Rouyn-Noranda, Que. — The annual convention of the Quebec Prospectors’ Association, held here recently in the heart of the Abitibi, is shining a spotlight on the many exploration and development projects under way in la belle province.
This week, The Miner reports on the activities of Quebec’s junior gold-seekers; next week, our focus will shift to the province’s base metals scene.
Most of the gold explorers in Quebec seem intent on adding tonnage to existing gold deposits — among them, Vancouver-based
Aurizon acquired the past- producing Casa Berardi mine and surface facilities from
In a 2000 economic study, Aurizon estimated that Casa Berardi’s West Mine zone contained a reserve of 6.9 million tonnes grading 6.7 grams gold per tonne (1.5 million contained ounces). Additional resources at the entire property stood at 4.5 million grading 7.7 grams gold (1.1 million oz.).
The study projected that, with a capital investment of US$83 million, Casa Berardi could produce about 200,000 oz. annually for 7.5 years at a total cash cost of US$145 per oz.
Aurizon’s current phase of work — a $2-million, deep-drilling program — has dual goals: prove up and expand the existing resource base in the West Mine zone, and explore for an extension of zone 113, zone 118-120, and deeper targets east of and below the known resources.
During the summer, after raising more than $12 million in the capital markets, Aurizon paid $5 million in cash for
Aurizon is also co-owner, with operator
Last year, to concentrate on Casa Berardi, Aurizon sold off its half-stake in the underground Beaufor gold mine to
Named Croinor, the property is 70 km east of Val d’Or. In the late 1980s, Cambior stripped the deposit and collared 142 south-dipping holes, but all were drilled perpendicular to the main ore zone and generally failed to reveal gold-bearing tension veins. From 1996 to 1997, Croinor was the site of a small open-pit gold mine operated by Calgary-based Goldust Mines, which changed its name in 1997 to
In the spring of 2000, working under an option agreement, South-Malartic discovered flat-lying, gold-bearing tension veins perpendicular to Croinor’s known, vertical ore zone — a discovery inspired by the similar technical success of
As a result of extensive drilling by South-Malartic, the mine was expanded dramatically: In January 2000, resources were pegged at 40,000 tonnes grading 6.51 grams gold per tonne; by February 2002, the deposit was found to hold 7.1 million tonnes grading 2.3 grams gold per tonne, or 525,000 contained oz. gold, using a cutoff grade of 1 gram per tonne.
Mineralization, consisting of chalcopyrite, pyrite and native gold, occurs in three related structures: shallow, sub-vertical shear zones within an altered dioritic intrusive; tension veins perpendicular to the shear zones; and brecciated diorite. The deposit remains open at depth and along strike.
Drilling in the winter of 2002 revealed potential for new resources west and east of existing resources. In particular, South-Malartic geologists found that altered carbonate zones, and their associated high-grade ore shoots, could extend outside the limits of the Croinor diorites that have hosted most of the gold mineralization found so far.
Another group of holes, drilled 4 km east of Croinor, encountered indications of volcanogenic massive sulphide mineralization.
Currently, South-Malartic is carrying out an induced-polarization survey at Croinor, as well as a baseline geochemical survey. Another round of infill and delineation drilling began at Croinor in late August, at the rate of 1,500 metres per month.
In January, South-Malartic earned a 70% interest in the property from Huntington by spending $1.5 million on exploration under the terms of a 1997 option agreement. Huntington still holds the remaining 30% interest plus a net smelter return royalty (NSR), which varies from 1% to 3%, depending on the ore grade and gold price.
To maintain its 30% standing, Huntington recently ponied up $100,000 to Malartic to cover its share of work carried out at Croinor between February and April.
Private placement
South-Malartic has completed a $408,000 private placement of 68 units priced at $6,000 apiece. A single unit consists of 16,000 flow-through shares at 30 each, 4,000 common shares at 30 per share, and 20,000 warrants. A warrant entitles its holder to buy one common share for 40. The common shares and warrants cannot be sold, transferred or exercised before May 31, 2004.
Next, the company is looking to file a public prospectus to raise another $2-3 million. Most of the funds will be directed toward exploration in known areas at Croinor, while a smaller amount will be applied to more grassroots exploration.
South-Malartic’s immediate goals include: boosting the resource base above the magic 1-million-ounce mark; upgrading 300,000 oz. gold of the existing resource into the reserve category; and putting the project into production within the next two years at the rate of 40,000 oz. gold per year.
Elsewhere in the camp, Malartic acquired Cambior’s mothballed, 1,500-tonne-per-day Chimo mill, 20 km southwest of Croinor, for $375,000 (plus the assumption of any environmental liabilities). Earlier, Malartic had arranged to buy the Chimo property — a former underground mine — and the adjacent Nova property from Cambior for $1 and a 1% NSR.
South-Malartic estimates it will cost $5 million to revamp the mill.
At Chimo, there remains a resource of 600,000 tonnes grading 1.9 grams gold that might be exploitable by open-pit methods.
The Anne Slivitzky-led junior
Using a 6-gram cutoff grade and a US$300-per-oz. gold price, Roscoe Postle Associates estimates Comtois’ resource at 808,000 tonnes grading 9.6 grams gold, or 249,000 contained ounces gold. Gold mineralization occurs in a network of quartz veinlets hosted by rhyodacitic flows and intermediate-to-felsic tuffs.
Maude Lake notes that it cuts all high assays to 30 grams gold. When uncut, the grade averages 20.2 grams gold, which swells Comtois’ contained ounces of gold to 524,000.
An induced-polarization survey at Comtois this past summer identified possible lateral extensions of the known zones, and the company is seeking financing to carry out further drilling.
Serving as project operator, Maude Lake has so far earned as a 54% interest in Comtois from uranium giant
Rouyn-Noranda based
Kinross can acquire the other half of the property and reduce Globex’s half interest to 30% by spending $4 million on exploration and completing a bankable feasibility study. Globex’s existing equal partner would then be reduced to a 0.5% NSR.
Between 1994 and 1997 at Duquesne West, Santa Fe Canadian Mining (now
Over the years, Globex management has put together a vast portfolio of small mineral prospects in the Abitibi region of Quebec and Ontario. Notable gold properties in Quebec include: the wholly owned Nordeau East and West deposits, which host 715,000 tonnes grading 6.3 grams gold and are situated close to the Chimo mill; the 75%-owned Fontana deposit in Duverny Twp., which hosts a resource of 878,000 tonnes at 5.8 grams gold; and the Parbec deposit, near Val d’Or, where there is a 413,000 tonnes resource grading 4.6 grams gold.
At its half-owned Black Cliff gold deposit in Malarctic Twp., Globex recently boosted its internally calculated resource to 466,342 tonnes grading 7.11 grams gold.
Matamec at Sakami
Meanwhile, Montreal-based
In September, the company released results from winter drilling into Sakami’s 25 and 26 zones. Seven holes returned grades ranging from 1.4 to 6.5 grams gold over lengths of 2-20 metres and at depths of about 100 metres.
In August, Matamec staked more claims around Sakami, bringing its total landholding in the area to 185 sq. km.
Also in the James Bay region,
While the company’s chief objective is to expand the resource base beyond 1 million oz. gold, current resources at Clearwater are pegged at 1.5 million tonnes grading 7.62 grams gold (or 363,000 contained ounces gold), down to a depth of 300 metres.
The budget for the current program is $1.3 million, with Eastmain able to earn a 75% interest in the project by spending $2.5 million over four years. The project is owned equally by Eastmain and Quebec government-owned
Over the past six months, Eastmain raised $2.3 million via private placements with Sprott Asset Management,
New kids on block
Quebec’s newest gold producers are
During the entire bulk-sampling program, the two juniors produced more than 4,339 oz. gold, generating $1.3 million, net of milling and refining costs.
Following up on a January 2002 scoping study prepared by Pincock Allen & Holt, the partners are exposing seven of the known gold veins over a 750-metre length.
Next, they’ll resume bulk-sampling the deposit via an open pit to a depth of 35 metres, producing as much as 40,000 oz. gold at mining cost of US$150 per oz. and a recovery rate of around 97%. Ore would be trucked to a custom mill.
Depending on the success of the ongoing exploration and sampling program, plans call for exploiting Fenelon at commercial rates using underground access.
During the summer, Fairstar raised more than $1 million via a loan and a private placement, putting the company in a position to fund its $1.5-million share of development costs. In return for boosting its share of funding for the Fenelon project, Fairstar’s interest has increased from to 38% from 33.3%, with Taurus holding the remainder and serving as operator.
Cyprus Canada discovered Fenelon in 1993 and, along with Fairstar, spent $8 million exploring the deposit and preparing a prefeasibility study. When Cyprus left Canada and the gold business in 1998, Fairstar acquired Cyprus’s stake in Fenelon, as well as the latter’s remaining Canadian properties, all of which are in Casa Berardi.
Since 1999, Taurus has spent an additional $2 million on the property, and the partners expect to have spent another $1.5 million to complete a feasibility study.
Taurus is also active in the bustling Quebec diamond scene, having formed a joint venture with London-based
Virginia-TGW JV
Currently, operator Virginia is drill-testing extensions of Poste-Lemoyne’s Orfe gold zone and assessing additional geochemical and geophysical anomalies along the same structure that hosts Orfe.
Orfe was first drilled earlier this year, confirming the depth extensions of high-grade trench results. The best intersections were 11.7 metres grading an uncut 43.1 grams gold and 9 metres grading an uncut 34.79 grams gold.
Virginia remains one of the best-funded juniors in Quebec, with $10 million in working capital and no debt. The total exploration budget for 2002 at all of Virginia’s mineral projects in Quebec is pegged at $8 million, of which $5 million is to be spent by Virginia’s partners.
Virginia’s other key gold venture in the province is its more-established La Grande Sud project. A joint venture with Cambior, it is near the massive hydropower facilities east of James Bay.
In early October, Montreal-based junior
Past drilling and trenching at Jolin intersected near-surface, gold-mineralized quartz veins hosted by felsic lavas. Veins were intersected over a strike length of about 250 metres and to a vertical depth of 150 metres.
An 1996 estimate suggests Jolin may host a resource of up to 500,000 tonnes grading 5.6 grams gold.
This past July, structural geologist Marc Bardoux became Goldsat’s president and chief executive officer. Bardoux is founder and president of Rheos Consulting, and he serves as an associate professor at the Universit du Qubec Montreal.
Foreign projects
While most Quebec-based companies are satisfied to explore for gold in their own vast backyard, a good number are active overseas.
In August, Sulliden had signed a letter of intent with Peru’s Compania Minera Algamarca to buy a 100% interest in the Shahuindo gold property in northern Peru’s Cajamarca department. The property, covering 80 sq. km, lies only 25 km north of
According to work performed at Shahuindo between 1993 and 1998 by Asarco and its Peruvian subsidiary, Southern Peru, the property hosts several epithermal gold occurrences, including the oxidized, high-sulphidation San Jose deposit.
During that period, the companies spent a total of US$4 million exploring San Jose, drilling more than 150 holes, carrying out metallurgical tests and completing a prefeasibility study.
According to a resource calculation by Southern Peru in 1998, San Jose’s oxidized portion, which strikes 3 km and is up to 75 metres wide, contains a reserve of 18 million tonnes grading 1.04 grams gold (or 580,000 contained ounces gold) and 17.5 grams silver per tonne.
These reserves are contained in a larger oxidized mineralized body totalling 29.4 million tonnes at 0.88 gram gold and 16.2 grams silver, based on a cutoff of 0.3 gram gold. This represents a total resource of 827,000 oz. gold.
Asarco’s study of Shahuindo envisaged an open-pit, heap-leach operation exploiting only the oxide material. The study concluded that, at a US$300-per-oz. gold price, the mine could produce 50,000-80,000 oz. gold annually over nine years at an operating cash cost of US$128 per oz.
Right now, Sulliden is carrying out due diligence and intends to close the deal and pay the first US$320,000 cash instalment before Nov. 13, 2002.
In recent years, Sulliden has been active at its Mario base metals property in the Peruvian department of Junin. However, despite some success in finding high-grade, zinc-lead-silver massive-sulphide mineralization, the junior was forced to abandon a planned drilling program there last December due to a lack of financing.
Sirios in Brazil
Dominique Doucet’s
In June, Sirios and Amazonia formed a co-operative arrangement to explore for and develop small-to-medium-sized, high-grade gold deposits with near-term production potential in Brazil. Amazonia is privately held and was formed by the principals of Arantes & Associates of Brazil and Mason Exploration Associates of Canada.
In mid-September, Ste-Foy-based
Robex has just granted consulting firm Bumigeme a contract to complete a prefeasibility study at Diangounte, which contains an internally calculated, inferred resource of 5 million cubic metres of soil with a mean grade of 5.59 grams gold per cubic metre, or 879,108 contained ounces gold.
In August, Robex inked a deal with privately held N’Gary Transport to renew an option that had expired June 25, 2002, permitting Robex to acquire an additional 5% interest in the Diangounte and nearby Kata properties in exchange for US$1.5 million in cash. N’Gary also agreed to a second option agreement allowing Robex to buy another 5% for an additional US$1.5 million. Both options expire at the end of 2003. If Robex exercises both options, its interest in the properties would rise to 95%.
Semafo at Mana
The effort further extended the structure by 400 metres to the north-east, so that the total, drill-tested strike now exceeds 2,800 metres and the average, minimum true thickness of the last 1,000 metres is 25 metres.
The first resource estimate for Mana was released in October 2001, showing an indicated resource of 3.4 million tonnes grading 2.38 grams gold.
In West Africa, Semafo has the Kiniero (Jean-Gobel) mine in Guinea in production, and two more projects are under development: Samira Hill in Niger and Mana. Semafo is majority-owned by ONA/Managem, Morocco’s largest mining company.
For the quarter ended June 30, 2002, Semafo produced 11,987 oz. gold at a cash cost of US$172 per oz. During this period, 93,913 tonnes of ore grading of 6.36 grams gold were treated, generating a positive cash flow of over $1 million. Semafo ended the quarter with $3.8 million in cash and equivalents.
As noted on page 10,
At Tulawaka, majority partner Barrick Gold has been drilling five gold targets discovered via a property-wide geochemical survey and a re-interpretation of geophysical results.
Shareholders of
As operator of the exploration program, Meridian had planned to carry out about US$800,000 worth of work for 2002, including 5,000 metres of infill and reverse-circulation drilling and 2,000 metres of reconnaissance diamond drilling.
To get a chance to explore Machacala, Meridian had subscribed earlier in the year to a private placement of 6.5 million Gold Hawk shares at 20 apiece for a 20.4% interest. Meridian also received 6.5 million share purchase warrants, with one warrant allowing Meridian to buy another Gold Hawk share for 20 for 18 months, and subscribed to a 1-year, $1.3-million convertible note from Gold Hawk. If the warrants and debentures are all converted into shares, Meridian would hold 26 million Gold Hawk shares, or about 50.7% of the junior.
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