Estacion Llano, Mexico — Striving to keep ahead of slumping gold prices, Geomaque Explorations (GEO-T) continues to optimize operating performance at its wholly owned San Francisco gold mine.
Since its first gold pour in October 1995, the Toronto-based company has expanded the mine from four small pits into one large pit, and has increased minable reserves to 27.9 million tonnes grading 0.91 gram gold per tonne (819,000 contained ounces), from 7.1 million tonnes averaging 1.46 grams gold (334,000 contained ounces).
The San Francisco operation is situated in Sonora state, about 120 km south of the Arizona border. The region’s flat terrain and established infrastructure are well-suited to low-cost mining activities. Geomaque’s holdings extend over 10,000 ha, within which the known gold resource and the mine infrastructure cover 6,600 ha.
The operation recently underwent a program of expansion to increase production capacity to 10,000 tonnes per day. The standard heap-leach operation uses hydraulic shovels to load 95-tonne trucks that haul ore to the crusher. From there, a newly installed conveyor-stacker system transports the ore to the leach pads.
Gold recovery has averaged between 65% and 70%, and a 0.4 gram gold cutoff grade is used to distinguish waste from ore in the pit.
“Reconciliation between the model [of the open pit] and actual blasthole results is within 5%,” said Michael Carter, Geomaque’s manager of operations at San Francisco, during The Northern Miner’s recent site visit. He went on to say that about US$1 million will be spent over the next year to expand the capacity of the leach pads. Each pad has a capacity of about 5 million tonnes; additional pads will be added as required.
The region’s gold was first exploited during the 1940s by way of small-scale placer and underground mining. Fresnillo, a Mexican-based company, first surveyed the area in 1983. In 1985, Fresnillo put down three diamond drill holes and 30 percussion holes, results of which were encouraging.
Underground development began in 1987, when a decline was developed to a depth of about 25 metres and numerous 1.8-by-1.5-metre drifts and crosscuts were excavated. Fresnillo drilled an additional 359 reverse-circulation (RC) holes and 10 diamond drill holes before agreeing to sell the property to Geomaque in 1992.
Geomaque put down 69 RC holes and completed a feasibility study in 1993, pegging the minable reserve at 4.4 million tonnes averaging 1.41 grams gold (199,000 contained ounces).
Commercial production commenced in March 1996 at 3,000 tonnes per day, and San Francisco went on to produce 36,257 oz. gold that first year.
Gold production at San Francisco during the first quarter of 1998 was 13,161 oz., 11% more than the first-quarter 1997 total of 11,894 oz. Cash costs decreased to US$269 per oz. gold from US$270 per oz. a year earlier. This slight drop was realized despite a 28% decrease in the average grade of ore mined during the quarter, to 0.97 gram gold from 1.24 grams in the year-ago period. The life-of-mine average grade has been pegged at 1.02 grams gold.
Geomaque processed 676,000 tonnes of ore during the quarter, compared with 361,600 tonnes in the first quarter of 1997. This reduced the operating cost per tonne by 37% to US$5.78 per tonne compared with US$9.12 per tonne a year earlier.
The company added a secondary crusher and reconfigured the crusher circuit during early April, thereby substantially increasing crusher throughput. In the ensuing 30 days of operation, a record 317,000 tonnes of ore were mined, crushed and stacked on the leach pad.
“We are very encouraged by the San Francisco mine’s continued cost-per-tonne decrease and the record crusher throughput following the reconfiguration,” said Geomaque President John Paterson. “The company remained profitable despite crushing fewer tonnes than budgeted in the first quarter, and with the extra crushing capacity, we anticipate increased gold production and lower unit costs as the year progresses.”
The geology of the region consists of a belt of metamorphic rocks which contains the Mojave-Senora shear, a large left-lateral transform fault that trends southeasterly and has up to 800 km of displacement. The structure hosts numerous gold occurrences.
A banded sequence of quartz-feldspathic gneiss, augen gneiss, green schist, amphibolite gneiss and some amphibolite and marble lenses make up the San Francisco unit, the oldest rocks in the project area. Most rocks within the package have been altered to a quartz-sericite assemblage. The protoliths (original rock types) of the unit are believed to have been sediments with intercalated volcanic tuffs and mafic dykes.
The rocks of the San Francisco unit are intruded by a younger Tertiary-aged granite that hosts much of the mine’s gold. The main intrusion is roughly stratiform, and is tens of metres thick.
Gold occurs principally as free gold or, more rarely, as electrum. It is associated with goethite and pyrite and, to a much lesser extent, with quartz, galena and petzite (a silver- and gold-bearing telluride). Stockwork quartz veinlets containing some tourmaline are also present in the mineralized zone.
The San Francisco deposit is made up of monotonously stacked tabular lenses of granite that strike northwesterly and dip northerly at between 30 and 45.
Alteration associated with the deposit consists of sericitization, coarse-grained pyritization and some local silicification. The alteration forms a halo that extends a few metres from the mineralization.
About 2.5 km west of the San Francisco mine, at the La Chicharra prospect, Geomaque has recorded some interesting drill results from a 12-hole program.
Highlights from drilling include: hole 511, which intersected 2 metres grading 0.76 gram gold, followed by a 12-metre interval averaging 2.16 grams and another 6-metre interval of 0.32 gram; hole 541, which intersected 20 metres grading 1.16 grams gold and another 4-metre interval grading 1.37 grams; hole 528, which hit 18 metres grading 3.6 grams gold; and hole 534, which intersected a 4-metre interval of 3.57 grams gold, followed by an 8-metre intercept grading 2.34 grams.
Outcrop geology at La Chicharra consists of schist and granite, with some andesite, rhyolite and gabbro dykes. Geomaque will continue stepout drilling at La Chicharra, en route to making an initial resource estimate by year-end.
Meanwhile, Geomaque recorded first-quarter earnings of US$107,000 (or nil per share), compared with US$429,000 (1 cents per share) in the first quarter of 1997. The decrease reflected the quarter-to-quarter decrease in the average realized gold price, from US$383 to US$349 per oz.
Cash flow during the first quarter was US$828,000 (2 cents per share), compared with US$1.1 million (3 cents per share) a year earlier.
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