Citadel Gold seeks to restart Waea area mine

There may be a little more than iron ore coming out of Wawa, Ont., in 1987 if, as anticipated, Citadel Gold Mines successfully reactivates its dormant mining operation there by next July. Reserves are thought to be sufficient to support a 750-ton-per- day milling operation, although strong potential exists for increasing both reserves and throughput.

The company is well financed and estimates its future requirements for underground development, working capital, and mill completion will be $3-$3.7 million. Citadel expects to have spent approximately $2.8 million on exploration prior to production, much of it on previously untested areas of the property. President Campbell Todd says dewatering of the mine has been almost completed to the fourth level. Also, a new roof has been put on the main office building which has been completely refurbished inside. The mine assay lab has been overhauled and is currently processing samples from other operators in the region, he says, adding the lab could yield income of $500,000 per year from outside parties.

The mill, which was only 85% completed, will cost from $1.75 million to $2 million to rehabilitate and the company may be eligible for a grant from the Ontario government. Depending on what government conditions apply for an outright grant, Citadel might fund the mill with equity, he says.

Citadel owns 100% of the property including the mill and surface facilities and reserves are estimated to be 2.6 million tons of 0.19 oz gold cut and diluted. Reserves on the fifth and sixth levels have been drilled on 25-ft centres and about 800,000 tons are defined on this spacing.

An aggressive surface exploration program is planned and the company intends to dewater the old Jubilee mine which is also located on the property. That mine was developed to approximately 100 ft but was closed during the war. Old reports indicate gold assays in excess of 0.29 oz per ton over good widths, says Citadel. Financing for the project has come from private placements and flow-through share offerings.