New Gold ships first concentrate in historic day for mine
Daily News Staff Reporter
NEW AFTON MINE — It looks like screened Aberdeen clay soil, but material loaded into a transport truck here Thursday morning is the first pay dirt for owner New Gold Inc.
Mine employees gathered to watch a front-end loader shovel buckets of copper concentrate and load them into a 50-tonne transport truck.
It's the first shipment of concentrate to leave the mine, another milestone for New Gold.
"We've gone from a net consumer of cash to actually producing it," said New Gold CEO Bob Gallagher, who gathered with employees for the occasion.
Once the underground copper-gold mine located just outside Kamloops' western boundary reaches steady-state production by the end of the year, the company expects it to generate $200 million annually in free cash flow.
Following several years of construction and months of commissioning, the New Afton mill — where concentrate is produced from ore shipped to the surface by conveyor — started production last week, running for one week. It was shut down Wednesday to allow a scheduled retorquing of bolts on its grinding machines.
The concentrate it produced, and will generate again continuously in a few days, is destined by truck for the Port of Vancouver. From there it will go to smelters in India and the Philippines, as well as to a third-party brokerage firm.
The entire complex, including underground works and mill, cost about $750 million to design and build.
Beside the mill, and visible from the Trans-Canada Highway, is a stockpile of ore from the mine's four kilometres of underground tunnels. The stockpile has accumulated for a year or more in order to balance out production needs.
Eventually it will be reduced to a small footprint, about one week's worth of ore, as the mine moves to a "hand to mouth" operation, whereby ore moves directly from underground to the mill and then to the loading area for transport as concentrate, about 25 per cent pure copper.
As dignitaries gathered to celebrate the first shipment, mill manager Craig Lockhart took a question from a mill engineer about mill cooling equipment from Europe that needs to be modified for the North American grid.
While the mill operated for a week, bugs remain to be worked out this year as New Afton ramps up toward full production. Eventually six transport trucks a day will leave the site loaded with copper concentrate.
"This is a destination mine," said the metallurgical engineer.
"People want to come here to work. It's been easy to find talented people who want to live and work here."
Some of those engineers and other specialized employees include Australians from New Gold's Peak mine.
In turn, Lockhart said some technical people at New Afton have gone to New Gold's Mesquite mine in California.
The mine employs about 475 people today. That's in addition to contractors on and off site, including local shops that maintain some transport trucks.
"It (number of employees) will stay high for two years as we continue development," Lockhart said. "We've got extra hands as well for set-up and training."
Eventually it will winnow down to under 400 employees.
On any given day, employees on site include underground miners, engineers, laboratory staff, surveyors, human resource staff, millwrights, electricians, haul truck drivers and mechanics. Unlike most B.C. mines, it is non-unionized.
Mill employees work 12 hours a day for seven days, followed by seven days off. Those underground work 11-hour shifts on the same rotating seven-day schedule.
New Gold, formerly DRC Resources, staked the Afton open pit more than 15 years ago after Teck Corp., believing the resource was exhausted, let it expire. The junior exploration company found a valuable copper-gold resource deep beneath the historic open pit mine that last operated in the mid-90s.
The mine has a projected 12-year life. New Gold is attempting to extend it by going into deeper deposits.
"There's a third block of potential ore that's being sniffed at," Gallagher said.
The company is looking to extend life by at least five years. Results of its deep exploration will be known next year, he said.