Aur set to join ranks of Canadian gold producers

After two years of concentrated exploration at its Val d’Or, Que., land holdings, Toronto-based Aur Resources (TSE) will make its debut this September as a Canadian gold producer.

The Toronto company has committed itself to a fall startup date at its wholly-owned First Canadian property 12 miles northwest of Val d’Or, where production will begin at a rate of 24,000 oz per year.

The decision was announced after a production feasibility study on the central core of the Kierens zone gold deposit, one of five Val d’Or deposits which could churn out 40,000 oz gold annually by 1989.

Starting with the Main zone at the adjacent Norlartic property, Aur will attempt to bring another four on stream within the next two years. An exploration program is already under way on the Gold Hawk horizon at the southern end of the Norlartic property and more are pending.

While reserves on the Kierens zone stand at 860,000 tons grading 0.22 oz gold per ton above 1,600 ft., initial production will come from a core area which Aur will mine, using a cut and fill method, at a rate of 73,000 tons annually.

Located in a region 450 ft long by 1,000 ft deep, the core reserves stand at 236,000 tons grading 0.29 oz (including a 20% dilution factor). Drilled at 50-ft intervals, the core reserves will be accessed via the 1,000-ft, 875-ft and 750-ft levels, said vice-president Howard Stockford.

Between now and September, Aur plans to spend $8.2 million to access the balance of the defined reserves above a depth of 1,300 ft. Aur is also doing detailed definition drilling on 678,000 tons of Kierens zone reserves not included in the feasibility study.

With over $22 million in working capital, Aur can finance any development costs from its own treasury.

At a gold price of $400(US) and a cash cost of $225 per oz, Aur expects to recover those costs in 1989 when the company will decide whether or not to build an on-site mill.

Meanwhile, pending the result of negotiations, the company will use one of four mills in the area (Lac Minerals’ Terrain mill, Belmoral Mines’ Mill, the Louvem and Dorval mills) to process the First Canadian ore.

A decision on whether to build a milling facility has been deferred pending completion of underground exploration work at the adjacent Norlartic property where Nova-Cogesco Resources (TSE) holds a 30% interest.

“We didn’t want to build something that might turn out to be too small,” said Stockford.

In a bid to connect the First Canadian and Norlartic properties, the company is currently drifting on the 1,300-ft level.

As reported (N.M., March 7/88), due to hard rock problems in the early portion of the drift, Aur is three months behind schedule on the project.

According to Gill, the Norlartic property is expected to conbribute to Aur’s gold production rate when the underground program at the Main zone deposit is completed in September.

Drilling above the 1,000-ft level has intersected wide widths of gold mineralization with grades in the 0.05-oz to 0.12 oz range. With a 1,400-ft shaft in place and drifts on the 1,000-ft and 1,300-ft levels, Aur is also looking for additional reserves below 1,000 ft.

The company has shelved any plans for additional exploration on the North and North-North zones until a Main zone feasibility study is complete.