The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
TMAC Resources enters final leg of developing Nunavut's next gold mine
TMAC Resources Inc. is closing in on the final destination on the “path to production” at its Hope Bay gold project in northwestern Nunavut.
"We remain on track and on budget with our progress to advance the Hope Bay Project towards commercial production in early 2017,” TMAC CEO Catharine Farrow informed shareholders in August.
TMAC acquired Hope Bay, a 1,100-square-kilometer (425 square miles) property that blankets most of the 80-kilometer- (50 miles) long Hope Bay greenstone belt in the Kitikmeot region, from Newmont Mining Corp. in 2013.
According to a pre-feasibility study completed in 2015, the Hope Bay mine is expected to produce 3.2 million ounces of gold over a 20-year mine life.
By leveraging the existing advanced infrastructure at Hope Bay, the PFS estimates that the robust economics of mining the high-grade gold at the project would result in a 1.7-year payback of the modest C$206 million in initial capital needed to bring the Hope Bay Mine into production.
While this plan allows TMAC to bootstrap Hope Bay into production, the company has its sights set on a bigger prize.
“The cash flows from early mining support the ramp-up of production at sites progressively further south in the belt and support exploration for significant additional mineralization along the belt,” TMAC Executive Chairman Terry MacGibbon said upon release of the study. “With three deposits already scheduled for production in the PFS, excellent potential to expand and grow those known deposits and discover new deposits along the 80-kilometer-long gold belt, we are truly at the early stages of building Canada’s next great gold mining camp.”
Expanding the cornerstone
The 2015 pre-feasibility study is based on 14.19 million metric tons of proven and probable reserves averaging 7.7 g/t (3.5 million oz.) gold. Most of this gold (2.6 million oz.) is located in the Doris and Madrid deposits at the northern end of the Hope Bay property, with the balance found at Boston, a deposit about 40 kilometers (25 miles) to the south.
From expanding the reserves encompassed by these three deposits to the discovery of new trends, the Hope Bay property provides ample targets for building the great gold mining camp envisioned by MacGibbon.
TMAC is already building this camp by expanding Doris, the cornerstone deposit were mining at Hope Bay has begun.
In June, the company reported that underground drilling from Doris had cut high-grade gold in a deeper zone dubbed BTD, short for below the dyke.
Highlights from this drilling focused on the below the dyke zones include: 17. 7 meters of 35 g/t gold in hole TM50003; 5.3 meters of 50.6 g/t gold in hole TM50010; and two meters of 97.7 g/t gold in TM50011.
The BTD zones identified so far are below a roughly 100-meter thick layer of diabase, dark-colored igneous rock that underlies the Doris North deposit.
TMAC believes the Doris North BTD exploration areas have the potential to add significant high-grade gold ounces to the Doris deposit mineral resources with continued drilling and underground development.
“We are excited by the initial results of our underground drilling program as we begin to explore and define mineralization on the Doris deposit below the diabase dyke. Management believes these results could significantly expand the current five-year mine life at the Doris mine and dramatically affect the global reserves and resources and annual gold production at Hope Bay,” said TMAC CEO Farrow.
This excitement is reflected in the C$56.5 million budget TMAC has set aside for exploring and developing Doris BTD over an 18-month period that started in July. This spending includes C$30.5 million for direct exploration and development expenditures; C$14.5 million for related equipment and site infrastructure costs; and C$11.5 million for working capital, including fuel.
The first results from this drilling continued to cut similar zones of high-grade gold, including: 4.2 meters of 43.6 g/t gold in hole TM50019a; 13.2 meters averaging 26.7 g/t gold in hole TM50025; 5.1 meters of 50 g/t gold in holeTM50027; and 4.3 meters of 68.9 g/t gold in hole TM50030.
“These positive results clearly demonstrate the significant exploration and development potential below the dyke at Doris and represent another milestone in the evolution of the Doris Mine,” said Farrow. “As we transition to production at the end of this year, it also establishes the annual process of replacing ore mined and begins the work of adding additional ounces of gold to Hope Bay’s global gold resources.”
To realize this potential, TMAC is gearing up for 1,200 meters of underground development to explore extensions and mine this deeper Doris deposit.
Golden destination
As exploration and development crews dig deeper to higher grade zones below Doris, construction crews are putting the finish touches on the mill building and other surface infrastructure needed to begin scaling up a 2,000-metric-ton-per-day operation capable of producing 183,000 oz. of gold per year.
This work has been hitting all of the milestones along the path to production. One of the most critical was the safe and successful delivery of the processing plant, which was shipped from Australia. As crews were putting the finishing touches on the mill building in August, a ship carrying the processing plant arrived at the Canadian Arctic gold mine.
By the end of the year, TMAC plans to have 110,700 metric tons of high-grade ore stockpiled that contains 55,600 oz. of gold. With the infrastructure in place and a pile of nearly half-ounce-per-metric ton-ore to feed the mill, TMAC will go into 2017 ready to become Nunavut’s next gold mine.
Given the exploration potential across the larger Hope Bay property, reaching the final destination of the path to production may just be a milestone along a greater journey for the Nunavut gold producer.
“TMAC remains focused on executing this critical stage in our evolution as we build the first gold mine in what we believe to be Canada's next gold mining district," Farrow said.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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