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By Rose Ragsdale
For Mining News 

Mines target mill capacity, better cons

As territory's three operating mines mature, owners focus on optimizing production by refining mining and milling processes

 

Last updated 9/30/2012 at Noon



Capstone Mining Co., Alexco Resource Corp. and Yukon Zinc Corp. have crossed the Rubicon.

Unlike other mining companies in Yukon Territory who continue to grapple with the complexities and uncertainties of exploration and development, the operators of the Minto, Bellekeno and Wolverine mines are working to master a new set of challenges - optimizing their mining and milling processes.

Going gangbusters at Minto

It will be five years in October since Sherwood Copper Corp. (Capstone Mining Corp.'s predecessor) commenced commercial production at the high-grade copper-gold Minto Mine located 240 kilometers (149 miles) north of Whitehorse in west-central Yukon, and became the first mine to come into production in the territory this century. Owned by Minto Explorations Ltd., a subsidiary of Capstone, the mine is not unlike the "Energizer Bunny" - it just keeps going and going and going.

Within two years of Minto's acquisition, the property's mineral resources were re-drilled to mineral reserve standards, a bankable feasibility study was completed, project financing arranged and a C$100 million open-pit copper-gold mine was built and in production. Minto had an initial mine life of eight years. Since then, the operation has been expanded twice and a C$76 million underground mine project initiated, increasing throughput by more than 100 percent, reflecting the impact of nine new deposits discovered in six years.

At Jan. 1, the mine had 14.39 million metric tons grading 1.53 percent copper, 0.58 g/t gold and 5.12 g/t silver in proven and probable reserves for contained metal of 484 million pounds copper, 270,000 ounces gold and 2 million ounces silver.

The combined mineral resource estimate, at 0.5 percent copper cut-off for the Minto South, Ridgetop, Minto Main, Minto North and Minto East deposits totaled 47.93 million metric tons grading 1.09 percent copper, 0.39 g/t gold and 3.7 g/t silver in measured and indicated resources for 152 million pounds copper, 65,000 ounces gold and 1 million ounces silver in contained metal, and 8.49 million metric tons grading 0.81 percent copper, 0.24 g/t gold and 2.9 g/t silver in inferred resources for 152 million pounds copper, 65,000 ounces gold and 1 million ounces silver in contained metal.

Minto uses conventional crushing, grinding, and flotation in a mill with 3,750 metric tons per day capacity that produces copper concentrates with significant gold and silver credits. In 2011, the mine processed 1.26 million metric tons of ore at a grade of 1.61 percent copper, 0.68 grams per metric ton gold and 5.9 g/t silver. Concentrates are exported via the Port of Skagway in Alaska to smelters in Asia for treatment and sale. Minto also produces a nelson concentrate with a higher gold content that it currently ships to another customer in Canada.

In July 2012, Capstone released a phase 6 pre-feasibility study that incorporates the results of exploration success through 2011 that extends Minto's life to 2022. With mining in the Main Pit completed, the company plans to fill the enormous cavity with tailings from other deposits and to employ both open pit and underground methods in mining most of Minto's remaining deposits.

Based on a start date of Jan. 1, 2012, Capstone said Minto's phase 6 open pit and underground mines will produce a total of 13.5 million metric tons of ore and 44.48 metric tons of waste over about a 7-year mine operating life, ending in 2019. Some 4.36 million metric tons of ore is planned to be produced from underground mining at a rate of 2,000 tpd. Once active mining is completed, mill operations will continue for an additional three years, processing an accumulated 4.08 million metric ton of stockpiled ore. Therefore, the total mill operating life is 10 years with final reclamation commencing mid-2022.

Stabilizing a work force

Operators were mining the Area 2 pit at Minto during a mine visit in August, and in the mill, they were testing rates higher than 3,600 tpd for processing Area 2 ore.

"We're producing 127 dry metric tons of concentrates per day," Ron Light told Mining News.

While mine tailings are currently stacked wet and dewatered to 16 percent moisture content, Light said that by year's end, "we will pump wet tailings into the main pit."

Capstone has overcome many of its operating challenges at Minto in short order. This year, the company installed a new reverse osmosis water treatment module to meet current effluent standards. Minto had no water discharge from the mine site in 2011, but must still prepare for the possibility of flooding when winter snows melt every spring.

One problem currently being addressed is the mine's relatively high 20-30 percent attrition rate among employees.

Light, who until recently worked at the Meadowbank Gold Mine in Nunavut, said Capstone plans to re-establish an office for Minto in Whitehorse to improve community relations, especially with government and First Nations, and to assist with general hiring. In addition, the company is sharpening its focus on attracting and retaining employees who are members of the Selkirk First Nation and other Yukon First Nations, currently 9 percent and 20 percent, respectively, of the Minto work force. The Minto Property is located within Selkirk's traditional territory.

Capstone is also building a new C$6.9 million, 90-room housing facility at the mine to enhance retention and recruitment efforts. It should be completed by summer of 2013, Light said.

Minto recently signed a new surface mining contract with Pelly Construction, effective until 2017, that imposes more site control and direction, plus increased environmental stewardship and responsiveness, he said.

"For the underground work force, we plan to phase in our own employees and phase out contractors after six months of operation," he added.

Ready to ramp up production

When Alexco Resource Corp. took over the former assets of United Keno Hill Mines in central Yukon Territory in 2006 under a funding agreement with the governments of Canada and Yukon Territory for the care and maintenance of the 40 or so historic underground silver mines and the eventual reclamation and closure of the UKHM sites, some observers said it was awfully big job for such a little company.

But Alexco suspected that the historic Keno Hill Silver District located 50 miles northeast of Mayo and a historic producer of 200 million-plus ounces of silver, had much more to offer than just a cleanup contract.

Today, Elsa Reclamation and Development Company Ltd., a unit of Alexco, is fulfilling the company's reclamation obligations in the district, while its sister company Alexco Keno Hill Mining Corp. will soon celebrate its second anniversary producing silver, zinc and lead in concentrates at the Bellekeno Mine.

Bellekeno, an operation brought from discovery to production in three years, has won for Alexco the distinction of being Canada's only primary silver producer. The underground mine currently processes ore at a rate of 230-240 metric tons per day in silver-lead and silver-zinc concentrates, but the company is intends to boost the mill's output to its 400 tpd capacity by the first quarter of 2013.

Alexco currently has indicated and inferred silver resources totaling 52 million metric tons along with zinc and lead resources, and is developing two new mines in exploration and development pipeline of deposits and prospects spanning the 30-kilometer-by-15-kilometer (19 miles by 9 miles) district that conceivably could tap a steady stream of new production for several decades.

Alexco President and CEO Clynton R. Nauman told participants in an investors' conference in September that by putting a series of mines in production, sequentially, the company intends to increase its annual silver production over the next few years to 5 million ounces from output of 2.2 million ounces projected for 2012.

"We were not happy with our cash cost of US$10 per ounce in 2011, and it climbed again this year" to US$12.99 in the first half of 2012, Nauman said. "The core reason for the increase is declining base metal prices, which have decreased 30 percent in the past six to eight months, and reduced throughput in the second quarter (2012). It fell well short of expectations. We're in the penalty box, and we are focused on debottlenecking and improving our mill feed and increasing throughput in the mill."

Two-pronged approach

For the district mill to reach 400 tpd as quickly as possible, Alexco is attacking the problem on two fronts - milling and mining.

The company is adding a new cone crusher and a new cyclone in the mill to help deal with classification issues on the front end. Alexco is also refurbishing its agitators to deal with a much more abrasive and heavier fluid or solution that's flowing through the agitation tanks, and finally, adding some filter capacity on the back end to ensure that operators do not encounter any problems with the mine's dry stack tailings in the future, Nauman said.

"This work will be completed in the next month or two," he said. "But I think the biggest issue here is operators. I'm interested at this conference that there has not been a lot of talk about the lack of trained conventional flotation operators.

"There are a lot copper guys around, but lead-zinc operators are really scarce. What we find is that we get these people trained up and no sooner than we train them, they leave for a fly-in/fly-out operation. We suffer turnover as a result, but there are programs and plans in place to solve that going forward," he added.

Alexco also plans to quickly bring on line two high-grade deposits that are extensions of the historic Lucky Queen and Onek mines.

"By the end of the first quarter of 2013, we will have three mines in operation feeding this district mill," Alexco Chief Operating Officer Brad Thrall told Mining News during a mine visit in August.

Lucky Queen, historically the highest-grade deposit in the district, has 124,000 metric tons averaging 1,227 g/t silver in indicated resources and 150,000 metric tons averaging 571 g/t silver in inferred resources, while the larger Onek has high-grade zone that average 24.3 ounces per metric ton to 44.3 oz/t silver.

"It's important to blend the Lucky Queen ore with Bellekeno ore to keep up head grades in the mill," Thrall said.

Alexco's ongoing exploration programs (C$12 million for 29,000 meters district-wide in 2012) generated additional resources at Bellekeno - new resource estimate due in late 2012, the 15-million-ounce Flame & Moth silver deposit discovered in early 2012 directly beneath the mill, and the Bermingham deposit. Alexco is also studying how to "reclaim" some 9.5 million ounces of silver it has identified in 2.49 million metric tons grading 119 g/t silver in the district's historic tailings, perhaps through a 1,500 tpd heap leach operation that will cost an estimated C$30 million.

Meanwhile, Alexco's environmental project in the Keno Hill district has offset some C$22 million, so far, in liabilities that would otherwise have been shouldered by Canadian and First Nations taxpayers.

Conquering complexities at Wolverine

Located 180 kilometers (112 miles) southeast of Ross River, Yukon, the Wolverine property is owned and operated by Yukon Zinc., public company taken private in 2008 by Chinese companies Jinduicheng Molybdenum Group Co. Ltd. and Northwest Nonferrous International Investment Company Ltd. In 2011, Yukon Zinc secured four additional shareholders - Fosun Gold Holdings Ltd., Arich Investments Ltd., Silvercorp Metals Inc., and Northern Mineral Investment Corp.

Wolverine is an underground mine with a capacity of 1,700 metric tons per day and about 20 months of production. Wolverine's current mine life is ~9.5 years based on a 5.2 million-metric-ton deposit of volcanogenic massive sulfide ore, grading 12.14 percent zinc, 354.8 grams per metric ton silver, 1.16 percent copper, 1.69 g/t gold and 1.58 percent lead, and there is potential to expand the reserve through drilling.

Yukon Zinc completed major site construction at Wolverine throughout 2009 and 2010, and mill commissioning commenced in late 2010. The concentrate from Wolverine is trucked to the British Columbia port at Stewart.

After more than 18 months of operation and two underground fatalities, the Wolverine Mine is still working to improve both its mining and milling processes. Indications are that the company is making considerable progress.

After an inspection of the underground operation in July, Yukon Zinc Technical Services Superintendent Alfred Dune, P. Eng., MBA noted "visible improvement in operational standards underground over the past year."

"Levels of ground support are good, with close adherence to the Ground Control Management Plan. Housekeeping standards are good. Operator safety and the general safety culture of the mine have significantly improved and a program of continuous safety improvement was observed," Dune wrote in a report submitted to Yukon regulators.

"Overall, the mine is being professionally operated under difficult ground conditions," he added, after enumerating the specific improvements that he observed.

Jack Korppi, underground mine manager at Wolverine, said Yukon Zinc is working to develop the most efficient mining method possible, setting a target of having 17 active stopes and mining six-seven of them daily.

Korppi, who formerly worked for five years for Cameco at the McArthur River uranium mine in Saskatchewan and 18 years for Placer Dome, says solving the mining and production problems at Wolverine is "an exciting challenge."

Production costs at the mine are currently averaging US$170 per metric ton, considerably more than the company's target of US$100/metric ton.

During a mine site visit in August, Korppi told Mining News that underground operators were just opening the 1170 level, had 11 active stopes and could cycle ore to the mill from five-six stopes per day.

"So we're pretty close to full capacity because our current production target is 1,200 (metric) tons per day, and we're currently at 1,100 tpd. Our (eventual) goal for the mine is 1,700 tpd," he added.

Yukon Zinc hired rock expert Remus Pakallais,, Ph.D. to perform a ground control assessment of the mine's underground workings, and then acted on the results of the assessment to improve backfilling methods and conditions in the mine tunnels.

The mine currently manufacturing cement paste to backfill the underground, but as mining continues the plan is to use waste rock as fill.

Korppi said Wolverine also has struggled recently with manpower and equipment availability, but the company aims to alleviate at least some of these problems by purchasing its own equipment fleet rather than continuing to lease from others.

Wolverine's work force has averaged 330 people recently, with 190-200 workers on site due to construction of a new tailings facility. The mine's work force in winter averages about 130 people.

Fine-tuning the milling process

Operators are focused on improving the metal recoveries of copper, lead, zinc, silver and gold at the current milling rates. The mill equipment has been successfully tested to operate at target mill design capacity of 1,700 tpd to achieve target copper, lead and zinc concentrate production of 58, 44, and 271 tpd, respectively.

"Our product is shipped to various smelters and\or refineries in Asia and North America," said Manny Rejano, chief metallurgist at Wolverine.
Among the processing challenges: "The ore must be ground so fine - to less than 20 microns in size - due to its fine-grained mineralization in order to liberate the complex minerals of copper, lead and zinc.

Other challenges are managing and understanding the mill feed, which is highly variable in composition and feed grades.

This is vital with sequential copper-lead-zinc flotation processes where copper, lead and zinc are floated one after another to produce separate copper, lead and zinc concentrates.

Successful re-agent addition rates must be correlated to feed type for use as standard starting condition.

Pyrite and sphalerite are the dominant sulphide minerals with secondary pyrrhotite, chalcopyrite, galena, tetrahedrite and arsenopyrite," Rejano said.

Another challenge is the release of carbon in the milling process, which interferes with the mineral selectivity during flotation. Yukon Zinc performed several onsite metallurgical tests and research in early spring, sent ore samples to China and teamed up with three senior researchers from Chinese government institute BGRIMM in the effort to solve the problem of carbon interference in flotation at Wolverine this summer. "They have experience with this kind of complex ore in China," explained Rejano.

"The recent plant trial showed that carbon flotation can be controlled, and it gave remarkable metallurgical improvements in concentrate selectivity and metal recoveries," he added.

Part of Yukon Zinc's strategy is to better understand Wolverine ore flotation characteristics through metallurgical bench testing of raw ore, plant slurries, and plant sampling surveys to identify optimum operating parameters on various ores and blends. The mine constructed a 6,250-square-feet assay laboratory and metallurgical testing facility, which has been operating for more than a year. Samples are delivered to the metallurgical lab where metallurgists and technicians test and analyze various flotation operating parameters that affect metallurgical performance and add the most value to the zinc, copper and lead concentrates produced.

"The other YZ development plan is to implement Portage Technology's flotation expert system to enhance the original DCS process control loops for adjusting and controlling pulp levels, air and re-agent additions to stabilize flotation operating conditions and parameters to improve concentrate grades and recoveries," Rejano said.

Though the gold and silver present in the ore is produced in all of the concentrates, Korppi said the mine receives more credit for them in the copper concentrate. As a result, operators are now focused on maximizing the amount of gold and silver in the copper concentrates and the residuals in the lead concentrates.

Meanwhile, further exploration of the Wolverine property is temporarily on hold. "We will focus on exploration later on, after we get good at mining and Yukon Zinc conducts an initial public offering on the Hong Kong Exchange," Korppi said.

 

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