Hecla passes environmental grade, brings Grouse Creek on stream

At a time when environmental constraints are dissuading many North American mining companies from carrying out work at home, it is reassuring to see an operation overcome these obstacles and reach producer status. Perched high in the mountains of the historic Yankee Fork mining district of central Idaho, the Grouse Creek mine has done just that.

Ownership is split 80% and 20% by Hecla Mining (NYSE) and Great Lakes Minerals (TSE), respectively, both of whom played host to The Northern Miner and more than 450 other guests at the grand opening.

Hecla acquired the project in 1991 through a merger with CoCa Mines. Permitting, which had been ongoing since 1982, was finally approved in the fall of 1992, following the submittal of a supplemental environmental impact statement. Construction was carried out in the summer of 1993 at a capital cost of US$92.1 million. And in early 1994, Hecla, needing capital for other mine development programs, sold a 20% interest in Grouse Creek to Great Lakes. Operations started up at the end of last year.

In spite of several roadblocks set up by environmental opposition, Hecla persevered, addressing environmental concerns at every turn.

“Minimizing the environmental impact is a strong focus of Hecla,” says Arthur Brown, the company’s chairman. The joint venture spent US$1.5 million on the creation of a wetland area downstream from the mine at Jordan Creek. Also, historic gold-dredging tailings were replaced with a functioning stream and fish habitat.

At the grand opening, a U.S. Forest Service representative announced that the mine had been nominated for three 1995 Idaho Department of Land awards, while three Grouse Creek employees were singled out and presented with certificates of appreciation from the U.S. Department of Agriculture.

Production at Grouse Creek was hampered by a rough startup attributed to severe weather conditions. For the first six months of this year, 643,469 tons of ore were milled at an average grade of 0.054 oz. gold per ton, yielding 43,996 oz. gold and 301,198 oz. silver at a cash cost of US$377 per oz.

The startup delays were finally resolved in May when an enlarged feeder system was installed in the mill at a cost of US$500,000. The previous system was found to be too small, as freezing conditions were causing it to plug and create bottleneck conditions beneath the ore pile.

The conventional mill uses both a gravity circuit and a carbon-in-pulp circuit, with gold recovered by means of the Merrill Crowe process. The current processing rate is 6,800 tons per day, with recoveries running 91% for gold and 54% for silver. And over the next six months, the mill will undergo fine-tuning in a bid to reach recoveries of 94% for gold and 58% for silver.

Production in July totalled 6,757 oz. gold and 60,710 oz. silver at a cash cost of US$324 per oz. While head grades averaged 0.049 oz. gold for the first seven months, Hecla expects these to improve to 0.053 oz.

For the second half of 1995, Hecla expects to produce 60,000 oz. gold and 328,000 oz. silver at a projected cash cost of US$238 per oz. Cash costs projected over the mine life of nine years remain at US$190 per oz., net of silver credits.

For Great Lakes, the mine represents an opportunity to join the ranks of producers. Its 20% share of the venture is expected to generate more than 20,000 oz. gold and 125,000 oz. silver this year. The company also holds the right to purchase up to an additional 10% interest.

Open-pit mining is initially being carried out on the Sunbeam pit, which hosts minable reserves calculated at 8.6 million tons grading 0.042 oz. gold and 0.32 oz. silver at a stripping ratio of 3.5-to-1.

Prestripping of the nearby Grouse deposit is under way, though it will be about a year before production begins. Grouse contains a minable reserve of 13.2 million tons grading 0.038 oz. gold and 1.3 oz. silver at a stripping ratio of 5.1-to-1.

The two deposits lie in the mountainside above the mill complex, and are hosted in Eocene volcanic rocks within the Custer graben, a major, northeast-trending, tectonic depression. The Custer graben forms part of the trans-Challis fault system, a 140-mile-long by-40-mile-wide zone defined by regional, high-angle faults, grabens and cauldron subsidence features.

The ash flow tuffs in the Sunbeam pit are intruded by rhyolite flow domes and post-mineralized dykes. Mineralization occurs along silicified and argillized zones of hydrothermal-fault breccias, controlled by northeasterly trending structures.

Ore minerals include native gold, electrum, pyrargyrite (ruby silver), pyrite and arsenopyrite. The central part of the deposit is higher in grade than either the top or bottom, running 0.05 to 0.07 oz. gold. The pit is expected to measure 1,500 ft. long by 700 ft. wide by 1,000 ft. deep.

The geology of Grouse differs from Sunbeam in that a carbonaceous black shale overlies the ash flow tuffs, with rhyolitic flow domes intruding at a much deeper level. Mineralization predominates in the hydrothermal-volcanic breccias and in the basal portion of the sedimentary unit that caps the sequence.

Grade increases toward the bottom of the pit. Earlier this year, the joint venture mined 118,000 tonnes grading 0.39 oz. gold and 1.56 oz. silver by underground methods from beneath the proposed pit. The projected dimensions of the Grouse pit are 2,000 ft. long by 1,500 ft. wide by 1,000 ft. deep.

Surface geochemical sampling and very-low-frequency geophysical surveys are being used to identify other systems of mineralization over the 22.3-sq.-mile property. The structures related to mineralization contain water and clay, making them highly conductive. Soil sampling is outlining potential targets, with reverse-circulation drilling expected to follow.

About US$1.5 million will be spent in a bid to expand the Sunbeam and Grouse open pits by stepping out on favorable trends where drilling is sparse. Also, a 16,000-ft. drilling program is under way on Estes Mountain, directly opposite the Sunbeam pit on the other side of a valley. Several large geochemical anomalies are being drill-tested.

In addition to the Sunbeam and Grouse deposits, a mineral resource of 26.1 million tons grading 0.013 oz. gold and 0.34 oz. silver is outlined at Soapstone Ridge. The low-grade nature renders it uneconomic, but follow-up drilling will test for a higher-grade minable resource.