Ketza River mine in Yukon second for Canamax

It’s now two down and counting for Canamax Resources’ (TSE) chief executive officer, John Hansuld, who has promised a new mine a year for five years.

In fact he’s ahead of schedule with the official opening of the Ketza River project 45 miles south of here, a joint venture with Pacific Trans-Ocean Resources (TSE). Brought into production in jig time, this is a jewel of a mi ne that will be followed later this year by its Kremzar project at Wawa, Ont. And there are two more waiting in the wings. This all adds up to some 80,000 oz gold that will be produced this year, with a realistic goal of doubling the total output of these Canamax-operated mines by 1990.

Ketza’s is a unique oxide deposit that holds important implications for Yukon gold production, for it could open a whole new mining chapter there. Although this particular sector has seen off-and-on cursory exploration for several decades, it was not until the summer of 1984 that the possibility of developing oxide ore was recognized.

From discovery to the first gold pour in less than four years is quite a feat, especially in such a remote mountainous (but beautiful) area. This was made possible in large part by the top-notch operating crew that Canamax has built up, working with a sympathetic and co- operative Territorial government. The availability of ample funds was certainly another plus.

Costs, of necessity, will be on the high side because of the mine’s location. But so is the grade, with ore reserves in excess of 500,000 tons that will average very close to one-half ounce virtually assuring a highly profitable operation.

Total investment by the joint venture partners in that area stands at $35 million, raised largely through flow-through financing and gold loans. Actual capital cost to production was just under $25 million.

“If we were to dedicate this mine, it would certainly have to be to flow- through shares,” Hansuld told a large on-site gathering at the official opening ceremony performed by the Hon Tony Penikett, leader of the Territorial government. (It was Hansuld and Canamax which fathered flow-through financing in this country.)

Access to the mine workings is by adit on three levels into the side of a mountain, interconnected via ramps using trackless mining equipment.

The ore, which occurs in a limestone formation, is of two types — oxides and sulphides. But it is the oxides that are being mined at this time because of their better grade. Too, they are environmentally safer than sulphides.

Grade of the 619,000 tons of drill- indicated sulphide ore (pyrrhotite, arsenopyrite and pyrite) averages 0.219 oz and is metallurgically more difficult to treat, but may be mined at a later date. Mining two zones

The oxide ore, as currently defined, is in two zones. The upper or Ridge zone is steeply dipping, joining up with the larger flat-lying Peel zone below the 1,510 level. It is mined by a combination of drift- and-fill and cut-and-fill methods, with ample talus fill readily available.

Because of the soft nature of the ground and the ore, considerable timbering and bolting is required which, of course, adds to mining costs.

The face of a stope, visited by The Northern Miner, assayed 0.80 oz across 12.5 ft with no visible gold.

There are now over 12,000 ft of lateral workings, well ventilated by two large fans that deliver 120,000 cu ft of fresh air per minute into the mine. This must be heated (by propane) in the winter to keep water lines from freezing.

Compressors are located underground as is the machine shop which services the 6 Eimco Jarvis Clark scoop-trams on the job.

Ore is trucked from the lower adit level down the mountain side to the 350-ton mill, which is located at the camp site. This is a neat, compact and highly efficient plant.

Already operating near capacity, it utilizes the carbon-in-pulp extraction process which uses a cyanide solution to leach out the gold in large wood- stave (for better insulation) tanks located outside the building. Carbon is then passed through this solution to remove the gold. This is electroplated onto steel wool which is smelted in a small on-site furnace into a dore containing about 90% gold.

The mill tuneup started in March using low grade development muck from a stockpile until mid-June when underground ore started feeding into the circuit. Total throughput to the end of June was 35,000 tons from which 4,680 oz gold were recovered.

With extraction now running 91%, there should be little trouble turning out gold at the planned 50,000 oz-per-year rate. This translates to something like $28 million, with annual operating costs estimated at $15 million.

A fully modern assay laboratory is located within the mill complex, as is the power plant. This consists of four 1,200-kw diesel generators, two of which are on standby and two in use. The fuel bill for this power plant will run close to $1 million annually.

The camp itself is first class, geared to accommodate 132 in single rooms. Consisting of portable Atco units, it was purchased (unused) from one of the major oil companies for $400,000 and which had cost that firm $1 million. It also houses the office complex as well as excellent dining room facilities and a recreation area.

There are 95 employees currently on the job under Mine Manager Bob McComb. Other senior operating staff include Steve Parry, assistant mine manager; Elmer Olafson, mine superintendent; Coleman Sinclair, mill superintendent; Antoine Beurskens, chief engineer; Shirley Abercrombie, senior geologist and Wayne Bull, accountant. Strong on exploration

This joint venture team continues with a very aggressive exploration program in the Ketza area, where it employs an additional crew of 30. $1 million is budgeted for the main property itself, with further large sums earmarked for adjoining optioned ground. Three diamond drills are currently at work.

“We feel we are looking at a camp, not just a mine,” Chris J. Hodgson, Canamax’s regional manager for Western Canada told The Northern Miner.

Determined to find additional sources of oxide ores for the mill beyond the present mine workings, he points out that work to date has turned up a dozen or so zones on the Ketza property that warrant further investigation, some of which hold “excellent potential.”

The most advanced is the Break zone, located higher up the mountain and just a short distance east of Ridge zone on which a portal has just been driven indicating a modest tonnage of good grade oxide ore. And while investigating this, something brand new has just been picked up only 100 ft or so away known as the Comet zone.

A drill hole just completed on this brand new discovery shows 50 ft of massive arsenopyrite which, he confesses, has him a little excited. Further drilling will be done here immediately.

A second drill is being put to work on the large adjoining property of the former Iona Silver, which the joint venture team holds under option and on which $500,000 is budgeted for this year’s program. And they also hold the adjoining High River Resources (VSE) and Quillo Resources (VSE) properties under option on which a minimum of $250,000 is to be spent this year.

“You can look forward to us being around here for a number of years,” said Charles E. Stott, chairman and and chief executive officer of the parent U.S.-based AMAX Gold Inc. and also chairman of the Canamax board.