Granges applies mining knowledge

The transition from exploration to mining is a difficult one for any company and Granges Exploration is no exception. But it might have been a lot worse had Granges not had a 19.8% interest in the Trout Lake mine, probably Hudson Bay Mining & Smelting’s most profitable operation in the Flin Flon area of Manitoba.

It’s also proved to be a profitable venture for Granges which last year netted $5.5 million from the copper- zinc-silver-gold producer. The company has been actively involved in the development of Trout Lake since its discovery and, indeed, Granges pressed hard for mechanization in the mine which has been a key factor in its profitability.

The knowledge gained there has been applied to its nearby Tartan Lake gold mine, which is currently processing 300-350 tons per day and, to a much lesser extent, to 58%-owned Hycroft Resources and Development’s Crofoot/Lewis mine project in Nevada which is also in the startup phase.

Granges President Mike Muzy lowski concedes that both properties have had their share of startup problems but he adds: “What mine hasn’t?” In Hycroft’s case, production has been increasing steadily and 15,000 tons of ore per day are currently being loaded on to leach pads. The company is projecting 80,000 oz of gold production this year from the combined property, most of it from the Crofoot side. A number of factors including difficult winter conditions, late equipment deliveries (Nevada’s gold mining industry is booming and some equipment is in short supply) and bottlenecks in the plant conspired to delay the project which is about three months behind schedule and approximately 12% over budget at $30 million(US). But the turnaround has arrived, he emphasizes.

Precipitation problems in the vacuum tower have been resolved, chemical consumption has been normalized, and commercial production is expected the first week in April, he says. In the past year the budget has been expanded above earlier estimates, owing to the fact that exploration has increased reserves on the property.

Production costs are expected to be $226 per oz but he points out the final figure will depend on recoveries which should average about 75%. Mine run material at the Lewis mine averages about 0.03 oz gold per ton and 0.028 oz at Crofoot. Crushing and agglomeration are required because of fines rather than clay content and a conveyor system is used to stack ore on leach pads. It’s similar to that used by Pegasus Gold at its Florida Canyon property in Nevada; the one at Pegasus is a radial system, however. Both systems are extremely efficient and cost effective in comparison to truck haulage, the companies emphasize.

The expansion phase of the Tartan Lake mill is still being tuned up and recoveries are expected to increase to over 90% in the near future, Muzylowski explains. The underground portion of the project was delayed because of water problems which required extensive grouting and mill heads have been slightly lower than expected; they currently average about 0.25 oz gold per ton. But the company has encountered some of the best widths and grades ever in the lower portion of the mine including a 20-ft section averaging over 0.4 oz. He says the orebody appears to be widening at the 260-m level which bodes well for the operation.

Muzylowski believes the company’s Windflower property in southeastern British Columbia could be a 20,000-oz-per-year producer, noting the current drift program is averaging about 0.3 oz. He also feels the Mishibishu property (N.M., March 28/88) in northwestern Ontario could be another gold mine for Granges. Grades have been averaging around 0.17 oz and he says underground exploration at a nearby property resulted in a substantial upgrading of reserves, which could happen at Granges.