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Alamos’ Island III goes on sinking mission for more gold

Having weighed five scenarios for a Phase III expansion at the Island gold mine, in Ontario, Canada, Alamos Gold is proceeding with a plan to carry out a blind sink down to the 1,373 m level, build a paste plant, and expand the mill and tailings facility at the operation to boost production.

The company is no stranger to shaft sinking; its Young-Davidson mine, also in Ontario, has just had its Northgate shaft commissioned after Cementation used large diameter raiseboring technology to establish it as part of an engineer, procure and construct contract.

Yet, the shaft sinking route was not a foregone conclusion, with three of the five scenarios involving ramp haulage.

The Phase III Expansion Study, carried out with assistance from Hatch, Cementation, Airfinders, Golder, Halyard, SRK and DRC Estimating, looked at these scenarios using Deswik planning software to find further growth at the mine.

Having added 900,000 oz of the yellow metal to its reserve base already this year and hit a rate of 1,240 t/d in the March quarter (ahead of the nameplate 1,200 t/d rate), the company was keen to leverage these ounces at the same time as come up with a sound economic proposition for expanding and extending the mine.

Of the five scenarios, three involved ramp haulage (two retaining the 1,200 t/d capacity and one at 1,600 t/d) and two would see a shaft installed (at 1,600 t/d or 2,000 t/d). All apart from one option included the addition of a paste plant.

The company settled on expanding throughput to 2,000 t/d, from 1,200 t/d, through a shaft and paste plant build, explaining that this option presented the best economics.

As a result, the Phase III expansion will involve an initial blind sink down to 1,373 m, that new paste plant, and an expansion of the mill and tailings facility.

These investments, which would see the mine life double to 16 years from the eight years currently outlined in the reserve base, are covered in the total capital of $1.07 billion, which the company says is offset by the lower sustaining capital and operating costs of this scenario versus all that were evaluated.

Following the completion of the shaft construction in 2025, it is envisaged the operation will transition from trucking ore and waste to skipping ore and waste to surface through the new shaft infrastructure.

Output would rise to 236,000 oz/y starting in 2025, 72% higher than the mid-point of previously issued guidance for the mine in 2020, while mine-site all-in sustaining costs would fall to $534/oz, a 30% drop on the 2020 guidance.

Combined, this made for an after-tax net present value (NPV) of $1.02 billion at a 5% discount rate, and an after-tax internal rate of return of 17%, using a base case gold price assumption of $1,450/oz.

“These are also the lowest costs of any scenario evaluated reflecting the significant productivity improvements, decreased ventilation requirements, increased automation, and higher throughput rates associated with the shaft,” the company said.

While the company did not spell out what automation elements would be included in this expansion, on a webcast discussing the results, Chris Bostwick, VP, Technical Services, included details of an LTE network underground installation at Island as one continuous improvement project for 2020.

An Alamos Gold spokesperson later confirmed to IM that the LTE network was in the process of being installed with the project expected to be completed by the end of this year. “The network is primarily being installed for voice communications and real-time data gathering,” the spokesperson said.

Asked whether it was a pre-cursor to the use of autonomous haulage at the operation ahead of the expansion, the spokesperson replied: “We don’t have any firm plans for increased automation of our mobile equipment currently, but are actively monitoring the progress with the technology and this remains a potential down the road.”

With regards to automation within the expanded mine scenario, the only aspect currently being considered is the automation or tele-remote operation of the rock breakers and skipping, the spokesperson confirmed.

“Some of the trucking requirements could be automated down the road as noted above,” the spokesperson said. “The shaft expansion will make the entire operation more automated and productive.”

John A McCluskey, President and Chief Executive Officer of Alamos Gold, reviewing the study, said Island Gold had proven to be a “tremendous acquisition” for Alamos.

“We acquired Island Gold in 2017 at a cost of approximately $600 million when it had 1.8 Moz of mineral reserves and resources,” he said. “This high-grade deposit has more than doubled to 3.7 Moz and we expect further growth yet.”

While the planned expansion would make Island more profitable through increased production and lower costs, it would also “best position the operation to benefit from additional exploration success”, he said.

Long-hole open stoping will continue to be utilised as the primary mining method at Island, however, increased development and key infrastructure changes including the addition of a paste plant and shaft will allow for mining rates to increase to 2,000 t/d, it said.

The addition of paste fill underground will allow for faster stope cycling, thereby supporting higher mining rates and providing increased geotechnical stability, according to Alamos. It will also increase mining recovery, resulting in an additional 100,000 oz of gold recovered over the life of mine (from existing pillars). This represented an in-situ value of $145 million at a gold price of $1,450/oz.

The paste plant will have a capacity of 2,000 t/d and capital cost of $34 million with the plant expected to be completed in the December quarter of 2023, Alamos said.

When it comes to the shaft options, which Alamos Gold evaluated with the help of Cementation, it was decided that a conventional blind sink methodology would be used to provide “improved schedule reliability with minimal impact on existing operations”.

A combined raisebore from the 840 m level, and blind sink option below the 840 m level was evaluated, however, this option would significantly impact existing operations, Alamos said. “The cuttings from the raisebore in the upper mine, and waste generated from the conventional sink in the lower mine, would displace underground throughput capacity and significantly reduce mining rates below 1,200 t/d by as much as 400 t/d over the next several years,” it said.

The settled-on option will see a 5 m diameter concrete-lined shaft constructed with a steel head frame. The shaft will house two 12 t skips in dedicated compartments for ore and waste movement and a double-deck service cage for the transport of personnel and materials.

The company estimated an overall shaft sinking rate of around 9.6 ft (2.9 m)/d, which included a ramp-up period.

While the shaft will be sunk to an initial depth of 1,373 m, the hoisting plant will be designed for an ultimate depth of 2,000 m providing flexibility to accommodate future exploration success, the company said.

At the initial depth of 1,373 m, the shaft has a capacity of 4,500 t/d, more than sufficient to accommodate the peak mining rates of 3,300 t/d (ore and waste), according to Alamos.

The underground ore and waste handling and loading pocket will be a conventional configuration like that of Young-Davidson, the company said.

Once skipped to surface, ore will be trucked to the expanded mill circuit.

On top of the payback being sweeter for the shaft expansion, ventilation requirements are also lower than under the ramp scenarios given the significantly smaller mobile fleet, Alamos said. This allows the shaft to serve as the only new required fresh air source.

The total construction capital for the shaft installation including all supporting infrastructure is anticipated to be $232 million.

Further, 56% of tailings will be placed underground reducing tailings dam raise requirements, a capital saving of $13 million, according to Alamos.

The mining rate ramp-up to 2,000 t/d after the shaft expansion will be supported by a total of five 42 t haul trucks. This compares with a peak of 18 haul trucks required to sustain ramp haulage at 1,200 t/d and 25 haul trucks for ramp haulage at 1,600 t/d, the company said.

“This contributes to the lower ventilation requirements with the shaft expansion, and significantly lower diesel usage and greenhouse gas emissions,” the company said.

The mill expansion will include upgrading the crushing circuit, adding a second parallel ball mill, and a new elution and carbon in pulp (CIP) circuit with carbon screens. The total cost of the mill expansion is expected to be around $40 million.

The flowsheet of the new circuit includes upgrades and expansions for the following major process operations:

  • New vibratory grizzly feeder;
  • New primary crusher;
  • New fine ore stockpile and conveyors;
  • Additional primary ball mill;
  • Primary ball mill screen for both ball mill circuits;
  • Existing thickener converted to high rate thickener;
  • Two additional leach tanks;
  • New elution plant and kiln (ADR); and
  • Tailing pumps.

Mill recoveries are expected to average 96.5% over the life of mine, consistent with the historical performance of the existing operation, it said.

To accommodate the increased electricity requirements with the larger mill and shaft, the power line to site will be upgraded at a cost of $14 million, it added.

Despite the backfill options with the envisaged paste plant, an expansion of the existing tailings impoundment area is underway and required under all scenarios to accommodate the growth in the deposit over the last several years, Alamos said.

“With two planned future raises beyond 2020 and the addition of the paste plant, the tailings facility has sufficient capacity to accommodate existing mineral reserves and resources,” it added.

SRK leveraging real-time data to improve tailings dam safety

Renewed global concern about the risks of tailings dam failure is accelerating a revolution in the use of automated sensors to generate big, real-time data to better monitor and manage these facilities, according to SRK Consulting.

“The need for knowing more about tailings dam conditions – and in real time – has become a major focus within the mining sector, demanding a step change in the way we collect, process and interpret data,” Lyzandra Boshoff, Principal Engineering Geologist at SRK Consulting, said. “As part of these efforts, SRK has been rolling out initiatives using automated vibrating wire piezometers (VWPs) on tailings facilities.”

Boshoff highlighted the particular significance of seepage and the associated pore pressure regime within a tailings facility as a vital aspect of the integrity and stability of the structure. This has conventionally been tracked by manual standpipe piezometers whose performance, while accurate, depends on the quality of installation and aftercare, she said. And, of course, manual data collection is subject to human error.

“This means expending considerable effort for relatively little data, which may often not exactly reflect the current situation by the time the information reaches the engineer for analysis,” she said. “Even the automated sensors using vibrating wire technology tended to rely on manual data collection from the logging devices connected to the sensors.”

This is now changing as many telemetry hardware developers have improved their wireless capability and cloud technology to upload and store data, allowing data to be immediately accessed by engineers and management.

“This has changed the landscape of data flow and interpretation, as well as the potential size of the datasets that can be generated,” she said. “SRK has been at the forefront of rolling out automated VWP networks, using logging systems that can send data wirelessly to cloud-based databases and can then be visualised and analysed in real time.”

Among the technological innovations the company is developing is a customised database and visualisation platform specifically for VWP data. This includes built-in, automated validation and interpretive tools to automate some of the routine engineering interpretive work. It builds upon available software technologies to create a solution that is customised to the field of tailings dam management, while also presenting opportunities for applying the principles in a range of disciplines.

The datasets generated by VWP networks can be significantly large, depending on the frequency at which data is collected. Conditions on site would determine the detail required for tracking where potentially adverse circumstances may develop, the company said.

“These VWP networks are also useful when needing to confirm whether the mitigation measures in place are having the desired effect,” Boshoff said.

Applying these technologies, SRK says it has been able to review the impact of construction process and other site activities and incidents on pore pressure responses, and analyse the impact of depositional patterns on the seepage flow regime within a facility.

“For the first time, we can see and correlate in real time what we have always predicted using models and assumptions,” Boshoff said. “Harnessing the power of big data, we can now test our assumptions and substantially raise the confidence of our observations. With the exponential growth in the application of technology in this field, more data is being generated and is available to be harnessed and interpreted.”

The sheer quantity of data generated means that engineers must innovate, finding new and more efficient ways to validate, evaluate and interpret the large incoming datasets.

Boshoff notes, however, that harnessing the full power of big datasets demands the appropriate database structures and validation processes to be in place – which is where SRK is investing considerable effort.

“To support this need, we have recently put in place a data services department at SRK, pulling together some of our brightest minds and data analysts,” she said. “This is helping champion our initiatives to harness these growing datasets into sound engineering information – so they can contribute to making informed engineering decisions.”

IMDEX symposium sets the exploration scene for AME Roundup

IMDEX recently held its fifth annual Xploration Technology Symposium in Vancouver, Canada, in which virtual reality, machine learning and new exploration technologies all received significant airtime.

The event, held on January 17, came ahead of AME’s annual Mineral Exploration Roundup, also held in Vancouver, on January 20-23. It saw 16 speakers and 160 attendees turn up.

IMDEX, which has a suite of drilling optimisation products to improve the process of identifying and extracting mineral resources globally, said the event covered multi-element data, artificial intelligence for mineral exploration and exploration instrumentation, along with a series of case studies. The focus was on improving and driving innovation in the mining industry and providing a platform to share big ideas, new technologies and new processes in exploration.

International consulting practice, SRK, had Principal Structural Geologist, Wayne Barnett, present on virtual-mixed reality, where he discussed augmented visual powers to automatically measure surface orientations and how this technology is changing best practices in data collection and analysis, IMDEX said.

Professor Bern Klein, of the University of British Columbia, meanwhile, discussed industry research to optimise value and ensure worker safety in deep underground mass mining operations.

The use of machine learning for mineral exploration in greenfield areas was discussed by GoldSpot Discoveries Corp Chief Operating Officer, Vincent Dube-Bourgeois, during the session on artificial intelligence.

Among the exploration case studies was one from Chris Gallagher, Rogue Geoscience President, a company that has been instrumental in developing several exploration technologies and geological data management systems used in the industry today, according to IMDEX.

And, Nick Payne, Global Product Manager Structural Geology at IMDEX, in his presentation ‘A New Wave of Drilling Optimisation’, discussed new technologies IMDEX COREVIBE and IMDEX XTRACTA – which, he says, offer substantial improvements in safety and productivity.

SRK, Coffey and Royal IHC to work on Giyani’s K.Hill manganese feasibility study

Giyani Metals has completed the feasibility study tendering process for its K.Hill manganese project, in Botswana, selecting SRK Consulting and a joint bid by Coffey, a Tetra Tech Company, and Royal IHC to conduct the study.

The tendering process began in early November with six service providers invited to bid.

The scope of work in the request for proposal (RFP) was divided into two work packages to run in parallel.

Work Package 1 (WP1) encompasses all the technical mining disciplines but will exclude processing, infrastructure and environmental/social. Work Package 2 (WP2) mainly encompasses the processing, infrastructure, and project execution disciplines.

Bidders were given the option to bid for both work packages, but the RFP stated that work packages may be awarded individually.

SOURCE: Manganese Metal Company, South Africa

SRK, who completed the preliminary economic assessment for K.Hill earlier this year, was awarded WP1 while WP2 was awarded to the joint Coffey and Royal IHC bid. On the latter, the company said: “The joint bid provides Giyani with specialised experience from Tetra Tech in the process of making electrolytic manganese metal (EMM – pictured) in a solvent extraction/electrowinning plant and mining engineering and construction experience from Royal IHC.”

The environmental and social impact assessment (ESIA) was tendered separately and bids are currently being assessed by the company, Giyani said.

Giyani will now move to the contracting phase which commences with a site visit with SRK, Coffey, and Royal IHC during the week of December 16.

Robin Birchall, CEO of Giyani, said: “Commencing the FS for K.Hill, along with the ESIA which we will kick off shortly thereafter, is a very important step forward, one that will prepare the company for the next and most important phase of its development, becoming one of the leading independent producers of high purity manganese for the battery electric vehicle market.”

Mike Beare, Project Manager for SRK, said: “SRK is very much looking forward to building on the work of the PEA and applying its skills to further development of the K.Hill project. This will assist Giyani with their continued growth into the burgeoning battery metals sector which we see as an area of considerable investment in years to come.”

Jacques du Toit, Project Director for Coffey & Derk Hartman, Director EPC & Project Delivery for IHC Mining, part of the Royal IHC Group, said: “We recognise that Giyani’s K.Hill manganese project offers outstanding potential for investors and look forward to providing our combined services and solutions to Giyani for the development of the K.Hill manganese project.”

The PEA on K.Hill was based on the 1.1 Mt inferred resource and showed a nine-year potential life of mine producing 245,000 t of what the company called “high-purity electrolytic manganese metal” (HPEMM). Pre-production capital was estimated at $108.5 million and the post-tax net present value (10% discount) was estimated at $285 million based on a projected average price of $4,700/t for HPEMM of 99.9% Mn over the life.

Leagold planning Los Filos gold mine expansion following latest study

A feasibility study on the expansion of Leagold Mining’s Los Filos mine, in Mexico, has shown potential for the development of the Bermejal underground mine, enlarging the Los Filos open pit, re-phasing the Bermejal open pit into two distinct open pits (Bermejal and Guadalupe), and construction of a carbon-in-leach (CIL) processing facility.

The study shows total gold production of 3.3 Moz over a 10-year mine life (2019 to 2028) at an average all-in sustaining cost of $795/oz at Los Filos. Post expansion (2021 onwards), average annual production would step up to 350,000 oz at an AISC of $759/oz, compared with 195,362 oz last year, which came from the existing heap leach facilities.

The capital cost came out at $180 million to develop the Bermejal underground and construct a new 4,000 t/d CIL plant with related infrastructure, with an NPV (5% discount) of $565 million generated using an average gold price of $1,250/oz.

Leagold CEO, Neil Woodyer, said: “When we acquired Los Filos in April 2017 from Goldcorp, we identified its potential to be developed into a long-life, low-cost operation with significant scale. During the 20 months since the acquisition, we have carried out extensive exploration programmes for both open pit and underground deposits, developed a 1,330-m ramp to access the orebody at Bermejal underground, completed the Bermejal underground mine design, completed comprehensive metallurgical testwork on all of the mineral deposits to support the CIL plant design, and learned a lot from current operations.

“The study identifies a new operating strategy, which includes three large open pits, two high-grade underground mines, the addition of a CIL plant to process the higher-grade ore, and the continued heap leaching of the lower-grade open-pit ore. The Los Filos expansion will also benefit from existing operations and excellent infrastructure. Approximately 51% of the gold production in the life of mine plan is from the CIL plant and 49% is from the existing heap leach facility.”

Woodyer added the company was now putting the study findings into its “overall corporate business model for planning and corporate financing purposes”, but he said it was “obviously a project we should undertake”.

Bermejal Underground

Bermejal underground mine design and cost estimation was completed by SRK Consulting. A total of 11 km of horizontal and vertical development was planned during the initial development period and a further 45 km over the life of mine. The mine life extends for nine years producing 6.4 Mt at 6.57 g/t for contained gold of 1.348 Moz.

Mining costs of $99/t were based on contractor mining, with the mining method being underhand drift and fill with cemented rock fill (CRF) used as backfill. Bermejal underground will have a dedicated CRF production plant. The production rate averages 2,000 t/d and peaks at 2,150 t/d. Bermejal underground contributes 31% of the contained gold in the life of mine plan.

Los Filos Underground

The Los Filos underground mine is currently operating at over 1,800 t/d and, in the life of mine plan, averages 1,700 t/d with mining costs of $73/t based on owner and contract mining. Reduced operating costs, improved mining efficiencies and additional drilling have enabled the update of the Los Filos underground mine plan to extend to 2021. The reserves are 1.9 Mt at 5.50 g/t for a total of 338,000 oz.

Open-pit mining

Los Filos uses conventional open-pit mining methods with an owner-operated fleet supplemented with rental of additional equipment during peak production periods. The average open-pit mining costs are $1.41/t mined.

Los Filos Open Pit

The expanded Los Filos open pit has a proven and probable reserve of 42.7 Mt at 0.57 g/t containing 776,000 oz. The mine life was extended seven years to 2027. The Los Filos open pit has an overall strip ratio of 4:1

Bermejal and Guadalupe Open Pits

The Bermejal and Guadalupe open pits have been split into two open pits and rescheduled to mine the higher-grade Guadalupe ore earlier in the schedule, which significantly improves the economics, according to Leagold. Guadalupe has a proven and probable mineral reserve of 26.3 Mt at 1.55 g/t Au for 1.313 Moz. A pushback in 2020 will open this up as a separate open pit that has a 10-year life, Leagold says. The Guadalupe pit has an overall strip ratio of 8:1.

The Bermejal open pit extends for at least five years to 2025 based on the current reserves. Proven and probable mineral reserves are 34 Mt at 0.54 g/t Au for 588,000 oz. The overall strip ratio of the Bermejal open pit is 2.7:1.

CIL and heap leach processing

The CIL plant is expected to achieve higher recoveries (an average of 89.7%) and better financial returns than heap leach processing for the underground ore and the higher-grade portion of the open-pit ores.

“The plant also provides the ability to process some ore types that were previously not included in reserves as they were not amenable to heap leach processing; this includes material with an elevated sulphur content which exhibits lower gold recoveries at the crush sizes typically used in crushing for heap leach processing,” Leagold says.

The plant is predicted to process a total of 12.4 Mt at an average grade of ore feed of 4.63 g/t Au with an average recovery of 89.7% to produce 1.658 Moz gold.

The expansion feasibility study contemplates the existing heap leach facility continuing to operate throughout the full life of mine plan. A total of 95.6 Mt of ore with an average grade of 0.79 g/t Au will be placed on the leach pads and have an average recovery of 61.9% to produce approximately 1.5 Moz of gold.

Secondary recovery is expected to contribute an additional 111,000 oz from surface re-leaching and re-handling of previously leached ore, Leagold says.

Contributions to the gold production in the life of mine plan are 51% from the CIL plant, 46% from the heap leach and 3% from secondary recovery.