Cripple Creek and Victor, Gold Mine, Colorado Springs, USA

The Cripple Creek and Victor gold mine (CC&V) lies southwest of Colorado Springs in the US state of Colorado. For many years the Cripple Creek Mining District was a series of underground mines. Following the start in 1994 of the CC&V Cresson Project today it is a low-grade, open-pit operation.

In March 1999 AngloGold Ashanti acquired the Pikes Peak Mining Company, and interests in the Cripple Creek & Victor Gold Mining Company (CC&V) and the Jerritt Canyon Joint Venture. The stake in the Jerritt Canyon Joint Venture was sold to Queenstake in mid-2003.

Up until mid-2008 the CC&V mine was a joint venture two-thirds owned by AngloGold Ashanti with Golden Cycle Gold Corporation owning the balance. In mid-2008 AngloGold completed a full acquisition of Golden Cycle which resulted in its taking 100% ownership of the CC&V mine.

Development drilling, engineering analysis and permitting requirements for the mine life extension project are under review. The proposed extension is to include the development of new sources of ore and an extension to the additional heap-leach facility.

AngloGold says that gold production at CC&V will increase to between 290,000oz and 300,000oz for 2008 at a total cash cost of between $298/oz and $308/oz. Operational initiatives have been taken to minimise growth in the leach-pad gold inventory in 2008.

Capital expenditure of $28m is scheduled for 2008, to be spent mostly on major mine equipment purchases and the mine life extension project. The mine currently employees 338 full-time workers and 67 contractors.

In 2007 investigators revealed that a gang of employees had stolen some $3m-worth of gold from the mine since 1999. A number of former staff are now serving time in prison.

Geology and reserves

The Cripple Creek mining district is centred on an intensely altered alkaline, tertiary-aged, diatreme-volcanic, intrusive complex, approximately circular in shape, covering 18.4km2, and surrounded by Precambrian rocks. The rocks consist of biotite gneiss, granodiorite, quartz monzonite and granite.

The intersection of these four units and regional tectonic events formed an area of regional dilation which subsequently localised the formation of the tertiary-aged volcanic complex.

Higher-grade pods of mineralisation occur at structural intersections and/or as sheeted vein zones along zones of strike deflection. High-grade gold mineralisation is associated with K-feldspar + pyrite +/- carbonate alteration and occurs adjacent to the major structural and intrusive dyke zones. The broader zones of disseminated mineralisation occur primarily as micro-fracture halos around the stronger alteration zones in the more permeable Cripple Creek Breccia wall rocks.

The average depth of oxidation is 120m and is also developed along major structural zones to even greater depths. Individual orebodies can be tabular, pipe-like, irregular or massive. Individual gold particles are generally less than 20 microns in size and occur as broad zones of low-grade gold-pyrite mineralisation or as fracture zones containing high-grade gold-silver tellurides. Gold occurs within hydrous iron and manganese oxides and as gold-silver tellurides. Silver is present but is economically unimportant. Gold mineralisation can be encapsulated by iron and manganese oxides, pyrite, K-feldspar alteration and quartz.

Proven ore reserves as at December 2007 were 118,904t at a grade of 0.028. Total mineral resources (measured, indicated and inferred) were 494,124t.

Mining and processing

Up until the 1960s The Cripple Creek Mining District was mined initially by multiple underground operations until the 1960s, after which mining activities ceased for a period. Small scale surface mining started in the 1970s until the start of large-scale surface mining in 1991, leading eventually to the start in 1994 of the CC&V Cresson Project. Today, CC&V is a low-grade, open-pit operation.

Ore processing

The ore is treated using a valley-type, heap-leach process with activated carbon used to recover the gold. The resulting doré buttons are shipped to a refinery for final processing.

Production add costs

Production at CC&V fell slightly in 2007 to 282,000oz from 283,000oz in 2006. A total of 23Mt was placed on the heap-leach pad.

AngloGold attributed the production decline to the greater distance over which the gold-bearing leach solution had to be transported from the higher stacked ore to the leach-pad liner. This decline was compounded in the third quarter by delayed production from the leach-pad stacking levels.

There was an 8% increase in cash costs for 2007 to $269/oz from $248/oz in 2006, due in larger part to higher commodity prices, especially diesel fuel. This more than absorbed savings arising from lower contractor costs, while creeping inflation in the US economy added to the burden.

The higher gold price received throughout 2007 contributed to a 222% increase in adjusted gross profit to $74m. Capital expenditure for the year amounted to $23m (2006: $13m).