Madeleine moving ahead at new platinum project

While both the new 3,000-ton mill building and crusher house are up at Madeleine Mines’ (TSE) platinum metals group project and most major plant equipment is on site, installation is proceeding more slowly than had been anticipated. So any start-up before year-end would seem highly unlikely, The Northern Miner feels following a visit to the property.

But it is still far ahead of any other platinum development in this country, and will almost certainly be the first straight producer of these metals, for the ore is there and the pit will certainly be ready. In fact there will be a 10-year reserve of low-cost open pit ore on the Roby zone alone, requiring no removal of waste rock for at least the first year’s production.

Still under budget, the total cost of putting this sizeable project into production under the management and watchful eye of the company’s president, J. P. Sheridan, should prove something of an eye-opener — especially to the larger companies.

Close to a million yards of overburden have now been removed, exposing the Roby zone for its full length. Drilling here is scheduled to start by month’s end to put down a major trough 40 ft wide and 40 ft deep right down the centre of the orebody from south to north for a length of 2,000 ft. This will provide a 250,000-ton stockpile of ore that will be crushed to 1/2 inch in a portable unit just recently purchased at a cost of $500,000. This material will be thoroughly sampled, as will both walls of the cut.

This will permit a comparison of grade from the percussion drill holes with the actual crushed grade of the ore. Also it should prove helpful in grade control as it will allow choices of points from which to draw the mill feed.

While grade of this ore is comparatively low, so are the expected costs. And the recoverable byproduct values of nickel, copper and gold are looming quite significantly.

This Roby zone, from which all production will be drawn for some time, has been extensively drilled. Over 2,000 ft in length and with widths up to 375 ft, it is estimated to yield 12,500 tons per vertical foot grading 0.186 oz platinum group metals per ton.

Grade varies as does the platinum-palladium ratio. One of the better holes for instance, shows a 110-ft width averaging 0.470 oz platinum group metals while another hole within the pit area averages 0.04 oz gold across 120 ft.

Recent bench tests indicate a 75% recovery of platinum, 82% of nickel and 90% of the copper, palladium and gold. At the planned milling rate of 1,000,000 tons annually, this translates into 2,000,000 lb of nickel, 2,000,000 lb copper, 20,000 oz gold and 150,000 oz of the platinum group metals annually.

At current metal prices gross value of the ore would be better than $62 per ton. Anticipating a full operating crew of only 25, Sheridan thinks he can keep mining and milling costs to $9 per ton. Refining costs are calculated at $180 per ton of concentrate which works back to $6 per ton of ore milled for operating costs of $15 per ton. This would spell an operating profit of better than $30 per ton or $30 million annually at the planned mill rate. So even if these estimates prove overly optimistic, it does appear that a highly profitable operation is in the making. Low cost operation

While the mill building itself is new, all the equipment is used, mostly from the dismantling of Madeleine’s former copper mine in the Gaspe area.

There are about 28 employees on site at this time (no contractors).

“We are experiencing some difficulty in getting skilled tradesmen,” Manager James Vernon, P.Eng., told The Northern Miner, which of course has slowed the mill installation.

The crushing section of the big new mill is 140 ft by 40 ft and will contain a 14×10-ft rod mill and four 12×10-ft rd mills.

The flotation section is 80×80 ft and will contain 5,000 cu ft of flotation cells (new). The thickener will be located outside the building.

The crushing plant, which will contain a 60×72-in jaw crusher, a 5-ft standard crusher and a 5-ft short head, will operate only 6 hours daily to supply the mill at the planned 3,000-ton rate.

The pit, which eventually will be 1,600 ft wide, will be operated with a Rand D 5,000 hydraulic drill and an O and K 30-C shovel with a 5 1/2-yd bucket. There will be two 50-ton trucks for the 3,500-ft. haul to the crusher.

Because there is no hydro power in the area, it will be necessary to install a 10,000-kva generator, equipped to burn either diesel oil or natural gas. Management’s intention is to truck natural gas under pressure from the main Trans- Canada line which is only 12 miles away at a cost of about $1 million a year.

Milling at the 3,000-ton rate will turn out some 200 tons of concentrate daily, plans for the treatment of which have not yet been finalized. One possibility under study is to truck this across the U.S. border to Silver Bay to a large dormant pilot mill at an iron ore plant that could be readily converted. Otherwise, the company will build its own reduction plant at Upsula which is just 30 miles away on the Trans- Canada highway where hydro- electric power is readily available. This would produce 25 tons of matte containing the precious metals which, initially, will be shipped to a large pl atinum refinery in California. Gold projects, too

While Madeleine has a rather full plate with its platinum project, it is also involved in several other interesting situations.

Jointly with Milner Consolidated Silver Mines (ASE), it is developing a heap leach gold mine in Honduras. Over 400 shallow percussion drill holes have been put down there indicating a sizeable gold deposit grading approximately 0.10 oz. A modest producer for years, it is currently being expanded to a 500-ton daily operation, with a further expansion to 1,000 tons targeted for early 1989. This is being financed from production returns.

Madeleine is also in a joint venture gold project in the Kenora area of Ontario with a major pulp and paper company on which drilling has outlined a zone 1,200-1,500 ft long grading approximately 0.15 oz across 12 ft. A ramp is now going down on this zone which to date has opened a 400-ft length of much better grade. (See separate story on Zenmac Zinc, in which company Madeleine holds a direct 7% share interest.)