Four miles from this small town is the New World project, which hosts five separate deposits — McLaren, Como, Miller Creek, Homestake and Fisher Mountain. To date, Crown Butte Resources (TSE), which purchased the property in 1987, has spent over US$15 million on exploration.
Eight rigs are still working on site, with this year’s development drilling already totalling 62,223 ft. in 100 holes. In late October, Crown Butte announced that at a composite cutoff grade of 0.10 oz. gold., preliminary reserves now total about 10.4 million tons “containing over 2.2 million oz. gold.”
With such a phenomenal rate of exploration success, it appears safe to say the New World project is well on its way to becoming a producer. After the 1991 season is over, Crown Butte expects to release a more detailed reserve analysis that will take into account stepout drilling still continuing in the Homestake deposit area. The deposit is closed off in one direction, but is still open to the east, west and south.
This drilling is still encountering significant mineralization as evidenced by some recent holes which returned 120 ft. of 0.51 oz. gold, 1.15 oz. silver and 0.43% copper; 109 ft. of 0.14 oz. gold, 1.08 oz. silver and 1.38% copper; and 95.4 ft. of 0.24 oz. gold, 1.93 oz. silver and 1.75% copper. “The odds are good we will end the season with a significant increase in gold reserves over what we see now,” President David Rovig said, adding that the updated and detailed reserve analysis will be done by Crown Butte’s largest shareholder, Hemlo Gold Mines (TSE).
Because of a corporate reorganization within the Noranda group, Hemlo now has a 60% equity interest in Crown Butte. This interest was acquired by Noranda after it delivered a feasibility report which indicated that a capital cost of about US$80 million would be required to bring the property into commercial production.
“We expect this project will have one of the lowest finding costs per oz. of gold in the industry,” project geologist Allan Kirk told The Northern Miner. “And we think the property still has extraordinary exploration potential.” Kirk said the best exploration tool has been geological mapping and sampling in the open pits which provided a model for ongoing exploration. Como, McLaren and Miller Creek are described as stratabound
(contact-metasomatic) skarn replacement deposits in a limestone host. Massive pyrite-chalcopyrite with magnetite is typical of McLaren, while Como features limestone replacements by massive pyrite and chalcopyrite. Miller Creek mineralization generally consists of massive specularite-magnetite-hematite and pyrite-chalcopyrite, with the higher-grade zones associated with intermixed oxide-sulphide replacement.
The Homestake is an explosion-collapse type breccia pipe with three styles of mineralization (in the breccia pipe proper, in large xenolithic replaced limestone blocks and in Tertiary intrusives). Fisher Mountain — the smallest of the deposits — is a replacement deposit with some fault-filling. The latter involves a dilation in a fault zone filled with 234,000 tons of unconsolidated massive sulphides grading 0.2 oz. gold.
The five deposits are confined to a zone that occurs over 9,000 ft. of strike length (from north to south: Como, Fisher Mountain, McLaren, Miller Creek and Homestake).
Rovig is now spending much of his time on permitting and environmental issues. A Montana resident and a respected mining engineer with considerable “people skills,” Rovig is closely involved in discussions with government agencies and local communities as part of the public review process. The New World property is accessible by road and is located in a spectacular alpine setting (9,200-10,400 ft.), with the Yellowstone Park boundary two miles to the southwest, and a wilderness area two miles in another direction. Naturally, groups have surfaced opposed to the project because of its proximity to the park and wilderness area.
But Rovig said the New World mining district was intentionally excluded from the wilderness area when its boundaries were being drawn up in the 1970s because government geologists recognized both its mining past and future mineral potential. And he said several other mines operate nearby, including the Stillwater platinum/palladium mine and the newer Mineral Hill gold mine operated by Inco and Homestake.
Rovig hopes to have all permits in hand by mid-1993, in time for construction to begin that year, continuing for 18-24 months and employing about 300. This would make 1995 the most likely year for a production start. The year-round operation would employ about 140 at the production stage, for a mine life of 15 years or better.
Although details have yet to be finalized, Crown Butte and Hemlo Gold envision a 1,000-1,500-ton-per-day operation which would produce in excess of 125,000 oz. gold annually, plus silver and copper.
The mill would incorporate both gravity and flotation circuits, with cyanide finish of tails. Metallurgical recoveries are expected to be good, but ongoing work will include the taking of an underground bulk sample from an old adit that is currently being rehabilitated for underground drilling. As for mining, cut-and-fill is considered the most likely technique for the Homestake deposit and room-and-pillar for Miller Creek.
“With the kind of grade we have, we don’t want to leave pillars,” Rovig said, adding that an additional benefit of using backfill will be the ability to reduce the size and scope of tailings disposal.
A detailed reclamation plan is being developed that is designed to enhance the project site after all mining activity has been completed, as well as previously mined areas. The program has already started, with reclamation of a number of exploration sites. The experimental revegetation plots will be used to harvest seeds from native species that grow in the naturally acidic soils.
“Our goal is plan a mining operation that meets or beats today’s environmental standards,” Rovig said.
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