Bond/Homestake rationalization proceeding at Kalgoorlie mine

The two companies have pooled most of their interests in the region (see chart) and they are now putting the rationalization plan into place. In effect, they have created a 50/50 ownership of the famous Golden Mile at Kalgoorlie including the Fimiston/Paringa, KMA Fimiston, Mt. Charlotte, and Mt. Percy operations. Management will be conducted through a joint management company, Kalgoorlie Consolidated Gold Mines.

During a recent visit by The Northern Miner to Bond’s Perth- based headquarters and to the sprawling mine site at Kalgoorlie, John Bovard, executive general manager operations (and a Placer Dome alumnus), noted that the first gold pour had been made at the new Fimiston mill. Homestake Gold Australia is funding its $56 million(A) share of the new Fimiston mill and roaster estimated to cost $112 million.

With an annual capacity of more than two million tonnes per year, the plant is still being commissioned and has been operating at 80% of capacity, Bovard said.

He predicted it could be handling up to four million tonnes next year and six million tonnes in the early 1990s as open pit production expands. However, this would require some duplication of equipment in the mill, he concluded. Most ores in the “Golden Mile” are refractory and three roasters are available to process concentrates.

A new roaster (Gidgee) has been constructed 13 miles north of Kalgoorlie and some of the others will be decommissioned in the next four years, he emphasized. The company is conscious of environmental issues in the region and has attempted to address local concerns in a practical fashion. Roasting capacity will be increased as mill capacity is expanded, he added. Three other mills are being used, Oroya, Paringa and Croesus but many of these will become obsolete as capacity increases at the new Fimiston plant.

Development of the so-called Super or Big Pit is now in progress which he said would enable the Kalgoorlie operations to produce 600,000 oz gold in the year ended June 30, 1990 and 800,000 oz the following year. “By then we will have the pit open enough to get our mining costs down,” he insisted. They are targeting a cash cost of $300(A) per oz versus the $400- per-oz costs from some of their operations today.

The Super Pit involves the consolidation of holdings in an area previously held by North Kalgurli Mines (controlled by Bond) and Kalgoorlie Mining Associates (controlled by Homestake). The large open pit, which will straddle the NKM and KMA properties, will eventually absorb the present Fimiston and Fimiston/Paringa open pits.

Costs should be significantly lower than they would be if the pits were developed independently and one analyst predicts costs could be as low as $214(US) within two years. By having a single management company, Bond and Homestake will reduce infrastructure requirements and overhead. Combining operations will also enable them to mine boundary pillars and increase reserves. Two different operational philosophies will have to be merged which they consider an important element in their business arrangement.

Underground mines are also included in the rationalization including Mt. Charlotte, the largest, trackless underground mine in Australia. Ore from Mt. Charlotte is trucked to Oroya. A project team has been formed to evaluate underground operations (some of which are marginal at today’s prices) to reduce costs. About five shafts are operational at the moment and some of these will be affected by the development of the super pit.

The Judd and South pits are being integrated into one single pit. The elevation difference between the pit bottoms is about 120 ft, but the pit bottoms will be synchronized before they are deepened again. The companies are trying to resolve the different equipment and mining methodology in the two working areas. Eventually the companies will use larger trucks, probably 170 tonne or larger. As with the Fimiston and Fimiston/Paringa open pits, mining the Judd and South pits co-operatively means that ore will not be wasted in large boundary pillars.

Geologically the mines host a vein-type system with some halo mineralization that can also be economic. As a result, mining has to be very selective which is why management is looking at hydraulic shovels. In-pit blending will be important and in-pit crushing systems may also be employed.

Head grades for the Big Pit are 0.084 oz gold per ton with a 7.5:1 strip ratio. Most ores are refractory because of their arsenic and telluride content but some of it is free milling. Underground ore at Mt. Charlotte averages 0.12 oz per ton and it produces about 1.5 million tons per year by open stoping mining methods. Operating cash costs for 1988 were about $230(US) per oz.

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