Treasure Hill Mine Feasibility Study

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Treasure Hill Mine Feasibility Study

• Scott R. Smith
• Mackay School of Mines
• May 2004

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Overview

• Location and General Site Information
• Reserve Estimation
• Mining
• Processing
• Financial Analysis

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Location
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Location

• Piñon-juniper ecosystem
• Elevation 8650 ft
• Water table 5500 ft
• Temp. range 7- 84F
• Annual precip. 12 in

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White Pine Mining District

• Gold and silver discovered 1868
• Production 20-40 million
• Population 10,000-15,000
• Shallow deposits
• Sporadic mining through 1950

Hamilton, 1869
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Permitting
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Reclamation

• Sinking fund
• Invest 62,405 per year at 4 interest over 30
  year mine life
• 3,500,000 available at closure

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Geology

• Narrow vein gold deposit
• 6,900 ft strike length
• 3,000 ft vertical extent
• 65 dip
• Host rocks limestone and dolomite

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Mineral Reserve Estimation

• Kriging used to estimate grade and tonnage

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Grade-Tonnage Curve
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Mineable Reserves
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Mining

• Cut and fill mining
• Adaptable to varying ground conditions
• Efficient for steeply dipping narrow deposits
• Highly selective (minimal dilution)
• Expensive and labor intensive

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Mining
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Mining
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Mining
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Mining
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Mining
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Mining
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Mining
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Mining
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Mining (Stope Summary)

• 400 shifts to take up stope
• 60 tpd from stope
• 24,000 tons per stope
• 16,900 tons of backfill placed per stope

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Mine Design
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Mine Design
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Hoisting

• Main Shaft
• Production
• Men and Materials
• 43 tph max.
• (2) 5 ton skips
• Vent raises
• Secondary escape ways

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Level Loading Pockets
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Level Development

• Track drift
• 24 gauge
• 35 lb rail

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Level Plan
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Production

• 700 tons per day
• 360 operating days per year
• 2 shifts per day
• 10 hours per shift

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Backfill

• Paste backfill
• 86wt solids
• 8 cement
• 800 psi
• 100 tph

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Ventilation

• Main shaft intake
• Ventilation raises - exhaust
• 100,000 cfm
• 72- 50hp fans in ventilation raises
• Parallel ventilation in stopes

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Auxiliary Stope Ventilation
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Drilling and Blasting

• Jackleg and stoper drills
• Pneumatically loaded ANFO
• LP non-el caps
• 20 gram stingers

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Drift Round
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Breast-Down Stope Round
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Raise-up Stope Round
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Underground Equipment
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Surface Equipment
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Mineral Processing

• 1000 tpd mill
• 95 blanket recovery
• 80 gravity
• 90 flotation

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Mineral Processing
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Infrastructure

• Power
• Mt. Wheeler Power Company
• 0.05 per kWh
• 115 kV transmission line to mine
• Substation
• Water
• Pipeline from Harris Spring

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Human Resources

• Hourly Personnel
• 216 underground and surface employees
• Average wage 22/hr benefits
• Salaried Personnel
• 24 Salaried Personnel
• Average salary 60,600/year benefits
• 240 total employees

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Financial Analysis

• Development costs
• Studies and permitting 617,000
• Site preparation 1.6 million
• Engineering 300,000
• Mine development 55.4 million

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Financial Analysis

• Capital costs
• Buildings and Facilities 14 million
• Equipment 4.8 million
• Operating costs
• Development 134/ft
• Stoping 19.45/ton 1.56 ft3

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Financial Analysis

• Cost Summary
• Total operating cost per ton 95
• Cash cost per ounce gold 49

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Financial Analysis
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Financial Analysis
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Economic Analysis (350 gold)

• Total project cost 83.7 million
• NPV_at_15 342.6 million
• IRR 124

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Recommendations

• Start mining ASAP!
• Scrutinize semi-variograms
• Obtain further geotechnical information
• Consider rubber-tired equipment
• Consider other mining methods
• Consider conventional sandfill
• Perform sensitivity analysis on gold price