EXPLORATION ROUNDUP — Bema and Amax turn corner at Refugio

The Refugio gold mine in northern Chile has achieved commercial production levels for partners Bema Gold (BGO-T) and Amax Gold (AU-N).

Output for October amounted to 16,700 oz. gold at a cash cost of US$249 per oz., which is in keeping with mine plan projections.

Perched high in the Atacama Desert of the Chilean Andes (800 km north of Santiago) at an elevation of 4,200 metres, Refugio ranks as one of the world’s largest open-pit, heap-leach mines. It is owned and operated by Compania Minera Maricunga, a 50-50 joint venture between Bema and Amax, who brought the mine into production at a cost of US$143 million.

Mining got under way in January of this year, and by mid-April Refugio had poured its first gold. To date, 64,000 oz. have been recovered, under cyanide leach, from more than 5.5 million tonnes of ore. Production in November is targeted to surpass 20,000 oz.

These figures are music to the ears of Bema and Amax, for they are a clear indication that the joint-venture partners have resolved the various mechanical and structural problems that have plagued the mine since startup.

“In the past few months, we have taken big steps toward solving problems at Refugio,” John Anderson, a spokesman for Bema, told The Northern Miner on a recent site visit.

In June, the fine crushing plant was knocked out of commission after the ground beneath the fine ore storage bin collapsed. The plant consists of two secondary and four tertiary crushers, which are designed to crush the ore to minus half an inch.

An investigation revealed that the fill that had been used during the construction phase to support the plant’s foundation was not properly layered or compacted, and it later settled.

To stabilize the ground, operators injected 2 million litres of grout through 27 holes. This succeeded in filling the cavities and also provided added compaction. Fluor Daniel, which built the mine installations, was responsible for correcting the problem.

It is only recently that all six crushers in the fine crushing plant have been up and running in conjunction with each other.

Donald Hunter, general manager of Compania Minera Maricunga, is delighted that operators have managed to exceed the targeted “base case” daily rate of 30,000 tonnes of crushed, half-inch-size ore, and he expects the rate to rise in due course.

“We have been fighting fires up to now,” Hunter said. “It has been a lot of work to get everything up and running, but we have made good progress and are now in a position to fine-tune the operation and make it more economical.” Dust remediation

However, while major obstacles have been resolved at the fine crushing plant, the facility continues to experience problems related to vibration, cascading rocks and dust. To address these glitches, operators will implement a US$500,000 dust remediation program (to replace a failed dust-suppression system), and add extra screens and skirting to curtail spillage.

Annual production is projected at 233,000 oz. over an initial mine life of 9.4 years at an average cash cost of US$237 per oz. The chief source of ore will be the Verde deposit, where minable reserves stand at 101.6 million tonnes grading 1.03 grams gold per tonne at a stripping ratio of 1-to-1, equivalent to 3.3 million contained ounces.

The partners intend to upgrade the Verde pit’s minable reserves to 185 million tonnes grading 0.89 gram at a stripping ratio of 0.9-to-1, equivalent to 5.3 million contained ounces. By doing so, they hope to extend the mine life to 17.2 years, based on a daily mining rate of 30,000 tonnes — in which case, average annual output would be 200,000 oz. at a cash cost of US$243 per oz.

Moreover, Bema and Amax believe there is potential for expanding daily throughput to 40,000 oz., thereby boosting annual production to 310,000 oz., increasing to 350,000 oz. by 1998.

Gold and minor copper mineralization at Refugio is hosted by quartz stockworks centred on diorite porphyry intrusives. The Verde deposit is one of two main areas of mineralized stockworks outlined, the other being the Pancho deposit.

Measuring 1,400 metres long, up to 640 metres wide and more than 180 metres deep, the Verde consists of oxide, mixed and sulphide ore mineralization. All three ore types are amenable to heap leaching.

The Pancho deposit, less than 1 km northwest of Verde, hosts a drill-indicated resource of 68 million tonnes grading 0.96 gram gold. It remains open in several directions and at depth.

A 30,000-metre program of drilling and metallurgical testing is scheduled to begin shortly.

Round the clock

The Verde deposit is being mined by conventional open-pit methods, in conjunction with a 3-stage crushing system. The mine operates around the clock, with 410 people on site, 120 of whom are employed by Elton Chile, a subsidiary of Australian-based mining contractor Elton.

Ore is blasted and mined from the Verde pit in 10-metre lifts. Elton uses backhoe methods to load 120-tonne trucks, which transport the ore to a primary crusher, where it is reduced to minus 6 inches. From the primary crusher, the ore is transported overland by a 1.7-km-long covered conveyor belt to the coarse ore stockpile. Four feeders beneath the stockpile transport the ore along two conveyor belts to the fine crushing plant, where it is reduced further, to minus half an inch.

The crushed ore is stored in a loading bin and then trucked to the leach pad, which will eventually consist of 30 cells, covering a 1.6-by-1.6-km area.

Each cell measures 250 by 250 metres.

The ore is stacked in 5-metre lifts, with the first lift already covering five of six cells. Loading will soon begin on a second set of six cells, currently under construction. Eventually, the ore will be stacked in eight lifts to a height of 40 metres.

The ore is then irrigated, by means of a series of drip emitters, with diluted sodium cyanide solution. The emitters are buried under 75 cm of material to protect them from cold winds. (Temperatures in June, July and August average minus 10 to minus 15C, and have been known to dip to as low of minus 52.)

Recoveries are expected to average 73% for oxidized ore, 67% for blended material and 58% for sulphides.

The gold-bearing leached solution is gathered into an insulated collection pipe at the bottom of the heaps and drained into a pregnant solution pond.

Carbon adsorption stripping and electrowinning are used to recover gold from the pregnant solution. The concentrate is smelted into dore bars consisting of about 91% gold and 8% silver.

Power is generated by five 3.5-MW diesel generators. Water is pumped from underground aquifers and then piped 23 km to the minesite.

Bema has 91.1 million shares outstanding (or 106.5 million fully diluted).