Gabanintha is a winner for Black Swan Gold

Even so, Gabanintha has been a highly successful venture for Black Swan which reported cash flow from operations for the year ended March 31 of approximately $1.7 million.

The company’s share of production from Gabanintha and its portfolio of properties, most of them “Down Under,” recently attracted the attention of Nerco Inc. (NYSE) which purchased a 19% interest by way of a private placement. Black Swan’s working capital now stands at more than $4 million.

Dominion Mining, which could soon become Australia’s fourth largest gold producer after its merger with Whim Creek Consolidated NL (N.M., May 1/89), picked up 50% of Gabanintha a few years ago and is mine operator.

The mine was commissioned in October 1987 and since that time production has been significantly higher than forecast. In the 12- month period ended March 31, gold output was 42,065 oz of which Black Swan’s share was 10,516 oz (25%). Average production cost was $245(US) per oz.

Existing reserves (2.4 million tons grading 0.1 oz) are sufficient for about five years of production, but studies are under way on the economics of upgrading the mill to treat harder, less oxidized ore. The additional capacity will also enable the joint venture to process any new reserves found by ongoing exploration.

For economic reasons, Black Swan has restricted its exploration activities to the Gabanintha area and surrounding Meekatharra district. Under its joint venture agreement with Dominion Mining, the company can earn a 50% interest in an area of influence extending some 75 miles past Meekatharra. “It’s not quite centred on the mine,” said Arthur Fisher, president.

Mine head grades are currently averaging 0.096 oz gold per ton, the recovery rate is approximately 95%, and mill throughput is about 450,000 tonnes per year, The Northern Miner was told on a recent visit to the impressive operation. The mine has excess crushing capacity so the primary crusher only operates 10 hours per day at 80% of capacity.

Care is taken to blend various ore types together to ensure a constant feed grade, a relatively simple process. Four pits are being mined at present and some copper-bearing oxide material has been encountered in the Terrells pit which, left unblended, would increase cyanide consumption. That’s one reason blending of various ore types is so important. A front end loader takes ore from the required stockpile and dumps it into the primary crusher — nothing fancy, but it’s an effective method of grade control. Current blending procedure involves the mixing of 75% oxide ore with 25% hard ore.

In recent years, cyanide costs in Australia have sky-rocketed, but Gabanintha is now paying about $2.30(A) per kg for cyanide, about half what it paid six months ago. Cyanide consumption is a major cost item at the mine so any price reduction goes right to the bottom line. About 0.9 kg of cyanide is required for each ton of ore processed which the joint venture describes as “average” for the industry there.

The mine has a carbon-in-leach plant which can process about 450,000 tons of soft oxidized material or 360,000 tonnes of primary ore each year. The latter is much harder, requires more grinding and consumes more power. Water is often scarce in Australia and what there is tends to be quite saline. Gabanintha mine water is supplied from three bore holes and the salt content is usually about 2,000 ppm. The water is drinkable despite it’s high calcium/magnesium content.

The mill flow sheet includes a Knelson concentrator, a Canadian invention that won Knelson International Sales (The Northern Miner Magazine, Aug/88) a Canada Export Award in 1988. Essentially a gravity separator, the concentrator recovers 30-35% of Gabanintha’s gold.

To keep capital costs down, the joint venture opted for contract mining. It’s mining costs are now about $18.50(A) per tonne, or about $3.20 per bench cubic metre all inclusive. They may look at purchasing their own equipment eventually, The Northern Miner was told.

Like most other open cut mines in Australia, mining practices are very selective. Waste is generally removed first to reduce dilution, leaving ore grade material to the last. Little blasting is required in oxide material (ore or waste) because it’s so soft; in most cases this material is ripped with a dozer and plowed into neat piles for loading onto haulage vehicles. (That’s one big advantage Australian mines have over Canadian producers. By comparison, Canadian mines are typically hard rock situations which require drilling and blasting with subsequent higher mining costs). Black Swan recently announced plans to de-list from the Australian Stock Exchange. Incompatibility of securities regulations between the Australian and Vancouver Stock Exchanges was cited as the reason.

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