Deak to reopen MacDonald mine, mill ore at Kidd Creek

The MacDonald mine, a former zinc-gold-silver producer four miles north of Rouyn-Noranda, will be reopened as an open pit zinc operation after Deak Resources (TSE) closes its deal with MacDonald Mines Exploration (COATS) and Noranda (TSE) for a 100% interest in Les Mines Gallen, owner of the MacDonald mine. With zinc production in mind, Deak recently signed an agreement with Falconbridge Ltd., whereby ore from the MacDonald mine will be custom milled at Kidd Creek until Deak completes the financing for a base metal circuit at its Kerr mill near Virginiatown, Ont.

The MacDonald deposit is estimated to contain a preliminary reserve of 1.2 million tons, 900,000 tons of which grades 6.35% zinc. Deak, which has agreed to mine the ore at a rate of 45,000 tons per month beginning in December, will crush the ore on-site before trucking it to the Kidd Creek mill at Timmins, Ont.

Once there, Falconbridge will produce a zinc concentrate and a copper-precious metals concentrate from the ore during the 12-month contract, which commences Dec. 1. Deak President Gerry Cooper refused to comment on Falconbridge’s charge for the custom milling agreement, but the company will bank early operating revenues from a sale contract with Noranda’s CEZ zinc refinery at Valleyfield, Que.

Deak and its 70% owned subsidiary, GSR Mining, have refurbished the old Kerr in Virginiatown for gold production and are now processing gold ore from the Kerr mine at a rate of more than 1,000 tons per day. Another 30-40% of the mill’s capacity is taken up by trial custom milling of Noranda’s (TSE) portion of the Silidor ore and Rouyn Mining Resources’ gold production from Francoeur. Deak plans to expand the processing facilities to 2,000 tons per day by the end of the year.

Deak has completed the engineering studies for the construction of a 1,750-ton-per-day base metal concentrating circuit at Kerr. The temporary milling agreement with Falconbridge will allow Deak to complete technical studies and financing plans for sulphide ore milling at the Kerr plant.