U.S. REPORT Van Stone mine reopened Equinox Res. breathes new

The reopening of the Van Stone mine is a welcome event to local residents who depend primarily on the flagging logging industry for employment. Of the 75 employees at the mine, almost all were hired locally and trained to operate the equipment.

Rolling hills covered with scrub pine surround the mine which is a short drive from this small community.

A stretch of rainy, unsettled weather broke just in time for the official opening of the Van Stone zinc-lead mine, blessing 60% owner Equinox Resources (TSE) with sunny skies for the mine’s June christening.

The history of the Van Stone mine dates back to its discovery by George Van Stone and Henry Maylor in 1920. The mine operated on a small scale from 1930 to 1942, prior to its acquisition by Asarco.

Asarco built a 1,000-ton-per-day mill and operated the mine as an open pit from 1952 to its closure in 1970. The company produced 4.3 million tons of ore over the period grading an average of 0.4% lead and 3.6% zinc.

The property was subsequently purchased by Callahan Mining which, along with partners U.S. Borax and Brinco, completed a full feasibility study on a second orebody located below the existing pit. The companies spent a total of $3 million on the property including extensive drilling and underground evaluation but did not proceed with production.

No further work was done on the property until Equinox acquired it in April, 1990, for US$1.05 million.

The company proceeded with plans to bring the mine into production, estimating a capital cost of about US$6.35 million including working capital.

Equinox obtained financing for the project in late 1990 from Cominco Ltd. and a group of European investors. Cominco, which holds the smelter contract for the mine’s production, provided a US$2.35-million term loan while the European syndicate put up US$4 million.

The syndicate is entitled to 70% of the mine’s net revenue after the project loan is repaid and until the US$4-million investment is retrieved. The project then reverts to a 60-40 venture in favor of Equinox.

John Wright, operations manager for Equinox, said the capital cost came in about US$400,000 under budget at US$5.325 million. He did add, however, that working capital requirements have been running ahead of budget and it looks like the total capital cost “all up” will be in the order of US$6.65 million.

Permitting the mine was a relatively easy process taking about four months. Wright noted that the regulatory officials are in a considerably better position than they had been, with new operators on sight and US$350,000 in reclamation bonds in hand.

Equinox put up a US$250,000 bond relating to water discharge and a US$100,000 bond relating to the mining operations.

Wright said the company will be responsible for reclaiming waste dumps made during current mining operations as well as revegetating both the old and the new tailings ponds.

Equinox is not responsible for the old buildings or waste dumps on the site or any problems stemming from operations prior to 1971.

Wright said the operation does not generate acid drainage since the deposit is hosted in a dolomite which acts as a neutralizer. Results from stream sampling below the pit and waste dumps were well within regulatory standards. And sampling on the old tailings ponds also returned no significant pollutants.

The Van Stone deposit is described as a Mississippi Valley type deposit modified by contact metamorphism from nearby igneous rock. Ore zone dimensions can vary widely, but on average the deposit could be described as roughly cigar-shaped, 250 ft. high, 50 ft. wide and 2,300 ft. long.

Reserves are estimated at about 2.5 million tons grading 5.66% zinc and 1.1% lead. The current open pit operation is expected to last 2-3 years with proven minable plus probable reserves of about 739,000 tons grading 4.75% zinc and 1.1% lead. The stripping ratio in the pit is estimated at 4.5-to-1.

When open pit reserves have been exhausted, underground reserves at either end of the deposit will be accessible from the pit bottom.

Detailed mine planning for the underground operation has not been completed although the company expects to use a modified longhole stoping method of vertical end slicing.

Equinox expects to begin delineation drilling for the underground reserve next spring.

Mining operations are contracted out to D.H. Blattner and Sons which sub-contracted drilling and blasting operations to Roundup Powder.

The company is pushing back Asarco’s old pit wall on the hangingwall side in order to deepen the pit to reach the deposit below.

The initial stage of the stripping operation was accelerated using both a Hitachi 7.5-yd. hydraulic shovel and a Cat 992 loader in conjunction with a fleet of five 50-ton Cat 773 trucks.

With the pre-strip essentially complete, Blattner is no longer using the loader and plans to move it off site shortly.

Wright said month-to-date mill feed grade has been running about 4% zinc and 1.6% lead with mining rates averaging about 30,000 tons of ore and 120,000 tons of waste per month.

Unit Electrical was contracted for the mill refurbishing which was completed by March 10, only 11 months after Equinox acquired the property.

The milling process is relatively simple, using a standard crushing and grinding circuit followed by conventional flotation.

Recoveries to date have been good although the company has been experiencing some trouble with higher than expected levels of lead in the zinc concentrate and higher than expected levels of zinc in the lead concentrate. Zinc concentrate grades are approaching 54% zinc with about 1.6% lead, while lead concentrate is averaging 69-71% lead plus 3% zinc.

Although there is no penalty for the contamination, Equinox is not paid for the lost metal.

Wright said recoveries are currently running about 88.5% for zinc to the zinc con, and about 82% for lead to the lead con. Ultimately the company would like to see recoveries in both circuits at about 90%.

A distinct advantage of the Van Stone mine is its proximity to Cominco’s smelter in Trail, B.C., a 38-mile drive across the Canada-U.S. border.

Concentrate haulage is contracted out with four 35-ton tandem trucks leaving the mine per day.

With a milling rate of about 1,000 tons per day, the mine is expected to produce about 25,000 tons of zinc concentrate and 4,500 tons of lead concentrate during 1990 at an estimated operating cost of about US35 cents per lb. of zinc produced. Given a 54%-zinc con and a 71%-lead con, that translates to 27 million lb. of zinc and 6.4 million lb. of lead.

Wright noted that the estimated operating cost is inclusive of smelter charges.

Given an average zinc price of US50 cents, the company expects to have the Cominco loan retired in about 14 months and the European investment of US$4 million paid off about 16 months after that.