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Preprint 99-130
CASE STUDY OF EFFORTS TO REDUCE COSTS AND INCREASE
PRODUCTION AT A MID-SIZED INTERNATIONAL MINING COMPANY
J. C. Harrison
M. V. T. Da Silva
Eldorado Gold Corp.
Nogales, AZ
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ABSTRACT
Eldorado Gold Corporation of Vancouver,
B.C. owns and operates three gold mines. The
So Bento underground gold mine in Minas
Gerais State, Brazil produced 105,907 ounces in
1997. The La Colorada and La Trinidad open pit,
heap leach mines in Mexico produced over 83,000
ounces in 1997. With a deteriorating gold market
plaguing the industry throughout 1997 Eldorado
had to take critical measures at each mine to
enhance gold production while lowering cash
operating costs. Each mine had its own unique
problems to confront. This case study will discuss
three distinct courses of action taken at the three
mine sites.
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9-LHD Scooptrams, 6-3 yard, 1-6.5 yard, 13.5 yard, and 1-2.2 yard.
4-Hydraulic Single Boom Jumbos.
5-Long hole drill machines, 4-Pneumatic, 1Hydraulic.
3-16 tonne trucks.
Various support equipment and vehicles.
Safety
Improving safety and working conditions at
So Bento was also an important objective for
Eldorado Gold Corp. The So Bento Mine
implemented the following changes to ensure a
safe and productive mine:
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SUMMARY
The actions taken at So Bento improved
underground production, lowered costs and
increased throughput in the plant. The main
achievements were: Mining Method Change,
Purchase
of
Underground
Equipment,
Implementation of a Bonus System, Improve
Working Conditions, Expansion of Shaft Hoisting
Capacity, Improve Safety, Engineering and
Planning and Optimizing of the Plant. The most
important results are: Complete Modernization
and Mechanization of the mine, Participative
Management Philosophy, Geological exploration
of Lower Levels, Optimization of Safety and Plant
expansion. The Operating costs were decreased
from $360 an ounce in 1996 to $266 in the first
quarter of 1997. These costs are expected to
reduce to $250 in 1998 and $235 in 1999.
plans. The monthly mine plan, including modelpredicted ore zones, is distributed at the start of
each month and is also posted at the pit for
reference.
To improve sampling efficiency, through-thedeck ore pipe samplers were installed on the blast
hole drills. These samplers were "field-modified"
to ensure a sufficient sample size. These changes
resulted in a reduction of manpower of three
laborers per shift that had been previously
assigned sampling responsibilities. Another
change was to designate "no sampling" areas in
the pit to reduce the assay requirements in the lab.
Waste stripping areas are identified and marked
by ore control personnel and no samples are
taken.
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Purchasing procedures were strengthened and
provided the framework and discipline for
obtaining multiple quotations for services and
products. A centralized mine warehouse was also
constructed and staffed to improve receiving and
routine ordering practices.
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Reduced Manpower
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SUMMARY
The La Colorada mine was successful at
reducing costs and increasing production by
overhauling the mining operations. The success
resulting from these changes can be seen in the
increased production and the decreases in costs
achieved in 1998.
Reduction in Manpower
The mine had a workforce of 23 professional
staff members and 85 laborers. Labor laws in
Mexico require a severance payment of three
months salary plus 20 days of pay per month for
each year of service. Careful planning was
required to reduce the workforce in stages so that
mine cash flow from gold production could pay
SUMMARY
Though reclamation work continues at La
Trinidad Eldorado is following the original plan
laid out in 1998. The staggered reduction of
manpower, careful planning of mine reclamation
work, close relationship with the local
communities and the sale of assets have enhanced
Eldorados effort at balancing costs with income.
The goal is to finish reclamation by the end of
1999 with total closure costs not to exceed the
income created by leaching pad inventory and
liquidating mine assets.
REFERENCES
Faust, W.A., Hernandez, S., 1998, Recent
Improvements at La Colorada Mine, SME
Annual Meeting, March 9-11.
Silva, Marcus Vinicius., 1998, Sao Bento
Expansion,
Brazilian
Gold
Symposium,
September.