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July 5, 2011 Vancouver, Canada -- Fire
River Gold and Mystery Creek Resources (collectively "the Company") are
pleased to provide the following update for the Nixon Fork Mine. It is a
thorough document that provides insight into all aspects of operations
at site. All photos contained in this release were recently taken and
represent current conditions at site.
Start Up Schedule
The mill was started up on July 4th. Only the gravity and flotation
circuits are being run, which will achieve approximately 80% recovery of
gold from freshly mined ore.
The crushing circuit has already been operating this past week as a
commission task and to prepare road surfacing material for construction.
See Figure 1 for a picture of the primary jaw crusher in operation.
The start up plan for the plant is to process barren waste for a few
days to get the material flowing through the mill. Next, low grade
mineralized rock (2 to 8 g/t) will be processed over the next week as a
"breaking in" period for the gravity and flotation circuits. After the
breaking in period, the mill should be fully operational on gravity
and flotation circuits and will start processing higher grade feed.
Completion of the cyanide-in-leach (CIL) circuit will be ongoing during
start up, with mechanical completion and commissioning projected for
late fall. Adding the third process should bring total recovery up to
96%.
The mine and mill should be fully operational and near capacity at 150
tpd of fresh ore from the mine by the end of October. By late spring of
2012, ore feed from the mine will be supplemented by recovering an
additional 100 tpd of tailings from the existing tailings pond, which
grades approximately 7.6 g.t (Giroux, 2010).
The key project objectives dates are summarized as follows:
- July 4 - Mill start up
- Late July -- First concentrate
shipment of 30 tonnes from Anchorage
- Mid to late August -- First doré gold
pour from gravity concentrate
- Early September -- Dry stack
construction completion
- September/October -- Mechanical
completion of CIL plant
- Late October -- Commissioning of CIL,
start of leaching
- Late Spring 2012 -- Leaching historic
tails from pond
Figure
1: Jaw Crusher in Operation The Mill
There were several modifications made to the existing mill that were
performed concurrent with construction completion of the CIL plant:
- At the crushing plant, the crush size was reduced from 2 inches
to 1 inch passing, which is a standard practice. This should reduce
the grinding requirement and could increase the capacity of the
mill.
- The feed to the centrifugal gravity separator used to come from
the cyclone overflow. This has been re-routed to draw from the
cyclone feed. This should increase gold recovery and system
operational reliability. Gravity gold is the cheapest to process and
has the highest value, so this will have a strong economic benefit
to operations.
- A slurry storage tank was added between the concentrate
thickener and filter to decouple the two processes and make them
more efficient. Peristaltic pumps were also installed to maintain a
high density and low flow. In past operations moistures as high as
20% were reported in the concentrate. We anticipate a much lower
moisture content of in the new concentrate.
The flotation circuit is very simple, using only xanthate and frother.
No pH control is required. As such, no improvement to the existing
circuit was deemed necessary. Our objective will be to moderate copper
content in the concentrate, which varied from 10 to 25% historically.
Figure 2: Gravity and Flotation Circuits at the Mill
The Carbon-In-Leach (CIL) Circuit
Two of the five cyanide leach tanks have been fully installed and a
third is partially complete. Though at site, these were delayed so that
several smaller installation around the large tanks would not be
obstructed.
The main components of the carbon stripping and electrowinning circuits
have been installed. Piping and electrical work will start in earnest in
mid August. Nearly all remaining equipment is at site, the exception
being the agitators for the detox tanks, which are the critical path
item for mechanical completion, which is anticipated for mid September.
A cyanide source has been secured for delivery in October.
The Filtered Tailings Disposal Site (Dry Stack)
The original design of the dry stack was for water collection beneath
the sand in porous pipes, transferring to a pond for sampling and
percolation into the earth. The company elected to line the dry stack
and enlarge and convert the percolation pond to a lined collection pond
to make this a zero discharge facility. This is the only significant
construction activity outside of the mill building in 2011. A fleet of
construction equipment is being assembled at site, including an
excavator, dozer, front end loader, and articulated truck for this work.
A crew of six will complete this construction by the end of August.
Completion of the dry stack is necessary prior to the commissioning of
the CIL circuit.
The Mine
The mine has been in operation for several months, with mine
rehabilitation, ore stockpiling, waste development, and diamond drilling
being the primary activities.
All mine rehabilitation work is complete, the largest project being the
refurbishing of the ventilation raise which serves as a secondary
egress.
Two primary waste headings are being driven: 1) the Crystal Ramp is
being extended to depth to access the down-dip extensions of 3000 and
3300 zones and 2) a shallow ramp is being driven from the Crystal Mine
to connect it to the Mystery Mine. To-date the Crystal Ramp has been
driven 42 m and the Mystery drive has been driven 90 m. A ventilation
drift for the Crystal ramp extension has also been completed, a distance
of 33 m.
The Mystery Mine connection drift is a shallow ramp, driven at 6% grade
from the Crystal Mine, starting at 170 mASL . This connection is crucial
to future operations, as it will open up the Mystery Mine for mining
operations (current resources in the Mystery Mine are 28,400 tonnes
indicated grading 23.7 g/t for a total of 20,900 indicated oz Au using a
cut-off grade of 10 g/t, from Giroux, 2010). It will also provide
excellent drill platforms to explore the zone between the mines,
including the Southern Cross and J5A mineralized zones.
Mining and development activities are still ramping up to full capacity
as the manpower expands to its full complement of 90 site employees.
Approximately half of the new production mining fleet has arrived at
site, including a one-boom Tamrock jumbo, BC2 longhole drill, 4 yd³
R1300 scooptram, and a 20 tonnes Dux truck. A second Dux truck and R1300
scooptram are scheduled to arrive early in June. The second scooptram
will be remote-capable, expanding stoping method options for the
operation. Additional equipment is being considered to enhance
productivity, including a rockbolting machine. The mine is expected to
achieve its full production target of 3800 ounces per month by October
2011.
Figure
3: Mine Equipment Purchases (L to R: One Boom Jumbo, 4 yd³ Scooptram, LH
Drill)
Stockpile Management
At present a stockpile of approximately 2300 tonnes of high grade
material and 100 tonnes of medium grade material is stored in front of
the primary jaw crusher outside of the mill building (Figure 4). In
addition, approximately 500 tonnes of low grade material has been stored
on a nearby laydown (Figure 5). This material is segregated into piles
awaiting grade determination by assay (note the identifying stakes for
each pile) before being added to one of the piles or disposed of onto
the waste dump.
Figure
4: High Grade Stockpile (left) and Medium Grade Stockpile (right) ahead
of Primary Crusher
Figure
SEQ Figure 5: Low Grade Stockpile (to right) and Unclassified Material
Piles
Water in the Mine
There is much speculation, but few facts known about the groundwater
situation in the mine. At present there is approximately 3 m of water at
the bottom of the old ramp and approximately 0.3 m in the new ramp
heading. The water level in the mine is known to fluctuate as much as 6
m in the spring after the snow melt.
While the full extent of the groundwater significance is not known, the
mine is taking several steps to manage groundwater inflows should they
become problematic to the crystal ramp development, including:
- Locating the drive in tightly healed limestone
- Installing a 200,000 gallon reservoir at 170 mASL to pump inflow
water (completed July 3rd) and a second 70,000 gallon reservoir at
340 mASL for drill water storage
- Diamond drilling ahead of the development heading to explore
groundwater and fracture conditions
- Acquiring a large capacity grout pump and contracting experts to
guide the grouting program should one be required
- Acquiring four evaporation misting machines to dispose of excess
groundwater through accelerated surface evaporation (one unit is
already in service at the tailings pond, see Figure 6).
Figure 6: Evaporation Mister at
Tailings Pond
Drilling
The mine has two Hagby drills that have been operated underground over
the past several months. Drill results have been extensively covered by
numerous press releases over that period.
The main objective of recent drilling was ore definition in support of
the earliest mining in the upper Crystal Mine, approximating the first
six months of production. This work is complete and the drills are now
being turned to exploration targets on surface and underground. The most
important target for both is the zone between the Mystery and Crystal
mines, which houses three targets: the Southern Cross, J5A, and 3100
zones. These will be more effectively drilled once platforms have been
provided by the shallow ramp connecting the Mystery and Crystal Mines.
The Company maintains that the property is fairly large and the ability
to replenish mining on an annual basis is a probable and appropriate
approach to extending the life of the operation.
Figure
7: Hagby Drill Set Up Underground
Assay Lab
One challenge of start up has been to fully staff the assay lab, which
has been accomplished with the addition of four assayers.
While the ore is visually discernable, the precise grade is not, and
there is enough latitude that the geologists are regularly surprised in
both directions -- assays demonstrating higher and lower grade than
expectations based on visual examination. Accordingly, a quick
turn-around of assays is necessary to properly manage the determination
of ore and waste. The number of results per day will increase with mill
start up, as the underground testhole, chip samples, and muck pile
samples with be joined by numerous daily checks on mill feed, gravity,
flotation, concentrate and final tailings determinations.
Diamond drill samples are still assayed independently such that they can
be used to support resource and reserve estimations.
Figure
8: Fire Assaying for Stockpile Grade Determination
Marketing Contracts
Negotiation of contracts for the off-take of concentrate and dore bars
are under active discussion with a number of major buyers. The
concentrate will leave site in 1 tonne totes on pallets aboard a C130
Hercules aircraft. The doré will be shipped in 25 to 30 kg bars that
will be comprised of gold (60%), silver (30%), and impurities (10%). No
delay to revenue is anticipated due to completion of either contract.
Security
A contract has been awarded to an independent contractor Doyon Universal
Services LLC for continuous surveillance of the mill area and to
accompany all shipments from site. The Company is confident that the
surveillance equipment installed coupled with the diligence of a
third-party security team will protect the operation from losses due to
theft.
Logistics
Being an air-support operation, efficient logistics are crucial to the
property's success. Our primary fuel supplier, Everts Air Cargo, has
successfully built up our inventory at site such that for the first time
in our project's history we refused a fuel flight last week. Figure 9
shows the Everts DC-6 offloading fuel into the Nixon Fork tanks. Note
that the art on the nose depicts the plane's original owner, Mr. Howard
Hughes.
Figure
9: Everts Air Cargo's DC-6 Transferring Fuel
Most of the heavy equipment at site was lifted from Anchorage aboard a
Lockheed C-130 Hercules airplane, supplied by Lynden Air Cargo (Figure
10). This plane will also be used for all bulk supply, such as cyanide,
lime, cement, and to fly copper concentrate from site. Excess payload
capacity is often exploited by offloading wing fuel from the plane to
our fuel storage tanks.
Figure
10: Lynden C-130 Hercules Airplane Arriving at Nixon Fork Mine
Anchorage Office
The Company has established an Anchorage office, which is embedded in
Lynden's main facility. Project accounting, human resources, and
logistics coordination will be managed from this office.
Closing Comments
Needless to say we are all excited about achieving this milestone. I am
very proud of our workers and our management and thank each employee,
consultant, and contractor whose contribution got us to this point. It
has certainly been a team effort with many helping hands.
On behalf of the Board of Directors, I look forward to keeping you
updated with our corporate developments.
"Richard Goodwin"
Richard Goodwin
President and COO
Certain information regarding the Company including management's
assessment of future plans and operations, may constitute forward-looking
statements under applicable securities laws and necessarily involve risks
associated with mining exploration and development, volatility of prices,
currency fluctuations, imprecision of resource estimates, environmental and
permitting risks, access to labour and services, competition from other
companies and ability to access sufficient capital. As a consequence, actual
results may differ materially from those anticipated in the forward-looking
statements. A feasibility study has not been completed and there is no certainty
the disclosed targets will be reached nor that the proposed operations will be
economically viable. The TSX Venture Exchange or its Regulation Services
Provider have not reviewed and do not accept responsibility for the adequacy or
accuracy of the contents of this news release, which has been prepared
by management. We seek
safe harbour.
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