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The mine has shown improved production, with lower cash costs, in each of the last eight quarters. For the 3-month period ended June 30, Tarmoola produced a record 53,549 oz. gold, up 9% from the March quarter. Cash operating costs declined to US$197 per oz. During the first six months of 1999, the mine produced approximately 103,000 oz., and third-quarter production is forecast to be in the order of 53,000 oz.
“We have established Tarmoola as a low-cost mine, with a life of 10 years plus,” Paul Richardson, resident manager of operations, told the The Northern Miner during a recent tour of the mine site. He expects cash operating costs will be under US$200 per oz.
PacMin is an Australian-listed subsidiary of
Teck’s foray into Australia began just over three years ago when it acquired a 14.5% stake in Camelot Resources as part of a strategy to develop joint acquisition opportunities within that country. Among its assets, Camelot owned the Mt. Gibson gold mine, then a 60,000-oz.-per-year producer. Today, it is on care-and-maintenance following the completion of the heap-leach operation in February 1999.
After assessing several prospects, Teck and Camelot made a joint $185-million bid in the early part of 1997 for all of the shares of Mount Eden Gold Mines, which owned and operated Tarmoola. Teck emerged with a 70% interest in Mount Eden, with the remainder held by Camelot.
PacMin Mining was formed in June 1998 through the consolidation of ownership of Camelot and the Australian assets of Teck. The principal assets of PacMin comprise 100% of the Tarmoola mine, 100% of the Carosue Dam gold project, north of Kalgoorlie, and 33% of the Chariot gold discovery, at Tennant Creek in the Northern Territory.
An extensive portfolio of exploration projects include the Edjudina, Irwin Bore and Tennant Creek joint ventures in Australia, plus the Cirianiu project in Fiji and the Pungkut project in Sumatra, Indonesia. PacMin also holds a 51% interest in Australian-listed Northern Gold (nng), owner of the Burnside gold project in the Northern Territory.
The Tarmoola mine, which, to date, has produced about 700,000 oz., is 30 km northwest of the town of Leonora in the Eastern Goldfields district. Production commenced in 1990 with the use of a conventional carbon-in-leach (CIL) processing plant that had an initial capacity of 400,000 tonnes per year.
In 1995-96, Mount Eden purchased a new mining fleet and upgraded the plant to 1.7 million tonnes per year. The fleet was later sold and a mining contractor was hired in January 1997.
When Teck and Camelot acquired Mount Eden in March 1997, the company was tapped out. Tarmoola was a high-cost, 100,000-oz.-per-year producer. Cash operating costs in 1997 were US$366 per oz. Reserves stood at 13.1 million tonnes grading 2.36 grams gold per tonne, equivalent to about 995,000 contained ounces. An additional resource contained a further 1.1 million oz.
The joint venture saw an opportunity to boost the mine’s performance by switching to large-scale mining, while realizing the exploration potential to boost reserves both at the mine and within the large regional property position.
Two years later, Tarmoola is operating at an expanded plant capacity of 3.4 million tonnes per year and is on target to produce 200,000 oz. in 1999 at a cash operating cost of under US$200 per oz. By June 30, the total resource had increased to 71.8 million tonnes grading 1.46 grams, equivalent to 3.4 million contained ounces.
Proven and probable reserves include an estimated 22.2 million tonnes of primary mill feed grading 2.4 grams, equal to 1.7 million contained ounces. An additional 150,000 oz. are contained in 5 million tonnes of lower-grade in situ ore averaging 0.74 gram, and stockpiles account for a further 146,000 oz. in 6.8 million tonnes grading 0.69 gram. The overall life-of-mine stripping ratio is somewhere between 6-to-1 and 7-to-1.
A new zone of higher-grade material, discovered last year along the eastern flank of the Tarmoola pit, is estimated to contain a half-million-ounce resource of 2.4 million tonnes grading 6.4 grams.
Richardson told The Northern Miner that after the joint venture took over Tarmoola, they realized that an orebody this size lent itself to standard bulk-mining methods. However, Mount Eden had been using quite selective mining techniques with comparatively small excavators and trucks.
“We stepped back and recognized we could mine it on a very large scale,” said Richardson.
The first thing the joint venture addressed was how to increase mill throughput and availability. A single-stage jaw crusher that produced 100-mm mill feed was replaced in July 1997 with a mobile crushing plant and the feed size was reduced to 50 mm. Richardson said the 100-mm crush size would have been fine if the ore were consistent, but variations in the Tarmoola body led to problems with the larger feed size.
The mobile crushing plant proved to be the way to go. PacMin used a contract crushing plant from March 1998 onwards, until a new, 2-stage, 600-tonne-per-hour crushing circuit was commissioned in March 1999. The feed size has become progressively finer, with half the ore feed now well under 30 mm. Richardson says PacMin is seeing significant benefits in the mill with the much finer product size.
The processing plant is now running at a throughput equivalent to 3.4 million tonnes per year. The crushed ore is fed through two semi-autogenous steel-lined mills, with the fines forwarded on to a regrind ball mill, while the overflow, which is material that is still 20 mm plus, is sent back to a cone crusher. The regrind material is fed to the cyclones. The material is a coarse grind of 145-150 microns. From the cyclones, there is a bleed-off to a 30-tonne-per-hour Knelson gravity concentrator. There is a significant coarse gold component in the ore, and 35% of the gold is recovered by means of gravity. PacMin plans to double the capacity of the gravity circuit and improve recoveries to 45%.
A conventional CIL and electrowinning stripping circuit is used to recover the remaining gold. There are two large leach tanks and four adsorption tanks, plus eight smaller adsorption tanks from the original circuit. “We are very lucky,” said Richardson. “Metallurgically, this ore is a breeze. There is no rocket science.” Gold recoveries in the June 1999 quarter averaged 96.3%.
When asked about the potential for further expansion, Richardson replied that the plant was pretty much at its limit now. He added, though, that it may be possible to boost throughput to 3.5-3.6 million tonnes per year by switching to a slightly finer crush, replacing or modifying some of the older CIL tanks and doubling the capacity of the gravity circuit. A limiting factor, however, is the power of the three mills, which are operating at capacity.
Throughout 1998, PacMin worked with the mining contractor to reconfigure the mining fleet, replacing the smaller 85-tonne trucks with 170-tonne units, and acquiring larger 200- and 350-tonne excavators. Improvements in grade control sampling gave PacMin the confidence to switch to 10-metre benches in the pit, instead of the more intensive 5-metre benches.
Contract mining represents a significant portion of cash operating costs at Tarmoola, accounting for about 52%. The mining contract expired in August and PacMin is now comparing the economic benefits of having its own mining fleet against tenders from four other contractors. “It is interesting that when you get to this scale, it comes down to finance,” Richardson said. “If you have a balance sheet of the type that PacMin has, you can actually demand interest rates from the equipment supplier that are similar to those offered by the contractors.”
The Tarmoola mine is in the Norseman-Wiluna greenstone belt. The mine area comprises foliated ultramafi
c units, metabasalts and minor sediments overlying the Tarmoola granodiorite. The granite is an elongated northeasterly striking and northerly plunging pluton with steeply dipping margins to the south, southeast and northeast. Mineralization occurs in a series of sheeted quartz vein and breccia zones that occur within the granite and along its boundaries.
The open pit is peanut-shaped, sitting in and around the granite. The pit area is divided into northern and southern pits. Over the next several years, mining will be focused on the North pit, which averages a grade of 2.33 grams.
PacMin carried out considerable mapping and three-dimensional modeling of the pit in order to understand the nature of the mineralization. “The geology had not been put together very well and people didn’t understand what was going on at the deposit,” explained Exploration Superintendent John Libby. “We are now developing that understanding, and that is coming up trumps for us, but we still have a long way to go.”
A lot of the previous drilling had been shallow, with little drilling below 200 metres. “It was wide open at depth,” said Libby. “The pit design went down to the extent that they had drilled.”
Working on the premise that the contact between a rollover zone of the granite and overlying basalts could represent a potential trap for higher-grade gold mineralization, PacMin drill-tested the eastern flank of the northern pit and recorded some “fairly healthy, chunky intersections” in a sub-parallel series of easterly dipping, sheeted vein sets.
Better results included 90 metres averaging 6.7 grams, 29 metres of 24.4 grams, 21 metres of 6.3 grams and 34 metres of 2.1 grams. The down-plunge of the mineralization was tested further, yielding 27 metres of 8.6 grams, 29 metres of 5.1 grams, 32 metres of 5 grams and 18 metres of 9.4 grams.
For the past eight months, drilling has been focused on the eastern flanks. At one stage, four rigs were turning. Highlights of that work include 6 metres of 13.2 grams, 5 metres of 14.1 grams, 5 metres of 10.7 grams and 4 metres of 10.6 grams.
Further deep drilling is planned. Meanwhile, a prefeasibility team is being put together to study the economic potential of an underground operation, though, as Libby told The Northern Miner: “We start talking underground potential, but when we run the pit model, its drives the pit deeper.” The pit is currently modeled to a depth of 350 metres.
In and around the mine are several potential targets that have yet to be followed up, including the Northeast Extension (deeps area) and King of the Hills, as well as the South Granite area, where drilling intersected 22 metres of 4.6 grams.
Regionally, PacMin holds 800 sq. km of ground in the Leonora area, with the mine comprising less than 1% of this total. The land package lies along the prospective Keith-Kilkenny fault — a major, north-northwesterly trending, crustal-scale structure.
Several smaller satellite resources have been identified on these holdings, and all are within a 45-km trucking distance of Tarmoola. Among them are the 80,800-oz. Celtic deposit (1.1 million tonnes grading 2.2 grams) and the 70,900-oz. Wonder North deposit (850,000 tonnes grading 2.59 grams).
Libby believes there is potential for five small pits containing in the order of half a million ounces. A proposal is being put together to conduct resource definition drilling on Celtic and Wonder North.
Closer to home, PacMin recently completed a preliminary program of rotary-air-blast drilling on the Ursus prospect, 5 km west of the mine site. The program was designed to test a lateritic redox horizon along a prospective, offsetting shear structure at a 400-metre spacing. An overlying transported cover masks the horizon and makes soil-sampling ineffective.
For the fiscal year ended June 30, PacMin posted a record after-tax operating profit of about $21.5 million, up 138% from 1998. Operating cash flow was $38 million before exploration expenditures. In August, the company announced that 10.9 million listed options had been underwritten to raise $16 million. Cash reserves are expected to total $29 million by year-end.
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