The Wild West may soon find itself in another gold rush frenzy: Golden Queen is building the first fully-permitted gold mine to open in California in 50 years.
Golden Queen Mining Company Ltd., a Canadian publically-held company, is developing the Soledad Mountain Project, a fully permitted, open pit, heap leach gold and silver project located just outside the town of Mojave in Kern County, Calif., about 90 mi. northeast of the Los Angeles International Airport. The project will use conventional open pit mining methods and the cyanide heap leach and Merrill-Crowe processes to recover gold and silver from crushed, agglomerated ore. Construction has started on site and commissioning is planned for 2015.
"We expect to produce 1 million ounces of gold and 10 million ounces of silver over the next decade or so," said Lutz Klingmann, director and president of Golden Queen, who added that he predicts a 12-year mine life.
Klingmann has been involved with Golden Queen Mining Co. Ltd. since 2001 and has been instrumental in the development and permitting process of the Soledad Mountain Project. A seasoned mine developer, Klingmann has developed six mines, four of which were in the southwestern United States, since mid-1981. His operating experience spans the globe and includes Africa, Venezuela, Canada and the United States.
The primary ore types that will be mined are rhyolite porphyry and flow-banded rhyolite, pyroclastics and quartz latite porphyry representing approximately 70, 10 and 20 percent of the ore tonnage respectively. Minor quantities of siliceous vein material (0.1 percent) will also be mined. The rock types will be found in different areas and at various stages of the mine life. The primary rock types are of extrusive volcanic origin and are quite similar in chemical composition and are high in silica with little or no clay.
The crushing-screening plant includes a primary and secondary crusher and screen in closed circuit with the secondary crusher. The HPGR will be used as part of the crushing-screening circuit to prepare the ore particles for stacking on the two leach pads.
The HPGR consists basically of two counter-rotating rolls — one a fixed roll and the other a "floating" roll. The "floating" roll is mounted on — and can move freely on — two slides, and the grinding forces are applied by four hydraulic rams. Ore is choke-fed to the gap between the rolls.
Assessments carried out by two HPGR manufacturers, third party technical consultants and company management have indicated that benefits of using the HPGR could include:
• Higher gold and silver recoveries due to the formation of micro-cracks in ore particles;
• Faster gold and silver extraction rates;
• Stronger agglomerates due to a more favorable overall particle size distribution. This also will impact the flow rate of solutions through the heap;
• Lower capital costs than a four-stage, conventional crushing-screening plant;
• Manageable dust control with fewer transfer points;
• Lower energy consumption and thus lower operating costs
• Circuit flexibility that will readily permit future upgrades such as a finer HPGR feed size or the recycle of edge product
The Soledad Mountain Project has been in the works for nearly 30 years due to careful exploration, sampling and studying before preplanning and construction could take place.
In the mid 1980s, Golden Queen was looking for property when it stumbled across Soledad Mountain, which had been mined back in the 1930s and 1940s.
Between 1985 and 2001, the company explored and sampled the site, raising capital. Between 2001 and 2008, feasibility, community impact and environmental impact studies were conducted.
All of this had to preceed the actual permitting process, which began in 2009 and concluded three years later.
"We spent 67 million before even starting construction, which began in 2013," said Klingmann.
"In 2014 we secured 110 million for construction. We sold 50 percent of the project to two American entities," he added.
Once the site was cleared, the contract for the site prep work was awarded to Guinn Construction Company of Bakersfield, Calif., who began site infrastructure and earth moving in 2014.
Guinn utilized equipment from Road Machinery, a Komatsu dealership headquartered in Phoenix, Ariz., including an HM400-3 articulated truck, PC800 backhoe and PC490 excavator.
The mine itself will be owner operated by Golden Queen and will utilize Komatsu equipment as well. Golden Queen initially took a delivery of approximately $17 million worth of Komatsu equipment, but Steve Morico, who facilitated the sale for Road Machinery, expects that number to double over the next five years.
Morico had been working with Klingmann for more than years on the deal.
Equipment to be utilized includes: two WA800-3E0 wheel loaders, four 785-7 rigid frame trucks, two HM400-5 articulated trucks, one HM400-3 articulated truck, one D275AX-5E0 bulldozer, one D375A-6 bulldozer, one PC800-8 backhoe, one PC240LC-11 excavator, one WD600-6 wheel dozer, one D65PX-17 bulldozer and one GD655 motorgrader.
Past positive experiences drove Klingmann to go with Komatsu equipment.
"I had worked with another manufacturer on previous mine projects, but found Komatsu was the best fit at the right price for the project," said Klingmann.
Klingman was attracted to Road Machinery because the two companies each share a strong connection to their community.
"Community commitment is a huge part of what we are doing at Soledad Mountain, and we felt that Road Machinery felt that same commitment."
In addition to other benefits Road Machinery also agreed to open a service/maintenance facility in Mohave, the location of the project.
"He saw us putting a branch in Mohave as tangible evidence of our commitment to the community of Mohave," said Morico.
Morico said a $17 million credit line for Golden Queen from Komatsu also contributed to the deal closing.
Construction is approximately 30 percent complete and Golden Queen is on track to commission the facilities in late 2015.
The site currently has 10 full-time employees and the company expects that number to increase to 50 employees for the start of pre-production mining.
The Hilfiker wall, which is a critical first step in the construction of the crushing-screening plant, was completed in February and construction of the site-wide power distribution and water supply infrastructure is advancing rapidly.
Partnership
In September 2014, Golden Queen Mining Co. Ltd. entered into a joint venture with Gauss LLC, a joint venture owned 67.5 percent by Gauss Holdings LLC, an entity controlled by Leucadia National Corporation, and 32 percent by Auvergne LLC, an entity controlled by certain members of the Clay family, whereby Gauss LLC invested $110 million in cash in exchange for a 50 percent joint venture interest in the Soledad Mountain Project.
Soledad Mountain History and Geology
Gold mining on Soledad Mountain dates back to the late 19th century. The largest producer in the area was Gold Fields American Development Co., a subsidiary of Consolidated Gold Fields of South Africa. This syndicate operated an underground mine and mill on the property from 1935 to 1942, when the mine was forced to close by War Production Board Order L-208. Production after the war was minimal, as costs had increased while the price of gold remained fixed at $35 per ounce until 1973.
The Soledad Mountain deposit is a large, epithermal, multi-episodic, fault/fissure vein system. Gold and silver mineralization occurs in low sulfidation, quartz adularia veins and stockworks that strike northwest. At least 14 separate veins and related vein splits have been identified. Core veins range from less than 3.2 to 19.7 ft. (1 to 6 m) wide with gold grades typically greater than 3.5 grams per tonne, surrounded by lower grade mineralization with widths ranging from 3.3 ft. (1 m) to greater than 164 ft. (50 m). The level of oxidation extends to depth and the deposit is well-suited for heap leaching.
About Road
Machinery
Road Machinery sells, services and rents construction, mining and forestry equipment from Komatsu. milling, compacting and paving equipment from Wirtgen Corporation (includes Hamm, Vögele and Wirtgen products); attachments from NPK, Hensley and JRB corporation as well as other products like rock screens, crushers and water towers.
In 1955, Harold R. Bone Sr. opened Road Machinery Co. in Phoenix, Ariz., to sell and service heavy machinery. The company's first products included street sweepers, motorgraders and compressors, and, for the mining industry, WABCO/Haulpak trucks.
In 2000, Road Machinery Co. was purchased by Komatsu America. In the spring of 2005, Komatsu sold Road Machinery to Mitsui & Co. (a $50 billion dollar corporation) and then in 2008, Road Machinery purchased Shanahan, which was the Komatsu dealer for almost all of California. Road Machinery LLC now has 14 facilities throughout Arizona, California, New Mexico, including one in El Paso, Texas, and two in Mexico.
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