Corona says grade and tonnage lower at Nickel Plate project near

Production deficiencies at Corona Corp.’s (TSE) Nickel Plate mine near Hedley, B.C., are finally out in the open.

Addressing a group of analysts in Montreal recently, President Peter Steen confirmed the reserve grade at the Nickel Plate mine has been revised downward to 9.1 million tons grading 0.088 oz gold. This compares with the original 9.9 million tons grading 0.133 oz of gold per ton, he noted.

“Higher stripping ratios combined with lower grades and complex metallurgy have resulted in operating costs averaging $335(US) per oz during fiscal 1988,” he added.

Earlier this year Steen reported that an in-house check of the ore reserve calculation done by its predecessor company, Mascot Gold Mines,”indicated a shortfall in both tons and grade.”

“The discrepancy between the original and the revised ore reserves is a direct result of the application of more stringent parameters based on the experience gained since mining and milling operations started in April 1987,” he emphasized.

The original reserve calculation and indeed the whole concept of a large open pit mining operation at Nickel Plate has been the subject of considerable controversy since mining operations began.

In a letter to the editor in the October, 1987 issue of The Northern Miner Magazine, a former consultant for Mascot said he was “skeptical about the near-term or ultimate operational profitability of the Nickel Plate 2,700-ton-per-day open pit operation.” And he hoped the “open pit operation will not ruin the chances for going underground after the smaller, high grade orebodies” which, incidentally, the company is now doing.

An adit has been driven into the deep section of the orebody which grades about 0.22 oz gold per ton and Steen said “we are currently supplementing our surface ore with 200 to 300 tons a day of the underground ore.” Corona is also examining the viability of mining the nearby Canty property which has geological reserves of 1.7 million tons grading 0.16 oz gold in the underground area and 650,000 tons averaging 0.15 oz of open pit material.

As part of an effort to reduce unit costs, mine crushing capacity was expanded last summer and selective changes were made in the mill which boosted design throughput from 2,700 to over 3,000 tons per day; gold recoveries were maintained at 85%. The company is also looking at advanced treatment techniques which will allow them to reduce their cyanide costs, a major expense in over-all unit costs.

The mine is scheduled to produce over 90,000 oz gold next year and Steen said Corona will continue to explore for more ore “on our property and on the neighboring properties held by companies controlled by Corona.”