Nevada Goldfields’ Aurora mine small, profitable

It took only 72 days and $5.2 million(US) to bring the Aurora mine of Nevada Goldfields (VSE) into production in 1987 — and that capital should be recovered in just over a year. The small open pit mining operation just three miles from the California border has become the crown jewel of the company.

Gold production is expected to reach approximately 20,000 oz in the current year all of which is subject to a 7.5% net smelter royalty to Siskon Corp., a subsidiary of Vancouver-based Centurion Minerals (VSE).

In the first eight weeks of Nevada Goldfields’ current fiscal year, gold output totalled 3,459 oz (30% over budget) at a cash cost of $160(US) per oz, well below the present industry average; and those costs could go lower yet, Alan R. Bell, chief executive officer for the company predicted. Mining represents 42% of the total cost, milling 35%, and administration the remainder, he noted.

The mine’s 42 full-time employees are multi-skilled so operations are extremely flexible, The Northern Miner learned first hand on a visit to the project. Equipment availability is well over 90% because of a basic but effective preventive maintenance program.

The company controls roughly 4,000 acres in the region but its open pit mine involves a single claim at the moment. Nevada Goldfields is mining what it describes as “bonanza type ore” which is sufficiently high grade to offset the 11:1 stripping ratio and generate a profit. At the time of our visit, the open pit was contributing 250 tons per day to the milling operation.

Mining operations are concentrated on the steeply-dipping (75 ) Prospectus vein which is being used as a geological model in the exploration for other vein structures. The open pit is heavily faulted and pods of ore grade mineralization occur at the intersections of these fault structures. Vein widths vary from 15-50 ft and the footwall is mined almost exclusively plus altered andesite in the wider sections. The hangingwall is mostly clay which is generally barren and not worth mining.

A backhoe is used to mine the pit selectively and it’s been very effective as demonstrated by the 10-12% dilution recognized to date. Such mining practices are common enough, particularly in Australia where Nevada Goldfields’ controlling shareholder, Golconda Minerals, is based. Many of the company’s technical staff have had extensive mining experience in that country.

Blast holes are usually laid out by geological staff and patterns are staggered to give good fragmentation. During our visit, a geologist was monitoring the digging on one of the lower benches in the pit. There is good visual control in the ore zone and a 0.06-oz cut off is used to simplify mining.

Eight more benches are available for mining in the pit, representing about 62,000 tons of ore reserves. This is sufficient for about 10 months of production but another 82,000 tons grading 0.26 oz gold is available behind the current pit. Waste material from the second pit will be dumped back into the first to reduce waste haulage.

Underground mining is planned below the pit bottom on the Prospectus vein and also in the old Juniata mine where reserves are limited to extensions of previously mined vein structures. Several mining options are available including shrinkage, cut and fill, or bulk mining for the wider sections.

Nevada Goldfields’ operating expertise encompasses both open pit and underground mining techniques. The company’s Kingston mine project (N.M., Oct 3/88) is the third largest underground gold mine in the United States at the moment. The Aurora underground mine is expected to contribute about 50 tons per day to the mill but this could be expanded eventually.

Underground development work has been hampered by poor ground conditions but this problem had largely been resolved at the time of our visit. Drifting is planned on the Prospectus vein to prove up underground reserves which currently stand at 76,000 tons grading 0.55 oz gold. Consolidated Goldfields mined the property in the early 1900s and, as a result, there are extensive old workings which aren’t properly mapped.

Because of the clay content in the ore, single stage crushing is used in the mill followed by 2-stage grinding which includes a semi- autogenous mill and a ball mill. The plant runs seven days per week and yields a 90% recovery rate; the open pit operates on a four day basis with 10-hour shifts. Carbon stripping is done at the Kingston mill 200 miles away.

Mill tailings are dewatered then discharged to a filter press which produces a 75% solid cake that is stored on site. This was viewed as a good alternative to building a tailings dam but problems with the belt filter have changed all that. The company plans to begin construction of a sub-aerial tailings facility which should take 6-8 weeks to complete and cost about $350,000.

People often confuse Nevada Goldfields’ Aurora mine with the nearby Minerex Resources (VSE) project which bears the same name. (Obviously there are no copyright laws in the U.S. regarding the naming of mining operations). Minerex is controlled by Canada Tungsten Mining (TSE) which re- cently announced plans to boost its equity in the company to over 50%.

The two mines are on the same gold structure but Minerex is heap leach and Nevada Goldfields is entirely conventional.

Nevada Goldfields has a price protection program associated with a gold loan whereby all its production (excluding 9,700 oz) is sold at a guaranteed minimum of $420 per oz. If gold goes up to $510 the company’s metal trader would “take a piece of the action,” Bell said, adding that they are well covered on the downside.