Cost remarkably low at Emerald Lake mine

R. A. Bruce McDonald’s first gold discovery was in Quebec’s Casa Berardi area. But his first gold producer is the Golden Rose mine, located 60 miles northeast of here, Mr McDonald is the charismatic chairman of Noramco Mining Corp., a Canadian mining finance house which went public this year with an over-subscribed $50-million-unit offering.

Owned and operated by Emerald Lake Resources, a 29.6%-owned affiliate of Noramco, the Golden Rose mine is expected to produce approximately 40,000 oz of low cost gold per year.

Reserves in all categories total 2.4 million tons grading 0.23 oz gold per ton.

Prior to an opening ceremony which was attended by more than 150 people, a group of analysts and bankers toured both the surface and underground facilities. Those, including the 400-ton-per-day mill, were put in at a remarkably low capital cost of $12 million. Payback, according to Gordon Keevil, president of Emerald Lake, is expected within eight months.

This low capital expenditure, which finds few if any equivalents in Canadian mining, is a direct result of Noramco’s operating philosophy. “One of the real differences is that we stay involved with the project,” Mr Keevil explained to The Northern Miner. “There is a high level of spirit to get the job done.”

This professional enthusiasm yielded impressive results. For example, all surface engineering design costs came in at $70,000. Also, the 400-ton-per-day mill, which came from B.C.’s Highland Valley, was purchased and erected for $500,000, less the carbon-in- pulp circuit.

Another low-cost feature of this mine, which contributes to the forecast $220-per-oz-of-gold cost picture is the deposit itself. A majority of the reserves are located above the 4th level, or 450 ft. Access is via a decline ramp and four developed levels.

Although the average grade is 0.23 oz per ton, management is anticipating higher grades due to indications of much higher grades within the mineralized zones. “Our stope development suggests grades could be much higher,” Mr Keevil adds. However, this high grade will be blended with lower grade material to yield millhead grades of about 0.3 oz.

An examination of the 2nd level of the mine by The Northern Miner showed the main sulphide quartz zone to be strong and continuous across the area inspected.

A tour of old stoped areas showed little, if any, ground support was utilized by previous operators. From 1937-41, the mine produced more than 45,000 oz of gold from 147,120 tons of ore. Also, no water inflow problems were observed.

Another positive aspect of the project is the relatively wide mining width available. Gold, which occurs in the free state, is associated with intense sulphide alteration which was observed to be pervasive up to several feet on either side of the main quartz veins.

These zones, mine staff say, all carry gold. “Very coarse mill grinding releases almost all of the gold,” Philip Brown, senior geologist special projects, explained.

The mill, which is still in the tune-up phase, is currently processing stockpiled development muck grading up to 0.15 oz. This surface stockpile totals 15,000 tons, David Innes, vice-president exploration for both Noramco and Emerald Lake, said.

“Within a couple of weeks the project will be operating at full capacity and generating a profit by November,” Mr Keevil esplained.

Also, the mill can be easily expanded. The crushing circuit can handle 750-1,000 tons per day. “The cost to double production is nominal, Mr Innes said. Such an expansion would require an additional ball mill and cyanide circuit.

Considerable exploration potential also remains. One of the best intersections drilled on the property came from below the 5th level, cutting 84 ft grading 0.438 oz.

Production from the Golden Rose mine is not only of satisfaction to Bruce McDonald, but the other officers at Noramco.

Dr Norman Keevil Sr., chairman and founder of Teck Corp., told The Northern Miner with pride that “those were the first claims I ever staked.”

Dr Keevil, who is closely associated with Noramco via his company’s equity stake in the group, next staked what became the Thompson copper mine in 1952.

What followed there became the stuff of Canadian mines legend.