Skyline overcoming delays at Johnny Mtn. gold mine

Gold production at Skyline Exploration’s Johnny Mountain mine will be two months behind schedule and slightly over budget, but setbacks caused by bad weather are being overcome, President Reg Davis told The Northern Miner at the company’s annual meeting in Vancouver.

Production is slated to begin at the northwestern British Columbia mine late in April or early May. About 72 people are on site and mill construction should be completed by early February.

“All the mill and mine equipment has been airlifted onto the property and once the building is up, we will double work shifts to make up for the delays caused by bad weather late last year,” Davis said.

Initially, the mill will treat 200 tons per day with an average ore grade of 1.0 oz gold per ton, for annual production of around 60,000 oz. The mill is designed to process up to 400 tons per day and annual output will rise to around 100,000 oz over the next two years. Recoveries will be in the range of 92% to 94% for gold and 75% for silver.

Delays have pushed costs slightly over the $20-million budget, but Ronald Adie, vice-president finance, told the meeting that working capital of $12.2 million at the end of October was sufficient to meet expenditures to the end of April.

Additional financing by way of a bank loan will be arranged in the next couple of months, he said. Operating costs will be around $200 per ton.

Grade is running high, and based on underground exploration completed to date, it would appear that both grade and tonnage are going to prove on the conservative side, the company expects. Average stope grade is proving to be about 2 1/2 times the drill hole average, consultant Ted Grove reports.

In the 16 zone stope, assays averaged 0.958 oz gold per ton over 260 ft with an average width of 7.7 ft. The western portion of the stope averaged 1.361 oz over 100 ft with an average width of 9 ft.

Measured reserves stand at 121,000 tons grading 1.246 oz. In addition, drill-indicated reserves are 236,875 of 0.556 oz and drill inferred are 700,000 tons of 0.57 oz. The ore also contains more than one ounce silver per ton and over 1% copper, plus lead, zinc, and other metals.

Skyline will spend about $1 million on 30,000 ft of drilling in 1988. Davis explained that one of the drills will concentrate on the Discovery vein and the 16 vein, which are both open at depth and at both ends. Two drills will explore other targets on the 15,900-acre Reg claim group.