Thursday, December 09, 2010

New life for old gold mine

American Bonanza Gold is getting ready to begin mining at the Copperstone gold mine in La Paz County near the California border 10 miles north of Quartzite, that previously produced from 1987 to 1993 under ownership of Cyprus Minerals. While Cyprus mined by open pit, American Bonanza plans to go underground [right, credit American Bonanza Gold] with a mining plan they say will create no new surface disturbance.

Company geologist Joe Fabrize provided an update at this week's SME Arizona conference in Tucson. Joe said that although Cyprus mined 50 million tons from the pit, American Bonanza calculates 5 million tons of ore remaining based on the 600 new core holes they've drilled to add to the 400 drilled by Cyprus.

[updated 12-16-10, 2:19pm: I changed the remaining ore amount from 50 million to 5 million. Nyal Niemuth at ADMMR thought he heard the 50 million figure too, but on checking, he found that "Cyprus’ Prospectus July 1988 reported Copperstone had about 5.9 Mt at 0.083 opt Au when they began mining. Total production was about 500,000 – so roughly 5 MT at 0.1 would make sense."]

AB plans on partially backfilling the existing pit with waste rock from the new underground mining. And because the deposit is an oxide, there will be no acid mine waste and no need for cyanide for a leach pad. Instead they will use a gravity and flotation process to recover the gold.

The company expects to recover 46,000 ounces of gold per year for the first three years, eventually recovering 231,000 ounces total, with a capital cost of $17.8 million. They recently bought a near-new mill from Homestake which is being transported to Arizona now.

In 1988, AZGS published a report on the geology of the Copperstone mine in our Field Notes newsletter, authored by Jon Spencer and John Duncan of AZGS and William Burton of Cyprus. They reported that the deposit occurs along a detachment fault, which was a still relatively new concept then. Jon told me today that the Copperstone deposit may be the largest gold deposit in the world that occurs in such a geologic setting.

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