Rayurock foresses long life at Marigold

But as guests on hand for the mine opening were told, Nevada- style luck also played a role in the discovery of what turned out to be the fourth gold mining operation developed and operated by Rayrock in this “silver state.”

Rayrock is mining the 8 South zone pit to feed a brand new 1,250-ton-per-day mill and 730,000- ton-per-year heap leach facility at Marigold.

By far the most significant of four main zones discovered to date, the 8 South pit is a “blind deposit” that was amazingly discovered by drilling through 300 ft of overburden about one mile from the nearest rock outcrops and known mineralization.

That discovery was made in 1985 by the Cordex VI Syndicate which is managed by Rayrock and owned equally by Rayrock, Corona Corp. (TSE) and Placer Dome (TSE). The Marigold property in turn is owned 70% by the Cordex Syndicate and 30% by Sante Fe Minerals.

Officials from all four mining companies joined local and state dignitaries and mine personnel for a western-style celebration under warm sunshine and clear blue skies. The mine’s 150-person workforce is largely drawn from the nearby towns of Battle Mountain and Winnemucca.

Also on hand for the event was Dr Ralph Roberts, the geologist credited with having worked on the first discoveries in Nevada’s famed Carlin Trend. Roberts’ geological theories and work at Marigold in the early eighties attracted the attention of Andy Wallace of Cordex who leased the initial discovery claims and then expanded the land position to its current 30 sq mi.

The 8 South pit was initially estimated to contain reserves of 5.02 million tons grading 0.073 oz gold per ton. The Marigold property now has four orebodies with reserves totalling 4.32 million tons of mill grade ore at 0.105 oz gold per ton, plus 7.64 million tons of heap leach ore averaging 0.026 oz gold per ton.

Rayrock estimates that the combined operation will produce 60,000 oz gold each year, with enough proven reserves on hand for at least 10 years of mine life.

David Crombie, president and chief executive officer of Rayrock, still sees plenty of potential to increase reserves as Marigold controls a 12-mi strike length of favorable geology.

“The reason we built a substantial operation here at Marigold is because we think it will be around a long time,” he said. “Our philosophy was to define just enough reserves for an economic operation to start, and then continue exploration as we go along.”

Rayrock began construction of the mine in August, 1988. Despite a one-and-a-half-month delay in start-up, the total cost of the project was close to its budget of $37 million(US) when completed.

According to Art Schwandt, Marigold’s general manager, one of the main challenges was and still is overseeing the removal of about 32 million tons of overburden that covers the 8 South deposit to depths varying from 150 ft to 300 ft. To date well over 12.5 million tons of overburden have been removed.

Earth moving of this magnitude represents a tremendous up-front cost (not to mention risk) on the mining side. However, Crombie said these costs would be amortized over the life of the mine. Crombie estimates it will take about 3-3.5 years to achieve payback at Marigold at current gold prices.

With the overburden removed, mining involves open pit techniques typical of most Nevada operations. After drilling and blasting, ore is classified by grade for either milling or heap leaching, and is then loaded in the fleet of 120-ton and 85-ton trucks for transport to various stockpiles.

Exploration geologist Douglas McGibbon said the bulk of the gold produced at Marigold, and the bulk of mill feed, will come from the 8 South pit which will be mined in stages to an ultimate vertical depth of 480 ft from surface.

Other zones on the property represent mainly heap leach grade material with reasonable strip ratios. Rayrock estimates that the ratio of waste to combined ore will average 5.21 to one for the entire project.

McGibbon is credited with the discovery of the Stonehouse deposit in the northern end of the property which contains both shallow oxidized mineralization and a deeper but refractory sulphide zone.

If overburden removal has been the challenge at Marigold, the new mill facility appears to have been an easier but unqualified technical success.

“Our mill recovery is currently 93.5% which is remarkable,” said Schwandt. “It’s much better than the 85% projected in the feasibility study.”

Before joining Marigold in 1987, Schwandt had been a general manager at the Dee mine in the Carlin Trend. The mill at Marigold is patterned after milling operations at Dee and Pinson, two other open pit mining operations managed by Rayrock in Nevada.

Schwandt attributes the good recoveries at Marigold to the fact that Marigold ore is very well oxidized and metallurgically clean. The ore is easy to process and contains less silica than some of Rayrock’s other mining operations.

After crushing, the ore is fed to the mill and then ground in both a rod mill and ball mill to expose the gold particles to the mill leach solution. Cyanide consumption in Marigold’s milling process is considered to be lower than average.

After completing the carbon-in- leach milling and recovery process, dore bars are produced on site which typically average about 97% gold and 3% silver.

In order to achieve the best environmental protection and to protect wildlife, tailings are stored in a sealed dam which uses a special deposition and drainage system aimed at eliminating seepage and keeping the pond size to a minimum.

Construction of the heap leach portion of the Marigold operation is nearing completion and production is expected to begin shortly.

This year-round operation will involve spraying a weak cyanide solution on the heaps to dissolve the gold. The resulting pregnant solution will be treated by a carbon column recovery process to achieve recoveries estimated at about 65%.

Production costs per oz of gold aren’t yet available for the Marigold mine. However, Rayrock’s average cost per oz at its other gold mining operations in Nevada was about $202(US) per oz for the first six months of 1989.

Because legislation to establish new regulations on mine reclamation was recently passed in Nevada, Rayrock is paying considerable attention to its future reclamation work at Marigold.

Topsoil from beneath the waste dumps, ore stockpiles and tailings dam was stripped and stockpiled and will eventually be used to contour waste dumps so they blend into the natural landscape.

In addition to Marigold, Rayrock partially owns and operates the Pinson, Preble and Dee gold mines in Nevada. It also has 100% of a specialty fertilizer mine in New Mexico, and it owns 56% of Minera Rayrock (TSE) which is active on a number of diversified mineral projects in Chile, Costa Rica and Ecuador.

Rayrock reported earnings of $3.1 million or 32 cents per share in the first half of 1989, a slight increase over last year’s first half results.

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