Great Basin in talks with Newmont to treat more Hollister ore
miningweekly.com
By: Liezel Hill
24th March 2009
TORONTO (miningweekly.com) – Vancouver-based Great Basin Gold expects to finish refurbishing its Esmeralda mill, in Nevada, around midyear, but is considering toll treating some ore from the company's Hollister mine in the meantime, CEO Ferdi Dippenaar said on Tuesday.
The company bought the Esmeralda mine and mill for $2-million last year, after it decided it would be cheaper to process the ore itself, rather than sending it elsewhere for treating.
Great Basin, which is also building a mine in South Africa, is conducting 'trial mining' at Hollister while it awaits final permitting approval for the operation.
Since production started last year, the company has processed a series of ore batches at US gold giant Newmont Mining's nearby Midas mill and was in talks over a longer-term contract, but Dippenaar had made it clear that he was not satisfied with the toll-treatment costs being levied.
The refurbishment of the Esmeralda mill is expected to cost about $8-million and will be completed during July. The mill will start up with a capacity of between 350 t/d and 400 t/d of ore.
Milling costs are currently estimated at $50/oz, plus $60/oz in transport costs.
In 2009, the company plans to mine 109 600 t, containing 134 000 oz of gold, Dippenaar said on Tuesday.
Ore is currently being stockpiled, as it will be needed to commission the mill once it is completed, “but, of course, there is also the need for working capital", he added.
Great Basin has made provision to treat between 30 000 t and 50 000 t this year at another facility, and is “probably in the final throes” of entering into an agreement with Newmont's Midas mill.
However, the terms of any agreement will be improved from earlier toll-treating arrangements.
The company extracted 50 161 t of ore at Hollister in 2008, but only treated 33 830 t.
Gold production for the year from treated ore amounted to 38 465 oz.
Great Basin is also planning to increase the milling capacity of Esmeralda to between 600 t/d and 700 t/d by the end of this year.
Shares in the company slid 6,88% on Tuesday, to C$1,49 apiece by 15:02 in Toronto.
Edited by: Liezel Hill |
