Oxide Production: 5 tph test plant and mining operation

 Buckreef Gold continues to operate the 5 tph oxide test plant at the Buckreef Project. In doing so, valuable information and analysis of oxide material characteristics continue to be gathered and resultant improvements to processes are being implemented, especially with respect to gold recovery and design of the 15 tph and 40 tph oxide mine operations. Further, the oxide test plant is also being used to provide data on: (i) retention times; (ii) cyanide and lime consumption; (iii) grind media consumption; (iv) aeration/oxidation; (v) elution; (vi) tailings characteristics, including dry stack tailings options; (vii) grade control; (viii) materials movement; and (ix) reconciliation processes. Select operating and stockpile information follows below:

Mining rates for Q3 2021 decreased versus the first half of the year as Buckreef Gold utilized a higher proportion of stockpiled material for its 5 tph oxide test plant. Mining rates are expected to increase prospectively as Buckreef Gold prepares and ramps-up the 15 tph oxide mill operation (subject to various government approvals). A request for proposal for contract mining has been advertised and is currently being evaluated. Mining cost per tonne were slightly higher in Q3 2021 versus the first half of the year as the mining contractor was placed on standby at reduced overall costs. Mining cost per tonne for the 15 tph and 40 tph oxide mine operations are expected to be consistent with historical costs incurred. 

Mineral reserve milled in Q3 2021 was consistent with the previous two quarters. The slight increase in variable milling costs in the quarter were primarily the result of operating during the wet season. Fixed and variable milling costs are expected to be consistent in the 15 tph and 40 tph oxide mill operations versus the costs incurred in the 5 tph oxide test plant.

Head grades have ranged from 1.12 g/t to 2.77 g/t and recovery rates have ranged from 77% to 87% in the first nine months. During the first nine months Management operated the 5 tph oxide test plant with a focus on balancing gold output and recovery rates. In doing so, it was identified that the main processing bottleneck in the oxide test plant circuit is CIL tank capacity. Illustratively, if throughput is maximized, grind size and retention times are negatively impacted (i.e. resulting in higher gold production and lower recovery rates). Conversely, if throughput is reduced, finer grind size and longer retention times are realized (i.e. resulting in lower gold production and higher recovery rates).

In working with SGSL and Ausenco, Management has determined that the major limiting factors for increased recoveries are retention time and grind size. The retention time at a throughput capacity of 3.5 tph for the oxide test plant is approximately 17 hours due to CIL tank capacity limitations, the average retention time over the first nine months has been 18 hours, which is low for this type of operation. The 15 tph and 40 tph oxide mill operation’s CIL tank capacity is designed for retention times of 28 hours, which allows more time for the cyanide to dissolve gold in the gold rich ores. The larger ball mills and the slower pace of gold rich ores proceeding through the circuit in the 15 tph and 40 tph oxide mill operations also allow for a finer and more consistent grind size.

For the final two months of the oxide test plant, the focus will be on optimizing recovery rates by reducing throughput, enabling a finer grind size and longer retention time; this process has already started and initial results to date are on target. The target recovery rates for the 15 tph and 40 tph oxide mine operations are 85% to 90% due to the following factors:

  • No preg-robbing or other refractory characteristics to date in the oxide ores;
  • Significantly longer design retention time of 28 hours for 15 tph and 40 tph oxide mill operations
    versus 18 hours to date in oxide test plant;
  • Finer design grind size for the 15 tph and 40 tph operations with the ability to cost effectively add a
    secondary grinding mill and cyclones to achieve an even finer grind size, if necessary. This is
    similar to what was experienced in the sulphide metallurgical study; and
  • The larger 15 tph and 40 tph operations are expected to improve processing of clay material in the
    oxide ore more efficiently. 

Operationally, the 5 tph test oxide plant has been a substantial success on several levels. First, operation of the oxide test plant, to date, proves the viability of the Buckreef Project to produce gold from oxides, and therefore, provides a considerable de-risking of larger 15 tph and 40 tph oxide mine operations at Buckreef, particularly in designing the operations, and stress testing financial models and returns. Additionally, the plant has been used to train and develop a crew that will be ready to operate the larger oxide plant when it comes online and has provided months of experience in: (i) understanding the metallurgical behaviour of oxide deposit; (ii) areas of mining and earth moving; (iii) stockpile management; (iv) grade blending control; (v) equipment and materials procurement; (vi) local content regulations; and (vii) security. See Figures 2,3 and 4 for pictures of: (i) the 15 TPH oxide plant flowsheet; (ii) the oxide mine pit; (iii) the oxide test plant and foundation construction for 15 tph oxide plant CIL tanks; and (iv) recent drone survey photographs. 

Figure 2: 15 tph Oxide Plant Flowsheet (With New 15 tph Ball Mill + Existing 5 tph Ball Mill)

 

Figure 3: Buckreef Gold Mine Oxide Mineral Reserve Starter Pit: View to the Southwest (February 3rd, 2021)

Figure 4: Buckreef Mine Oxide Test Plant (left) and Foundation Construction for 15 tph Oxide Plant CIL Tanks (July 2nd, 2021)  

OXIDE PRODUCTION: OUTLOOK

  • The targeted completion of the 15 tph oxide plant upgrade is expected in September/October 2021 and is anticipated to mitigate the negative cash flow on the 5 tph oxide test plant, while maintaining continuity of the existing workforce. The cash flow generated from the larger plant will enable reinvestment in the business and fund exploration, drilling and capital expenditures at the Buckreef Gold level.
  • The 15 tph oxide mine plan is based on the grade control and block model; the mine plan has been reviewed by SGS Canada Inc. (“SGSC”). Based on the mine plan and financial inputs from the 5 tph oxide test mining operations, the Company anticipates the following operating guidance for the 15 tph oxide mine operation over an 18-month mining program:

  • The long-lead items for the 15 tph oxide operation, including the ball mill, tailings facility liners and various plant upgrade components have been ordered and are in transit. Earthworks for the 15 tph oxide facility have also commenced (See Figure 4). 

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1. The 15 tph Oxide Plant estimates have not been prepared in accordance with the results of the Company’s 2018 Prefeasibility Study, reflected in the Company’s May 15, 2020 Updated Mineral Resource Estimate. The 18-Month mining plan estimates are based upon an internal mine model reviewed by SGSC and cost inputs as validated by actual mining and processing costs from the 5 tph oxide test plan over the last 9 months. No assurance can be given that the 18-Month Estimate (Monthly Average) will reflect actual results. See “Cautionary Note Regarding Forward-Looking Statements”.

2. ‘Total Cash Cost’ includes mine site operating costs such as mining, processing and local administrative costs, royalties, production taxes, mine standby costs and current inventory write downs, if any. Production costs are exclusive of depreciation and depletion, reclamation, capital and exploration costs. Total cash costs are net of by-product sales and are divided by gold ounces sold to arrive at a per ounce figure. Total Cash Costs is a nonIFRS financial performance measure often used in conjunction with conventional IFRS measures to evaluate performance. Total Cash Cost does not have a standardized meaning under IFRS and therefore may not be comparable to similar measures of performance disclosed by other issuers; it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.