why the two junior companies sold after identifying a sizable ore reserve is not as strange as it might seem. Many companies then operating in Nevada were looking for easily-mined surface deposits amenable to inexpensive, heap-leach gold recovery. But ore grading 0.25 oz. per ton would make mill construction unavoidable. Heap-leaching that grade of ore was simply not an option.

The juniors had, therefore, to confront the problem of raising the necessary capital. And, in all probability, of losing control of their companies as part of the price. There was also the fundamental risk that accompanies the mining business the world over — would ore grades and tonnages live up to their billing? Would the joint venture make money on the project?

Under these terms, the $62 million offer was irresistible. Interestingly, Newmont turned down the opportunity to make the purchase.

By mid-1988 the first 4,500 tons-per-day (tpd) mill came on stream. In addition, the stripping needed to gain access to the higher-grade oxide ore, though low in grade, was suitable for heap-leaching, providing a timely and steadily increasing cash flow.

Milling capacity increased to 6,000 tpd in 1989. The first autoclave for pre-treating refractory ore came on line February, 1990. Two additional autoclaves were added in the spring of 1992. Three more will be operational by April, 1993, bringing the total to six. Milling capacity is 15,000 tpd.

Barrick produces three types of ore. That for heap leaching is oxidized material grading 0.01-0.04 oz. per ton. Costs are low but recovery is also low at approximately 65%. To June 30, 1992, total gold production from the 41 million tons leached so far is 814,000 oz.

The second type of ore is also oxidized. It grades more than 0.04 oz. per ton and averaged 0.09 oz. in 1991. The ore is ground in twin, semi-autogenous-grinding (SAG)/ball mill circuits and the gold recovered by cyanidation and carbon-in-leach (CIL) processing. Recovery in 1991 was 83%

The third type of ore is refractory sulphide. It grades 0.15 oz. per ton and greater. Average grade in 1991 was 0.17 oz., the same grade as the 95 million tons of refractory reserves so far delineated.

Autoclaving is one of the few processes suitable for the pretreatment of refractory ores. Without pretreatment, cyanidation would recover less than 30% of the metal. It liberates the infinitely small gold particles (an electron microscope is needed to see them) from their encapsulating pyrite. Recoveries are 88% at present, with expectations of 90% in the future.

Starting early in the second quarter, 1993, only higher-grade refractory ore will be milled and 15,000 tons per day are scheduled for the battery of six autoclaves. There is the probability of an increase to 18,000-20,000 tpd later.

Low-grade ores extracted in the course of mining sulphide will be delivered to the heap-leach pads or stockpiled for later treatment as circumstances dictate.

By late 1995, the underground Meikle mine will start delivering ore to the mill. It will average 0.63 oz. per ton (after dilution). All of the mine’s output will be autoclaved.

Full capacity is scheduled in 1996 at 2,000 tpd. Production will be 400,000 oz. gold per annum.

Geology

The confused sequence of rocks in northeastern Nevada was unravelled during the early, post-World War II period by Dr. Ralph Roberts of the United States Geological Survey (USGS). He elucidated the Carlin area as part of a major overthrust belt. During periods of mountain building, older cherts and mudstones of Ordovician age were pushed, en masse, over a basement of geologically younger Devonian sediments. These latter are limestones in the mining areas and host much, but far from all, of the region’s orebodies.

The older rocks are eroded through to the carbonates below at several points along the overthrust, creating the well-known “windows” of the Carlin Trend.

The Trend itself is a belt of fracturing several miles wide and at least 60 miles long. It is a zone of crustal weakness intruded by acidic dykes and diorite/granitic stocks. Through-going fractures served as conduits for hydrothermal solutions. Where the fractures traversed reactive carbonates, silicification and leaching of carbonates took place, and ore-bearing sulphides were precipitated. The age of the mineralization has been established at 40 million years.

So far, the bulk of Goldstrike’s ore has been recovered from the silicic sediments above the overthrust. This less chemically-reactive environment is responsible for the lower grade of the ore. Current production is derived increasingly from the carbonate rocks below the thrust and is markedly higher in grade. The Robert’s Mountain Thrust, named after its USGS discoverer, transects the pit. However, because of its complex, shingle-like structure, its precise bounds remain a matter of some debate.

Surface weathering reaches to a depth of 600-70
0 ft. and the bulk of the ore within the zone is oxidized. Below, lies sulphide.

Antimony, arsenic and mercury are common accompaniments of the ore. Although they are present in little more than trace amounts, they are invaluable pathfinders for the geochemist.

The Meikle orebody, two miles northwest of the Goldstrike pit, apexes 900 ft. below surface. It develops a broad, mercury soils anomaly. The corresponding arsenic anomaly is tighter and it was the focus of subsequent drilling. The antimony anomaly was more specific again, delineating a series of steeply dipping faults which circumscribes the mineralization. Interestingly, a mercury prospect was explored in the 1920s by an adit located near the surface projection of the Meikle orebody.

Mining

Goldstrike’s proven and probable reserves (Betze and Deep Post orebodies) total 145.3 million tons grading 0.127 oz. gold per ton. The orebodies are contiguous and mined from a single pit. Newmont’s portion of the Deep Post will also be mined from the same pit.

From the start of operations to June 30, 1992, 442 million tons of ore and waste have been mined. More than 41 million tons have been delivered to the leach pads and approximately six million tons to the mill.

Mining plans call for a decision to be made in the mid-1990s. Thus, open-pit mining may continue solely on the western extension of the Betze, or it may concentrate exclusively on the Deep Post, leaving the Betze until later. The first option will see completion of the western and central sections of the pit in the year 2000, the second some years later.

It is also planned to draw mill feed from lower-grade stockpiles in later years as pit production declines.

Excluding the major dewatering program that makes mining at Goldstrike possible, the pit is a conventional truck-and-shovel operation. Benches are 40 ft. in waste, 20 ft. in ore. Average slopes are 35deg to 38deg depending on location. Overall dimensions today are 4,000 ft. long by 3,500 ft. wide. Depths are variable but average about 950 ft.

Over 1.5 billion tons of rock will be extracted by the year 2000, leaving a pit 7,000 ft long, 4,000 ft. wide and approximately 1,500 ft. deep. In time, there will be a man-made, fresh-water lake, a boon to the wind-blown sage brush country.

Practically all Goldstrike’s ore lies below the water table. A comprehensive dewatering system is required to lower the water table in advance of mining. Twenty-two perimeter wells and seven in-pit wells are active. They pump 50,000 gallons per minute (gpm) and the rate will increase to 68,000 gpm by year end. Hydrological studies indicate that the latter rate will probably be the ultimate required over the life of the pit.

Pumps range in size from 600 HP to 1,500 HP. Some are deep-well pumps, others are line-shaft drives. Dissolved solids and acidity/alkalinity are not troublesome, but few pumps are designed for the high lift and large volumes at water temperatures of 130degF-135degF that Goldstrike requires. The selection, adaptation and redesign of pumps are a vital part of the overall operation and field testing is a continuing priority.

While vertical wells dewater the ground prior to mining, localized areas of perched water table initiated a number of pit-wall failures. The failures were most noticeable during the early years of operation before their cause was diagnosed. Today, perched water is located using piezometers. Two areas near the south wall of the pit and adjacent to the granodiorite intrusive are particularly prone. Here, 6-inch-diameter horizontal drain holes 600 ft.-1,000 ft. long are drilled at 200-ft. centres. They drain 200 gpm at the present time.

Routine pit wall stability is monitored by observation of 30 strategically located prisms. Pre-split blasting is practised to limit damage to the final pit wall.

A round-the-clock, seven-day-a-week operation moves an average of 385,000 tons of ore and waste from the Goldstrike pit per day — equivalent to an annual total of 140 million tons. Operators work a 12-hour shift so scheduled that four shifts worked back-to-back is the maximum called for. Typically there are less.

The load-and-haul fleet comprises three, 42-cu.-yd. electric shovels; four, 23-cu.-yd. hydraulic shovels; 46, 190-ton trucks; 18, 100-ton units and three 85-ton trucks, bringing the pit total to 67 trucks. Drilling is carried out using six, 60,000-lb. and four, 45,500-lb. (pull-down force) rotary drills. In addition, there is a fleet of water trucks, bulldozers, and maintenance and service vehicles.

A computerized dispatch system is run from a control tower located on the high wall of the pit. It integrates the truck-and-shovel cycle to ensure the least lost time. Equally important, it provides a wealth of detailed operating data for planners, production supervisors and maintenance personnel.

Each truck and shovel has its own computer panel. The operator supplies a continuing flow of information throughout the shift. Through the feedback loop, the truck driver is told which shovel to go to and where to take each load — to the heap-leach, low-grade stockpile, crusher or waste dump.

The property boundary between Newmont and Barrick splits the Deep Post orebody. When Newmont’s portion is mined in earnest (some already has) the dispatch system will be especially useful. Newmont’s ore will be mined and hauled by Barrick but milled at Newmont’s Gold Quarry mill 28 miles to the south.