Cambior improves performance of Doyon — Development accelerated into higher-grade zones at depth

Having settled in as operator of the underground Doyon gold mine in northwestern Quebec, Cambior (CBJ-T) is continuing its efforts to boost output and drive down costs by reducing dilution and getting at the mine’s deeper, richer ore.

In January 1998, Cambior spent US$95 million acquiring the half of Doyon it didn’t already own from Barrick Gold (ABX-T), thus becoming the sole owner and operator of the province’s largest gold mine (T.N.M., Sept. 14-20/99).

After the purchase, Cambior spent the next year and a half creating the company’s new Doyon division by integrating the Doyon mine-and-mill complex with its smaller neighbour, the wholly owned Mouska gold mine, which had already been trucking high-grade ore to Doyon’s mill prior to 1998. Today, Cambior estimates the integration is generating cost savings of $2 million annually.

“The Doyon division is our most strategic asset and we see a lot of potential here,” Cambior’s chief financial officer, Henry Roy, told a group of analysts who recently visited the mine. He also said the company plans to operate Doyon in view of a long-term gold price of US$325 per oz. and then hedge production to that level.

The division is expected to produce 245,000 oz. gold this year at a direct mining cost of US$207 per oz., compared with 240,000 oz. at US$226 in 1998. While this year’s production is an improvement over that of previous years, it is still about 6% under the company’s original 1999 forecast — a shortfall attributed to delays in the division’s reorganization.

This reorganization included the trimming of 10% of the division’s employees in March, which left 440 employees remaining at the Doyon mine and mill (including 340 unionized workers) and a further 100 non-unionized employees at Mouska. As well, Doyon’s 7-day work schedule was changed to a 5-day schedule, except for mucking and hoisting.

Cambior has already reduced dilution at Doyon to 20% this year from about 33% in 1997 by reducing drift dimensions, mining narrower widths and switching from cemented-rock backfill to paste backfill.

Commented Raynald Vzina, Cambior’s vice-president of operations: “We decided to go more for quality, to be more selective [in order] to improve grade and cut down on volume. On a cost-per-tonne basis, we won’t save, but we will save on costs per ounce. Still, the changeover from bulk mining to narrow mining is quite a challenge and there’s lots of things to do in terms of planning.”

To boost productivity, the company is making several more changes, such as increasing the number of active domains, improving stope sequencing and accelerating mining cycles. “These are the key elements to get the mining plan on the go, and we’ll need to be well-synchronized,” explained Robert Marchand, manager of mining engineering.

Meanwhile at surface, some tweaking carried out at Doyon’s mill has boosted throughput by 10% to 1.3 million tonnes per year without any major investment. Milling costs are down to US$6.05 per tonne from US$6.57 last year, while recoveries have remained above 95%.

In the coming years, the mixture of ores processed at the mill will increasingly favour higher-grade ores derived from below level 8, with these ores comprising 42% of the milled ore by 2001, up from 15% this year. For comparison, the average grade above level 8 is 6.9 grams gold; below that level, it is 8.1 grams gold.

At the entire Doyon division, proven and probable reserves stand at 11.1 million tonnes grading 7.4 grams gold per tonne, equivalent to 2.6 million in situ oz. when a gold price of US$325 per oz. is used. At US$275 per oz., reserves drop to 2.3 million oz. gold.

The 11.1-million-tonne figure includes: 9.8 million tonnes of 7.5 grams gold within three zones (named 1, 2 and West) at the Doyon mine; a surface stockpile at Doyon of 605,000 tonnes grading 1 gram gold; and 322,000 tonnes of 17.4 grams gold at the Mouska mine, which is producing at a rate of 42,000 oz. gold annually.

Since startup in the early 1980s, reserves at Doyon have been steadily maintained at about 10 million tonnes even as the mine cranked out more than 4 million oz. gold.

For the remainder of 1999 and beyond, Cambior will continue its accelerated development of levels 10 through 14, providing more working areas and allowing access to higher-grade zones.

Geologically, the Doyon mine straddles a fault boundary between felsic to intermediate volcanic rock (which hosts zone 1 and 2’s polymetallic massive-sulphide and vein deposits) and the Mooshla tonalitic pluton (which hosts the West zone’s vein-type gold-silver deposits).

Exploration drilling at the Doyon mine is primarily targetting mineralization at depth in undrilled areas below level 14 in the West zone and at depth, farther west of the existing infrastructure.

In the West zone are several “vein corridors,” including those designated M, F and O, with the average continuity of a single vein in a zone being 50-70 metres laterally and 100-150 metres vertically. Overall, there are more than 300 veins in the Doyon deposit averaging 10 cm in width and grading about 180 grams gold per tonne, yielding a production grade of 6 grams gold diluted over 3.6 metres using the longhole mining method.

An exploration drift developed to allow drilling into the “O” corridor is now being driven westward on level 8 in order to gain access to the Far West showing. Should the Far West zone prove to contain economic mineralization, Cambior is considering sinking an internal shaft in the West zone. Other options include deepening the existing shaft and sinking a new one from surface.

Cambior is also exploring the near-surface potential of the West zone, with upcoming work to include surface mapping, stripping and drilling.

Cambior’s secondary exploration targets include mineralized zones east of the Doyon mine. One such target, named Warrenmac, hosts reserves of 312,000 tonnes grading 5.6 grams gold.

Overall, definition and exploration drilling programs this year at the Doyon division will exceed 50,000 metres.

Looking ahead, Cambior plans to ramp up gold production at the Doyon division to 265,000 oz. by 2000 and 280,000 oz. by 2001. With the milling rate scheduled to be static at 1.3 million tonnes annually, these production gains will be achieved by head grades that are due to increase to 6.7 grams gold by 2001 from 5.9 grams gold in 1999. With this rise, the direct mining cost is expected to dip below US$200 per oz. beginning next year.

Between 2001 and 2003, ore from below level 8 will begin to dominate Doyon production, and, by 2004, the dominant source of ore will come from between levels 12 and 14.

Overall at the Doyon division, Cambior expects to spend US$22.8 million this year on capital expenditures, US$14.9 million next year and US$13.3 million in 2001. These expenses include US$5.2 million for shaft-deepening at Mouska, where there are also tentative plans for the sinking of an internal shaft and the driving of an exploration drift into the Authier zone, which Barrick has drilled from surface.