Malozemoff pours first gold at Carlin mine | NevadaAppeal.com

Malozemoff pours first gold at Carlin mine

Elko Daily Free Press May 27, 1965 Plato Malozemoff, president of the Newmont Mining Corporation, this morning personally directed pouring of the first ingots of full-production gold at the Carlin Gold Mine, as dignitaries from Elko, Nevada, the federal government, Newmont, and other affiliated interests, observed. Newsmen from leading journals throughout the nation were also on hand. At a press briefing last night at the Stockmen's Motor Hotel, Malozemoff revealed the hitherto secret fact that the Carlin Gold Mine ore is averaging 0.32 ounces of gold to the ton, or $11 per ton. Production will claim more than 90 per cent of the gold in the ore. Robert Fulton, vice president of Newmont, said the orebody has so far been mapped out to contain 11 million tons of ore; or enough to keep the mine and mill operating at its 2,000 ton per day capacity for just less than 15 years. Beyond that, mapping is not complete, although Fulton said the end of the orebody has not yet been found. Newmont's operation is the first major gold strike to be made in the past 35 years. Malozemoff noted that, 35 years ago, the operation would have required three times the men it does today, because of advances since then in mechanization. The Carlin Gold Mine, with about 76 employes, will produce about one-seventh the annual U.S. gold production with 200,000 ounces, coming from the mill. Only the Homestake mine at Lead, S.D., produces more, at 500,000 ounces per year. Two Canadian mines are larger making Carlin the fourth largest in North America. Fulton said his studies of the orebody reveal it dates back to the Paleozoic age for formation of the host rock. The gold itself dates to the Terciary period of the earth's development. He noted there is a remarkable association of barite in the ore, and said it is their hunch that the two mineral are not too far apart in age. Frank McQuiston, Newmont vice president and designer of the Carlin operation, said the gold is in siltstone — "mud when its wet," but the recovery of gold through cyanidization is hampered by the slime formation. Special filtration and floculation systems were designed, including radioactive systems, to clear the solution so the gold could be precipitated out. McQuistion noted that Carlin is the only cold-climate operation using outdoor thickener tanks and the first of its size to be constructed in as short a time as ten months. Construction began before the drawings were complete, McQuiston said, with the Bechtel Corporation in charge of mill construction. Bob Hernlund, vice president of Newmont who headed up the engineering, said several unique problems in gold mining were presented by the ore, and unique solutions were found. The gold is so fine, it can only be seen under 1,800 power magnification, and then only the larger particles are photographable. These "larger" particles are two millionths of a square inch in size, he said. In order to successfully assay the ore, Newmont had to adapt the Australian system of atomic absorption spectrophy, the only North American operation using this system. Fire assaying by methods over a hundred years old were not satisfactory for extremely fine, low grade ore. Bob Denny, Newmont vice president in charge of engineering for automation and mechanization, said the plant was designed with three control points. Radiation from cesium is used for control throughout the plant, he said, with little or no danger to workmen from the radioactivity present because of shielding. All critical items were started up for production on the automatic setup, with no manual beginnings, so that there would be no possibilities of error or failure showing up later, he said. Fulton noted that Isbell Construction Company, holders of the original stripping contract, removed 2.5 million tons of earth prior to the start of the operation. Howard and Crawford is now continuing the overburden stripping. A 3 1/2-yard electric shovel loads the dump trucks with ore or overburden, which then moves to its proper destination. Malozemoff said the mill represents a $6 million investment, the tailings dam another $1 million, and the overburden removal prior to operation another $3 million, for a total investment of $10 million before the first ingot was poured early this month during the shake-down period. Newmont footed the investment alone, with no loans, stock promotion, or other methods, and will recover the investment in the first five years of operation, Malozemoff noted.

Gold price recovery leading to extended Newmont activity

The rise of gold prices to free-market levels has Newmont Gold Co. doubling the life of one if its Nevada mines. “When we thought the price of gold was going to move up last fall, we announced plans for our gold quarry operation at Carlin that will extend the life of this pit for 10 more years,” Newmont vice president of investor relations Jack Morris said Thursday. “At sub-$300 price levels, the mine had basically been depleted. It had not been economical to continue there at lower prices.” The price of gold climbed to more than $300 an ounce this week with the late London fixed price Thursday at $312.70, up $3.40 from Wednesday. It had bottomed at $253 in June, Morris said. He said the price of gold was driven down artificially by fears that some European central banks intended to sell off large portions of their gold reserves. Morris said some speculators and traders had exaggerated those concerns and taken advantage of the falling gold prices through short selling. And some central banks were lending gold to speculators and producers who used it for price hedging transactions, he said. But the leading European central banks announced in September an agreement to limit their future gold sales, Morris said. “That has put some faith back into the market,” he said. The price of gold spiked briefly after that and dropped, but has climbed fairly steadily to the current level. “What’s happening now is there’s a realization on the part of the gold market that the price of last summer was simply not sustainable,” he said. “Now there’s a change, a sentiment that the artificial constraints on the pricing mechanism – from fears of central bank selling or of excessive lending or borrowing by producers – has abated,” Morris said. “It appears that gold prices again will be set by supply and demand. “The supply of gold is limited and the demand is increasing, so we should see the price of gold continue to move upward.” Newmont’s operations at the Gold Quarry pit, about 10 years old, have nearly exhausted one layer of ore and stripping the overburden covering the next layer would have been too expensive at last summer’s prices, he said. Mining at Gold Quarry has been going to end early this year, he said, but the company’s optimism about gold prices led to the commitment to remove the overburden and reach the deeper ore. “You can’t just turn mining operations on and off like a spigot,” Morris said. He said the development work at Gold Quarry is being staffed by moving Newmont employees from other operations, rather than adding more miners. “We’ve been working the past three years at increasing the efficiency of our operations in Nevada,” Morris said. “We have a large work force, which is quite mobile.” He said Newmont currently has nine active operations in Nevada but had 18 active in 1998. Louis Schack, Newmont’s spokesman for Nevada, said the company has not laid off miners since 1998 and has about 2,800 employees in the state. He said the decision to develop the deeper ore at Gold Quarry would not mean more mining jobs for the company’s surface operations in Nevada. But Newmont is planning to increase its force in the state, Schack said. The Deep Post underground mine near Carlin is being expanded to develop the remaining gold in that mine’s deposit, which Schack described as “considerable. “We will be hiring quite a few people this year and through 2001 to staff that operation,” Schack said. Production from that deposit is scheduled to begin in mid-2001, he said. Morris said Newmont produced gold at an average cost of $164 an ounce in the last quarter of 1999 and at an averaged 1999 price of $175 an ounce. He said the company’s production cost is one of the lowest in the industry. Newmont’s Nevada underground mines also include the Deep Star and the Carlin East, West and Main operations, Schack said. Newmont has been mining underground in Nevada since 1994. And Newmont’s surface operations outside of the Carlin area include Twin Creeks near Winnemucca and the Lone Tree complex between Winnemucca and Battle Mountain, he said.

Malozemoff pours first gold at Carlin mine

Elko Daily Free Press May 27, 1965 Plato Malozemoff, president of the Newmont Mining Corporation, this morning personally directed pouring of the first ingots of full-production gold at the Carlin Gold Mine, as dignitaries from Elko, Nevada, the federal government, Newmont, and other affiliated interests, observed. Newsmen from leading journals throughout the nation were also on hand. At a press briefing last night at the Stockmen's Motor Hotel, Malozemoff revealed the hitherto secret fact that the Carlin Gold Mine ore is averaging 0.32 ounces of gold to the ton, or $11 per ton. Production will claim more than 90 per cent of the gold in the ore. Robert Fulton, vice president of Newmont, said the orebody has so far been mapped out to contain 11 million tons of ore; or enough to keep the mine and mill operating at its 2,000 ton per day capacity for just less than 15 years. Beyond that, mapping is not complete, although Fulton said the end of the orebody has not yet been found. Newmont's operation is the first major gold strike to be made in the past 35 years. Malozemoff noted that, 35 years ago, the operation would have required three times the men it does today, because of advances since then in mechanization. The Carlin Gold Mine, with about 76 employes, will produce about one-seventh the annual U.S. gold production with 200,000 ounces, coming from the mill. Only the Homestake mine at Lead, S.D., produces more, at 500,000 ounces per year. Two Canadian mines are larger making Carlin the fourth largest in North America. Fulton said his studies of the orebody reveal it dates back to the Paleozoic age for formation of the host rock. The gold itself dates to the Terciary period of the earth's development. He noted there is a remarkable association of barite in the ore, and said it is their hunch that the two mineral are not too far apart in age. Frank McQuiston, Newmont vice president and designer of the Carlin operation, said the gold is in siltstone — "mud when its wet," but the recovery of gold through cyanidization is hampered by the slime formation. Special filtration and floculation systems were designed, including radioactive systems, to clear the solution so the gold could be precipitated out. McQuistion noted that Carlin is the only cold-climate operation using outdoor thickener tanks and the first of its size to be constructed in as short a time as ten months. Construction began before the drawings were complete, McQuiston said, with the Bechtel Corporation in charge of mill construction. Bob Hernlund, vice president of Newmont who headed up the engineering, said several unique problems in gold mining were presented by the ore, and unique solutions were found. The gold is so fine, it can only be seen under 1,800 power magnification, and then only the larger particles are photographable. These "larger" particles are two millionths of a square inch in size, he said. In order to successfully assay the ore, Newmont had to adapt the Australian system of atomic absorption spectrophy, the only North American operation using this system. Fire assaying by methods over a hundred years old were not satisfactory for extremely fine, low grade ore. Bob Denny, Newmont vice president in charge of engineering for automation and mechanization, said the plant was designed with three control points. Radiation from cesium is used for control throughout the plant, he said, with little or no danger to workmen from the radioactivity present because of shielding. All critical items were started up for production on the automatic setup, with no manual beginnings, so that there would be no possibilities of error or failure showing up later, he said. Fulton noted that Isbell Construction Company, holders of the original stripping contract, removed 2.5 million tons of earth prior to the start of the operation. Howard and Crawford is now continuing the overburden stripping. A 3 1/2-yard electric shovel loads the dump trucks with ore or overburden, which then moves to its proper destination. Malozemoff said the mill represents a $6 million investment, the tailings dam another $1 million, and the overburden removal prior to operation another $3 million, for a total investment of $10 million before the first ingot was poured early this month during the shake-down period. Newmont footed the investment alone, with no loans, stock promotion, or other methods, and will recover the investment in the first five years of operation, Malozemoff noted.

Malozemoff pours first gold at Carlin mine

Elko Daily Free Press May 27, 1965 Plato Malozemoff, president of the Newmont Mining Corporation, this morning personally directed pouring of the first ingots of full-production gold at the Carlin Gold Mine, as dignitaries from Elko, Nevada, the federal government, Newmont, and other affiliated interests, observed. Newsmen from leading journals throughout the nation were also on hand. At a press briefing last night at the Stockmen's Motor Hotel, Malozemoff revealed the hitherto secret fact that the Carlin Gold Mine ore is averaging 0.32 ounces of gold to the ton, or $11 per ton. Production will claim more than 90 per cent of the gold in the ore. Robert Fulton, vice president of Newmont, said the orebody has so far been mapped out to contain 11 million tons of ore; or enough to keep the mine and mill operating at its 2,000 ton per day capacity for just less than 15 years. Beyond that, mapping is not complete, although Fulton said the end of the orebody has not yet been found. Newmont's operation is the first major gold strike to be made in the past 35 years. Malozemoff noted that, 35 years ago, the operation would have required three times the men it does today, because of advances since then in mechanization. The Carlin Gold Mine, with about 76 employes, will produce about one-seventh the annual U.S. gold production with 200,000 ounces, coming from the mill. Only the Homestake mine at Lead, S.D., produces more, at 500,000 ounces per year. Two Canadian mines are larger making Carlin the fourth largest in North America. Fulton said his studies of the orebody reveal it dates back to the Paleozoic age for formation of the host rock. The gold itself dates to the Terciary period of the earth's development. He noted there is a remarkable association of barite in the ore, and said it is their hunch that the two mineral are not too far apart in age. Frank McQuiston, Newmont vice president and designer of the Carlin operation, said the gold is in siltstone — "mud when its wet," but the recovery of gold through cyanidization is hampered by the slime formation. Special filtration and floculation systems were designed, including radioactive systems, to clear the solution so the gold could be precipitated out. McQuistion noted that Carlin is the only cold-climate operation using outdoor thickener tanks and the first of its size to be constructed in as short a time as ten months. Construction began before the drawings were complete, McQuiston said, with the Bechtel Corporation in charge of mill construction. Bob Hernlund, vice president of Newmont who headed up the engineering, said several unique problems in gold mining were presented by the ore, and unique solutions were found. The gold is so fine, it can only be seen under 1,800 power magnification, and then only the larger particles are photographable. These "larger" particles are two millionths of a square inch in size, he said. In order to successfully assay the ore, Newmont had to adapt the Australian system of atomic absorption spectrophy, the only North American operation using this system. Fire assaying by methods over a hundred years old were not satisfactory for extremely fine, low grade ore. Bob Denny, Newmont vice president in charge of engineering for automation and mechanization, said the plant was designed with three control points. Radiation from cesium is used for control throughout the plant, he said, with little or no danger to workmen from the radioactivity present because of shielding. All critical items were started up for production on the automatic setup, with no manual beginnings, so that there would be no possibilities of error or failure showing up later, he said. Fulton noted that Isbell Construction Company, holders of the original stripping contract, removed 2.5 million tons of earth prior to the start of the operation. Howard and Crawford is now continuing the overburden stripping. A 3 1/2-yard electric shovel loads the dump trucks with ore or overburden, which then moves to its proper destination. Malozemoff said the mill represents a $6 million investment, the tailings dam another $1 million, and the overburden removal prior to operation another $3 million, for a total investment of $10 million before the first ingot was poured early this month during the shake-down period. Newmont footed the investment alone, with no loans, stock promotion, or other methods, and will recover the investment in the first five years of operation, Malozemoff noted.

New mining projects expected to come on line

A year that saw the price of gold reach record highs helped Nevada gold mining companies expand operations and tackle ore bodies they might not normally pursue, and the momentum of $1,400-an-ounce gold is expected to continue through 2011. And some new projects and mine re-starts should add to the state’s production of precious metals. Fronteer Gold of Vancouver is expected to commit $30 million to bring its Long Canyon mine in Elko County online, and Nevada Copper, also based in Vancouver, is well on its way to bringing its Pumpkin Hollow property near Yerington into production. Elsewhere, Allied Nevada Gold Corp. is expected to expand production at the Hycroft Mine in Humboldt County, and Coeur d’Alene Mines Corporation expects to begin production of silver at the Rochester mine in Pershing County in the fourth quarter of 2011. Coeur currently is leaching ore previously mined at the Rochester site. John Dobra, director of Natural Resource Research Institute for University of Nevada, Reno, adds that there are exploration projects throughout Northern Nevada counties, from near the Utah border to the California state line. “The mines themselves are doing very well financially, and we are seeing a lot of interest in exploration projects,” Dobra says. “The difference is that it takes a long time to get one of these things going to get permitting and pulling together finances.” Dobra says gold rose to a record high primarily due to worldwide financial fears as well as the spectre of rising inflation. Lou Schack, communications and community affairs manager with Barrick Gold of North America, says there is no reason to expect that the runup on gold prices won’t continue through the coming year. “We are pleased with gold prices the last few years, and it has opened up some opportunities that weren’t there before,” Schack says. “Costs, of course, are increasing as well, but we are enjoying pretty good margins right now.” Tom Kerr, senior vice president of North American operations for Newmont Mining, says Newmont remains bullish on the price of gold for the coming year mainly because the financial factors underpinning the runup in gold prices remain intact. “The ongoing economic uncertainty in the world, weakness in currency around world and in the U.S. and ultimately the growing demand in China and India all put us in a position where we are very bullish going forward,” Kerr says. The increase in gold prices allowed Barrick to significantly expand mining operations at its Cortez Hills mine, which came online in the first quarter of 2010. Barrick also is in the middle of a $200 million expansion of its Bald Mountain mine in White Pine County, and it’s working through permitting for its Artoro project north of its Goldstrike mine in Elko County. Barrick invested more than $500 million in Lander County at the Cortez Hills mine. “The higher the price, the more opportunities we have because resources that were not economically viable at lower prices become so,” Shack says. “Of course there are a lot of risks – we can’t be sure the price will stay up.” Newmont also seeks to expand its Nevada operations, which account for 35 to 40 percent of Newmont’s global mining portfolio. The company will advance expansion at its Leeville and Carlin underground operations, as well as at its Gold Quarry site. Newmont also will look at acquisitions or acquiring assets that have the right strategic fit, Kerr says. “Nevada is a core asset in Newmont’s global portfolio,” he says. “We will continue to explore our most productive areas – why wouldn’t you? It’s one of the most prolific gold-endowed sectors in the world. We look at our business here and consider it a strategic place to be and will continue to reinvest in Nevada.” Though the price of gold has increased substantially, Newmont’s employment in Nevada held steady at 3,500 to 3,600, says Mary Korpi, director of external affairs. The company doesn’t expect to hire many additional miners in 2011. “It really is ideal when you don’t have fluctuations, and it is advantageous to communities as well,” Korpi says. “When you have a steady, stable workforce there is a lot more consistency and you don’t have any ups and downs.” Other commodities in the state – primarily those used in construction materials, such as aggregates, lime and gypsum – haven’t done as well as gold the past few years due to the construction downturn. For example, the decline for demand in gypsum led to USG Corp. to halt production of gypsum and wallboard at its plant near Empire, a devastating economic blow to the tiny town of far-northern Washoe County. The plant opened in 1948.

State’s mining industry pulls in reins

The luster is wearing off Nevada's gold. Gold prices last week fell below $1,300 an ounce for the first time in two-and-a-half years, and the price is down more than $600 from its record high in the fall of 2011. The decline in price has led to the first hints of a coming contraction in the mining industry. Perhaps the most telling sign of an industry slowdown is the announcement by Newmont Gold Corp. ­— the second-biggest gold producer in Nevada — two weeks ago that it will lay off one-third of its operations staff at its Colorado headquarters to counter rising production costs and price volatility. Omar Jabara, group executive for Newmont's corporate communications team, said the reduction reflects the company's decision to shift the focus of operations at its corporate headquarters to strategy and governance. Jabara says that though Newmont has not yet finished working through new operating models for its Nevada properties, the company expects workforce reductions at many of its mines and ore-processing facilities. "Rising costs across the industry and continued volatility in metal prices only reinforces the need to run our operations as safely and efficiently as possible to ensure success in any commodity cycle," Jabara said in a written statement. Other mining firms are shaving staff to cut costs as well. Atna Resources of Golden, Colo., which is mining and developing the Pinson mine about 27 miles northeast of Winnemucca, trimmed its staff of 75 at the property to just 25 employees and curbed mining activity from a 24-hour operation to five 10-hour shifts each week. James Hesketh, Atna's president and chief executive officer, said soft gold prices and limited access to capital led to the change in operational strategy. Atna had been working on a plan to substantially increase gold production by developing an underground mine at the Pinson site that would have cost upwards of $72 million. However, Atna began to reshape its plans as gold began tumble. Gold hit a two-year low of $1,360 an ounce on April 15. "Some of the mining systems we were utilizing made more sense at a high gold price than they do at a low gold price," Hesketh said. "We have to step back and really modify the way we are approaching it to reduce costs. "When a business sees the price of its product decline by 20 percent in a four-month period you have to step back and see if you can handle things differently to create a profitable situation." Atna's new focus is mining ore that already has been developed and re-screening surface stockpiles to remove waste. Atna had been milling its sulfide ores under a toll agreement at Veris Gold's Jerritt Canyon roaster and selling its oxide ores to Newmont. Those agreements still are in place, albeit at lower volumes, Hesketh says. Gold's wild ride would be the envy of roller-coaster aficionados everywhere. In 1980, gold peaked at $615 per ounce before receding, and it took another 26 years for the yellow metal to again cross that threshold. Gold hit a low of $271 an ounce in 2001, but between then and September of 2011 the price of gold rose more than 600 percent to a record of $1,923 an ounce. John Dobra, director of the Natural Resource Industry Institute at University of Nevada, Reno, and a senior fellow at the Fraser Institute in Canada, said as prices tumble Nevada gold miners will be forced to mine higher-grade ores to remain profitable. Some Nevada mining firms had been tapping ore bodies with just .01 ounces of gold per ton, Dobra said. "That is barely above dirt. If you go back 20 years ago when the boom first started, the average cutoff grade was around .05 a ton. Stuff they didn't even think was ore 20 years ago they have been processing, and you will see a reversal of that." A slowdown in mining activity can affect a huge swath of industry in the state, from RV parks to drill rig operators, staffing firms to assay labs. Exploration efforts for new gold deposits already are being put on hold as junior mining firms struggle to raise capital required to initiate costly drilling campaigns and to pay for consultancy firms. Keith Meyers, regional manager for National Exploration Wells and Pumps, says National's drill work is tracking about half of what it did last year, and there's been no increase in seasonal demand this year, either. That's in stark contrast to 2010 and 2011, when mining firms were hard-pressed to get more drill rigs in the field due to high demand. "Now there's surplus capacity," Meyers says. "It started to slow down last fall, and it really hasn't picked back up." Ben Veach, Nevada division manager for JBR Environmental Consultants Inc., with offices in Reno and Elko, says several exploration programs were curtailed last year as clients reined in their expenditures. JBR provides long-range environmental planning work in advance of mining operations and works to secure permits for mining on public lands. JBR employs 45 in the state and hasn't yet seen any real slowdown in its volume of work, Veach says. "We are still operating the same as when the price was $1,700 an ounce, but what we have seen are minor interruptions due to financing of the junior companies. That has had a bigger impact on our company than the drop in the price of gold." Many RV resorts in Elko still remain full — Iron Horse RV Resort is at capacity and still has a lengthy waiting list of people try to get a permanent sport to park their RVs. Double Dice RV Park, which has 140 total spaces with 120 permanent slots, still has a long waiting list for the permanent sites but there's been a noticeable decrease of miners coming in from out of town looking for work, the front-desk manager says. If the price of gold continues to fall, though, mining firms will shed costly contract labor and rely on their own staffs. Construction companies also will feel the brunt of any slowdown in the sector, but key mine-site positions such as haul truck drivers, blast operators, diesel mechanics and mill and site workers will be the last to go, Dobra notes. "When a company starts to feel the squeeze, the last place they cut is the people actually producing gold. The last people to be cut are the ones in Elko, though there will be some of that."

Nevada Mining Association to recognize safety winners

The Nevada Mining Association said last week it will recognize 19 mine operations and 38 individuals with its 2013 Safety Awards. The awards, which will presented during the association's annual conference in September, are based on safety performance during 2012. Honorees will are: Mine operators safety awards Surface operations: Large (300-plus employees): 1. Newmont Mining Corp., Twin Creeks & Sage Mill. 2. Newmont, South Area. 3. Barrick Gold of North America, Goldstrike. Medium (100-299 employees): 1. Coeur D'Alene, Rochester Mine. 2. Barrick, Goldstrike Mine autoclave and mill. 3. Newmont, Genesis. Small (20-99 employees): 1. Newmont, Lone Tree. Underground operations: Large (300-plus employees): 1. Barrick, Turquoise Ridge. 2. Newmont, Leeville. 3. Barrick, Goldstrike Meikle/Rodeo. Medium (100-299 employees): 1 Barrick, Cortez. 2. Newmont, Midas. Small (20-99 employees): 1. Scorpio Gold, Mineral Ridge. Non-metal mining category 1. EP Minerals, Colado. 2. Granite Construction, Nevada Operations. 2. EP, Clark Mill & Mine. Contractors category 1. Ames Construction, Nevada Operations 2. Brahma Group Inc. Nevada Operations 3. Bodell Construction, Nevada Operations. Individual safety awards General manager: Nigel Bain of Barrick. Safety manager: Colt Nelson of Barrick Gold North America. Safety professional: Doug Longchamps of Goldcorp Inc., Terry Sandy of Barrick Turquoise Ridge, Kenny Groves of Barrick Cortez and Jennica Fitzgerald of Newmont. Mine manager/superintendent: Joseph Lounsbery of Newmont, Chuck Pollard of Barrick Goldstrike, Chris Swanson of Round Mountain Gold Corp., Jon Laird of Barrick Turquoise Ridge and Byron Hammond of Newmont. General supervisor/middle management: Mark Wonenberg, Barrick Goldstrike Mines Inc. Al Smith of Allied Nevada Gold Corp. and Pat Donovan of Newmont. Trainer: Tom King of Barrick Turquoise Ridge, Jesse Hill of Newmont and Matt Rucker of Barrick Cortez Supervisor: Perseo Anaya of Goldcorp, Tom Thornton of Goldcorp, Cody Horton of Newmont, Greg Jones of Newmont and Mark Jenkins of Newmont. Non-supervisory trainer: Scott Cross of Goldcorp, Dave Rascon of Round Mountain and David Ricker of Newmont. Non-supervisory emergency response: Greg Teixeira of Round Mountain, Ron Snellings of Newmont, Jack Simonsen of Barrick Goldstrike and Glen Mangold, Barrick Cortez. Non-supervisory: Randy Fentress of Newmont, Scott Munger of Round Mountain, Francisco Diaz of Goldcorp, Joy Lassiter of Barrick Goldstrike, Heather Hickman of Florida Canyon, Nathan Daily of Barrick Bald Mountain and Ramon Marin of Barrick Cortez. Special awards: Tom Bassier and Chet Bate, Outstanding Careers in Safety.

Falling gold price, rising costs squeeze state’s miners

The pressures that affected large and small mining firms operating in Nevada in 2013 are expected to continue squeezing the bottom line in 2014. The tumbling price of gold — it hovered under $1,250 an ounce for much of December after entering the year at nearly $1,700 an ounce — coupled with rising production costs have mining firms scrambling to cut costs in an effort to bolster flagging profits. Joel Lenz, general manager of the Phoenix mine for Newmont Mining Corp., said 2013 was a challenging year for the entire mining sector. "We don't control the price of the product we produce," Lenz said. "The most difficult challenge we faced was the declining metals price environment — it goes to the top line, and that top line is under stress." Gone is the attitude of aggressive expansion of the past few years. Mining companies scaled back on exploration and development efforts and shifted focus on squeezing maximum profit from current assets. Take Barrick Gold of North America as a prime example: Its 2012 North America exploration budget was $188 million, but in 2013 that number is projected to be $94 million, said Director of Communications Lou Schack. The bulk of Barrick's Nevada exploration budget is being spent advancing its Gold Rush property in Eureka County. Barrick currently has more than 100 drillers working in the area. Throughout the state, mine plans were revised to reduce capital expenditures and protect profits, and that philosophy will dominate mine site operations and planning in 2014. "Because of the change in the price environment a lot of mining companies — and Newmont is no exception — had to come up with changes in the plan that were less focused on growth and more focused on viable business plans through the price cycle," Lenz said. "That really is the big issue." Gold still is at a historically high price, Schack said, but the cost of producing an ounce of gold and expanding mine infrastructure has risen over the early part of the decade. Large firms such as Barrick and Newmont, with multiple gold mines, will fare better in the new mining landscape than small exploration firms or junior mining companies with just one single asset. "We are fortunate to have a pretty good cash flow," Schack said. "Even though margins have come way down we still are generating a fair amount of cash so we can sustain things and ride out this tough market. When you look at some junior companies that don't have operating assets to generate cash it's really hard to make it." Investors and market analysts will keep close watch on Reno's Allied Nevada Gold Corp. in the coming year. Allied Nevada operates the Hycroft Mine near Winnemucca. The company headquartered at South Meadows retreated from ambitious expansion plans at its mine near Winnemucca. Its share price tumbled from $30 in January to $3 in December. The firm is looking to raise about $25 million in cash through the sale of a large shovel. Despite the rocky landscape, Barrick and Newmont both have large construction and expansion projects under way. Newmont is making good headway on a massive project to build an additional ventilation and access shaft at its Leeville underground mine. The completed shaft will be used to convey water, compressed air, power, communications, fuel and lubricants to the underground mining operations. Sinking of the shaft is expected to begin in January and be completed in 2015. Executives at Newmont's largest development project, the Long Canyon mine in the Pequop Mountains east of Wells, will continue to work toward permitting during 2014. Exploration is limited to expanding the Long Canyon resource estimate and for drilling in close proximity to existing mines to replace or grow the reserve base, Lenz said. Barrick's largest construction project in 2014 is its $400 million expansion of the autoclave at the Goldstrike property. The expansion will extend the life of the autoclave and allow Barrick to treat different ores and enter into toll milling agreements with other regional mining firms. Barrick also is completing a large infrastructure addition to underground mine at Cortez to allow for expansion. "Cortez by far is the largest producing mine for Barrick, with a large array of mining and processing options," Schack said. "It has grown into quite a large underground operation as well as the open pit above it."

State’s gold production flat as miners hold back their best

Nevada’s gold producers continue to save their best deposits for a rainy day that seems a long ways off in the future. Gold production in the state declined slightly in 2009 and totaled 5.64 million ounces, found an annual overview of the mining industry developed by John Dobra, an economist who heads the Natural Resource Industry Institute at the University of Nevada, Reno. But the decline in production isn’t necessarily a troublesome indicator for the future, Dobra said in the study released last week. “Higher prices allow operators to process lower grades of ore,” the UNR economist said. “While lower production levels may seem like bad news in the short term, it extends the life of ore bodies and enhances the sustainability of the industry.” And prices were definitely higher. The average price of gold received by Nevada producers during 2009 – $972 an ounce – was almost $100 higher than a year earlier. At the same time, Dobra said, the average cost of gold production in the state declined for the first time in a decade. The average cash cost – a figure which doesn’t include depreciation – fell to $508 an ounce from $525 in 2008. That’s largely a reflection of the startup of some low-cost mining operations such as Barrick Gold’s Cortez Hills mine in Lander County as well as improved efficiencies at big properties such as Barrick’s Goldstrike mine on the Carlin Trend and Newmont Mining’s operations on the Carlin Trend and at the Phoenix Mine in Lander County, Dobra said. Nevada’s mines produced $5.1 billion in gold and silver during 2009. The state’s production ranks sixth in the world, trailing China, South Africa, Australia, Russia and Peru. Higher prices as well as new discoveries during 2009 mean that the pipeline of yet-to-be-mined gold deposits in Nevada continue to grow. Proven and probable gold reserves at Nevada properties – a figure that includes gold that can be mined profitably at current prices – stood at 75 million ounces last year. That’s an increase of 5 million ounces over the previous year. Even if no more gold is discovered in Nevada, Dobra said the proven and probable reserves are enough to sustain mining at current levels for more than 13 years. Tim Crowley, president of the Nevada Mining Association, called the increases in reserves “very good news for Nevada.” Enough promising projects are in development around the state, Dobra said, to lead observers to think that new reserves will be boosted further. Among the gold projects in the pipeline, he noted, are Fronteer Gold’s Long Valley project southeast of Wells, Newmont’s Genesis project on the Carlin Trend, and expansion of mines such as Allied Nevada Gold’s Hycroft property at Winnemucca and Marigold Mine operated by Goldcorp west of Battle Mountain. Exploration activity, however, may have declined. A survey by the Nevada Division of Minerals found that exploration investments in the state totaled $110 million during 2009 compared with $158 million a year earlier. Executives of exploration companies have tight credit markets made it difficult to raise money since the onset of the recession.

NV gold mine fined $500,000 for fatality

RENO – Federal regulators have fined Newmont Mining Corp. more than $500,000 for safety violations they say contributed to the death of a worker at an underground gold mine in Nevada. The Mine Safety and Health Administration also announced Tuesday that four supervisors for the Denver-based mining company have agreed to pay a combined $60,000 in individual penalties for their role in the accident at the Midas Mine north of Elko in June 2007. The agency said managers “showed a disregard for the miners’ welfare” before the victim fell through a level of the mine while operating a loader. It said several Newmont employees were aware of safety deficiencies at the time but continued to require miners to work in hazardous areas. An administrative law judge for the Federal Mine Safety and Health Review Commission approved the penalties for the violations, including failure to provide adequate controls to guard against cave-ins and failure to provide adequate barricades and signs to warn miners about the hidden hazards of sinkholes. In addition, Newmont was cited for impeding MSHA’s investigation of the accident by failing to provide maps and other documents, as well as failing to report the entrapment within the required 15 minutes. The first-line supervisor, two general foremen and the engineer in charge agreed to pay the $60,000 for their roles in the “flagrant ground control violation,” the agency said. Their names were not immediately released. The 30-year-old victim, Dan Shaw, and the loader he was operating fell through the floor of one level of the mine on June 19, 2007 while working to use a mixture of concrete to backfill a space that had been left open after ore was removed during the underground mining process, MSHA said. His body was not recovered until July 2. Newmont spokesman Matt Murray said company officials were in a meeting Tuesday afternoon and unable to immediately comment.