Suppliers Roundup (April 12, 2004)

Dynatec stays at Red Lake

Contractor Dynatec will continue to operate Goldcorp’s Red Lake mine in northwestern Ontario for at least three more years.

The deal will see Dynatec earn at least $35 million per year by supplying Goldcorp with 650 tons of ore per day from the mine, or roughly 500,000 oz. gold per year.

Dynatec employs about 300 people at the mine.

The contract with Goldcorp expired at the end of 2003 and the new deal runs until the end of 2006. Dynatec began work at the prolific gold camp in 1999, when it signed a deal to conduct underground development on behalf of Goldcorp.

“The Red Lake mine is an important foundation of our mining services business — one that has consistently exceeded its production targets,” says Dynatec President Robert Dengler.

Goldcorp predicts production from the mine will exceed 500,000 oz. gold for the fourth straight year. Red Lake is one of the lowest-cost gold producers in the world, with cash costs averaging US$86 per oz.

Dynatec is based in Richmond Hill, Ont., and has mining, drilling and metallurgical divisions.

Barrick goes with Gekko

Toronto-based Barrick Gold has placed an order with Australian supplier Gekko Systems for an automatic in-line leach reactor for use at the Tulawaka project in Tanzania.

Barrick tested a similar reactor at its Lawlers operation in Western Australia. The unit will treat gravity gold concentrates from a Knelson concentrator.

Earlier this year, Barrick announced it would proceed with construction of Tulawaka, about 100 km west of its Bulyanhulu mine. It has resources of 2.3 million tonnes grading 11.1 grams gold per tonne, based on a 1-gram cutoff grade, or 1.7 million tonnes grading 14.2 grams gold based on a cutoff of 2 grams. Total cash costs are expected to be US$175 per oz.

Another Gekko in-line leach reactor was recently installed in Tanzania at AngloGold’s Geita gold mine.

Wardrop tries consulting

Mississauga, Ont.-based Wardrop Engineering has established a consulting business that will specialize in mining and minerals.

Wardrop says the initiative is designed to meet the growing need for specialized global mining and process consulting services.

Services will vary from re-development support to feasibility work.

The four key members of the consulting group are: Andrew Marchbank, a process specialist with experience in hydrometallurgy, biotechnology, and conventional milling; John Kiernan, who assesses risk and project viability; David West, who has experience in geotechnical engineering, rock mechanics, and excavation engineering; and geologist Jamie Lavigne.

Bank finances equipment loan

The Export-Import Bank of the United States will lend Minera Argentina Gold US$76.5 million to finance the purchase of Caterpillar mining equipment.

Minera Argentina Gold is a subsidiary of Barrick Gold. The equipment will be used for open-pit mining and processing of ore from the Veladero gold project in Argentina.

Among the main suppliers involved are Hoss Equipment Co. of Irving, Tex.; Annandale, N.J.-based Ingersoll-Rand Co.; Metso Mineral Industries of Milwaukee, Wis.; and Modular Mining Systems in Tucson, Ariz.

“This transaction furthers trade ties between our two countries while creating and sustaining U.S. jobs,” says Export-Import Bank Chairman Philip Merrill.

The deal marks the bank’s first project financing in the mining sector since 1997.

In fiscal 2003, the bank financed US$14.3 billion in U.S. exports worldwide.

Varis unveils ‘smart tags’

Sudbury, Ont.-based Varis Mine Technology recently introduced its proprietary Smart Tag Asset Location system, which tracks the location and movement of vehicles and personnel underground.

The system uses self-powered “tags” that repeatedly send out signals to antennae, which then transmit the information back to a central computer.

The information is then accessible on any computer on the network.

The system has a range of 75 metres and can accommodate up to 250 tags.

“Smart tags allow a mine manager to know exactly where his people and equipment are, where they were, and for how long,” says Varis President Mathew Ward.