Bunker Hill profits hinge on running near capacity

Even so, the fragile nature of the area’s economy is best exemplified by the rusting hulk of the old Kellogg smelter, parts of which are being sold off; the dilapidated metallurgical complex is clearly visible from the town where past smelter emissions have left its outskirts barren of vegetation.

Bunker Hill Mining (VSE) reopened the mine last September at a cost of $4.8 million after a report by Vancouver-based Wright Engineers confirmed the economic merits of the project. The mine and surface facilities were well maintained and start-up was relatively smooth.

As The Northern Miner discovered on a recent visit to the operation, the mill is processing about 1,000 tons of predominantly zinc ore every day, although its rated capacity is approximately 2,400 tons. Throughput is expected to rise to 2,600 tons by year-end and 3,000 tons by this time next year, said Jack Swanson, vice-president mining.

Swanson is a Bunker Hill alumnus under whose guidance the operation was reactivated in a remarkably smooth and cost efficient manner. The mine has the potential to become a company builder, assuming production can 0506,0000 be increased to more profitable levels. But the company left no doubt that it has the will and technical expertise to do this. The non- unionized operation employs about half the underground miners it did in the past and Swanson said worker moral is good and productivity considerably higher than before. Problems reactivating

Reactivating dormant mines isn’t easy because you are held captive to the mining practices of your predecessors; and things aren’t any different with Bunker Hill. Swanson didn’t understate the problem when he said they have to eliminate “1940s state of the art mining practices” and switch over to more mechanized methods.

Past practices included jackleg drilling and Atlas Copco air- powered Cavo loaders for mucking out stopes. When the mine shut down in 1981, Gulf Resources & Chemical had just come out of a 0506,0000 two year hiatus on mine development which Bunker Hill now has to make up. Although still in the conceptual stage, consideration is being given to driving an 8,000- ft decline down to the 15 level which should open up new areas for bulk mining, said Kevin Wright, mine manager.

There are three principal entries into the mine. The No 1 shaft (an incline) is the main production shaft which is also used for incidental travel. No 2 shaft is utilized for men and material and No 3 will be the main air intake, noted Swanson. Mine crews reach the No 1 and No 2 shafts via the 10,000-ft Kellogg tunnel. Eleven internal shafts exist as well, 2 or 3 of which will be used later. Mining operations are concentrated in and around the Quill deposit in the upper part of the mine. The Quill was known at closure but Bunker Hill has expanded reserves there by several orders of magnitude. Most of the new reserves are coming from the Quill deposit, the company said. Abandoned stopes

A number of previously abandoned stopes were reactivated at start-up to “get a quick cash flow and break the mine in,” said Wright. The company is presently phasing in one yard LHD (load-haul-dump) vehicles and small jumbos in larger stopes where economic. (Jumbos are sometimes lowered down into old stopes.) Grade control is strictly monitored by geologists who work in concert with miners. At present, the underground is supplying feed to the mill grading 7.5% zinc and 2.5% lead.

Three drills are exploring for additional reserves at the moment and two more are being added. The Quill remains open at depth, to surface, and also to the west. “I feel the possibilities here are only limited by access and our imagination,” Swanson emphasized.

The property covers an area of about 14 square miles and there is further potential in the upper reaches of the mine and to the west, Swanson added.

At closure the mine had 2.4 million tons of reserves grading 6.4% zinc, 2.9% lead and 1.6 oz silver of which 460,000 tons were classified as proven. That reserve base has since tripled and President Jack Kendrick estimated that mine life is now about 15 years. “We are beginning the reserve delineation process,” he said, while predicting the company will find enough reserves “for another century of mining.”

The Bunker Hill plant is well designed and generally in excellent shape. It only cost $400,000 to reactivate the mill which puts out 80-100 tons of zinc concentrate (56-58% zinc) every day. New and larger flotation cells from the previous operation, which hadn’t been used, were installed by Bunker Hill during the start-up phase.

The company recently signed a refining contract with Cominco’s Trail smelter which will save Bunker Hill about $2 million per year over a previous agreement with a Japanese company.

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