Mishibishu rush compares to Hemlo

A mini-Hemlo camp in the making at Mishibishu Lake?

That’s the impression one quickly gathers after a helicopter flyover of this bustling new gold area and meeting first hand with its key developers. Certainly it has excited this nearby boomtown that was built for iron ore, reflecting in an almost overnight population surge from 4,600 to over 6,000.

While Mishibishu (or any other new Canadian gold camp) would have a long way to go to match the fabulous Hemlo deposits, there are some interesting analogies.

Located just 45 miles southeast of Hemlo, over 8,000 claims have been staked here tying up the entire Mishibishu greenstone belt, almost exactly the number staked at Hemlo. Already there are three mines virtually assured for this new camp. Albeit much smaller than their three Hemlo counterparts, there is a strong likelihood of more to be developed at Mishibishu.

“The high probability of the Mishibishu area becoming an important mining camp has prompted Hemlo Gold Mines Inc. (TSE) recent share acquisitions in both Central Crude Ltd. (VSE) and Windarra Minerals (VSE),” says John D. Harvey, its president and chief executive officer who also heads Noranda Exploration Co. (It was Harvey who was primarily responsible for putting Noranda Inc. (TSE) into its prized Hemlo position in 1982).

And it is this same Noranda- Hemlo team that has been tying up a lot of other favorable ground in the area, with heavy commitments to obtain a dominant position in properties of Dominion Explorers (TSE), San Paulo Explorations (ASE), Joutel Resources (TSE) and Caribbean Resources Corp. (VSE). Indeed its exploration expenditures in the area this year could run to $15 million, the bulk of which will be on the Eagle River property of Central Crude (see adjoining story).

“Where else could you find a more promising unexplored area? And it’s right in our own back yard,” says Harvey. Magnicon first producer

By far the most advanced project, and the one that really got the Mishibishu area rolling, is the Magnacon mine operated by Flanagan McAdam Resources (TSE) which holds a 50% interest, with Windarra Minerals (VSE) and Muscocho Explorations (TSE) each holding 25%.

Scheduled to come into production early next year at an initial rate of 600 tons per day, it should prove a real money maker because of its excellent grade and ore widths.

Reserves as reported in March stood at 1.4 million tons grading 0.24 oz. But these will be upgraded shortly and sharply because of fine underground results far exceeding surface drill findings. The new grade figure could well be in the 0.4 oz range, The Northern Miner gathers. Output should run at least 70,000 oz annually, with costs likely under $200. That would spel l a payback of the $29 million capital cost within two years — in other words a first class mine.

Mill startup, of course, cannot be before the power line from Ontario Hydro’s new Magpie Dam project is brought in. Clearing for this is now under way.

While work at this property is currently concentrated on construction and underground development, exploratory drilling on surface is to resume shortly, probing for ore extensions of the main zone as well as other targets.

To be watched closely, too, will be the work getting under way on a large group of claims adjoining Magnicon on the east. This ground is owned 50% by Windarra, with Muscocho and Flanagan each holding 25%. (Hemlo Gold recently purchased 2 million treasury shares of Windarra at $2 per share for half of Windarra’s interest, $3.5 million of which must be spent exclusively on this east ground).

Preliminary work here has revealed several extensive gold bearing veins. Overburden stripping of the Discovery vein which is 2.5 miles east of the Magnicon mine exposed two parallel quartz veins 10 ft apart for a length of 130 ft. Grab samples range from 0.40 oz to 1.37 oz, with systematic channel sampling now under way.

Road construction to this group has just been completed, with drilling to start shortly.

“We are going to be quite busy”, says Steve Brunelle, Muscocho’s vice president corporate affairs.

There are between 60-70 employees on site. Mishi Lake project

On the Granges Exploration (TSE)-MacMillan Energy (VSE) 22,000-acre joint venture spread surrounding the Magnacon mine known as the Mishi Lake project, indicated reserves in the Main zone continue to mount, now standing at 1.1 million tons grading 0.166 oz with the final parameters still unknown.

“The most recent drill results indicate there will be further increases in both grade and tonnage,” Mark Kreczmer, Granges’ regional geologist and exploration manager for Central Canada told The Northern Miner.

Early this year the companies budgeted a $4.5-million exploration-development program, including $2.5 million for underground work and $550,000 for site preparation now under way, but no actual underground work has yet started.

A portable crushing plant is to be set up and a 5,000-ton bulk sample taken from surface. This could lead to the establishment of an open pit.

Fully cognizant of the potential of this large Granges-MacMillan ground, Muscocho recently acquired a significant minority interest in MacMillan (1.4 million treasury shares at $2.50 with warrants) and will have representation on its board.

“We feel confident that the upcoming underground exploration program of MacMillan’s Mishi main zone will demonstrate the presence of a significant gold reserve”, Muscocho President J. T. Flanagan told The Northern Miner. Applegath Group confident

Very active in the area is the Applegath Group of companies headed by A. W. (Bert) Applegath, a colorful veteran mining promoter who shuns joint venture partners.

Certainly one of the first to move into the Mishibishu area, he acquired close to 2,000 claims in 15 separate groups which he carved up between his 5 VSE listed companies — Alotta Resources, New Beginnings Resources, Oneida Resources, Tundra Gold Mines and Villeneuve Resources. (He was also the chief vendor along with prospectors Don McKinnon and Peter Ferderber of what has turned treasury shares and a retained 2% net smelter interest).

These companies spent some $5 million on grass roots exploration during the past four years and are just now embarking on a major follow-up drill program that will cost upwards of $6 million. It is under the direction of exploration manager Don Cross, a veteran geologist who tells The Northern Miner “it’s all good hunting ground”.

Hopes are especially high for a new discovery on Tundra’s 55-claim Kabenung group, 5 miles north of the Magnacon mine. Drilling here has just started to cross-section a 1,200-ft wide shear zone that has been traced for 2,400 ft along a sedimentary-volcanic contact in which 11 quartz veins and stockworks carrying gold values have been identified. Fifty samples from these are now out for assay. Now drilling, the first hole will go to 1,000 ft. A second rig will be moved in shortly.

Another drill is currently at work on Villeneuve ground, with additional machines to be put on Alotta and New Beginnings holdings shortly. Drilling will continue at least through late fall, Cross says.

All told the Applegath Group has over 50 employees in the field.