Permit paves way for mine start-up

Toronto-based Wheaton River Minerals (WRM-T) has moved one step closer to re-opening the Golden Bear gold mine in northwestern British Columbia.

Wheaton River controls the heap-leach operation through its 84%-owned subsidiary North American Metals (NAM-V).

Although production is scheduled to begin in August, the partners attempted to re-open the mine earlier this year. They were unable to receive financial backing, however, as the necessary permits for the Ursa mine and heap-leach pad were not yet in place.

Several institutions began showing a renewed interest in the project last month, but were reluctant to commit any funding until a feasibility study had been completed. With that study in hand, Wheaton recently renewed talks with backers.

“The meetings went well,” says Ian McDonald, Wheaton’s president. “There’s a real interest and I’m quite sure we’ll get a couple of offers. The company expects to begin hearing back from the institutions in January, after which final negotiations will begin.

Reserves for the Ursa deposit stand at 511,000 tonnes averaging 7 grams gold per tonne, and has a stripping ratio 6.6-to-1. The Kodiak A deposit currently hosts 824,000 tonnes averaging 3.3 grams gold, and has a stripping ratio of 1-to-1. Both deposits are permitted and will be mined by open-pit methods.

The Kodiak B deposit, which is to receive permits by June, hosts reserves of 278,112 tonnes averaging 8.6 grams gold. The deposit will be mined by underground methods.

The updated study, which is based on a recovery rate of 84%, estimates that production from combined reserves of 1.53 million tonnes grading 5.1 grams gold will amount to 214,000 oz. over a minelife of six years.

Production costs are pegged at US$232 per oz. over the life of the project, and will generate a cash flow of US$44 million. Capital costs are estimated at US$9.8 million.

Golden Bear’s production for 1997 is projected at 25,000 oz. All of the gold will come from the Kodiak A deposit, and will be processed at a leach pad with a capacity of 500,000 tonnes.

Once construction is completed, the Ursa pad will a capacity of 1.5 million tonnes. Leaching will occur in only the summer and fall months.

By 2000, Wheaton River expects gold output to reach 51,000 oz. per year.

The Golden Bear property also includes the Grizzly and Kodiak C deposits and a low-grade stockpile on surface. The stockpile contains 2.47 million tonnes grading 1.3 grams gold, while the deposits host 152,945 tonnes grading 20.5 grams gold and 276,000 tonnes grading 7.8 grams gold, respectively. These mill feed sources would provide an additional 277,000 oz. if brought into production.