Dickenson after higher grade, lower cost at White gold mine

Gold producer Dickenson Mines (TSE) increased output and tonnage and lowered its production costs last year at its Red Lake operation in northwestern Ontario. This year, the company would also like to improve its recovery grade, which averaged 0.31 oz. gold per ton in 1989. “We’re striving this year to get the grade to 0.35 oz.,” President John Kachmar said in an interview.

The company’s White mine at Red Lake produced 75,600 oz. at US$346 per oz. last year, compared with 70,200 oz. at US$347 in 1988. This year Dickenson is aiming at 82,000 oz. at a per-ounce cost of US$302.

Adjacent to the larger Campbell mine of Placer Dome, the White mine has proved a challenge to the Dickenson operators over the years. The pod-like character of the ore zones often makes it difficult to predict the amount of recoverable ounces.

Dilution has also caused problems. Caution must be exercised when following an oreshoot that it does not run out of minable ore, said R.E. Van Tassell, vice-president of exploration.

During the mine’s early years, long, continuous veins made for easier extraction. But as the mine deepened, “the oreshoots started to get pulled out,” Van Tassell said.

The company was able to maintain grade last year despite restricted stope access as mandated by the provincial government. By the end of 1989, the company increased the number of stopes to 33. Mine development was advanced by a total of 10,100 ft. Dickenson mined 277,000 tons ore in 1989. Ore reserves (proven and probable) dropped slightly, by 36,000 tons, by the end of the year.

Drilling representing 81,500 ft. was undertaken during 1989. From the 15 and 16 levels in the ESC zone, additional reserves of 132,000 tons at 0.3 oz. were identified; the area is to be mined later this year.

In the South C zone on the 15 level, 16,000 tons averaging 0.59 oz. were outlined. The drilling also uncovered an additional 63,000 tons at 0.29 oz. between the 24 and 28 levels in the ESC zone, and 40,000 tons at 0.37 oz. in the PLM zone on the 26 and 27 levels.

Dickenson also drilled (about 5,700 ft.) from the Campbell side last year, from the 10 and 12 levels, in search of an extension of the No. 1 shaft zone. Van Tassell said he was encouraged by the results.

For 1990, drilling representing 71,000 ft. is scheduled, along with 10,700 ft. of mine development. A milling rate of 850 tons per day is projected.

In South Dakota, Wharf Resources (TSE), in which Dickenson has a controlling 36.4% interest, is looking to boost its gold production this year to 86,000 oz., from 77,000 oz. last year. The heap leach project had an operating cost of US$180 per oz. in 1989.

Proven and probable reserves at the project stand at 26.9 million tons grading 0.035 oz. In addition, 2.6 million tons (proven and probable) have been proved up outside of the permitted area, Van Tassell said.

The company plans to boost output by increasing crusher throughput and expanding the leach pads.

Wharf has also purchased a 28% interest in United Coin Mines (TSE), which has a 66 2/3% interest in the Golden Reward mine adjacent to the Wharf property. Golden Reward was placed into production during the second half of 1989; the heap leach mine is expected to turn out 65,000 oz. gold this year. Mine reserves stand at about 13 million tons averaging 0.042 oz.

“We view it as a smaller Wharf at an earlier stage of development,” Kachmar said of the Golden Reward mine.