Goldbeam to spend $2 million at Manitoba gold prospect

A former National Hockey League player says he is about to succeed where a number of companies have failed by turning the old Goldbeam mine at West Hawk Lake, Man., into a commercial gold producer.

After 15 years of stickhandling his way through government red tape and depressed gold prices, Goldbeam Resources President Hugh Currie expects to see production at West Hawk by mid-1988.

A former defenceman with the Montreal Canadiens and Vancouver Canucks, he has guided the old 23-claim property through various stages of exploration since acquiring it in 1973.

Assuming that he can prove up between 350,000 and 500,000 tons of roughly 0.4 oz gold per ton, the Goldbeam property will begin life as a 300-ton-per-day open pit, tank leaching operation. Since metallurgical tests on ore samples are indicating 90% to 94% recovery rates, Mr Currie says the mine could produce at an annual rate of 25,500 oz gold initially.

With 132,500 tons grading 0.25 oz of proven reserves in the so-called “Sunbeam pipe,” Goldbeam will spend around $2 million between now and 1988 to increase those reserves.

According to Mr Currie, 49,000 ft of drilling has already been completed and with the Sunbeam pipe open at depth and three additional pipes on the property, he believes propects look good for a low cost operation.

A Goldbeam report says the Sunbeam pipe (inclined at 55 degrees at surface and steepening to 65 degrees at depth) has been explored by an inclined development shaft to a depth of 438 ft. “Four levels have been cut down the shaft and the mineralization has been shown to be consistent and continuous from surface to this depth,” the report says.

While he doesn’t have access to all the old reports, during 16 years of continued exploration, Mr Currie has been able “to tie up most of the loose ends” and past reserve estimates, he believes, are conservative.

“It’s not a big one but we think we have a mine now,” said Mr Currie who has financed exploration largely through what he called hip pocket and private methods.

Located 90 miles east of Winnipeg at the Manitoba/Ontario border, the property contains a 500-ft, 3-compartment production shaft. While work on a 9 x 14-ft ramp will begin in conjunction with surface production, he won’t utilize the shaft until surface reserves are exhausted. “Those reserves are sufficient to keep us going for 2 1/2 years,” Mr Currie told The Northern Miner.

One of those so-near-but-yet-so far operations, the old mine has been close to production on a number of occasions. Back in 1939, for example, owner Goldbeam Mines was about to begin underground exploration at West Hawk when steel rationing put the plan on hold for six years. After the production shaft was completed between 1944 and 1946, the Westhawk claims were sold along with Goldbeam Mines to Homestake Explorations (now HSK Minerals) for 200,000 escrowed Homestake shares.

In 1960, the property was optioned to Winnipeg Gold Co. (now defunct) which has some dormant gold claims adjoining the Goldbeam property to the north. But Winnipeg Gold failed to do anything with the property and it remained inactive until Mr Currie bought it from Homestake in 1973.

“When we took it over, the property wasn’t too attractive because gold was priced at only $35(US),” he said. “But we started to get serious when gold prices went up to $101.” However, the property’s proximity to the Whiteshell Provincial Park has been a major barrier to any Goldbeam production plans. “We wasted three years just trying to get mining permits from the Manitoba government,” said Mr Currie who recently signed a 10-year agreement permitting him to start up at 500 tons per day with an option for an additional 10 years.

Although the property is close to the Trans Canada Hwy. and a main power line runs 150 ft from the production shaft, Goldbeam has built an access road, enabling the company to avoid heavy tourist traffic in the region. After ore is mined and crushed on site, it will be trucked 12 miles west to Goldbeam’s tank leaching plant for processing.

However, before any production decision can be made, Goldbeam must spend from $1 1/2 million to $2 million on additional exploration. “If we can prove up 300,000 to 500,000 tons, we are off to the races,” said Mr Currie who must spend an additional $5 million to bring the property to a start-up mode.

To get the necessary financing, he has applied for a listing on the Toronto Stock Exchange under the name Goldbeam Resources and a major underwriting is expected to follow. Whiteshell Ventures, a wholly-owned subsidiary of Goldbeam will act as project operator.

Any production decision will be good news for Toronto-based HSK Minerals. With a 3 3/4 % net smelter royalty interest, including a $5,000- per-year advance royalty payment in the property, hsk expects to earn around $500,000 annually from production.