By Steve Fiscor, Editor-in-Chief
Today, Elko, Nevada, represents the epicenter of metal mining activity in the U.S. The land between Elko and Winnemucca hosts the Carlin and Battle Mountain-Eureka trends, which is the highest concentration of known gold deposits in North America. If Nevada were a country, it would be the third-largest gold producer behind China and Australia.
Last year, two industry giants merged their operations in the region creating a ripple affect. As they realized massive synergistic savings, displaced executives and engineers moved to small- and midtier operations and began improving them. A number of new names have emerged, Nevada Gold Mines, i-80 Gold and Hycroft Mining, among others.
Nevada Gold Mines Hits Its Stride
A little less than two years ago, Barrick Gold and Newmont Corp. formed Nevada Gold Mines LLC (NGM) in a 61.5/38.5 (Barrick/Newmont) joint venture, which Barrick operates. The NGM assets include 10 underground mines, 12 open-pit mines, two autoclave facilities, two roasting facilities, four oxide mills, a flotation plant and five heap-leach facilities, along with several development projects. Last year, NGM produced 3.47 million ounces (oz) and it has proven and probable reserves of 45.2 million oz and measured and indicated resources inclusive of reserves of 74.2 million oz.
“Nevada is Barrick’s value foundation hosting three of our six tier 1 mines, leading margins, a strong operating cash flow and a solid net cash position,” said Mark Bristow, CEO, Barrick Gold. “The joint venture has a good grip on its geological inventory with the brownfields and greenfield exploration programs up and running and already paying dividends. Major opportunities are taking shape around our core sites at Carlin, Cortez and Turquoise Ridge.”
The operations at NGM are divided into three regional districts, Carlin, Turquoise Ridge and Cortez. The Phoenix and Long Canyon mines stand alone in more remote locations. NGM employs nearly 7,000 people with more than one-half of them working for the Carlin Complex (3,563), followed by Cortez (1,349), Turquoise Ridge (965), Phoenix (471) and Long Canyon (252). Of that group, 14.2% are women.
The Carlin Complex consists of eight operations: Goldstrike (open pit), Goldstrike (underground), Leeville (UG) Pete Bajo/Fence (UG), Exodus (UG), Genesis/Tri-star (OP), Gold Quarry (OP) and Emigrant (OP). For NGM, Carlin represents about one-third of its NGM’s potential production.
Barrick’s Turquoise Ridge mine merged with Newmont’s Twin Creeks to form the Turquoise Ridge Complex. It consists of three operations: Turquoise Ridge (UG), Vista (UG) and Turquoise Ridge Surface, which includes the Mega (OP) and Vista (OP) operations. All processing facilities are located at Turquoise Ridge Surface on what was formerly Newmont’s Twin Creeks property. Sulphide ore is processed at the Sage autoclave, while oxide ore is processed at the Juniper mill or stacked on heap leach pads.
Accessed by two shafts and a system of internal ramps, Turquoise Ridge (UG) produces high-grade sulphide gold ore using underhand drift and fill mining methods. It is currently hoisting 2,700 metric tons per day (mt/d) of ore, which will increase following the completion of a third shaft that is currently under construction. Vista (UG) is a portal and ramp accessed vein-style stoping mine with a few years of mine life remaining that produces approximately 1,000 mt/d of sulphide ore. Turquoise Ridge Surface has been in operation for more than 30 years and its current reserve mine life is expected to extend until 2030 at approximately 71,000 mt/d. It produces oxide heap leach, oxide mill and sulphide ore.
The Cortez Operations consist of the Pipeline (OP), Crossroads (OP), Cortez Hills (OP), Cortez Hills (UG); a 15,000 t/d, carbon-in-leach (CIL) gold plant and heap leach pads and heap leach processing plants; with additional mineral resources contained in the Cortez and Gold Acres open pits.
When the JV was initially announced, the companies were targeting 3.4-3.7 million oz/y and believed they could reduce costs by $500 million synergistically over five years. Supply chain synergies alone were projected to be $115 million.
Commenting on 2020 performance, Bristow said NGM’s integrated operations met all key performance indicators. He also said the focus will now shift to exploration and adding resources. The three regions under consideration lie between Turquoise Ridge and Twin Creeks; between Pipeline and Robertson in the Cortez Complex; and in the Carlin Basin south of Gold Quarry.
For 2021, NGM has posted guidance of 3.40-3.65 million oz with cost of sales between $980/oz-$1,030/oz. Cash costs and AISC guidance are $660-$710/oz and $910-$960, respectively.
During the first quarter, production at the Carlin Complex was down as higher carbonaceous ore had to be blended with lower grade stockpile feed, which affected roaster feed grade. Both Carlin roasters will be shut down for annual maintenance during the second quarter and that partly explains why the company is forecasting a better second-half performance.
Production at Cortez was impacted by resequencing after the operation sustained a “geotechnical event,” which delayed stacking at the heap leach pad and affected the feed blend to the oxide mill. “The mine expects a stronger second half of the year, thanks to a higher contribution of fresh ore from Pipeline as mining there ramps up,” Bristow said.
The exploration declines at Goldrush have now intersected the ore body with positive results. After bulk metallurgical campaigns are completed, development will head north toward the first vent shaft position.
Turquoise Ridge had a good first quarter with steady production and slightly better grades at Twin Creeks (OP). “Construction of the third shaft debottlenecks the hoisting and ventilation constraints, which will allow for higher underground production,” Bristow explained. “And, [the third shaft project] remains within budget and on schedule for commissioning in late 2022.”
Turquoise Ridge has made considerable progress with exploration. “Improved understanding of the controls of mineralization has provided a solid foundation for mine design and planning and has indicated a significant potential for a new high-grade underground operation,” Bristow said. “If, as anticipated, Turquoise Ridge and Twin Creeks are proved to be geologically connected, it could add significant high-quality ounces to this complex.
Production at Phoenix and Long Canyon remains on track. Costs at Phoenix were significantly lower due to increased copper byproduct credits. “With total cash costs of $79/oz for the quarter, Long Canyon continued to boast some of the best margins in the industry,” Bristow said. Long Canyon’s mine life extension project is being reviewed and NGM may restart the permitting process for Phase 2.
Kinross Sets Stage for Continuous Improvement
Kinross has two operations in Nevada, Round Mountain and Bald Mountain, which together produced more than 500,000 gold equivalent ounces (geo) in 2020. Round Mountain produced 324,277 geo and Bald Mountain produced 191,282 geo in 2020.
“Nevada is one of the best mining jurisdictions in the world, and we are proud to be a part of the state’s long mining history as responsible operators of the Round Mountain and Bald Mountain mines,” said Louie Diaz, vice president, corporate communications, Kinross Gold. “With a strong resource base, and a comprehensive exploration program planned for 2021, we are excited about the potential of both operations and the important part they will continue to play in Kinross’ future growth strategy.”
Round Mountain uses conventional open-pit mining methods, and processes ore by mill and heap leach. Kinross began operating the mine in 2003, and it has since become a continuous improvement leader in the Kinross portfolio, Diaz explained.
The orebody is open at depth and has a large reserve and resource base with 2.2 million oz in proven and probable reserves, 3.7 million oz in measured and indicated resources, and 1.6 million oz in inferred resources.
First gold was poured from the site’s Phase W expansion project in May 2019, which extended mine life to 2027. “We are now focused on further expansions, including potential future pushbacks to the southeast (Phase S) and to the west (Phase X) with the goal of extending mining into the next decade,” Diaz said.
In 2021, a large portion of the $6 million exploration budget allocated for Round Mountain is expected to focus on drilling the Phase X deposit. One part of the program plans to continue defining the narrow structurally controlled high-grade vein at the upper portions of Phase X that was identified in 2020. In addition, drilling is expected to test along-strike and down-dip extents of the mineralized structures with the goal of delineating high grade material for potential underground mining.
Bald Mountain is an open-pit mine located along the southern extension of the Carlin trend and was acquired by Kinross in January 2016. The mine plan is optimized for cash flow, with higher production expected over the next three years from the North area of Bald Mountain. The majority of production in 2021 and 2022 is expected to come from the Vantage Complex, a project completed in 2019, located in the South area, and the Top pit in the North area. Expansions at North and South Duke, Royale and Saga pits are expected to support 2023 and 2024 output.
Bald Mountain is located on a very large land package and has more than 1.1 million oz in proven and probable reserves, nearly 3.6 million oz in measured and indicated resources, and nearly 700,000 oz in inferred resources, as well as a pipeline of high-quality targets. Kinross is exploring opportunities for additional resource conversions with future studies anticipated to provide a path to further mine life extensions.
The company expects to spend $6.5 million on exploration at Bald Mountain in 2021 with an increased focus on drill testing targets identified in 2020. Near-mine targets in the North area of Bald Mountain — such as Duke, Galaxy, Bida and Royale — are expected to be explored during 2021. Approximately 50% of Bald Mountain’s 2020 depleted reserves were replaced through exploration and engineering optimization work.
i-80 Gold Acquires Getchell Project
After being spun out of Premier Gold as a Nevada-focused mining company, i-80 Gold has set its sights on becoming a midtier gold producer. In addition to its producing mine, El Nino at South Arturo, i-80 is beginning to plan for future production growth through the potential addition of the Phases 1 and 3 projects at South Arturo and advancing an underground development program for its McCoy-Cove Property. i-80 is also completing the acquisition of the Getchell Project and will aggressively pursue the development of the Pinson underground and open-pit opportunities.
i-80 Gold recently completed the previously announced purchase agreement of Waterton’s interest in Osgood Mining Co. LLC for $50 million in cash and common shares. Osgood owned the Getchell Project near Winnemucca, Nevada.
It’s an interesting project geologically because it is located at the intersection of the Getchell gold belt and the Battle Mountain-Eureka trend immediately south of NGM’s Turquoise Ridge operation. The project currently hosts both high-grade open-pit and underground deposits and the Pinson mine has been on care and maintenance since 2015.
The Getchell Project will be i-80’s focus for 2021 with a 22,000-plus meter drill campaign designed to upgrade and grow mineral reserves and resources. The company is progressing work on a preliminary economic assessment (PEA) for the project, which it expects to release soon. Permitting for the purpose of developing an open pit at Getchell is expected to be initiated in the near future.
“We look forward to immediately commencing this major drill campaign aimed at advancing the development of the high-grade Pinson underground mine within the next 12 months, while at the same time progressing permitting of the open pit, heap leach, mining opportunity,” i-80 CEO Ewan Downie said.
The resources at Getchell include 1.464 million oz of gold in the measured and indicated category and 646,000 oz in the inferred category.
The primary goal of the 2021 drill program is to advance the Pinson underground and open-pit opportunities to production. Once underground platforms are upgraded, two underground drill rigs will be mobilized, focused on delineating sufficient resources for near-term development. Initial surface drilling will test near-surface mineralization for metallurgical purposes and open-pit definition.
“The goal for our team this year will be to complete the PEA on the property as quickly as possible, which will drive our decision making and planning for an upgraded economic study once this year’s drill program is completed,” said Matt Gili, president and COO of i-80.
The Pinson project is host to a high-grade underground resource that includes 190,000 oz of gold of measured and indicated resources (563,000 metric tons at 10.49 g/mt gold) and 581,000 oz of inferred resources (1.5 million mt at 11.90 g/mt gold), making it one of the highest-grade, permitted gold deposits in North America. The open-pit deposit area hosts a measured and indicated resource of nearly 1.28 million oz ounces of gold (20.5 million mt at 1.95 g/mt gold).
Hycroft Hits Reset Button
Denver-based Hycroft Mining owns and operates the Hycroft mine, 54 km west of Winnemucca, Nevada. The company has hired a new team to manage the project and they have announced plans to turn the operation around this year.
During May 2020, Mudrick Capital Acquisitions Corp. purchased the mine and formed Hycroft Mining. In late August, they hired Dr. Diane Garrett as president and CEO. She built and led the Ramarco team that developed the Haile gold mine in South Carolina. In October, Mike Eiselein was promoted to vice president, general manager, of the Hycroft mine. He was the process manager for operations and has 30 years of experience with Barrick and Newmont. In January, they brought Jack Henris, a mining operations executive with 35 years of experience with Newmont and Barrick, on board as COO. In less than a year, the company has attracted more than a dozen key technical and operations personnel.
Last year was an important year for Hycroft Mining as the company continued to focus on the restart of the Hycroft mine, Garrett explained. “Throughout the year, we advanced work on the proprietary two-stage sulphide heap oxidation and leach process and made several important findings that will need to be addressed prior to our implementing the novel technology on a commercial scale,” Garrett said. “In 2021, we expect to mine predominantly oxide and transition material, which are more economic when treated using a conventional run-of-mine heap leaching method, which gives us the opportunity to continue to refine the operating parameters and the flowsheet for the new heap leach pad and novel process.”
Garrett said the new leadership team launched into an extensive and detailed review of the Hycroft mine and took immediate steps to rectify operational shortcomings, significantly cut costs and formed an operating team aligned with the company’s long-term strategy to establish the Hycroft mine as a long-life, low-cost gold and silver producer.
During the last few months, Garrett said Hycroft has worked alongside its consultants to identify and investigate opportunities for improvements in operating parameters for the two-stage sulfide heap oxidization and leach process (See Processing Solutions, p. 58). The result of the work to date has identified several items that were not considered or included in the original plan and design but are critical to the success of this process.
Hycroft expects to produce 45,000 to 55,000 oz of gold and 400,000 to 450,000 oz of silver in 2021. They also expect to mine and stockpile at least 300,000 tons of sulphide ore in 2021.
Rochester Expansion Begins
Coeur Mining’s Rochester mine is an open-pit, heap leach silver-gold operation located in Pershing County, Nevada, approximately 26 miles northeast of Lovelock. The mine consists of the main Rochester deposit and the adjacent Nevada Packard deposit, southwest of the Rochester mine. Additionally, Coeur acquired the Lincoln Hill, Gold Ridge and Wilco projects that are adjacent to Rochester for $19 million in November 2018.
Rochester is currently undergoing an expansion under Plan of Operations Amendment 11 (POA 11), which is expected to be largely completed by late 2022. The expansion project includes the construction of a new leach pad, a crushing facility equipped with two high-pressure grinding roll units, a Merrill-Crowe process plant, and related infrastructure to support the extension of Rochester’s mine life.
“The expansion of Rochester represents the company’s single largest organic growth opportunity,” Coeur President and CEO Mitch Krebs said. “The combination of significant reserve growth, the scope of the expansion project to leverage economies of scale, and the benefit of higher and faster silver recoveries from HPGR technology is expected to generate an internal rate of return of more than 30%. Importantly, the project is supported by a technically sound foundation with robust economics that helps drive an anticipated step-change in Coeur’s cash flow profile, which we believe will fundamentally reposition the company and unlock meaningful long-term value for our stockholders. We are all excited about the future of Rochester…”
POA 11 includes the construction of a new leach pad, a crushing facility equipped with two HPGR units, a Merrill-Crowe process plant, and related infrastructure to support the extension of Rochester’s mine life. The company plans to fund the project with a combination of cash on hand, internally generated cash flow from its four operating mines and existing debt capacity.
Coeur began major construction on the POA 11 expansion earlier this year. Overall project progress was approximately 20% complete at the end of the first quarter. Key elements of the project timeline remain on schedule and are expected to be largely completed by late next year.
Pumpkin Hollow Commissions Hoists
Nevada Copper owns and operates Pumpkin Hollow, located near Yerington, Nevada, which has developed an underground project now in production. The processing facility commenced production in December 2019, using development ore stockpiled during construction of the underground mine. The project’s substantial reserves and resources include copper, gold and silver, and there is potential for deposit expansion and greenfield exploration.
In March, Nevada Copper announced it had completed commissioning of the main shaft hoist. It now has the capacity to hoist at 5,000 tons per day (t/d), as well as move people and equipment as required. The company is currently in the process of completing the automation of the auxiliary hoist, however, this work is not critical for achieving steady-state production levels. The repurposing of the East North Ventilation Shaft is ongoing and on schedule in support of the installation of the surface ventilation fans.
To enable the ramp-up of production at Pumpkin Hollow (UG), the company also needed to upgrade and expand the electrical system underground. That work has been completed and the mine now has sufficient electricity to power additional production equipment and ventilation. Additions to the mobile production fleet were deployed in February as planned, with final pieces of equipment to follow on schedule during the next few months.
“We are very pleased to have recently completed both commissioning of the main shaft and the electrical system upgrades — two important steps toward achieving nameplate production. The remaining step, ventilation upgrades, is progressing well, and we remain on target for steady state production of 5,000 t/d in Q3 this year,” said Mike Ciricillo, CEO of Nevada Copper. “With the underground project expected to be ramped-up to full production in Q3, we look forward to advancing our other key growth opportunities, including our fully permitted open pit and property exploration targets.”
As part of the ventilation upgrade, two additional fans have been installed underground with another two underground fans were expected to be installed in May. Two large permanent surface fans have been ordered and are scheduled to be installed in Q3 2021.
First stopes are anticipated to be extracted soon, which will likely result in a grade increase from the developmental ore currently being processed.
Lithium Americas Advances Thacker Pass
Lithium Americas is developing the Thacker Pass mine, the largest known lithium resource in the United States and the next large-scale lithium mine. Located in Humboldt County, the project is situated at the southern end of the McDermitt Caldera, approximately 100 km northwest of Winnemucca. In 2018, Lithium Americas completed a prefeasibility study (PFS) on a two-phase project with a production capacity designed to reach 60,000 mt/y of battery-grade lithium carbonate (Li2CO3) and 46-year mine life.
The PFS contemplates initial Phase 1 production capacity of 30,000 mt/y of battery-grade Li2CO3 commencing in 2022 and increasing in Phase 2 to 60,000 mt/y in 2026. The project will be developed as an open-pit mining operation using surface miners. The ore will then be processed in a leaching circuit using sulphuric acid to liberate the lithium from the claystone. Following the leaching process, the lithium bearing solution will be purified using crystallizers and reagents to produce battery-grade Li2CO3.
During January, the U.S. Bureau of Land Management (BLM) issued a Record of Decision (ROD) to Lithium Americas following completion of the National Environmental Policy Act process. The ROD is the final federal approval required to start construction and operation. The company believes that all remaining state permits and water right transfers required to commence construction will be issued later this year.
The process testing facility in Reno, Nevada, has produced more than 20,000 kg of lithium sulphate solution.
Results of a feasibility study targeting an initial 30,000-35,000-mt/y lithium carbonate equivalent of capacity (Phase 1) are expected by year end. In addition, the company is advancing engineering to consider a 20,000-mt/y lithium hydroxide chemical conversion plant to have flexibility to meet potential customer and partner needs.
Lithium Americas continues to expand the engineering and technical team at Thacker Pass. There are now more than 30 professionals focused on advancing the project toward the start of construction, expected to begin in early 2022.
NVMA: Ensuring the Voice of the Nevada Miner is Heard
Nevada is a mining state, but not everyone knows it. Similar to many states, there is a disconnect between the activity that takes place in rural regions of Nevada and the urban centers, like Las Vegas. People who are unfamiliar with the industry will likely say Nevada had a rich mining industry once, but that has run its course and ask: Hasn’t it?
Tyre Gray, president of the Nevada Mining Association (NVMA), and his team are on a mission to educate Nevadans about mining. “Today, mining is the 12th largest industry in Nevada,” Gray said. “It provides 11%-15% of all non-energy minerals mined in the U.S. and it does so by disturbing less than 0.5% of the land in Nevada, while generating $11 billion in economic activity and paying salaries that support more than 37,000 families.” Gray is also well aware that the Fraser Institute recently recognized Nevada as the best mining jurisdiction.
One group of Nevadans that do know that mining exists and thrives in Nevada today is the state’s legislators in Carson City. They are currently considering a tax scheme that could hinder growth and jeopardize that Fraser ranking.
With much of its income dependent on tourism, Nevada was one of the states hit hardest by the pandemic and the state is experiencing some budget challenges. “This shouldn’t come as a surprise as the state faced a similar downturn after the 2008 global financial crisis, but it has, and the state is now considering a tax increase on mining,” Gray said.
Nevada’s mining industry pays all taxes every other business pays plus an industry specific tax, which is set by the state’s constitution and capped at 5% on net proceeds, Gray explained. “Lawmakers took the first step toward amending the constitution last summer during a special session and passed a resolution to increase taxes on mining,” Gray said. “If approved by the legislature again, the resolution would be placed on the ballot for 2022.”
Gray said there are currently two proposals on the table. “AJR1/SRJ1 would increase the total tax burden on mining companies by 400% and the state’s portion of the tax by 850%,” Gray said. “AJR2, extended as an olive branch by the industry, would increase the total tax burden by 140% and the state’s portion by 250%.”
The last mining-related tax adjustment was in 1989. “The mining companies understand the pressure to modernize the tax basis,” Gray said. “We often hear, ‘Can’t the industry pay a little more?’ And, we’re happy to have those discussions, but 400% is not a little more.”
Gray estimates the new mining tax could threaten 30% of Nevada’s mining workforce. “People see the revenues that gold mining companies are posting, but they tend to forget about the initial investment the mining companies made in these properties, and that revenues and profits are different,” Gray said. “This tax increase could result in a net zero benefit to the state, as the revenue generated would be paid out to provide social services for the possibly 10,000 displaced workers that were never a drain on the state’s social safety net.”
Beyond public outreach and working with policymakers, the NVMA is also engaged in workforce development for its members. “Nevada’s mining industry operates with a constant deficit of 200 to 400 jobs, which is surprising considering that the average job pays $95,000 per year with really great benefits,” Gray said. “From an industry perspective, if we could resolve this, the mines would run more efficiently. From the state’s perspective, we are taking people off the social safety net and paying taxes. Elko is culturally and geographically diverse, and it’s a wonderful place to live, work and raise a family in the shadows of the Rubies, and there are other opportunities in mining in other locations throughout the state.”
New mines have opened recently in other districts and mining companies are breathing new life into idled brownfield operations. Beyond gold, the state is now seeing interest in battery mineral deposits and other strategic minerals. Gray sees this as another positive for business and NVMA members. Of its 550 members, only 40 are mining companies, the rest are interested in business-to-business opportunities and they also want to make sure Nevada’s mining voice is heard.
“We’re the leading state mining association with a rich history that dates back 115 years,” Gray said. “Our mission is clear: Unite, educate and advocate and serve as the voice of Nevada’s modern mining industry. We want informed Nevadans to embrace the mining industry as forward thinking, respected and essential for a vibrant future. We have an appreciation for the Earth’s resources and we are leading the way to a greener future.”