Mining plans postponed at Goldex’s Dubuisson

After spending $13.4 million since 1985 on surface and underground exploration, Goldex has discovered that grades are insufficient to support a viable mining operation at current gold prices.

For the second time in eight years, that conclusion was reached after a 37,000-ton bulk sample was run through Agnico-Eagle’s (TSE) mill at Joutel, Que. Agnico Eagle holds a 6% stake in Goldex.

Results of the program show a proven reserve inventory in the Main zone of 857,851 tons grading 0.073 oz gold per ton.

Previous drilling and underground work had indicated total reserves of 856,000 tons grading 0.21 oz.

While Goldex claims that selective mining would increase the grade to 0.098 oz, gold prices would have to increase substantially from $402(US) for the company to contemplate production. Back in 1973, talk of mining was also put on hold when gold was trading at $80(US) an oz.

This time around, the announcement coincided with a halt trading order placed on the Goldex issue at company request. The issue last traded on the Toronto Stock Exchange at $1.65 in a 52- week range of $3.50 and $1.50.

“It’s a set-back but we are still going ahead with additional exploration,” said Goldex secretary-treasurer Barry Landen who attributed the low grades to the erratic nature of gold mineralization at Dubuisson.

“Unlike the nearby Sigma mine where gold is distributed in long shears, we are only getting pin pricks,” he said.

The Dubuisson gold mineralization is predicated on a granodiorite sill (in quartz-tourmaline vein clusters) which straddles the entire property. The intersecting veins systems make the geology extremely complex.

“When you line up the areas you want to mine you end up having to process a lot of low grade ore along with the higher grade material,” said Wencel Hubacheck, a consultant to the Agnico group of companies.

The bulk sample, which was taken to establish continuity of gold bearing structures and grade in the Main zone, represented the final part of a 2-phase exploration program.

The program included the sinking of a 1,500-ft shaft, 13,214 ft of lateral development, 1,920 ft of raising and over 105,000 ft of diamond drillin g.

Much of the work focused on the 1,100-ft and 1,250-ft levels where the highest intersections were pulled from the Main zone. Measuring 240 ft wide, 400 ft long and 150 ft in height, the Main zone was also tested on the 800-ft level.

“I’ve been on a lot of properties but this has been one of the toughest,” said Hubacheck. “While you get some great intersections, (as high as 0.25 over 20 ft) they don’t carry very far.”

He believes that Goldex could eventually make a mine at the Dubuisson property but much will depend on the price of gold.

Meanwhile, plans for 1989 include a $2-million exploration program designed to probe other areas within the underground workings. “Our Goldex project will fly at the right time. This is certainly not the end of the story,” says its President, Paul Penna, whose philosophy has always been that mines are made, not found. He has been involved with Goldex since 1970.

Hopes of future production may also rest on two drill-indicated zones which lie closer to surface and are believed to be similar in nature to the Main zone. Combined with the Main zone, they bring total reserves to about two million tons grading 0.073 oz.

Postponement of mining operations at Dubuisson means that Goldex will lay off 10 employees while an additional 30 will be absorbed by other mines within the Agnico group of companies.

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