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By Shane Lasley
Mining News 

Trial run at Chandalar ruled success

Goldrich runs three-week test with gravity recovery circuit of own design; aims for bigger equipment, larger settling pond in 2010


Last updated 10/25/2009 at Noon

Goldrich Mining Co. completed a brief pilot program during the final weeks of the short Arctic placer mining season at Little Squaw Creek on the miner's 14,993-acre Chandalar property located in the foothills of the Brooks Range about 200 miles north of Fairbanks.

The three-week trial run involved a full-scale mining test that produced 593.5 ounces of placer gold. The Spokane-based miner said the test also yielded valuable mining and engineering data that will enable it to ramp up the project into commercial production in the spring.

"We have effectively negotiated a steep learning curve in putting an important mining operation together in Arctic Alaska. We believe the toughest part of getting started is behind us," Goldrich President Richard Walters said.

Too much silt

Utilizing a gravity gold recovery plant of its own design and fabrication, the explorer-miner began a 200-cubic-yard-per-hour test-mining operation at Chandalar Aug 21.

"We have constructed a large and unique double-drum trommel and triple sluice system wash plant that we believe will have the capacity to process relatively large volumes of dirt and gravel and be capable of recovering a full range of gold particle sizes. We see this Arctic summer operating season as being the shakedown period for this plant and also expect to get engineering data from the test pit, which will be used in planning our future operations," Walter explained.

Though Goldrich was pleased with the gold recovery during the trial, issues involving re-circulation of the process water prevented the new system from reaching its production potential.

Crews were only able to feed about 89 cubic yards per hour through the gravity plant, or about 45 percent of its designed capacity. The company attributed the lower-than-expected production rates to silt plugging up pumps and water jets.

Walters told Mining News Oct. 19 that the large settling and re-circulation pond was not large enough to settle out a large amount of fine particulate matter before it was circulated back into the recovery plant. The silt caused the spray jets to plug. The silt also increased the density of the water, decreasing the effectiveness of the gravity plant's recovery.

When the water pumped from the re-circulation pond became too silty, Goldrich shut down the recovery plant until the fine particulates settled out of the water.

"We had a small pond, which was in a tight valley up near the pit, and it would slime up so fast that we could only run the plant three hours in the morning and three hours in the evening," Walters recounted. "When we go into commercial production, we will put in a large pond down at the mouth of the valley, 30 times the size we have now."

Lower grades than anticipated

Goldrich began testing the plant by processing 4,920 cubic yards of low-grade material mined from the upper layers of the alluvial deposit. This allowed the company to test the new circuit before processing gravels from the higher grade pay zone.

Reaching the pay material on Aug. 25, the company ran 8,905 yards of the higher-grade gravels through the newly constructed plant, recovering 522.3 troy ounces of gold. Adding 71.2 ounces recovered from the overburden, the take for the late-season test run totaled 593.5 ounces.

An independent study commissioned by Goldrich in 2008 estimated that the Little Squaw alluvial deposit contains nearly 8.8 million bank cubic yards of pay dirt with an average grade of .0246 ounces of gold per cubic yard, or about 216,600 ounces of placer gold.

The overall recovered grade for the 13,825 cubic yards of material was about .0429 oz/CY. The pay zone gravels ran substantially higher at .0666 oz/CY.

The Spokane, Wash.-based miner said it expected to find even higher grades in the area it chose to start in, but someone had beaten them to the punch. When the crews got into the pay zone, they discovered old drift mine workings they estimated to be 90 years old. The miner said further digging revealed the historical mining to be limited.

"Extensive exposure created by the new mining activity indicates the old workings are of limited scale and confined to certain areas in the upper reaches of Little Squaw Creek, which lie mainly outside of the previously drilled area," the company said.

Larger equipment needed in 2010

From gold recovered this year, Goldrich repaid 300 ounces of gold toward the futures sales agreements it used to fund the 2009 operations.

The purchasers who helped fund this year's test paid 73 percent of the closing price of gold as quoted on the Daily London Bullion Brokers Second Gold Second Fixing on the day they signed the confirmation letter. Goldrich said it needs to repay an additional 990 ounces of raw placer gold by November 2010. The company plans to repay this debt with gold recovered next summer.

Goldrich said the effort and expense put into the 2009 pilot program will lower costs and increase efficiency of the mining operation at Little Squaw Creek in 2010.

"Most of what is needed for a fast seasonal restart is in place. Substantial sunk startup costs have been made in camp, equipment, plant, fuel, tools, hardware and consumable supplies, airstrip and the pre-stripping. Renewed operations can be mobilized by winter haul road, instead of incurring relatively expensive air freight costs as we did this year," Walters said.

However, Goldrich will need to purchase larger equipment to begin commercial-scale placer mining at the Chandalar property, according to Walters.

"The equipment we used this year was really exploration equipment. It was not sized properly for mining. We couldn't keep up with the stripping fast enough to mine. We need to get large enough equipment for the stripping, which we intend to do," he explained.

The company plans to raise additional capital to purchase the larger equipment. The Goldrich board has not decided on which route it will take to raise the additional money needed to fund commercial production in 2010. Walters said he prefers the forward sales of gold because it is non-dilutive to the company's share structure.

He said Goldrich expects to acquire the rolling stock in time to transport to the mine on the winter road in March. Using larger equipment, the company plans to be able to begin commercial production early next summer.

"This was a demonstration project that proved we can do it. It's an unqualified success. We completed the first and most difficult phase of operations and set the stage for ongoing gold production, Walters said.


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