Otis Gold Investment Interest Part 1: Environment Hey all,
I have started covering Otis Gold and I am looking forward to writing up a few pieces for everyone to mull over / comment on / tear apart? I enjoy providing write ups on why I am interested/invested in junior mining space companies and discussing aspects that attract/detract from my point of view. With that in mind lets kick off what I hope will be a great discussion series about Otis Gold and in particular, the Kilgore deposit.
My interest in this company was originally sparked by a geologist friend of mine (full disclosure, my background in mining engineering) who mentioned it in regards to some of the attractive intercepts. I promised I would look into it and that I would share with him my thoughts, and these series of posts I will be writing up are a result of my own due diligence. I will endeavor to provide links and references to the material I comment on for you to review, but always do you own due diligence as well. I will be providing my own opinion on the items I comment about and would appreciate and encourage that if you read over this material and have your own thoughts, please share!
So the first thing I would like to get into in these series is the attractive environmental aspects of the Kilgore Deposit. The first thing to get a good understanding about any gold ore body is to understand the hosted deposit geology? In the case of the Kilgore deposit the ore body is predominantly an
Oxide type deposit. What does this mean? Unlike a Sulphide hosted gold deposit that are typically exploited utilizing large amounts of water for froth flotation milling and processing techniques which result in medium to large tailing pit/ponds requirements, Oxide type gold deposits like the Kilgore deposit are exploited utilizing what is called heap leach mining and processing methods which are not water intensive and do not require tailings deposits of the same scale seen with the sulphide type deposits.
Heap Leach Pads What makes this so attractive from an environmental perspective is that it completely eliminates the environmental risk posed by a tailings management facility that could potentially fail and flood the local environment. Heap leach operations also use less water. Oxide Ore Bodies can also be less energy intensive (depending on the ore characteristics) due to reduced crushing and grinding requirements.
The major risks associated with Heap Leach operations lies in the lixiviant (the solution sprayed /sprinkled/dripped on the top of the heap that is used to extract the gold from the crushed ore) The solutions that are utilized are typically pretty nasty stuff [Cyanide, Sulphurous Acid, Thiocyanate,etc.] and the big risk is if it gets out into the surrounding environment. So when accessing a potential Gold mining operation utilizing this method, it’s important to take a look at the local environment and assess the risks. For example, check out one of the more recent mining incidents involving cyanide to give you an idea of the consequences.
2000 Baia Mare cyanide spill In the case of the Kilgore deposit, some of the most beneficial information I have found to date was actually in the informative 2012 investor presentation
Skip to 13:25 mark to catch the environmental discussion
Otis Gold Corp hired Golder Associates to perform an environmental scoping study in 2010 where no issues were identified consider “fatal flaw”, no threatened or endangered species present, not in the view shed of any National parks or near the vicinity of any native American lands and most importantly in regards to the lixiviant solution; All drainage is internal with no flows into salmon bearing rivers or spawning grounds. The final point is very important to the viability potential of a heap leach operation from an environmental permitting perspective.
It is also important to consider the local mining history and prior/current operations to gain an understanding if the Kilgore deposit is located in a jurisdiction that is receptive to mining operations and whether or not they have permitted similar operations in the past. In this case, the Kilgore deposit is located in Idaho which has both current operations and a rich history of mining. Most importantly,Idaho also has previous experience with an open pit Heap Leach mining and extraction operations at the Beartrack Mine operated by Meridian Gold (which later merged with Yamana Gold). Meridian Gold was actually awarded two accolades for its handling of the closure and reclamation of the Beartrack mine
Beartrack Mine Reclamation Awards Announced From an environmental perspective, I like the prospects of the Kilgore deposit.
This wraps up my first entry in the series of posts I plan on making about Otis Gold and the Kilgore deposit. I hope this stirs up some good conversation and discussion.