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Good things happening at Jerritt Canyon
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Good things happening at Jerritt Canyon

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“I think everybody here can feel that there are some good things that are happening at Jerritt Canyon,” Rodney Lamond, the president and CEO of Jerritt Canyon Gold, said recently.

The Jerritt Canyon Mine, which is about 50 miles north of Elko, has been through many turns of fortune over the years.

For a while, Jerritt Canyon was the big operation in the region.

“If you turn back the clock to the early ‘80s, when Freeport was running the operation, before all of our neighbors were here, this was the major producer, this was the largest producer in Nevada,” Lamond said. “It was producing well over 250,000 ounces a year. They had four pits on the go - it was a big open pit operation.”

Jerritt Canyon now is producing about 130,000 ounces a year, and the biggest mines in the region, like Nevada Gold Mines’ Cortez and Goldstrike, can produce over a million ounces a year.

In recent years, there have been some negative news reports about the Jerritt Canyon mine. For example, in January 2014, when the mine was owned by Veris Gold, the Mine Safety and Health Administration issued 61 citations and orders to Jerritt Canyon and MSHA put out a press release criticizing the mine.

From June 2014 to June 2015 Veris Gold operated under a form of bankruptcy protection. A Canadian bankruptcy court then ordered Veris to sell its assets. Eric Sprott, a Canadian investor who is one of the largest gold equity holders in North America, purchased the majority of the Jerritt Canyon Mine in June 2015, so the mine is now privately owned. Jerritt Canyon Gold LLC, owned by Sprott Mining, owns 80% of the mine, and the other 20% is owned by Whitebox Asset Management.

“We have two tremendous shareholders as supporters and they believe in the assets,” Lamond said.

Lamond said there are now a lot of great things happening at the mine. In January, they had gone more than 450 days without a lost-time accident. In November, they had a grand opening of a new $15 million water treatment plant – see the story on page 14 of this issue of the Mining Quarterly. Reclamation projects are ongoing. After years of very little exploration, a major exploration project is now underway, and the results look promising. And in the third quarter of 2019, the mine reported its first profit in many quarters.

For now, Lamond said, all the profit being generated by the mine is going into reclamation and exploration activities.

“Historically there has been 10 million ounces (of gold) mined here,” said Kevin Small, Jerritt Canyon’s general manager. “If you look in the mining world, single entities, there are not too many 10 million ounce producers. We just happen to be in a really good gold district. And we’re still open. … This ground here has the potential to produce quite a bit of gold. With our exploration programs we’re starting to see, it’s not all mined out, there’s quite a bit left here to mine.”

Some history

The Jerritt Canyon Mine is in the Independence Trend. Mining got started in this area with the Sb Mine, which produced 20 tons of antimony in 1918 and another 12 ½ tons of antimony in 1945, according to westernmininghistory.com. Decades later, FMC was exploring for more antimony, and gold was discovered in 1972. FMC asked Freeport Gold Co. to enter into a joint venture to develop the property. Construction of the mine began in 1980, and the mine cost a total of about $105 million. The first gold was poured in 1981. By 1983, more than 270 people worked at the mine and mill. Today there are about 350 people working at the mine, including both the Jerritt Canyon employees and the Small Mine Development employees who work in the two underground mines.

The mining was all open pit from 1981 to 1993, and open pit mining continued to 1999. The open pits produced a total of about 5.5 million ounces of gold. Underground mining started in 1993 with the opening of the SSX-Steer Complex and the Smith mine. Other underground mines have included MCE, which was shut down in 2004, and Murray, which shut down in 2006. Jerritt Canyon’s underground mines have produced about 4.5 million ounces of gold so far.

A 2015 story in the Elko Daily said, “Jerritt Canyon has had numerous owners through the years. It started out as a joint venture of Freeport McMoRan and FMC, then FMC Gold and then Meridian Gold. Freeport sold to Independence Mining Co., a subsidiary of Minorco, which later sold all its mining assets to AngloGold. AngloGold Ltd. and Meridian Gold then sold it to Queenstake Resource Ltd. in 2003. Yukon-Nevada, which became Veris Gold, was a subsidiary of Queenstake.”

In recent years Jerritt Canyon has had four underground mines – Smith, SSX-Steer, Starvation Canyon and Saval. Starvation Canyon is now shut down because the resources were depleted there, and Saval was shut down last spring because the resources there were running low and the company decided on a change in focus. Smith and SSX-Steer are the two mines in operation today, and Small Mine Development is doing the mining. Jerritt Canyon had been doing the mining at Saval in-house.

“We may go back into in-house mining at some point,” Lamond said, “but we felt that the effort that we needed to focus on company-wise was all of the surface infrastructure and the surface operations, and utilize a mining contractor, SMD, to do the mining. And they’ve done a great job. What we wanted to try to do over the last six to eight months is invest a lot of time and money into exploration activities.”

Management

Both Lamond and Small are fairly new to Jerritt Canyon. Lamond started there in April and Small arrived in May.

“I’ve been involved with Jerritt Canyon since April as president and CEO,” Lamond said, “but I’ve been looking at Jerritt Canyon for probably the better part of five years, ever since Eric Sprott purchased the asset. And I think in terms of its district and geological potential, it’s absolutely world-class.”

Lamond, a professional mining engineer with more than 30 years of experience, is also chairman of Jaguar Mining and a board member of Stratabound Minerals. He is from Toronto and spends some of his time there, but he said he is spending 60 to 80% of his time at Jerritt Canyon.

“I run most of the company business out of here,” Lamond said.

The mine has a senior vice president and a controller who work in Toronto, Lamond said, but most of the rest of the staff work at Jerritt Canyon, including a new CFO who was hired in October.

Small is also a mining engineer with over 30 years’ experience in mining. He has worked mostly in Canada, but also spent two and a half years in Australia.

“I worked at a company down in Australia; that’s where I first met Eric (Sprott),” Small said. “That’s the reason why I’m here, because he asked me to come here, to see if I can help out. I wouldn’t be here if I didn’t see the potential.”

Lamond said Jerritt Canyon has a management team with lots of experience.

“We have a great management team here with a tremendous amount of years of experience,” Lamond said. “We want to highlight that on our website and show that there’s hundreds of years of experience here, all in their different fields, whether it’s environment or geology or engineering or mineral processing or maintenance. They’re a great group of people.”

Reclamation

Reclamation of historic mining sites is one of the priorities at Jerritt Canyon.

“The open pits finished in 1999, and reclamation needs to be done on the waste dumps for those pits,” Lamond said. “And we’re committed to move those reclamation projects forward. There are a number of reclamation projects that we can do progressively while the mine is still running, and we don’t have to wait until the mine closes to do it. Because I anticipate through our exploration success that we won’t be closing anytime soon.

“One of the major projects we started last year and we’re going to be finishing this year is our old tailings area,” Small said. “We’re going to cap that and we’re going to put that into final closure.”

“That’s a great project,” Lamond said. “That’s something that’s visible, and you can see right away that there’s a real impact.

“Obviously, those projects take capital, and we need to generate the revenue in order for us to be able to do those projects.”

Exploration

When the management decided to emphasize exploration at Jerritt Canyon, Lamond said, they considered the possibility of shutting down the mine for a couple of years and focusing entirely on exploration.

“But we have a great management team here that has a tremendous amount of years of experience; our workforce is trained, our workforce is very talented, and we want to retain those people,” Lamond said. “So we just have to make sure that what we’re doing underground currently today is sufficient to be able to meet both goals in terms of sustaining the operation, of covering our costs for all the labor, all the materials, the sustaining costs, as well as looking at some of our investment costs that we’re making as well, and reclamation costs. And, knock on wood, we seem to be tracking very well.”

Talking about the need to know about a mine’s resources and reserves, Lamond said mining is kind of like driving at night.

“You only see that 30 feet in front of you, but if you know where you’re going, you’ll eventually get there,” Lamond said.

However, without doing much exploration for years, the lights have not been reaching out very far at Jerritt Canyon. They have continued to produce about 30,000 ounces of gold a quarter, and Lamond said because of the mine’s replacement history, he feels confident the mining will continue for years. But the exploration program that started about eight months ago will give the mine known reserves, and could show where to go to possibly find some more big deposits.

Lamond said the ground with gold deposits is like a layered sandwich that twists through the landscape in the Independence Trend.

“Everywhere there are outcrops, there are pits that have been mined historically up to 1999. Now all of those surface outcrops of that lower plate are underground. The resource potential is still there, it’s just covered with this upper plate.”

Jerritt Canyon’s exploration program is making use of three techniques – two state of the art techniques, hyperspectral imaging and magnetic surveys – along with more traditional on-the-ground and underground exploration.

Hyperspectral imaging does satellite imaging of the property, and measures the infrared light reflected off rock surfaces to determine the mineralogic characteristics of an area.

“It basically is like putting on a pair of glasses and everything stands out property-wide,” Lamond said.

Lamond said they gathered some core samples they had logged and categorized and sent them to Reno for scanning, and these scan results provided guidance on what to look for during the hyperspectral imaging.

The magnetic surveys use a drone to determine the density differences in an area.

“The drone did hit a tree. Which is quite comical for this area,” Small said.

“It’s hard to find a tree,” Lamond said.

The information from the hyperspectral imaging is combined with the information from the magnetic surveys.

“We’re excited about the new exploration techniques that allow us to look deeper and see things that are undercover that we haven’t seen before, without going out with a very expensive exploration drill program and doing like they did in the ‘90s where they systematically just drilled everything, which cost a fortune. What we’re doing now is we’re looking at structural features along with chemical features that hone in our exploration targeting.”

Lamond said they started the magnetic survey program in late July, and they just recently started getting the data back.

“So things take time,” Lamond said. “It takes 12 months to 24 months to build a life-of-mine plan that you can bank on, that gives some credibility to the future of the operations.”

Jerritt Canyon recently hired a new mineral resource geologist to work on the exploration project.

“He’s pulling together a lot of the historical information along with the new information that we have coming in,” Lamond said.

The primary focus of the exploration has been around the existing mines. If they find good deposits around the existing mines, then the infrastructure will be nearby.

They are especially focusing on the area between Smith and SSX-Steer. Smith is very close to the mine’s infrastructure, but to get to SSX-Steer, the miners have to go up over the top of the mountain.

“But these two mines, in terms of the separation between each other, are only 4,200 feet apart,” Lamond said. “So if we connected the two, we don’t have to drive all the way across over the mountain all the time and we could just come in through one side. So all of this area is a great area for exploration.”

Jerritt Canyon has a big land package. The southern border of the land package is about 25 miles south of the mine, about halfway between Elko and the mine. And although the exploration has focused primarily around Smith and SSX-Steer, the new techniques Jerritt Canyon is using have made it possible to survey the entire property to look for other areas that warrant additional exploration. Lamond said that hyperspectral imaging and the mag survey of the whole property have highlighted an area far from the active mines where there is “a great big anomaly.”

“We just can’t wait for spring so we can go over and start exploring on it,” Lamond said. “That has huge potential. It could be another two-million-ounce deposit. SSX-Steer, which over its life has mined 1.8 million ounces, could be sitting over there as well. So we’re pretty excited with our exploration results so far.”

All of the exploration that is going on is keeping the mine’s lab busy. In the month of October the lab processed a record-breaking 16,366 samples. There was one 24-hour period when the lab processed over 1,000 samples.

“We were stepping and fetching, for sure,” said Lab Supervisor Allen Park.

The lab was originally designed to process up to around 500 samples a day.

Processing

The underground mines at Jerritt Canyon are all less than 1,000 feet deep. Low profile mining equipment removes the ore, which is stacked near the mine portals for grade sampling. After sampling, four 100-ton haul trucks take the ore to the mills.

As mining progressed in the early days of Jerritt Canyon, the mine made a complete changeover in the way the ore is processed. The mine started out with a wet mill and used a carbon-in-pulp process to extract the gold. The mine then switched to a dry milling process and a carbon-in-leach circuit.

According to a report from the mine, “as the ores became more carbonaceous and refractory, and higher grade with the introduction of underground ore, a dry mill with an ore roasting circuit was added in 1989.”

Small explained that along with the CIP circuit the mine also had a chlorination circuit which oxidized the ore.

“In the end they were losing too much and they were mining more of the sulfite, so that chlorination one wasn’t the right process,” Small said.

The mine stopped using the wet mill in 1997. The unused wet mill and carbon-in-pulp processing facilities are still at Jerritt Canyon. The wet mill facility has two semi-autogenous grinding mills and fairly large ball mill. Small speculated that maybe someday the wet mill will be shipped away for use at another mine.

The dry mill process continues today. There are a lot of steps to the process. The ore starts out going through a 42x48-inch jaw crusher, and then goes in a gas fired drier. It then goes through a secondary crushing circuit with a 4.25-foot Symons standard cone crusher. Next is the tertiary crushing circuit, with two Symons 4.25 short head cone crushers in a closed circuit with vibrating screens. Next, the dry grinding circuit has a 14.5-foot diameter by 18.5-foot-long Fuller grate-discharge ball mill driven by a 2,500-horsepower motor. The ground product is then stored in a 2,000-ton roaster feed bin.

The ore roasting circuit has two Dorr-Oliver two-stage fluid-bed roasters. The roasters are about 11 stories tall. You walk up flight after flight of stairs in the building housing the roasters to get to the top, where the windows look out at on a good view of the Jerritt Canyon mine site.

The roasting process almost completely destroys all the refractory constituents, making cyanidation more effective.

The roasted ore goes into quench tanks and then is pumped into a big outdoor thickener tank. The solution then goes to the carbon-in-leach cyanidation circuit with six tanks, where the gold is leached and recovered.

Jerritt Canyon has a refinery, so the final product leaving the mine are gold bars.

A basic difference between the carbon-in-pulp process which Jerritt Canyon used to use and the carbon-in-leach process used now is that CIP has tanks dedicated to leaching, followed by tanks dedicated to absorption onto carbon, whereas with CIL the carbon is added to the leach tanks.

The roasting process at Jerritt Canyon is quite unique. Jerritt Canyon is one of only three processing plants in Nevada that uses roasting in its treatment of refractory ores, according to the mine’s website.

Jerritt Canyon’s roaster uses oxygen instead of air as the fluidizing-combustion gas. That achieves high conversions of sulfides and carbon at lower combustion temperatures than traditional air roasting.

Jerritt Canyon has an oxygen plant to provide the oxygen for the roaster. In a simplified explanation of the cryogenic distillation process, air from the atmosphere is pulled into the main air compressor with a 5,500-horsepower motor, and is supercooled with a heat exchanger, bringing the air down to temperatures as low as minus 320 degrees Fahrenheit. The cold air, which is in a 200-foot-tall column, separates into its three elements – oxygen, argon and nitrogen. The oxygen and argon are liquids which settle into different levels in the column. The nitrogen isn’t quite a liquid, and it rises to the top. This makes it possible to pull out the liquid oxygen, which is put into storage tanks. Oxygen gas is then piped to the roasters.

The oxygen plant is designed to produce 325 tons of oxygen a day.

Roasting processes have been used for processing ore over the years, but people at Jerritt Canyon said that Jerritt Canyon was the first to develop the large-scale roasters that the mine uses today. Matt Jones said a smaller-scale roaster was built at the nearby Big Springs as a prototype for the roasters which were being planned for Jerritt Canyon back in the 1980s.

“Big Springs was built as a pilot for these roasters to see if it was really going to work,” Jones said.

Small said the engineers at Jerritt Canyon in the 1980s thought through the problem they were having with not recovering enough gold, and they figured out a way to deal with it.

“They used true engineering in developing a new process that was never used before,” Small said. “That’s quite amazing.”

Small said he is a history buff, and when he goes to work at a mine he does some research on the mine’s history, and at Jerritt Canyon he found some of the early documents on the roasters.

“I found the original drawings of the roaster, and I found the original letter from Barrick saying, we’ll buy the patent,” Small said.

He said Barrick paid Jerritt Canyon $1 million for the patent to the roaster, which was quite a bit of money in the 1980s. But Small said he believes the roaster patent was actually worth a lot more.

“Normally, now, you’d offer it up on a per-ton royalty basis,” Small said.

Small said that as a long-time mining engineer, something he wanted to do for years is go inside a roaster.

“Because in mining I knew about the roasters, one of my bucket list items was to actually get inside one. So we had a down in October, and I actually went inside … Not too many people have had the opportunity to stand inside one of these roasters.”

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