TORONTO, ONTARIO — (Marketwire – March 28, 2012) – Gowest Gold Ltd. (“Gowest” or the “Company”) (TSX VENTURE:GWA)(OTCBB:GWSAF) announces that it has entered into a Letter of Intent (“LOI”) to purchase the pressure autoclave and associated equipment (“autoclave”) previously operating at Miramar Northern Mining Ltd.’s (“Miramar”) Con Mine near Yellowknife, Northwest Territories. Gowest intends to incorporate the autoclave into the Company’s mine development plans at its 100% owned Frankfield East gold deposit, part of its Timmins North Gold Project.
“A pressure autoclave circuit will be key to effectively processing the refractory gold ore at the Frankfield East deposit,” said Greg Romain, CEO of Gowest Gold. “As we continue to push for ways to accelerate the project’s development cycle, we were presented with an extremely rare opportunity to acquire existing equipment that not only matches the capacity of our project but is also in excellent condition. Current lead times for the fabrication of this type of equipment are approaching two years. In addition to scheduling impacts, this acquisition represents a minimum savings of $4-5 million to the project’s overall capital cost.”
Gowest’s Frankfield East deposit was the subject of a recent Preliminary Economic Assessment (“PEA”) (see news release dated November 14, 2011), which confirmed robust economics and growing resource potential. The pressure oxidation process outlined in the PEA utilizes conventional technology for refractory gold deposits, which after being widely introduced in the 1980’s, is now well proven throughout the industry. This includes some of the largest gold mines in the world, including Red Lake (Goldcorp), Goldstrike (Barrick Gold), and Lihir (Newcrest Mining).
REFRACTORY VERSUS FREE MILLING GOLD DEPOSITS
Gold deposits are generally grouped according to two broad categories – free milling and refractory. The majority of the historic gold production from the Timmins camp has come from free milling deposits defined as those deposits where the use of gravity and basic cyanide leaching techniques can extract greater than 80% of the contained gold. Current operations in the Timmins area that fall into this category include: the Dome and Hoyle Pond Mines (Goldcorp), Bell Creek and West Timmins (Lakeshore Gold), Holt/Holloway (SAS Gold Mines), and Black Fox (Brigus).
As the quantity and quality of new free milling gold deposits around the world declines, refractory gold resources have become a significant component of new gold discoveries and operations. The term refractory simply means that gold recoveries are lower than what would be expected with free milling ores without the use of additional, and now common, processing stages to “free” the gold particles. Refractory gold particles are typically contained within a matrix of other minerals (primarily sulphides like pyrite and arsenopyrite) that prevent leach solutions from effectively contacting the gold.
Many of the current and historic gold deposits in the Timmins camp contain zones of at least partially refractory mineralization. These were often left in the ground un-mined, or processed through the existing mills with lower than optimal gold recoveries.
TECHNICAL BACKGROUND
Refractory Gold Processing
There are a number of available processes to improve the recovery of gold from refractory deposits with the basic premise being to liberate gold particles from the background mineral matrix for leaching. In some cases, this can be as simple as very fine grinding, which allows for the leach solutions to better contact gold particles. For more difficult deposits, the historical solution was to roast (or “burn”) the mined material to allow for the conversion of the sulphide minerals and/or graphite in the ore to their oxide form. The remaining solids, which contain the liberated gold particles, are then more susceptible to conventional gold leaching and recovery techniques. In Canada, there were a number of historical gold roasting operations including those at Giant Yellowknife and Red Lake.
Over time, air emissions regulations were tightened and roasting became a less favourable technique for the treatment of refractory gold ores. Instead, hydrometallurgical techniques became more common. In these processes, the minerals are reacted in mixed tanks with liquid solutions (primarily acidic) and oxygen, which reacts to decompose the sulphide minerals. One of the primary advantages of these techniques was that all of the decomposition products could be contained in liquid form and then precipitated thereby preventing them from becoming a source of air contaminants. By controlling the chemical conditions, the precipitated products could be made chemically inert and stable for long term disposal.
In the 1980’s acid pressure oxidation became the predominant hydrometallurgical technique for the processing of refractory gold deposits. The process was first implemented in 1985 at Homestake’s McLaughlin mine in California and shortly thereafter at the flagship Goldstrike property on the Carlin Trend in Nevada, which Barrick Gold transformed from a small heap-leach operation to a more than two-million-ounce per year gold producer.
Gold Processing – Frankfield East Deposit
The Frankfield East deposit is considered refractory because gold is present as fine particles encapsulated (surrounded) by the sulphide minerals pyrite and arsenopyrite. Although the gold cannot be extracted directly with cyanide, the correlation between gold and the sulphide minerals allows for the Frankfield East mineralization to be ground and then processed via flotation to produce a very high grade gold concentrate (up to +90 g/tonne gold) that comprises less than 10% of the original weight of mined rock. The remaining 90% of the rock can then be removed from the process allowing for the size and cost of the remaining gold recovery equipment to reduced significantly.
A number of techniques were examined for the recovery of gold from the Frankfield East concentrate including bacterial and pressure (autoclave) oxidation. Pressure oxidation was selected as the optimal process for the Frankfield Project for a number of reasons, including:
- The ability to process a small quantity of high grade gold concentrate so that the pressure oxidation equipment can be minimized in size;
- The excellent gold recoveries (+98%) achieved using cyanide on the product from the pressure oxidation stage;
- The pressure oxidation process is understood, well proven, and provides a robust solution to the treatment of these types of ores; and
- The residues produced from pressure oxidation are extremely stable when discharged to the environment for final disposal.
A simplified schematic of the proposed gold recovery operations for the Frankfield East deposit is attached below. The additional refractory treatment (autoclave) portion of the process is shaded on the diagram to separate it from the remaining conventional (“free milling”) processing stages that are common to almost all gold recovery operations. It is important to note that due to the implementation of a prior flotation stage, only a small fraction (~10%) of the initial quantity of mined material at Frankfield East will need to be subjected to the pressure oxidation process. Some of the significant advancements made by Gowest with respect to the production of high grade gold flotation concentrates have been published recently in a paper titled “Development of Processing Alternatives for Frankfield East Deposit Using Selective Arsenopyrite-Pyrite Flotation.” (See news release dated February 1, 2012.)
“While inserting a pressure oxidation stage to the process at Frankfield East adds an estimated $80 to $100 an ounce of operating costs based on the current resource grades, it sharply increases our production by increasing gold recoveries,” said Darren Koningen, Gowest’s Vice president, Technical Services. “Probably just as important though, it also allows us to consider a business plan that could include generating future revenue processing similar refractory materials from some of the many other refractory deposits in the region.”
LOI TERMS
The planned acquisition includes the pressure vessel as well as related ancillary items including agitators and process feed pumps. The autoclave was constructed in 1992 and, although it was still in good condition, was decommissioned in 2006. The vessel itself, which is 3.2 m in diameter (OD) and 12.9m in total length, was designed to operate at temperatures and pressures up to 400 psig.
Gowest entered into the LOI with Miramar on December 5, 2011, after which the Company inspected the autoclave and provided the vendor with list of related property to purchase together with a non-refundable cheque for CDN$10,000.00. This deposit will be used as down payment against the purchase price in the event that Gowest decides to complete the acquisition. Gowest has until September 28, 2012 to finalize its decision. The purchase price of the autoclave will be the based on the scrap steel market closing price at the time of shipment. Gowest will also be responsible for all shipping and handling costs.
Qualified Person
This press release has been reviewed by Mr. Darren Koningen, P. Eng., Gowest’s Vice President of Technical Services. Mr. Koningen is a Qualified Person under National Instrument 43-101.
About Gowest
Gowest is a Canadian gold exploration and development company focused on the delineation and development of its 100% owned Frankfield East gold deposit, part of the Company’s Timmins North Gold Project (TNGP.) Gowest is exploring additional gold targets on the 60-square-kilometre TNGP land package and continuing to evaluate area, which is part of the prolific Timmins, Ontario gold camp.
For further information please contact:
Greg Romain Greg Taylor
President & CEO Investor Relations
Tel: (416) 363-1210 Tel: 905 337-7673 / Mob: 416 605-5120
Email: [email protected] Email: [email protected]
Forward-looking statements
This news release contains certain “forward looking statements”. Such forward-looking statements involve risks and uncertainties. The results or events depicted in these forward-looking statements may differ materially from actual results or events. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.
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