Award-winning success at Eagle Gold
Victoria Gold team honored with E.A. Scholz Award for Excellence in Mine Development for overcoming challenges North of 60 Mining News – February 4, 2022
Last updated 2/24/2022 at 2:54pm
People. Victoria Gold Corp. CEO John McConnell's answer could not be more concise or clear when asked about the secret behind junior exploration turned gold producing company's success in developing, commissioning, and the first year-and-a-half of operations at the Eagle Gold Mine.
Not planning, even though having a well-engineered plan and sticking to it was critical to staying on budget and schedule while developing a 200,000-ounce-per-day gold operation in the middle of Canada's Yukon.
Not perseverance, even though a healthy dose of tenacity must come into play when building a northern gold mine that was commissioned during the outbreak of COVID-19 and spent the entirety of its operational life under a global pandemic that created labor shortages and disrupted supply chains.
People – a team of individuals led by Eagle Mine General Manager Kelly Parker that are committed to the mine's success – is the secret to building and operating the largest gold operation in the history of the Yukon.
"It is the experience of our team, we have a very well-rounded team – from the GM right down to operators and supply chain people – they are experienced in the North," McConnell expanded.
The Victoria Gold CEO and this well-rounded team assembled at Eagle Mine have now been honored with the Association for Mineral Exploration's E.A. Scholz Award for Excellence in Mine Development in British Columbia or the Yukon Territory.
"Developing and financing a mine in any part of the world as a single asset company is a great achievement but building and operating a mine in the North is always a challenge, and coupled with heap leaching in such a climate, it is especially difficult," AME penned in a summary of its decision to bestow McConnell and the Victoria Gold team with the 2021 E.A. Scholz Award. "John and his team met these challenges and have shown that not only could the Eagle Gold Mine be successful, but in doing so have now changed the way people can and should think about mine development in northern regions."
The path from a junior exploration to producing mining company is challenged with financial, engineering, and production pitfalls that threaten the viability of a company with all its eggs in one basket. The annuls of mining are filled with such aspiring mining companies that have fallen into one or more of these pitfalls – some have survived, and others have not.
The path for Victoria and its development of Eagle Mine was further challenged by a very large pitfall that came as a surprise and threatened to derail the company's best-laid plans.
By the end of 2019, Victoria had begun pouring gold at the newly developed Eagle Mine and was ramping up to commercial production. Just six months into this, however, the new operations team at Eagle was challenged by the rapid spread of COVID-19.
While worker availability and other challenges related to the pandemic posed uncertainties at the mine during those early days of both the pandemic and production ramp-up at Eagle, quick adjustments and establishment of protocols allowed the operation to continue without downtime.
"The COVID cases really have not impacted us because very early on we put in protocols that helped us minimize the spread of COVID on-site," McConnell told Mining News.
With heightened protocols in place, the Victoria Gold team achieved commercial production at Eagle on July 1, 2020. Something the Victoria Gold CEO was quick to attribute to the Eagle Mine team and the wider Yukon community.
"Achievement of commercial production is a meaningful and memorable accomplishment that the entire team is proud to be part of," McConnell said at the time. "Special thanks goes to so many contributors, including the local communities and the First Nation of Na-Cho Nyak Dun who have helped us make Eagle a reality."
Over the final six months of 2020, the Eagle Mine produced 77,748 oz of gold, putting it on pace to reaching the ultimate production target for the operation.
"Our goal has always been to get up to a steady state of 200,000 oz per year," McConnell said.
A goal that the company did not quite achieve during 2021.
Infected supply chains
Victoria had hoped to get close to the 200,000 oz mark during 2021, the first full calendar year of production at Eagle. COVID, however, caught up with the operation. It was not a major outbreak at the mine, however, that slowed production. Instead, the lowered gold output was a side effect of global supply chain disruptions that have become a lingering problem since the pandemic.
"Like many companies, we are experiencing pressure on our supply chain," McConnell said. "We continue to work with all of our suppliers very closely to avoid such disruptions as COVID-related challenges persist."
For Victoria, the gnarled supply chain resulted in a five-week delay for the arrival of a shipment of driplines used to irrigate ore stacked on the heap leach pad with a solution that dissolves the gold for recovery. With this delay, Eagle Mine crews laid low-flow driplines that were available as an alternative. While this allowed the continued stacking of ore, the slow drip of leach solution to freshly stacked ore equated to less dissolved gold to recover.
With freshly stacked ore being the largest contributor to gold production at a heap leach recovery operation such as Eagle, the slower leaching of the ore contributed to lower-than-expected gold recoveries for the fourth quarter and the year.
As a result, Eagle produced 49,497 oz of gold during the fourth quarter and 164,222 oz for 2021.
"COVID-19 has had a significant impact on Eagle operations in 2021, but our team has been very innovative adjusting to conditions and we achieved record annual gold production in 2021; increasing by over 40% from 2020," McConnell said. "2022 will undoubtedly present new challenges and I look forward to working with our team to continue the steady growth we have realized since Eagle began operations."
Ramping to 250,000 oz
While Victoria has yet to publish its 2022 guidance for the Eagle Gold Mine, it is expected that the foreseen steady growth at Eagle will include pushing gold production above the original 200,000-oz-per-year goal.
The company, however, has much bigger plans for the largest ever gold mine in the Yukon.
Earlier this month, the company unveiled details of Project 250, a strategy to increase annual production at Eagle to 250,000 oz starting in 2023.
"Project 250 represents a significant near-term, low-cost opportunity to increase annual gold production at Eagle," said McConnell.
The Victoria Gold executive told Mining News that over the course of mining thus far, the drilling and blasting of ore has generated a lot more fine material than originally anticipated. These fines were slowing mill throughput.
The solution is to add a screening plant that will scalp off these fines between the secondary and tertiary crushers and send them directly to the heap leach pad.
The new fines screening and scalping facility will be located just north of the current fine crushing plant. This locale, along with the designed layout, allows the screening facility to be built without interrupting the operations through tie-in of two existing conveyors, which will result in minimal downtime to commission the facility once constructed.
The total capital cost for the equipment, engineering, procurement, construction, indirect spares, commissioning, freight, and contingency is C$18 million. Based on processing 14 million metric tons of material per year, the operating costs for this new facility are expected to be C4 cents per metric ton.
This simple and low-cost diversion is expected to increase the crushing circuit throughput by roughly 15%, thereby boosting potential ore stacking on the heap leach pad by approximately 1.5 million metric tons per year.
In real terms, this solution is calculated to boost Eagle Mine gold production by roughly 30,000 oz per year.
The rest of the boost to 250,000 oz will come from stacking more ore on the heap leach pad for a longer period during the winter.
The original mine plan called for shutting the stacking of ore on the heap leach pad during the 11 coldest weeks of winter. The new plan lowers this winter shutdown to just five weeks, which will be used for maintenance of the crushing circuit.
This shorter winter shutdown goes into immediate effect and should boost 2022 Eagle Gold production.
Construction of the new fines bypass facility is slated to get underway during the second quarter and is expected to be completed by the end of the year, which would put Project 250 into action for 2023.
"The team continues to drive further opportunities to increase value," said McConnell. "I am confident Project 250 will produce material benefits for all our stakeholders."
Project 2040 and beyond
In addition to bolstering annual gold output, Victoria is looking at extending the life of the Eagle Mine well into the future.
Deepening the Eagle pit itself from the 350 meters considered in the current mine plan to the 650-meter depth of known gold mineralization at Eagle is the most immediate source of new ore for Victoria's Project 2040. As its name suggests, this project aims to extend the life of Eagle Mine out to 2040.
According to a late 2019 calculation, Eagle hosted 148 million metric tons of proven and probable reserves averaging 0.64 grams per metric ton (3.06 million oz) gold. The Olive deposit about 3,000 meters northeast of Eagle hosts another 7 million tons of reserves averaging 0.95 g/t (200,000 oz) gold.
This is enough ore to keep the mine in operation until 2030.
Looking to expand the Eagle resources and eventually reserves to depth, Victoria completed 6,200 meters of drilling in 10 holes early in the 2021 program and completed additional drilling later in the year.
The most exciting potential source of future Eagle Mine ore, however, is being delineated at the Raven target about 13 kilometers (eight miles) northeast of the Eagle Mine.
Discovered with soil sampling and trenching during 2018, Raven is a large, near-surface gold target associated with Nugget, the second largest known intrusive body on the Dublin Gulch property – the Dublin Gulch stock, which hosts the deposit delivering ore on the Eagle Gold Mine heap leach pad, is the largest.
Trenching in 2018 and 2019 began to unveil Raven's potential to host a large gold deposit that is higher grade than what is currently being mined at Eagle. Highlights from this trenching include 124 meters of 3.51 grams per metric ton gold; 50 meters of 4.15 g/t gold; and 12 meters of 7.91 g/t gold.
Drilling has continued to tap high-grade gold within a wider bulk tonnage deposit. Highlights from the 2019 and 2020 drilling include:
• 88.1 meters of 0.6 g/t gold, including 2.8 meters of 7.72 g/t gold.
• 166.4 meters of 0.46 g/t gold, including 5.9 meters of 4.48 g/t gold.
• 174.2 meters of 0.76 g/t gold, including 19 meters of 3.95 g/t gold.
• 126 meters of 0.68 g/t gold, including 10.5 meters of 2.13 g/t gold.
• 107.2 meters of 0.92 g/t gold, including 13.7 meters of 4.48 g/t gold.
Victoria says the structural control of the high-grade gold mineralization encountered so far at Raven is evident over the entire strike length tested to date and has led company geologists to develop a mineralization model defined by these repeated high-grade veins contained within what is interpreted to be a dilatational fracture zone within the Nugget granodiorite intrusion that Raven is associated with.
With the goal of establishing a meaningful inaugural resource for Raven, Victoria completed an extensive 2021 drill program targeting extensions of gold mineralization at this emerging gold deposit.
Not unlike the driplines that slowed Eagle gold production toward the end of 2021, COVID-related disruptions are slowing the return of assays from the Raven drilling.
McConnell told Mining News that as of Jan. 19, only about 25% of the results from 2021 Raven drilling had come back from the assay labs.
"We did more drilling than anybody in the Yukon and so it stands to reason that for us to get full results it is going to take longer," he said.
While understandable, the slow turnaround times are less than ideal for a company planning a more than 60,000-meter drill program for 2022 and feasibility level studies for Raven in 2023.
"It has been a frustrating year on that," McConnell said, referring to assay delays. "To prevent that from happening next year, we are putting in our own lab."
Likely to be established on Banyan Gold Corp.'s AurMac gold exploration property about 40 kilometers (25 miles) south of Eagle Mine, this lab will be dedicated to assaying the roughly 100,000 meters of drilling completed by the two companies this year.
While COVID-related shipping and assay lab delays have been frustrating for Victoria, the reliable team that helped to build and operate Eagle Gold Mine has kept the operation moving forward through this challenging environment.
A win-win situation for the Eagle Mine and Yukon.
Roughly 50% of the Eagle Mine workforce are Yukoners. Victoria Gold's cultural awareness and gender-equality policies go beyond concepts on paper – of the approximately 500 workers at Eagle, 25% are women, and 25% are First Nations citizens.
Considering that the entire Yukon population sits at around 43,000, having more than 200 Yukoners working at Eagle is a major contributor to the economy – a contribution that is even larger when considering the other economic activity the mine spurs.
"Victoria Gold has flourished to become Yukon's largest private-sector employer employing a total workforce of over 500," AME penned in its citation for honoring the Victoria Gold team with the E.A. Scholz Award. "The mine's construction phase involved more than 25 contractors, the majority of which were Yukon-based and Yukon First Nation-partnered businesses, resulting in a high level of local hiring, capacity-building and pride."
While McConnell's firm belief that local people should be the biggest beneficiary of any mine, he admits that Victoria's strong commitment to hiring Yukoners is also good for the company
This is because a local workforce is more likely to stick with the job for the long term and takes a greater amount of pride in the operation.
"So, the more people that live in the Yukon, the better for Victoria," said McConnell.
The commitment to Yukoners has culminated into an award-winning effort to develop, commission, and operate a mine in a challenging environment.
"John's leadership, with support and cooperation from the Yukon Government, throughout the COVID-19 pandemic has kept the Eagle Gold Mine in operation, providing continuing employment and contract opportunities for Yukoners and benefits to them while achieving project milestones," the AME wrote.
An award-winning effort that all Yukoners can be proud of.
"Receiving this outstanding achievement displays John's dedication and vision in bringing the Eagle Gold Mine into production," said Victoria Gold Chairman Sean Harvey. "The Eagle Gold Mine, Yukon's newest and largest ever gold mine, is the culmination of over a decade of work for John and the Victoria Gold team and the Yukon community, and all stakeholders have an outstanding opportunity to share in the benefits for decades to come."