By NICK STEWART
With a bankable feasibility study now in hand, Apollo Gold Corporation is moving full steam ahead on its plans to bring both a new open pit and a past-producing mine online in the Timmins area by early 2009.
“What this means to us is that the project is now a go,” says David Russell, president and CEO of the Denver-based Apollo Gold.
“The board of directors have approved it, and by August and September we should be well on the way to getting the project developed.”
The Black Fox project, located 64 kilometres east of Timmins, involves the re-opening of the former Glimmer Mine and the creation of a new open pit, with the intent of starting production by January 2009.
The dual mining efforts are expected to produce a joint total of 150,000 ounces of gold every year throughout the nine-year operational life of the project. However, as the company works to add the 820,000 ounces of resources to the 1.3 million reserve ounces, Russell anticipates that the mine life may extend to 13 years.
While the underground mine workings are set to reach to 400 metres below surface, drilling to a depth of 1,000 metres returned an intercept of 12 grams per tonne (g/t) gold. This knowledge of being open on strike and on dip provides some confidence to believe that Black Fox may be in operation 30 years from now, Russell says. This marks a considerably longer period than the mine’s previous production of 213,000 ounces from 1995 through 1998, though this was largely done as a test as the latter stages of an exploration project, rather than standing as a full-fledged producing mine.
Although the project is carrying a projected cost of $86.9 million, a gold price of $750 per ounce would mean the company would be able to see payback within two years.
Initially, Black Fox is set to produce roughly 1,500 tonnes per day, with approximately 1,000 tonnes stemming from the open pit and 500 from the underground operations. Within two to three years, that will increase to 2,500 tonnes per day.
While the company initially sought permitting to create their own mill on site, St. Andrews Goldfields recently agreed to sell their Stock Mill to Apollo, along with the related equipment, infrastructure and tailings facilities, for $20 million.
As the cost of building such a mill would reach $65 million, the move represents a considerable savings for Apollo, even considering that the ore produced at Black Fox will need to travel 28 kilometres westwards down Highway 101 to reach the mill.
While the mill is capable of processing 1,100 tonnes per day, Apollo is seeking to increase that total to 1,500 in time for the beginning of production in 2009. In anticipation of eventually reaching 2,500 tonnes per day, the company is also examining the potential of increasing the mill to reach that capacity; in the meantime, agreements are being signed with St. Andrews Goldfields to mill all extra material at their nearby Holt Mill.
No shortage of work remains to be done, however. Permitting for pre-stripping the area in preparation for the open pit is expected to be completed by July, while the actual work will be contracted out and is expected to take up to six months.
Development of the underground facilities is expected to take place later this year, including extending the ramp’s current depth of 235 metres to the 400-metre level.
While the near future certainly looks bright for Apollo, officials are already looking to the horizon with an eye on expanding the mine’s potential. In recent months, they’ve acquired two properties adjacent to Black Fox which have been known to expand the structural system. Once the mine has begun production, a 30,000-metre drill program will be undertaken on these new properties to examine the potential to use them to expand the Black Fox project even further.
They’ve already shown some promise, as drilling performed there by Newmont Mining in the late 1980s identified 1.1 million tonnes grading 6.5 g/t gold, though this is considered historical and not industry-compliant. As the mineralization there appears to be close to the surface, it could allow for the expansion or creation of a new open pit.
“We’ve had a lot of luck out at Black Fox thus far, and if things shape up the way we expect them to, we may well be out there for a very, very long time,” Russell says.
