From Timmins to Val d’Or

When Juri Houtman left his New York City office last August to move t o Timmins, he really wasn’t prepared for the problems he was about to face. As assistant to the vice-president at Asarco Inc.’s mining department and a professional engineer, he had all the credentials to get a mining operation up and going. That’s why Asarco, the largest silver producer and the second largest copper producer in the U.S., charged Houtman with job of getting its only North American primary gold mine back into operation. The Aquarius project, in German Twp., just east of Timmins, had been put on a care-and-maintenance basis in 1984, never having really got into production. Underground exploration had started in 1979 and the company spent almost $11 million(US) to sink a 570-ft shaft, drive 3,000 ft of lateral workings, install underground haulage facilities and build a 300-ton-per-day flotation mill. That was all completed, and a considerable amount of development ore broken underground by 1984, but the project was put on the back burner before it ever reached commercial production. This summer, after being on hold for three years and with gold over $450(US) an ounce, Aquarius has started to look good again.

But Houtman was having his problems back in August when I stopped by the property for a visit. The mine facilities were in good shape and the mill was experiencing no problems. What had Houtman stymied was a shortage of miners.

The Aquarius story is, in many ways, typical of scores of situations — many of them new discoveries — along the 300-km stretch of highway between Timmins and Val d’Or. It may well be 300 km of the most intense mineral exploration in the world, certainly in Canada. It has the geology, the infrastructure and the political climate to make it attractive for sustained exploration. The problems — and there are always problems — arise from other considerations. Such as the shortage of good, narrow-vein miners. Or getting prompt delivery of goods and services. Or backlogs at the assayers. They’re the kind of problems that come with the increased activity — problems that eventually will be sorted out by creating new jobs, training new miners, starting new businesses. In short, it’s boom time in this part of the world. And even though people have to put up with a lot of headaches, it’s hard to find anyone who complains very loudly. They just don’t have the time.

The Timmins area, of course, is Canada’s most prolific gold producer, having turned out more than 58million oz of gold since 1909 when what would become the Hollinger mine (for years the world’s largest gold mine) was discovered. Even Hemlo has a long way to go before it can rival The Porcupine, as the Timmins area has long been known, as the country’s premier gold-producing area.

And, since gold seekers have long held that the best place to look for gold is where it has already been found, Timmins and the stretch of the Abitibi Precambrian greenstone belt that runs east from there toward Rouyn-Noranda and Val d’Or in Quebec, is a logical place to look.

But many of the exploration projects of two and three years ago are now development projects, and the shortage of good narrow stope miners is becoming acute. Mine contractors are finding it harder to keep good men on the payroll as more and more opt for jobs at the newly established operations. Established mining companies have had to set up “school stopes” to train new miners. Meanwhile projects just starting up or, like Aquarius, gearing up to resume operations are finding it difficult to find skilled miners.

Fiscal policy has had a big impact on recent exploration activity, too. Without the current depletion allowance and “flow-through” provisions provided by the federal and Quebec governments, exploration activity would certainly not be as intense as it has been for the past five years. And the threat of ending those tax incentives has been enough to prompt more activity than ever before as investors try to make the most of flow-through shares while they can.

Still, the overriding factor when explaining the high pace of exploration and development of mineral exploration in the area is the price of gold. No matter what fiscal incentives might be in place, if it’s not possible to mine the stuff at a profit, nobody’s going to look for it.

But that’s not a problem today. Exploration is occurring at a remarkable pace and a lot of grassroots projects have graduated to a more advanced stage with a number of them well on the development path. In fact construction contractors seem to be almost as busy here as diamond drillers.

It’s difficult to comprehend the scope and diversity of work going on along the Timmins-Val d’Or corridor. But if you take a drive along Highway 101 in Ontario and Highway 117 in Quebec, you can easily stop into a couple of dozen projects without straying more than a few miles from asphalt. That’s exactly what I did last August, trying to get a handle on developments along what’s fast becoming known as The Golden Highway. What follows is a round-up. AQUARIUS

The Aquarius story shares some similarities with other projects in the area, but in many ways it is unique. The orebody was discovered in the late 1970s and a production decision made in 1983. But in 1984 the mining operation was shut down and the property was put on a care-and-maintenance status. Even though Asarco was struggling at the time, as all U.S. base metal miners were during the early 1980s, the company able to keep its only gold project alive at no direct cost to it. Kidd Creek Mines used the small 350-ton-per-day flotation mill at the Aquarius property to produce a gold concentrate from its highly graphitic Owl Creek ore.

For Kidd Creek, the arrangement worked like a charm. The Asarco mill got better than a 90% recovery from ore that no one else wanted to — or could — process. The black, graphitic ore cannot be treated by standard cyanidation methods. However, Kidd Creek was able to take the concentrate after it left the Aquarius mill and put it through its copper smelter about five miles down the road.

But Kidd Creek recently decided to end the contract with Asarco; and Asarco decided to put the mine back into operation. The Kidd Creek contract will end in October. By August Asarco had already stockpiled about 6,000 tons of ore on surface and there was still more broken ore underground that had yet to be hoisted. By January or February Asarco will be running its own ore at the mill’s capacity of 300 tons per day. BROULAN

Elsewhere around Timmins, a lot of activity is centred on rehabilitating former producers. Indeed, one of the striking features of Timmins is the number of former producers — mines that many believe were shut down prematurely because of a shortage of manpower during the Second World War and low gold prices in the 1950s and 1960s.

The Ontario Ministry of Northern Development and Mines lists 49 gold mines in the area, active and shut down, up to the end of 1985. Together, they account for more than 57 million oz of gold — well over $35billion dollars worth of gold at current prices. So it’s not surprising that many of the old mines are getting another look.

Belmoral Mines, for example, is putting $6.25 million into the Broulan property — a group of four former- producing gold mines in Whitney and Murphy twps — in order to earn a 50% interest. Belmoral President Malcolm Slack probably knows the area as well as anybody, having worked as area manager for Pamour Porcupine Mines for several years. (The company which holds the former producing Hallnor mine and currently producing Pamour No. 1 mine, both of which adjoin the Broulan property to the east.) He’s convinced there’s a lot more ore on the Broulan property.

Altogether, about $14.4 million is being spent on exploring the property over two years. The primary target is the area between the 2,500 and 5,000-ft levels between the Reef’s 2,500-ft shaft and the 5,000-ft Hallnor shaft about 3.5 miles to the east. The Hallnor’s historic average ore grade was 0.42 oz gold per ton while the Broul
an Reef property had grades of about 0.25 oz.

When I stopped by the Broulan site, the headframe was being clad with steel, the hoist was expected to be commissioned within weeks and the 2,500-ft shaft had been dewatered to 700 ft. Meanwhile a small open pit on the property’s eastern boundary has been mined out and the 40,000 tons of ore trucked to Belmoral’s mill near Val d’Or. VEDRON

Belmoral is excited by the potential at the Broulan property, but it is more advanced on the Vedron project — a similar project in that the property lies in the midst of prolific former producers. The Belmoral-Vedron joint venture is in the very middle of the Timmins camp and is virtually surrounded by past producers — the Paymaster and Buffalo Ankerite. Belmoral and Vedron Ltd. are well on their way to mining a new orebody. By mid-1987 Belmoral had spent more than $3.7 million on the project to earn a 47% equity interest in Vedron Ltd. Eventually Belmoral will own 59% of Vedron and there has been some talk of a merger of the two.

The first phase of the project is to reach 500 vertical ft and prove up 500,000 tons grading about 0.2 oz gold per ton, all of that above the 500-ft level. Judging by the numbers encountered so far, getting that tonnage should be simply a matter of doing enough development work; grade should be no problem. Earlier drilling confirmed the continuity of the Main zone along a strike length of more than 1,000 ft between the 275-ft and 500-ft horizons with grades of 0.30 oz or better across widths ranging from six to 27 ft.

The original plan for the ramp had to be revised when the drive entered the ore zone earlier than expected on the 275-ft level. The location originally planned for the ramp became the 275-ft level workings and the ramp was shifted to the west. That change, however, didn’t cause any great problems because a 275-ft level was planned anyway.

The ramp was advancing at about 16 ft per day with 50 tons blasted per round. But the ore is lensy and pinches and swells. In addition, it is quartz rich and foliated and although not straightforward geologically, it is easy to follow when in ore. Although no decision has been made yet, the ramp could go to 1,000 ft and a shaft raised from that point. ST ANDREW

St Andrew Goldfields’ Stock Twp. project is probably one of the longest running exploration projects in the area, but each year the project looks better. With interests varying between 50%-100% in 6,000 acres of ground stretching 12 miles along the Porcupine-Destor fault, the potential here is enormous.

Earlier this year, the company’s plans for the original property in Stock Twp. came a step closer to fruition when a production decision was announced. At a capital cost of $15 million, production from the North zone is expected to begin before the end of 1988 at an annual rate of about 30,000 oz per year and at an operating cost of $250(US) per oz. If the higher grade North 2 zone, discovered in 1986, is used for initial mill feed, that production rate could be as high as 38,000 oz at $200 per oz.

Reserves at the North 2 zone currently stand at about 762,000 tons grading 0.23 oz. Over-all reserves, proven and probable, come to about 1.5 million tons at 0.18 oz. Three zones only partially tested are not included in that estimate. Those zones include the East zone, about 3,000 ft east of the Stock Twp. shaft, and the Porphyry and Shoot zones, about six miles to the east in Taylor Twp.

At the North 2 zone, raising is being completed between the second, third and fourth levels at 325, 450 and 575 ft respectively. Access to proposed levels at 725 ft and 875 ft are being considered.

In Taylor Twp., St Andrew spent $4.5 million on an underground program including a 565-ft shaft. Diamond drilling is continuing here. No further work is planned for the Shoot zone at the moment, but reserves already stand at just over a million tons grading 0.13 oz. GOLDPOST

Goldpost Resources is a new company that has taken over a project that had been on the books for several years.

It’s one of those projects that just seem to click when a new owner moves in. No sooner had Goldpost taken on the two Hislop Twp. properties and started work than some whopping holes were reported from the New Kelore property, 100% owned by Goldpost. At one time in the Hollinger Mines portfolio, it hadn’t been touched for years. One hole drilled by Goldpost in late 1986 returned 70.5 ft at 0.27 oz, enough to send the Goldpost stock soaring and put its Hislop project into prominence.

In the 1940s there had been an old 475-ft shaft on the New Kelore property, but it burned down. The South zone, which has Goldpost most excited, is about 1,300 ft. southeast of that old shaft. Traced over a 500-ft length, project manager Peter Atherton says it is a steady and very predictable zone. The area is very wet and swampy, so drilling can only be done after freeze-up. Because of that, there have been no new results since the winter of 1986-1987.

Right now the company is drilling on the West zone, discovered just before Christmas 1986, with one hole grading 0.393 over 18.5 ft and another grading 0.14 over 10 ft. On average, the zone is running at 0.2 oz over a 10-15-ft width.

Meanwhile a ramp has been completed to 200 ft on the Hislop West property next door, 95%-owned by Goldpost. The 1,130-ft decline, driven by mining contractor Patrick Harrison of Sudbury, intersected a high grade section averaging 1.48 oz over about 14.5 ft. HOLT-McDERMOTT

Of all the projects along the Golden Highway, the most impressive is American Barrick Resources’ Holt- McDermott mine in Harker and Holloway twps, east of Matheson, Ont. The size of this project alone commands attention. It is scheduled to produce about 100,000 oz of gold a year in the second quarter of 1988 at a capital cost of about $52 million. It is the most advanced project in the new camp known as the Harker Holloway area and it will be the first to go into production.

The McDermott deposit is a splay off the Porcupine-Destor fault which is about one kilometre north of the mine site. Gold mineralization is hosted within a deformation zone 5-100 m thick. Within the mineralized zone are a number of lenses of brecciated, silicified and carbonitized zones. Pyrite and albite are associated with higher gold grades.

Reserves stand at 3.3 million tons grading 0.187 oz using a 0.1 oz cut-off grade. If a 0.08 oz cut-off is used, grade drops to 0.172 and tonnage increases to 3.9 million tons.

The 420-m shaft was completed in mid-1986. Below the 310-m level, a fourth compartment can be used to sink the shaft further without interrupting mining. Drifting and development is now underway on the 150- and 350-m levels. MATHESON

Just across the highway, northeast of the Holt-McDermott, is Canamax Resources’ 65%-owned Matheson project. There seems little doubt that this operation will be producing soon, but Canamax still classifies it as an exploration project. Procan Exploration is Canamax’s partner on the project, though Canamax intends to purchase all of Procan’s 35% interest in the property to increase its interest to 100%. Procan would retain a 5% net profits royalty.

Canamax sees a lot of potential in what it calls the Mattawasaga zone, the eastern extension of the orebody being mined by Barrick. But that’s for the future. What is now being explored is the totally different Matheson East zone, about two miles northeast of the Mattawasaga zone. Drill-indicated reserves here are about 576,000 tons grading 0.22 oz gold per ton.

The most striking feature of the Matheson project is the size of the decline ramp, 12 ft high and 15 ft wide. Canamax didn’t scrimp when it decided to go underground here. But it’s all trackless mining, so the large dimensions seem reasonable.

The 1,800-ft, 15 degrees ramp was put down to develop the 230- and 100-ft levels, but a decision has been made to go on to the 360-ft level. When I stopped by the sites, drifting was just about completed on the 100-ft level and the workings had just intersected ore on the 230-ft level. SILIDOR

The Silidor exploration
project is at the top of the list for all three partners involved — Noranda Minerals, Cambior and Cogesco. It took a while for the three partners to iron out how they were going to share the deposit, which straddles two properties. But once the decision was made to split it up 55% to Noranda, 25% to Cambior and 20% to Cogesco, things started to happen quickly.

Noranda has put the project on a fast track with phase two of exploration, expected to take 20 months, to include sinking a 1,400-ft shaft and constructing all surface facilities, plus 10,000 ft of lateral development on three levels.

When I visited the site the first concrete had been poured for the hoist room footings. The shaft collar had been cleared, and reinforcing bar put in place.

When you consider that the discovery hole was only put down in November of 1985 and that more than 150,000 ft of surface diamond drilling has been done since then, the project’s timetable appears impressive. FRANCOEUR

Ressources Miniere Rouyn has a lot riding on this property and indications are that its confidence is well placed.

The little company, founded by former insurance salesman Jean-Guy Rivard in 1981, has raised $23 million since 1984. Now teamed up with Lac Minerals on the Francoeur property — each has a 50% interest — it looks like it has a winner. Rouyn has two other advanced exploration projects, its 100%-owned Lac Fortune property and the Wassamac property (another 50-50 venture with Lac). Rouyn is operator on all three projects.

The geology at Francoeur is related to the Larder Lake-Cadillac break. A 10-40-m-wide shear zone, dipping at about 45 degrees to the north, hosts three known gold zones. The mineralized zone is mainly in a sequence of volcanic rocks between mafic rocks to the south and rhyolite to the north. Reserves are estimated at more than two million tons grading 0.20 oz.

Rouyn has dewatered and rehabilitated the No. 6 shaft to 1,450 ft. But because the orebody dips at an awkward 45 degrees rate, a second shaft will be sunk 2,200 ft north of the existing shaft where good drilling results have indicated better grade ore below the the 2,500-ft level. ASTORIA

Yorbeau Resources has been working on its Astoria property just south of Rouyn since 1984. It’s one of those projects that seemed to get pretty good results, but it was always just shy of having enough to go into production. Yorbeau never had trouble raising money, though. It made the most of flow-through shares and eventually ended up with 30 million shares outstanding. Since then it’s consolidated them 2-for-1.

Now, however, Yorbeau thinks it’s into a new zone — one that was missed for most of those three years of exploration and most of the $13million spent on the property. In January of this year, it lucked onto what it calls the A West zone, and it looks like the A West will make all of Yorbeau’s efforts worthwhile.

Roche Consultants says the zone hosts continuous and economic gold mineralization vertically over 1,100 ft with a diluted average grade of 0.212 oz gold per ton over 12 ft.

What’s more, the grades appear to increase with depth as does the lateral extension which reaches 650 ft on the ninth level. The zone is also open at depth and to the west.

This zone could be just the thing to make Astoria a mine. ORION

Here’s an example of just how verdant with gold potential the Rouyn- Val d’Or area is. There’s so much exploration going on, much of it with considerable success, that a property on the verge of production can almost slip by unnoticed.

Malartic Hygrade Gold Mines has been a dividend-paying gold mining company for several years on the strength of its Malartic property. It adjoins American Barrick Resources’ Camflo mine and Barrick has been mining Malartic Hygrade’s ore through its mine for some time.

But even though Malartic Hygrade wasn’t an operating company, it set to work exploring the rest of its large, wholly-owned property in hopes of finding an orebody. In the summer of 1985 the company met with success and now calls the program its Orion project.

Reserves of 225,124 tons grading 0.247 oz were eventually indicated from surface drilling. Following rehabilitation of an existing shaft and mine workings, a 2,500-ft drift was driven on the 400-ft level to access the zone from underground. Drifting has also started toward a second zone, the No. 11 zone.

Development has been carried out on four levels and, in July of this year, testing of the ore zone resulted in three gold bars totaling 1,542 oz of gold being produced.

Production is scheduled for the fall of this year even though a final production decision has not been made for the project. WRIGHTBAR

Belmoral Mines hopes that Wrightbar Mines’ project will soon provide additional mill feed for its 1,500-ton- per-day operation. The mill lies six miles away on Belmoral’s adjoining property north of the Wrightbar property. The mill has been running at fewer than 1,000 tons per day in 1987, and the company is anxious to make better use of the facility.

Belmoral, which owns about a third of Wrightbar Mines, has already spent spent $4.75 million on this property that lies on the edge of the Bourlamaque batholith. It owns about a third of Wrightbar’s common shares outstanding.

A 14×16-ft ramp has been driven at a -20-17% gradient to a depth of 550 ft. On the 500-ft level drifting out to a west zone, discovered in 1986, is well underway. Lateral work at the 200-ft and 400-ft levels has been completed. Some 400-ft of exploration drifting has been done in waste while another 500 ft has been done in ore. Altogether more than 3,300 ft of drifting and raising had been completed.