Hycroft poised to increase output with second Nevada gold producer

Junior gold producer Hycroft Resources & Development is poised to join the big leagues when its second Nevada mine comes on-stream in early 1988. Annual gold output will jump 50,000 oz to 75,000 oz gold and 150,000 oz silver when the Crofoot and Lewis mines are producing at capacity, President Douglas McRae reports.

Completion of the $23-million(US) Crofoot open pit mine is expected before year-end. The property is adjacent to the producing Lewis mine, which Hycroft bought from Standard Slag Co. of Ohio in January, 1987, for $14.15 million.

Hycroft, owned 56% by Granges Exploration, has financed the project through a Eurobond financing of $17 million at 5%, and a convertible issue of $10 million at 7%. Anticipated payback of this investment is three years at a gold price of $400.

At the Crofoot property, construction of the crushing plant, leach pads, solution collection ponds and gold recovery circuit is well under way. An oversized 3- stage crushing circuit is being installed. Ore will be crushed to — 1/2 in. Cement, lime and water will be added during crushing to agglomerate the fine ore particles to larger fragments. Crushed ore will be conveyed to the heaps and stacked in 12-ft lifts with moveable, self propelled conveyors.

Each heap will measure about 1,500 ft wide by 3,500 ft long, cover over 120 acres and ultimately contain about seven million tons of ore when all four lifts have been completed. During the leaching process, a dilute cyanide solution will be pumped from a 5-million-gal barren solution pond to a grid of sprays on the surface of each 12-ft heap, dissolving the particles of gold and silver. The high grade solutions will be processed and the low grade solutions will be recirculated to the newest ore heap to increase gold content.

A Merrill-Crowe zinc precipitation plant will be used to recover the gold and silver values from the pregnant solutions. Hycroft carried out two 4,000-ton pilot scale heap leach tests on Crofoot ore and had recoveries exceeding 70% of the contained gold.

An extensive 200,000-ft drilling program undertaken in 1986-87 has increased reserves on both the Crofoot and Lewis properties, McRae reports. Reserves at Crofoot now stand at 25 million tons averaging 0.025 oz gold per ton, up from six million tons a year ago. Reserves at the Lewis mine have increased from 2.5 million tons at the time of acquisition to 8.3 million tons averaging 0.032 oz.

At the Lewis mine, work was held up by arbitration proceedings which were settled in favor of Hycroft and Granges in July. The mine produced 1,700 oz gold in July and Hycroft expects this to increase to 2,100 oz a month.

Improvements made this year include construction of Leach Pad 3. Designed to accommodate three lifts, the new pad can handle more than one million tons of ore in a single 20-ft lift. A 4-million-gal pregnant solution reservoir has been constructed below Pad 3, and three automated clarification filters installed. The company plans further improvements, including a 7-day, round-the-clock operation, a larger closed-circuit tertiary crusher, increased solution processing and expansion of both pad and pond capacities.

Hycroft holds two other gold prospects in B.C., at Harrison Lake and in the Queen Charlotte Islands. It also has a working interest in the Independence property north of Elko, Nev.