Kalgoorlie, Australia — Nearly 20 years ago, gold entrepreneur Alan Bond used the word “rationalization” to describe the potential for improving profitability by combining all the mining operations in the historic gold camp immediately east of here. Today, the area is home to Australia’s largest gold mine, and new owners
Operated under the equal partnership of two of the world’s largest gold producers, the mine includes the famous Golden Mile, where, in 1903, output peaked at 1.2 million oz. gold derived from material grading 41 grams gold per tonne. Production gradually declined from that point on, as the old-timers mined out the oxide rocks and encountered the primary, refractory gold mineralization at depth.
The region saw another spurt of activity from 1932 through 1960, but by 1975 all the operations on the Golden Mile had ceased. A revitalized gold price in 1979 brought the region back to life, leading to a progressive rationalization and consolidation of the ground ownership. This culminated in the 1989 integration of all the operations under a single management company known as Kalgoorlie Consolidated Gold Mines (KCGM).
Underground mining had extracted much of the high-grade ore from the area, but huge quantities of low-grade material remain in “halos” around the old workings. KCGM targeted these “halos” through the aggregation of what were known as the Judd, South, Paringa, Croesus-Eclipse, Central, Brownhill, Drysdale, Morrison, North and Horseshoe pits into one continuous large-scale operation.
One of the first things the new operating company did was add a second ball mill, which increased the capacity to about 4 million tonnes per year from 2.2 million tonnes. In 1995, the company ramped output up to 7.5 million tonnes per year by putting in a semi-autogenous grinding mill and adding two more mills, including the Mt. Charlotte facility, to treat material from the (now-closed) Mt Charlotte underground operation, 3 km to the north.
The old underground mines, which closed in 1992 as a result of high mining costs, account for a challenging environment in the current pit because of the presence of 3,000 km of historical workings, including stope voids, shafts, drives and crosscuts. In the lower areas of the pit, the old shafts and associated exclusion zones cover around 25% of the bench.
“They got down to 1,800 metres, and our final pit will go to about 650 metres, so we are stuck with it all the way down,” said KCGM General Manager John Shipp, who spoke with The Northern Miner on-site, “and, of course, they took all the really good gold.”
Probe drilling is used to detect old workings, and wherever underground workings create a potential hazard because of insufficient solid cover, the bench is flagged over the extent of the workings.
The operation moves 230,000 tonnes of material from the pit each day, producing up to 850,000 oz. gold per year. In 2001, the operation cranked out 616,344 oz., making it, once again, Australia’s largest gold producer. The pit currently stretches 3 km along the eastern edge of the city and is 1.8 km wide. Mining occurs down to the 330-metre level, with the bulk of the material coming from the 180- and 300-metre levels.
“For every load of ore we send to the mill, we have to ship six loads of waste,” added Shipp. “That means 1,300 tonnes of material need to be moved for 2 grams of gold.”
The profitability of the operation is due to economies of scale, and the new owners are currently defining the limits of the mineralization in order to plan for pit optimization.
“You would think that after 100 years of mining, we would know the extent of the mineralization, but we don’t,” said Shipp.
Barrick picked up its interest in the operation when it took out Homestake mining in 2001, and Newmont got its share through last year’s takeover of Normandy Mining. Both companies are known for creating efficiency through operational control.
“We’d rather be a hundred per cent over fifty per cent,” says Alex Davidson, Barrick’s vice-president of exploration.
Geology
The Kalgoorlie gold field is defined by a 10-by-2-km area east of the city and developed within the Archean Norseman-Wiluna greenstone belt of the Yilgarn Craton. Mineralization is controlled by a complex series of shears and hosted within the Golden Mile dolerite and, to a lesser extent, the Paringa basalt.
The ore is refractory and complex, containing free gold and a significant proportion of gold and silver-bearing telluride minerals, often associated with pyrite. The mineralization is localized within alteration zones of ankerite-quartz-sericite-pyrite and subdivided into the Eastern and Western Lode systems on the flanks of the Kalgoorlie Syncline.
Individual zones range from 30 to 1,800 metres long, 0.1 to 10 metres thick and extend 30 to 1,160 metres downdip. The highest gold grades are associated with gold-silver-mercury tellurides and alteration minerals with high vanadium contents.
In 1999, KCGM became directly responsible for: production planning and scheduling for pit planning, management of underground workings and geotechnical work; production drilling and blasting planning; production processes for loading and hauling ore and waste; co-ordination of all production and maintenance contract activities; haulage roads, and development and maintenance of benches; provision of light vehicles and minor equipment for mine production and support; and crusher operation.
The company currently uses a fleet of 24 Caterpillar 793s with bucket capacities of 35 cubic metres to move about 85 million tonnes of ore and waste each year. The broken material is loaded into 220-tonne haulage trucks. The high-grade ore (exceeding 1.2 grams gold per tonne) goes to the mill for processing. The medium-grade ore (0.9-1.2 grams gold) and sub-grade material (0.5-0.9 gram) are placed on separate stockpiles for possible treatment at a later date. Waste is classified as material with less than 0.5 gram gold. About 12 million tonnes are treated at the Fimiston mill, and the remaining 73 million tonnes of waste are transported to various waste dumps surrounding the pit perimeter.
Mining in ore blocks is completed along the same angle as the orebody in order to minimize dilution. Face shovels are used because the configuration of the hydraulic face shovel’s digging action and bucket shape are able to sustain minimal dilution of ore blocks down to a width of 6 metres.
The mine uses Caterpillar’s computer-aided earth-moving system (CAES) to assist shovel operators in identifying material types. Using satellite navigation technology, the shovel position is displayed in real time on a computer screen in the cab, along with the current position of the shovel in the pit and a map showing the type of material (waste, sub-grade, ore) in the area to be dug. The CAES also shows the operator where the underground workings are located in the pit.
Reserves
At June 30, 2001, Super Pit had reserves of 185 million tonnes grading 2.1 grams gold and total resources of 354 million tonnes grading 2.6 grams gold. In the second quarter of 2002, the mine cranked out 80,780 oz. gold at a total cost of US$213 per oz. This marks a steep decline from the 108,957 oz. produced in the corresponding period last year at a cash cost of US$176 per oz. The lower output and higher costs are a result of a 5% decrease in grades, 3% lower recovery rates and higher unit mining and processing costs.
Production in the second half of 2002 is expected to rise to 198,000 oz, with cash costs averaging US$222 per oz. As a result, for the year, production is expected to be about 366,500 oz., as planned, while cash costs are expected to be 6% higher than planned, at US$218 per oz.
With the pit expected to encompass a 4.5-km-by-1.5-km area down to depths of 650 metres over the next 18 years of operation, Barrick and Newmont have launched a “rationalization” study aimed at exploring operating initiatives to improve the mine’s cost structure and operating system.
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