Improving Gold Recovery via HPGR
From the bottom in gold shares in 2001 until September of 2011, champagne flowed in offices of gold companies all the way from Vancouver to Toronto. Any former cab driver or drill crew supervisor with a good pitch could raise all the money he wanted from a seeming unending cornucopia of dollars from hedge and mutual funds.
That began to stop in late 2011 and has come to a grinding halt as of almost four years later. To raise money today would require a higher grade of gold than found in the US Treasury storage barn at Fort Knox.
It means mining companies who intend to go into production have to shave every possible expense off their costs and have to do everything possible to increase recoveries.
One of the companies I follow has a pair of near-term production projects near Tonopah Nevada. The company is West Kirkland Mining (WKM-V) The numbers from the company are simply absurd. With 294 million shares outstanding, they have a market cap of $16 million. In April of 2014 they paid $20 million to Allied Nevada to get 75% of the 2 million ounce Hasbrouck/Three Hills project. They can purchase the remaining 25% for $10 million up until October of 2016.
Since April of 2014 the company has spent an additional $5 million for a PFS (Pre-Feasibility Study), permitting and exploration. They have $3 million in cash as of today.
The market has so little respect for mining companies that it gives the company a value of $16 million for the $28 million they have spent in the last year. You can get gold for $8 an ounce for a company planning on production in 2-3 years at Three Hills. The Three Hills deposit is all oxide gold and run of mine material will give an estimated 81% recovery.
Hasbrouck will take a couple of years more to put into production. The material at Hasbrouck will require more processing to achieve satisfactory recovery. Initially WKM had planned on the use of a pair of conventional cone crushers to break up the material. More research has led them to believe they should go to High Pressure Grinding Rolls or HPGR. The initial cost will be higher than that of two cone crushers but their tests show they can increase gold recovery from 60% to as much as 72.6%. Operating costs for energy will be lower than that of cone crushers as well.
A change in gold recovery as small as that of increasing recovery from 60% to 72.6% could double profits. It doesn’t sound like much but with sub-$1,200 gold it could make a lot of difference to the bottom line.
WKM will be providing a Pre-Feasibility Study as early as the end of March 2015. The numbers will be interesting.
While WKM has a lot of shares outstanding at 294 million, an investor is buying gold cheaply. WKM offers one of the lowest cost and best leverage to the price of gold of any of the juniors I follow. If you think the price of gold might go up one day, you should think about a position in WKM.
West Kirkland Mining is an advertiser. Do your own due diligence.
West Kirkland Mining