Resource World Magazine

62 www.resourceworld.com a p r i l / m a y 2 0 1 5 e p i l o g u e D a v i d D u v a l G old exploration on Banks Island in Hecate Strait, approximately 120 km south of Prince Rupert off the coast of northwest British Columbia, has a long his- tory dating back to the early 1960s. In the half century since that period, several com- panies have conducted exploration on the island's Yellow Giant gold property – includ- ing underground diamond drilling and drifting – producing results that often just failed to meet the threshold for commercial production. These exploration activities did, how- ever, lead to the partial delineation of several gold deposits on the property, pro- viding the impetus for Banks Island Gold Ltd. [BOZ-TSXV] to develop BC's newest gold mine. Based on the current mineral resource estimate, mine production is scheduled at 75,000 tonnes per year employing con- tract mining crews. The principal gold deposits on the property are projected to have a combined life of slightly over two years without taking into account the high probability of new discoveries. While that might seem like a risky short term bet for any gold company, structurally-controlled gold deposits of this nature tend to have long lives and there's probably no reason why this one shouldn't be any different. Under the leadership of Benjamin Mossman, P.Eng., President and CEO, the company's longer term game plan for Yellow Giant is to boost gold production incrementally – a tried and tested strategy first adopted by mines in most of Canada's major gold camps. Many of these mines are still going strong a century later! With multiple mineralized zones that are open at depth and along strike and numerous gold showings that have had little exploration to date, the prospects for staged production increases at Yellow Giant seem good indeed. Gold mineralization at Yellow Giant occurs in massive sulphide veins with quartz/carbonate gangue. It is closely associated with pyrite and typically is non- refractory. Mineralized veins are steeply dipping with widths varying from 0.5 m to 5.0 m which no doubt limits mining (stoping) options. High-grade shoots with strike lengths of approximately 50 m and known depths up to and exceeding 150 m are present within mineralized zones. The combination of strong wall rocks and the ability to remove mining dilution through Dense Media Separation (DMS) facilitates the use of highly productive sublevel long- hole mining methods, the company notes. Yellow Giant hosts measured and indi- cated resources of 57,600 ounces grading a hefty 0.76 oz gold/ton with inferred resources of 35,700 oz. at approximately the same grade. Mineral resources cur- rently exist in four zones: Bob, Tel, Kim and Disco with the PEA recommending sequential mining of the various zones and preferential mining of the higher grade areas. The company has targeted produc- tion of 28,000 oz gold per year, producing a gold sulphide concentrate that is shipped out for refining. Banks Island has an off-take agreement for the sale of gold-sulphide concentrates with Metallica Commodities Corp. The agreement included advance payments of $6 million in 2013 about half of which has been drawn down to date. Repayment is made on the basis of 25% of the invoice value from concentrate purchases and the term of the agreement covers the existing mineral resources at Yellow Giant. Thinking outside the proverbial box by some seasoned industry veterans has facilitated development of what is essen- tially a relatively narrow, near-vertical vein system whose ultimate success requires careful planning. The project also avoided the prohibi- tive cost of a full-scale feasibility study by relying on a thorough and quite detailed Preliminary Economic Assessment (PEA) which laid out options to achieve low risk, small-scale, commercial production. For low capex operations with experienced management, this level of study would appear to be more than adequate and, in fact, is increasingly "de rigueur" for oper- ations this size. Banks Island Gold commenced com- mercial production on January 1, 2015 and is one of only a few operators in the world that is successfully operating a DMS plant. DMS is suitable for any ore which has enough difference in specific gravity between waste and mineral particles to repay the cost of treatment. According to the company, "The unique mineralization at Yellow Giant in conjunction with DMS provides important benefits including increased throughput, decreased costs, and lower mining cut-off grades. Pre-concentration rejects up to 50% of the mined mass in a coarse gravel- sized product resulting in sufficient void space in underground workings to dispose of all tailings underground." The company has thus far managed to achieve its planned mining schedule, although the operation has experienced higher mining dilution (and thus lower grades) than initially projected because of surface caving into the Bob Zone and the fact only large equipment was available for waste development in the Tel Zone. Measures have been taken to counter this increased mining dilution by modi- fying the surface plant's flow sheet to pre-concentrate up to 600 tonnes of mine feed and purchasing smaller underground equipment. n BC's newest gold producer sees incremental expansion in future

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