New lease on life for Cobalt – by Norm Tollinsky (Sudbury Mining Solutions Journal – September 2013)

This article was originally published in the September 2013 issue of Sudbury Mining Solutions Journal.

Refining, milling, assaying and bulk sampling capacity creates critical mass

Proclaiming the rebirth of Cobalt, one of Ontario’s earliest mining camps, may be a stretch, but the recent reopening of the Yukon Refinery just north of town is a step in the right direction.

The refinery had been in mothballs for 13 of the preceding 15 years when United Commodity AG of Switzerland purchased it in June 2012. It has since added a Merrill-Crowe process for gold and silver recovery and struck some longterm deals for processing concentrate.

Originally a silver mill, Cobatec purchased and converted it to a recovery plant for tailings in the early 90s, recalled plant supervisor Gunner Skillins. “That didn’t work too well, so we went into feed from a smelter stack in Cuba containing both cobalt and nickel.”

That, too, proved short-lived. The plant shut down and was purchased in the late 90s by Canmine Resources, which operated it for a few years before going bankrupt. Ownership devolved to the bondholders represented by a Swiss financial group, which kept it on care and maintenance while trying to sell it for 10 years.

Approximately 46 employees are currently working at the refinery and an expansion is planned for later this year.

The refinery is specially equipped and licensed to process ore containing arsenic, which it is able to render inert by heating it in an autoclave to form ferrous arsenide.

“In the absence of this plant, a lot of the material would just end up sitting in piles,” said Skillins, a graduate of the Haileybury School of Mines who worked at the plant in the early 90s and came out of retirement to help fellow Haileybury grad and plant manager Michael De Carlo get it going again.

Most processing facilities in Canada and the United States won’t accept the material, “but this way, we can clean up the environment and make some money at the same time,” said Skillins.

With the addition of the Merrill-Crowe process, the refinery is able to produce nickel, cobalt, silver and gold from otherwise difficult to process concentrate.

Capacity to double

The refinery has the capacity to process 12 tonnes of material a day, but United Commodity president Reto Hartmann says he hopes to double capacity by the end of this year.

“The purpose of the facility is to process material from the old mines and to make money from it. We’re right in the Cobalt camp, which has a lot of feed available and we have the technology to do it. “We have had a very warm welcome from the local government people,” noted Hartmann. “Everything is working fine and we are optimistic for the future.”

To date, United Commodity has invested approximately $15 million in the refinery, but an equivalent greenfield operation would cost somewhere between $80 and $90 million, according to Hartmann.

Much of the mineralized material from historic mining operations in the area has to be concentrated before United Commodity is able to process it, but this piece of the puzzle is also falling into place with the addition of new milling capacity in the Cobalt area.

Toronto-based Trio Resources, which owns the Duncan Kerr property threekilometres south of Cobalt, an old mill and hundreds of thousands of tonnes of mineralized material in above ground stockpiles and tailings ponds, is acquiring new equipment to increase production.

In April, the company announced a five-year offtake agreement with United Commodity to process $30 million worth of silver-containing mineralized material. In mid-May, it delivered its first semi-monthly shipment of approximately 165 tons of concentrate to the Yukon Refinery.

United Commodity is also processing gold concentrate from Armistice Resources’ McGarry Project in Virginiatown and has its eye on several other sources of material in the region.

The refined material is converted into dore bars at the former Temiskaming Testing Laboratory, another historic facility that is back in operation.

The former Ministry of Northern Development and Mines facility in Cobalt operated as an assay lab, but also performed bulk sampling and microbullion processing until 1994. A resident geologist operated out of the building until 1997, following which it sat vacant for several years.

Polynet Labs

The facility was purchased in 1999 by local entrepreneurs to process silver from photographic waste. Low silver prices spelled the doom of that business and in 2003, Gino Chitaroni assumed sole control and launched PolyMet Labs to provide assaying and bulk sampling services to area mines.

SMC Canada’s McAlpine Mill in nearby Coleman Township “was my first major client, but it was Kirkland Lake Gold that put us over the top,” said Chitaroni. Today, PolyMet Labs has 15 employees and also performs assay work for Osisko Mining Corporation, Armistice Resources and Brigus Gold.

The business has prospered by offering priority pick-up and delivery service to its customers.

“Normally, third party transportation is used to deliver core to a lab, but we throw that in,” said Chitaroni. “It’s quite a perk for the mining companies because when they call and ask us to pick up some samples, we say ‘Just tell us what time.’”

The bulk sampling side of the business hasn’t been fully exploited, but a spur line from the adjacent Ontario Northland Railway line is able to bring bulk samples right into the building. From there, the material is ground down to 20 mesh by a series of jaw and cone crushers, and introduced into a sampling tower that systematically takes a representative cut of the material for assaying.

Sometimes, drill core doesn’t tell the whole story, said Chitaroni. “You go underground and you get a surprise. One tonne of material is a big step up from a sample bag of one or two kilos.”

Ever the entrepreneur, Chitaroni has purchased a shredder for computer components and plans to offer a third- party bulk sampling and assay service for recycling companies that currently rely on refineries to tell them “what’s in there.”

While far from rivaling the boom times of early 20th century Cobalt, the emergence of this revitalized collection of mineral processing, sampling and assaying businesses, together with the hundreds of thousands of tonnes of tailings and concentrate stockpiles in the region, heralds a return to better times for Cobalt.

www.united-commodity.com

www.polymetinc.com

www.trioresources.com
Cobalt mining camp steeped in history

Silver was discovered in Cobalt in the summer of 1903. By 1905 there were 16 mines in the area and, in 1911, production exceeded 30,000,000 ounces, according to research compiled by Charles Dumaresq, a Cobalt enthusiast whose website cobaltmininglegacy.ca serves as an authoritative resource on the history of one of Ontario’s earliest mining camps.

Following are some excerpts from the site: “News of discoveries in Cobalt made headlines across the continent, and silver fever gripped many who never ventured to Cobalt. In 1906, the New York Police Department had to use mounted police to break up mobs of people trying to buy Cobalt mining stocks on Wall Street.”

“The mines at that time were all very small and most were simple operations. Ore was mined with picks, hammers and drilling bars and hoisted to the surface by hand. Profits were huge; in 1906, $2,000,000 worth of ore was shipped. As the richest surface veins were exhausted, the exploration for new veins intensified and existing mines started to go deeper.”

“Mining in Cobalt reached its peak in 1911. By this time the town was thriving and had a population of between 10,000 and 15,000. In 1911, production reached 31,507,791 oz. of silver, an all time high for the area. “By the end of [World War 1], Cobalt had reached a milestone with the shipment of 10,000 tons of pure silver.

“World War II and the period following saw a revitalization of mining in Cobalt. Until then, there had been little use for the cobalt contained in the ores, and most of it ended up in the tailings, but during and after the war new medical uses were developed for cobalt for the treatment of cancer, and the metal also saw increasing use in metal alloys.

In addition, the discovery of new high grade veins led to renewed exploration and mining for silver.”

“Inevitably, the ore was depleted, and by the 1970s most of the mines had again shut down.”

“A couple of short lived ventures kept hopes alive through the 1990s, but today the mines of Cobalt are silent.”

“In 2002, the area was declared a National Historic Site [and in] 2003, the Royal Canadian Mint … struck a special commemorative silver dollar to mark the 100th anniversary of the discovery of silver in Cobalt.”

Courtesy of www.cobaltmininglegacy.ca

 

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