Timmins, Ont. — Tempora mutantur, said Ovid, though he was probably not thinking about the recovery of the gold market when he did. But in Timmins, the times have changed, enough that a camp that lost one of its major gold producers in 1999 is beginning to see good fortune return to its gold mines.
Royal Oak Mines isn’t around to enjoy the bull market this time, and
St Andrew’s history in Timmins dates back to the mid-1980s when it took on several old properties held by Hollinger Mines. It wasn’t precisely a creature of the flow-through era — much of its financing came from European investors at a time when gold bugs were anxious to find equity bets. But its philosophy — a handful of mines sending ore to a central mill — was very much a flow-through concept. It was a Timmins concept too, after the example of the Pamour Porcupine operation.
St Andrew opened its mine and mill in Stock Twp., about 30 km east of the city, in July 1989, just as gold prices closed out a late-1980s peak. Ground problems and weakening prices were hard on the new mine, and in 1994 St Andrew — having gone to the financing well repeatedly during production — suspended production at Stock. By 1995, the company itself had restructured, issuing stock to its creditors to avoid insolvency.
That left Timmins with something it didn’t badly need in the last half of the 1990s: an idle mill. Stock re-started, for a while milling ore from the Glimmer mine east of Matheson, but that didn’t last. And with the decline in the gold market, St Andrew itself was nearly idle, despite having a large property holding in the Timmins camp. In 1999, the company did pull a small quantity of ore from its Hislop open-pit mine, but the mill ground to a halt again in late 2000.
The above-ground and below-ground assets remained an attractive combination, and as gold prices rose again, it was inevitable that someone with cash would come sniffing around. At the time, it was Australian mining financier Joseph Gutnick, who agreed to take a 36% stake in St Andrew in September 2000. St Andrew’s financial advisors, though, ultimately came up with a private financing package that topped Gutnick’s offer, and the company was restructured again, in 2001, with Glenn Laing as its president.
The philosophy of the restructured company was to assemble gold projects at the margins of profitability, and to bring those to production once the gold price recovered. St Andrew, cashed up after the financings, took on large minority interests in several junior mining companies: Royal Victoria Minerals and United Tex-Sol Mines, which held interests in the Timmins area, and
Tex-Sol brought in the Clavos gold project, about 10 km northwest of the Stock mill. Clavos was originally a flow-through discovery, one of the deposits Canamax Resources never quite got around to mining. Tex-Sol had diligently drilled away at it in the late 1990s, ultimately optioning it to Kinross, but Kinross dropped its option in 2001, mainly to concentrate on new Porcupine Joint Venture interests.
Clavos’s virtues are a persistent and (for Timmins) coherent mineralized body, evidently controlled by the contact between metasedimentary rocks and an ultramafic body, mineralization as wide as 20 metres, and a shallow eastward plunge. A September 2003 estimate by Roscoe Postle Associates put its indicated resource at 753,000 tonnes grading 7.3 grams gold per tonne, with another 452,000 tonnes, grading 8.9 grams per tonne, classed as inferred. Once the merger was complete and the gold price was back near US$400 per oz., there was reason enough to head underground. Experienced Timmins underground contractors Dumas Contracting got the $9.7-million job.
Clavos spent “many years as a piece of flat ground,” says Laing, but by the time of The Northern Miner’s visit in late February, the topography had begun to get more interesting. A decline driven into the southern wall of the Clavos deposit was in bedrock, making it, as Laing said, “the first major new mining development in nearly a decade” in the Timmins camp.
The decline, which had been advanced 405 metres by the end of April and was expected to be 600 metres long and at 100 metres vertical depth by the end of May, will ultimately go to the 275-metre level, running 1,850 metres. Underground drilling to prove a reserve will go from the 100, 150, 200 and 250-metre levels, with about 400 metres of underground workings coming off the decline.
Stock mill
A positive production decision would mean reopening the Stock mill, which is accessible by road from Clavos; the 40-tonne trucks could make the run directly to the mill from the decline. The mill itself has been maintained since it was closed in 2000, and most of the refurbishing it will need will be at the front end, mainly in ore handling, crushing, and screening. Earlier expansions brought the mill’s capacity to 1,300 tonnes per day.
Stock is a standard carbon-in-pulp mill, but there are plans to add a gravity circuit at the start. Most of the cyanide leaching actually occurred in the ball mill rather than in the leach tanks, and historical recoveries at Stock averaged 94%.
Estimates based on preliminary mining plans put the cost of mining at Clavos at around $58 per tonne, with another $8 in general and administrative expenses. Milling costs would run about $15 per tonne, but if a $5-million expansion proposal to allow a 2,300-tonne daily throughput was justified, it could reduce costs to $12. The mill is fully permitted and has immediate capacity for 4 million tonnes of tailings (almost twice St Andrew’s indicated resource base); expansion of the tailings disposal area to 25 million tonnes is possible.
Another facet of development at Clavos is that it is a relative rarity in the Timmins area — a mine on the Pipestone fault, north of the main Porcupine-Destor break. “It’s sort of a poor sister to the Porcupine-Destor, but there’s still a lot of mineralization there,” says Wayne Reid, St Andrew’s exploration manager in Timmins. A number of factors have made it so: drift cover is thicker, so the first wave of prospectors made their discoveries in outcrop farther south. As well, modern grassroots exploration in the northern part of the camp has been hampered by the old system of veteran lots — one of the complexities of Porcupine land title under which veterans of the South African War received title to surface, mineral and timber rights at one go.
Still, St Andrew has one of the larger land positions in the Timmins camp, right behind Placer Dome and Kinross. “We can see another Kalgoorlie gold belt at Timmins — it’s been ignored for 20 years,” says Laing.
Mixture
Exploration being a mixture of expertise and money, the critical question is whether Clavos goes ahead and starts providing cash flow that can be put back in the ground. Early production could also come from the Stock mine, which has a small remnant resource underground. At the time the Miner visited, dewatering was under way and the hoisting equipment was being tested and refurbished. It has now been pumped out down to the mine’s 4 Level, and underground drilling was scheduled to start before the end of May.
Surface drilling at Stock during the fall and winter, to the tune of 4,300 metres of core, suggests that open extensions of the Stock orebody may persist below the deepest workings at 350 metres, as well as in untested areas at shallower depths.
Production at Clavos and Stock would also mean development of the Taylor property, 10 km east of Stock, where there is a larger gold resource to keep the mill in business.
The 2003 resource estimate at Taylor’s West Porphyry zone came out at 735,000 tonnes grading 9.5 grams gold per tonne indicated, plus 631,000 tonnes grading 9.8 grams per tonne inferred. The smaller Shoot Zone sports an indicated resource of 670,000 tonnes at 5.5 grams per tonne, with a further 106,000 tonnes grading 5.2 grams in the inferred category.
An underground exploration program, budgeted at $14.7 million, would drive a decline to a vertical depth around 350 metres to allow underground development and drilling. Assuming good results at Clavos and Stock — and the continued cooperation of the gold market — Taylor could see that happen in 2005.
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