JUNIOR MINING

Brigus conquers grade at its Black Fox gold mining operations

Brigus Gold looks to have turned a corner on gold grade in early 2012 after wrestling with underground dilution last year at its Black Fox gold mine near Timmins, Ontario as it builds up production.

HALIFAX, NS (MINEWEB) - 

Brigus Gold (TSX:BRD) looks to have slayed the dilution dragon that preyed heavily on it last year in the ramp up of its Black Fox gold mine near Timmins, Ontario.

In an interim production update Brigus touted gold grades from underground operations that were around double in January and the first half of February - 5.36 g/t gold and 6.7 g/t Au in each month respectively - as compared to the 2.99 g/t Au average it reported in fourth quarter 2011.

Last year Brigus' production plans were plagued by higher than expected dilution from underground mining, forcing it to scale back annual production guidance. Including ore from open pit operations at Black Fox, Brigus ultimately produced 55,756 ounces gold @ 2.66 g/t Au at a C$947 cash cost per ounce.

The trouble, some suggested, was dilution of ore stemming from ineffective oversight of underground operations. "Brigus has indicated that the block model continues to track well with actual operating results," noted Haywood Securities analyst Kerry Smith back in December, "so higher dilution can only be the result of poor supervision of the underground."

This was no secret to Brigus, which last year made a series of major management changes at the mine, hiring a new general mine manager - who started work in December - along with some additional underground geologists. As they coincide with the strong bump in underground gold grades, the new hires seem to be doing the trick.

Brigus attributed underground progress that way, stating: "As a result of these and other actions, grades from the underground are now improving." Haywood's Smith concurred. "It looks like they have the mining underground sorted out," he said in an email.

Boosting underground tonnage looks to be the next beast for Brigus to tackle. Brigus aims to hit a 900-tonne-per-day mining rate in the third quarter this year, considerably higher than the current average which is shy of 300 tonnes per day. To hit its target Brigus plans to open 30 stopes underground, keeping about a third of them active at any given time.

Brigus' stope count is clearly on the minds of analysts. Smith noted that he expected Brigus would sustain grades in the 5.5 to 6 g/t Au range, but that "The issue now is getting the tonnes up by developing more stopes."

In its latest forecast Brigus pegged 2012 production between 77,000 and 85,000 ounces gold, with cash costs falling to C$700 per ounce gold by year's end.