Geomaque opens golden gates to San Francisco

Joining a growing list of Canadian junior mining companies finding success in Mexico is Geomaque Explorations (TSE), which recently reached commercial production at its fully owned San Francisco mine in the northern state of Sonora.

Since mining operations began last September, the Toronto-based company has poured 10,000 oz. gold, while getting its open-pit, heap-leach mine up to speed. In March, Geomaque cranked out 2,222 oz. and, over the first three weeks of April, daily production exceeded 100 oz.

Cash operating costs are averaging less than US$6.20 per tonne of ore crushed (or under US$200 per oz.), compared with a projected US$7.11 per tonne (or US$218 per oz.) over a minimum mine life of five years.

“We are extremely pleased with how smoothly the startup went at the mine, and how quickly we have attained commercial production,” Geomaque President John Paterson told The Northern Miner at the mine’s official opening. “The mine is operating profitably and generating cash flow from operations.” The company is aiming for annual production of 50,000 oz. by mid-year.

Production for 1996 is expected to exceed 40,000 oz. at a cost of below US$200 per oz.

The San Francisco mine lies 2 km west of a 4-lane highway that runs between Nogales (120 km to the north, on the U.S.-Mexico border) and Hermosillo (150 km to the south). The mine’s favorable setting — in a rural setting, but close to several towns — has been instrumental in attracting personnel. At present, 90 people are employed on site.

Geomaque acquired an option on the 10,000-hectare property in July 1993 and completed its acquisition in 1995 by purchasing a 50% back-in right and a 3% royalty held by the original vendor for US$3.5 million and 1.2 million Geomaque shares.

At year-end, the proven and probable minable reserve stood at 6.9 million tonnes grading 1.47 grams gold per tonne, or 326,000 contained ounces.

The reserves are defined in four pit areas, with three-quarters of the reserves contained within the main pit. The stripping ratio is 2.8-to-1. An additional inferred resource within the pit areas is estimated at 754,000 tonnes grading 1.46 grams.

The company plans to process, as run-of-mine ore, low-grade material that does not meet the cutoff grade of 0.4 gram. Recoveries of 40% are projected for this material.

The mine property occupies a flat, alluvial, semi-arid plain at an elevation of 700 metres above sea level.

A belt of metamorphosed sedimentary and volcanic rocks exist along side the northwest-trending Mojave-Sonora megashear zone. The metamorphic rocks are believed to be Jurassic in age, though recent age dating suggests the rocks may be Precambrian. The gold, although hosted primarily in Tertiary-age granitic intrusions, does cut across lithological units.

The mineralization occurs in stacked, tabular zones ranging up to 40 metres thick and dipping gently to the northeast.

Within the zones, the gold is mainly in free form in quartz tourmaline veins, stringers and breccias, and as disseminations throughout the host rocks. The zones have been traced over a strike length of more than 1 km.

Geomaque is attempting to expand the reserves in the hope of proving up at least 500,000 minable ounces by year-end. In February, the company began definition drilling along strike of the western extension of the main pit.

Results to date have confirmed an extension of at least 260 metres beyond the current pit limits, along with a significant widening of the zone.

Mineralization open

Recent drill results include 38 metres grading 3.01 grams for hole 96-3, 35 metres grading 2.62 grams for hole 96-4, and 28 metres grading 3.4 grams for hole 96-6.

Mineralization remains open to the southeast, as well as at depth, but, owing to the success the company has had drilling the northwest extension, it has not yet stepped out on the eastern extension. Only one drill rig is operating.

Initial plans called for 9,000 metres of drilling, but Geomaque is considering doubling that amount since mineralization continues to be encountered.

Since acquiring the property, Geomaque has proved up 130,000 oz. at a cost of US$5 per oz., Paterson said. An interim reserve estimate is expected to be completed by the end of April.

Construction costs amounted to US$4.8 million, compared with the feasibility study estimate of US$5.2 million.

Mining is carried out by open-pit methods, with the company leasing a fleet of 50-tonne haulage trucks and front-end loaders. Ore-grade material is trucked a short distance from the pit to a 3-stage crushing system, where it is crushed to minus 16 mm. The daily mining rate is 5,500 tonnes, and the crusher operates on a 6-day work week.

Del Wisner, processing superintendent, said that, to improve efficiency, the company is looking at adding a cone crusher, which would increase daily crushing capacity to 8,000-9,000 tonnes.

The crushed ore is placed over a quarter of the pad, which, when finished, will measure 500 metres long, 500 metres wide and 45 metres high.

Geomaque expects to have half the total pad area completed by July and three-quarters completed by late fall. To provide additional protection for the environment, Geomaque will double the thickness of the liner in place, as well as add a clay liner.

Cyanide leach solution is dripped onto the ore, and the gold-bearing pregnant solution is collected in lined solution ponds. As of March 31, more than 600,000 tonnes of ore were under leach. Although no recovery figures were available, testwork indicates 72% of the contained gold can be recovered during a 4-month leaching cycle.

Typically, pregnant solution ponds are covered by nets, which act as a barrier to wildlife. Geomaque, however, has opted to cover its pond with small, black plastic balls. Although more expensive than nets, or other standard coverings, the balls have proved effective in preventing evaporation and lowering cyanide degradation, the end result being a reduction in operating costs.

The gold is recovered from the pregnant solution in a carbon adsorption-desorption recovery plant. Gold is absorbed onto activated carbon and then stripped off of the loaded carbon by means of a hot, caustic solution. It is recovered by electrowinning, after which dore bars are poured.

Plant expansion

To meet the mid-year production target of 50,000 oz., Wisner is expanding the recovery plant by increasing the capacity of the strip vessels, as well as adding another electrolytic cell.

Geomaque has 33 million shares outstanding, or 35 million shares fully diluted, and more than US$1 million in the kitty. It has two other exploration gold projects in Mexico, as well as a 500-sq.-km gold concession in Burkina Faso, West Africa.

In Mexico, two advanced, bulk-tonnage targets are being explored: La Chicharra, which lies 2.4 km west of the mine, and La Vetatierra, 7 km to the northwest.

Drill permits are in hand for La Chicharra, which occurs in similar geology on strike to San Francisco. A 1.4-sq.-km area of mineralization is defined by old workings, surface samples up to 9 grams and previous drilling, which returned values up to 24 grams over 2 metres.

La Vetatierra comprises sedimentary rocks that are not as highly deformed or metamorphosed as those in the mine area. A 1-sq.-km area is outlined by numerous old workings on quartz tourmaline veins. Grab samples have assayed up to 15 grams. At the moment, drill rigs are a tight commodity in Mexico, but Geomaque hopes to secure another rig, on a part-time basis, in July.