Northern B.C. hosts old and new mining operations

The recent Minerals North conference held in this “pro-mining” northern community provided delegates with a snapshot look at a variety of mines operating in the northern portion of British Columbia.

Although the Premier Gold mine owned by Westmin Resources (TSE) near Stewart is best known locally, the province’s north hosts a variety of operations producing a variety of metals and commodities.

Westmin’s gold mining operation has found it tough going since start-up in 1989 (grades were lower and costs higher than expected), but delegates were told that a number of older operations in the north have survived tough times and low metal price cycles to become profitable producers.

One such mine, Endako, recently celebrated its 25th year of operation. The open pit molybdenum mine is a wholly-owned division of Placer Dome (TSE), and Canada’s only primary molybdenum producer.

As Mark Smith, mine geologist, pointed out during the Minerals North conference, the Endako mine has been consistently overshadowed by Placer Dome’s more glamorous gold operations.

At only 0.088% molybdenum per ton, the grade is probably the lowest of any molybdenum mine so it’s not difficult to understand Smith’s point that grade control and high productivity are extremely important.

The mine’s current performance owes much to a course of action taken when the mine was re-opened in 1986 with a non-union work force after a four-year shutdown.

Strict cost control, a push for increased productivity, and aggressive marketing (molybdenum is not traded on metal exchanges) enabled Endako to resume full capacity in late 1988, and current production is now about 14 million lbs. of molybdenum per year.

Endako recently purchased some new mining equipment at a cost of about $12 million in order to carry out some significant moves into new areas of the orebody.

Drill programs have also been carried out to delineate ore and explore for new reserves, which at the end of 1990 stood at about 140 million tons. With these and other changes and improvements, and with potential for reserve expansion, the mine is expected to remain one of the least costly primary producers of molybdenum well into the next decade.

But Noranda’s (TSE) Bell copper mine near Babine Lake is facing almost certain closure in 1992. The open pit mine began operations in the early 1970s, closed in 1982 because of high operating costs and low metal values, and reopened in 1985 with an expected 3-year life. But tenacity and innovation kept the operation going, although work is now directed at decommissioning (which coincidentally may position Bell for many years of sustained profitability).

New reserves were discovered at Bell, but they are not viewed as economic under current metal prices because of a high stripping ratio and new capital requirements to develop and mine the deposit.

A unit of Princeton Mining (TSE) removed the last ore from its open pit mine near the town of Cassiar last year, and recently started underground mining of asbestos fibre from the newly developed McDame deposit. The new underground operation is a chrysotile asbestos deposit utilizing a unique footwall extraction, block caving method.

Cassiar has operated continuously since 1952, and is the second longest operating mine in the province. But the switch from open pit mining to an underground method has meant higher costs, a good component relating to the man-hours, costs and challenges involved in ground support. The mine is expected to produce for a further 10-15 years.

Equity Silver Mines (TSE) has already started preparing its employees and the mine site near Houston for closure by the end of 1992. Brian Robertson, mine manager, said the downsizing program was initiated well in advance, with the objective of reducing the workforce through attrition and thereby avoiding staged layoffs.

Equity Silver had its 10th anniversary of production in Sept. of 1990, achieving a total output of more than 59 million oz silver, 372,500 oz. gold and 156 million lb. copper.

With mining operations winding down, the company has deposited a total of $31 million in security under its environmental reclamation permit. The total amount is still being discussed with government, but the $31 million is the company’s best estimate of costs required for the long term treatment of acid mine drainage.

New mines were also featured at Minerals North, including the brand new Snip operation in the Iskut River region. The mine is the only one in the district since Skyline Gold (TSE) closed its Johnny Mountain gold mine last year. Cominco (TSE) operates and owns 60% of the underground gold mine, with Prime Resources Group (VSE) holding the remainder. By all accounts the operation has performed extremely well since start-up, but then Cominco is no stranger to successfully developing mines in the north.

The mill achieved its full 330-ton-per-day production rate six days after start-up on Jan. 25 of this year, and from Feb. 1 to March 15th, processed an average of 352 tons-per-day. Grade for this period was near reserve grade at 0.8 oz. gold per ton, and overall mill recovery has been 91%. Gold is recovered by two methods: about 25% by gravity circuit and the remainder as a sulphide-rich flotation concentrate. The concentrate is shipped to Wrangell by hovercraft or Bristol aircraft, and then to Japan for final processing.

Cheni Gold Mines (TSE) enjoyed a good start in 1989 with its Lawyers gold mine in the Toodoggone, but things are getting a little tougher now that much of the AGB zone has been mined out.

Reserves in the Cliff Creek zone were found to be not

as continuous as originally thought, and the company downsized its reserves and took a writedown on the mine. According to Vern Smith, operations manager, Cheni has also found a road built to access its minesite something of a mixed blessing.

The company is meeting with government officials to discuss road maintenance costs which have extended past the portion of the road which it effectively owns.

“It’s beginning to become a major cost item,” Smith said.

But Cheni also had good news to report. The company is preparing to mine the Al gold deposit which it bought from the U.S. affiliate of Energex Minerals (TSE), and it also has discussions with nearby property holders for possible joint ventures.

Operators of the Golden Bear mine near Dease Lake also have similar concerns about maintenance costs of their access road.

But the main concern is to achieve commercial production after a problem-plagued start-up in early 1990.

The company hasn’t had the best of luck with its mill which has a roasting circuit, but senior engineer Lyle Morgenthaler told conference delegates, “we’re having success now”.

A new mining plan was also recently put in place which involves the phasing out of underground mining to open pit techniques (stopes were being lost because of poor ground conditions). The stripping ratio will be high, but the pit will only have to be two-sided (it’s at the side of a hill). The company is currently looking at various designs to optimize its open pit mining plan. With this method, North American Metals (VSE) hopes to keep mining until 1995 which would allow the exploration team a chance to find new reserves.