Deep hole ups potential of Redstone nickel mine

A deep drill hole completed by operator Timmins Nickel, a private company, has intersected 19.6 ft grading 2.76% nickel per ton — the best drill hole ever completed on the property, The Northern Miner learned while examining the project. What Timmins Nickel and partner BHP-Utah Mines find encouraging is that the hole intersected high grade nickel at a depth of 2,700 ft. Known mineable reserves of 351,171 tons grading 2.91% nickel per ton are defined to a depth of only 800 ft. For perspective, Redstone’s grade of 2.9% translates to a gross gold equivalent of 0.93 oz per ton.

The gap between 800 ft and 3,000 ft is an immense area of potential reserves — one which would require a shaft for access. “This hole opens up a whole new potential area,” Koos Schippers, vice- president of Timmins Nickel explained. “If the orebody proves up we could be shaft sinking by spring 1990.”

Access to the deposit is provided via a decline ramp which has been extended to a depth of 200 ft. Three levels have been established at 100 ft, 150 ft and 200 ft. What is amazing about the operation is the speed with which the facility was constructed.

Timmins Nickel acquired its option on the deposit in December, 1988. Ore crushing and the shipping of nickel concentrates to Sherritt Gordon’s refinery in Fort Saskatchewan, Alberta, began in early May. “To do this (build the mine) in less than five months is incredible,” Armand Riox, maintenance superintendent at Redstone, told The Northern Miner on site. “We also had our share of problems,” he adds. Problems ranged from a washed out culvert across a creek which took three days to repair to typical mill tune- up headaches which required correcting.

Despite the initial and on-going hurdles, Redstone is off and running in record time, The Northern Miner learned. In May the project milled 4,105 tons of ore grading about 1.5% nickel per ton. “This was development muck. Most of it came from the east area which is lower grade. We also encountered some dilution,” Schippers explained.

In June, the grade has improved to 1.9%. “We plan to mill 10,000 tons grading over 2% in June,” Schippers said. The schedule for this year is to mine and mill 9,000 tons per month which Schippers says will likely be exceeded. The target grade is 2.91% nickel per ton which should be achieved once the first stopes are completed.

Discovered by Utah Mines in the 1970s, the Redstone deposit is a narrow, high grade, massive sulphide zone which is associated with the contact of hangingwall komatitic ultramafics and footwall felsic volcanics — geology similar to that found in Australia’s Kambalda nickel camp.

Ranging in width from less than 4 ft to more than 6 ft, the zone demands careful mining in order to avoid excessive dilution. “Our biggest problem is getting the guys to think narrow,” Schippers said. Using 1.25-yd scoop trams, the company can mine to 4 ft in stopes.

Underground, few problems have been encountered which puts to rest earlier fears of ground control and water troubles. Until this month, the mine was relatively dry. A drill hole on the 100-ft level hit a water seam which required grouting. Ground conditions are also good, The Northern Miner can report.

Although dilution is a concern, Redstone’s high average grade of 2.9% combined with record nickel prices in excess of $6(US) per lb provide plenty of room for error. But, Schippers and his staff are not intent on letting high grades forgive errors. “We’re on a learning curve,” he adds, commenting on the week to week drive to maximize productivity while taking advantage of the currently high nickel market.

The Redstone River, which flows across the deposit, precludes mining above the 100-ft level. In order to allow for mining in this area, a $600,000 river diversion program has been approved. A portion of the river will be moved 1,000 ft to the west to a 1,500-ft channel, Greg Powell, a mining engineer with BHP explained. Requiring two months to complete, the project is expected to get under way in August.

Ramp development will continue to the 270-ft level followed by level development at 70-ft increments. Approximately 600 ft of drifting has been completed on both 150-ft and 200-ft levels with an additional 100 ft required on both. “The development has been going at such a pace, the geologists have had a difficult time trying to keep up,” Schippers noted. Another positive aspect of Redstone is the low capital cost to production. Amounting to $4 million, which matches Timmins Nickel’s buy-in amount to earn 51%, the capital outlay was kept to a minimum by using mill capacity in Timmins.

Ore is processed on a toll basis at Pamour’s Schumacher mill at a rate of 280 tons per day. Managed by Tony Lipiec, an engineer with Orocon, the mill was converted from gold to nickel in a short period of time. “We got the mill running and producing in one week,” Lipiec said. “Since then (May), we’ve worked to get a stable operation with few fluctuations.”

Nickel recoveries have stabilized in the “high 70% to low 80% range. We expect 80%-85% nickel recoveries,” Lipiec said. Concentrate is grading 12% which will increase to 17% in June he adds. “We’re finding that our recent changes to the mill are producing better recoveries and higher grading concentrates.”

The milling rate will be increased to 350 tons per day in July and then to 400 tons per day, Lipiec noted. During the first six days of June, the mine actually yielded 440 tons per day.

At this rate, Redstone is expected to produce 5.2 million lb of nickel per year. Operating costs are approximately $86 per ton for mining and milling.

Following the completion of a $6-million public offering next month, the company will be funded to complete mine development and a $2-million exploration program, Stephen McIntyre, president of Timmins Nickel says. With an established operating base, the company is also examining several other lower grading nickel deposits known to exist in the area.

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