The Hoyle Township project owned by
The study, performed by consultants A.C.A. Howe International, fixes the resource at 1.64 million tonnes grading an average 10.2 grams gold per tonne, based on a 6-gram cutoff grade. The paper also concludes that the project could be economic at a gold price of US$300 per oz. Of the 1.64 million tonnes, 668,700 tonnes are classified as indicated, with the same average grade.
At a cutoff grade of 5.5 grams, the resource expanded to 1.86 million tonnes with an average grade of 9.6 grams. The indicated part of the resource is 758,700 tonnes at an average grade of 9.6 grams.
For both resources, the study estimated ore dilution of 12.5% and the call factor (the recovered part of the diluted resource) at 92.5%. Mill recovery was assumed to be 95%.
The calculation was based on just over 43,000 metres of drilling in 134 drill holes. Since whole cores had been sampled in some of the previous work, Howe International did not conduct verification sampling.
The resource — which previous estimates had pegged at 1.71 million tonnes grading 8.4 grams per tonne — grew partly because Howe International estimated a larger inferred tonnage. The consultant also cut high assays to 100 grams rather than 34.28 grams per tonne (1 oz. per ton), which has the effect of increasing the average grade.
Cash flow analysis calculates that, at US$300 gold, the project would have an internal rate of return of 12.6%. It would have a payback period of 6.2 years; the life of the mine is projected at 8 years. At US$350, the project has an internal rate of return of 24% over a 9-year life, paying back in 5.4 years.
Should the deposit be developed, current plans involve driving a ramp from surface to the 140-metre level. A shaft could be sunk in stages to the 720-metre level for deeper production. Howe recommended custom-milling of the ore.
The nearest mill facilities are those of
Like its fellows, Kinross is limping through the current economy, but the company’s second quarter was bright even as it posted a loss.
Costs at Hoyle Pond fell to US$183 per oz. in the second quarter of 1999, down from US$243 in the first quarter. Following two fatalities at the mine and a union certification vote, Kinross implemented what it called “substantial changes in both management and procedures.” It expects those changes to push average cash costs down to US$180 for the year.
Kinross, which closed its Macassa mine in Kirkland Lake during the second quarter, lost US$14.7 million (or 5 cents per share) on revenues of US$77.8 million during the period. For the six months ended June 30, Kinross lost US$24.7 million on revenues of US$156.5 million.
Production increased at both the Fort Knox gold mine in Alaska and the Kubaka mine in eastern Siberia. Costs at Fort Knox were down to US$179 (from US$210 in the first quarter). In the same quarter, costs at Kubaka fell US$7 to US$142 per oz. The Refugio mine in Chile saw its costs rise to US$259.
On the balance sheet, Kinross still has US$119.7 million in cash and another US$32.6 million in other working capital.
Be the first to comment on "Resource grows at Timmins project"