First Toronto’s Forsayth placed on auction block

The project, which has been producing since 1986, is a 50/50 joint venture between Reynolds Metals Company (NYSE), and Forsayth NL (Australian Stock Exchange), the mine operator. Forsayth is 30% owned by First Toronto Mining (TSE) which has announced plans to sell its shareholding, believed to be worth $55 to $80 million(C).

With proven laterite reserves of 4.3 million tons grading 0.036 oz gold and approximately 1.6 million tons of lode reserves averaging 0.13 oz, the joint venture is studying the feasibility of doubling milling capacity to three million tonnes per year. One of the options available to them is to construct another plant, leaving one for oxide material, the other for sulphide. The present mill was upgraded in 1988 at a cost of $4.7 million(A).

During a recent visit by The Northern Miner to the impressive mining operation, John Kelly, senior mining engineer, noted that design capacity in the mill is about 1.25 million tonnes per year at present, but he emphasized it will take a while longer to achieve that rate. Clay has been causing problems in the mill, but this should be resolved with the installation of a Barmac crusher.

Until recently, mill feed was mostly laterite, (a highly weathered red material rich in secondary oxides of iron, aluminum, or both) and about 17-18% oxide. Head grades have been averaging about 0.061 oz gold but they recently jumped to higher than 0.1 oz with the addition of more oxide material into the mill.

“We are in a transition period right now,” he said, noting the mill is being fine tuned to “eliminate variations.” Oxide and sulphide ores require less milling energy than laterites.

Reynolds Australia is responsible for all exploration and last year the company discovered a major new gold zone beneath the laterite blanket. Indeed, the discovery is viewed as one of the most significant in Western Australia in many years. Drilling has returned some high grade sections including 50 ft of 0.3 oz in weathered bedrock.

Gary Brabham, senior exploration geologist for Reynolds, said the new Hornet zone hosts about 1.4 million tonnes of reserves grading 0.13 oz gold within a 500 ft deep pit design. In addition, 1.1 million tonnes of reserves have been indicated beneath this and the zone is still open. The former reserve occurs over a mining width of about 50 ft. The ore zone is weathered to about 180 ft and below this are sulphides, he noted.

The Gibson anomaly has a known strike length of five miles and may be extended. “We have barely scratched the surface,” said Brabham.

He said the Hornet zone is a pyritic schist and it’s similar to Lac Minerals Bousquet mine in Quebec. In general, the higher the sulphide content, the better the gold, he said.

The silver to gold ratio is 3:1 in the primary zone, unusually high for an Archean gold deposit, he explained. Base metal content is also high. Th e gold occurs as electrum and is free milling and quite fine, he said.

The mine property encompasses an area of about 460 sq mi, little of which has been explored. Most gold mines in Australia are honey- combed with old workings but the near-surface, low grade laterites at Mount Gibson prevented old timers from panning gold and discouraged them from going deeper. (The laterite blanket is generally about 15 ft deep).

Mount Gibson has three laterite pits but they have just exposed the Hornet lode zone which will be blended 50/50 with laterite ore. Although they are heavily weathered, an impact ripper is often required for laterite material. Nevertheless, that’s still cheaper than conventional drill/blast methods used in Canadian mines.

Blasting is sometimes required to loosen things up, but they prefer not to blast in order to reduce dilution. Normal bench height is about eight feet, pit walls are 45 degrees , and up to 70 degrees in sulphide material. Mining costs over the life of the project are expected to be less than $1(A) per ton.

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