In the shadow of Lac de Gras, gold still glitters in the

While most of the industry’s attention this year has been focused on the diamond play of BHP Minerals Canada in the Lac de Gras region of the Northwest Territories, the gold potential of this vast and still relatively under-explored land mass continues to attract serious attention, and dollars, from both major and junior mining companies alike.

Given the size of the potential prize — another Lupin or Giant or Con, all multi-million-oz. deposits that can and have launched companies into the big leagues — it is no wonder that the far-sighted in the exploration community are spending their dollars here, as opposed to scratching around the established camps where, among other concerns, and cash costs per ounce are not significantly lower than the currently producing mines here. At the Lupin mine, for example, Echo Bay Mines (TSE) last year produced more than 216,000 oz. gold at a cash cost of US$242 per oz. Production to date from the deposit is in excess of 1.7 million oz., and current in-ground reserves exceed 1.25 million oz.

The Con mine of Nerco (NYSE), currently up for sale, poured a record 123,093 oz. gold last year at a cash cost of US$254, and the Giant mine of Royal Oak Mines (TSE) produced another 102,398 oz. at US$339 per oz.

Along with limited production from the Ptarmigan mine owned by Treminco Resources (TSE) and the now closed Colomac mine, total production from the territory in 1991 was 532,452 oz., valued at $220.7 million, and representing almost 10% of this country’s gold output.

While logistical support remains a problem, explorationists consider it no more a hindrance than it is, say, in remote parts of Ontario or Quebec. News that a deep-water port facility in the Coronation Gulf is currently under consideration, with a study and proposal by CanArctic Shipping due later this year, is further incentive for those working in the area to stay, hoping that shipping costs can be substantially reduced and the economic viability of new northern mineral deposits thus greatly enhanced.

Also important to the exploration community here is that the territorial government offers more than lip service, clearly recognizing the importance of the mining community to the economic well being of the people of the Northwest Territories. It remains the single largest private sector, goods-producing and export-dollar-earning industry, accounting for 26% of the territory’s gross domestic product, and paying more than 13% of the wages and salaries (almost $100 million).

To that end, an ambitious “geoscience initiative” has been developed jointly by the territorial and federal governments, whose mandate is “to assist and encourage mineral exploration by adding to a systematic modern information base on the relation between mineral deposits and geology in sufficient detail to identify areas most favorable for economic mineralization.” The $7.5-million program includes data compilation, regional mapping and mineral deposit projects throughout the territory, as well as a 5-year study of the potential of gold in iron formation.

Among the most active in the territory is Comaplex Resources (TSE), which along with several joint venture partners is actively involved in exploring several exciting new gold plays. At the Meliadine River project, 11 miles north of Rankin Inlet, partner Asamera Minerals (TSE) has upped its stake to 75%, and is currently involved in a $1.5-million exploration program on the property.

Work there will test the limits of the previously identified Discovery zone, where gold grades averaging 0.35 oz. gold per ton have been returned from sulphidized oxide facies iron formation over widths of 15 ft., a strike length of 575 ft. and to a depth of 985 ft., Asamera will also test several geophysical targets in the area, in the hopes of defining adjacent and similar styles of mineralization.

Fifteen miles west of Meliadine, Rio Algom (TSE), by spending $5 million during six years, may earn a 60% interest from Asamera and Comaplex on a block of ground covering the strike extension of the Discovery zone. In the Cullaton Lake area, about 360 miles north of Stony Rapids, Sask., junior Melinga Resources (VSE) and Comaplex are working on the Griffin Lake and Kognak River properties, where surface gold mineralization has been discovered within sedimentary sequences many compare to the prolific Witswatersrand in South Africa.

Melinga has the right to earn a 55% interest in the Griffin Lake property on expenditures of $1.7 million, and a similar interest in the Kognak River property on expenditures of $400,000, both by the end of 1993. This year’s work will include geophysical surveys and limited diamond drilling on both prospects.

In the Back River area — now rumored to be an area of interest to diamond explorers — Homestake Canada, a unit of San Francisco-based Homestake Mining (TSE), and Kerr-McGee Corp. have spent more than $25 million in exploration on their George Lake property. This year Homestake announced an undiluted inventory of 3.4 million tons grading 0.35 oz. gold in five deposits along the limb of an oxide facies iron formation. The status of this 1.2-million-oz. inventory is currently unclear, in light of Homestake’s recent merger with International Corona, and the subsequent severe exploration cutbacks.

Homestake is, however, continuing exploration on a large block of claims around the George Lake property, where several structurally deformed and potentially auriferous iron formations similar to George Lake have been delineated.

BHP Minerals continues to work on its Ulu claims in the High Lake belt, 340 miles north of Yellowknife. and Athabaska Gold Resources (TSE) continues to work on its Nicholas Lake property where a preliminary reserve of 980,000 tons grading 0.46 oz. gold has been defined. Athabaska Gold arranged financing to buy Chevron Minerals’ 40% interest in the property, and Royal Oak is currently earning a 33% interest in Athabaska.

Several other companies are involved in grassroots programs throughout the territory, hoping to discover the mines that tomorrow will add to the impressive production history of over 495 tons of gold from 25 mines here since 1928.

Duncan McIvor is a geologist living in Vancouver, B.C.