Discoveries by McWatters, Noranda highlight 2000

The dreary state of metal markets failed to deter several domestic explorers from advancing their projects in 2000. Leading the pack was McWatters Mining, which began the year with a fourfold increase in open-pit resources at its Sigma-Lamaque gold mine, in Val d’Or, Que.

By mid-year, the resource had been upgraded to reserve status; by year-end, it was being mined. The achievement, combined with the discovery of a new zone at its nearby Kiena underground gold mine, enabled the miner to raise an impressive $36 million in debt and equity markets.

Unfortunately, McWatter’s exploration success was overshadowed by quarterly losses in the second and third quarters, owing to a difficult startup at Sigma-Lamaque. The newfound production should translate into better results in the future.

Although its failed takeover attempt of Rio Algom (RIO-T) took the spotlight, Noranda (NOR-T) made significant progress in exploration. The major discovered three closely spaced massive sulphide deposits in the Matagami camp of northern Quebec.

Dubbed Perseverance, Perseverance West and Equinox, the zones are less than 7 km from the company’s Matagami milling complex. By the fall, some 45,000 metres of drilling had been completed, and an additional 11,000 metres were to have been sunk by year-end.

Combined resources are pegged at 5 million tonnes grading 16.8% zinc, 1.3% copper, 34 grams silver and 0.4 gram gold per tonne. Noranda is incorporating the resource in a feasibility study scheduled for completion in the coming months.

Across the Ontario border, Goldcorp (G-T) received promising results from underground exploration drilling at the newly restarted Red Lake mine. Results suggest the Hanging Wall 5 lens, one of several that comprise the producing High Grade zone, continues beneath the reserve outline. Similarly promising results were obtained from other areas of the mine.

St Andrew

St Andrew Goldfields (SAS-T) took first prize in deal-making, having inked a share-exchange deal with Bay Resources (BYRE-O). Bay is majority-owned by Joseph Gutnick, whose Australian companies have poured an average of US$20 million annually into that country’s mining industry over the past 15 years. That, plus the funds raised from the quasi-merger, may augur well for St Andrew’s aspirations in the Timmins gold camp of northern Ontario.

Although its remoteness makes it one of the more expensive regions in which to explore, Nunavut nevertheless attracted its fair share of attention. Continuing to play a leading role was Cumberland Resources (cbd-t), which made headlines early in the year by expanding the resource at its Meadowbank property, near Hudson’s Bay. A new discovery followed, adding even more ounces to the project.

Resources are now pegged at 14.6 million tonnes averaging 5.31 grams gold. The material is spread among five closely spaced, near-surface deposits, including the new Vault zone.

Like McWatters and St Andrew, Cumberland was among the few companies to arrange financing deals in 2000. Subject to regulatory approval, 1.2 million units priced at $1.10 apiece will be issued in a private placement. A unit consists of a flow-through share and a non-transferable share purchase warrant, with two warrants exchangeable for one share at $1.20 within a year of the deal’s closing and at $1.50 in the following year.

Proceeds are earmarked for Meadowbank.

Hope Bay

Partners Miramar Mining (mae-t) and Cambiex Exploration (cbx-t) had a mixed year at their Hope Bay gold property, near Bathurst Inlet. Although more mineralization was discovered, a revised resource estimate of known deposits came back smaller, albeit more reliable, than the original estimate, calculated by then-owner Broken Hill Proprietary (bhp-n).

Combined resources in the Boston, Doris North and Madrid deposits now stand at 2.8 million tonnes averaging 15.7 grams gold per tonne. Another 4.6 million tonnes averaging 12.5 grams are classified as inferred, and a pillar below Doris Lake was blocked out with an inferred 207,000 tonnes at an average grade of 22.4 grams.

A bright spot on the year was the extension of Boston mineralization (which was excluded from resource estimates) and the discovery of new zones. One of the new zones, a carbonate-facies iron formation known as Domani, returned 1.4-4.5 grams over core lengths of 0.5-1.3 metres. The zone lies 3 km south of the Boston deposit and is reflected at surface in outcrop and elevated gold concentrations in soils.

Wheaton River Minerals (wrm-t) signed on Kinross Gold (k-t) to its George Lake project, also near Bathurst Inlet. For a 70% stake, Kinross must spend $20 million on exploration over four years.

More than $3 million was spent during the 2000 field season, mostly at the Goose Lake deposit, the second largest of six known to exist on the property. Indications are that the deposit is larger than expected: drilling yielded 13.3 metres grading 23.6 grams at 320 metres below surface — the deepest intersection to date.

A follow-up campaign entailing 9,000 metres, aimed at Goose Lake and outlying targets, is scheduled for 2001. About 11,000 metres were drilled in the first round, adding to the 900 holes drilled by Kit Resources (recently merged with Wheaton River) and previous owners.

At last report, George Lake hosted 6.5 million tonnes grading 9.76 grams gold.

Howards Pass

Over on the Yukon-Northwest Territories border, Copper Ridge Explorations (krx-v) resurrected the massive Howards Pass zinc-lead project of Placer Dome (pdg-t) and U.S. Steel. Placer had mothballed the project in 1982, after concluding that underground mining would be uneconomic.

Considered one of the world’s largest undeveloped zinc deposits, Howards Pass is now being assessed as a possible open-pit operation some six times larger than Placer’s underground scenario. By the fall, Copper Ridge had sunk eight stepout holes as part of its evaluation while luring Billiton as a partner along the way. However, the British major soon backed away, after completing an expensive takeover of Rio Algom.

At the time of writing, Copper Ridge was requesting an extension to the due diligence period in order to complete discussions with other potential partners. Following the review period, the junior must pay $1 million upfront and another $9 million over four years.

No year is complete without some controversy. Filling the role in 2000 was International Wayside Gold Mines (iwa-v).

On May 11, the Canadian Venture Exchange suspended trading of Wayside’s shares in response to several infractions, including dissemination of misleading and over-promotional information regarding the company’s Cariboo gold project in north-central British Columbia. A subsequent independent audit, which reduced stated resources to 680,000 oz. from 1.1 million oz. and downgraded them to inferred, plus other corrections, resulted in Wayside’s trading privileges being reinstated in late June.

The debacle also forced Wayside to revise a private placement after failing to attract any takers. The company had offered 3 million units at 85 each, though this was later reduced to 2 million at 50 apiece.

By year-end, Wayside had sunk 48 holes in the Bonanza Ledge zone. Extensive line-cutting and geophysical surveys were also completed.