Cover December 2010 Mining Quarterly
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P U BL I S H E D BY T H E E L K O D A I LY F R E E P R E S S
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Busy Days At Long Canyon
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Carlos Flores knocks core out of a tube at a Major Drilling diamond rig at Fronteer Gold’s Long Canyon exploration project. Ross Andreson/photo
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Inside cover Dec 2010 Mining Quarterly
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FEATURED THIS QUARTER
Turquoise Ridge Super pit in the future? — Page 3 PHOENIX MINE Testing hybrid Cat truck — Page 16 LONG CANYON Fronteer’s golden opportunity — Page 26 MARIGOLD MINE Steps up exploration — Page 44 PATZER FABRICATION Big things happen — Page 63 Find the job you want — pages 86-87
Gold finds, prices build enthusiasm ELKO — Gold prices rose to a new height of more than $1,400 an ounce, if only for a short time, but gold prices of more than $1,300 an ounce are exciting enough. Investors have turned to gold as a safe haven amid uncertainties over the global economy, and now they are asking whether there is a gold bubble or prices will stay at higher levels. John Dobra, director of the Natural Resource Industry Institute and an associate professor of economics at the University of Nevada, Reno, addresses the bubble question in this winter edition of the Mining Quarterly. The higher gold prices also are bringing new enthusiasm to exploration companies looking for the precious metal in Nevada. One of the most enthusiastic is Fronteer Gold, a company with hopes of developing a gold mine at its Long Canyon Project in the Pequop Mountains, an area little explored in the past but now yielding deposits open on all sides. “The gold is so fine it didn’t develop into a placer deposit or veins, so prospectors had no way to see the gold,” explains Jim Lincoln, president of Fronteer Gold USA and vice president of operations for Vancouver-based Fronteer. Articles about Fronteer Gold’s Long Canyon Project and the company’s Northumberland Project, where underground exploration is planned, are inside this quarterly. Great Basin Gold also is enthusiastic, after finding bonanza gold and silver grades at the Hollister underground project in northwestern Elko County. Sampling came up with ore grades of more than 2,000 ounces per ton, and the article on that discovery is inside this quarterly. Higher silver prices also are sparking new enthusiasm. “There is much more interest in silver as a safe haven at over $20,” analyst David Morgan said.
High gold prices, high silver prices and good copper prices that lead to more exploration and mine development also lead to more jobs in the mining industry. The problem is that most of the jobs are for mining engineers, metallurgists and others with specialized skills, and those jobs are hard to fill as the older people retire and the new ones have yet to gain enough experience. For example, William Lawton, human resources manager at Goldcorp Inc.’s Marigold Mine, said the mine has had to bring people in from its projects in Mexico to fill critical spots. At the same time, the price of gold and news reports that Nevada’s mining country is recession-proof are attracting job hunters. Staffing services share their views of the employment market in this Mining Quarterly. There also are articles inside about Caterpillar testing a hybrid haul truck at Newmont Mining Corp.’s Phoenix Mine, as well as at Barrick Gold’s Cortez Mine, and about Bucyrus testing a superloader at Barrick’s Cortez Hills underground mine. Now, Caterpillar is planning to acquire Bucyrus International in a $7.6 billion buyout. The boards of both companies approved the deal that was announced in mid-November but still requires Bucyrus shareholder approval. Mines may go for the gold, but they try to do so as safely as possible. They also strive to be more environmentally and socially conscious than mining companies in the past century. Also inside are articles about sustainability, the U.S. Mine Safety and Health Administration’s regional safety conference, Newmont’s Supplier Summit and national U.S. Bureau of Land Management awards for closing abandoned mines on Spruce Mountain and a sustainability project in Battle Mountain. ————— Adella Harding is editor of the Mining Quarterly. She may be reached at aharding@elkodaily.com.
Adella Harding
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Sustainability efforts grow with times ADELLA HARDING Mining Quarterly Editor ELKO — Major gold producers are increasing their emphasis on sustainability, a word that’s meaning for the mining industry has grown over the decade. The growth is a reflection of advances in global communications that make it much easier for people to learn about a company’s environmental and social actions, according to Joe Pollara, senior director of environmental and social responsibility for Newmont Mining Corp. “Now people are connected in ways they never were before,” he said, mentioning the growing use of Facebook as an example. This means companies need to be more transparent and talk candidly about what they do, Pollara said. “I think it’s a good thing,” he said. “It’s the age of instant accountability.” Pollara said sustainability reports also “help stakeholders get to know us.” Mines also are scoring placement on the Dow Jones Sustainability Index because of their efforts to show what they are doing to help communities and protect the environment. Listing on the index is aimed at pleasing shareholders. “They want to know that what we do will survive us and communities will survive after mining ends,” said Lou Schack, director of communications and community affairs for Barrick Gold of North America. “They prefer to put their money in companies that are doing good things for people.” He said Barrick’s focus is primarily on
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education because “if people are educated, they can find work in any field, whether mining is booming or not.” Barrick Gold of North America’s parent, Barrick Gold Corp., was named to the Dow Jones Sustainability Index this year for the third year, both to the world and North American lists. Newmont was included on the world list for the fourth consecutive year. The company also made the North American Index this year for the fifth time. The Dow Jones world index tracks the performance of 2,500 leading companies worldwide, independently evaluating their long-term economic, environmental and social performance. The index publicly identifies the top 10 percent of performers in areas of sustainability. The word “sustainability” has evolved beyond addressing how communities can survive when mining ends to encompass environmental, safety and social issues. “It’s a pretty difficult thing to measure,” Schack said of sustainability, a word that was rarely used until recent years. Mining companies began hiring third
Brad Hurd Adella Harding John Pfeifer Randy Woodrow
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parties to assess their sustainability, and the consultants in turn helped the companies build sustainability programs. They also created a whole new industry to look at companies through the eye of sustainability, according to Schack. Pollara said his view and Newmont’s view of sustainability “is working with host communities to meet their current and long-term needs and to work with communities so they are not dependent upon us for their livelihoods and infrastructure development.” Meeting the short-term needs helps Newmont obtain mining permits, but the company also helps communities leverage Newmont’s assistance to build for the future, he said. “Also, the environmental end has to be balanced into it to make sure when we design and build our operations, it doesn’t impact whatever the traditional needs are, such as medicinal or sacred uses, hunting or gathering,” Pollara said. Newmont is a member of the International Council on Mining and Metals, and Pollara said some companies may say sustainability is following the council’s principles. These principles include the development of ethical business practices and sound systems of corporate governance, integration of sustainable development considerations within the corporate decision-making process, upholding fundamental human rights and respecting cultures, customs and values. “I think we’ve evolved quite a bit as an industry. The $64,000 question is how do you put tangible benefits or values upon what you get with improved relations,” Pollara said. Along with pleasing the public and investors, sustainability efforts and sustainability reports help attract good employees, Pollara said, reporting that job applicants say they check out Newmont’s sustainability report to decide if it is a company where they want to work. “There also are strong business reasons to do this,” said Mary Korpi, director of external relations for Newmont. She said one of those reasons is the ability to obtain mining permits easier, and another is to show large investors that the company is responsible and has a good track record. As an example of what companies include in their sustainability accomplishments, Barrick reported in its announcement on the Dow Jones listing
that it has provided 26,000 scholarships worldwide over the past five years and invested in school construction, teacher training and computer technology. The company reported it also supports health care infrastructure and is involved in a HIV/AIDS program in Papua New Guinea with the government and the Asian Development Bank. Barrick stated it has helped train nearly 10,000 people in Chile and Argentina, and 3,000 people in the Dominican Republic. Kinross Gold Corp. also was named to the Dow Jones Sustainability North America Index this year. “This recognition is a tribute to our employees and their commitment to our core value of outstanding corporate citizenship,” James Crossland, executive vice president of external relations and corporate responsibility, said in the company’s announcement on making the index. Toronto-based Kinross launched a new corporate responsibility strategy last year. Goldcorp Inc. started a new publication called Above Ground to provide a regular update on the work the company does worldwide for communities and their people. The company’s president and chief executive officer, Chuck Jeannes, wrote in the introduction to the first edition that he is “pleased with the evolution in our industry towards greater efforts to protect the environment and enhance socio-economic development.” He said Goldcorp wants to be the benchmark “and continually raise the bar in these areas.” Goldcorp also issued a sustainability fact sheet for 2009 that states “the business of gold takes us to many diverse regions and we strive to understand the customs, culture and history of our communities, which include indigenous people and disadvantaged groups.” Pollara said the Carbon Disclosure Project is another example of how the times have changed for all industries. He said large institutional investors look to the Carbon Disclosure Project to see if a company files reports. Pollara said the organization has become a “one-stop shop” for investors. Reporting is completely voluntary, but 70 percent of the S&P 500 companies participated last year, he said. The Carbon Disclosure Project describes itself as an independent not-forprofit organization holding the largest database of primary corporate climate change information in the world.
Turquoise Ridge looks to future ADELLA HARDING Mining Quarterly Editor GOLCONDA — The Turquoise Ridge Joint Venture is expanding underground operations to boost gold production, and operator Barrick Gold of North America could be developing a giant surface mine on the property within eight years. “We’re looking at a combined open pit and underground mine,” said Brent Kristof, general manager of Turquoise Ridge, which is 75 percent owned by Barrick and 25 percent by Newmont Mining Corp. The companies first looked at expanding the mined-out Getchell open pit and then decided to look at the whole property “and see if there is enough material to justify a large open pit operation,” he said in mid-October. Barrick Gold Corp. President and Chief Executive Officer Aaron Regent said in the company’s third-quarter earnings teleconference that tentative plans are for a super pit that would be bigger than the open pit at Barrick’s flagship Goldstrike Mine north of Carlin. “Turquoise Ridge has the potential to develop into a large open pit,” he said. Regent said in late October the expanded Turquoise Ridge could produce 800,000 ounces of gold a year, compared with the 150,000 to 200,000 ounces of gold now produced at the underground mine. He said the next steps are exploration drilling and a prefeasibility study, and he estimated the project wouldn’t go into production until 2018 and 2019, based on permitting times. “We would start at the Getchell area and extend out from there. It could be a couple of miles long, bigger than the Goldstrike pit, but not more ounces,” Kristof said during a mine tour. He said the proposal to produce up to 800,000 ounces of gold per year is based on a potential resource of more than 20 million ounces, but more studies are needed before any decision on surface mining. Kristof said the underground aspect of such an expansion might involve a portal in the new open pit, but the planning for a surface operation is “very preliminary” and at the corporate level. The joint venture is spending more on exploration, however, to determine the feasibility of the project. The companies already approved $15 million for exploration this year, and they then approved $6.3 million more for drilling to look at pit potential. There is also
Ross Andreson/Mining Quarterly
Rogelio Femat operates a jackleg drill at the Turquoise Ridge underground mine north of Golconda in mid-October. He said he lives in Las Vegas when not working for mine operator Barrick Gold of North America.
Dustin Hill is at the hoist button board at the 1715 level of the Turquoise Ridge underground mine north of Golconda in mid-October. The production shaft includes two ore skips and one cage to move workers and supplies. Ross Andreson Mining Quarterly
See TURQUOISE, 4
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Turquoise ... Continued from page 3 $1.8 million for technical studies. “They are spending $24 million for drilling and evaluations, and we will start the feasibility study in 2012,” Kristof said. There are currently up to five drills operating on the surface and six underground at Turquoise Ridge now, according to Simon Pollard, the chief geologist at the mine. Expanding underground While the corporate offices are looking at the potential for a pit project, the joint venture is expanding underground operations, including starting a two-year, $40 million construction project for a new concrete batch plant at a lower level of the mine. “Mining has moved down. This will be more accessible to do our headings,” Blake Davis, an operations front-line supervisor, said about the new plant. Turquoise Ridge also expects to increase gold production. The joint venture produced 116,400 ounces of gold in the first nine months of this year, roughly 4 percent ahead of expectations, and plans to produce 152,000 ounces for the year, Kristof said. “By 2016, we will be doubling production. Instead of 150,000 to 200,000 ounces a year, we will be at 350,000 to 375,000 ounces,” he said. Turquoise Ridge produced 23,000 ounces of gold in the third quarter for Barrick’s share, down from 36,000 ounces in the 2009 quarter, according to the Barrick earnings report. Total cash costs were at $817 per ounce, up from $523 last year. The Turquoise Ridge underground operations currently have a mine life to 2036, but if the open pit takes over, the mine could even reach the shafts and change the underground mine life, Kristof said. Barrick as operator has increased the number of workers on site because of the underground development work. Kristof said there are 340 employees at Turquoise Ridge and another 150 contractors working above and below ground. The employee number is up roughly 75 to 100 people from a couple of years ago. “Recruiting to the Winnemucca area has been challenging, but it has been
Ross Andreson/Mining Quarterly
A DMC-operated bolter moves through the Turquoise Ridge underground mine on its way to a new location in mid-October. Contractor DMC is doing development work at the mine.
See TURQUOISE, 6
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The Turquoise Ridge Joint Venture is looking at developing a super pit, starting at the site of the mined-out Getchell Main Pit. Underground portals were in the closure process in mid-October at Getchell. Ross Andreson Mining Quarterly
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Turquoise ... Continued from page 4
Ross Andreson/Mining Quarterly
Hoistman Steve Clement of Winnemucca watches the computer screens as he controls the hoists at the Turquoise Ridge underground mine in Humboldt County in mid-October.
Wayne Mansanares, left, senior environmental coordinator for the Turquoise Ridge Mine north of Golconda, and Mark Miller, environmental superintendent for Turquoise Ridge, look at one of the hoists for the underground operations. Ross Andreson Mining Quarterly
better in the last couple of years,” he said. Turquoise Ridge also continues plans to construct a conveyor system underground to move ore as the distance to the shaft to the surface continues to grow with development. Kristof said they hope to start the conveyor system in 2012, if the capital project receives approval, and the rock work alone is estimated at $35 million. Chief Engineer Rory Howell said the conveyor system would cost another $19 million. Ore mined underground is brought up to the surface in 10-ton quantities, said Mike Isaac, operations superintendent. The ore is moved by conveyor to temporary stockpiles, and contractor R.E. Munks out of Arizona moves the ore to a longer-term stockpile until John Davis Trucking hauls it to Newmont’s Twin Creeks Mine for processing, he said. Barrick has a limestone quarry at Turquoise Ridge to supply the aggregate for the backfill used underground to fill the voids once ore is mined out of a section. R.E. Munks operates the quarry and provides its own equipment. “We generate our own backfill,” Isaac said. Turquoise Ridge mainly uses the top cut and under cut methods of underground mining. The miners muck out an area, a concrete floor is then established, and “we keep diving under the areas of cement,” Isaac said. Crews have been mining 10-foot by 10-foot sections for six years now, and they are still mining on the same level, as well as underneath. On a tour, Isaac pointed out one area that produced high-grade gold averaging 2.5 ounces per ton, but the average grade at the mine is 0.5 opt. Miners use hand-held jackleg drills for small cuts, but Kristof said Turquoise Ridge has been experimenting with more mechanized equipment to do the same job. Reclamation The proposed pit project wouldn’t be the first surface operation at Turquoise Ridge. The Getchell Main Pit and North Pit would be the starting point for the new project, but Barrick is reclaiming or has reclaimed several older pits on See TURQUOISE, 7
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Ross Andreson/Mining Quarterly
The Turquoise Ridge underground mine operated by Barrick Gold of North America is expanding, and Barrick and joint venture partner Newmont Mining Corp. are looking at developing a new surface mine on the property. The production shaft is at right.
Turquoise ... Continued from page 6 the property. The Hansen Creek Pit is completely filled, but the new mine could go through Hansen, said Wayne Mansanares, senior environmental coordinator for Turquoise Ridge, who worked at Getchell from 1988 to 2001 and returned after six years at Barrick’s Cortez Mine. “Surface mining ended in about 1997 at Getchell,” he said. Prior owners Getchell Gold and Placer Dome, which later merged with Barrick, mined the Getchell Underground Mine while still developing the Turquoise Ridge Mine, but Barrick was closing Getchell and sealing the portals in October. “Basically, we will plug the portals within the next two weeks,” Kristof said in mid-October. The earlier surface operations at
Turquoise Ridge included a mill, autoclaves, a refinery and process tanks that are nearly gone from the property now. Turquoise Ridge employees and contractors removed structures this past spring and summer, as well as in past years. The reclamation of the mill site this year cost $550,000, but Turquoise Ridge made $342,500 in recovered gold and $100,000 in the sale of scrap steel, Kristof said. The gold was in drums. Salvaged material to be used elsewhere on the property was valued at $550,000, Kristof also said. The old tailings area near the mill site has been converted into cells where slime from the underground operations is placed. “We let it dry out and recover gold from it,” Kristof said. “We’ve been doing See TURQUOISE, 8
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Ross Andreson/Mining Quarterly
Ross Andreson/Mining Quarterly
Kenneth Rogers operates the cage that takes people down into the Turquoise Ridge underground mine. Rogers, who lives in Winnemucca, said he is a parts runner and keeps an eye on the cage.
Mike Isaac, operations superintendent for the Turquoise Ridge Joint Venture in Humboldt County, explains how ore from the underground mine goes through a conveyor on the surface to temporary stockpiles.
Turquoise ... Continued from page 7 it for about the last year.� Turquoise Ridge dewaters the underground mine at an average rate of 800 to 900 gallons per minute, he said. Barrick earnings In its third-quarter earnings report, Barrick announced net income soared to a record $837 million, or 85 cents per share, compared with a loss of $5.35 billion in the third quarter of last year, when Barrick took a $5.7 billion charge for eliminating its hedgebook. The world’s largest gold company also reported adjusted net income rose 75 percent to $829 million, or 84 cents per share, in the third quarter. Gold production also was up, with the Cortez and Goldstrike mines in Nevada helping boost numbers. Gold production totaled 2.06 million ounces in the quarter, and total cash costs were $454 per ounce, while net See TURQUOISE, 9
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Sam Patterson, who works for Cashman Equipment out of its Winnemucca office, assembles a new Caterpillar loader with a 6-yard bucket in the underground shop at the Turquoise Ridge Mine in mid-October. Ross Andreson Mining Quarterly
Turquoise ... Continued from page 8 cash costs were $349. Production in the 2009 quarter totaled 1.9 million ounces, and total cash costs were $456 per ounce, while net cash costs were $371. Third-quarter copper production worldwide was 84 million pounds at total cash costs of $1.12 per pound. The averaged realized gold price for the quarter was $1,237 per ounce, $10 above the average spot price of $1,227 per ounce and 27 percent higher than the average price in the 2009 quarter, according to the earnings report. The Goldstrike Mine north of Carlin produced 377,000 ounces of gold in the third quarter at a total cash cost of $494 per ounce, primarily due to higher ore grades and more ore through the roaster. The 2010 quarter compares with production of 360,000 ounces of gold in the 2009 quarter at a total cash cost of $504 per ounce for Goldstrike. Barrick’s executive vice president and chief operating officer, Peter Kinver, said in the earnings teleconference efforts to better utilize the autoclaves at Goldstrike may pay off. If so, Goldstrike production may stay at current levels, rather than seeing an expected drop. Third-quarter production at Barrick’s other Nevada operations included 49,000 ounces of gold for Barrick’s 50 percent share of the Round Mountain
BARRICK’S THIRD QUARTER Production Gold . . . . . . . . . . . . .2.06 million ounces Copper . . . . . . . . . .84 million pounds Gold costs . . . . . . .$454 per ounce Copper costs . . . . .$1.12 per pound Mine in Nye County, operated by partner Kinross Gold Corp., down from 55,000 ounces in the 2009 quarter. Round Mountain’s total cash costs were $768 per ounce, up from $431 in the 2009 quarter. The Marigold Mine near Valmy produced 8,000 ounces for Barrick’s one-third share, down from 15,000 ounces, and total cash costs were up at $724 per ounce from $567 per ounce. Goldcorp Inc. operates Marigold and owns the remaining two-thirds. Barrick’s 100 percent-owned Bald Mountain Mine produced 12,000 ounces in the quarter, down from 18,000 ounces in the 2009 quarter. Total cash costs
were $731 per ounce, down slightly from $738 last year. The Ruby Hill Mine in Eureka County produced 23,000 ounces in the quarter, down from 31,000 ounces in the 2009 quarter. Total cash costs were at $852 per ounce, way up from $330 in the 2009 quarter. Barrick stated the company is on track to produce between 7.65 million and 7.85 million ounces of gold worldwide this year at total cash costs of roughly $455 per ounce and net cash costs of $350 to $360 an ounce. Regent said Barrick hopes to increase gold production to 9 million ounces a year once Pueblo Viejo in the Dominican Republic and Pascua-Lama on the border of Argentina and Chile are in production. He also said in the earnings teleconference regarding a new Argentina law to protect glaciers that Barrick supports measures to protect glaciers, and Pascua-Lama operations won’t affect the glaciers in the vicinity. Regent additionally reported the Buswagi Mine in Tanzania will have lower production because of the recent discovery of a fuel theft ring there, which in turn led to 60 miners losing their jobs. The mine is processing lower grade ores but can’t mine the high grades.
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Cortez production better than forecast ADELLA HARDING Mining Quarterly Editor CRESCENT VALLEY — Barrick Gold of North America’s Cortez Mine is humming along on its way to producing roughly 1.1 million ounces of gold this year as construction winds down at the new Cortez Hills operations. The mine will produce at least 1 million ounces of gold a year for the first seven years of full production at Cortez Hills, said Cortez General Manager Joe Dick, who oversees both Cortez Hills and the Pipeline Complex that make up the Cortez Mine. “There’s no denying it. It’s a helluva mine,” he said. The last buildings to be constructed at Cortez Hills were those for the underground operation. They replaced temporary facilities. The leach pad at Cortez Hills isn’t yet in operation, however. “Ore is being stacked and leaching will start before the end of the year,” Dick said. Parent Barrick Gold Corp. reported Cortez produced 366,000 ounces of gold in the third quarter at a total cash cost of $277 per ounce, compared with production of 139,000 ounces at a total cash cost of $554 per ounce in the 2009 quarter, before Cortez Hills was in full production. Barrick stated that because of the higher grades and recoveries from the underground and surface mines at Cortez Hills, the mine’s production will be at the higher end of the forecast of between 1.08 million and 1.12 million ounces of gold this year. “Cortez Hills is operating at about 300,000 tons a day, ore and waste,” Dick said, talking about the surface operations. Now that Cortez Hills is in full production, there are 1,018 full-time employees at the combined operations, according to Marie Byington, manager of human resources and training at the mine. Dick said there also are roughly 200 contractors on site.
Ross Andreson/Mining Quarterly
Don Schumacher, senior operations engineer for Barrick Gold of North America’s Cortez Hills underground mine in Lander County, has been working at the mine two and a half years, after spending 13 years at Barrick’s Meikle Mine north of Carlin.
Cortez Hills decision The production is ongoing as the U.S. Bureau of Land Management works on a final supplemental environmental impact statement and record of decision on the three aspects of the Cortez Hills Project that the 9th Circuit Court of Appeals ruled needed more study. See CORTEZ, 11
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Brad Stocks of Elko operates a mucker and bolter at Barrick Gold of North America’s Cortez Hills underground mine. He is in the cab of the newest Caterpillar mucker, also called a loader. Ross Andreson Mining Quarterly
Ross Andreson/Mining Quarterly
Don Kovall is process maintenance general supervisor at Barrick Gold of North America’s Cortez Mine in Lander County. The mill processes ore from the new Cortez Hills operations and the older Pipeline surface mine.
Cortez ... Continued from page 10 The BLM studied air emissions from ore to be transported from Cortez Hills to Barrick’s Goldstrike Mine north of Carlin for processing, mine dewatering impacts and particulate emissions at the order of the U.S. District Court in Reno, where the 9th Circuit remanded its opinion. Dick said Barrick expects the final EIS by the end of the year. “We’re in the process of responding to comments on the draft. Hopefully, we will have the responses done by the end of the month,” Chris Worthington, resource management plan team lead for the Battle Mountain BLM district, said in mid-November. “The tentative schedule is to bring out the final for public review in midDecember,” he said. The BLM received roughly 2,200 form letters during the comment period for the draft study, along with about four letters from cooperating agencies, 12 from individuals and two from environmental organizations, Worthington said. The new study stems from legal action calling for an injunction to halt the Cortez Hills Project filled by the Western Shoshone Defense Project, the Te-Moak and Timbisha tribes and Great Basin Resource Watch. “The BLM has handled the process
very well, we think. We’re very confident the project will be approved,” Barrick President and Chief Executive Officer Aaron Regent said in the third-quarter teleconference on its earnings report. Cortez continues to work under a tailored injunction while the BLM completes the analysis process. The injunction restricts mine dewatering at Cortez Hills and blocks Barrick from trucking refractory ore from Cortez Hills to Goldstrike. That ore is stockpiled, but most of the ore mined at Cortez Hills is oxide ore that doesn’t need to go to Goldstrike for processing. The mill at Pipeline processes the higher grades of oxide, while the lower grades go to leach pads. Refractory ore from Pipeline still goes to Goldstrike. Mining phases “Cortez Hills has six phases. We’re now in phase 2 at the bottom of the pit,” Dick said. The latest layback is phase 3, he said, and phase 4 is extending the high wall on the flank of Mount Tenabo. Phases 5 and 6 will reach the Pediment deposit. The Cortez Hills Pit is down more than 900 feet from the 6,300-foot elevation at the top. See CORTEZ, 12
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Ross Andreson/Mining Quarterly
Ross Andreson/Mining Quarterly
Giant haul trucks look like toys in this view from the top of the Cortez Hills open pit mine in Lander County in October. A shovel is working in the right corner, loading the trucks.
Jennifer McReynolds of Crescent Valley works in the assay laboratory at the Cortez Mine in Lander County in October.
Cortez ... Continued from page 11 “In the fourth quarter, we will be focusing more on Pipeline. We want to get out of the bottom of the pit before Thanksgiving,” Dick said in mid-October. “When spring comes, will starting bringing the laybacks down again.” In the cold weather, the Pipeline mining will be on the higher ground. Mining at Pipeline is in phase 9, and future potential lies in the GAP and Crossroads deposits, Dick said. Barrick also Marie Byinton, human was doubling resources and training the size of the manager for the Cortez assay laboratory Mine, said there are 1,018 in October at the full-time employees. Pipeline Complex, and Dick said there was a “debottling project” under way to improve efficiencies at the mill. “We’re now at 10,600 tons a day. The mill was at about 10,000 tons a day,” Dick said. Yet another project was installing new
emission controls at the refinery. Meanwhile, the dewatering at Pipeline is at roughly 14,000 to 15,000 gallons per minute for the Crossroads area that isn’t being mined yet, and Dick said Cortez is looking at adding three more wells for Crossroads. Pipeline and Cortez Hills combined are permitted to dewater up to 34,500 gpm. Counting all the pipelines that carry the water from the mine to infiltration basins and Barrick’s Dean Ranch, Dick estimated the Cortez Mine encompasses 164 square miles. Cortez Hills underground At the underground operations, Don Schumacher, senior operations engineer, said the mining is going to be under the Cortez Hills open pit. “What’s unique to our property is we’re coming in underneath the open pit operation,” he said. The pit communicates with the underground on blast times, and eventually the pit and underground will come together where the underground reaches under the pit, Schumacher said. “But we will be done mining in that area by then,” he said. The future ore is in the middle and lower zones, Schumacher said, and the newest areas of the underground mine will be partially under the pit but trend to
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Ross Andreson/Mining Quarterly
A Connors Drilling crew operates a diamond drill at Barrick Gold of North America’s Cortez Hills underground mine in mid-October. From left: Jeramy Orren of Miami; Travis Tucker of Cheyenne, Wyo.; and J.C. BeLieu of Twin Falls, Idaho. the south. Dick said Barrick added a half million ounces of gold in the middle zone in 2009, and the company expects to add more reserves at the end of this year. “We’re doing reserve development in
the lower zone,” he said. Cortez Hills underground crews and supervisors moved into the new administrative and dry building around Sept. 1. See CORTEZ, 13
Cortez miners go to Tanzania
Cortez ... Continued from page 12 The coverings the miners wear underground are hung up to dry in the large, new room for that purpose. The above-ground buildings at the underground site in F Canyon also include a new shop and warehouse, a fuel facility, a wash bay, a compressor building, fixed maintenance shop and the batch plant to provide backfill for the underground operations. Barrick takes aggregate from waste dumps at Cortez for the backfill. Most of the repairs and assembly work is done in the new four-bay shop on the surface, but there is a small break-down shop underground. Schumacher said the Cortez Hills underground mine has 72 pieces of mobile equipment. Mechanic Emilo Marin of Elko said before the new facility was completed, mechanics used a temporary area at the site and the old mill shop to work on equipment. The old mill site is near Cortez Hills and
Ross Andreson/Mining Quarterly
Mechanic Emilio Marin of Elko works on a Sandvik bolter in the new fourbay surface shop for the Cortez Hills underground mine in Lander County in October. the old administration buildings there are back in use for the Cortez Hills operations. Plans call for tearing down the old mill and roaster next year, however. Inside the underground mine, Connors Drilling is operating diamond drills to find new ore and delineate ore bodies. “The exploration drive for the drill platforms is to define the upper part of the lower zone,” Schumacher said. See CORTEZ, 14
CRESCENT VALLEY — Fifteen people from Barrick Gold of North America operations went to Tanzania to help in the wake of the discovery of a fuel theft ring at the Buswagi Mine. Marie Byington, manager of human resources and training at the Cortez Mine in Lander County, said nine of the 15 came from Cortez “to help out with problems there.” The employees from Cortez included skilled operators, supervisors and warehouse specialists. “It wasn’t as though we wanted to say good-bye to anyone. It’s a great experience, and we jumped on it,” said Cortez Mines General Manager Joe Dick in mid-October. “It’s supposed to be eight weeks.” Barrick’s Goldstrike, Ruby Hill and Bald Mountain mines in Nevada also sent people, according to the company, and the 15 are slated to return in early December. Parent Barrick Gold Corp. sent the workers from North America because there weren’t enough people on site to continue mining operations. “We let about 60 operators go,” Barrick President and Chief Executive Officer Aaron Regent said in the thirdquarter earnings teleconference in late October. He said as a result, Buswagi was processing lower-grade stockpiles rather than mining the higher grade ores. “The impact of the fuel theft is very serious. The ore body is robust, but it’s just a question of operating on an even keel,” said Barrick’s chief operating officer, Peter Kinver. He said in the teleconference the syndicate of thieves stole a substantial amount of fuel, and the ring included security people at the mine.
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 13
Cortez Hills tests superloader underground ADELLA HARDING Mining Quarterly Editor CRESCENT VALLEY — A superloader is mining at the Cortez Hills underground operations, knocking down dirt and rock without the need for drilling and blasting. “On softer formations, you don’t have to blast. This helps with ground control,” said Mike Lortie, area sales manager for Bucyrus, which distributes the superloader in the Americas. Cortez owner Barrick Gold of North America is leasing the Terex superloader from Bucyrus Mining. “It’s a pilot project,” Lortie said. One of the superloader operators, John Lemke of Spring Creek, said the superloader is designed for subway tunnels, but the large rig is efficient in the softer ground at Cortez Hills. “Down here it is working really well. We’re averaging 10 to 12 feet in about six hours,” he said in mid-October. “It cuts down with the mining cycle.” Lemke said Barrick will be testing the superloader until the end of January. Mark Wakefield, field service technician for Bucyrus, said the superloader eliminates the need for a jumbo drill and blasting because the superloader has a rock-breaker and small bucket to dig into the rock. “We don’t have to bolt or backfill on the sides, which cuts dilution of ore,” Lemke said. Once he uses the bucket and rock-breaker to loosen the rock, he has a 4.5-yard-bucket to load ore onto the loader’s conveyor system. Another large loader then pulls up to the conveyor for See SUPERLOADER, 15
Ross Andreson/Mining Quarterly
John Lemke of Spring Creek operates a Terex superloader at Barrick Gold of North America’s Cortez Hills underground mine in Lander County in October. The superloader eliminates drilling and blasting in soft ground.
Cortez ...
Barrick Gold of North America’s director of communications and community affairs, Lou Schack, stands in the new dry facility for the Cortez Hills underground mine in Lander County. Ross Andreson/Mining Quarterly
14 MINING QUARTERLY, Elko, Nevada WINTER 2010
Continued from page 13 Plans also are under way for raise boring for ventilation and escapeways as the mine grows, according to Schumacher. Miners use the underhand cut and fill method to get to the ore,and they fill minedout areas with the backfill. Schumacher said they mine roughly 1,200 tons of ore a day. “They’ve got to be approaching 40,000 feet of drifting. Typically, they move about 10,000 feet a year,” Dick said. Brad Stocks of Elko was operating the newest mucker (loader) at Cortez Hills and a bolter in mid-October at what will be the 3910 level. “This is the very bottom of the mine,” he said. “Right now, we’re not too far from the open pit shop,” Schumacher said, referring to what is on the surface above the underground workings.
Of the total 1,018 workforce at Cortez, roughly 190 of them work underground, according to Dick. Exploration is ongoing underground and on the surface at Cortez. Dick said there were three diamond drills underground and three surface drill rigs on site. “We’ll spend about $16 million for exploration drilling this year,” he said. With development of Cortez Hills, Barrick had to boost its workforce, and Dick praised Byington for all her work in putting a workforce together. She transferred to Cortez from Goldstrike in June. Mike Brozovich, general supervisor for open pit operations at both Cortez Hills and Pipeline, said there are 39 haul trucks at the Cortez Mine, three electric shovels and one hydraulic shovel at Cortez Hills and one electric shovel and one hydraulic loader at Pipeline.
Superloader ... Continued from page 14 an ore fill-up. The superloader is on tracks, rather than tires, and its height is 12 feet from top to bottom. With the conveyor system fully extended, the length is 46 feet, and the superloader has a 23-foot reach, Lemke said. “It can do a 15-foot face, whereas a jumbo does a 12-foot face,” he said. “It’s a simple machine and air cooled,” Lemke said. Wakefield said repairs and maintenance can be performed where the superloader sits. The superloader is made in Germany, and Lemke said a trainer flew over from there to teach a small crew how to operate the superloader. The Cortez Hills underground mine manager, Vern Goglio, came up with the idea of trying out the superloader, according to senior engineer Don Schmacher, who said that in parts of the mine, “the ground is so soft, we’re always looking at a better way to mine it.” Blasts aren’t as safe in softer ground so the superloader can do the job without the
need for explosives. “If the test is successful, we would probably make some changes and order one,” Schmacher said. Cortez Hills started the superloader out on hard rock, and advanced some, but it hurt the machine and went too slowly, Lemke said. “They put us to the test, even to places where it shouldn’t be,” Lortie said. “It’s designed for softer rock. If they know the hardness of the rock, we can tell them if it will work.” The superloader doesn’t work on hard rock, so the superloader doesn’t eliminate the need for jumbo drills and blasting in underground mining. “In harder rock, you have to blast. There is no two ways around it,” said Lortie, who works out of an Elko office with Wakefield. Bucyrus can sell mining companies those jumbo drills and other pieces of underground equipment and haul trucks, drills and shovels for open pit mines, as well. Bucyrus International,which was known for its giant electric shovels, acquired the
Submitted
A Terex superloader dumps gold ore into a bucket at the Cortez Hills underground mine during a pilot project. Terex Corp. mining division back in February to expand its product lines for all types of mining, Lortie said. The Elko office covers all of Nevada, Idaho and Arizona. “We’re just at the baby stage in Elko,” Lortie said. “We want to expand the
facility.” Bucyrus also has facilities throughout the world, including in Utah and Wyoming in the West, he said. Bucyrus Mining is a division of Bucyrus, which has its headquarters in South Milwaukee, Wis.
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Phoenix hits gold, copper marks ADELLA HARDING
Mining Quarterly Editor BATTLE MOUNTAIN — Newmont Mining Corp.’s Phoenix Mine is “performing very well for Newmont and the region,” according to General Manager Joel Lenz. “We’ve really hit our stride, with clean operations and good costs, and we’ve hit our mark for both gold and copper,” he said in November. The goal is 200,000 ounces of gold and 20 million pounds of copper production this year, and the high copper prices are helping drive costs downward, Lenz said, pointing to Joel Lenz gold in the range of $1,400 an ounce and copper at roughly $4 a pound. Newmont considers Phoenix a gold mine, with copper as a byproduct, even though there is a lot of copper. Copper and gold could switch roles, however, if Phoenix receives approval for its planned copper leach project. Permitting is under way for a supplemental environmental impact statement for the project that incorporates changes in the operating boundary, Lenz said. The project has its state permits, but the U.S. Bureau of Land Management hasn’t published the draft document yet. “That’s the next step. It’s been a little slower than I would like,” he said. Chris Worthington at the Battle Mountain BLM office said the BLM now has the latest version of the plan of operations so the agency can resume the supplemental EIS process. “It needed more modeling and analysis,” he said. The Copper Leach Project will treat copper oxide mineralization and partial leach mineralization that is now waste. Lenz said Phoenix was able to clarify how much copper there is that could be leached, more than originally expected. “It will essentially double copper production,” he said, making Phoenix a roughly 40 million-pound copper producer.
Adella Harding/Mining Quarterly
Mining is under way in the Fortitude 4 open pit at Newmont Mining Corp.’s Phoenix Mine in November. The mine is south of Battle Mountain.
See PHOENIX, 18
16 MINING QUARTERLY, Elko, Nevada WINTER 2010
Matt Murray, left, an external relations representative for Newmont Mining Corp. in Nevada, listens to Phil Dalke, process superintendent at the Phoenix mill, explain the camera system on flotation cells during a November tour. Adella Harding/Mining Quarterly
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Phoenix ... Continued from page 16 Currently, Newmont produces a copper concentrate that John Davis Trucking takes to Newmont’s Dunphy railroad terminal, and the concentrate then goes by rail to the Xstrata smelter in Quebec for processing. The leach project will produce copper sheets on site, however, called copper cathode. Phoenix employees Phoenix has 450 employees at the mine site, and roughly 25 contractors may be on site at any given time, according to Lenz. In addition, Phoenix uses the laboratory at the Lone Tree Mine to the west at Valmy. There is no mining at Lone Tree, but Newmont continues to produce gold from residual leaching, while also working on reclamation. Lenz is over Lone Tree, as well, and he reported Lone Tree has started “rehandling” leach production because of the high gold prices, which means moving ore and leaching again. Newmont plans a leach pad expansion to rehandle addi-
tional material, Lenz said. There are 20 to 25 employees at Lone Tree. The assay lab there, as well as the assay labs at Twin Creeks and Carlin employ 150 people combined, and Lenz is also over the labs, after moving back to Phoenix, where he started his career in 1981 with Duval and then Battle Mountain Gold, which Newmont later acquired. He spent more time at Phoenix after the merger, and also was at Lone Tree and Twin Creeks a number of years. Most recently, he was over all the process facilities in Nevada before returning to Phoenix as the general manager. “These are exciting times in the gold industry and mining in general. There are upward cost pressures, but it’s exciting,” he said. He said that while the current business plan is for mining at Phoenix into 2035, “we believe there is potential beyond that assuming metals consistently support it.” Newmont currently is exploring back
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Metallurgical technicians Krystal Wedlake, left, and Nola Lindskog gather data in Newmont Mining Corp.’s Phoenix mill in November. at Copper Basin, which has been mined in the past, and at Buffalo Valley, 10 miles to the northwest. Copper Basin is primarily copper, but Buffalo Valley is a gold prospect. “I am very optimistic about the district, as well,” Lenz said.
Phoenix mill Phoenix has challenges, however, because the rock is “very, very hard,” and that has led to changes in blasting, See PHOENIX, 19
Phoenix ... Continued from page 18 crushing and the mill to handle the ore, Lenz said. A secondary crusher process has been added to get the ore even finer for processing, after it has gone through the main crusher. Over at the mill, one of the most recent upgrades was to add Visio Froth made by Metso, a system that features cameras mounted over the bubbling ore mixture on the rougher side of the flotation circuit. The camera takes 20 to 30 pictures a second so the control room operator can adjust the air or reagents to improve the froth height and velocity, according to Phil Dalke, process superintendent at Phoenix. “We have had it about a year,” he said. “We still need operators, but Visio Froth is a tool that can make changes a lot faster and get higher recovery.” The cameras are on four of the six cells. “We put $80,000 into it, and it paid for itself in probably two weeks,” Dalke said. He also said Phoenix has been a lot changes at the ball mill that improved copper recovery. Lenz said Phoenix has seen a lot of changes over the years and supported miners and their families for almost 150 years, “my family as well.” The family of his wife, Bernadette, actually lived in Copper Canyon in the 1950s. Nevada production Overall, Newmont’s gold production at Nevada operations totaled 453,000 equity ounces in the third quarter, compared with 486,000 ounces in the 2009 quarter, and costs applicable to sales in Nevada were up 6 percent to $575 per ounce from $541 in the 2009 quarter. The company reported the lower production and higher costs were due to lower leach tons placed at the Twin Creeks Mine in Humboldt County and the Carlin operations, lower ore feed to Mill 5 from Gold Quarry due to last year’s slope failure and the end of mining at the underground Deep Post Mine north of Carlin at the end of last year. Increased ore from the Leeville underground Mine north of Carlin nearly offset the Deep Post underground mine’s closure, Newmont reported. Newmont stated it now expects Nevada’s gold production for the year to be between 1.71 million and 1.75 million
ounces, with costs at between $590 and $610 per ounce. Worldwide gold production in the third quarter totaled 1.4 million ounces, and Newmont produced 83 million ounces of copper, compared with gold production of 1.3 million ounces in the 2009 quarter and 64 million pounds of copper last year. Costs for the third-quarter 2010 gold production averaged $477 per ounce on a co-product basis, compared with $404 per ounce in the 2009 quarter, and the cost for copper was 73 cents per pound. Newmont narrowed its projection for gold production for the year, however, to between 5.3 million ounces and 5.4 million ounces, rather than up to 5.5 million ounces, and increased the estimate for cost of sales for the year to between $485 and $500 per ounce, rather than $460-$480 per ounce. Newmont earnings Companywide, Newmont reported a 38 percent increase in net income for the third quarter, attributing the higher profit to higher gold and copper prices. The Colorado-based company stated its net income totaled $537 million, or $1.07 per share, compared with $388 million, or 79 cents, in the 2009 quarter, and the income excluding one-time items was $534 million, or $1.08 per share. Quarterly revenue totaled $2.6 billion, up from $2 billion in the 2009 quarter, with the average gold price at $1,221 per ounce in the quarter and the average copper price at $3.67 per pound. “With the substantial free cash flow that we continue to generate in the current metal price environment, we remain focused on progressing the development of our next generation of mining projects,” Newmont President and Chief Executive Officer Richard O’Brien said. “This includes Conga in Peru, Akyem in Ghana and Hope Bay in Canada, as well as a series of satellite deposits in Nevada,” he said. O’Brien didn’t name the Nevada projects, but they include the Genesis Project and underground projects north of Carlin. The CEO said 40 percent of the company’s $1.3 billion to $1.5 billion in capital spending this year will be invested in the development pipeline, “with increasing reinvestment expected over the next several years.”
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 19
Going Hybrid Phoenix tries out electric haul truck ADELLA HARDING Mining Quarterly Editor BATTLE MOUNTAIN — Newmont Mining Corp.’s Phoenix Mine is testing a 350-ton Caterpillar electric and diesel hybrid haul truck, and Caterpillar and dealer Cashman Equipment are keeping a close eye on the truck’s performance. “The hybrid is not in production. You can’t buy one today,” said Gale Griggs, project coordinator for Newmont’s western Nevada operations for Cashman Equipment out of Winnemucca and a liaison between Caterpillar and Newmont. “We’re testing the electrical application, testing how the electrical truck performs versus our all-mechanical fleet,” said Nash Johnson, mine maintenance planning general foreman at Phoenix, a gold and copper operation south of Battle Mountain. He said Phoenix provides an opportunity for Caterpillar to test the hybrid on Phoenix’s downhill profile. At most mines, the drive out of an open pit is uphill, but a fully loaded truck at Phoenix heads downhill to dump its loads, which provides a test of the electrical braking system. “They’re taking down the mountain as they go,” Griggs said of Phoenix’s mining operations that contrast with the mines that go deep so the trucks have to climb. The diesel engine in the hybrid runs all the time, generating electricity and powering the generator. “It’s all simultaneous. They interact with computers,” Griggs said. “They’re getting the best of both worlds.” He explained that the cost savings is in the components of the truck, including how much oil and fluids are used, rather than on the amount of diesel used. “There also is less environmental impact,” Johnson said, because the hybrid doesn’t release as many biocarbons. One of Newmont’s 240-ton Caterpillar haul trucks that make up the Phoenix fleet currently holds 355 gallons of oil, he said. See HYBRID, 21
20 MINING QUARTERLY, Elko, Nevada WINTER 2010
Adella Harding/Mining Quarterly
The new hybrid, 350-ton Caterpillar haul truck that Newmont Mining Corp. is testing at the Phoenix Mine heads out with a load in November.
Adella Harding/Mining Quarterly
Nash Johnson, mine maintenance planning general foreman at Newmont Mining Corp.’s Phoenix Mine near Battle Mountain, points to a photograph of the new 350-ton Caterpillar hybrid truck and the adjacent 240-ton truck parked for vocational classes from neighboring high schools who visited the mine.
Hybrid ... Continued from page 20 The hybrids, however, don’t use oil in the rear end or transmission, so that reduces the amount of oil used, which saves money and also saves on the amount of used oil that has to be properly disposed, Griggs said. “This is driven as an environmentally friendly solution,” he said of Caterpillar’s decision to build the prototype. Both Cashman and Newmont are tracking the truck’s performance, and they expect the pilot project to last roughly a year, or 6,000 running hours. The test at Phoenix will provide Newmont with the opportunity to determine whether the hybrid might also work at the company’s operations overseas, including whether a trolley set up might work at certain mine sites where the trucks climb out of the pit, said Johnson, who worked at Newmont’s Twin Creeks Mine for 16 years before coming to Phoenix in the fall. “The capability could be out there to burn less diesel,” he said. Barrick Gold Corp. years ago tested a trolley system at the Goldstrike Mine
north of Carlin, but the project was later disbanded. However, Griggs said there are newer technologies now that may make the difference. Caterpillar is testing the uphill climbs at the Cortez Mine in Lander County, where there are two hybrid haul trucks operating, and these three hybrids in Nevada are among 10 prototypes in the testing stages. “We track them all on a daily basis. We follow them around,” said Greg Hulva, a field engineer for Caterpillar in Nevada, during a site visit at Phoenix. Keith Underwood, the marketing leader for the truck worldwide for Caterpillar, said the prototypes in North America are also at Kennecott’s Brigham Canyon Mine in Utah and at coal operations in Wyoming and Canada. Griggs said Caterpillar hasn’t set a price yet for the hybrids that are still in the testing stages, but he estimated if a mine bought one today it would cost in the neighborhood of $4.2 million. Newmont’s decision to test the hybrid meant months of preparation, including heightening the berms along the Phoenix
haul roads, because the 240-ton trucks now in operation aren’t as tall as the 350ton hybrid, and the new truck had to be assembled on site, Johnson said. “The bed alone came in six pieces to be welded on site,” Griggs said during a mine tour that provided a glimpse of the 350-ton hybrid at work. Ten drivers also had to be trained to operate the new truck and mechanics trained to work on the truck, which is larger than the fleet of 240-ton trucks. Johnson said the biggest part of the training for the truck drivers was on the use of the hybrid’s braking system, because electrical trucks use dynamics to slow them. The hybrid has both electrical and mechanical brakes “so you are getting the best of both worlds,” he said. The mechanical brakes are used when trucks arrive at the crusher, leach pad or waste rock dump. Griggs said the hybrid handles better on slick roads, and the electrical braking system offers smoother handling. “We’ve been testing the truck since the beginning of October,” Johnson said
in November. Johnson said the test at Phoenix is looking at whether running a fleet of larger trucks would be economical, whether hybrid or full-mechanical. Cashman and Phoenix representatives recently illustrated the difference in size by parking the hybrid and a 240-ton truck side by side for vocational classes from Battle Mountain and Winnemucca high schools to see as part of an educational tour. The tour was arranged to show what types of career opportunities might be available for the students. “It will take different mechanics to work on this truck. There is more electronic capability,” Johnson said. “Mechanics are not just turning wrenches today. There’s a lot more to it. A lot of the equipment operates like computer games,” Griggs said, and both pointed out that the hybrid computer provides readings of its performance. Newmont and Caterpillar have a worldwide alliance, Griggs said, and Cashman is part of the alliance in Nevada.
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 21
Tap along to mine safety songs ADELLA HARDING
Mining Quarterly Editor CARLIN — Have you heard the song “Driving Faster Multi-Tasker” or “Nineteen-Year-Old Superman?” How about “Cyanide is a Sodium Salt?” You may have heard one or more of those songs if you work for Newmont Mining Corp. and listened to Greg Vaught singing a few of the safety songs he has written and performs to inspire miners. “I felt the need to do something, to really get to the heart of it. I saw the need to take it to the next level, beyond the intellect and reach the heart. Music is a powerful tool, and a side benefit is that music helps you remember things,” Vaught said. He said he thought when he started singing his safety songs he would be singing for eight people in metallurgy. Since then, he has performed for at least 1,000 people in the past year and a half and done 37 presentations. “I’m just amazed people relate to is as well as they do,” Vaught said. “People complain to me, ‘your songs get stuck in my head,’ and I say thank you.” Matt Murray, an external relations representative for Newmont, said about half way through one of Vaught’s presentations, people are tapping along to the music. “It’s no joke. His songs get in your head,” he said. Vaught said there is usually a total mood change from when he walks into a room with his guitar and begins singing, telling jokes and telling stories to when he is ready to leave. He wears his Superman shirt when he sings “Nineteen-Year-Old Superman,” and he said he once was that 19-year-old Superman who didn’t worry about safety. “Wisdom is what comes with age and experience,” Vaught said. He also sings his most serious song, “If You Don’t Go Home.” Although he has played in bands and been involved with music over the years, he said Newmont’s safety culture grew on him and led him to write his safety songs, on his own time. “It’s what I’m about. It’s trying to change the culture,” Vaught said. “Newmont’s emphasis on safety was a catalyst.” He said he talks to workers about their safety behavior and has done a little research, but he is more focused on urging workers to be honest about their safety behavior, rather than drumming statistics into their heads. “I’ve never had so much fun at work, ever. I feel I am a direct influence on people,” Vaught said. He said during a break from his job as a ventilation technician at Newmont’s underground Leeville Mine north of Carlin that he writes all of his songs off hours and more than 99 percent of the music. He has 20 songs that can fit the focus of a gathering, and he plans to have a CD released in December that features 14 songs. Vaught said people urged him to make a CD.
22 MINING QUARTERLY, Elko, Nevada WINTER 2010
Adella Harding/Mining Quarterly
Greg Vaught, a ventilation technician at Newmont Mining Corp.’s Leeville Mine north of Carlin, writes songs about safety in his spare time and performs them at safety gatherings. He also has a website, safetytroubadour.com, and is preparing to expand to paying gigs “on the side.” He can perform his safety songs for other mining companies or any company hoping to inspire a safety culture, as well as for safety conferences. His songs fit safety issues that work anywhere, except for a few that are strictly mining related, such as “Cyanide is a Sodium Salt,” which is for laboratory, mill or leach pad workers. Another one is geared to assay labs and is about diluting acids, Vaught said. That song is called “Do As You Oughta.” He also wrote a song on avoiding the U.S. Mine Safety and Health Administration’s pattern of violations citations, called the “MSHA Blues.” Vaught performed it at the Mining Metallurgy and Exploration conference in Phoenix in March. He said he can write songs to fit a need, but he thinks a recent request to write one about environmental and social responsibility might be a little harder to do. “I was asked to write about teamwork, and I did,” Vaught said. Another song is about the National Fire Protection Association hazards labels, called “NFPA Label.” “I actually do it in Spanish and Chinese,” Vaught said.
He worked at Newmont’s assay lab at the South Operations Area near Carlin before transferring to Leeville in the early fall. Now, he goes underground three hours a day. “What I do in my real job is critical to safety. People need ventilation to breathe,” he said. Vaught said he takes a lot of samples for dust, diesel particulate matter and gases and does diesel permitting. He also posts escapeway maps. He also said in early November he expected to perform a song underground later in the month for a safety video. He would be singing while wearing his full protective gear. Vaught was working at the lab when he started writing the safety songs, and the work just grew from there. He has volunteered to perform occasionally at the Nevada Youth Training Center, for local businesses and sang once for a Barrick Gold of North America safety gathering. He also performed at a United Parcel Service hub in Louisville, Ky., while on vacation. Vaught said he moved to Elko in 2005 with his wife Amber, a chef at the Flying Fish in Elko, coming to Nevada from Kentucky. He can be reached via e-mail at safetytroubadour @gmail.com. His cell phone number is 775-777-4009.
COEUR D’ALENE MINES CORP.
Rochester in early days of expansion project ADELLA HARDING Mining Quarterly Editor ELKO — Coeur d’Alene Mines Corp.’s Rochester Mine in Pershing County has started work following the U.S. Bureau of Land Management’s approval of the company’s plans to resume mining. Equipment was arriving on site in mid-November, and Rochester General Manager Cindy Jones said the mining fleet will begin arriving in December, with haul trucks arriving in the first quarter of the new year. The BLM approved the project in late October, and national BLM Director Bob Abbey was in Reno for the announcement. “The BLM is pleased to complete the environmental analysis and decision record that will allow for the expansion,” Abbey said. “This proposed project will create new jobs and help
“We have been working together for over a year to make this mine expansion possible. These highpaying jobs will make a big difference to families in northern Nevada.” — Sen. Harry Reid, D-Nev.
stimulate economical support for the county and local community.” The BLM action allows Rochester to begin mining silver and gold again, which means new jobs. The silver mine
20 miles northeast of Lovelock laid off workers and stopped mining in 2007. The expansion will add roughly 200 jobs, according to Coeur’s announcement on the project approval. Rochester held its first job fair the same week as the BLM approved the project. “We had a super response to our Career Fair with over 500 applications/resumes. We are striving to hire locally whenever possible,” Jones said. “Some of the applicants are those wanting to return home to Nevada,” she said. “Now, we are in the process of reviewing all the applications, arranging interviews, and hiring,” Jones said. Although the mining ended in 2007, Rochester has been producing silver and gold through residual leaching since that time. Coeur reported Rochester produced 491,433 ounces of silver and 1,935
ounces of gold in the third quarter of this year at a cash operating cost of $5.10 per ounce. The 2010 figures are down from last year. The mine produced 528,037 ounces of silver and 3,097 ounces of gold in the 2009 quarter at a cash operating cost of $2.77 per ounce. Idaho-based Coeur stated it expects the project to add several years to Rochester’s mine life and put silver production at more than 24 million ounces a year and annual gold production at roughly 35,000 ounces. The mine has produced more than 125 million ounces of silver and 1 million ounces of gold since opening in 1986, according to Coeur. Coeur also reported capital costs for expanding Rochester are estimated at $29 million in 2011 and $38 million over See ROCHESTER, 24
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Rochester ... Continued from page 23 the life of the project. “The company extends its appreciation to the BLM, the State of Nevada and the Nevada congressional delegation for its support and assistance, which will help lead to the creation of 200 new jobs at Rochester,” Coeur Chairman, President and Chief Executive Officer Dennis Wheeler stated in the company’s thirdquarter earnings report. Federal, state and local officials supported the planned project to create jobs, and the BLM agreed to do an environmental assessment rather than an environmental impact statement on the project, which shortened the permitting time. Nevada Mining Association President Tim Crowley said approval of the Rochester expansion is an example of “people working very aggressively to get this project up and running. They should be proud of the way they expedited this to put people back to work.” He said Nevada’s congressional delegation, Gov. Jim Gibbons, Abbey and the BLM “rolled up their sleeves” to move as
quick as they could with the project approval while still meeting BLM’s National Environmental Policy Act obligations. “The Coeur Rochester Mine is vital to the economic stability of Pershing County,” said Sen. John Ensign, R-Nev. “People across Nevada are grappling with record-high unemployment rates, but in counties such as Pershing where one industry is the main source of employment, high unemployment is crippling.” “We have been working together for over a year to make this mine expansion possible,” Sen. Harry Reid, D-Nev., said. “These high-paying jobs will make a big difference to families in northern Nevada.” Coeur forecasts the mine to be producing new ounces from the expansion project in the fourth quarter of next year. Rochester also resumed exploration this year, with more drilling planned in 2011. Coeur stated in its earnings report that the first phase of a drilling program
24 MINING QUARTERLY, Elko, Nevada WINTER 2010
focused on new targets on a major structural corridor between the Rochester and Nevada Packard satellite mine was completed in the third quarter. This was the first drilling in this area in more than a decade, Coeur reported, adding that several holes returned oregrade silver and gold mineralization. Coeur reported Rochester’s proven and probable reserves at the beginning of this year totaled 25.9 million ounces of silver and 232,000 ounces of gold, but a recently completed feasibility study on the expansion increases those amounts. The feasibility study looks at 27.6 million contained ounces of silver and 247,000 contained ounces of gold within 48.3 million leach tons at average grades of 0.57 ounces of silver per ton
and 0.005 opt gold at Rochester. The study based the reserves at a gold price of $1,205 per ounce and a silver price of $16.25 per ounce, both lower than the current price. “Finally, our Rochester silver and gold mine in Nevada is experiencing a rebirth as it moves ahead with a planned expansion of mining operations,” Wheeler said. He said in the company’s thirdquarter earnings report that Rochester would soon become a major contributor to Coeur’s production. The BLM also reported in October the agency and Nevada state agencies will continue to coordinate closely with Coeur toward development of an environmental impact statement to analyze the long-term closure and reclamation plan for Rochester. Abbey praised Coeur for working toward establishing a long-term trust to ensure that long after the mine has closed and reclamation completed, funds will be available to mitigate any unforeseen environmental problems or impacts.
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 25
Golden opportunity
Moira Smith, chief geologist for Fronteer Gold’s Nevada operations, holds a rock with gold potential that was lying along the road at the company’s Long Canyon exploration project in the Pequop Mountains.
Long Canyon a ‘company maker’ for Fronteer ADELLA HARDING Mining Quarterly Editor OASIS — Even the road cuts at Fronteer Gold’s Long Canyon Project in Elko County have gold in them, and that’s just one of the reasons Fronteer is excited about the prospects of turning Long Canyon into a gold mine. “Red is gold. The road cuts have red so you can tell gold is in there,” said Moira Smith, Fronteer’s chief geologist for Nevada projects. That enthusiasm about Long Canyon in the Pequop Mountains led to the company’s recent deal to acquire AuEx Ventures, giving Fronteer 100 percent control of Long Canyon and AuEx’s interest in two additional projects in the Pequops. The excitement about Long Canyon’s potential also led the company to close a
deal to acquire the Big Springs Ranch that is in and around Fronteer’s mineral holdings for the Long Canyon Project. “Long Canyon is viewed a ‘companymaker’ for Fronteer Gold, with its combination of high grades, simple metallurgy, resource upside and favorable jurisdiction,” Fronteer President and Chief Executive Officer Mark O’Dea said in a November announcement on exploration results. Although Fronteer’s $12 million purchase of the ranch closed, Jim Lincoln, president of Fronteer USA and vice president of operations, said in November there were still outstanding water issues that he hoped would be resolved shortly. Fronteer leases ranch operations to Randy Stowell. Lincoln said owning the ranch means
Ross Andreson Mining Quarterly
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Long Canyon ... Continued from page 26 having “our own stakeholder neighbor,” and that will help with advancement of Long Canyon. “And we can use small amounts of the surface for mining.” Fronteer announced in November that new assay results show exploration drilling at Long Canyon continues to intersect wide intervals of high-grade gold. Fronteer’s latest results are for the northeastern portion of the Long Canyon property, and Chief Operating Officer Troy Fierro said the deposit remains open in all directions. “It’s expanding, and the grade is getting higher in the area to the northeast,” he said. As an example of the latest findings, one hole showed 129 feet of 0.37 ounces per ton of gold, including 50 feet of 0.59 opt. Even before the latest results, Smith was enthusiastic about Long Canyon’s gold potential as she led a tour in October. “It’s been a long time since anyone has found anything like this,” Smith said. The Long Canyon deposit’s current resource is roughly 1.2 million ounces of
measured indicated and inferred gold based on 2009 drilling, but there has been a lot of drilling since then. There were six drill rigs on site in November. The drilling is defining and expanding the ore body as Fronteer people gather data for a prefeasibility study that the company plans to do while the U.S. Bureau of Land Management works on a draft environmental impact statement on the proposed mine. “We can do the feasibility study parallel with the EIS process,” Smith said. Fierro said the drill program would continue to mid-December and one or two drill rigs would be working again in January in the lower reaches of the Pequop Mountains. “Next year, we’ll continue to do additional drilling to update resources, update the preliminary economic assessment and start the prefeasibility study,” he said. “We will spend $20 million to $25 million next year. Our hope is to be in the permitting cycle next year. A lot of what we’re doing today is needed for permitting,” Fierro said. The company plans 230,000 feet of
Ross Andreson/Mining Quarterly
Moira Smith, chief geologist for Fronteer Gold’s Nevada projects, and Kent Samuelson, geology manager for Fronteer’s Long Canyon exploration project, point out project details at the office trailer at Oasis. drilling in 2011. Fronteer is an exploration company with Long Canyon as its key project, but Fronteer hopes to become a mining company. “Most of us at Fronteer have worked for mining companies. We’ve all been in the real mining business. We know what it’s
all about. We want to take it along that path to become a mine operator,” Lincoln said. Fronteer’s two other key Nevada projects are Northumberland and Sandman, See LONG CANYON, 28
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Fronteer Gold geologist Randy Hannink shows a core sample from drilling at the Long Canyon exploration project in Elko County in early October. The core is sorted and logged in trailers at Oasis.
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Continued from page 27 which Newmont Mining Corp. is exploring in an earn-in agreement with Fronteer. “Our primary focus is Long Canyon. It’s a high quality asset that will always be the priority until it is up and running and in production,” Fierro said. “Long Canyon is such a great asset. It won’t be as sensitive to the gold price as the other projects.” Long Canyon’s gold is near the surface, and the ore is oxide so it will be easy to process, and the mine is near infrastructure, he said. The project site is near Interstate 80 off the Oasis exit. “We’re happy with the progress of all three assets and look forward to more progress next year,” Fierro said. The Long Canyon land package that expanded with acquisition of the Big Springs Ranch and AuEx Venture’s properties in the Pequops includes public and private land and mineral rights under public land. “We’re also looking at options for what
we can do on private land. That gives us a lot more flexibility. Nobody wants to get it into production more than we do,” Smith said. The BLM has to be involved with the south end of the project, but Smith said Fronteer can site “a lot of structure on private land,” which would involve Nevada Division of Environmental Protection permitting. The deal valued at $265 million with AuEx closed on Nov. 1, and Fronteer reported a week later that former AuEx President and CEO Ronald Parratt has since been named to the Fronteer board. Parratt is now head of a new exploration company called Renaissance Gold that was spun off in the deal with Fronteer, which only acquired AuEx projects in the Pequop Mountains. Renaissance holds the remaining former AuEx projects. At Long Canyon, Moira said in October that Fronteer was doing hydrological See LONG CANYON, 29
Long Canyon ... Continued from page 28 work, as well as exploration drilling. “Now, we are fast-tracking two large wells to do a full hydrology study,” she said. Smith said 2011 will be a big year for Fronteer with “so many studies to do” in preparation for the planned open pit mine. Smith said they have even looked at an underground mine because “some gold intercepts point to underground.” The BLM, NDEP and the State Engineer’s Office will want the hydrology data and a proposed water budget for the mine. Smith said Fronteer also is working with West Wendover, which gets its water from the area via a pipeline that brings water from the base of the Pequop Mountains to the city. “West Wendover was involved with the design and approved our hydrology testing,” she said. The water source is on a small parcel that the city has an easement for on the Big Springs Ranch, and the city also has a well field at Shafter. Smith said Fronteer drilled a replacement well in the Shafter area to provide an alternative water source for the city. The city had five wells and Fronteer’s made six. She said there are more than 20 miles of pipeline. Fronteer also is studying the metallurgy of the ore at
Ross Andreson/Mining Quarterly
Fronteer Gold Chief Geologist for Nevada Moira Smith shows from thumb to thumb the approximate width of the Long Canyon area that may be mined in the Pequop Mountains of Elko County. Long Canyon to decide how best to process the ore. “With the price of gold so high, even at 80 percent to 90 percent recovery, we would be leaving a lot of material behind so we are looking at crushing or even milling on higher-grade portions of the deposit,” Smith said, adding that Fronteer plans to process the ore on site,
rather than toll milling at another company’s facilities. All the ore is oxide that is easy to process, even with run-of-mine leaching, according to Fronteer. Fronteer, which has a Nevada office in Elko, also has a See LONG CANYON, 30
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Fronteer loses $21 million VANCOUVER — Fronteer Gold reported a net loss of nearly $21 million, or 17.8 cents per share, in the third quarter, compared with earnings of $11.8 million, or 9.9 cents per share, in the 2009 quarter. The loss in the 2010 quarter was mainly due to a more than $30 million writedown on the company’s Zaca Project in California, according to the earnings report. Fronteer also reported the company had $161.2 million cash on hand at the end of the third quarter, up from $145.6 million at the end of 2009.
Long Canyon ... Continued from page 29 work station at Oasis and a warehouse in Wells to store core samples from drilling at Long Canyon. Lincoln said Fronteer has roughly 25 people working on Long Canyon, as well as consultants. At the Oasis site, Fronteer has three trailers, two filled with core to be logged from Long Canyon drilling, and usually 10 people work out of that location to manage the exploration work, handle the core and plot the deposit.
Kent Samuelson, the manager of geology for Long Canyon, said he spends all of his time working out of Oasis. Long Canyon is roughly four miles south of the Oasis exit. “It all happens here,” Smith said. The drilling companies have about 30 people working at Long Canyon, including the water truck drivers who fill up at Oasis to bring water to the rigs. Major Drilling is doing the diamond, or core, drilling and Boart Longyear is doing the rotary drilling and monitor wells.
30 MINING QUARTERLY, Elko, Nevada WINTER 2010
Renaissance Gold holds ex-AuEx properties ELKO — Renaissance Gold Inc. is now in business, after the closure of a deal with Fronteer Gold that gave Fronteer 100 percent of the Long Canyon exploration project. “The deal’s closed. I’m pinching myself that it really happened,” Ron Parratt, the president and chief executive officer of Renaissance and former chief executive officer of AuEx Ventures, said after the arrangement was finalized. Fronteer named him to its board of directors as part of the deal. AuEx had held 49 percent of Long Canyon, with Fronteer owning the remaining 51 percent. Fronteer also now owns the 49 percent share AuEx held at the West Pequop Project that Agnico Eagle is exploring, as well as ownership of the early-stage South Pequop Project. Golden Dory Resources Inc. is the joint venture partner in South Pequop. Fronteer acquired AuEx in an arrange-
ment valued at more than $265 million. AuEx shareholders received 0.645 of a Fronteer Gold common share, 65 cents in cash and 0.5 of a share in Renaissance Gold for each AuEx share held. The former AuEx shareholders now hold 18.6 percent of Fronteer, and Fronteer owns 9.9 percent of Renaissance. The new company also started up with nearly $5 million, while Fronteer gained AuEx’s assets in the Pequop Mountains. All of the rest of the former AuEx projects are now in the hands of the spun-off Renaissance exploration company based in Reno. “For us, it’s just continuing business. We have the same employees, so we can hit the ground running, and just change the sign on the door,” Parratt said. Renaissance has 10 regular employees and five contract employees, including two in South America, he said.
Fronteer heads underground at Northumberland ADELLA HARDING Mining Quarterly Editor KINGSTON — Fronteer Gold is going underground to explore for gold at the Northumberland Project near the small community of Kingston in Nevada, and the company expects blasting for the portal to begin this month. “The contractor is mobilized on site. It’s very close,” Jim Lincoln, president of Fronteer USA and vice president of operations for Vancouver-based Fronteer, said in November. Fronteer awarded the contract for underground development to J.S. Redpath Corp. Fronteer Chief Operating Officer Troy Fierro said the contractor was preparing the surface “before they can blast into the side of the hill” to start the portal. “The first round should be shot in December.” “I'm pretty optimistic this will be producing in a couple of years,” said Fronteer’s senior engineer, James Ashton,
Jim Ashton, senior engineer for Fronteer Gold, talks in early October about the new exploration portal about to start at the Northumberland Project. The grader is just to the left of the portal location. Ross Andreson Mining Quarterly
See FRONTEER, 32
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 31
Fronteer ... Continued from page 31 at the project site north of the Round Mountain Mine and southeast of the town of Austin in October. “The decline will answer a lot of questions.” The portal is in a location where the Zanzibar deposit can best be reached, rather than into a wall in one of the two open pits mined at Northumberland in the 1980s. A Fronteer crew already did the initial site work for the portal and decline that will go down 1,300 feet in the first phase to reach mineralization. Plans call for moving 160,000 tons of earth, according to Ashton. He said Redpath expected to have 17 people on site running 24 hours a day, seven days a week with three-man crews. Fronteer plans to drill underground to better outline high-grade mineralization discovered from surface drilling, and the bulk sampling will help the company determine how best to process the ore reached from underground, if it decides to mine at Northumberland. Fronteer hopes to develop both underground and open pit mining operations at
Northumberland. The company has found oxide, transitional and refractory ores on site, but the 1980s production came only from oxide ores leached on site. The earlier owners, Cyprus and Western States Minerals, mined the two open pits in the mountains near the little town of Kingston. Ashton said Western States stopped leaching the Northumberland ore in 1991. The portal is at the 8,290-foot elevation. Fronteer already has permits in place from the Nevada Division of Environmental Protection to develop the decline. The project site is on private property. “The permit allows mining up to 120,000 tons of ore at 18,500 tons per year,” Ashton said during a tour. The 120,000 tons is over the life of the project, which is considered a five-year project. NDEP’s permit is through Dec. 29, 2014, according to Fronteer. Fronteer would mine at least 720,000 tons if the mine goes into production, Ashton said.
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Steve Shappert, a self-employed geotechnician, carries a box of core fresh from a drilling rig at Fronteer Gold’s Northumberland exploration project in early October. He said starting surface mining would take longer than getting the underground started, with permits needed for leach pads and waste dumps still in the planning stages.
Fronteer would mine the Main and Chipmunk pits and extend mining to take out one of the old leach pads. The two See FRONTEER, 33
Fronteer ... Continued from page 32 pits would become one. “It ends up being quite a large pit,” Ashton said. The company also reported core drilling results at Northumberland extended a second high-grade gold and silver zone at the 100 percent-owned project site where mining ended in 1990. Zanzibar results The results announced for Northumberland’s Zanzibar deposit included one hole with 0.299 ounces per ton of gold and 1.254 opt of silver over 23 feet, including 0.544 opt of gold and 2.836 opt of silver over 8 feet. Another hole showed 0.219 opt of gold and 0.931 opt of silver over 67.5 feet, including 0.422 opt of gold and 0.645 opt of silver over 9.54 feet. Results of a third hole showing 0.229 opt of gold and 0.291 opt silver over 37.5 feet, including 0.405 opt of gold and 0.724 opt silver over 7.5 feet. These results were from the nine-hole exploration program designed to test mineralization, and another sevenhole program is targeting the shallow area of the oxide and transitional deposit to obtain core for metallurgical testing, according to Fronteer. The core from drilling goes first to a building down the
Ross Andreson/Mining Quarterly
See FRONTEER, 34
Brian Goss of Rangefront Consulting LLC of Elko wets and brushes core just brought into the warehouse from a drill rig at Fronteer Gold’s Northumberland exploration project in early October. Goss said he wets the core “to see it better.”
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 33
Fronteer ... Continued from page 33 mountain from Northumberland, on the site where earlier companies had their office and processing facilities. A leach pad near the buildings was reclaimed around 1990, Ashton said. He said there were four leach pads on site from the earlier mining. The one was reclaimed, two are in the process of reclamation and the fourth will be mined out, if Fronteer develops the open pit mine as planned. “I spend most of my time out here,” Ashton said, who worked for Cyprus from 1982 to 1985 when Western State Minerals acquired Northumberland and mined from 1986 to 1990. He said Western States stopped leaching at Northumberland in 1991. “I always thought it would be an underground mine,” he said. If all goes as planned, Fronteer hopes to be in production at Northumberland in 2014, according to Glen Edwards, director of communications for Fronteer. The company reported in its thirdquarter earnings report it plans to do a preliminary economic assessment at
Fronteer Gold’s senior engineer, James Ashton, looks out over the old pit at Fronteer’s Northumberland exploration project north of the Round Mountain Mine in Nevada.
Northumberland after completion of the underground development work. Although the pits at Northumberland come from mining in the 1980s and early 1990s, the area has historic mining, as well. Old mill foundations from before World War II are still visible on the road to the mine from a gold-mining operation. Historically, Northumberland was a small silver producer, after the first silver discovery in 1866, according to historic accounts. Sandman Northumberland is one of three key Nevada projects, including Long Canyon in Elko County that the company hopes to develop into an open pit mine and the Sandman Project in Humboldt County that Newmont Mining Corp. is exploring in an agreement with Fronteer. Newmont is due to make a production decision on Sandman in June 2011. Fronteer stated in its third-quarter earnings report that drilling at the North Hill deposit at Sandman returned multiple intervals of near-surface oxide gold,
Submitted
and assay results for a new propertywide drilling program were expected in the fourth quarter. The company also has the Michelin uranium project in Labrador, Canada, and he said the company plans to “seek out a transaction” for that property, with the proceeds to be used to fund the gold projects in Nevada. Another project in Turkey also could provide funds. That project, Halilaga, Is operated by Tech Resources. Fronteer holds a 40 percent share. The company also entered into an
agreement in late October to sell 10 exploration properties to Bridgeport Ventures Inc. in a deal valued at more than $5.5 million. The properties are mainly from the Nevada Eagle portfolio Fronteer acquired in the second quarter. Fronteer started exploration in Nevada in 2007 when the company acquired New West Gold. Newmont had a joint venture with New West, and Fronteer then gained 100 percent ownership of Northumberland, and Newmont earned into Sandman, according to Edwards.
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Hollister hits extremely high-grade gold ore ADELLA HARDING Mining Quarterly Editor ELKO — Great Basin Gold Ltd. found gold grades as high as 2,560.4 ounces per ton during trial mining at the Hollister underground mine in northwestern Elko County. “It’s exciting for us. It’s very, very fine gold. Some of its visible,” Lee Morrison, manager of human resources for the company’s Nevada operations, said in mid-November. “We’re verifying the results now at an independent lab, but obviously the miners know and people in the area know about it,” he said. “It’s in the very early stages. We don’t know what we have. We have the tiger by the tail and will see where it goes,” Morrison said. Great Basin Gold announced the discovery of high grades of gold and silver because the word on the find was out locally, but the company cautioned investors on their interpretation of the findings. Trial mining in the Blanket Zone of the underground mine above the main Clementine vein No. 18 encountered the bonanza grades over a strike distance of 170 feet, according to Great Basin Gold’s announcement. Channel sampling taken every 10 feet gave values ranging from a low of 1.5 ounces per ton of gold and 3.2 ounces per ton of silver to the highs of 2,560.4 opt of gold and 1,829.8 opt of silver over channel widths from 0.3 feet to 2 feet. The company reported the current stope is continuously mineralized along its 180-foot length. Great Basin Gold stated that diluted over 3.5 feet the average sample values were 66.4 opt of gold and 78.5 opt of silver. As a comparison, gold mining grades generally average less than an ounce per ton, although they go higher, but rarely into the hundreds and thousands of ounces per ton. Great Basin Gold reported muck piles also were sampled, and the fully diluted value of the muck samples taken from the slope to date averages 22.3 opt of gold and 23.4 opt of silver. “In the past, we have identified the
Channel sampling taken every 10 feet gave values ranging from a low of 1.5 ounces per ton of gold to a high of 2,560.4 opt of gold, compared with most mines where ore generally contains less than one ounce of gold per ton. Blanket Zone as a target area worth exploring, and trial mining at the top of vein No. 18 has turned out to be a great way to test the prospective nature of this style of mineralization,” said Ferdi Dippenaar, president and chief executive officer of Great Basin Gold. “Although we have encountered a limited amount of this high grade material through trial stoping, drilling is under way to determine the full extent of mineralization,” he said in a statement. “Based on our experience in the Main Clementine vein No. 18, we are evaluating the possibility of returning to previously stoped out areas above the Gwenivere high grade veins,” Dippenaar stated. The gold in the Blanket Zone is very fine disseminated gold, but with the grade so high, Hollister has upgraded security, Morrison said. Trial mining continues while Hollister awaits U.S. Bureau of Land Management approval to become a full production mine. The BLM is currently working on a draft environmental impact statement on Hollister. The ore from the trial mining is processed at Great Basin Gold’s Esmeralda mill near Hawthorne, and Morrison said the mill is “doing quite well,” averaging 350 tons a day as planned. Great Basin’s latest mineral resource estimate for Hollister includes measured and indicated resources totaling 1.64 million gold equivalent ounces grading 1.3 opt for gold and 10.3 opt for silver. Great Basin also reported a hallmark at its new Burnstone Mine in South Africa. The company stated in early November that the Burnstone Metallurgical Plant held its first gold pour on Oct. 31.
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 35
Round Mountain expansion continues ADELLA HARDING Mining Quarterly Editor ELKO — Round Mountain Gold Corp. in Nye County is working on expanding the current open pit operations, and a road to the new Gold Hill site will be starting soon. According to Round Mountain, the Phase H expansion at the existing Round Mountain open pit is under way and the completion date is April of next year. This project includes moving the conveyor system to the primary crusher. Round Mountain Gold also is moving ahead with mining in the Fairview area southeast of the Round Mountain Pit, after relocating a bat population and placing bat grates at the openings of any abandoned mine shafts in the area, states the Valley View, the Round Mountain Gold newsletter. The Gold Hill site roughly five miles from the Round Mountain facilities will be mined using Round Mountain crews and equipment and be connected to the main mine property via the new road expected to
be completed by the end of the first quarter of next year. Round Mountain was able to start the work in the summer following U.S. Bureau of Land Management approval in early July, but there is an appeal of the project pending before the Interior Board of Land Appeals. “We still haven’t heard the reasons why the Great Basin Resource Watch filed an appeal with the IBLA,” Chris Worthington of the Battle Mountain BLM office said in November. Great Basin Resource Watch and the Western Shoshone Defense Project filed their appeal in July, and Audrey Casey of Round Mountain also filed an appeal, according to earlier reports. Round Mountain Gold Corp. is owned by partners Kinross Gold Corp. and Barrick Gold Corp. Kinross is the mine operator. Round Mountain Gold also owns and operates facilities on the site and in Hadley Subdivision for employees, including a new daycare center under construction in the subdivision. The 6,000-square-foot facility will
replace the existing center that has only 2,800 square feet, according to Valley View. Kinross Gold’s third-quarter production included 48,477 ounces of gold from Round Mountain for its 50 percent share of the operation, compared with 59,375 ounces in the 2009 third quarter. The cost of sales was up at $647 per ounce from $529 per ounce in the 2009 quarter. Companywide, Kinross Gold announced net earnings of $346.9 million, or 45 cents per share, in the third quarter, helped by the high price of gold. The 2010 quarterly income compared with a net loss of $21.5 million, or 3 cents per share, in the 2009 quarter. Toronto-based Kinross also reported adjusted net earnings were $123.6 million, or 17 cents per share, including the impact of acquiring Red Back Mining. That’s a jump over of the adjusted earnings of $1.7 million, or zero cents, in the third quarter of last year. Revenue for the quarter was a record $735.5 million, compared with $582.3 mil-
lion last year, with the average realized gold price was $1,190 per ounce, up from $956 per ounce in the third quarter of 2009. Gold production was up 7 percent to 575,065 gold equivalent ounces in the quarter, including 20,238 ounces from the former Red Back assets in West Africa, and cost of sales was $508 per ounce, not counting the impact of the Red Back acquisition. Kinross reported that with Red Back impact, the cost of production was $517 per gold equivalent ounce. Gold costs last year averaged $517 per ounce in the third quarter, up from $464 in the 2009 quarter. Kinross acquired Red Back and its African assets on Sept. 17 in a roughly $7 billion deal, and the company reported an aggressive exploration program is now under way, with 23 drilling rigs expected to be busy on site by the end of the year. Kinross also raised its estimate for worldwide gold production this year to between 2.3 million and 2.35 million gold equivalent ounces, up from the earlier forecast of 2.2 million ounces.
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Staffing Services Agencies work closely with mining industry JU LIE W OO TTO N and DANIELLE SWITALSKI Mining Quarterly ELKO — Staffing services throughout northeastern Nevada work hand in hand with the mining industry, providing job seekers with employment and clients with potential employees. American Staffing Inc., Geotemps Inc., Carlin Trend Mining Supplies & Services and Price Mine Service work throughout Nevada to keep the right people at the right mining jobs. Despite the number of staffing agencies working closely with the mining industry, representatives from American Staffing and Price Mine Service both said mines are hiring conservatively, although they have an influx of people looking for work at mines. American Staffing Inc. More than 50 percent of American Staffing’s clients are either mines or mine contractors, particularly in the Elko and Winnemucca areas, said Shaun Dominguez, American Staffing district manager. One of American Staffing’s biggest clients is Cat Logistics’ warehouse, which provides materials to mine sites. Dominguez said the majority of people who come to
Ross Andreson/Mining Quarterly
American Staffing coordinators Mary Jones, left, and Aubree Anderson talk about the job application process at their offices at 705 Railroad St. in Elko in mid-November. their office are looking for work at the mines, which he attributes to the common knowledge that Elko’s economy is better than a lot of communities throughout Nevada and the nation. “A lot of people have this dream of coming to Elko and getting work, but the mines are hiring very conservatively now,” Dominguez said. He said the times have changed since the 1990s when mines hired everyone and even paid for workers to move to the area with signing bonuses. Now, the mines are looking for experience and specific skills. “It’s hard to place them when they don’t have the experience,” Dominguez said. American Staffing has clients in a broad range of
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fields, from the mining industry to clerical or accounting work. Dominguez said they will place any kind of employee in any industry. In order to make sure applicants are placed in the proper job and their clients get the right employee, American Staffing meets with each applicant face to face. In order to get placed at a job that makes a good fit, applicants must come to the office to fill out a profile and go through an orientation. Although Dominguez has not seen a big change in the number of clients and applicants, he said the mines have been opening up employment slightly as some of See STAFFING, 39
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38 MINING QUARTERLY, Elko, Nevada WINTER 2010
Staffing ... Continued from page 38 the mines have started to utilize their services more this summer. “In the last two years it’s been steady, not gung ho, but a steady stream,” Dominguez said. In the past 10 months, American Staffing has been turning out better numbers than they’ve seen in years, said Dominguez. He attributes this in part to the company’s focus on serving the mining community. To apply, applicants should visit the office in person. American Staffing is located at 705 Railroad St. There is a daily orientation for new applicants at 12:45 p.m. Monday through Thursday. For more information, call 738-1595. Price Mine Service “Probably 85 percent of the people who come through our doors are looking for positions in mines,” said Cheri Gallio, manager of Price Mine Service. She said some people who come from outside of Elko County think it’s easy to
find a mining job without any experience. “We try to guide them in the right direction,” she said. Gallio said there used to be too many mining jobs and not enough applicants, but now there are too many applicants and not as many jobs. Price Mine Service helps companies find employees from general laborers to managers. Gallio said the agency also helps companies that need temporary manpower in order to get projects done. Companies use the agency as a stepping stone to find employees who will be a good match with their business, such as drivers for subcontracting companies. “Companies use our services to make sure the employee is the right fit for them,” Gallio said. In addition to working with mining companies, Gallio said Price Mine Service works with businesses that make products needed by mines. She said the company tries to find positions for applicants, even at busi-
nesses that aren’t Price Mine Service customers. Price Mine Service’s office is open 8 a.m.-5 p.m. Monday through Friday at 1302 Mountain City Highway, Suite 102B, near the Family Dollar Store. Gallio said applicants should bring in their resume, as well as any training or Mine Safety and Health Administration certificates. She said when company representatives come into the office, they generally want to see resumes. If a candidate’s resume is already on file it saves time, she said. Price Mine Service also has offices in Price, Utah; Hotchkiss, Colo.; Craig, Colo.; Cortez, Colo.; Rock Springs, Wyo.; and Gillette, Wyo., so Gallio said Elko’s office can also help people who are looking to relocate. Geotemps Inc. Geotemps is an employment service that works throughout the nation, including Nevada, Colorado and as far away as Alaska.
The service is currently working with more than 80 different companies and has more than 300 people on assignment through its employment services. Although not all of the jobs Geotemps places people at are mining jobs, Stephanie Dmytriw, marketing director at Geotemps, said the vast majority of them are. Geotemps mostly works in natural resources. The two biggest industries Geotemps works with that are in need of employment are mining and exploration. The time of year and the area determines how many job openings they have. Currently, there are between 70 and 80 openings. Geotemps has offices in Elko and Ely that employ a variety of people at the mines. “Both offices are quite busy, and we employ quite a few folks in a lot of towns in rural Nevada,” Dmytriw said. Geotemps posts jobs on monster.com and www.geotemps.com. See STAFFING, 40
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 39
Staffing ... Continued from page 39 If people are interested in Geotemps placement services, they can apply online, e-mail or fax their resume. Dmg. Carlin Trend Mining Supplies & Service Linda Hicks from Carlin Trend Mining Supplies & Service said the company processes an average of 30 applications per month for mining jobs. “We take applications every (business) day,” she said. The Elko office, which provides temporary employment services, also has a sister office in Superior, Ariz. Between Elko’s office and the office in Arizona, there are about 75 employees. Hicks said the number of people looking for mining jobs “stays about the same.” She said a lot of people turn in applications, but many mining companies want applicants to visit the company’s office in order to apply.
Franco-Nevada nets $18M Carlin Trend Mining Supplies & Services also offers employment services for non-mining positions. “We take applications for anything and everything,” Hicks said. Once the company receives a phone call from an employer, they’ll try to find an employee for the position using applications that have been submitted. Hicks said the company also sends out a lot of claim staking crews to mine sites. In addition to staffing services, Carlin Trend Mining Supplies & Services also sells mining supplies for drilling, geology, staking and other needs, such as special orders. The company provides a soil sampling service and AutoCAD drafting. The Elko office is open 8 a.m.-5 p.m. Monday through Friday and 9 a.m.-5 p.m. Saturday at 369 Fifth St. Hicks said job applicants should come in and pick up an application to either fill out at the office or bring back later.
40 MINING QUARTERLY, Elko, Nevada WINTER 2010
ELKO — Franco-Nevada Corp. reported net income of $18 million, or 16 cents per share, in the third quarter, up from $12.3 million, or 11 cents per share, last year as higher gold prices boosted royalties. The Toronto-based company’s adjusted net income without investment gains and foreign exchange losses was $14.8 million, or 13 cents per share, compared with $7.3 million, or 7 cents per share, in the 2009 quarter. The company stated in November that its royalty revenue totaled $49 million, up 35 percent, from $36.4 million last year, including royalties on Barrick Gold Corp.’s Goldstrike Mine north of Carlin. Franco-Nevada realized $11.7 million from net profit interests and $4.5 million in cash receipts from net smelter returns from the Goldstrike in the quarter, according to the earnings report. The company’s royalty on Newmont Mining Corp.’s Gold Quarry Mine brought in $4 million, which was lower than last year because the pit wall slides
in late 2009 at Gold Quarry delayed production. Due to minimum royalty provisions, however, Franco-Nevada stated it expects to be paid for roughly 16,600 ounces of gold this year on Gold Quarry, and 13,000 of those ounces will be recorded in the fourth quarter. Franco-Nevada also reported it acquired a royalty on the northwestern portion of Barrick’s Bald Mountain Mine in Nevada for $14 million in late September and two royalties on the Tonkin Springs Project, also in Nevada, for $1.35 million. Franco-Nevada also holds a gold royalty stream on Coeur d’Alene Mines Corp.’s Palmarejo Mine in Mexico that provided $12.4 million in cash receipts in the third quarter. The company reported, however, that the British Columbia government didn’t approve Taseko Mines Ltd.’s proposed Prosperity copper and gold project. Franco-Nevada had agreed to spend $350 million for a share of gold production but hadn’t forwarded any funds.
MINING COMMENTARY
Is there a gold bubble? By J OHN DOBRA
they had on hand from selling stock divided by the amount of money they were spending per month. RENO — Recently, I have been asked Around 2000, I read that the numerous times if the current price of Price/Earnings Ratio on the S&P 500 gold is a “bubble” as in the recent (what you have to pay for a stock to get a housing “bubble” or the “dotcom dollar of earnings) was the highest it bubble” a decade ago, or the tulip had been since 1929. Some of “bubble” in Holland in the the dotcoms had P/E’s over early 1600s (Google “The 1,000 and burn rates of less Madness of Crowds” written than 18 months. I sold every by Charles Mackey in 1841). stock I owned except gold I’ve always answered no, but stocks. I did quite well, thank as the price of gold appears to you. be heading to more than But before I pat myself on $1,400 per ounce, I’m starting the back and strain my arm, I to reconsider. have to admit that I used the On Jan. 21, 1980, the London proceeds to buy … real estate. PM fix was $850 (the spot John This brings us to the recent price hit $852) then closed housing bubble, the ostensible below $740 the next day. The Dobra cause of the 2008 Wall Street average for the year was $610 meltdown, and the world and the price never got close to financial crisis. In my view, the bubble $600 again until April 2006. and all that it has brought us was a The real, inflation adjusted, price of result of government failure. gold in 1980 is equivalent to more than Government Sponsored Enterprises $2,300 in 2010 dollars. (GSE’s), Fannie Mae and Freddie Mac, Considering that the price of gold in created an enormous “moral hazard” January 1979 was in the $230 range, I leading to “liar loans,” the subprime feel quite confident in saying that there mortgage mess, bailouts, etc. was a gold price bubble in 1980. Barney Frank, D-Mass., chairman of If you had bought gold at $850 in the House Banking Committee, basi1980 and held it until today, you would cally admitted as much in a recent be seriously “under water” on that article in the Boston Globel. Barney investment. isn’t saying “Honey, I Shrunk the Kids.” If you had taken that $850 and It’s more like “Oops, I caused a global invested it in something that just financial meltdown.” increased at the rate of inflation, which But, I keep being asked, is there a gold is a poor return compared to the stock bubble now? market or bonds, you would have over If you look at the examples above and $2,300 today instead of a hunk of metal others you will find a common theme. worth almost $1,400. If you had inThere was an unrealistic belief that the vested in stocks or bonds in 1980 and price of tulip bulbs, dotcom stocks, gold got the average yield you would have and houses would go up forever. Not considerably more than $2,300. So, call even the price of whale oil or custom me skeptical on the “gold bubble” buggy whips goes up forever. theory. Now, in the case of gold in 1980 (and But, I keep being asked, is there a gold 2010), we might want to amend and bubble now? extend those remarks. I don’t really So let’s look at other, obvious, bubthink that people in 1980 or now bles for comparison. In the late 1990s thought or think that the price of gold the stock market went ballistic. The would or will go up forever. The great S&P 500, a broad-based measure of uncertainty is what appears to be a share values, went from the 250 level to massive federal debt, including trillions 1,500 around 2000. The Wall Street Journal and other publications were publishing dotcom companies’ “burn See DOBRA, 43 rate,” which was the amount of cash
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 41
QUADRA FNX MINING LTD.
Robinson generates 92% more revenue ADELLA HARDING Mining Quarterly Editor ELKO — Quadra FNX Mining Ltd.’s Robinson Mine near Ely has solved problems with old underground mine workings at the Ruth Pit that were reflected in lower copper and gold production in the third quarter. Still, Robinson generated a 92 percent increase in revenue in the third quarter for Quadra FNX because of higher copper and gold prices. Quadra FNX reported the mine brought in $46 million in operating income, compared with $24.1 million for the 2009 quarter. Vancouver-based Quadra FNX Mining Ltd. reported it now anticipates Robinson’s 2010 production will be at the lower end of the year’s targets, in the range of 115 million to 125 million pounds of copper, while gold
Robinson produced 26.7 million pounds of copper and 15,300 ounces of gold in the quarter, compared with 33.6 million pounds of copper and 21,142 ounces of gold in the third quarter of 2009. production is expected to achieve the target of 75,000 ounces. The Robinson Mine produced 26.7 million pounds of copper and 15,300 ounces of gold in the quarter, compared with 33.6 million pounds of copper and 21,142 ounces of gold in the third quarter of 2009. “We had some underground work-
42 MINING QUARTERLY, Elko, Nevada WINTER 2010
ings we had to contend with, and the grade was lower in those underground workings,” Robinson General Manager Joseph Landon said in October. He said Robinson expected a better ore grade in the old workings at the Ruth Pit based on grades in the old workings in the Liberty Pit crews earlier mined through, but “Kennecott did a better job of mining on the Ruth side.” Kennecott mined Robinson in years past, and Quadra FNX is back in the same area as it expands and deepens the Ruth Pit. “We’re now in an area pretty much out of the underground work so production should really be much better,” Landon said. Quadra FNX stated Robinson continued drilling at the bottom of the Ruth Pit in the third quarter. The drilling results and evaluation of his-
torical information indicate the old underground workings in the Ruth Pit shouldn’t further impact mining or impact 2011 production or the reserves at Ruth. “With the additional drilling completed during the third quarter, we have become more confidence that the underground workings in the Ruth Pit at Robinson will not impact our shortterm production outlook or our reserve base negatively,” Quadra FNX President and Chief Executive Officer Paul Blythe said in the production announcement. The announcement stated Robinson is expected to mine higher grades and softer material in the fourth quarter from the Ruth Pit, offsetting the impact of an unscheduled three-day mill shut down to repair a 200-foot See ROBINSON, 43
Robinson ... Continued from page 42 faulty conveyor belt this month. Quadra FNX also reported Robinson processed ore from both the Ruth and Veteran open pits during the quarter, and head grades improved from the second quarter. The higher grades were partially offset, however, by lower throughput at the mill resulting from harder and more abrasive ore at the bottom of Veteran. Companywide, Quadra FNX reported it produced 57 million pounds of copper and 31,800 ounces of gold in the third quarter, including production from operations acquired in the FNX merger. The company also reported net earnings of $37.2 million, or 20 cents per share, for the third quarter on record revenue that rose 186 percent to $259.1 billion due to higher copper prices and because of the merger of Quadra and FNX. The net earnings compare with $14.7 million, or 15 cents per share, in the third quarter of last year, before
Dobra ...
Quadra and FNX merged in May. Revenue was $90.7 million in the 2009 quarter. Adjusted earnings that exclude the impact of derivative gains, gains and losses on marketable securities and investments, merger costs and related tax adjustments totaled $42 million, or 22 cents per share, according to this week’s Quadra FNX earnings report. The revenue was on the sale of 56.8 million pounds of copper at an average realized price of $3.52 per pound, compared with 27.6 million pounds at a
price of $2.65 per pound last year, and on the sale of 33,500 ounces of precious metals in the third quarter. Quadra produced 44.3 million pounds of copper and 21,142 ounces of gold in the third quarter of last year before the merger. Quadra FNX reported the Carlota Mine in Arizona produced 7.3 million pounds of copper, and the Franke Mine in Chile produced 10.1 million pounds of copper. The Podolsky operation in Sudbury, Ontario, produced 5.4 million pounds of copper and Morrison produced 6.3 million pounds, while the Levack Complex, excluding Morrison, produced 1.2 million pounds of copper. The Podolsky operation produced 5,400 ounces of precious metals, while Morrison produced 3,000 ounces of precious metals and Levack produced 3,000 ounces, according to the production announcement. Morrison reached commercial production on Sept. 1, but pre-production ore is counted in the totals.
Continued from page 41 of dollars in unfunded liabilities for Social Security, state and local pensions, Medicare, Medicaid, Obamacare, etc., massive trade deficits and a declining dollar. Plain and simple, it’s Washington that is driving the price of gold. So the issue isn’t whether gold will go up forever, it’s whether Washington can be brought under control. And there are obviously some doubters. And it’s not a Democrat or Republican thing. They have all proven to be profligate spenders. 1999 Economics Nobel Prize winner Robert Mundell recently said that the price of gold is a measure of inflationary expectations. That is uncontroversial. He also said that he thought gold was “overbought.” We’ll see about that. John Dobra is director of the Natural Resource Industry Institute and associate professor of economics at the University of Nevada, Reno.
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 43
Marigold steps up exploration drilling ADELLA HARDING Mining Quarterly Editor VALMY — Marigold Mine is exploring for more gold and defining current deposits while also continuing facility expansions. “We’re doing a significant amount of exploration and development drilling. There was always the issue that Marigold was under-drilled,” said General Manager Duane Peck. He said Marigold’s owners will have invested $13 million by the end of this year on exploration and development drilling, “giving us a higher degree of confidence” in ore estimates and identifying targets for more exploration work. “We’re also doing soil sampling and geophysics,” he said. Goldcorp Inc. operates Marigold and is the two-thirds owner. Barrick Gold of North America owns the remaining one third of the mine. Boart Longyear had three drill rigs operating on site the first day of November, but there were as many as five on site this year. While the drilling continues, crews are mining ore in Phase 7 of the Basalt Pit, and plans are under way to begin the permitting for a new mining area just north of Basalt, called the Mega Pit. Peck said they hope to be mining the Mega Pit in 2012, so Marigold will be working with the U.S Bureau of Land Management’s Winnemucca office on the proposal. Marigold also plans to start mining in the Target 2 area in 2011, but that project is already permitted, Peck said. Goldcorp reported Marigold produced 16,800 ounces of gold in the third quarter, down from 29,900 ounces in the 2009 quarter, for Goldcorp’s two-thirds share of the mine. Cash costs were up to $817 per ounce at Marigold, compared with $542 per ounce in the 2009 third quarter because of few ounces stacked on the leach pad and increased costs because of a larger fleet of haul trucks, according to the earnings report. The third-quarter production from Phase 7 was down, with the ore grade lower than expected, Peck said, but Goldcorp reported production is expected to improve as more ore is stacked on the leach pads and mining goes deeper
Ross Anderson/Mining Quarterly
A 320-ton Hitachi haul truck carries a load of waste rock to be dumped as backfill at the Basalt Pit at the Marigold Mine operated by Goldcorp Inc. in Humboldt County in early November.
See MARIGOLD, 45
44 MINING QUARTERLY, Elko, Nevada WINTER 2010
Theron Scherer of Battle Mountain drives this 320-ton Hitachi haul truck at the Marigold Mine near Valmy. “It is easy to forget how big it is until you see light vehicles go by,” he said. He was at the Goldstrike Mine north of Carlin for a couple of years before joining Marigold. Earlier, Scherer was a U.S. Bureau of Land Management firefighter. Ross Andreson Mining Quarterly
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LEFT: Lonny McCoy of Winnemucca shows how tape is used for loading blast holes with explosives at the Marigold Mine near Valmy. The tape is dropped 12 feet into the 35-foot holes. The explosives fill up 23 of the 35 feet. RIGHT: Tony Perez fills a blast hole with explosives at the Marigold Mine near Valmy in early November. Southwest Energy supplies the ammonium nitrate solution for the blasts that loosen rock for mining.Ted Sweeney, who works for Southwest, is driving the truck. Ross Andreson/Mining Quarterly
Marigold ... Continued from page 44 into Basalt Phase 7. The waste rock from the mining is going into an earlier-mined area of Basalt as backfill, and the adjacent Antler Pit is roughly half backfilled. New truck shop On the construction side of the operation, a new wash bay for haul trucks is complete, and work is under way on a new four-bay shop that will allow mechanics to work inside on the 320-ton haul trucks that can’t fit inside the old shop still in use. “The truck shop will be done in April,” Peck said. “We completed the wash bay in the summer.” The enclosed wash day is shaving hours off the time it takes to wash a giant haul truck before it goes to the shop for
The Hitachi hydraulic shovel fills one 320-ton Hitachi haul truck as two other trucks line up for their turn at the Marigold Mine operated by Goldcorp Inc. near Valmy in early November. A blast drill rig is in the right foreground. Ross Andreson Mining Quarterly
See MARIGOLD, 46
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 45
Marigold ... Continued from page 45 maintenance, according to Mine Operations Manager Mike Iannacchione. “It cuts the time from eight hours to three hours to wash one 320-ton truck,” he said. Iannacchione also said the plans for the shop allow for future expansion, and the next construction phase will be for a new warehouse adjacent to the shop. Layton Construction out of Salt Lake City is the general contractor on the shop. Peck said there are 275 people on the payroll and roughly 30 contractors on site, and “we’re still hiring to get us up to 290.” The most difficult niches to fill are the senior level engineers, metallurgists, geotechnical and senior mechanical engineers, said William Lawton, the human resources manager. “Many have retired and the younger people haven’t gotten that experience yet,” he said, adding that Marigold has Ross Andreson/Mining Quarterly
Marigold Mine Operations Manager Mike Iannacchione explains the new shop project under way at the mine site near Valmy. In middle is the new wash bay, and to the right is the shop site.
See MARIGOLD, 47
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Marigold ... Continued from page 46 brought in people from Goldcorp operations in Mexico to fill vacancies, but getting visas is difficult. He said he had to bring them in on North American Free Trade Agreement visas rather than in-company transfer visas, and the “resistance in U.S. immigration is very cumbersome.” Marigold now has a dozen 320-ton Hitachi haul trucks in operation to move more material and offer more fuel efficiency, Peck said. The mine also still runs seven 190-ton Caterpillar haul trucks. Iannacchione said Marigold continues efforts to increase the life of the tires on haul trucks, including keep the haul roads graded. “The tire life is part of bonus incentives,” he said. Marigold tries to keep a six-month supply of the giant truck tires on hand and would like to stockpile more, Iannacchione said, noting that there are reports there could be another tire shortage in 2012. “With all the commodities going strong again, there is not enough supply,”
he said. There was a shortage a few years ago that had mines scrambling to find tires for their trucks. Iannacchione also said during a mine tour that Marigold plans to add a training simulator in December for truck drivers, and plans are under way to start the first phase of a dispatch system for the haul trucks and shovels in December, but the system won’t be in operation on the trucks until next year. Blasting away At the Basalt Pit, a blasting crew was loading holes with explosives for a blast the following day to loosen the rock for mining. “We’ve got 390 holes on this pad,” said Lonny McCoy of Winnemucca, one of those on the blasting crew. Marigold used to do all its own blasting work but recently began a leasing arrangement with Southwest Energy that combines the Marigold crews and Southwest Energy people. Southwest Energy provides the ammonium nitrate explosives mix that is
downloaded from its trucks directly into the holes. The current estimates for the mine life at Marigold are seven to 10 years, depending on the economics and drilling results, Peck said. “We still have a great land package, and we’ll still do exploration,” he said. The gold price also makes a difference. “When the price of gold goes up, stuff that wasn’t ore before becomes ore, plus the stuff we have becomes more valuable,” Peck said. Goldcorp earnings Companywide, Goldcorp reported net earnings of $466.5 million, or 63 cents per share, in the third quarter four times the net earnings of $114.2 million, or 16 cents per share, in the 2009 quarter. The company attributed the higher earnings to high gold prices and low cash costs. “Continued strong demand in the third quarter, along with Goldcorp’s lowest quarterly cash costs in over two See MARIGOLD, 48
Ross Andreson/Mining Quarterly
Marigold Mine near Valmy posts safety drawings on the property as reminders. They are done by the children of mine employees.
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 47
Ross Andreson/Mining Quarterly
Ross Andreson/Mining Quarterly
Mike Iannacchione, left, mine operations manager at the Marigold Mine, gets an update from Jim Matley of Winnemucca, who handles general maintenance at the new truck wash.
This 320-ton Hitachi haul truck doesn’t fit inside the current truck shop at the Marigold Mine near Valmy, but mine operator Goldcorp Inc. is building a new shop with higher doors.
Marigold ... Continued from page 47 years results in record cash margins of $979 per ounce, generating significant growth in both cash flow and earnings,” Goldcorp President and Chief Executive Officer Chuck Jeannes stated in the earnings announcement. Vancouver-based Goldcorp also reported adjusted net earnings totaled $231.5 million, or 31 cents per share, in the quarter, compared with $140.6 million, or 19 cents per share, last year. Goldcorp showed a 28 percent increase in revenues to $885.8 million, up from $691.9 million in the 2009 quarter. Revenue was based on gold sales of 568,100 ounces. The average realized gold price in the quarter was $1,239 per ounce, up from $968 per ounce last year, Goldcorp stated.
48 MINING QUARTERLY, Elko, Nevada WINTER 2010
The total cash costs were $260 per ounce on a byproduct basis and $429 per ounce on a co-product basis in the quarter on gold production of 596,200 ounces, according to Goldcorp’s earnings report. The third-quarter production compares with production of 621,100 ounces in the third quarter of last year. Goldcorp reported production was down due to the sale of the San Dimas Mine and lower production at Los Filo in Mexico due to heavy rains. The company reaffirmed its guidance that 2010 production will be roughly 2.55 million ounces of gold. Goldcorp reported low-cost gold production continued in the third quarter at the cornerstone Red Lake Mine in Canada and new Penasquito Mine in Mexico. “Penasquito’s ability to contribute meaningfully to our third-quarter earnings and record cash flows in just
its first month in commercial production is indicative of its emerging position as a powerful driver of financial performance,” Jeannes said. He also said Goldcorp’s focus on investing for the future results in progress on a number of advanced stage projects. “By the end of 2010, we expect to complete scoping or prefeasibility studies for the Eleanore project in Quebec, Noche Buena near Penasquito and Cochenour in Red Lake, as well as an updated feasibility study for our El Morro copper-gold project in Chile,” Jeannes said. In addition, the expected completed of Goldcorp’s acquisition of Andean Resources in December will add Cerro Negro, another gold asset in Argentina, he said. Goldcorp is paying $3.5 billion for Australian-based Andean Resources.
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General Moly sets sail for water rights ADELLA HARDING Mining Quarterly Editor ELKO — General Moly is hoping to clear two major hurdles late this year or soon after the new year for its planned Mt. Hope molybdenum mine in Eureka County. The State Engineer’s Office has scheduled a rehearing beginning Dec. 6 on the company’s request for permits to pump water for the mining operations to satisfy a district court ruling, although General Moly took steps that could eliminate the need for the hearing. The second hurdle is the U.S. Bureau of Land Management’s release of a draft environmental impact statement on Mt. Hope 21 miles north of Eureka that would lead the way to a record of decision on the project in 2011. “We expect a draft EIS to go out for
public review early 2011,” Angelica Rose, planning and environmental coordinator for the Battle Mountain BLM District Office, said in November. Pat Rogers, director of environmental and planning for General Moly, said General Moly has been “trying to educate the community” about the water issues through newsletters, brochures and meetings and is willing to talk to anyone. General Moly established a conservation trust for the Eureka Producers Cooperative that in exchange calls for the growers to drop their protest against the water permits and links a higher trust amount to the growers convincing Eureka County Commissioners to drop their protest. The trust starts out at $4 million and can go as high as $12 million. The stipulations also link higher trust amounts to permitting milestones to-
50 MINING QUARTERLY, Elko, Nevada WINTER 2010
Adella Harding/Mining Quarterly
General Moly’s Elko office is Nevada headquarters for the Colorado-based company. From left at the Elko office in November are Lee Shumway, controller and treasurer; Zach Spencer, manager of external relations; and Pat Rogers, director of environmental and planning. ward final BLM approval. “The intent there is to get more active support from the community, and the potential decrease is based on whether the county drops its protest before the hearing,” Rogers said. “The lawyers are still negotiating,”
Eureka County Commission Chairman Leonard Fiorenzi said on Nov. 10. General Moly owns the water rights in Kobeh Valley, but alfalfa producers in Diamond Valley and the county are worSee GENERAL MOLY, 51
General Moly ... Continued from page 50 ried that the pumping in Kobeh Valley could impact the water supply in Diamond Valley. Rogers said the company’s applications to the State Engineer’s Office are to change current water rights for mining and milling use from agricultural use and to change well locations from earlier proposed sites based on newer modeling. “We absolutely have to have water to operate the mine and mill,” Rogers said. Zach Spencer, manager of external relations for General Moly in Nevada, said the company proposes using 11,300 acre feet of water a year, and the annual recharge in Kobeh Valley is 16,000 acre free, so the usage would be “well below the recharge.” Rogers said the water is in an “entirely separate basin from Diamond Valley, and we are confident the permits will be granted. All our evidence shows the ground water in Kobeh Valley is not very strongly connected to Diamond Valley. One reason is Kobeh Valley is 100 to 300 feet higher.” The state originally approved the company’s requests for water permits but Eureka County and Diamond Valley producers filed a lawsuit, and Seventh District Court Judge Dan Papez remanded the issue of whether all sides were working from the same water modeling. A newly formed group of farmers said in October they were unhappy with the trust agreement. “We want to reopen negotiations with Eureka Moly,” said Denise Moyle, one of the growers in the Diamond Natural Resource Protection and Conservation Association. “What we are looking for is for Eureka Moly to come back to the table for a problem that is very real.” She said the growers are worried about potential water impacts to Diamond Valley from Mt. Hope and don’t believe the trust agreement is adequate to cover those potential impacts. Moyle said the new association doesn’t want to block the mine that would provide jobs, but “agriculture has been here 60 plus years, and we just want to maintain our lifestyle.” Mt. Hope would provide roughly 400 jobs once the mine is in production, and General Moly would employ hundreds of contractors during the construction period. Mt. Hope will have a 44-year mine life. Rogers said that as of early November General Moly hadn’t heard from the
Mt. Hope would provide roughly 400 jobs once the mine is in production, and General Moly would employ hundreds of contractors during the construction period. new group. The trust agreement already covers all the growers in Diamond Valley, said Spencer, adding that General Moly will have a monitoring plan that would show any impacts to the valley from Mt. Hope. “Even $4 million covers more than the expected impact,” he said. Spencer said Diamond Valley has been over-pumped for years, and the agreement could help with water conservation. Diamond Valley users pump 55,000 acre feet a year, while the recharge is 30,000 acre feet, he said. Moyle said $4 million couldn’t cover the cost of losing one irrigation pivot for conservation. General Moly already made it over another hurdle, which was the release of partial financing before the draft EIS is published on Mt. Hope. General Moly announced in October the company amended its agreement with Sichuan Hanlong Group to remove the condition that $40 million in funding wouldn’t be available until the BLM releases the draft study. The $40 million first tranche represents a 12.5 percent stake and roughly 12 million shares of General Moly and is expected to close on Dec. 20. The financing is for General Moly’s 80 percent ownership of Mt. Hope. Steel producer POSCO is 20 percent owner of the Mt. Hope Project. Molybdenum is used in steel production. Although BLM publication of the draft study is no longer tied to the $40 million, General Moly stated the study’s release still remains a requirement of the entire finance agreement with Hanlong. The required date for the draft study’s release was extended from the end of February to May 31. “Obviously there is confidence in the project and our ability to bring it along. We’ll look at restarting engineering that was on hold back in March 2009,” Rogers said in early November.
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 51
Jerritt Canyon Mine poises for growth ADELLA HARDING Mining Quarterly Editor ELKO — Yukon-Nevada Gold Corp.’s Jerritt Canyon Mine 50 miles north of Elko has a new general manager with an eye to the mine’s potential, Guy Simpson from Perth, West Australia. “My whole aim is to expand the operations, using existing sources of ore,” he said. “I was brought across because of my experience developing mines.” Simpson was the group mining engineer for Resolute Mining Ltd. based in Australia, but he worked on developing new gold mines in East and West Africa. He said one of those sources of ore at Jerritt Canyon may be the old open pits. Jerritt Canyon ended surface mining 11 years ago and became strictly an underground operation, but gold prices were lower then. Simpson said with the high gold prices well above $1,000 an ounce, “it’s logical to evaluate the existing pits,” as well as to continue exploration for underground expansion that includes plans to restart
the SSX-Steer underground mines. Vancouver-based Yukon-Nevada is looking at producing ore from SSX next year for another ore source, but Simpson said he wants to look at all the details before a final decision. Meanwhile, the Smith Mine at Jerritt Canyon already is producing 28,000 to 30,000 tons of high-grade ore a month, with Small Mine Development as the operator, Simpson said. Another ore source is Newmont Mining Corp.’s Nevada operations. YukonNevada is purchasing ore from Newmont and processing the ore at the Jerritt Canyon roaster. John Davis Trucking is hauling the ore to Jerritt Canyon. “The first contract is for three months. It’s high-grade material,” Yukon-Nevada Gold Corp. Chief Operating Officer Graham Dickson said. Newmont is sending 2,000 tons of gold-bearing ore per day to Jerritt Canyon. Dickson said the processing “order of priority is SMD, Newmont and our See JERRITT CANYON, 54
Adella Harding/Mining Quarterly
A Caterpillar forklift with a load of bolts enters the main SSX portal at Jerritt Canyon north of Elko. Yukon-Nevada Gold Corp. is rehabilitating the underground mine in hopes of restarting production.
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WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 53
Adella Harding/Mining Quarterly
John Watson, left, the mine superintendent for Yukon-Nevada Gold Corp.’s Jerritt Canyon Mine, chats with Adam McKnight, the Jerritt Canyon mine manager, at the SSX underground site in early November.
Jerritt Canyon ... Continued from page 52 stockpiles” to keep the mill busy. In addition, Jerritt Canyon is still open to “people sending us their ore” to process, and the company is looking at acquisitions for ore sources, he said. The goal is to produce 150,000 ounces of gold a year, Dickson said. Growth also is showing in the employee numbers. Jerritt Canyon has 175 employees now, according to Dickson. SMD has roughly 50 employees, said Adam McKnight, the mining manager at Jerritt Canyon. McKnight said there is a five-man crew working at SSX now, doing the preparation work to restart production, including bolting underground, rehabilitating the electrical, water and air systems and rerouting utilities to a shorter haul road finished just before the mine closed. “We should be shotcreting by the beginning of December,” he said in early November. McKnight said there are 30 miles of workings in the SSX-Steer complex, although most of them have been mined out and backfilled. There also are three portals to the complex. “The mine was in remarkably good
54 MINING QUARTERLY, Elko, Nevada WINTER 2010
shape,” McKnight said. He also said he was impressed with SMD’s operations at Smith, and he reported SMD is developing a new ore zone “previously untouched.” Smith produces roughly 1,000 tons of ore per day. Simpson also said he will be working to develop advanced safety systems at Jerritt Canyon used consistently in Australia. The U.S. Mine Safety and Health Administration included Jerritt Canyon on a list released in October of mines with a pattern of safety violations, but Dickson said he wasn’t sure why. He said the mine corrects any cited violations and takes safety seriously. “We want to keep everybody focused on safety and send everyone home totally intact,” he said. Jerritt Canyon’s mascot dog “Lucky” is also part of the safety program. A painting of the dog is on the side of the wet mill along with a safety slogan. Yukon-Nevada spruced up the buildings at the mill site with a fresh coat of paint earlier this year and added landscaping at the mine entrance, and the painting was done at that time. See JERRITT CANYON, 55
Adella Harding/Mining Quarterly
Control room operator Donnie Ozman of Elko keeps an eye on the computer screens at the Jerritt Canyon mill north of Elko in early November.
Jerritt Canyon ... Continued from page 54 Yukon-Nevada and subsidiary Queenstake Resources USA also continue to be the target of a lawsuit filed by former employees laid off at Jerritt Canyon in August 2008, and Dickson said YukonNevada still hopes to resolve the lawsuit. “We want to pay employees everything they requested, but we just don’t want to pay the lawyers. If we’d had our way, we would have paid the employees last December,” he said. Queenstake and laid-off employees returned to federal court in Reno in late October after negotiations stalled. “It was a discussion of issues,” Queenstake attorney Dora Lane of Reno said at the time. “The court has invited both sides to continue negotiations. We haven’t said yes or no.” A lawyer for the employees, Mark Thierman of Reno, said he agreed in court to continue settlement negotiations, but the other side “walked out.” The lawsuit is on behalf of the 400 workers who lost their jobs when YukonNevada Gold suddenly shut down the gold mine because of financial circumstances. Queenstake paid employees half of their promised severance pay after the shutdown, but the lawsuit seeks the
second half of the pay and payment of medical bills. Queenstake claimed a dispute over attorney fees was all that was holding back settlement of the lawsuit and asked for the status conference. Thierman said in late October that wasn’t the case and that federal Magistrate Judge Valerie Cooke agreed. “There was no deal with legal fees holding it up,” he said. The two sides were in court because Yukon-Nevada sought a status conference on negotiations. Cooke wasn’t happy that Queenstake’s motion for the status conference went into the public record, along with negotiation details, when both sides had agreed negotiations were confidential, according to Thierman. Meanwhile, the $5.2 million lien against Jerritt Canyon on behalf of the employees is still part of the lawsuit. The five former employees whose names lead the lawsuit include Kurt Knudsen, Donald Capp, Larry Moon, Steve Volkert and Paul Dyer. The motion that became part of the public record stated that Queenstake See JERRITT CANYON, 56
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 55
Jerritt Canyon ... Continued from page 55 offered to settle for $650,000 in attorney fees, rather than the $800,000 attorneys for the employees offered. Queenstake also said it would pay $1.6 million in medical claims and $1,210,431 in back pay for employees, $75,000 to cover 401k contribution claims and $100,000 in enhancements for the five named plaintiffs, according to the motion. The lawyers for the ex-employees claimed, however, the defendants didn’t offer to pay 100 cents on the dollar. Yukon-Nevada also continues to report on its air emission controls. Dickson said the mill recently put 100 tons of ore an hour through each of the two roasters in an emission test that showed the operation can keep emissions down now that it has new equipment. “Our throughput is not 100 tons per hour, but we did that for the test,” he added. The Nevada Division of Environmental Protect allowed Queenstake to restart the mill in the spring of 2009 but ordered the mill shut down again after the company missed a May 30, 2009, deadline to install the new mercury air emission controls. Under a subsequent consent decree, Queenstake agreed to pay a $550,000 settlement to NDEP over past environmental issues, agreed to comply with environmental regulations and install new mercury air emissions equipment. The controls were installed July 20, 2009. The equipment is designed to reduce mercury air emissions to roughly 175 pounds per year from an estimated 1,700 pounds reported in 2007, according to earlier reports from NDEP.
56 MINING QUARTERLY, Elko, Nevada WINTER 2010
Adella Harding/Mining Quarterly
Alina Erhart of Elko stops on the scales on her way out of the Jerritt Canyon Mine north of Elko after delivering ore from Newmont Mining Corp. operations. She said in early November she has worked for John Davis Trucking Co. roughly eight months. She moved to Elko from Alaska.
Sandvik building new Elko facility RISHI DAULAT
Mining Quarterly ELKO — Sandvik Mining and Construction’s $3.5 million project for better facilities is under way. The company broke ground on the project in September and though there have been a few minor changes added to the design since then, the project still should be completed by its original target date, May 1, 2011. “Things are moving along well. We didn’t have any delays but we did make a slight modification in the building design,” Sandvik’s Elko branch manager, Steve Antonini, said. “We added 1,000 more square feet to our wash bay, so now the facility is 22,000 square feet,” he said. “Another part of the re-engineering was a filtration system. This unit will take all the internal air and recycle it back as clean air. We don’t want the exhaust fumes to linger when our guys are working, so this unit sucks up the car-
bonites, and it pushes heated fresh air back into the system. We had to do a little re-engineering on the roof because it is a heavy unit,” Antonini said. Sandvik’s facility is going up on 3.5 acres on Alta Vista Drive across from the Arctic Circle and Sinclair gas station. Sandvik currently leases a building at 3710 East Idaho St. that is half the size of what the new building will be. “Ruby Dome Construction is at our new location everyday. Our fight right now is getting the site work done and the concrete poured,” Antonini said. “Fortunately you can pour concrete in cold temperatures whereas asphalt you cannot. The ambient temperature is needed and it has to be dry. “Our projected move-in date is still May 1, and I believe we are on target to hit that date. We are very excited about moving into the facility,” Antonini said. Sandvik currently provides services to underground mining operations, how-
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See SANDVIK, 58
Ross Andreson/Mining Quarterly
Sandvik Mining and Construction’s new facility under construction in Elko will provide more room for service of underground mining equipment. Jeff Wisely of Winnemucca operates a Sandvik bolter at the Turquoise Ridge Mine north of Golconda in mid-October.
Marigold Mine is a run-of-mine heap leach operation, producing since 1988. Our people have transformed Marigold from a modest, conventional milling operation into a large and extremely efficient heap leach mine. Exploration led to the discovery of the Millennium ore body in the southern reaches of the property, which then led to the Millennium Expansion project.
Sr. Mechanical Engineer s Nevada Taking an active approach to ensuring the health and safety of all Marigold employees in this new role, you will coordinate operation, maintenance, and repair activities to ensure optimum utilization of machines and equipment. The experience you have gained in service with mobile repairs will translate well into this leadership and team building position as you develop and implement a continuous improvement maintenance strategy as well as systems and strategies for analysis of equipment failure and downtime events. You are an effective communicator (written and verbal), organized, and able to source and resolve problems. You have a bachelor’s degree in mechanical engineering or a related field along with five years’ progressive experience, ideally including supervisory duties. A PE designation is a plus. To apply or find out more, please contact us at: Goldcorp Marigold Mine, Human Resources e-mail: marigold.hr@goldcorp.com fax: 775-635-2551 View complete job details online at: www.goldcorp.com/careers If you want to work with one of the lowest-cost and fastest-growing senior gold producers, we’ll show you clear skies and a great team in a beautiful natural setting.
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BUILDING SUSTAINABLE PROSPERITY WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 57
Sandvik ... Continued from page 57 ever, with the new facility Sandvik may expand to sales to surface mining operations. Sandvik’s Elko branch was formed in 1995 with three people and now has grown to 27 employees. “We have already increased employment by two people in preparation for the new facility with more to follow. It’s a big deal for Sandvik,” Antonini said. The new building will be the only Sandvik property in the United States where Sandvik owns both the building and the land it will operate on. The company plans to sublease the current office on Idaho Street once they move out. Laughlin Construction is the general contracting company for the new Sandvik property, and Antonini had nothing but high praise for the contractors. “I just can’t say enough about how great they have been to work with,” he said. “They, along with the subcontractors, have gone far and beyond what ordinary contractors do. They have been outstanding.”
Submitted
This is an artist’s concept of what the completed Sandvik facility will look like at its new Elko location. Though snowfall slowed down the site utility work, Kathy Laughlin, head of Laughlin Construction, figures that once the building is up in early January the site utility work won’t be affected by any of the weather conditions. “We are hoping for a few more weeks of warm, dry weather since we can’t have any moisture in the ground when we pour the concrete,” Laughlin said. “The large metal building will be shipped out in December and after it’s up the rest of the work will be done indoors. We should be
able to be done by May.” Though Sandvik has paid a hefty amount for the building, the company still was able to make a recent substantial charitable donation. Sandvik just pledged more than $500,000 at the end of October in funding and heavy equipment gifts to support Habitat for Humanity’s affordable housing work in the United States and earthquake recovery efforts in Haiti. “Our involvement with Habitat for Humanity is an important component of
our community outreach and support efforts,” Peter Larsen, vice president of marketing for Sandvik Construction Region USA and Canada, said in an announcement. Sandvik sent commercial concrete crushing equipment to Haiti to recycle tons of concrete rubble on Jan. 12 when the 7.0-magnitude earthquake struck near Port-au-Prince. Habitat for Humanity will use the recycled concrete as filler and to make new materials for the reconstruction process.
Leach Pads • Contract Mining • Infrastructure • Reclamation Tailings/ Storage Facilities • Site Development • Specialty Equipment
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www.gcmining.com 58 MINING QUARTERLY, Elko, Nevada WINTER 2010
Allied Nevada reports record gold, silver sales ADELLA HARDING Mining Quarterly Editor ELKO — Allied Nevada Gold Corp. reported record gold and silver sales in the third quarter and double the revenue from the 2009 quarter based on production from the Hycroft Mine in Humboldt County. The Reno-based company’s gold sales for the quarter totaled 30,585 ounces of gold and 69,365 ounces of silver, with the average cost of sales at $416 an ounce, up from $364 last year. Revenue totaled $38.9 million in the third quarter, up from $20 million in the 2009 quarter, and net income totaled $3.1 million, or 3 cents per share, with the average realized gold price at $1,222 an ounce in the quarter, compared with $955 an ounce last year. Net income was down from $5.1 million in the 2009 quarter, because of exploration costs to complete in-fill drilling at Hycroft in time for an update of reserves and resources in early 2011, according to Allied Nevada. Third-quarter production totaled 29,563 ounces of gold and 75,552 ounces of silver, compared with 19,000 ounces of gold and 20,100 ounces of silver in the 2009 quarter. The company stated in its earnings report it hopes to ramp up Hycroft to produce 130,000 ounces of gold in 2011 and more than 250,000 ounces in 2012. The company also reported it is on track to beat guidance for the year of roughly 100,000 ounces of gold, while cost of sales are expected to be between $400 and $450 an ounce of gold sold. Sales for the first three quarters of this year totaled 80,584 ounces of gold and silver sales totaled 184,161 with the production ratio of 2.3 ounces of silver to an ounce of gold continuing to exceed expectations for Hycroft. Allied Nevada said in its third-quarter earnings report that 145 holes were drilled at Hycroft in the third quarter to convert resources and continue silver delineation, and significant intercepts continue to show good oxide mineralization at North Brimstone and along the east wall of the Central Pit. An updated interim estimate released earlier shows a 13 percent increase in measured and indicated gold resources to
8 million ounces and a 41 percent increase in silver resources to 259.2 million ounces. The company announced a few days after the earnings report that new metallurgical test results from composite samples were included in the metallurgical tests results so far for milling oxide and sulfide mineralization. Based on 39 composites, average recoveries are expected to be 87.2 percent for gold and 81.7 percent for silver with a mill. All the ore is now placed directly on leach pads. Test work shows that these recoveries may be achieved through a grind-flotation-cyanidation circuit, and mill recoveries will improve with optimization of the metallurgical testing process, according to the announcement. “The metallurgical model is providing us with a good sense of what we should expect metallurgically from the various rock types on the property,” said Scott Caldwell, president and chief executive officer of Allied Nevada. “While we understand that there remains a significant amount of work to be completed, these continued positive steps provide confidence as we move forward with the milling project feasibility study,” he stated in the announcement. The company added that management estimated roughly 30 percent of the required metallurgical study has been completed for the milling feasibility study expected in mid-2011. Allied Nevada also estimated capital and mine development costs will total $51 million this year, including money spent for expanding the Brimstone leach pad, a mobile crushing unit and a larger mining fleet. The company reported the first two 320-ton trucks are on site and being introduced into the mining fleet, while a third was expected to be operational in the fourth quarter. The earnings report also stated the leach pad expansion is progressing well and will provide a further 3.5 million square feet of space. The pad is expected to be done by the end of this year. “A well-deserved congratulations to the employees at Hycroft for their excellent safety record and recently achieving one year of operations without a lost time accident,” Caldwell stated in the company’s earlier production announcement.
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 59
Rye Patch starts core drilling at Wilco ADELLA HARDING Mining Quarterly Editor ELKO — Rye Patch Gold Corp. is conducting core drilling at its Wilco Project in Pershing County roughly seven miles east of Lovelock as part of the company’s growth in Nevada. “Wilco is the largest project,” said Bill Howald, president and chief executive officer of Rye Patch, which he said has a goal of becoming “the supermarket to the majors” when it comes to finding gold. Wilco has a measured and indicated resource of 686,000 ounces of gold and 1.7 million inferred ounces of gold, along with 4.7 million ounces of measured and indicated silver ounces and 20 million silver ounces in the inferred category, he said. “There was a mine there in the late 1980s and early 1990s,” Howald said. Western States mined Wilco, but Rye Patch drilled below the pits and found another oxide zone. There were four small oxide pits when Western States
was mining Wilco. Most of the new discovery is on private land, Howald said, and covers 14 square miles. There have been gold discoveries in the project area since 1905. The company announced in late October that metallic-screen assays at Wilco’s North Basin target from reverse circulation drill samples showed coarse gold associated high-angle structures and that the zone is open to the west. The core drilling under way is to help better understand the geologic controls and orientation of the high-grade zone, according to the company announcement on the assay results. “Understanding the controls and distribution of the higher grade gold will help future targeting on the project, and the potential of the high-grade zone as a feeder system may have a significant impact on the Wilco resource,” Howald stated in the announcement. Wilco had an option agreement with Newmont Mining Corp., one of the
60 MINING QUARTERLY, Elko, Nevada WINTER 2010
See RYE PATCH, 62
Rye Patch Gold Corp.
This chart outlines the location of Rye Patch Gold Corp.’s Wilco exploration property in Pershing County.
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 61
Rye Patch ... Continued from page 60 companies that drilled the property in years past, and has since earned a 100 percent interest in Wilco by spending more than $3 million on exploration. The company also has a drilling rig on its Lincoln Hill property, which is also in Pershing County and adjoins Coeur d’Alene Mines Corp.’s Rochester Mine, and Gold Ridge is between Wilco and Lincoln Hill. The Jessup is about 25 miles away from Wilco, just a few miles from Interstate 80. They are within the same area as the Spring Valley exploration project that Midway Gold Corp. owns and Barrick is earning into by exploring. “It’s like a district play,” Howard said. “It’s the new, emerging Oreana Trend.” Rye Patch’s newest acquisition, however, is near Barrick Gold of North America’s Cortez Hills operations. The project, called Garden Gates Pass, is seven miles south-southeast of Cortez Hills about seven miles, Howald said. “It’s early-stage. We’re getting ready
to drill it in the spring,” he said. There has been drilling around Garden Pass but not specifically where Rye Patch is looking, according to Howald, who said the location is “elephant country.” Barrick expects to produce more than 1 million ounces from its Cortez Hills and Pipeline operations this year. Rye Patch acquired Garden Gate Pass in early October from a local prospecting company, Pyramid Lake LLC. The project includes 153 mining claims. Howald is familiar with the Cortez site. He was general manager of exploration in North and South America for Placer Dome Inc., which merged with Barrick in 2006. He said Rye Patch isn’t looking to become a mining company, but wants to “be the exploration arm for people like Barrick and Newmont. We’re finding gold at $1.25 an ounce. They find it at $5 an ounce,” Howald said, talking about the exploration costs. “We’re looking for joint ventures or a sale of the company, and then we start
62 MINING QUARTERLY, Elko, Nevada WINTER 2010
“... the potential of the high-grade zone as a feeder system may have a significant impact on the Wilco resource.” — Bill Howald, president and CEO Rye Patch Gold Corp.
again,” Howald said. He said the major gold producers need junior companies to find ore for them, and junior companies like Rye Patch, Fronteer Gold and others are showing people there is still gold in Nevada. “Outside Nevada, people think Nevada is fairly mature,” Howald said. He said Nevada’s gold production is down from 9 million ounces in the late
1990s to 6 million or so ounces, and the major producers need junior companies to find ore for them. The rising gold price also helps, Howald said, and he said he expects the price to go higher. “It’s likely gold will go to $2,000 and beyond in this cycle,” Howald said. He said President Obama’s interest in increasing exports and the Federal Reserve’s plan to pump $600 billion into the economy attributed to the price rising above $1,400 an ounce. As the price goes up, so does the value of the gold the company has in the ground through drilling results. With the projects combined, the company has 1.2 million ounces of gold equivalent measured and indicated resources and 2.7 million ounces in the inferred category, after starting out with 150,000 ounces of resources. The silver resource across all categories is 40 million ounces. Rye Patch Gold started out as a private company in 2006 and went public the following year.
Patzer Fabrication goes big and heavy for mines JARED DuBACH Mining Quarterly ELKO — Big things have been happening for Patzer Fabrication lately, and things could get even bigger if plans pan out for the possible location of a refurbishing center on property in Beowawe to bring services even closer to the mines. The biggest advancement for the company, according to owners Jeff and Mary Patzer, is the relocation from a 30- by 50-foot shop across from the Elko Fire Department on West Idaho Street to the much larger facility at 5370 Idaho St. that was vacated when Rocky Mountain Cummins moved to its new facility. Jeff Patzer recalls many times being at the current building under Cummins’ occupation and thinking how great it would be to be in such a building. Much of Patzer’s work comes in designing personnel carriers for underground equipment or modifications to above ground equipment for local mines. Patzer said he has also sold modified equipment to operations back east and recently to a mine in Alaska. But to say Patzer modifies
Kelly Patzer welds on the collapsible railing on a Dux truck for the mining industry at Patzer Fabrication shop in Elko in midNovember. Ross Andreson Mining Quarterly
See PATZER, 64
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 63
Patzer ... Continued from page 63 Caterpillars and other heavy equipment vehicles is somewhat of an understatement. He and his five-man crew take equipment and make it better, tougher and longer lasting. “We don’t need to advertise because our reputation is spread through word of mouth,” Patzer said. One of the projects in the shop in mid-November was a Dux truck outfitted with a heavy duty platform and operating system rigged with collapsible railing. Barrick has funded the project, and Patzer is outfitting it with a hydraulic arm made by Arva that can rotate 270 degrees and reach out to take off truck tires, lift large sections of pipe and even several-hundred-pound exhaust fans like the type that are used underground for ventilation. The mechanism is even operated by remote control for added safety. Patzer said as far as he and his crew know, this Arva arm and outfitted Dux truck is the only setup of its kind in the United States. Patzer’s fabrication shop is often presented by local mines with outdated and worn out tractors that, according to manufacturers and other so-called experts, need to be completely junked and replaced with something brand new. Patzer illustrated one tractor in particular on his lot that still has a solid running engine and a good transmission. By the time he and his men are finished with such a machine, many are fooled by
Ross Andreson/Mining Quarterly
See PATZER, 65
Jeff Patzer stands next to a tractor on which he and his crew fabricated decking, a detachable bed, roll bar and front area for the mining industry at Patzer Fabrication in Elko.
64 MINING QUARTERLY, Elko, Nevada WINTER 2010
Patzer ... Continued from page 64 what they see and believe it’s a new machine. Often the only things that give it away from an outside look are the old tires or the unpainted interior of the bed if it’s a truck. “The reward is when you get to see it work,” Patzer said. “And when people come and see something that shouldn’t be working work.” But Patzer’s shop doesn’t just expand upon existing equipment. The fabrication end of things also can include original designing work to make something that doesn’t exist or at least isn’t readily available in the local market. Case in point: A unit that uses BB pellets to remove old paint from a haul truck rim in about eight minutes. Removing the paint off of a haul truck rim by hand could take a laborer all day for just one rim. The unit can remove old paint and other elements from other metal objects, such as flanges, by the operator inserting the object into the front door and paddles moving at a high rate of speed that propel
the pellets all around the inside of the rubber lined chamber. Patzer’s team has also designed it so more pellets can be added while the machine is running, a task that before, with other similar machines, was a dangerous maneuver due to the risk of pellets flying outside the chamber and causing injury. Patzer Fabrication was also instrumental in the recovery effort of the two miners killed in an accident at the Meikle underground mine earlier this year. Patzer said he and his men closed down the shop for all other jobs for a week while they worked on constructing an automated arm that could reach into the mine shaft and extract the large pieces of debris for workers to be able to go in and search for the men. Since time was of the essence, the fabricators worked 17 hour days and incurred 27 hours of overtime. Patzer’s employees include a certified hydraulic mechanic and certified electrician, and the crews do their own painting and pretty much anything else
that needs to be done for a project. “We’re a one stop shop,” Patzer said. In an example of hydraulic engineering and electrical reconstruction, Patzer is finishing a project for Southwest Energy. The new blast truck is outfitted with a two-man bucket on the front of what was at one point a Caterpillar backhoe. Patzer’s design has eliminated many 90-degree corners that are often the first things to get crushed in when such a vehicle is being driven underground or above ground on a mine site. The rear corners on the frame have been eliminated and are reinforced with one-inch metal. Again, it’s about taking something that’s heavy duty and improving upon it. Even the personnel entry points on the vehicle have angled corners to accommodate clunky boots to keep people from slipping off on the step up. The exhaust has been rerouted to go underneath and shoot down toward the ground to try and eliminate excess dust blowing up, which is a plus for under-
ground work. The batteries for the blast truck have all been isolated with access points and a master power switch that will shut off the entire vehicle and keep it from being turned on at the ignition. Since the main construction of the vehicle is that of a backhoe, some of the controls were located on the side of the driver’s seat to operate the now gone hoe. The electrician has modified that operation so the gauges and other apparatus are on the main console, and the side area where the controls once were can be outfitted with more seating area. As Patzer said, “It’s the little things that make the difference.” Patzer and his wife, Mary, stress nothing leaves the shop until everything on it has been tested for proper functioning. The shop also now does occasional work that is not for the mines. An example is a recently fabricated attachment that is meant for one of the bays at Les Schwab Tires that will help keep a See PATZER, 67
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Midway optimistic after core drilling ADELLA HARDING Mining Quarterly Editor ELKO — Midway Gold Corp.’s first round of core drilling at its Pan Gold Project in White Pine County shows an improved gold grade that will help with the company’s plans to develop Pan into a mine. The company reported intercepts showed a significant increase over the 0.55 ounces per gold that was the average grade of the resource in the preliminary economic assessment completed in July. “The results support our belief that much of the previous RC (reverse circulation) drilling and sampling significantly understated the gold grade of the known resource,” Midway President and Chief Executive Officer Ken Brunk said in an announcement in late October. Midway has moved Pan “from an exploration to a development focus,” R.J. Smith, manager of corporate administration, said earlier in October. “The feasibility
study will be done on Pan early next year.” He also said Midway hopes to file a plan of operations for an open pit mine with the U.S. Bureau of Land Management in the first quarter of next year, and the goal is to begin gold production from Pan in 2013. “We’re doing baseline studies now,” Smith said. The core drilling included 5,764 feet of drilling in the north and south areas of Pan, and Midway will report on the results later. Midway plans to continue drilling to expand the gold resource at Pan, including 13,000 feet of reverse circulation drilling this fall, according to the company. Pan currently has a measured and indicated resource of 682,000 ounces of gold. Midway acquired the project in 2007. “The core drilling program was conducted to provide key information for our engineering, metallurgy and permitting at the Pan deposit,” Brunk said. Pan is an exploration site that has
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been drilled in the past but never mined. It is fairly near the closed Easy Junior Mine and fairly near the White Pine border with Eureka County, Smith said. Midway’s Gold Rock Project nearby includes the Easy Junior open pit. The preliminary economic assessment of Pan showed potential for a mine at an operating cost of $453 per ounce. Just as Midway is changing its focus on Pan to a development project, the company is “in transition from an exploration to a production-focused company,” Smith said. The transition included opening headquarters in the Denver area and consolidating the management team there under Brunk’s direction. Brunk was hired in May of this year. “The team in place is a productionoriented team,” Smith said. In a company announcement, Brunk stated the company moved to the Denver area “to avail Midway of the opportunities that Denver offers an emerging mining company, including direct access
to world-class consultants and engineers who will assist in fulfilling our goal of commencing gold production in 2013.” The new office is in Englewood, Colo. Midway also owns the Spring Valley, Burnt Canyon and Midway projects in Nevada, and the company reported in October on Barrick Gold Exploration Inc.’s latest drilling results at Spring Valley north of the Coeur Rochester Mine in Pershing County. Barrick is exploring Spring Valley to earn into the project, and the company reported test results show gold recoveries up to 98 percent with conventional oxide ore leaching treatment based on metallurgical tests of ore samples. “These positive metallurgical results speak well for the high quality of this gold resource at Spring Valley. The results show that several commonly used production options exist for processing and recovering gold from Spring See MIDWAY, 67
Patzer ... Continued from page 65 forklift operator from damaging an overhead door. Instead of hitting the door, the forklift would hit the bar first. The company is in greener pastures than it was a year ago, according to Mary Patzer. Although the company didn’t have to lay off anyone last year, there was some hardship, as many other similar businesses in this economy have experienced. “We did everything we could last year to keep it going. This year is good,” Patzer said, even if it was the little things like eating canned soup for dinner as Jeff Patzer pointed out. But it’s now a year later, and the Patzers are eyeing property in Beowawe to set up a refurbishing shop to bring those services closer to the mines. Patzer said this idea has many benefits. It caters more to the mines so they don’t have to ship something all the way to Elko. Barrick Gold of North America’s Cortez Mine is south of Beowawe. Another benefit is to reduce the hazards of moving heavy equipment over Emigrant Pass during the winter on Interstate 80 — a place known for leaving many a semi-trailer jackknifed or worse during adverse road conditions. Patzer brought his idea to Eureka County, and the commissioners approved the sale of the closed Beowawe school’s shop to Patzer, but since Newmont Mining Corp. donated the land for the school, some paperwork has had to be prepared. Patzer said he hopes to have that cleared up soon, as it would be a winwin situation for not only his company and the mines, but Eureka County as
well since the school and shop are now sitting vacant. Some of the school building’s rooms could even be modified slightly into an office. Patzer Fabrication’s notoriety has gone outside the mining equipment realm through the popularity of GrillZilla — a fully functional cabinet-style grill with built-in hydraulics and a rotisserie. The contraption has done about 50 steaks at a time and more than a dozen turkeys. It can even do a whole hog. Patzer said he got the idea for it when he was at the Elko Municipal Landfill and saw an empty oil drum left discarded. From that, he got the idea to cut it in half and implement it into the design, along with using a truck tool box on the bottom to house the hydraulic mechanisms. Taking the idea for Grill-Zilla and bringing it to the next level, Patzer constructed a grill on wheels for the local Nevada Department of Wildlife to use with volunteer programs and nonprofit groups. Nevada Bighorns Unlimited, Western Nevada Supply, Boss Tanks and Les Schwab Tire Center were also part of the project. At the time the grill was presented to NDOW’s Joe Doucette he was surprised by what he saw. During a TV news report of the occasion, Doucette said he expected a grill on a trailer. “What I got was a full-blown kitchen,” Doucette said with a big smile. But, as Patzer said, “There’s no girlie stuff here. We don’t mess around.” For information on Patzer Fabrication’s services, call the business line at 777-3442 or the shop at 753-5250.
Midway ... Continued from page 66 Valley, and these include heap leaching, typical oxide leaching and recovery by gravity methods,” Brunk stated in the announcement on Spring Valley. Midway reported Barrick tested 13 composite samples with grades ranging from 0.006 ounces per ton to 0.148 opt. Midway and Barrick entered into a March 9, 2009, agreement for the exploration and development of the
Spring Valley property that covers approximately 18.4 square miles roughly 20 miles northeast of Lovelock. Under the terms of the agreement, Barrick may earn a 60 percent interest in the property by spending $30 million on the project by Dec. 31, 2013. The company also still has plans for a decline for underground exploration at its Midway Project near Tonopah, but “we basically swapped Pan and Midway” as the company’s focus, Smith said.
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NDEP, EPA to rule on Rio Tinto ADELLA HARDING Mining Quarterly Editor ELKO — The Nevada Division of Environmental Protection and the U.S. Environmental Protection Agency will be deciding on the final cleanup plan for the old Rio Tinto copper mine now that the comment period has ended on the proposed options. The proposed remedy both agencies chose as the preferred one would complete the cleanup at a cost of nearly $18 million, according to Scott Smale, the Rio Tinto project manager for NDEP. Smale said at a public meeting in Elko in November that Rio Tinto near Mountain City is a Superfund alternative site, which means the state will oversee the final remedy, “but what we do will be consistent with the federal process and EPA will be a partner.” The comment period ended Nov. 22. The proposed work is the final phase of a cleanup project that started in 1996. Smale said in answer to a question from the attorney representing the companies, Elizabeth Temkin, that the earlier efforts resolved any human health concerns. “Now, it’s protection of the environment and beneficial uses of the water,” he said. The tailings contaminated Mill Creek and the Owyhee River in the early years, but Smale said the water now meets safety standards. Rio Tinto is roughly 10 miles south of Mountain City
and also south of Owyhee and the Duck Valley Indian Reservation. The preferred alternative calls for removing the tailings to a hillside repository to the east and south of the former Rio Tinto town, leaving the sludge pond in place, covering the footprints of the tailings ponds with top soil and monitoring the water quality in Mill Creek and the Owyhee River for several years after construction. The NDEP estimated the operation and maintenance cost for this alternative, called Alternative 3A, at $3.6 million, and the construction period is estimated at four years. The time to finally achieve cleanup standards could be up to 10 years. The most expensive solution, Alternative 3, would involve moving tailings and all mining materials from Mill Creek Valley to a new containment site and longterm water treatment, as well as construction of a cutoff wall to capture groundwater in the valley. Construction costs for this alternative are estimated at $29 million, and operation and maintenance would cost $11.4 million, but the construction time would be shorter, three years. NDEP also stated it would take three years to reach cleanup standards in the Owyhee River. Alternative 2 would cost $13.4 million, and operation and maintenance would cost another $11.4 million, and the construction time would be two years. Time to reach cleanup standards would be three years. Alternative 3A is the best for long-term cleanup and
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Chris Cleveland with the environmental program for the Shoshone and Paiute tribes at Owyhee looks at the preferred alternative for the final Rio Tinto cleanup at a meeting at the Nevada Department of Wildlife building. doesn’t involve a permanent water treatment plant, Smale said. Rio Tinto was once a busy town and busy mine. The town was born after the discovery of a copper deposit in 1932, and the town died when the deposit became too costly to mine in 1947. There was mining and exploration on site later, however, with the last mining-related activity in 1976. The old mine is on a 280-acre site that hosted both underground and surface mining. The companies filled the shafts in the 1990s on the property, which Smale said is still privately owned.
Klondex Mines going underground ADELLA HARDING Mining Quarterly Editor ELKO — Klondex Mines Ltd. is about to start an underground exploration project at its Fire Creek gold property near the town of Crescent Valley on the border of Eureka and Lander counties. The company is contracting with Small Mine Development to develop the portal and decline that will lead to bulk sampling, according to Klondex President and Chief Operating Officer Blane Wilson. “SMD will start the portal early next year,” he said. The Vancouver-based company plans a 5,000-foot decline to access underground mineralization. The bulk sampling will provide revenue from gold sales, as well as providing data on the metallurgy. The deposit is highgrade and narrow vein, Wilson said. “We expect to bring up the first bulk samplings in the fourth quarter of next
Klondex Mines Ltd. stages a ground-breaking ceremony at the company’s Fire Creek property near Crescent Valley as earthwork begins for underground exploration. From left are Dave Eastwood, Bill Eastwood, Blane Wilson, Larry Wilson and Doug Carter. The dog is “Buster.” Submitted
See KLONDEX, 71
WINTER 2010 ELKO DAILY FREE PRESS, Elko, Nevada 69
Royal Gold announces record revenue ADELLA HARDING Mining Quarterly Editor ELKO — Royal Gold Inc. reported record royalty revenue of $45.3 million for the quarter ending Sept. 30 and net income of $11.8 million, or 22 cents per share, for the quarter as the company continued growing through recent acquisitions. The 74 percent increase in revenue for the first fiscal 2011 quarter compared with $26.1 million in revenue in the same quarter last year, while net income was $7.1 million, or 18 cents per share, last year. Colorado-based Royal Gold stated higher average gold prices helped boost revenue, along with an increase in overall gold production at the mines where Royal Gold has royalties on production. The average price of gold for the first fiscal quarter was $1,227 per ounce, compared with $960 per ounce for the comparable period, up 28 percent. Royal Gold reported production increases at Peñasquito in Mexico, Taparko
in West Africa and Robinson in Nevada and new production from Andacollo in Chile, Voisey’s Bay in Canada, Gwalia Deeps in Australia and Las Cruces in Spain. “Our first quarter results represent not only continued strong performance, but also the beginning of a fundamental shift in the source of our royalty revenue as we transition away from maturing projects to our new generation of longlived core properties, including Andacollo, Peñasquito and Voisey’s Bay,” Royal Gold President and Chief Executive Officer Tony Jensen stated in the earnings report. The maturing projects for the royalty company include the Cortez Mine in Nevada, where Royal Gold has royalties on the Pipeline operations but not the new Cortez Hills operations that are the driver behind Barrick Gold Corp.’s expectation that Cortez will produce more than a million ounces of gold this year. Royal Gold also is in line to collect royalties on the Crossroads deposit at
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“Our first quarter results represent ... the beginning of a fundamental shift in the source of our royalty revenue ...” — Tony Jensen, president and CEO
Pipeline, when Cortez puts that deposit into production. Jensen said in an earnings teleconference he expects the royalty revenue from Cortez to be steady but “not pick up from that level” in the new fiscal year. “We look at them to focus on Cortez Hills for five years or so,” he said, and then put Crossroads and South Pipeline into production. Royal Gold reported the increase in revenue for the quarter was partially offset by lower production at Cortez, Mulatos in Mexico, Dolores in Mexico
and Newmont Mining Corp.’s Leeville Mine north of Carlin compared with the first quarter of the prior fiscal year. According to the earnings report, Andacollo provided $8.2 million in revenue to Royal Gold on 8,905 ounces of gold in the quarter, and Taparko provided $7.6 million in revenue on 30,587 ounces of gold. Andacollo, operated by Tech Resources, wasn’t providing a revenue stream in the quarter ending Sept. 30, 2009, but Taparko, operated by High River, provided $6 million in revenue on 25,350 ounces last year. Voisey’s Bay, operated by Vale, provided $3.5 million in revenue on 18.2 million pounds of nickel and 3.9 million ounces of copper in the quarter. There was no revenue from Voisey’s Bay last year, Royal Gold reported. Robinson, operated by Quadra FNX, provided $3.1 million in revenue to Royal Gold on 19,012 ounces of gold and 28.5 million pounds of copper, compared with $1.9 million on 18,269 ounces of See ROYAL GOLD, 71
Klondex ... Continued from page 69 year. We expect to recover in excess of 32,000 ounces in the first sampling,” he said in early November. “We want to get underground and get the bulk samples so we can self-fund ourselves,” Wilson said. “There will be gold in excess of one ounce per ton for the first sampling.” If all goes as planned, the second bulk sampling will be ready in the first or second quarter of 2012, he said. The U.S. Bureau of Land Management’s Battle Mountain office confirmed the BLM issued a permit for the earthwork and underground exploration project, but Wilson said Klondex was still waiting in November for a water pollution control permit from the Nevada Division of Environmental Protection. He said that permit should be granted by the end of the year, and the company is generating data now for the next phase of permitting for the project. The company also has posted a $1.4 million reclamation bond, Wilson said. Meanwhile, Klondex is continuing exploration drilling and preparing for the
Royal Gold ... underground project. N. A. Degerstrom is doing the earthwork. “We’ve got a lot going on out there right now. We’re doing 40,000 feet of drilling and looking at three targets near the current resources,” Wilson said. He is enthusiastic about the potential at Fire Creek. “It’s a great time to be in the mining business in Nevada. The high gold price increases our options,” Wilson said. “We just completed a private placement for $9 million.” Fire Creek is on 11,000 acres and has a gold resource totaling 1.6 million ounces in the indicated and measured category. The company also is talking to different companies about custom milling for the bulk ore samples, Wilson said. Fire Creek has been an exploration site and even had a small mine on it over the years, but the push to start mining got started in the early 2000s. “It’s been around 30 years,” Wilson said, but the project was always with joint venture partners and little happened until Klondex started drilling deeper and made discoveries.
Continued from page 70 gold and 21.1 million pounds of copper last year. Penasquito provided $3 million in revenue, compared with $600,000 last year before Goldcorp Inc. was continuing development of the mine. The quarterly revenue for this year was based on 35,624 ounces of gold, 3.2 million ounces of silver, 21.9 million pounds of lead and 39 million pounds of zinc. Leeville provided $2.6 million in revenue on 122,834 ounces of gold, compared with $2.3 million on 133,821 ounces last year, while Cortez provided $2.5 million in revenue on 33,134 ounces of gold, down from $5.8 million on 94,864 million ounces last year. “The revenue strength of Andacollo is evident as it has quickly become our top revenue source even though the project was still ramping up to design capacity during the quarter,” Jensen said. “The additional interests at PascuaLama and Mt. Milligan that we just acquired are also expected to become key revenue generators starting in 2013.” Royal Gold now holds a 5.23 percent
royalty on the Chile side of PascuaLama on the border of Chile and Argentina at gold prices at or above $800 per ounce. Barrick is developing a gold and silver mine at Pascua-Lama. Royal Gold acquired a gold stream on the Mt. Milligan Project as part of a deal that tied in with Thompson Creek Metals Co.’s acquisition of Terrane Metals Co. Royal Gold acquired the right to 25 percent of the payable gold produced from the Mt. Milligan copper-gold project in British Columbia for $226.5 million now and $85 million during the construction period at Mt. Milligan. In addition, Royal Gold will pay Thompson Creek cash equal to the lesser of $400 or the prevailing market price for each payable ounce of gold until 550,000 ounces have been delivered to Royal Gold and the lesser of $450 or the prevailing market price for each additional ounce. Currently, Royal Gold has 34 properties that are providing revenue, out of 188 properties in its portfolio.
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Next safety conference to be in Las Vegas ELKO — The 2011 Joint Western Regional Mine Safety and Health Conference will be held at the Green Valley Ranch in Las Vegas in October. The site location for next year’s conference was announced at the 2010 conference in Reno in October, according to Todd Valline of the University of Nevada, Reno Fire Science Academy and a member of the conference planning committee. Additional information regarding the 2011 conference will be available at www.nevadamining.org after the first of the year, he said. At this year’s conference, industryleading presenters and a record number of exhibitors greeted a record 400 attendees, Valline said. “They include more people from a broader reach geographically,” Nevada Mining Association President Tim Crowley said as the conference was under way. The conference's annual Distinguished Mine Safety Professional Award went to See CONFERENCE, 75
Justo Lopez wins heroism award VALMY — Justo Lopez used skills he learned at his place of work — Marigold Mine near Valmy — to save his daughter’s life. His actions earned him the annual Life Saver Heroism Award at the Joint Western Regional Mine Safety and Health Conference in Reno in late October. “I was happy with it,” Lopez said in November. He said if hadn’t received the life-saving training at Marigold, “I would have jumped and down like a chicken with my head cut off,” rather than taking the action that saved the life of his daughter, Alma Guzman. She is the mother of two chilSubmitted dren, Lopez said. Alma Guzman and her father, Justo Lopez, display the hero award Lopez, a plant operator at the he received in October at the Joint Regional Mine Safety and leach pad at Marigold, received Health Conference in Reno for saving her life. training in cardiopulmonary
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resuscitation and first aid at the mine, according to Marigold General Manager Duane Peck. “His daughter was in an accident, and after she was brought home, she went into convulsions. He gave her CPR and kept her stabilized. They said it was a good thing he did it,” Peck said. William Lawton, manager of human resources for Marigold, said the mine decided to provide emergency training for the small teams that are often on their own on the mine site, and the training paid off. “It is an exciting award,” he said. Goldcorp Inc. operates Marigold and is the two-thirds owner. Barrick Gold of North America owns the other one-third of the mine. — Adella Harding
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Conference ... Continued from page 72 Richard Tucker, Newmont Mining Corp. The annual Life Saver Heroism Award was presented to Justo Lopez of Goldcorp Inc.’s Marigold Mine. MSHA’s national Sentinels of Safety awards were presented earlier in Washington, including one to Barrick Gold Corp.’s Ruby Hill Mine in Nevada, but regional awards were presented at the Reno event. The regional awards included one for Round Mountain Mine in Nye County, operated by Kinross Gold Corp. The Storm underground operation at Barrick’s Goldstrike Mine north of Carlin also received an award, according to the list of winners. Other Nevada winners included: Martin Marietta Materials Inc., Spanish Springs Pit No. 6; Chemical Lime Co. of Arizona, Apex quarry and plant; Sierra Nevada Construction Inc., portable rock plant No. 1; Celite Corp., Celite Fernley operation; and Sunrise Minerals LLC, Sunrise gold placer mine. Awards also went to companies in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Kansas, Montana, Nebraska, North Dakota, South Dakota, Oregon, Utah, Washington and Wyoming. Assistant Secretary of Labor Joe Main, who oversees the U.S. Mine Safety and Health Administration, was one of the keynote speakers at the event at Peppermill Hotel and Casino in Reno in late October. Other keynote speakers for the twoday conference included MSHA Administrator Metal and Non-Metal Neal Merrifield, motivational speaker Chad Hymas, Senior Vice President of the National Mining Association Bruce Watzman, President and Senior Con-
Nevada Mining Association
Joint Western Regional Mine Safety and Health Conference emcee Cecil Slattery of Holcim Cement, left, shakes hands with Assistant Secretary of Labor for Mine Safety and Health Joseph Main, at the late October event in Reno. sultant Center for Behavioral Safety Ted Boyce and Tom Hethmon of Hethmon Associates, LLC. Conference sponsors included the Nevada Mining Association, Barrick Gold Corp., Calcima, KL&P Motivation, Newmont Mining Corp., Wells Fargo Inc., Geotemps, Ledcor Group, Nevada AGC and Sierra Nevada Construction. The annual conference started in 2005 as a joint venture between industry and MSHA’s Western and Rocky Mountain districts. The conference’s overall theme is to build relationships that foster the best in mine safety and health practices for today's mining professionals, Valline said.
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Nevada mines, miners receive safety awards STATELINE — The Nevada Mining Association presented its 2009 mine safety awards at the association convention at Stateline, including the award for general manager of the year. Joe Dick, general manager of Barrick Gold of North America’s Cortez Mine in Lander County, accepted the award at the Mountbleu Resort Casino & Spa in midSeptember. “Safety is No. 1 for all of us in the industry, and I am proud of what we are doing,” said John Mudge, the new association chairman and one of the award presented. Lance Taylor of Geotemps also presented the awards as the award sponsor. Photographs of the other award winners appear on this page and the following pages.
The Nevada Mining Association’s safety awards for mine manager or superintendent went to: Mark Evatz, left, Newmont Mining Corp.’s Phoenix Mine; Phil Walker, Newmont; and John Hebert, Barrick Gold’s Goldstrike Mine.
Nevada Mining Association’s top award for large open pits went to Round Mountain Mine. From left are Terry Severn, loss control manager, and Randy Burggraff, general manager.
The Nevada Mining Association’s first-place award for small open pits went to Coeur Rochester Inc. From left are: John Mudge, association chairman; Cindy Jones, Rochester general manager; Richard Wagner, Rochester; and Lance Taylor of Geotemps.
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The Nevada Mining Association’s safety professional awards went to Dayne Heese, left, of Twin Creeks Mine, Tom Bassier of Goldstrike Mine and Richard Wagner of Coeur Rochester Mine.
Photos by Adella Harding/Mining Quarterly The first-place safety award for medium underground mines went to Newmont Mining Corp.’s Deep Post Mine that has since been shut down. From left are: John Mudge, association chairman; Tim Sirotek, Steve Long, Brian Andreozzi, Jennifer McMullan, Doug Nelson, Dee Post; and Lance Taylor of Geotemps, the award sponsor.
Nevada Mining Association safety trainer honors went to: Myer Ellsworth, left, Sandvik Mining, Great Basin Gold Inc.; Galen Hope, Newmont Mining Corp.’s South Area Operations; and Mike Runner, Barrick Gold’s Goldstrike Mine.
Safety Awards
Barrick Gold’s Ruby Hill Mine and Goldstrike Mine roaster tied for first place for the Nevada Mining Association’s 2009 safety awards for medium open pits. From left are: Andy Cole, Ruby Hill general manager; and Tony Carroll, Bart Beatty, John Rodriquez and John Hebert of Goldstrike.
(Continued) Photos by Adella Harding/Mining Quarterly
The Nevada Mining Association’s awards for general supervisors or middle management personnel went to: Don Weeks, left, Kinross Gold Corp.’s Round Mountain Mine; Mike Lester, Newmont Mining Corp.’s Twin Creeks Mine; and Charlie Beatty, Barrick Gold of North America’s Cortez Mine. At right is Lance Taylor of Geotemps.
The Nevada Mining Association’s safety awards for non-supervisory mine employees went to Chesney Carney, left, of Newmont Mining Corp., Randy Billows of Newmont’s Phoenix Mine and Luis Deleon of Barrick Gold’s Goldstrike Mine.
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The Nevada Mining Association’s 2009 second-place safety award for large underground mines went to Newmont Mining Corp.’s Leeville Mine. From left are: John Mudge, mining association chairman; Brian Marczak, Jason Mayne, Joe Driscoll, Tim Felzien, Ian McMullan, Darrell Gerstner and Clem Hartery, Leeville; and Lance Taylor, Geotemps.
The Nevada Mining Association’s first-place safety award for a non-metal mine went to EP Minerals’ Colado Mine, and the third place went to EP’s Clark Mine and Mill. Accepting for both is Randy Thomas, vice president of EP Minerals operations.
Photos by Adella Harding Mining Quarterly
Non-supervisory trainers Ken Taylor of Marigold Mine and Jason Mayne of Leeville Mine display their 2009 safety awards at the Nevada Mining Association’s 2010 convention at Stateline.
Awards for supervisors went to Farrel Rose, left, of Goldcorp Inc.’s Marigold Mine, Wayne Maita of Coeur Rochester Inc. and Robert Flowers of Newmont Mining Corp.’s Twin Creeks Mine.
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The Nevada Mining Association’s first-place safety award for large underground mines went to Barrick Gold of North America’s Meikle Mine. The mine had two fatalities in 2010, but the award was for 2009. From left are Raul Martinez, Josh Duncan, Juan Gonzalez, Lee McCombs, Brend Jacobson, Mike Owsley and Nigel Bain, Meikle.
Safety Awards (Continued) Photos by Adella Harding/Mining Quarterly
The second-place award for small open pit went to Great Basin Gold’s Esmeralda Mine. From left are: Paul Huet, general manager; Albert Morrison, safety coordinator; Butch Moore, mill manager; and Lee Morrison, human resources manager.
Scott Limbardo of Graymont Western’s Pilot Peak Plant holds the Nevada Mining Association’s safety award for non-metal mines. With him are association Chairman John Mudge, left, and Lance Taylor of Geotemps.
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The Nevada Mining Association’s 2009 firstplace safety award for contractor mining went to JS Redpath. From left are Randy McFatridge and Wayne Felzien.
The Nevada Mining Association’s second-place 2009 safety award for contractor mining went to Ames Construction. Accepting the award are Allen Rushton, left, and Andy Anderson.
The second-place award for a medium underground mine went to the Cortez Hills Mine. Accepting the award are Amber Donnelli, left, and Sharon Lang.
The secondplace safety award for a medium open pit went to Barrick Gold’s Goldstrike Mine autoclave operations. From left are Bart Beatty, Steve Cashin and Wayde Esplin.
The thirdplace safety award for large open pits went to Newmont Mining Corp.’s Phoenix Mine. From left are Karen Bishop, Joel Lenz and Steve Johnson.
Photos by Adella Harding/Mining Quarterly The thirdplace safety award for small pits went to Newmont Mining Corp.’s Lone Tree Mine. From left are Steve Johnson, Steve Seay and Joel Lenz.
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Outstanding Career in Safety Awards went to Richard Tucker, second from left, who retired from Newmont Mining Corp., and Bob Stephenson, who was at Barrick Gold’s Ruby Hill Mine. Association Chairman John Mudge is left and Lance Taylor of Geotemps, the safety awards sponsor, is at right.
The Nevada Mining Association’s thirdplace safety award for medium underground mines went to Newmont Mining Corp.’s Midas Mine. From left are Jim Kestle, Sandy McFarlane, Sid Tober and Mark Ward.
Bill Ferdinand, left, director of environment, health and safety for Barrick Gold of North America, accepts the Excellence in Mine Reclamation Award for the Wood Gulch project from Ronald Parratt, vice chairman of the Nevada Commission on Mineral Resources.
A Nevada Excellence in Mine Reclamation Award went to Newmont Mining Corp.’s Twin Creeks Mine for its West Pit backfill project. From left are: Alan Coyner, administrator of the Nevada Division of Minerals; Glenn Alexander, Twin Creeks; and Ronald Parratt, vice chairman of the Nevada Commission on Mineral Resources.
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Newmont hosts Supplier Summit ADELLA HARDING Mining Quarterly Editor ELKO — Newmont Mining Corp. wants to enhance partnerships with its suppliers worldwide, and new Supplier Summits are one of the ways the company is reaching out. The company also is honoring suppliers worldwide with awards in recognition of their service, and the Global Supplier of the Year Award went to ConocoPhillips Lubricants, which serves Newmont’s Nevada mining operations. “They have a great working relationship and safety record,” said Alan London, Newmont’s director of supply chain for North American operations. The award and regional awards were presented at the global Supplier Summit put on by Newmont headquarters in the Denver area, the second annual global summit. The Supplier Summit Newmont held in October in Elko was the first, however, for northeastern Nevada vendors. The event attracted more than 100 people, including suppliers and Newmont supply and safety experts. “We’ll definitely do it again,” London said in midNovember regarding the Elko summit, which featured workshops to bring the vendors and company together. He said at the workshop earlier that there was a lot of
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Debra Lou Lau, who works for Newmont Mining Corp., writes the comments of the people at her table on leadership behavior during Newmont’s 2010 Supplier Summit at the Elko Convention Center in midOctober. good feedback on the Elko summit. “You couldn’t ask for better participation during the round tables,” said Matt Murray, a Newmont external relations representative. “The whole program has been great,” said Grant Green of Ash Grove Cement, during one of the breakout sessions. The goals of the first summit and workshops in Elko were to bring suppliers together to improve Newmont’s
relationship with them, to improve communications, create a sustainable business model and “then start to focus on Newmont’s Safety Journey,” London said. “One of our goals is to reach a fatality-free and accident-free workplace. To do that, we have to partner with vendors,” he said. At the global summit, Newmont presented regional awards to suppliers, as well as the Global Supplier of the Year Award that went to ConocoPhillips. Newmont stated in an announcement on the awards that Newmont implemented a “best-in-class” lubricant pricing model with the help of ConocoPhillips. Newmont also said ConocoPhillips has provided exceptional value through its ongoing technical education and hands-on training program for Newmont’s maintenance groups. The awards recognized the vendors for their contributions toward lasting partnerships, while operating in line with Newmont’s values in worker safety, environmental protection and social responsibility. Newmont evaluated nominees on their operations and products, as well as their commitment to safety, environmental stewardship and social responsibility, Newmont stated in its announcement. See SUMMIT, 83
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Adella Harding/Mining Quarterly
Alison Itza, business manager for processing for Newmont Mining Corp.’s supply chain in Nevada, helps conduct a session during Newmont’s Supplier Summit at the Elko Convention Center in October.
Summit ... Continued from page 82 “We want to create mutual value with our suppliers and partners to maintain long-term business relationships,” said Gerry Gluscic, Newmont’s vice president and chief information officer. “ConocoPhillips and our regional award recipients have demonstrated a commitment to improved execution, communication and transparency, which helps create sustainable value and opportunities for Newmont and its business partners,” he said. Award recipients at the regional level included: • North America Regional Supplier of the Year — Small Mine Development provides underground contracted mining solutions to Newmont’s Nevada operations. The company facilitated open dialogue with Newmont and demonstrated flexibility to drive continuous improvement.
• Asia Pacific Regional Supplier of the Year — WesTrac Group was selected for its commitment to environmentally conscious work at Newmont’s Boddington mine site. The Caterpillar dealer provides construction and mining equipment services and solutions to Newmont in Australia. • Ghana Regional Supplier of the Year — WBHO Ghana Ltd, a subsidiary of WBHO Construction focuses on civil engineering for Newmont’s Ahafo operations and was recognized for more than two million hours without a lost time injury since 2006. • Peru Regional Supplier of the Year — Hitachi Construction Machine Co. Ltd. provides Newmont’s Minera Yanacocha a comprehensive maintenance and repair service for machinery operating at the site. HCMA (Peru) S.A.C. was recognized for its commitment to community involvement and social responsibility.
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BLM honors two Nevada projects ADELLA HARDING Mining Quarterly Editor ELKO — Two northeastern Nevada projects won the 2010 U.S. Bureau of Land Management’s Reclamation and Sustainable Mineral Development Awards during a ceremony in Washington hosted by the National Mining Association. The winner of the Fix A Shaft Today! — or FAST! Award — is the Spruce Mountain Abandoned Mine Remediation Project in Elko County. The winner of the 2010 BLM Community Outreach and Security Award is the Future Industrial Needs Discovery Project of Lander County, a sustainability program. Nycole Burton, a wildlife biologist for the Elko BLM office, said the Elko BLM and the Nevada Department of Wildlife share the award for the Spruce Mountain project that involved closure of 53 abandoned mine sites. Now, they are involved in a mine-closure project at Contact in northern Elko County, using “push closures” that involve dumping the dirt pile back into the abandoned mine, Burton said. This is possible in locations where there aren’t “cultural or critter” worries, she said. On Spruce Mountain, some of the old mine openings were hard-closed, some were closed with bat grates because they were bat habitat and some were closed with foam to preserve cultural significance, Burton said. She said the Spruce project south of Wells started in 2005 as an offshoot of the recreation trails plan the Elko Convention and Visitors Authority coordinated with federal agencies and state grant money and grew from there. “We continued to go through the entire mountain to find what openings were on public lands,” Burton said. She said the BLM and NDOW used the Nevada Division of Minerals data base for abandoned mines for the project and found more sites to update the data base. Spruce Mountain is the site of several ghost towns where there was mining
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Adella Harding/Mining Quarterly
Rory Lamp of the Nevada Department of Wildlife shows the U.S. Bureau of Land Management award the Elko BLM office and NDOW won for a project to close old mine shafts on Spruce Mountain in Elko County. for many years. Burton said the last people involved in mining pulled out in the 1960s. Rod Davis of the Nevada Cooperative Extension in Battle Mountain said the Lander County Sustainable Economic Development Committee received the award for the FIND Project for the mining community. “We were initially looking to find industrial matches to closing mines,” he said. The project grew to mapping mine infrastructure from Lovelock to Elko, and prioritizing them for potential industrial use that would bring in business and keep the infrastructure, instead of mining companies tearing See AWARDS, 85
Awards ... Continued from page 84 everything down. “Lone Tree was at the top of the list,” said Davis, who is on the committee. Newmont Mining Corp. ended mining at Lone Tree near Valmy several years ago but continues to use facilities on a limited basis. Summit Engineering did the mapping for the committee, and the town of Battle Mountain contracted with Summit to do even more detailed mapping , and the Mackay School of Mines maintains the system. “We also did a housing study and a business survey in Battle Mountain,” Davis said, adding that the committee is doing an economic leakage study and community-business matching program. The committee brought in the Lander Economic Development Authority as a collaborator to handle grant money, he said. The committee is part of the Gold Belt Coalition.
Submitted
Jason Ringenberg of the Idaho Forest Service works on a grate closing an old underground shaft in the ghost town of Sprucemont in Elko County. The U.S. Bureau of Land Management contracted with the Idaho agency to close mining workings on Spruce Mountain.
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Inside cover Dec 2010 Mining Quarterly
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Cover December 2010 Mining Quarterly
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P U BL I S H E D BY T H E E L K O D A I LY F R E E P R E S S
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Busy Days At Long Canyon
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Carlos Flores knocks core out of a tube at a Major Drilling diamond rig at Fronteer Gold’s Long Canyon exploration project. Ross Andreson/photo
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