In yet another asset sale to deal with its short-term debt crisis, Teck (YCK.B-T, TCK-N) is unloading its half stake in the Hemlo gold assets in northwestern Ontario to its joint-venture partner Barrick Gold (ABX-T, ABX-N). Barrick is paying US$65 million in cash, and the sale, due to close soon, is effective Jan. 1, 2009.
Situated 50 km east of the town of Marathon on Lake Superior’s north shore, the Hemlo operations comprise the neighbouring Williams and David Bell gold mines.
Williams is both an underground and open-pit operation.
The underground portion is accessed by a 1,300-metre production shaft, with mining carried out by long-hole stoping and Alimak methods with paste backfill. The open pit lies immediately above and adjacent to the underground mine.
The underground David Bell mine has a 1,160-metre production shaft, and miners use the same mining and backfill methods. However, the mill at surface is decommissioned and all ore is hauled over to the Williams mill for processing.
Williams mill using semi-autogenous grinding and a carbon-in-pulp gold recovery circuit. A gravity circuit pulls in about 20% of the gold. The dore bullion is refined in Canada and sold to third parties.
In 2007, the Hemlo joint venture produced 338,000 oz. gold at average total cash costs of US$529 per oz.
At the end of 2007, total proven and probable reserves at the Hemlo JV were 14.8 million tons grading 0.085 oz. gold per ton (13.5 million tonnes at 2.91 grams gold per tonne.), or 1.3 million contained ounces gold.
Barrick picked up its original 50% stake in the JV through its acquisition of Homestake Mining in 2001.
The third miner in the small but exceedingly rich gold camp was Newmont Mining (NMC-T, NEM-N), which closed its Golden Giant mine in 2006.
Fortune Minerals (FT-T, FTMDF-O) bought the Golden Giant mill and surface facilities from Newmont in 2006, and is now moving the mill and surface facilities to the junior’s NICO cobalt-gold- bismuth-copper project, located 160 km northwest of Yellowknife, N.W.T.
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