EDITORIAL PAGE — Minesite exploration pays off

Grassroots exploration is on the decline in most parts of Canada, and one of the main reasons for this disturbing trend is that companies are not certain they will be able to mine what they find. We are hopeful that this trend will reverse itself in the long term as land-use uncertainties are resolved. The situation would improve sooner if our politicians could be persuaded to stop kowtowing to special interest groups and pay a collective visit to Margaret Thatcher’s new business venture, “Rent-a-Spine.”

In the meantime, several Canadian companies have decided to step up the pace of exploration at, or near, their minesites. A new discovery linked to an existing operation is always welcome news for a company, its employees, and the communities and businesses that naturally benefit from a mine expansion or the extension of the life of a mine.

The politicians, too, are happy when a new discovery is made, as it secures existing jobs and keeps up the flow of tax dollars for them to spend. British Columbia Premier Michael Harcourt has taught mining companies that it is much safer to invest exploration dollars in a producing district than to head off into the last remaining wilderness and find the next Windy Craggy. One of the most aggressive and successful minesite exploration campaigns has been launched by Placer Dome Canada at its various operations. In the past year, the company has announced a major expansion program at the Dome gold mine at Timmins, Ont. Open-pit development will augment underground mining to increase gold production to 315,000 oz. from the current 187,000 oz. Work is also in progress to extend the life of the Detour Lake underground gold mine, northeast of Timmins. The 2-phase program will extend the mine life by another five years.

Another successful exploration effort took place at one of the company’s oldest mines — Sigma in Val d’Or, Que. This mine celebrated its 50th year in 1987 and has produced more than 4 million oz. gold since startup in 1937, mostly from underground. And Sigma still has a future, thanks to an 18-month campaign aimed at further exploring mineralization below an open pit (a seasonal operation that began in early 1984 and ended late in 1993). This recent program showed that mineralization extends beyond the limits of the open pit at depth and towards the east. The new resource was recently reported as 659,765 tons grading 0.086 oz. gold per ton, with a waste-to-ore ratio estimated at 4.5-to-1. A mill expansion is being considered, and the new open-pit operation is to start this fall and continue for another four years.

Successful minesite exploration programs can pay big dividends for mining companies that already have processing facilities in place. This type of exploration effort is low-risk and economical, relative to grassroots exploration in regions that have no mining infrastructure, but it will not solve the problem of Canada’s declining reserve base.

For this development to be achieved, the industry needs incentives to launch programs in underexplored terrains and to pursue new

geological contexts and deposit

types. That means the right to explore over a large land base, and the right to mine deposits which occur on a tiny percentage of that same land base.