Bulyanhulu District, Tanzania — Even with scorched red soil and unmistakably African vegetation, it isn’t difficult to imagine the Lake Victoria gold camp as a southern cousin to Canada’s famous Abitibi mining camp.
That’s what
In early 1999, though, the rationale was less obvious. The Sutton deal ran counter to an industry preference for large, disseminated epithermal deposits. Plus, rival
However, Alan Hill, executive vice-president, told analysts Barrick could not be more pleased with progress at Bulyanhulu. “In 22 months, we’ve taken a project with 3.6 million ounces, and virtually no infrastructure, to 10 million ounces, and built a mine that will begin production on schedule this April.”
Already, Hill said, plans are in the works to boost Buly’s annual production to 500,000 oz. from 400,000 oz. “We see potential for this to increase to 800,000 ounces, and the economics keep getting better and better. Buly will be a powerful cash-flow generator for at least 20 years.”
The company also views its newest mine as the hub of a district development program, and as a springboard to acquire and explore other projects in the emerging mining camp.
“Some 25 million ounces of gold have been found in the district during the past five years and there is still excellent upside yet,” Hill added.
Alex Davidson, vice-president of exploration, said the project continues to exceed his original expectations. “In today’s gold price environment, grade is king, and the average grade here is about 15 grams per tonne. The property now has over 10 million ounces of reserves at US$300 oz. gold, and it’s pretty insensitive to price.”
As for upside, Davidson expects the original reserve to be quadrupled with ongoing exploration. “The key to all this reserve growth is the continuity of the orebody. It’s absolutely amazing. I’ve never, in my entire career, seen an orebody with such continuity, both at depth and along strike.”
The Bulyanhulu deposit extends downdip at least 2 km and has a strike length of almost 5 km. More than 200,000 metres have been drilled to date, turning Buly into three distinct deposits: the Main zone, the East zone and the West zone. They are all found within Reef 1, one of nine reefs in the land package.
The bulk of the 10-million-oz. reserve (21 million tonnes averaging 14.69 grams gold per tonne) is within the Main zone. The East zone, discovered last year, contains 1.2 million oz. grading 12 grams. Though lower in grade than the other zones, its near-surface reserves can be reached by means of a ramp.
The West zone is deeper, and hosts almost 2 million oz. at 15.5 grams. It was found below some shallow Sutton holes that were barren. Recent drilling encountered encouraging results west of the West zone, in what is now being called a potential “Far West zone.”
The Main zone has the highest grades, averaging 18.9 grams per tonne, and is still open to depth. Based on two widely spaced, deep holes that returned high-grade mineralization, Davidson said he has “no doubt” that the orebody will be as continuous between these deep holes as has been demonstrated closer to surface.
Because of the continuous nature of the deposit, the conversion rate to reserves from resources is about 100%. Barrick is testing other reef systems, though results have yet to rival those encountered at Reef 1.
Mine building
In early 1999, the Bulyanhulu project consisted of an airstrip, a basic exploration camp, a decline developed to 280 metres below surface, and minimal surface facilities. Barrick has since built a process plant that is about to be commissioned, developed the underground to a depth of 375 metres, brought in power and water lines, upgraded an access road, and expanded the workforce to 800 from 200 people. Of this total, 600 are Tanzanians.
“All of this infrastructure is a great asset for local communities,” said Roy Meade, general manager. “They are now enjoying employment opportunities, greater medical care, access to electric power and water, and improved roads.”
Capital costs are US$280 million. Production this year will be 250,000 oz, ramping up to 380,000 oz. in 2002, and 400,000 in 2003. Cash costs of US$130 oz. are expected at full production (US$60 per oz. for mining and US$41 for processing), with total costs below US$200 per oz.
The mine is a modern, trackless operation using long-hole (45%) and drift-and-fill (35%) methods; the balance being development ore. Ore is accessible by a 1,090-metre deep shaft, 6.4 metres in diameter, situated at the centre of Main zone, and by three internal ramp systems.
In the years ahead, it may be necessary to sink another shaft, most likely in the high-grade West zone, to achieve expanded rates of production. That could mean another major capital investment, but will reduce development costs and haulage distances.
Most of the mining in the first five years will be long-hole, and tests are under way to determine if more of the Main zone can be mined using this method, thereby lowering costs. Even so, with grades concentrated in a narrow portion of the mining widths, selective mining must be exactly that, said James Walchuk, manager of mining. “Sometimes we feel as though we’re working at cross-purposes. We need the tonnes to feed the mill, but always have to remember we’re mining for ounces.”
The 2,500-tonne processing plant was designed for expansion in the years ahead. It consists of a 4,000-tonne-per-day crushing and grinding circuit, a copper-gold-silver flotation circuit, and a tailings thickening-filtration circuit. About 30% of thickened tailings will be used for paste backfill.
Recoveries are expected to average 89% for gold, of which 42% will be recovered in the gravity concentrate and 47% in the copper concentrate. However, with considerable visible gold in ores, mill personnel expect gravity recoveries could be even higher. The expected recovery rates for copper and silver are 85% and 79%, respectively.
Buly’s plant was designed to treat Buly’s sulphide ores. Given the presence of various oxide deposits in the region, it’s obvious why Barrick was a motivated bidder for a 50% stake in the nearby Geita mine, which was placed on the block by Ashanti Goldfields last year. Geita’s plant handles oxide, sulphide and transition ores, and therefore would have given Barrick the ability to process a broader range of ore types. However, that’s water under the bridge now that AngloGold is Ashanti’s partner at Geita.
‘Halls of Buly U’
The Lake Victoria gold district is far less explored than Canada’s Abitibi camp, which bodes well for reserve expansions and new discoveries. What it does not have is skilled miners — unlike the Abitibi, which boasts some of the best underground ore-chasers in the world. To remedy the problem, Barrick assembled a team of expatriates to train and transform hundreds of Tanzanians into productive miners.
The expatriates act as mentors at the production face, and through training courses conducted on surface and underground. Safety is emphasized, along with multi-tasking. Expats currently make up 28% of the mining department, though this will be reduced to 10% by 2006 and 5% by 2008.
The trainers and their management praised the Tanzanian crews for exceeding expectations. Underground training stopes — dubbed by one analyst as “the halls of Buly U” — have already turned out their first fully independent, national development crew.
“The Tanzanians are motivated, keen to learn and prepared to work hard,” Meade said. “Thanks to their efforts, we’re well ahead of our development schedule, and have built a stockpile that is 50% higher than we budgeted. This stockpile, and production from underground, will be the mill feed for the next two years, until we reach full production underground.”
Walchuk is equally impressed. “The two biggest surprises after the [quality of the] orebody are the ability to work in Tanzania and the achievement of the underground crews.”
The stockpile now exceeds 320,000 tonnes, and at year-end, 15,660 metres of development had been achieved, up from the budgeted 11,200 metres. Longhole stoping is achieving 30% total dilution, versus 43% in plans. The average mining widths experienced are close to the feasibility model (longhole minimum: 2.1 metres, and drift-and-fill minimum: 2.7 metres).
Ground conditions are described as “good,” though some poor conditions have been noted in upper sub-levels, owing to localized weathering.
Ongoing exploration
In addition to Bulyanhulu, Barrick picked up a package of properties from Rangold Resources and, more recently, Pangea Resources. The company now controls 7,200 sq. km of ground in the Lake Victoria gold belt, with Buly at the hub of its district development program.
The Lake Victoria gold belt consists of an inner and outer arc, both of which are bounded and intruded by granitic intrusives. The inner arc, consisting mainly of mafic and felsic volcanics (similar to the Abitibi camp), hosts several important deposits, such as Buly and Barrick’s nearby Tulawaka deposit (acquired in the Pangea takeover). Iron formation and sediments dominate on the outer arc, which hosts deposits such as Geita and Golden Ridge.
“There are almost no outcropping rocks,” Davidson said, “so although the belt has barely been touched, it has already made Tanzania one of the most attractive countries for gold exploration. I think it will be one of the top Archean districts in the world.”
Barrick has organized its holdings into six main geographic districts: Bulyanhulu, Tulawaka, Golden Pride, Geita, Musoma and Sekenke. The exploration teams at work in these groupings have experience in both Archean and African terranes.
This year’s exploration program is budgeted at US$24 million, and largely focused on Buly and Tulawaka, though significant work is also planned at Sekenke, Geita and parts of the Golden Pride district.
At Buly, about 80,000 metres of drilling will target the Main, West and East zones. Another target here is Itetemia, under option from
As for Bulyanhulu South and Golden Ridge, the former is the subject of a dispute with partner Ashanti Goldfields, and the latter is on hold because of metallurgical complexities.
Exploration at Tulawaka, 200 km from Buly, will focus on expanding the existing resource, and also test the nearby Kakindu prospect. Before drilling begins later this year, about US$200,000 will be spent at Kakindu, where thousands of artisanal miners were active a few years ago along a 7-km strike length.
Davidson said last year’s exploration effort at Tulawaka confirmed the grade and continuity of Pangea’s previous reverse-circulation drilling. Mineralization, which occurs in quartz veins and adjacent wall rocks, is continuous over a 1-km strike length and extends to a depth of 300 metres. A resource of 1 million contained ounces has been confirmed at a grade of 16 grams, and more drilling is under way to expand resources at depth and along strike, and to upgrade them to reserves.
“Then we’ll start a feasibility study,” Davidson added. “If we’re able to bring reserves to the 2-million-oz. level, Tulawaka may be a stand-alone facility. Otherwise, we’ll truck the ore to Buly for processing. In either event, Tulawaka will initially be an open-pit mine.”
About US$16 million will be spent at Tulawaka this year, including the feasibility study and environmental studies. While the land package covers 35 km of favourable geology, a priority is to test new targets below encouraging drill intercepts, such as 22.8 grams gold over 13.5 metres and 47.9 grams over 5.7 metres.
Exploration in the Golden Pride district will target gold mineralization along, or on splays of, the shear zone hosting the Golden Pride mine. Another target is the nearby Chocolate Reef project, acquired from Pangea. “It hosts a 1.6-million oz. gold resource in the same type of ore as Buly,” Davidson said. “We’re excited about its upside potential.”
The Musoma district on the east shore of Lake Victoria is an early-stage project covering small scale mines. Reconnaissance mapping and sampling are planned.
Barrick holds 18 licences (1,200 sq. km) in the Geita area, including extensions of the Geita mine to the east and west. Previous work returned encouraging results, including 7 grams over 4 metres and 3.2 grams over 13 metres, that will be followed-up this year. Extensions of artisanal workings were also found on four of the licences by reverse-air-blast drilling. Results include 17 grams over 4 metres, 10 grams over 5 metres, and 47 grams over 4 metres. Barrick plans to spend US$600,000 in the Geita area this year.
At Sekenke, southeast of Buly, Barrick holds 26 licences (2,400 sq. km). The land package covers the old Sekenke mine (145,000 oz. before 1960, at grades of 16-plus grams), and a 60-km long corridor of artisanal workings. The geology is described as “similar to Buly,” with about 3 km of gold-bearing reefs outlined on the main Sekenke shear itself. About US$500,000 will be spent this year before drilling begins.
“Most of these properties are at an early stage,” Davidson said. “Barrick doesn’t normally do grassroots exploration, but I think it can be justified in this case, because we have Buly as a processing hub for the entire region.”
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