Piedmont’s Haile gold mine has large exploration potential

Production began over four years ago and since that time the company has been mining the fringe zones around old mine workings dating back well over a century. In its best year Haile produced just over 11,000 oz of gold, but in terms of production potential, Haile would rank as one of the real “sleepers” in the U.S. mining industry which has tended to focus its exploration efforts on Nevada.

Earl Jones, president and chief operating officer at Piedmont, has never stopped believing in the property since he first recognized the potential there 15 years ago. At that time, he was working for two Western-based U.S. mining companies as an exploration geologist. In attempting to develop the property Jones at one time was in debt more than $90,000 to friends and associates and he had no idea when they would be paid back.

As Jones pointed out to The Northern Miner, the present working area at Haile has yielded over 300,000 oz of gold in the past 160 years, over 10% of it to Piedmont; yet he says “it’s never been drilled and there has never been a big sophisticated program of exploration.”

Haile started production as a “bootstrap” operation and Jones says it has been chronically short of capital since that time. Piedmont simply hasn’t been able to raise the money to achieve economies of scale at the mine. But this is expected to change.”We are looking at financing alternatives and are seriously negotiating on joint ventures right now,” he said.

The company did find some money last year to mount an extensive geophysical program over the entire property which he said identified “28 real true anomalies.” Two of these were drilled and the results included 130 ft of 0.132 oz and 130 ft of 0.11 oz. “It’s common to hit 50 and 60 ft intersections of 0.25 oz,” he said, noting this was the first program geared towards the discovery of virgin ore deposits.

He predicted that most of these new finds will be “fresher unweathered material” which will eventually require a conventional milling facility.”We also feel there is a deep underground potential and this was suggested to us years ago by both Newmont and Consolidated Goldfields,” he said.

Piedmont raised $4.4 million(US) when it went public in September 1987 which “was under what we had hoped to raise,” he noted. The money was earmarked for improving equipment, buying land, and for drilling. “But as we got into the operation we simply didn’t have enough to drill,” he conceded.

The company has over 2,500 acres of land in the area, most of it leased and subject to 3-4% net smelter royalties. It has attempted to buy out these royalty interests over the years in some cases successfully.

A recent tour of the property showed that management emphasizes keeping costs down and protecting the environment. Indeed, reclamation work was already under way. Jack Whisnant, operations manager, probably summed it up best when he said: “What we lack in equipment we make up for with good management.” He attributed a large part of the company’s relatively low on-site cost of $200(US) per oz to Laurie Reed, mine manager and Terry Turner, production manager.

South Carolina gold ores leach readily. Piedmont has a 20-day leach cycle and final recoveries of 80% and higher which is quite unusual for the industry. Production costs are about $7 per ton and mining is their largest expense (approximately 50%); about 40% of their over-all cost is for the recovery plant and refinery.

Mining is done on a contract basis with Piedmont managing the drilling and blasting. A sub-contractor handles all mucking for $1 per ton; current mining rate is about 5,500 tons per day and the strip ratio is a modest 1:1. Ten foot benches are used to reduce dilution and maintain head grades which average around 0.036 oz gold. The company’s best year so far was 1986 when it produced 11,326 oz gold but it’s optimistic it can beat that this year.

Whisnant told The Northern Miner that despite the humid climate in the region “the mine has never had a discharge.” Average rainfall is about 40 inches and the company’s leaching system is designed to contain almost 80 inches of precipitation if necessary. Heaps and solution ponds are used for storage purposes. On the drawing board is an alkaline chlorination plant for cyanide destruction, he added.

The mine has an excellent reputation in the area which no doubt helped pave the way for the nearby Brewer Gold property (N.M., Feb 13/89) and the Ridgeway mine (N.M., Feb 6/89).

South Carolina has a tough regulatory climate which is partly due to the unfamiliarity of government officials with metals mining. But this is changing as the state realizes the positive economic impact of mining on its economy, especially in rural areas.

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