https://www.miningweekly.com

TMAC again lowers guidance as mill ramp-up slows

15th August 2017

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

Font size: - +

VANCOUVER (miningweekly.com) – Emerging gold producer TMAC Resources expects to produce even fewer ounces this year at its Dorris mine, in Canada’s Nunavut Territory, as a slower-than-expected ramp-up of the plant impacted on the operation’s most recent quarterly performance.

TMAC poured first gold at Dorris – part of the Hope Bay gold project, in the Kitikmeot region – during the first quarter, before declaring commercial production on June 1. The Toronto-based company now expects to produce between 50 000 oz and 60 000 oz of gold this year, down from the original forecast calling for 130 000 oz to 140 000 oz of gold, which itself was lowered to a range of 100 000 oz to 120 000 oz of gold, before the latest guidance reduction.

During the first quarter, the company advised that circuit instability resulted in interruptions in plant availability. Subsequently, the plant can and has operated at or more than its design capacity of 1 000 t/d, but average daily throughput for the second quarter was considerably lower because of variable and occasionally low plant availabilities, the company advised.

The variation in overall mechanical stability of the plant has had a negative impact on recoveries through to mid-July. Plant availability typically varied between 50% and 80% owing to unplanned, mechanical upsets during the ramp-up and optimisation period in the quarter, the company said.

The inconsistent availability and recoveries of the plant have negatively affected the feed ore tonnes as well as the number of tonnes of ore mined and placed on the ore stockpile. The grade of ore sent to the plant has also deliberately been kept lower than planned, resulting in the amount of gold produced and sold being significantly lower than planned.

The result has been lower revenues and higher costs for the quarter. An increase in plant recoveries is a prerequisite for the company to start processing ore from its high-grade stockpiles and achieving stated guidance, TMAC noted.

During the quarter, the plant processed 60 600 t of ore, of which 39 900 t of ore was processed before June 1, and 20 700 t in the month of June. The 39 900 t of pre-commercial production ore processed in the second quarter yielded 7 070 oz of gold produced, bringing the total number of tonnes processed during the 2017 commissioning period to 58 800 t and the total ounces of gold produced to 15 290 oz as at May 31.

Since achieving commercial production, the plant processed 20 700 t of ore at an average grade of 11.7 g/t, with a recovery rate of 67%, producing 5 200 oz of gold to the end of the quarter. With the low recoveries being experienced by the plant during the slower-than-expected commissioning and ramp-up period, the plant was fed lower-grade ore to reduce the absolute number of ounces being lost to the tailings impoundment area.

In the second quarter, TMAC mined 30 400 t of ore at an estimated grade of 12.4 g/t, containing 12 100 oz of gold. Since the start of the year, mining produced 59 400 t of ore, at an average grade of 12.6 g/t.

All-in sustaining costs were $1 801/oz of gold sold during the month of June, the only month of commercial production in the quarter.

Mine development was adjusted to be in line with the fewer tonnes processed owing to the slower-than-planned ramp-up of the plant. Development rates are sufficient to ensure that ore is available for processing based on the current processing demand. Development of the BTD zones, to facilitate increasing production tonnages from 1 000 t/d to 2 000 t/d later in 2018, continued as planned.

Net profit totalled $500 000, or $0.01 a share, on a basic and fully diluted basis.

Of the 11 630 oz of gold sold, 7 880 oz of gold was sold before June 1, for C$13.5-million of proceeds credited to development costs, and 3 750 oz of gold were sold in June for C$6.1-million of sales in the quarter.

EXPLORATION SUCCESS
Meanwhile, having recently declared commercial production from the Doris deposit, TMAC has turned its focus to the Boston deposit. The initial drilling programme was designed to extend the wide, high-grade trends within the current resource model, which proved successful.

Highlights from the Boston B2 drill holes included Hole TMB0001, which returned 15.3 g/t over 22.3 m – including 36.6 g/t gold over 4.5 m, 18.9 g/t gold over 6.3 m and 20.6 g/t gold over 2.6 m. Hole TMB0003 returned 17.3 g/t gold over 2.1 m; and Hole TMB0007 returned 8.9 g/t gold over 8.9 m and 5.9 g/t gold over 8.7 m.

Further, TMAC continues to test the Doris deposit, including the BTD extension, with substantial success. This includes Hole TM50058 returning 10.7 g/t gold over 2 m; Hole TM5007 returning 33.8 g/t gold over 3.8 m and 15.3 g/t gold over 2.3 m; Hole TM50078 returning 77 g/t gold over 0.7 m; and Hole M50085 returning 5.7 g/t gold over 21.2 m.

The company continues with the Doris BTD underground development and has started development on the upper levels of the BTD east limb.

TMAC targets the Madrid and Boston deposits to start production in 2020 and 2022, respectively.

Edited by Samantha Herbst
Creamer Media Deputy Editor

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION