Ateba gets gold flowing again in Beardmore, Ont

The yellow metal will start to flow again here in December, The Northern Miner can report after a visit to the only active mill in the area — the Pan-Empire mill being operated by Ateba Mines Inc. of Toronto.

Exploration work is picking up too. Several mining companies, both juniors and the majors, are bullishly exploring along this 80-km stretch of the northern route of the TransCanada Highway between here and Geraldton, Ont.

A new headframe has been erected on the old Magnet mine property — once the highest grade producer in the area — and a new electrical substation has been built to allow dewatering pumps to work around the clock. They will dewater the old mine workings, providing access to the 17th level where it is believed major mine-making ore potential exists.

Some 359,912 tons at a grade of 0.42 oz gold per ton were mined between 1938 and 1951 whereby mineralized rock on either side of the ore was blasted into the stope as fill. Remaining mineral inventories total 944,000 tons averaging 0.18 oz. Richard Robert, mill superintendent of the only operating gold mill in this camp, which at one time supported at least 11 mills, says he intends to pour a bar of the yellow metal sometime in early December.

The small, 200-ton-per-day carbon-in-pulp mill, built by Pancontinental Mining (Canada) in 1981, is located on the former- producing Northern Empire mine property. Gold was last poured here in 1983. At that time it was being leased to Teck Corp.

But now, Mr Robert and 18 others are employed by Ateba, a Toronto-listed company under the directorship of internationally well- known mining engineer and entrepreneur Arthur (Peter) C. A. Howe. This will be his second operating mine in Canada.

About two weeks ago, Ateba started treating the 160,000 tons of already-mined material that sits on surface behind the mill.

This material grades as low as 0.01-0.04 oz.

Gaston Poulin of Hearst, Ont. has been contracted by Ateba to move and screen the run-of-mine ore at a cost of just $3.20 per ton. Ore sorter

The ore is being separated into three different size fractions. The –1-inch material goes directly to the mill and the other two are being fed with front-end loaders into a sophisticated machine that eliminates most of the waste rock. The machine reduces the amount of material going to the mill by as much as 90%.

Mill head grades are subsequently increased significantly to about 0.15 oz gold per ton. Based on pilot-scale work at Lakefield Research in Peterborough, Ont., recoveries are expected to be 92%.

The ore sorter automatically sorts the material according to the photometric and magnetic properties of the ore and waste rock — light- colored quartz and magnetic magnetite, which is associated with the gold, goes to the mill feed pile and dark-colored, non-magnetic, waste rock goes to the reject pile.

Once the so-called “bugs” are worked out (a new Compair 6000 compressor is operating and operators are adequately trained to run the machine) Ateba general manager Stephen J. Wilkinson is confident he’ll have enough mill feed, grading 0.15 oz to enable Mr Robert to pour about 8,400 oz of gold in each of the next two 12-month periods. Very profitable

Although this may not sound like much, the fact that Ateba has use of the $4-million mill and a $350,000 sorter at no capital cost to the company and due to the fact that the operation is exempt from provincial taxes for the first three years, means net profits will be substantial — about $3.2 million over two years, or 7 cents -8 cents per share.

Ateba has access to enough of this already-mined material in the area to maintain a mill feed rate of 200 tons per day for two years.

Total costs are projected to be $300(C) per oz, but The Northern Miner has learned this is a very conservative figure. It will more likely be in the order of $250 per ounce.

Pancontinental retains a 13.75% net smelter interest in production from the Pan Empire mill.

Asked why the material is not being heap leached and only the carbon-in-pulp circuit in the mill used instead, Mr Wilkinson replied that this technique may be tried next year.

But Ateba has much bigger plans for the area. Using the $1.6 million the company expects to net each year from this small milling operation, and a combination of flow- through and equity financing, Ateba fully intends to find mineable gold deposits in the area. A total of $3.5 million may be available to the company for exploration work in April if all its rights, which trade on the tse, are exercised. Exploration work is under way on several properties in the area. Magnet mine

The Magnet mine is by far the most advanced and at the rate the company is spending money it will have earned a 60% interest in the ground, from Roxmark Resources, probably by February, 1988, according to Mr Howe. Ateba holds a 19.5% interest in Roxmark.

Dr Stan Malouf, president of Roxmark, is very bullish on the potential of finding more ore in the mine below the Magnet fault. “There are widths of 70 ft grading 0.17 oz cut to 2 oz, drilled by Magnet Consolidated Mines back in the old days (1951),” Dr Malouf says.

“We have stepped out over 80 ft and got the same widths grading 0.08 in a series of intersections,” he adds.

Once the mine has been dewatered to the 2,600-ft level the workings can be re-sampled for the first time since the early 1950s. The 17th level should be dewatered by the end of January, according to project superintendent Paul Brugger.

The company is now completing a drilling program on surface, which according to Dr Malouf has been scoring well.

“I think there is no question about getting narrow-type occurrences here, but we’re looking for the big ones too,” Dr Malouf says.

Since the oldtimers needed 0.30-oz material to make the mine economic, chances are there are gold values in the broken rock that fills the stopes in the upper levels. This material could be economic today.

Ateba and Roxmark plan to drive crosscuts on the second level in the mine while waiting for water levels to go down.

The hoist for the underground winze has arrived on site and the main surface hoist, which should be delivered completely assembled should be on site Nov 1. The surface hoist comes from an old mine in New Mexico.

Ateba is projecting mining will commence at the Magnet mine in 1989-90. Alternatives for treating the ore include: constructing another ore sorting machine then trucking to the Pan Empire mill; or constructing a new mill at the Magnet mine.

Ateba estimates it would cost about $250,000 to double the capacity of the Pan Empire mill to 400 tons per day.

Although it may sound as if Ateba has a large float, with some 18 million shares outstanding, only about 4.5 million of these are actively traded on the market. The rest are tightly held by the directors of the company, mvp Capital, nim and shareholders in Australia and New Zealand.

The stock traded this week in Toronto and Alberta at about $1.03.