ERG opens huge tailings project (October 31, 1988)

An ambitious 17-year mine tailings project which could see the recovery of 110,000 oz gold during the first full year of operation in 1989 has been officially placed into production by ERG Resources (TSE).

The recent pouring of a dore bar at a newly-constructed mill at the old town of Schumacher marked the beginning of a project which will involve the treatment of more than 200 million tons of tailings deposited throughout the Timmins gold camp during the past 80 years.

“New mine developments do not happen overnight, and the ERG gold tailings retreatment project is a good example of the critical and important steps which are necessary to develop a new mine,” said ERG President Adrian Fleming in a speech in which he noted the contributions of the original players earlier this decade in the tailings project.

ERG, formerly known as Energy & Resources (CAM) Ltd., is 61.6% owned by Pamour Inc. (TSE), which in turn is 67.5% owned by Giant Resources of Australia. (Giant Resources also has a 0.8% interest in ERG.) Managing operations at the ERG project is Giant Yellowknife Mines (TSE), which is controlled by Pamour through a 41.8% interest. Second tailings project

The Timmins tailings project, with a $78 million capital cost and a permanent workforce of about 54 people, is the second placed into operation by the group this year. Giant Yellowknife commissioned a smaller tailings project in the Northwest Territories in May, that project costing $23 million to bring into production.

The ERG mill is situated behind the old Schumacher mine site on McIntyre Rd. Most of the tailings are located above ground in dams built from the coarse fraction of the original tailings; two of the deposits, the McIntyre Ball Park and Gillies Lake, are contained within old lake basins.

The old tailings ponds grade between 0.006 oz gold per ton and 0.05 oz; ERG estimates total gold content of more than 77 tons.

A gold recovery rate of 45% is believed possible for the project, although that rate is expected to be closer to 60% during the first phase of the project when the higher grade material is processed.

The reclamation method employs high-pressure water jets and the re-slurried tailings are pumped along high density polyethylene pipelines to trash screens at the mill, which features bulk sulphide flotation and a carbon-in-pulp circuit.

Construction of the mill began in August, 1987, under the direction of Kilborn Engineering; the mill was commissioned in late summer of this year. First gold pour was in mid-September. General manager of the project is Peter Rowlandson. Winter shutdown Because of the harsh winter conditions, the tailings project is expected to be in operation only from April to November. Ontario- wide labor problems during the summer slowed the construction phase of the project and the anticipated August startup had to be put off. According to Fleming, the operation is about two months behind schedule.

Commencing operations now has allowed ERG to work out any bugs in the system this year and be in a position to enter full production as early as possible during the 1989 season. Fleming said the company hopes to be processing 15,000 tons per day (about half the full throughput rate) by the end of the 1988 season.

Tailings ponds to be worked during the first phase (1988-94) are Gillies Lake, Coniaurum, Schumacher/McIntyre, McIntyre Park and Hollinger; during the second phase (1995-2001), Hollinger, Delnite and Aunor; and during the third phase (2001-2004), Pamour and Hallnor.

Fleming said current plans call for a 3-year payback period for the Timmins tailings project. Estimated operating costs are in the $1.70- $1.80(C) per ton of feed range.

To pay for the operation, ERG recently arranged a $41 million(C) gold loan in Australia with the assistance of parent Giant Resources, while Pamour advanced $41 million by way of loans subordinated to the gold loan. ERG proposes to retire about $21 million of its debt by way of an equity issue during the next 12 months.

Fleming said about 75% of ERG’s gold production for 1989 has been sold forward.

After the old tailings have been removed, ERG plans a rehabilitation program for the sites, with slopes regraded and vegetation established on exposed surfaces. In the case of McIntyre Park, the site will be refilled with pyrite-free tailings and landscaped to include an 11-acre lake with trees, shrubs and grassed areas, and re-established as a parkland area.

High-powered water jet breaks up old Coniaurum tailings to form a slurry which is piped to a nearby mill for gold recovery in the Timmins gold tailings project of ERG Resources. Operations at the old tailings pond make for a bleak outdoor working environment.