NEVADA — Nevada gold operations foundation of Barrick empire — Goldstrike to mine 2 million annually into next century

The Busang project in Kalimantan may have had more allure and sizzle for a time, but the Goldstrike property in Nevada’s Carlin trend was never in danger of losing its place as the production cornerstone — and the jewel in the crown — of Barrick Gold (ABX-T).

For not only do Goldstrike’s two mines currently produce 2 million oz.

annually (or about two-Thirds of Barrick’s total production) — they are expected to continue producing at this rate well into the next century. Gold properties, at least in the real world, do not get much better than this.

Goldstrike already has produced more than 10 million oz. gold, and it still has about 29.7 million oz. in store — the single largest gold reserve in the United States. Of this total, the Betze-Post mine contains 23.6 million oz., whereas the adjacent, and newer, Meikle mine contains 6.1 million oz. A further 11.6 million oz. of “mineralized material,” not yet classified as reserves, have been identified.

In spite of its vast size, Goldstrike got off to a slow start. The first hole was drilled in 1962 and was followed by 17 shallow holes a year or so later.

Initial results were disappointing, which was partly a reflection of the low gold price at the time (US$35 per oz.). Several companies worked the property, including one which began limited heap-leach production in 1976. By 1986, 14 small, separate deposits were being mined at Goldstrike, including the Post oxide deposit, which was discovered in 1982 by a hole that intercepted 120 ft. grading 0.28 oz. gold.

Barrick’s interest in acquiring the Goldstrike property was spurred in the fall of 1986 when a deep hole below the Post oxide deposit led to the discovery of the high-grade Deep Post deposit.

The company acquired a 100% interest in the 7,000-Acre Goldstrike property at the beginning of 1987. The price was US$62 million, which, with the benefit of hindsight, appears to have been the bargain of the century. It took only two months for Barrick’s exploration team to discover the Betze deposit, which took its name from co-discoverers Keith Bettles and Larry Kornze.

Several other gold zones also were identified.

.SGeology

The Goldstrike area consists of folded and faulted Paleozoic sedimentary rocks, which were intruded by the diorite-granodiorite stock of Jurassic age.

Mesozoic folding and thrust faults form important structural traps for the mineralization in the Betze-Post pit. Tertiary faulting developed ranges and basins, which were subsequently filled with volcanics and sediments during Tertiary time.

The major gold deposits (Post oxide, Betze, Meikle and Deep Post) are all hosted in sedimentary rocks of Silurian to Devonian ages. The Post oxide deposit occurs in the siliceous siltstones, mudstones, argillites and minor limestones of the Rodeo Creek Formation. The remaining deposits are found in the silty limestones and debris flows of the Popovich formation.

Hot hydrothermal fluids deposited the gold with very fine pyrite and silica.

Over time, the pyrite oxidized, freeing the gold and making it relatively easy to extract, as in the case of the Post oxide and other surface deposits.

But in the deeper deposits of Betze, Deep Post and Meikle, the gold is still locked up with the iron sulphides; as a result, autoclaving is required.

The gold mineralization is controlled by favorable stratigraphy, structural complexities in the form of faults and folds, and the contact of the Goldstrike intrusive. It occurs as micron- to submicron-sized particles associated with iron oxides in the oxide zones and with pyrite and marcasite in the sulphide zones. Some ore occurs below sills, which act as dams to the ascending hydrothermal fluids. Alteration exists as decalcification of the limestones, silicification of all rock types and clay development in the structurally disturbed areas. Overall, the Post-Betze ore zones extend for 6,000 ft. in a northwesterly direction and average 600 to 800 ft. in width and 400 to 600 ft. in thickness.

.SProduction

In 1996, Betze-Post, a conventional open-pit shovel and truck operation, produced 1.9 million oz. gold from ore grading 0.35 oz. gold per ton at a cash cost of US$162 per oz. Recoveries averaged 90%.

Cash costs at Betze-Post are expected to rise this year to about US$175 per oz., and the grade processed will be 0.31 oz.

Shallow oxide deposits have a relatively shorter mine life, which is why the production emphasis at Goldstrike has shifted in recent years to the deeper, higher-grade sulphide ores first reached in 1992.

Last year, US$62 million was spent on capital projects at Betze-Post, exclusive of stripping costs. These funds were directed primarily to mining equipment, water management and processing facilities. This year, a further US$88 million will be spent, mainly on additional mining equipment and on the construction of a water discharge and treatment facility. (Most of the deposit lies below the original water table.)

Barrick spent US$186 million to develop the Meikle mine, which began production last September on schedule and within budget. Production last year amounted to just under 80,000 oz. at an average cash cost of US$142 per oz.

This year, Meikle is expected to produce 435,000 oz. at a cost of US$125 per oz., making it the largest underground gold mine in the U.S.

Meikle has 6.1 million oz. of reserves in ore grading 0.716 oz. gold, plus a further 1 million oz. classified as “mineralized material.” It has two ore zones: an upper, flat-lying structure, which will be mined first; and a deeper, steep zone, which contains the bulk of the ore. The deposit is serviced by two shafts: a 1,480-ft. production and service shaft and a 1,320-ft. ventilation shaft.

Long-hole open stoping is used to mine about 75% of the reserves, with underhand drift-And-fill methods employed for the remaining areas of thinner and flat-lying mineralization. Both methods require a high-quality cemented rockfill. Also, Meikle has the largest mine refrigeration system in North America.

.SProcessing plant

The Goldstrike process facility is now handling ore from both Meikle and Betze-Post at a daily rate of 2,000 and 15,500 tons, respectively. The plant includes a mill and six autoclaves, which, on a daily basis, handle 17,500 tons of refractory ore.

Each of the two grinding circuits is composed of ball and semi-Autogenous grinding (SAG) mills. As the Meikle ore is harder and requires a finer grind, Barrick has installed two variable-speed drives for the SAG mills at a cost of US$9 million.

The pressure oxidation, or autoclaving, facility is the largest of its kind in the world, boosting refractory ore recoveries to more than 90% from less than 30%.

Barrick still faces the metallurgical challenge of determining the best process to treat the significant amounts of carbonaceous ore that will be mined at Goldstrike after the year 2000. Roasting is one option; another is the company’s new, patented ammonium thiosulphate process. A decision is expected by mid-year so that processing facilities can be in place when needed.

.SExploration

In 1986, Barrick spent about US$12.8 million at Goldstrike in an exploration program that consisted of 160 deep drill holes and 265,000 ft. of other drilling. This year, a US$10-Million program will concentrate on the Screamer, North Betze and West Betze areas of the pit, the objective being to delineate reserves at Betze-Post, as well as underground at Meikle.

Also, the company will spend US$18 million to sink an exploration shaft at the Rodeo deposit, some 4,000 ft. south of Meikle. This deposit has been tested by 62 surface drill holes. Shaft-sinking will begin this summer and, once complete, Barrick plans to carry out delineation drilling.