Eastmaque signals trend by recovering gold from tailings

Officials cut a ribbon here May 31 to open the country’s first commercial tailings re-treatment project. About 60 people were on hand to help Eastmaque Gold Mines (TSE) celebrate the occasion.

With six other Canadian gold tailings recovery projects on the go, this probably won’t be the last such operation to open. The relatively strong price of gold compared to production costs makes this kind of investment in gold production very attractive.

With tailings recovery projects — recovering gold from the waste produced by previous mining operations — there is none of the uncertainty about finding the deposit such as there is in exploration. The size, location and grade of tailings deposits can be determined fairly easily and confidently before any production decision is made. Nevertheless, the novelty of recovering gold from tailings (there are no gold tailings recovery operations outside of South Africa) and the low grades involved have given rise to some skepticism that they will be profitable.

But while other such projects have may have more ambitious plans, Eastmaque is the first to actually produce gold and thereby reduce that skepticism.

“Since financing was obtained in September, 1986, (3.2 million shares at $7.50 per share by James Capel & Co. of London) remarkable progress has been made,” says General Manager Rod Samuels. “Despite the extreme winter conditions of northern Ontario, our dedicated, professional staff proved a year-round dredging operation is feasible.”

The first shipment of gold concentrates from Kirkland Lake (grading 2.2 oz gold per ton recovered from a simple flotation milling circuit) was made on Jan 18 to Noranda Inc.’s Horne smelter at Rouyn- Noranda, Que.

In the first three months since, 2,683 oz of the yellow metal were recovered. With operating expenses of $182(US) per oz, the operation netted Eastmaque $865,000 in the first three months of operation (all costs are in Canadian currency unless otherwise noted). A total of 5,100 oz have been recovered so far.

The ball mill and an outside thickener have been commissioned, and the operation is expected produce at the design capacity of 2,000 oz per month beginning in June.

The tailings, from two of the smallest tailings deposits in the area — from the Toburn mine (1913-47) and the Kirkland Lake mine — will be purchased through installments from production revenues. Capital costs of the project total $8.9 million. If gold stays at $450(US) per oz, it could pay for itself in about 18 months.

Reserves total 6.6 million tons averaging 0.041 oz gold per ton, according to Eastmaque — enough for about nine years of operation.

The fine-grained material (80% –200 mesh) is scooped up with an 8-inch Stacey dredge, purchased from Kenner Marine of Laplace, La. The tailings slurry is pumped to a mill, designed by George Shadford and Leslie Engineering of Toronto, where they are re-ground in a 1,250- HP ball mill to about 80% –400 mesh. About 67-70% of the gold together with associated pyrite, is then recovered using simple flotation techniques. Concentrat es are de- watered using a Lasta pressure filter and are trucked 55 miles to the Horne smelter. Trucking costs $7.50 per ton, but the silver recovered in the process (about 2,000 oz so far) pays a large portion of that.

Eastmaque must pay a penalty of $1.10 per ton to Noranda for every 1% moisture in the concentrate above 10%, so moisture is an important factor in the operation. Using an automatic filter press from Ingersoll-Rand, moisture contents have been kept to about that 10% level.

Smelting charges total $110 per ton and $3 is charged for every ounce of gold refined.

Labor and milling are by far the largest contributors to operating costs, accounting for about 60% of the total. About 33 will be employed at the project eventually.

Profits have been made even though the ball mill was commissioned only a month ago.

The company also has a 60,000- ton-per-month open-pit-heap- leaching operation in Imperial Cty., Calif., and plans an underground gold mine at nearby American Girl Canyon. In the nine-month period ended March 31, 8,377 oz were poured. The two operations are expected to produce 1,200-1,500 oz per month from the open pit and 3,600 oz per month from the underground mine. The underground mine is scheduled to begin production in early 1989.

Eastmaque has 9,408,495 shares outstanding, trading in Toronto recently at about $4.70 per share.