Coxheath ponders alternatives for Tangier

Coxheath requires about $3.9 million to rehabilitate the mill and develop enough stopes underground to get the operation running again at a rate of 200 tonnes per day.

After spending $20 million, most of it flow-through money, Coxheath still does not have a producing gold mine. But expenditures to date have not gone totally to waste.

If the company heeds the operating lessons it has learned in the past three years and implements solutions to problems involved, this property still has the potential to become a gold producer.

Eight boxes of spectacular gold nuggets, each weighing four ounces, collected by President Michael Riddell over the years testify that there is gold here. But the nuggety nature of the gold, more pronounced here than on any other property in the province, has been more of a curse than a blessing so far.

Proven, probable and possible reserves total 6.8 million tonnes in two zones, an A Zone and a B Zone, says chief mine geologist Wesley Hanson. He has confirmed a geological model that strongly suggests that gold grades increase dramatically to the west and down plunge of existing workings where grades average 8.4 g per tonne (0.25 oz per ton). Limited work to date suggests the less-developed B Zone could average 27 g gold per tonne (0.79 oz per ton).

The model that predicts the location of this zone of higher grades relates to jump-over features — an idea originally postulated in the 1930s whereby high grade values “jump over” from one bedded lead to another parallel bedded lead via a crosscutting structure. The cause of the feature, Hanson says, appears to be related to tectonic stresses which have created an en echelon set of cross-overs which, on this property, plunge to the west. A limited number of drill holes support the structural model.

By following the model, Coxheath should be able to reduce significantly underground development costs.

To continue mining at Tangier, Coxheath has two choices. It can relinquish a significant interest in the property in order to obtain the capital to get out of hock and to finance the necessary milling changes. Alternatively, it can attempt to raise the money on its own.

“We would consider a stock consolidation if it could be tied to a financing,” Riddell told The Northern Miner on a recent visit to the property. Coxheath has about 25 million shares outstanding, trading recently at 15 cents .

“Retiring our short-term debt could lead to a dilution of our interest in the property through a joint venture agreement,” Riddell said. “We’re willing to do that too.”

About $750,000 is needed to buy new milling equipment and to make the necessary modifications to the mill. And an additional $3 million is required to develop the richer B Zone.

In order to recover 90% of the coarse gold at Tangier, the company figures it will keep its 4×8-ft primary kinetic jaw crusher. But a 2-ft cone crusher will be added to the crushing circuit. This should reduce the feed material to — 1/2 inch, the size required to liberate the gold particles.

Manufacturers’ technical specifications for the kinetic crusher claim that it can reduce feed material to — 1/2 inch at a rate of 200 tonnes per day, but operating experience at Tangier does not support this claim. About 35% of the gold at Tangier is larger than eight mesh (2.36 mm) in size.

A jig will also be added to the circuit to recover about 80% of the gold before the feed material goes to a rod mill for grinding.

During the previous operating period, coarse gold was liberated in a ball mill and subsequently pounded into the cracks between the liners of the mill. The ball mill had to be shut down every two weeks so that the gold could be washed out. This operating procedure was not economic.

The revised mill design eliminates the ball mill and most of the gold should be recovered before it enters a rod mill.

It will take about three months to rehabilitate the mill and about one month to run it in. During that time, development work would be carried out underground in the B Zone.

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