U.S. REPORT Santa Fe to heap leach, expand mill at Rabbit Creek

Few mining companies would aspire to produce a projected 25,000 oz. of gold in the fourth quarter of 1990, 100,000 oz. in 1991, and 200,000 oz. in 1992 if they only started breaking the ground in the summer of 1989. But Santa Fe Pacific Minerals, a unit of Santa Fe Pacific (NYSE), appears to be well on its way to making this look like child’s play at its Rabbit Creek deposit, 45 miles northeast of Winnemucca. Pre-stripping of the deposit began in March, 1989, with a total of 26 million cu. yd. of material moved to date. By July of this year, the mill was running at design capacity within two weeks of startup.

The Rabbit Creek deposit is a sediment-hosted gold deposit, completely covered by valley floor alluvium. Stratigraphy consists of shales, siltstones, limestones, cherts, lava flows, tuffs and intrusive sills. The company believes that a series of northwest and northeast trending faults were the conduits for the mineralized fluids which created the deposit.

Alteration and mineralization are stratigraphically and structurally controlled, with the major mineralized zones associated with weak to strong silicification. The highest gold grades tend to occur in highly fractured and altered zones.

The upper regions of the deposit have been oxidized by ground water percolating through fracture zones with “tongues” of oxidation extending to depth.

The deposit is about 5,000 ft. long oriented in a north-south direction, and ranges in width from 1,500 to 2,000 ft. The oxide portion of the reserve is about 250 ft. in thickness starting at a depth of about 400 ft. The sulphide reserves extend below the oxide reserve to a depth of at least 1,200 ft.

Gold Fields Mining, a wholly owned subsidiary of London-based Hanson owns the ground directly to the north and south of the deposit. Gold Fields’ Chimney Creek mine, which produces about 200,000 oz. of gold per year by milling and heap leaching, is visible to the north of Santa Fe’s pit.

With the two deposits believed to be one-and-the-same, Mike Surratt, mine manager at Rabbit Creek, said the two pits will ultimately be connected into one long pit extending on to Gold Fields’ ground to the south.

The deposit’s ore is divided into three types; oxide-mill, oxide-heap- leach, and sulphide-mill. Minable oxide-mill reserves total 11.7 million tons grading 0.13 oz. gold per ton. Minable oxide-heap-leach ore is 33.5 million tons grading 0.027 oz. and minable sulphide ore is measured at 6.3 million tons grading 0.19 oz.

Waste material is divided into two categories; alluvium and waste, although for practical purposes Surratt said the two are essentially equivalent. It was initially thought that the alluvium would not require blasting, which in practice proved wrong. Surratt said virtually all material is blasted.

This proved to be a blessing in disguise since, with the alluvium more competent than initially thought, the pit walls have had very little sloughing.

Total waste is 533.1 million tons, giving the deposit an overall stripping ratio of about 10.4-to-1.

The ore mining fleet consists of 85-ton trucks and two front-end loaders; one with a 13.7-cu.-yd. bucket and the other with a 20- cu.-yd. bucket.

Waste mining operations are being conducted by the contractor under the pre-strip agreement, although Surratt noted that stripping operations have tapered down considerably and the contract will be completed shortly. Santa Fe will take over waste mining operations and begin a push-back of the pit wall, using a recently erected P&H 2300 electric cable shovel with a 27-cu.-yd. bucket.

The initial pit was designed to reach a high-grade pod of ore in order to shorten the capital payback. The initial capital cost of the project was about US$76 million including the pre-stripping. The estimated capital cost of the phased expansion is US$61 million.

Surratt noted that head grades have been averaging about 0.25 oz. gold recently, and have been as high as over 0.50 oz.

As part of the phased expansion, the company has a P&H 2800 shovel on order which will allow for an accelerated stripping schedule. The company also has three 170-ton and six 190-ton haul trucks on order for the expansion.

Presently, waste is mined by a hydraulic shovel and sent by an 85-ton truck to an in-pit conveyer that transports the material to a radial stacker on the waste dump. Ore is trucked to the mill facilities which use carbon-leach- technology.

The pit does generate water, the level of the water table evident from the wet stain around the wall about 100 ft. below surface. Water production is 700-800 gallons per minute. The pit water is used in the mill as well as for dust suppression on the haul roads.

The mill is rated at 1,500 tons per day but Surratt said it has been run at 2,000 tons per day with no difficulty. He noted that the mill is over-built to handle a planned doubling in capacity to 3,000 tons per day.

He said the mill expansion will be relatively easy since all the components were built to handle the 3,000-ton-per-day load. All that will be required is an increase in pumping capacity, he said. The mill will be expanded in conjunction with the pit expansion which will include the addition of a second and larger conveyer and the second electric shovel.

The company will also start heap leaching operations with the expansion at a rate of three million tons per year. Surratt said the mine is fully permitted for eight million square feet of pad space, although the company plans to start leaching operations with one million square feet.

The phase-two expansion should bring gold production up to 200,000 oz. per year by 1992. Production costs are estimated at US$190 per oz.

In addition to the Rabbit Creek deposit, Santa Fe Minerals holds a 30% interest in the Marigold mine near Battle Mountain, Nev., operated by Rayrock Yellowknife Resources (TSE). The company also holds a sizable land position as an “inheritance” from its parent, the Santa Fe Pacific Railroad (the original Santa Fe company), which was granted a huge amount of land as incentive to open up the west in the 1800s.

With a large prospective land package to draw from, the Rabbit Creek mine is undoubtedly not the last gold mine Santa Fe will develop.