Barrick’s Goldstrike mine Crown jewel in company

Not quite two years ago the Goldstrike Mine was a relatively small heap leach producer and a moderately successful one at that. But this was before Toronto-based American Barrick Resources (TSE) got its hands on Goldstrike, a mine which now hosts about 13 million oz of gold reserves, among the largest of any property in North America. At the en d of 1987, Barrick said there were 1.4 million oz of reserves in the Surface Post and 7.3 million oz in the Betze/Post deep sulphide deposit.

The company purchased a 50% interest in Goldstrike for approximately $43 million from Western States Minerals on Dec 31, 1986 (avoiding some onerous tax consequences by closing before year end) and the remainder from PanCana Minerals over two weeks later.

PanCana was paid in Barrick shares (valued at $38 million) and $333,000 in cash. The total purchase price was considered by many at the time to be outrageous; but what happened after that is probably one of the great Cinderella stories in the North American gold mining industry.

In 1987 alone, reserves at Goldstrike increased 14 fold, mostly from the discovery of the Betze and Deep Post sulphide deposits along with additional tonnage in the Surface Post, presently the mine’s main source of feed. Oxide material from this area will be milled conventionally and is expected to exceed 0.09 oz gold at a very low strip ratio.

During at recent visit to Goldstrike, assistant mine manager, David A. Moody told The Northern Miner that reserves have now increased 30 fold since the purchase and Larry Kornze, exploration manager confirmed that “the new numbers are even larger.” Approximately 1.5 million oz of those reserves are considered heap leachable.

Mining capacity is four times what it was 20 months ago and the capacity of Barrick’s heap leach system has tripled to 3,600 gallons per minute. A crushing and agglomeration circuit has also been installed which has increased gold recoveries significantly. Barrick recently poured the first gold bar from its new 4,500-ton-per-day Goldstrike mill which began operating Aug 5. Cladding was missing from one section of the plant during The Northern Miner’s visit and we were told production started before the building was completed. (One thing Barrick understands is the bottom line).

A second mill is planned for refractory sulphide ores and it will require an autoclave with an initial capacity of 1,500 tons per day. (The company expects to expand it eventually to 5,000 tons). Once the near surface Post oxide deposit has been mined out, the recently commissioned mill will be converted to handle the deeper sulphide ore. Barrick said that metallurgical test work on the sulphide ore — including a composite bulk sample through a continuous pilot plant autoclave — “has exceeded the company’s recovery expectations.” Barrick will have an open pit mining plan for this sulphide ore in the fourth quarter.

Moody said that Barrick’s 1988 capital budget for Goldstrike is approximately $108(US) million which includes the mill, an underground decline into the Betze deposit, and the new tailings containment area. Total gold production this year is expected to reach 115,000 oz, rising to 175,000 oz next year when mining capacity reaches 60 million tons.

The Upper (Surface) Post, Lower (Deep) Post, and Betze deposits are located along the northern section of the Carlin trend, approximately five miles northwest of Newmont’s Carlin mine (N.M., Sept 5/88). Newmont’s Gold Quarry mine and the Upper Post are located in the upper plate rocks of the Roberts Mountains Thrust.

The host units for the near surface Post Deposit are siltstones and argillites while the Lower Post rests in silty limestones. Gold mineralization is associated with faulting and it appears to be tertiary in age and related to a volcanic event, said Kornze. “Basically, it’s a hot springs system,” he added.

The Deep Post was discovered by Western States which pulled a 357-ft intersection averaging 0.19 oz gold per ton. Barrick followed that up with a 620 ft hole that averaged 0.3 oz gold. Kornze told The Northern Miner that a one million ton high grade section on Barrick’s portion of that deposit could average 1.0 oz. Later, Barrick found the Betze deposit which is still in the feasibility stage but will probably be mined next year.

The Betze deposit, an IP discovery, could be surface mineable but Kornze noted it also looks good for block caving. Drilling has encountered heavy water flows, in some instances about 120 degrees fahrenheit. (Interestingly enough, Newmont said it’s been getting much lower volumes on its portion of the Deep Post which is below the Betze deposit).

Barrick has nearly completed exploration work on the Betze and it’s now doing condemnation drilling before developing the deposit. (The expression “condemnation drilling” means they are trying to find barren ground for waste dumps, etc.)

Barrick doesn’t seem too concerned about the water problem which Kornze said could be used for irrigation purposes on Newmont’s TS Ranch, possibly to extend the growing season for cattle feed. A 1,900-ft well is being drilled beside the Betze deposit for test pumping purposes which should give them a better handle on the water situation.

A decline is being put down from the old Long Lac pit through a large intrusive (to avoid water problems) which will access higher grade material on the south end of Betze. Material from this area might be used initially when the sulphide mill starts up. A drainage tunnel will be put under the oxide portion of the Post.

Barrick is mining Newmont Gold Company’s portion of the Surface Post at its own cost. The material is being stockpiled for Newmont’s use. Barrick really doesn’t have any choice if it wants to deepen its portion of the Post pit. Barrick and Newmont are putting a task force together to oversee development of the Surface and Deep Post deposits. At last report, Newmont was drilling the northern portion of the Deep Post which The Northern Miner was told is now closed off at depth, at least on Barrick’s Goldstrike property.

About 220 holes have been drilled to greater than 1,000 ft. The deeper holes have been concentrated in the Post and Betze areas where large reserves have been delineated. Drilling is planned on extensions of the Betze deposit, the promising Screamer and Gold Bug discoveries and other areas controlled by Barrick on the Carlin trend, said Kornze.