Why Romarco Minerals Inc. [TSX:R] and why now? The Haile deposit has been covered previously on this website, but now it takes on a new importance. Recent developments, including a $300 million deal, permit grants and a $200 million debt facility now mean that the company has the money, and the right to build and operate the Haile mine. When completed, this will be the largest gold mine east of the Mississippi (and south of the Canadian Border). This is a significant achievement and reflects the well on the management team to bring together the money and permit in a very difficult market.
What & Where?
Gold mining has long history in the south eastern part of the United States, specifically the rocks known as the Carolina Slate Belt which extends from Alabama to Virginia and is best exposed in North and South Carolina. These rocks were originally created off the coast of what is now Africa during the Ediacaran and Cambrian periods (600 million – 550 Million years ago). This ancient group of islands, similar to the Solomon Islands or parts of Indonesia, was essentially picked up and dropped on top of the ancient North American coast some 530 Million years ago, and then buried, squeezed and cooked and much later brought to the surface. Then it was buried again, under a mantle of sand dating to the late Cretaceous (some 90-60 Million years ago). Finally it was brought to the surface again and deeply eroded to it’s final rolling topography. These are hard, crystalline rocks and they form the uplands of the Carolina’s, distinct from the flat sedimentary coastal plain. The deposit itself is located in Lancaster county South Carolina, 50 miles north east of Columbia.
The setting of the deposit itself is in what is called the Persimmon Fork Formation, a 550 million year old sequence of volcanic material and the Richtex Formation, a package of marine sediments. These are typical types of rocks found on the edges of volcanoes and their associated islands. When these rocks were pushed up and over the “North American Craton” – what is now the core of the continent, they were heavily deformed into what are called isoclinal folds. The buried rocks were heated so that the original minerals were replaced by higher temperature analogues, and finally the whole area was tilted, eroded and covered with a thick layer of soil from weathering (called “saprolite”). As these rocks were buried and squeezed they were intruded by a series of granites which further disrupted them by heating and deformation the area.
The gold mineralization is hosted in the Richtex Formation at or near the contact with the Persimmon Fork. This is a district-wide phenomena, and is related to burial metamorphism that occurred during emplacement. The gold itself is in the pyrite (an iron sulfide) and electrum (a natural alloy of Silver and Gold) which is hosted in an intensely altered silicified (flooded with silica) zones. At least 4 generations of silicification have happened which is important for the development of ore grade material as repeated flooding introduced more gold each time. In addition to the influx of silica, some areas show stockwork veining and jigsaw brecciation (where the rock is broken into jagged pieces and later re-cemented). This alteration in the core of the deposit grades outward to a weaker quartz-sericite pyrite and finally into the regional greenschist metamorphic alteration. Interestingly there is weak halo of quartz-carbonate-sericite-pyrrhotite at the edges of the mineralized zone. Halo’s are useful in targeting future mineralization as they are usually the first indication of a potential ore body.
Abundances of pyrite are up to 15% in some parts, along with minor molybdenite (molybdenum sulfide) , chalcopyrite (copper-iron sulfide) and sphalerite (zinc-sulfide).
The molybdenite has been dated to 553 million years ago indicating this is the most likely time of mineralization. Other deposits in the belt show similar ages indicating a regional gold deposit forming event.
The nature of the genesis of these deposits has been debated throughout the extant literature, with some authors pointing to submarine hot springs similar to modern day “black smokers”, while others suggest that mineralization came later when the rocks were being squeezed and deformed. Other authors propose that it is a combination of the two where rocks where initially mineralized by hydrothermal (hot water processes) and then later the original mineralization was remobilized by the deformation which created the current pattern showing elements of both processes
Exploration and development
The first mineralization discovered in the region of the deposit came from placer gold deposits discovered in 1827. The hard-rock deposits were discovered soon after and exploitation started by the 1830’s. Mining went on sporadically until the 1940’s when mining was shut down for World War II. Exploration resumed in 1966 and continued until mining started again in 1980’s during a period of high gold prices. During the gold price lows of the 1990’s exploration continued but the mine was put on care and maintenance and reclamation was done to mitigate acid rock drainage.
In 2007 Romarco acquired the Haile Property from Kinross and began an evaluation for production scenario. By 2010 the company had defined a proven & probable reserve of 30,509,000 Metric tonnes at 2.06 g/t gold for a very respectable 2,018,000 million ounces gold. However there remained the process of permitting and getting the money to achieve production. Romarco systematically moved forward, waiting until gold prices had bottomed out and were rising again to start funding the deal and the permits were achieved one by one until the final permit (the permit to build and operate the mine or “ SCDHEC Mine Operating Permit”) was granted on Jan 8th 2015. Soon after the final piece of the puzzle was achieved with the $300 Million bought deal.
Dec 10th 2014 NI 43 101 Technical Report