Reserve History

NEWMONTS RESERVE HISTORY ON THE CARLIN TREND

19652001
Dean G. Heitt1
Star, exploration focused on jasperoid outcrops located 2l miles (4.5 km) southeast of Blue Star, leading to discovery of the Carlin deposit in late 1961 (fig. C-2). Development drilling between 1962 and 1965 proved up a reserve of 11 million short tons (10 Mt) grading 0.320 opt (troy ounces per short ton; 11.0 g/t) gold for a total of 3.5 million ounces (110 t). Early exploration and development focused around the Carlin deposit because only high-grade ore was economic at a fixed gold price of $35.00 per ounce (fig. C-3). With the demise of the Bretton Woods Monetary Agreement in 1971 and the subsequent rise in gold price, Newmont began acquiring other properties in the area. In 1972, the Blue Star and Bootstrap deposits were acquired and, in 1977, the North Star deposit was discovered north of Blue Star. Intermittent exploration in the Maggie Creek claim area, from 1962 to 1979, led to development of a 359,000-ounce (11-t) reserve in 1979 (Rota and Ekburg, 1988). Figure C-4 shows the location of new deposits added to reserves during this period. The 1965 pre-mine reserve of 3,520,000 ounces (109 t) steadily decreased to a low of 765,600 ounces (24 t) in 1973 as mining depleted the Carlin deposit reserves (fig. C-5). By 1981, new discoveries increased Newmonts Carlin trend reserve to 1.15 million ounces (36 t). Average grade of the reserves decreased as higher gold prices made lower grade material economic (fig. C-6). The average reserve grade of 0.165 opt (5.6 g/t) gold in 1981 was approximately half of the 1965 grade. Newmonts first mill was commissioned in 1965 to process oxide ore from the Carlin Mine (fig. C-7). Mill #1, as it became known, later processed ore from other deposits until it was decommissioned in September 1994. Increasing carbonaceous ore from Carlin led to the addition of a flash chlorination circuit in 1971 to pretreat ore prior to cyanidation. A double oxidation process, added in 1977 to process sulfidic-carbon ores, allowed the conversion of 285,000 ounces (8.8 t) from waste to ore. Newmonts first leach facility began at Bootstrap in 1979 processing ore averaging 0.028 opt (1.0 g/t) gold stockpiled during mining. Heap leaching using reusable asphalt pads began at Maggie Creek in 1981. Large-scale leaching having been proved economic, leach-grade ore would contribute significantly to Newmonts reserves in the future. Production decreased steadily during the Early Years, as the Carlin Mine was depleted and lower grade ore from new deposits was processed, reaching a low of 110,000 ounces (3.4 t) in 1980 (fig. C-8). Ironically, this is the same year gold hit $800 per ounce and averaged over $600 per ounce (fig. C-3). From 1965 to 1981, Newmont produced 3,291,700 ounces (102.4 t) from the Carlin trend, the vast majority coming from the Carlin Mine (fig. C-9).

ABSTRACT
Northeastern Nevadas Carlin trend contains one of the richest gold endowments in North America. Newmont Mining Corporation has explored and produced gold from this region since discovering the Carlin Mine in 1961. Newmonts Carlin trend gold reserves have grown from an initial 3.5-millionounce (110-t [metric ton]) reserve in 1965 to nearly 12 million ounces (373 t) in 1998. Over the same period, Newmont produced 27.3 million ounces (849 t) of gold. Reserve additions have come from systematic surface and underground exploration and expansion of more than 30 deposits, through new metallurgical processes and changing mining methods.

INTRODUCTION
The central part of the Carlin trend is a 38-mile (60-km) long alignment of gold deposits in Eureka and Elko Counties, Nevada, extending from the Rain Mine on the south to the Dee Mine on the north (fig. C-1). Newmont and other companies have discovered over 40 gold deposits along this trend. The Carlin trend is one of the largest concentrations of gold deposits in North America, estimated to contain over 100 million ounces (3,110 t) of gold including past production, reserves, and resources (Teal and Jackson, 1997b). This paper provides a summary of exploration, metallurgical developments, changing mining methods, and their relation to Newmonts reserve history on the Carlin trend. The reserve history is broken down into three periods starting with the Early Years from 1965 to 1981 centered on mining of the Carlin deposit and the early expansion to other deposits. The Growth Years chronicle the meteoric growth of Newmonts reserves in the 1980s and the Going Deeper Years focus on the development of deeper, higher-grade deposits that have been developed by or led to the onset of underground mining.

EARLY YEARS 19651981

Gold was first mined on the Carlin trend from small placers located in Maggie Creek, east of the Gold Quarry Mine, in the 1880s (Ryneer, 1985). However, it wasnt until the 1960s that modern exploration began to uncover the real potential of this productive gold trend. Newmont began exploration on the Carlin trend in 1961 when geologists Alan Coope and John Livermore began investigating the Blue Star Mine and Maggie Creek claims (Coope, 1991). After a three-week examination of Blue Star, a recommendation was made to acquire the property, but Newmont was unable to negotiate a deal with the landowner (Coope, 1991). Using the experience gained at Blue
1

Newmont Mining Corporation

35

Dee
WASHOE

HUMBOLDT
Winnemucca

ELKO

Capstone Bootstrap Tara Meikle Rodeo (Goldbug) Betze-Post Deep Star North Star Bobcat Blue Star Beast Lantern Universal Gas Pit Carlin Pete West Leeville Genesis Turf

Elko
80

80

80

PERS HING

Carlin

80
Reno

EUREKA

LANDER

Lovelock

CHURCHILL LYO N

WHITE PINE
Ely

Four Corners

MINERAL

NYE

ESMERALDA LINCOLN

CLARK Las Vegas

North Area Operations

Mike Tusc Mac

South Area Operations

Eureka County

Elko County

Gold Quarry

Carlin

80

Rain Area Operations

Emigrant Pass

Emigrant

0 0 2

2 4

4 6 8

6 miles 10 kilometers

Rain

Figure C-1. Map of the Carlin trend showing the major gold deposits and Newmonts major operation areas.

36

Reserve History

Popovich Hill

Mill 1

Tailings Facility

Figure C-2. A 1966 view of the Carlin Mine and Mill complex, looking east. Photo courtesy of Newmont Mining Corporation.

$700 612 $600

$500

U.S. dollars

$400

387

$300

317 273

$200

159

$100 35 $0

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

Year

Figure C-3. London yearly average gold price from 1965 to 2001. Source: www.kitco.com.

37

2000

HUMBOLDT

ELKO

WASHOE

Winnemucca Elko
80

Bootstrap

80

80

PERS HING

Carlin

80
Reno

EUREKA

LANDER

Lovelock

CHURCHILL LYO N

WHITE PINE
Ely

North Star Blue Star

MINERAL NYE

ESMERALDA LINCOLN

Carlin
CLARK Las Vegas

Eureka County

Elko County

Maggie Creek

Carlin

80

Emigrant Pass

0 0 2

2 4

4 6 8

6 miles 10 kilometers

Figure C-4. Location of deposits added to gold reserves during the Early Years (19651981).

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Reserve History
30 Early Years 25

Going Deeper Years, Open Pit Going Deeper Years, Underground

20,684,000

Growth Years

23,335,000 15,963,000

20

Millions ounces of gold

15

10

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

1966

Year-end

Figure C-5. Total Newmont reserve ounces of gold on the Carlin trend from 1965 to 2001. Source: Newmont Mining Corporation and Newmont Gold Company Annual Reports.

0.35

0.320

Early Years Growth Years Going Deeper Years

0.30
Troy ounces of gold per short ton

0.25

0.15
0.100

0.10
0.051

0.05

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

Year-end

Figure C-6. Average grade (opt) of Newmont gold reserves on the Carlin trend from 1965 to 2001. Source: Newmont Mining Corporation and Newmont Gold Company Annual Reports.

39

2000

0.165

0.20

2000

765,600

1,153,020

3,520,000

9,839,809

11,841,000

Thickener Tanks

Mill Building

Figure C-7. A view of Mill #1 from Popovich Hill in 1968, looking west. Outcrops in the foreground are Popovich jasperoids. Photo courtesy of Newmont Mining Corporation.

2,000 1,800

Early Years Growth Years Going Deeper Years

Thousand ounces of gold

1,600 1,400 1,200 1,000 800 600

128,500

200 0

1966

1968

1970

1972

1974

1976

1978

1980

110,000

400

337,000

1982

1984

1986

1988

1,467,800

1990

1992

1994

1996

1998

Year

Figure C-8. Newmonts total annual gold production (ounces) from the Carlin trend from 1965 to 2001. Source: Newmont Mining Corporation and Newmont Gold Company Annual Reports.

40

2000

1,866,000

2,200

Reserve History
27,321,767 1966 1968 1970 1972 1974 1976 1978 1980 3,291,700 1982 1984 1986 1988 7,401,220 1990 1992 1994 1996 1998
Year

30

Cumulative production (million ounces of gold)

25

20

15

10

Figure C-9. Newmonts cumulative gold production (ounces) from the Carlin trend from 1965 to 2001. Source: Newmont Mining Corporation and Newmont Gold Company Annual Reports.

GROWTH YEARS 19821989

During the 1980s exploration focused on discovery of large, oxide gold deposits amenable to open-pit mining and met with great success. Twelve new deposits were added to reserves during the period, nine of them between 1985 and 1988 (fig. C-10). Geologic mapping, soil and rock chip geochemistry combined with drilling proved to be the best exploration tools during this period. Many of the deposits discovered during the 1980s cropped out at the surface. The dramatic rise in reserves began with the discovery of the Gold Quarry and Rain deposits in 1980. Gold Quarry was discovered approximately 1,000 feet (300 m) east of the Maggie Creek Mine when drilling encountered gold mineralization below 250 feet (75 m) of postmineral Tertiary Carlin Formation (fig. C-11) (Rota and Ekburg, 1988). At about the same time, Newmont geologists also began investigating the Rain claims located 12 miles (19 km) south of the town of Carlin (Knutsen and West, 1984). Although the discovery was originally staked for barite by local prospector Price Turk Montrose, jasperoid rock chip samples from the discovery assayed up to 0.480 opt (16.5 g/t) gold (Thoreson, 1988). Gold Quarry and Rain were classified as reserves in 1982. Purchase of the TS Ranch in 1982 from Charles Thorton and Roy Ash was a major milestone in Newmonts development of the Carlin trend. Acquisition of these lands

provided Newmont with a substantial private land holding on the Carlin trend and allowed geologists to explore in areas previously unavailable. Reserves increased dramatically during the Growth Years from 1.15 million ounces (36 t) in 1981 to over 20.68 million ounces (643 t) in 1989 with additions coming from new discoveries and expansion of existing deposits (fig. C-5). Gold prices ranging from a high of $460 per ounce in 1982 to a low of $317 per ounce in 1985 (fig. C-3) meant that lower grade ore could be included in the reserves. Consequently, the average grade of 0.051 opt (1.7 g/t) gold in 1982 was a third of the 1981 grade of 0.165 opt (5.7 g/t) gold (fig. C-6). Gold reserves added throughout the Growth Years averaged approximately 0.050 opt (1.7 g/t) (fig. C-6). During the 1980s, new mines were developed over nearly the entire length of the trend. These new mines, combined with increased production from existing operations, required new process facilities to be located closer to the operation areas than during the Early Years when all of the mill-grade ore was shipped to Mill #1. To meet these needs, Newmont commissioned its second oxide mill (Mill #2) at Gold Quarry in 1985 followed by Mill #3 at Rain and Mill #5 at Gold Quarry in 1988, and Mill #4 in the North Area in 1989 (fig. C-1). New oxide leach pads were constructed at Rain, Gold Quarry, and the North Area to treat the increased amount of low-grade ore developed during this time.

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2000

HUMBOLDT

ELKO

WASHOE

Capstone

Winnemucca Elko
80

80

80

PERS HING EUREKA LANDER

Lovelock

Carlin

Post (Newmont Portion) Genesis Bobcat

80
Reno

CHURCHILL LYO N

WHITE PINE
Ely

MINERAL

NYE

ESMERALDA

Lantern Pete

LINCOLN

CLARK Las Vegas

Eureka County

Tusc Mac Gold Quarry

Elko County

Carlin

80

Emigrant Pass

Emigrant

Rain
0 0 2 2 4 4 6 8 6 miles 10 kilometers

SMZ

Figure C-10. Location of deposits added to reserves during the Growth Years (19821989).

42

Reserve History

Gold Quarry Maggie Creek Mine

Maggie Creek Leach Facility

Figure C-11. Aerial view (looking east) of the Maggie Creek Mine and exploration for the Gold Quarry deposit, 1982. Photo by Galen Knutsen.

Production rose dramatically from 136,600 ounces (4.25 t) in 1981 to 1,467,800 ounces (45.5 t) in 1989 (fig. C-8). In 1988, Newmont became the largest gold producer in North America (Newmont Gold Company, 1988). Between 1965 and 1989, Newmont produced 7,407,220 ounces (230.4 t) from the Carlin trend (fig. C-9).

GOING DEEPER 19901998

During the late 1980s exploration and development drilling began focusing on higher-grade, refractory deposits as near surface discoveries were exhausted. Refractory material contains organic carbon and/or unoxidized sulfides and requires pretreatment of the ore prior to cyanide gold recovery. Newmonts first deep discoveries were the Deep Post and Gold Bug deposits in 1988 near the Post deposit (fig. C-12). The first drill hole at Deep Post encountered 470 feet (143 m) averaging 0.930 opt (32 g/t) gold, substantially higher-grade than the typical oxide deposit discovered in the 1980s. While both Deep Post and Goldbug would eventually become underground mines, both were planned originally as open-pit mines. Barrick Gold Corporations 1989 discovery of what would become the Deep Star deposit started Newmont on the road to underground mining. Newmonts first hole intersected 195 feet (58 m) grading 2.058 opt (70.6 g/t) gold beginning at 1,295 feet (388 m) and subsequent development drilling indicated a

1992 pre-mine reserve of 789,000 ounces (25 t) grading 0.929 opt (31.9 g/t) gold. Early feasibility studies indicated that twin shafts were the best option for accessing the deposit but startup was delayed in 1993. Underground mining engineers then began to evaluate other projects at the Carlin and Rain Mines. Newmonts first foray into underground mining had been at Carlin in 1974 and 1975 when a 2,500-foot (750-m) adit was driven as a drill platform into the north wall of the pit to test the down-dip potential of the Main and East orebodies (Kuehn, 1989). Forty-three holes were drilled, and the results justified an additional layback to the open pit. Underground mining at Rain was first proposed by Thoreson in 1990 to access highgrade ore that would have been left in the ultimate pit wall. Both the Carlin and Rain underground mines began development in late 1993 with production commencing in 1994 (fig. C-13). Success of both of these projects led to a redesign of the Deep Star Mine from twin shafts to twin declines to access the deposit. Development for Deep Star began from the active Genesis open-pit mine in 1994 with production beginning in 1996 (Clode and others, this volume). Exploration for deeper, typically blind deposits required different techniques than those used in the 1980s. High-grade gold in the northern Carlin trend is hosted in the lower units of the Devonian Popovich limestone or in the upper units of the underlying Devonian-Silurian Roberts Mountains Formation. Drilling targeted these units below weak geochemical

43

HUMBOLDT

ELKO

WASHOE

Winnemucca Elko
80

80

80

Tara Goldbug

PERS HING
EUREKA LANDER
Lovelock

Carlin

80
Reno

CHURCHILL LYO N

WHITE PINE
Ely

Deep Star West Leeville

MINERAL

NYE

Beast Four Corners

ESMERALDA LINCOLN

Hardie Footwall
CLARK Las Vegas

Eureka County

Elko County

Chukar Footwall

Carlin

80

Emigrant Pass

0 0 2

2 4

4 6 8

6 miles 10 kilometers

Rain Underground

Figure C-12. Location of deposits added to reserves during the Going Deeper Years (19902001).

44

Reserve History
anomalies and/or favorable structures found in the overlying barren Ordovician Vinini Formation (D. Groves, 1999, personal commun.). This exploration method led to the discovery of the West Leeville deposit in 1994 on lands joint-ventured with High Desert Mineral Resources about 1.5 miles (2.5 km) north of the Carlin Mine (Jackson and others, 1997). The West Leeville deposit lies 1,600 to 1,800 feet (480540 m) below the surface and contains a drill-indicated resource of 3.2 million ounces (100 t) at an average grade of 0.436 opt (15.0 g/t) gold (Jackson and others, 1997a). While most of the exploration emphasis was on deep deposits, several small, oxide deposits including Tara and Beast were discovered (fig. C-12). Newmonts metallurgical research and development group played a significant role in increasing reserves during this period. The Refractory Ore Treatment Plant (Mill #6) was commissioned in 1994 to roast high sulfide and carbonaceous refractory ores from all its active operations. Most of Newmonts underground ore and a significant portion of the remaining open-pit ore is refractory and requires pre-treatment prior to gold extraction. Also in 1994, Newmont began a 3year commercial demonstration of its patented bioleaching technique to process low-grade refractory ore. Bioleaching uses bacteria to oxidize sulfides prior to gold extraction with cyanide or ammonium thiosulfate. In 1994, Newmont added 2.0 million ounces (62 t) of Gold Quarry bioleach ore to reserves. In 1999, bioleach processing was deemed uneconomic due to the low gold price. Currently only bio-milling ore, which is a combination of bioleach pretreatment and processing through an oxide mill, is now included in Newmonts reserves. Newmonts reserves reached a high in 1996 of 23,335,000 ounces (723 t). Figure C-5 illustrates the rising importance of the underground reserves beginning in 1994. The higher-grade underground ore has slowly increased the average grade of the reserves to 0.100 opt (3.4 g/t) gold in 2001 (fig. C-6). Depletion and the revaluing of the reserves at a lower gold price has led to declining reserves since 1996 (fig. C-7). Gold production remained relatively constant in the 1990s reaching a high of 1,866,000 ounces (58 t) in 2000 (fig. C-8). Between 1965 and 2001, Newmont produced 27,321,767 ounces (849.8 t) from the Carlin trend.

FUTURE
Newmont is confident of continuing to add quality reserves to its Carlin trend operations in the future. Development is ongoing to convert known resources into reserves and exploration continues to look for the next big deposit in this productive area. Ongoing metallurgical research of new processes continues to allow material once considered waste to be mined and processed economically.

Carlin East Portal

Batch Plant

Figure C-13. A 1998 view of the Carlin East underground portal area, looking north. The portal is located in the north wall of the Carlin East pit. Photo by Matt Breitrick.

45