Hemlo’s ’88 output nears 900,000 oz

Relatively low production costs continue to be the order of the day at the Hemlo gold camp in northern Ontario, where production from the three gold mines operating there is expected to total about 900,000 oz this year.

During the third quarter of this year, the Golden Giant mine, operated by Hemlo Gold Mines (TSE), continued to be the lowest cost producer at $109(US) per oz.

The David Bell mine, a joint operation of Teck Corp. (TSE) and Corona Corp. (TSE), came in at $125 per oz during the quarter, while at the Page-Williams mine (the battle over ownership of the mine is still before the courts) the quarterly production cost stood at $185 per oz.

Compared with the third quarter of 1987, the production cost at the David Bell dropped about $15 per oz. The average grade of the ore has picked up, to 0.51 oz gold per ton from 0.34 oz last year, as the mining operation has gone deeper.

“It was a cut-and-fill operation last year,” Corona’s Gil Leathley, senior vice-president operations, said of the underground work which took place in 1987 at higher levels. Now at the deeper levels, where a long-haul stoping method with delayed fill is being employed, the ore “can run up to 0.8 oz,” he said. Miners at the project are working on the seventh level, at 4,600 ft. Continued good grade

Leathley said the ore grade is expected to average about 0.5 oz during the next two or three years. The average grade for the entire Teck-Corona deposit is estimated to be 0.36 oz.

During the quarter, the mine produced about 55,000 oz, with mill throughput averaging 1,100 tons per day. The recovery rate was 97%.

At the Golden Giant mine, the quarterly average grade dropped from 0.41 oz last year to 0.31 oz this year. John Harvey, president of Hemlo Gold, which is controlled by Noranda Inc. (TSE), said last year the grade was abnormally high.

“What we’re doing this year is more according to the plan,” he said, adding that the drop in grade was not unexpected. Over-all grade of the deposit is estimated to be 0.29 oz.

The Golden Giant, which produced 369,300 oz in 1987, will turn out an estimated 350,000 oz this year. During the third quarter, mine output totalled 85,260 oz (down from 115,181 oz for the same quarter in 1987), with the daily mill throughput averaging about 3,025 tons.

Harvey said ore being mined during the fourth quarter is showing grades as high as 0.5 oz and the last three months of 1988 will “probably be the best quarter of the year.” At the Page-Williams mine, where the rate of production was doubled to 6,600 tons per day at the first of October, the ore processed averaged 0.26 oz during the third quarter. The grade was slightly higher compared with the same period last year. Total production during the quarter was 87,000 oz.

Ownership of the Page-Williams mine was awarded to Corona (then known as International Corona Resources) in March, 1986, by the Supreme Court of Ontario in a landmark decision. The developer of the mine, LAC Minerals (TSE), appealed to the Ontario Court of Appeal, which upheld the original ruling, and LAC then took the case to the Supreme Court of Canada, which heard the case in October and has yet to render a decision. LAC continues to operate the mine under the direction of a management committee comprising one LAC and one Corona nominee and a third party agreed upon by both companies.

Should the final court decision go in Corona’s favor, Corona and Teck have agreed to become joint operators of the Williams mine on a 50/50 basis.