1994: A LOOK BACK — Seven mines come on stream in ’94

Seven mines — four gold, one platinum group metals, one nickel and one base metal — achieved producer status in 1994.

By far the largest of these is Louvicourt, co-owned by Aur Resources (TSE), Teck (TSE) and Novicourt (TSE). Situated near Val d’Or, Que., the base metal mine entered production in July at a rate of nearly 2,200 tons per day (tpd). Full-scale commercial production of 4,400 tpd is expected by mid-1995. Developed at a cost of about $280 million, the mine is expected to operate for at least 12 years based on current reserves which are calculated at 17.6 million tons grading 3.4% copper and 2.2% zinc, as well as 0.9 oz. silver and 0.03 oz. gold per ton.

At a copper price of US$1 per lb., payback of the invested capital would be achieved in about 3.5 years.

Copper production is expected to rise beyond 100 million lb. in 1997 from 22 million lb. in 1994. Zinc production will reach the 40-to-50-million-lb. level during the same period, and appreciable gold and silver will also be produced.

Elsewhere in northern Quebec, preproduction work at MSV Resources’ (ME) Eastmain gold deposit is progressing on schedule. During the third quarter, 14,300 tons grading 0.34 oz. gold were mined and stockpiled on surface. Surface infrastructure is nearly complete and underground development is reported to be on schedule.

The company plans to truck the ore via winter road to Chibougamau where it will be processed at the Copper Rand mill. The initial ore will be shipped in the first quarter of 1995.

The most recent metallurgical tests on the Eastmain ore estimate gold recoveries from the gravity circuit at 40% and total recoveries at 90%. In addition, copper revenues will cover the transportation and smelting costs associated with the treatment of the Eastmain gold-copper concentrate. Reserves stand at 950,387 tons averaging 0.35 oz. gold.

Orco Resources (ME) is projecting output of 20,000 oz. gold during the first year of production at its Donalda project, near Rouyn-Noranda, Que. The company placed the deposit in production in late March and subsequently boosted the daily milling rate to 495 from 385 tpd in September after the seventh-level stopes began producing on a regular basis.

Total reserves are estimated at 1.3 million tons grading 0.18 oz. gold. Orco is mining the deposit under an agreement with property owners Metall Mining (TSE) and Thunderwood Resources (TSE).

In July, production commenced at Royal Oak Mines’ (TSE) Colomac open-pit gold mine, 137 miles north of Yellowknife, N.W.T. Gold production in the third quarter was 15,909 oz. At full capacity, the mine is expected to produce about 170,000 oz. gold annually over five years. Cash costs are estimated at US$275 per oz., and the property hosts a mineral inventory of 17.6 million tons grading 0.05 oz. gold.

Initially worked by Northgate Exploration (TSE) in 1990, the mine was closed after a year as a result of operating and financial problems. Royal Oak acquired the project in 1993 from Neptune Resources for 3.5 million Royal Oak shares and a production royalty.

Commercial production began at Granduc Mining’s (TSE) Keystone gold mine at Lynn Lake, Man., in June. The mine is currently operating at a rate of 1,320 tpd, and gold production to the end of the third quarter totaled 7,396 oz. at an average cash cost of US$327 per oz.

At the Lynn mill, changes are in progress which will, early in 1995, cause recovery to rise to 91% from 86% and throughput to increase by 10%. When the improvements are complete, the operation will produce about 33,000 oz. per year from the BT pit.

Meanwhile, Granduc is preparing the Farley pit for production in late 1995. With reserves of 1.76 million tons grading 0.1 oz. gold, this deposit is expected to yield almost 50,000 oz. per year over four years at a cost of US$225 per oz.

Production at Inco’s (TSE) Thompson 1-D orebody in northern Manitoba began in July. Developed at a cost of $209 million, the 1-D orebody is expected to be the most economical source of nickel in Inco’s Manitoba division. To date, the company has spent $90 million on the first phase of exploration and development which outlined 7.7 million tons of ore.

Reserves for the deposit are estimated at 20.9 million tons grading 2.51% nickel. The next phase of activity will focus on the exploration for, and development of, additional reserves.

After suffering through an icy winter startup, the Lac des Isles platinum group metals mine, 60 miles north of Thunder Bay, Ont., entered the “commercial production” phase in the second quarter. The 3,000-ton-per-day operation, owned by North American Palladium (TSE), is expected to produce, on an annual basis, about 120,000 oz. palladium, 6,000 oz. platinum, 12,000 oz. gold, 1.5 million lb. of copper and 1 million lb. of nickel.

Mine concentrates are currently being processed at Falconbridge’s (TSE) smelter in Sudbury, Ont.

Looking ahead to 1995, several new mines are waiting in the wings. including: Eskay Creek in British Columbia, Holloway in Ontario, Puffy Lake in Manitoba, Grevet and the 1100 Lens in Quebec, and Contact Lake in Saskatchewan.