A million oz. gold and counting for Wesdome

Picking up a gold dor bar doesn’t look that hard but 961.5 troy oz. of gold nearly 30 kg all compacted into one convenient brick takes a bit of effort.

That was the exact weight of a gold bar made at Wesdome Gold Mine‘s Eagle River mine in Wawa, Ont. recently. The bar was lifted briefly by many people who came to celebrate the one millionth oz. of gold produced by the company from five mines over a span of more than 20 years.

Eagle River has been in production since 1995 and with more than 700,000 oz. of gold produced at an average grade of 9.5 grams gold per tonne, is responsible for the bulk of the company’s gold output.

The road has been a bumpy one for Wesdome. Although it managed to keep producing gold during those dark years when the gold price dropped as low as US$250 per oz., the legacy of cutbacks in exploration means the company has hardly known its future beyond two years over the last decade.

“A lot of people don’t realize that (the Eagle River mine) remained in production,” says vice president of corporate development, Donovan Pollitt. “We kept it going in belief that the gold price would eventually correct itself, which it has, and we feel very vindicated in that sense.”

Incrementally adding reserves year by year is not uncommon with vein-type deposits like Eagle River but since the company is only operating the mill eight days of 14 about 57% of the time it’s eager to find some more mineralized ore. It’s a similar story at Kiena where the 2,000-tonne per day mill is only running at half capacity five days a week.

The first quarter of 2008 marked a turn of the tides for Wesdome. The company announced a net income of $150,000 compared to a loss of $4.4 million for the first quarter of 2007. During the first quarter it also produced 20,400 oz. of gold, putting it in good shape to meet its 2008 target of 80,000 oz. gold between the Kiena and Eagle River mines.

This year the company plans to drill about 50,000 metres total between the two projects in an effort to increase reserves and expand resources maybe even find what vice-president of operations, Benoit Laplante calls “the next big fish.”

“We have the capacity for more at both mines,” Laplante says. “Both mines right now are good until 2010 but we are working hard to extend the mine life.”

That hard work includes drilling as deep as 1,200 metres at Eagle River to test the junction where the Noname Lake structure that intersects the Eagle River structure. The current mine extends only to 600 metres.

Over at the Kiena mine, the company is drilling from two barges on a lake. The company is hoping to find another S-50 zone, which produced nearly 99% of the 1.56 million oz. produced at the mine between 1981 and 2002. There are also satellite deposits on the property that the company wants to develop.