Epithermal Gold Economics

Epithermal gold deposits are well sought after because they tend to have good grades, and may contain high grade ore shoots, but they are found as small vein systems (less than a million tonnes in size). This quality makes these deposits attractive to smaller mining companies as they provide quick payback at high rates of return on moderate amounts of investment capital. The major mining companies prefer to mine large scale epithermal deposits which are suitable for open pit operations. These projects tend to be long term and a vast amount of capital investment is needed in the initial stages. This type of ore deposit is particularly attractive when base metal prices are depressed, because of high precious metal values with little or no base metal content.

The methods used in the exploration for this type of deposit are the same as those used to find porphyry deposits and volcanic massive sulphides. Therefore the regional geochemistry and the mapping of altered country rocks or float material is very important. Geochemical stream sediment and soil surveys are useful, but some of the techniques required such as sub-ppm, carbon rod and atomic absorption can prove expensive. Another useful technique is the bulk cyanide leach technique, a qualitative and inexpensive tool for regional gold surveys.

Many epithermal deposits display a widespread demagnetization of the host rocks, due to transfer of potassium into the upper part of the epithermal system with reduced sulphur. Therefore airborne magnetic, radiometric and resistivity surveys are very useful in locating these deposits.

On the ground, geochemical surveys based primarily on gold are of great importance in locating ore zones. Where there is sufficient outcrop or if exploration drilling has taken place the possibility of alteration could be very important. Also mapping of breccia types could provide a guide to the mineralization style and possible targets. Fluid inclusion thermometry is also useful in characterizing mineral deposits.

No single technique will find an epithermal gold deposit. It is a combination of careful mapping, geophysics and geochemistry that may lead to a good ore prospect. Ultimately drilling is the best test. This will be initiated once the ground work is complete and there is sufficient evidence to justify the capital cost of drilling.

Epithermal gold deposits are situated in many parts of the world, including the classic examples of Creede, Colorado; Toodoggone Camp, Blackdome, and Premier of British Columbia; Comstock Lode, Nevada and Pachuca, Mexico. Most of the epithermal deposits of the world can be found on the "Ring of Fire" which is the area of volcanism that is on the rim of the Pacific Ocean from Southeast Asia to western South America.

Epithermal gold deposits provide an important contribution to the worlds gold production. They are a desirable exploration target which should be caref ully evaluated on the bases of the capital investment needed and the amount of metal that can be extracted.

The amount of gold in a deposit is calculated based on the amount of gold per tonne of rock (the ore's grade) and the tonnage available at that grade. The higher the grade of the deposit the lower the tonnage needed to make the extraction economical (higher than 3g/t considered). Therefore a low grade deposit needs a large tonnage of rock to make the recovery economical (> hundred million tonnes).

The presence of other metals can increase the value of a deposit, as many epithermal deposits contain significant amounts of silver and/or copper. This may contribute towards lowering the cost of mining the gold, therefore making the deposit more economic. The price of gold when considering the possibility of mining a deposit can be a very important factor as a small or low grade deposit may be uneconomic. Another factor to consider is the location of a deposit; most epithermal deposits are in areas which have no infrastructure such as roads or electricity. A water supply will also need to be located.

Eventually when the mine closes, the area usually undergoes environmental rehabilitation. Commonly the area is turned into a nature reserve or is filled with water and used for recreational purposes etc. These factors will contribute to the eventual cost of mining a deposit and may render the possibility of mining uneconomic.