BacTech Environmental and REBgold two years on

HIGH PROFILE
BacTech Environmental
and REBgold two years on
In Toronto John Chadwick talked
with Mark Burridge and Ross Orr
to find out how the two BACOX
companies are faring after their
creation in December 2010 as
part of the BacTech Mining Plan
of Arrangement
oth companies apply the patented BACOX
bioleaching technology. In Bactech
Environmental’s hands it is an
environmental clean-up solution that also
creates a profit. REBgold is primarily using the
process to acquire and develop economic
interest in gold assets.
The only two widely used gold bioleaching
technologies are BACOX and Gold Fields’ BIOX.
In copper, the two are a BHP process and
BACOX. A copper/gold project would be an ideal
application for REBgold. There is interest in
using bioleaching on complex concentrates,
which in addition to copper would include zinc,
nickel, cobalt and lead . BACOX can produce
LME grade A copper on-site. The bioleach
hardware for base metals is similar to that used
in refractory gold bioleaching.
Mintek, the globally respected mineral
processing and metallurgical technology
organisation has undertaken significant work
with BACOX. It estimates that about “one third
of the world’s gold is produced from refractory
ores, and this proportion is growing as oxidised,
near-surface resources become depleted. The
most common cause of refractoriness is the
association of the gold with sulphide minerals
such as arsenopyrite and pyrite, by physical
lock-up in the sulphide grains or by substitution
in the sulphide lattice. This results in poor
recoveries (as low as 10 to 20%) by direct
B
100 International Mining | FEBRUARY 2013
cyanide leaching. Several process routes are
available for breaking down the sulphide
minerals and bioleaching is an attractive option
for the following reasons:
■ No airborne pollutants are produced, and the
solid and liquid wastes are environmentally
acceptable
■ Simplicity of design and operation makes the
technology suitable for use in remote
locations, with low-level operating skills
being required
■ Plant availability is high
■ Start-up times are short, and capital and
operating costs are favourable.”
Bactech Environmental applies the
technology to the processing of toxic, arsenicladen mine tailings. An added benefit of
bioleaching, in addition to stabilising arsenic
and capturing heavy metals, is that it oxidises
sulphides in mine tailings, thereby eliminating a
major source of acid mine drainage. It also
recovers precious and base metals from tailings
for sale to market. Bactech holds the perpetual,
exclusive, royalty-free rights to use BACOX for
the reclamation of tailings and mining waste
materials.
Ross Orr, President & CEO notes that a
“number of troublesome tailings have been
inherited by governments” and that the
“conventional model is to tender to engineering
companies for capping and the taxpayer pays.
Bactech is working on a
project to remediate an
arsenopyrite residue
stockpile at the Snow
Lake mine
They are more interested in treating long term –
50-year water treatment contracts. The answer
of course is to cure the patient not treat the
patient”
The BacTech approach is to provide a problem
solution by removing sulphides. He explained
that there is a “no cost to the taxpayer when
contained metal can provide suitable returns.” It
has quite a lot in its pipeline of projects,
including numerous problematic tailings sites in
Bolivia, with economic assessment on-going. At
the Giant mine in Canada’s NWT , BacTech is
trying to convince anyone who will listen that
spending $500M is not necessary if bioleaching
is used to clean up the tailings. There is
additional, less advanced, work in Chile, Peru,
Mexico and Bulgaria.
Gold mine operation
To date, BACOX has been used at three
producing gold mines located in Australia,
Tasmania and China, designed and
commissioned by Bactech since 1994 and prior
to the plan of arrangement. This is now
REBgold’s main target – involvement in gold
mine operations, leveraging the BACOX
technology.
It is a commercially proven technology,
focused on refractory gold deposits. Its
advantages include the low capital expenditure
required, the fact that it is scalable and the
HIGH PROFILE
Rantasalmi potential - geophysics
potential for base metals credits.
REBgold is evaluating and negotiating on a
number of targets, ranging from scoping stage
assets to producing mines. It plans to develop a
small portfolio of equity interests, including
control positions, in assets of merit. Very
recently, the company has also made the
decision to make its technology available on a
commercial basis, Burridge, Chairman & CEO
told me. So, interested companies can now
licence the technology for their own projects.
In 2011, REBgold and Belvedere Resources
signed an Earn-In Agreement. REBgold is
earning a 50% interest in two of Belvedere's
properties, Kiimala and Rantasalmi. This is
REBgold’s main focus now and it is required to
make expenditures of C$6 million in a four-year
period. During the first year, REBgold spent
C$1.5 million on the properties. After the earn-in
has been completed a decision as to whether to
proceed to a feasibility study will be made and,
if REBgold elects, it will have a period of a
further two years to complete the feasibility
study. By completing the feasibility study,
REBgold's stake would increase to between
55% and 75%, depending on the level of
Belvedere's contribution to the study. A further
5% interest may be earned through the
contribution of BACOX technology to the
projects. REBgold currently owns 14% of the
projects.
REBgold has a combined global resource of
0.6 Moz between the Rantalsami project and the
Kiimala project.
The Rantalsami property hosts two gold
deposits, Osikonmäki and Pirilä located 8 km
apart in southeast Finland. The gold is
associated with arsenic and bismuth in quartz
veins. Both deposits have already been
extensively drilled. Osikonmäki is open in all
directions while the existing Pirilä body appears
well defined and represents a small highergrade addition to Osikonmäki. Osikonmäki has
large tonnage potential as the mineralised shear
extends for at least 3 km, with recent
geophysics showing potential further along
strike. The bulk gold till anomaly encompassing
Pirilä is more than 30 km long and the chances
of finding further mineralisation of similar type
is good.
Metallurgical test work has indicated
predominantly free milling and Burridge,
acknowledging that leveraging BACOX is not
essential, explained to me that the project may
not justify the BACOX cost, because good
recovery may be “achieved without the
additional cost to raise recovery by less than 10%.”
Total resources at Osikonmäki East amount
244,000 oz Inferred plus 68,000 oz Indicated. In
addition, historical resources at Osikonmäki
West and Pirilä come to 77,000 oz.
The Kiimala property totals 34 km2 of claims,
with excellent infrastructure, power and roads
cut through the property area. Numerous
occurrences of orogenic vein and shear hosted
gold mineralisation have been identified along a
15 km strike length. Outcrop in the area is less
than 5% with the remainder covered by glacial
deposits 3-10 m thick.
Historical drilling amounted to 160 holes for
11,000 m. The multiple zones include K1
(Ängesneva): 1.2 Mt @ 1.54 g/t Au (59,400 oz)
and K3 (Vesiperä): 0.3 Mt @ 2.5 g/t Au (24,100
oz) (both historical). Further drilling has
commenced with 3,500 m planned for
Ängesneva and 2,000 m for Vesiperä.
Mineralisation remains open along strike and
to depth with several additional targets to be
tested. The total Indicated resource at Kiimala is
put at 147,000 oz plus 23,000 of historical
resources.
REBgold announce the completion of the final
three drill holes for Phase 2 of the 2012 drill
program at the Rantasalmi property of
Osikonmaki East in mid-October. Highlights
included BELOSI078 intersecting 19.9m m @ 6.3
g/t Au , identifying a high grade hanging wall
zone and surrounded by a halo of lower grade
mineralisation, reflected in the results of BELOSI
81, which amongst other intesections reported
35.6m at 3.2g/t.
Burridge commented: “The 2012 drill program
has been very successful in establishing the
potential of the project. Areas of both high
grade and bulk tonnage type mineralisation
have been defined and the system remains open
along strike, at depth and in associated district
structures with the geophysics helping to
confirm this potential. While more work remains
to be done, there is clearly potential for a
significant mineralised system to be delineated.”
Snow Lake clean-up
In December 2011, BacTech signed a contract
with the Mines Branch of the Manitoba
Resource Table
Indicated Resources
Rantasalmi Osikonmaki East
Kimmala K1
Total Indicated
Inferred Resources
Rantasalmi Osikonmaki East
Total Inferred
Historical Estimates
Oskionmaki West
Rantasalmi Pirila
Kiimala K3
Total Historical
Tonnes
Grade g/t
Ounces
1,296,000
3,850,000
1.7
1.19
68,000
147,000
215,000
3,542,000
2.1
244,000
244,000
90,000
300,000
291,000
4.86
6.5
2.5
14,000
63,000
23,000
100,000
FEBRUARY 2013 | International Mining 101
HIGH PROFILE
leaching of arsenic into the environment and the
second a gold residue concentrate. The bioleach
plant will sit adjacent to the ARS to provide for
relatively easy access to and from the plant and
to keep noise and dust at a minimum. About 1.4
km from the proposed plant site there are
several clay pits that were recently excavated to
source clay for projects in the local area.
BacTech intends to pipe and safely dispose of
the stable ferric arsenate to one of the nearby
pits for storage, water recycling, and
subsequent clay capping at the end of the
project. BacTech has engaged Golder &
Associates to provide baseline environmental
studies for the proposed plant site and the clay
impoundment pits, as well as formal submission
of environmental operating permits and closure
plan to Manitoba Conservation.
The proposed bioleach plant is designed to
treat 109 t/d of concentrate from the ARS. This
provides for a project life of approximately
seven years to remediate the ARS safely and
benefit from an annual gold production of
10,400 oz. At a base case gold price of
$1,396/oz and 88.6% gold recovery, the direct
operating cost is $671/oz gold. Royalties and
the cost for gold recovery through offsite toll
treatment add $302/oz; bringing the total cash
cost to $973/oz. CAPEX, including a 10%
contingency for the project, is estimated to be
C$21.4 million. BacTech continues to identify
and evaluate additional feeds that potentially
can add to the operational life of the plant, now
slated for seven years. It should be noted that
most bioleach plants achieve recoveries of 9396% and the company expects its recoveries will
match this. It also plans to install its own CIL
plant in Year 2 which will reduce OPEX by
$200/oz.
Below is a chart with the highlights of the
study, as well as price sensitivities for the
project using 12- and 24-month average gold
prices alongside the 36-month average base
case price. IM
Proposed site location for BacTech bioleach
facility - Snow Lake
Preliminary economic study highlights (toll treatment, 88.6% gold recoveries, pre-fax)
GOLD PRICE (US$/oz)
Department of Innovation, Energy and Mines to
remediate an arsenopyrite residue stockpile
(ARS) situated at the Snow Lake mine in Snow
Lake, Manitoba, to eliminate further leaching of
arsenic generated within the ARS into the
surrounding watershed. Then, this past August
BacTech filed the NI 43-101 compliant
preliminary economic assessment study for this
proposed reclamation project, prepared by
Micon International.
At Snow Lake it is planned that bioleaching
will generate two streams; one being a stable
ferric arsenate precipitate preventing any further
102 International Mining | FEBRUARY 2013
Cumulative cash flow (C$ million)
NPV @ 5% (C$ million)
NPV @ 7% (C$ million)
IRR
Payback (undiscounted pre-tax)
Total cash cost ($/oz)
Measured resource
Indicated resource
Inferred resource
Tonnes
265,000
9,300
28,000
$1,396
three-year avg.
(base case)
$13.3
$6.2
$3.9
11.1%
4.9
$972.72
Au g/t
9.7
9.2
7.0
$1, 53
(two-year avg.)
$1,674
(one-year avg.)
$22.6
$13.6
$10.8
17.8%
3.9
$990.54
$34.2
$22.9
$19.3
25.3%
3.1
$989.62
Ounces
82,643
2,750
6,300
Ag g/t
2.17
2.15
2.4
Ounces
18,488
642
2,160