Sadiola Hill mine makes golden progress — Iamgold sets stage for foreign juniors in West Africa

Any time you dig a big hole in the ground, you get a surprise or two. All any operator can do is try to be ready for them.

Fortunately for the partners in the Sadiola Hill project in western Mali, the new mine has turned in mostly pleasant surprises. With commercial production exceeding expectations, the final capital cost should come in about US$4 million under budget.

Societe d’Exploration des Mines d’Or de Sadiola, or SEMOS, was formed to operate the new mine, near this village, 420 km northwest of Bamako, the country’s capital. Partners in SEMOS include Iamgold (IMG-T) of Markham, Ont., South African mining house Anglo American and the government of Mali.

Iamgold and Anglo each hold a 38% interest, while the government holds 18%.

Another 6% belongs to the World Bank’s development agency, International Finance Corporation.

Sadiola’s first gold pour, in January, marked Mali’s emergence as a credible gold producer. The country shared the Birimian greenstone belts of its West African neighbors, so it had the right geology to host Precambrian gold deposits. But it was short on infrastructure, and its former Marxist politics had soured potential Western investors.

Liberalization of the Malian economic system in the early 1990s, the emergence of Canadian junior exploration companies with foreign ambitions, and the more outward-looking attitude of the South African mining houses combined to bring Iamgold, Anglo and the Malian government together at Sadiola. The junior approached Anglo in 1992 for an option agreement; by late 1993 Anglo American had presented a feasibility study to the Malian government, mining permits were issued and, in late 1994, construction started. The first feed went to the Sadiola mill in December 1996; the first gold was poured a month later; and the mine is on-Track to produce an average of 386,000 oz. gold annually over the first six years of a planned 12-year life.

The gold is entirely in an oxide zone in deeply weathered carbonate and calc-silicate rocks, and, as a result, is free-Milling and easy to leach.

Reserves stand at 4.5 million tonnes grading 2.9 grams gold per tonne, with an additional inferred resource of 3.5 million tonnes. But since production started, Sadiola’s starter pit has provided low-grade ore from areas that were expected to be waste.

This additional ore has increased the mill throughput and depressed the head grade, but the net result has been more gold from more ore at lower unit costs. Despite the early success, SEMOS is still predicting the same cash cost calculated in previous feasibility work — US$138 per oz., with a total cost of US$169 after a 6% royalty to the Malian government and a 1% management fee to Anglo.

The partners went the contract-Mining route at Sadiola, engaging South African mining firm Moolman Brothers to dig the big hole. Moolman’s job is strictly earth-Moving, as Anglo American’s staff have been seconded to SEMOS to carry out all mine planning, surveying and supervision. Mine superintendent Glen Koropchuk, a transplanted Albertan, has found that the contractor-operator relationship is working well, a relationship to which he attributes a carefully written contract which ensures that both parties have the same goals — for example, to decrease double-handling of excavated materials, save fuel and promote safe working conditions in the pit. “We’ve saved on the capital,” he told The Northern Miner on a recent visit to the West African project, “and we’re getting the job done in the correct fashion.” The unexpected bonus of finding marginal ore where the pit design counted on waste has increased the overall costs, simply because more ore has gone through the mill. At the same time, savings on fuel and rehandling, combined with higher production, have meant lower net production costs.

The mill at Sadiola combines semi-Autogenous grinding with conventional cyanide leaching and carbon-in-pulp recovery. It has absorbed the additional ore without choking, and the fine-Tuning problems that every mill has to go through in the early stages of production have proved manageable. The principal challenge has been ensuring that ore slurries are not too viscous.

In places, the ore is mostly a clayey saprolite, the product of deep tropical weathering. SEMOS has found the secret lies in careful monitoring of the balance between saprolite and the more granular and better-behaved laterite ores.

Sadiola’s success, even in the teething stage, might suggest that the feasibility study was pitched too low, that Anglo American had run the risk of turning down its thumb on a good project. A closer examination of the situation in Mali, though, suggests that the feasibility study needed conservative assumptions.

All the partners in the project were new to something: Anglo was new to West Africa, Iamgold was new to gold production, and the Malian government was new to mining.

A part of the former French West Africa, the country had been among Africa’s poorest for years. In colonial times, the country’s principal connection to the rest of the world was a railway from Bamako, through Mali and Senegal to the massive port at Dakar. Secondary manufacturing was concentrated in western Senegal, and when the two countries became independent, in 1960, the division left Mali with a poor road system, a largely agrarian economic base and virtually no heavy industry. Layered on top of Mali’s disadvantages from the French period was a post-Colonial dalliance with doctrinaire Marxism.

Given the difficulties of operating in Mali, provision for high costs (especially for transportation and fuel) and for delays and down-Time were justified. The pleasant surprises in the pit have been mirrored by pleasant surprises in the overall project; Mali has proved to be a good place to start a mine.

Sadiola is geologically intriguing as well, being hosted in marbles and calc-silicate rocks that form the eastern wall of a major north-south fracture zone. A diorite dyke intrudes the sequence parallel to the fracture zone, and the gold, disseminated in the marble and calc-silicate rocks and their weathered equivalents, appears to be broadly controlled by the fracture zone.

Future potential at Sadiola hinges on finding more oxide mineralization (either as extensions of the present pit or in satellite pits elsewhere on the property) and on finding an exploitable primary sulphide resource below the level of weathering. Currently, SEMOS is carrying out reverse-Circulation (RC) drilling north of the pit limit to define a resource in the area of Farabakouta village.

The Farabakouta zone, which is all in the oxide layer, covers an area about 600 metres along strike to the north, and about 200 to 300 metres west to east. The mineralization, defined by 105 RC holes, is open to the north. At presstime, SEMOS was calculating a resource figure but had not yet released it.

So far, 4.5 million tonnes, grading 2 grams gold, are known to have been defined in the first 300 metres north of the pit. A further 12.5 million tonnes, including Farabakouta, could be present over the next 1.25 km of strike length, but that information is based on only four drill holes, and SEMOS has not yet assigned a grade to the figure.

The partners have always planned for the possibility of developing gold mineralization in the unweathered rock below the oxide layer. “Soft” sulphide material — slightly weathered rock that could be mined in the open pit by ripping and limited blasting — amounts to 9.6 million tonnes, indicated and inferred, grading 3.1 grams gold. “Hard” primary mineralization is estimated at 32.8 million tonnes grading 2 grams.

The Sadiola mill was designed with possible changes to the circuit in mind; it has two grinding streams, rather than one, which allows one stream to be converted to handle hard rock if SEMOS begins to mine the sulphides. There is also enough flexibility in the design to allow a sulphide-destruction or flotation process to be added if it is needed for the recovery of gold from the sulphides.

.SSulphide resources

Little is currently known about the m
etallurgy of the primary mineralization, but the mineralogy — pyrite, arsenopyrite and stibnite — means the gold mineralization could be either refractory or free-Milling. The current round of deep drilling will provide samples for preliminary tests to establish how much metallurgical prodding the sulphides will need.

It is on the question of proving sulphide resources that the interests of junior and senior have diverged. In the short term, a company of Anglo’s size has little incentive to spend money on bringing drill-indicated sulphide mineralization into a defined resource; for a major, replacing mined resources is a long-Term strategy, not an immediate need. But defining a deep resource, and seeing the resource justify a higher market price for its shares, is important to a junior such as Iamgold.

The solution was that Iamgold arranged to fund additional drilling to test the sulphide mineralization between 300 and 1,000 metres of vertical depth.

The 20-hole, US$3.3-Million program started in March and, at the time of The Miner’s visit, two holes were complete and a third was in progress.

Mineralization in the primary sulphide zone appears to consist of gold-bearing, structurally controlled “feeder” zones separated by zones of waste rock. When weathered, as it is in the oxide and mixed zones, the mineralization is more diffuse, producing lower-grade, larger zones.

Because Sadiola may ultimately reach a depth where it is only feasible to operate as an underground mine, the shape of the mineralized bodies is more critical in the sulphide zones than in the oxide zones. Ideally, SEMOS would like to see mineralization that could be exploited by underground bulk-Mining techniques.

Dennis Jones, Iamgold’s vice-president of exploration, thinks the sulphides are the real key to Sadiola’s future. “It’s a great oxide cap,” says Jones, “but Anglo isn’t here for the oxide cap.”