Goldstrike the largest U.S. gold producer
Canadian mining giant Barrick Gold Corp. is engaged in a long- running wrangle over the Busang gold mine in East Kalimantan, one of the world's richest gold finds. Barrick recently invited a number of Indonesian journalists to visit its Goldstrike mine in Elko, Nevada, U.S. -- the largest gold producer in North America. The Jakarta Post's journalist Benget Simbolon joined the tour. The following is his story on Goldstrike.
Elko, Nevada, (JP): Ten years ago no one foresaw that Goldstrike Property would become the largest producer of gold in North America and one of the most modern, efficient mining operations in the world.
A number of companies had previously explored the property to no avail. They only identified a smaller reserve of gold which did not encourage them to further their explorations.
When Barrick Gold Corp. acquired a 100 percent stake of Goldstrike Property from Pancana Industries and Western States Minerals in January 1987 for US$62 million, it identified a gold reserve of about 600,000 ounces, said Vincent Borg, vice president of Barrick for public affairs and communication.
He said that following the acquisition, Barrick pursued intensive exploration efforts. In March 1987, it discovered the Betze deposit, which contained 12 million ounces of gold. Since that time, the reserves have steadily risen to today's level of about 30 million ounces of gold.
Under Barrick's development plan, the mine, which now employs about 2,000 people, has grown from a small heap leach operation producing 40,000 ounces of gold per year into one of the world's largest gold mining and processing complexes. It produces 2.4 million ounces per year.
Located in Elko, a small city with a population of 21,000 in northern Nevada, U.S., the 7,000-acre Goldstrike Property contains the single largest gold reserves in the country.
Now Goldstrike Property has the Betze-Post and Meikle mines. The Betze-Post mine is an open pit gold mine which contains 23.3 million ounces with an average grade of 0.203 ounces of gold per ton. The Meikle mine, on the other hand, is an underground mine which contains 6.6 million ounces of gold with an average grade of 0.68 ounces of gold per ton.
Processing plant
The company also has a gold processing plant in the area that currently can process up to 17,500 tons of ore per day to produce about 6,500 ounces of gold per day or 2.4 million ounces per year.
"Betze-Post Mine was a conventional open pit shovel and truck operation, using large-scale equipment, to mine about 150 million tons per year," Borg said.
He added that the Betze-Post Mine is the largest open pit gold mine in the world, producing about two million ounces of gold per year.
Goldstrike Property has invested $160 million on mine equipment which includes four 42-cubic yard electric shovels and three 23-cubic yard hydraulic shovels. There are 73 190-ton trucks used in the pit. Each 190-ton truck cost $1.6 million and each electric shovel cost $7 million.
It has a computerized truck dispatch system which has increased productivity and improved cost efficiency by coordinating the truck and shovel fleet operations in the pit.
The mine has also installed a $26-million electrified trolley- assist system for faster and more cost-effective hauling from the pit. The system benefits include reduced energy costs, increased engine life and reduced emissions and improved air quality in the pit.
The Meikle mine, located one mile north of the Betze-Post Mine on the Carlin Trend, is a compact, high grade ore body underground mine.
It was first discovered in 1989. Its sulfide ore body has been outlined at a depth of between 800 feet and 1,900 feet below the surface.
The Meikle mine, which came into production late 1996, produces about 400,000 ounces of gold per year.
The capital required to develop the mine was $180 million, or about $30 per ounce. These development costs were financed through existing cash and future cash flow from the Betze-Post mine.
Borg said Barrick would continue its explorations to expand the current reserves.
"In Goldstrike alone we spent averagely $10 million per year for explorations. But overall in our world operations, we spent approximately $110 million per year for explorations," he said.
He said his company's exploration expenditures increased every year. For instance, the 1996 budget for exploration at Goldstrike was set at approximately $17.5 million, increasing by 53 percent from $11.4 million in 1995.
"Only by continuing explorations can we extend our mining life," he said, adding that besides the explorations his company would also pursue community development and environmental programs that would in turn benefit his company. (bnt)