Campbell Red Lake top all-round mine

Not many gold mines in this country have turned out over $1 billion from 10 million tons of ore. And with a long, long life still ahead of it, there is an excellent chance that Campbell Red Lake Mines will repeat this feat — and faster — in the years to come. Furthermore, this textbook mine is one of the lowest-cost gold producers in the world, making it the very Cadillac of the Canadian gold mining industry.

Right now, the company is in the throes of a $12-million program that will see a complete revamping of its 50-year old grinding mill — replacing five small units with two modern large automated and computerized ones. This will reduce the manpower required in the mill by eight, as well as cutting maintenance costs way down. Indeed milling costs, which currently amount to $14.85 per ton, are expected to reduce to $13.

While this new grinding plant will increase milling capacity by about 5% or 50 tons daily to 1,150 tons, it should not be regarded as an expansion program per se, S. M. Reid, general manager, told The Northern Miner on a tour of the surface plant. Rather, it’s part of an ongoing program to make the whole operation as cost efficient as possible, employing modern technology and computer applications, coupled with the longtime operating experience of the Dome Mines management.

This particular move will add 10,000 oz to annual production, for a 2 year payback.

In the first six months of this year the mill handled 198,000 tons of ore grading 0.59 oz, yielding 110,705 oz for a recovery of 94.7% and revenue of $53,092,000 or $480 per oz while the cost of producing an ounce of gold was $149. (All figures in Canadian funds. U.S. cost per oz is now $105, the lowest in Canada).

There is just one shaft on the property, but being centrally located and with four compartments, it appears quite adequate for all foreseeable requirements. In a far- sighted move, this was deepened to 4,316 ft years ago when costs were just a fraction of what they are today. Twenty-seven levels have been established to the 4,000-ft horizon, but the deepest active mining level is the 21st at 3,100 ft.

Ore is currently being mined from no less than 50 separate working places from the 5th to the 21st level, which enables a very close control to be maintained on grade. This occurs in two different types of veins — quartz carbonate ones that are relatively narrow (4 to 5 ft wide) but which extend for lengths of 1,500 ft or more, and as sulphide replacement zones which run up to 40 ft wide and for lengths of up to 600 ft and which are generally of better grade.

What is known as the G zone, for instance, a north-south striking occurrence of the sulphide replacement type, is 30 ft wide with average grade of 0.75 oz which extends right through the mine at least to the 2lst level. “This is one of our bread-and-butter stopes,”quipped Senior Geologist Ray Church.

The over-all ore picture at this mine is extremely healthy, The Northern Miner has no hesitation in stating. Reserves have always been reported on the conservative side, with very little change in either grade or tons from year to year, the latest being 2,022,000 tons grading 0.616 oz which represents a 5-year mill supply. This is all above the 2lst level.

“We have never found it necessary to increase ore reserves beyond five years,” said Mr Reid, pointing out that there is no geological indication of any change with depth. Indeed limited drilling at the deepest horizon has picked up the ore — good ore — but there has been no drilling on the big block of ground between the 21st or deepest working level and the 27th. And, of course, there is nothing in the above ore reserve calculation below the 21st. Coping with rock pressures

As in the neighboring Dickenson mine, rock pressures are becoming more of a mining problem with depth, necessitating a change to cut- and fill stoping (now 80%) and extensive rock bolting (9,000 a year) which adds to mining costs. Nevertheless productivity has been rising steadily and now stands at 18 tons per man shift.

The changeover to cut-and-fill stoping has created a heavy demand for backfill. Much of this is currently sand which the company has to purchase at $5 per yard. But this is soon to change, for it is going to mine and grind waste rock in a new plant. This, together with the mill tailings, will then be distributed throughout the mine via a completely automated $2-million installation that will cut the current $5 sand backfill cost to as little as $1 per ton.

One of the problem areas where rock pressures are telling is in the party wall separating the two mines. While the Campbell ore zones carry across the boundary and are one and the same as developed on the Dickenson, mining was stopped short of the boundary from both sides. While the actual tonnage that has been left behind on the upper levels is not large, these pillars are quite rich and would contain many millions of dollars. But those headings and workings are now badly crushed and caved, rendering their recovery today very difficult if not impossible.

These two companies now enjoy a good working relationship, but whether or not the two mines will ever join up their underground workings is a moot question. Broadening earning base

Campbell’s interests, of course, now extend well beyond Red Lake as the company seeks to broaden its earnings base. Some of these ventures have turned out well while others have soured, especially its association with Dome Petroleum. However, the company recently sold 2,265,622 shares of the petroleum company for $2,488,000, retaining only 49,378 shares as of June 30 which had a quoted market value of only $57,000.

Another venture that backfired was its 1985 purchase of 1,274,000 shares of Lac Minerals at a cost of $44,684,000. From a year-end quoted value of $46,50l,000, that market plunged precipitously when a trial court ordered Lac to give up ownership of the big Page-Williams gold mine it had developed at Hemlo. However, Campbell has no intention of selling any of its Lac holdings and “is awaiting an appeal court ruling with great interest,” H. D. Scharf, the company’s treasurer and chief financial officer told a group of financial analysts who visited the Red Lake operation recently.

On a more positive note, Mr Scharf pointed out that Campbell’s consolidated gold production this year would exceed 340,000 oz, reflecting its recent acquisition of a 57% interest in Kiena Gold Mines and an upturn in production from its 50%-owned Detour Lake operation.

Campbell is very pleased with its Kiena purchase, Mr Scharf said, pointing out that it is a low-cost operation with long life reserves (minimum of 14 years). It is expected to produce 71,000 oz of gold this year at a cost of $193(US) per oz. Too, it has excellent exploration targets which it will be following up.

Detour Lake, which gave Campbell some headaches during its initial operation, is definitely doing better and is no longer an economic drain. Grade, tonnage and recoveries are all up from a year ago, and costs are down. It milled 231,000 tons in the first half of this year for 24,650 oz that returned $12,227,000 at an operating cost of $9,849,000. Underground work there is going well, with a decision to be made shortly whether or not to proceed with the second phase of that program.

An early decision, too, is expected shortly whether to proceed to production at the Donna Lake project in Northwestern Ontario in which Campbell holds a 50% interest. An exploration shaft has been put down to a depth of 550 ft with underground work under way to prove up a drill-indicated 1.5 million tons grading 0.30 oz. Cost of completing the present program and feasibility study is estimated at $4.4 million. Being contemplated is a 550-ton mill that would turn out 40,000 oz annually.

In the U.S., Campbell is taking a 20% equity interest in Colorado- based Silver State Mining Corp. at a cost of $13.4 million. That company operates a small but profitable gold-silver mine and is active in exploration in that country.

Campbell currently has a total of 444
on its payroll at Red Lake, including 89 salaried employees. Senior operating staff under General Manager S. M. Reid includes K. Newman, general superintendent; R. Boylan, mine superintendent; S. Roberts, mill superintendent; H. Bunclark, plant superintendent; M. Neumann, chief engineer; R. Church, senior geologist and R. Quesnel, office superintendent.