Timmins Report ERG set to produce gold from tailings

It’s full-speed-ahead for the $75-million tailings recovery project of ERG Resources Inc. (TSE), says the project’s Timmins-area manager.

Chris Harvey says ERG has reached an agreement with Giant Resources of Australia, which will provide the company with all the necessary financing to bring the Timmins gold tailings re-treatment project into production by late this year or early 1989.

Giant Resources will provide an interim loan of $43 million and, in addition, has agreed to provide security for a $60-million gold loan to be entered into by ERG. Proceeds of the gold loan will retire the interim financing from Giant Resources, as well as $20-million in loans previously provided by Pamour Inc. (TSE), also of Toronto.

Pamour owns nearly 62% of ERG Resources while Giant Resources indirectly and directly owns nearly 68% of Pamour.

ERG’s new tailings recovery mill is currently under construction on the property of the Schumacher division of Giant Yellowknife Mines (TSE).

It is expected to be in full production, milling one million tons of tailings a month, by late this year or early 1989.

Harvey said as much as 80% of the equipment necessary to bring the mill into operation has already been installed.

He said the goal of the company is to get as much gold production as possible from the mill before the end of the year.

ERG also holds the rights to enough tailings in the Porcupine area to keep the reclamation project operational for a minimum of 17 years.

But that does not mean that ERG is not in the market to acquire further reserves in order to extend the life of the project.

The total amount of gold ERG expects to recover from the 200 million tons of tailings it owns amounts to more than 2.3 million troy oz.

The tailings deposits contain between 0.006 and 0.05 oz gold per ton and the company expects a gold recovery rate in excess of 40%.

Placer Dome’s giant Dome mine in south Porcupine has taken a step back into the 1930s in order to keep its newly-modernized mill churning at the rate of 3,300 tons per day.

The mine’s mile-deep No 8 shaft has been shut down, probably until December, for maintenance and for the installation of new guides on the shaft walls, said mine general manager Robert Perry.

So, in order to keep the feed to the mill at a constant 3,300 tons per day, workers have had to markedly increase the production from the mine’s venerable No 3 shaft.

“We are working the No 3 shaft with double-shifted crews right now,” said Perry. “But even by doing that we are only putting out 1,700 tons from No 3.”

And that is where a nostalgic trip back to the ’30s comes in. Dome has recommissioned its open pit, located behind the new mill, and the pit is providing the 1,600 tons to make up the balance of the mill feed.

The mine is paying a price for reopening the open pit, however, because the initial grade being put through the mill from the pit was around 0.04 to 0.05 oz gold per ton.

But Perry said since the pit has once again become operational, the grade is slowly improving

Work at the Vedron project of Belmoral Mines (TSE) on the Back Road in Timmins has slowed to a snail’s pace following the layoff recently of 43 workers at the McDonald Hill mine site.

Jim Johnstone, Belmoral’s vice- president mining for Ontario, says the layoff was necessitated because company officials weren’t happy with the progress being made in terms of establishing ore reserves at sufficient grade tojustify the erection of a test mill.

“There is still a small mining force left operating on one shift,” said Johnstone. “We had hoped, by this time, to be in a position to make a decision regarding the erection of a mill, but the trouble is up to now we just haven’t found sufficient ore at a good enough grade.”

Diamond drilling is continuing on two levels, however, and drill crews are working three full shifts daily, he said.

The Vedron project is adjacent to the old Buffalo Ankerite mine workings, and the plan was that the Vedron project would eventually link up with the Buffalo Ankerite workings.

Belmoral had driven a decline ramp to 650 ft below the surface underneath the populated McDonald Hill subdivision, but ore reserves found as a result of drifting off the ramp proved insufficient for a production decision to be made.

“I have no idea right now when or if the laid-off workers will be recalled,” said Johnstone. “We haven’t achieved what we wanted to achieve, and that’s the bottom line.”