Placer Dome plans to spend $12-m on Musselwhite project

Placer Dome Canada, the new business unit of Placer Dome (TSE), is poised for a busy year in 1994.

Thats when the unit will oversee a $12-million program to advance the Musselwhite gold property in the Opapimiskan Lake area of northern Ontario. Also in the cards is a possible major expansion program at the existing Dome gold mine, also in northern Ontario.

The decision to revive Musselwhite was based on a change of exploration strategy which enabled geologists to expand the current resource of 4.2 million tonnes grading 9.52 grams gold per tonne. An updated resource incorporating results from 1993 drill programs is expected to be completed in February, 1994, and released shortly thereafter.

Placer Dome now holds 68% of Musselwhite, having acquired an additional 25% interest in March, 1993. TVX Gold (TSE) has the remaining 32%. Also expected early in the year is a decision whether the Canadian unit will proceed with a major expansion of the Dome gold mine in Ontario. Based on the feasibility study nearing completion, open-pit development would augment underground mining to increase gold production to about 315,000 oz. per year from the expected 1994 rate of 170,000 oz. Production at this level would be for 11 years at an average cash production cost of about US$215 per oz. While expansion plans at Dome are not a surprise in view of Placer Domes strategy to intensify exploration at existing operations, the revival of Musselwhite has raised eyebrows. The geologically complex project was on the back burner for years after an unsuccessful feasibility study in 1989. Musselwhite is said to have turned the corner in 1993, after a re-evaluation led to a change in exploration strategy. In a recent issue of Placer Domes in-house publication Prospect, spokesman Hugh Leggatt said that while the previous plan was to search for a high-grade plum in order to improve the economics, now the goal is to define more of the same mineralization, in order to improve the tonnage rather than the grade of material. At the end of 1992, 12 zones of gold mineralization within folded iron formation had been identified. The 1993 drill program extended by 550 metres the defined length of the main T-Antiform zone of gold mineralization. This involved 29 drill holes totaling 12,600 metres spaced at 50-metre intervals. In addition, a series of 70 short holes were drilled on three near-surface targets, for a total of 4,700 metres. Indications are that 1993 programs have significantly expanded the projects geological resource.

Placer Dome and TVX have budgeted $12 million for programs to be undertaken in 1994. The work will involve upgrading the existing winter road route to a single-lane, all-weather road, and drilling from surface of further extensions of the T-Antiform deposit, as well as drill-testing of other defined zones of mineralization. Also planned is an underground exploration program to include infill drilling of the T-Antiform deposit, metallurgical sampling and test work, and environmental impact studies.

A primary objective will be to prove up and double the resource to more than 3 million oz. gold from an estimated 1.3 million oz. If this is achieved, Musselwhite could well become the first new mine developed by the business unit, Placer Dome Canada.