Centerra Gold Inc. [CG-TSX, CAGDF-OTC] said Friday March 23 that it has restarted its second ball mill circuit at its Mount Milligan Mine located 145 km northwest of Prince George, central British Columbia.
As announced on February 5, 2018, milling operations were restarted (albeit at a reduced capacity) following a shutdown in December, 2017, due to a lack of sufficient water resources.
The company was able to resume mill operations by using one of its two ball mills to minimize water requirements.
On Friday, the company said the second ball mill has now been restarted following a build-up of water at Mount Milligan’s tailings storage facility due to higher than expected thawing of ice in the tailings facility. The company has also been able to pump water from groundwater sources, tower drains and nearby Philip Lake.
Investors reacted by sending Centerra shares up 1.68% or $0.12 to $7.27 in early afternoon trading Friday.
The Mount Milligan Mine is one of two flagship assets in the Centerra Gold portfolio. The other is the Kumtor Mine, which is located in the Kyrgyz Republic.
Mount Milligan is a conventional truck-shovel, open pit copper and gold mine. It features a copper processing plant with a design capacity of 62,500 tonnes per day.
Proven and probable reserves at the end of 2016 stood at 496.2 million tonnes, grading 0.187% copper or roughly 2 billion pounds of contained copper, and 0.36 g/t gold or 5.76 million ounces.
Centerra has previously said Mount Milligan experienced a drier than normal spring and summer during 2017, with a limited amount of snow melt. This resulted in lower than expected reclaim water volumes in the tailings storage facility, which is used in the mill processing operation, the company said.
The water shortage was exacerbated by extremely cold temperatures at Mount Milligan, resulting in a greater than expected loss of water volumes in the tailings storage facility due to ice formation.
In the fourth quarter of 2017, the company tried to mitigate the water shortfall by drilling additional wells to draw water from nearby aquifers. But this proved insufficient to offset the loss of water volumes caused by the limited snow melt and cold temperatures.
As a further mitigation measure, the company moved to secure an amendment to Mount Milligan’s Environmental Assessment to allow it to pump water from a nearby lake (Philip Lake).
On Friday, Centerra said it expects mill throughput levels to average approximately 40,000 tonnes per day until the spring melt occurs, provided that the collection and pumping of water to the tailings storage facility continues as planned and there are no unexpected cold water events.
The company said it anticipates steadily improving mill throughput, quarter over quarter during 2018, as additional water becomes available and improvements are made to the milling and maintenance processes.
The company expects the Mount Milligan Mine to achieve sustainable mill throughput levels averaging approximately 55,000 tonnes per calendar day for the second half of the year.