Echo Bay, Nuinsco still short of mineable grades at Cameron

The jury is still out on the mineability of the Cameron Lake gold deposit in northwestern Ontario, shareholders were told at Nuinsco Resources’ (TSE) recent annual meeting in Toronto.

Partners Nuinsco and Echo Bay Mines (TSE) won’t know if grades are good enough to support a gold mine until a $6.7-million Phase II exploration program is completed in June, said Nuinsco President Douglas Hume.

Due to the erratic distribution of the Cameron Lake ore, operator Echo Bay is conducting a 17,000-ft drill program from a couple of lateral drifts located between the 490- ft and 685-ft levels.

The program is designed to place 875,200 tons grading 0.175 oz gold per ton of possible reserves in the proven category. An additional 32,700 tons grading 0.182 oz in probable reserves is also waiting to be proven up.

“The only reliable method of determining the ore content is to mine the deposit and run it through a mill,” said Hume. While 10,000 to 20,000 tons of stockpiled ore is waiting on surface, that option isn’t available to the Cameron Lake joint venturers until they build their own on site milling facility.

For that reason, Echo Bay and its 51%-owned subsidiary (Nuinsco) must prove up enough ore via drilling to justify construction of a 250- to 500-ton per-day mill before making a production decision. Vertical depth

As part of the Phase II program, Echo Bay will drive a 500-ft exploration crosscut to the north of the deposit on the 685-ft level. From there, the company will attempt to determine the extent of mineralization to a vertical depth of 1,600 ft.

When Phase II is complete, the partners will have spent $14 million at the Cameron Lake project.

“Since we have already obtained 92% recovery levels on ore samples, we don’t see any problem metallurgically,” said Peter Clarke, Echo Bay’s senior vice-president operations. “It’s simply a question of mining economics,” said Clarke who expects a decision to be made around the beginning of September.

Assuming the decision is positive, Nuinsco’s chances of bringing one of its other northwestern Ontario properties to production would be enhanced considerably, Hume said.

They include a joint venture with Canadian Arrow Mines (TSE) at the Dogpaw Lake property where Nuinsco can earn a 51% interest by spending $750,000 including $250,000 in 1988. Rowan Lake

Located seven miles west of Cameron Lake, the property contains an estmated 96,650 tons grading 0.43 oz gold. Nuinsco says two main zones vary in width from 2 ft to 18 ft over 600 ft in length and 600 ft deep.

About six miles further east at Rowan Lake, the company owns 92 unpatented claims which Hume says are geologically similar to the Cameron Lake area. While a late winter diamond drill program encountered anomalous gold in most holes, Rowan Lake will be put on the back burner until revenues from a Cameron Lake mining operation are sufficient to support additional exploration.

Due to a loan arrangement, which gives Echo Bay a 51.14% interest in Nuinsco, the latter company reported a cash position of $6.7 million at the close of fiscal 1987, compared to $397,443 at the same time last year.