Gold search leads in Ontario

The search for gold remains pre- eminent among Ontario’s prospectors and developers. More than $153 million or 44% of the provincial expenditures on exploration and development was spent on the search for gold, most of it in northern Ontario.

Finding a gold deposit has been compared to finding a needle in a haystack, a million-to-one shot at best. The Mines and Minerals division of the Ontario Ministry of Northern Development and Mines is established to provide an array of services to help mineral developers minimize those odds. It has created three regional directorates to facilitate the delivery of these services. Northeast region

Throughout most of this century, Ontario’s northeast region has attracted the interest of mineral developers who have tapped the wealth of Timmins, Sudbury, Elliot Lake, Cobalt and Kirkland Lake. These areas remain of great interest, along with the Black River- Matheson and Swayze areas and greenstone belts in the Oba, Hearst- Kapuskasing, Batchawana and Wawa areas.

The region saw an unprecedented level of exploration activity in 1987.

The Wawa area in particular is interesting because it has only been in recent years that mineral developers have resumed their hunt for gold there; their work has been rewarded.

The efforts of mineral developers in the area were aided by the establishment last year of an Ontario government resident geologist’s office in Wawa. During 1987 there was a 300% increase in major exploration projects in the Wawa area with activity focusing on four main areas of the Michipicoten and Mishibishu greenstone belts: Goudreau, Wawa, Renabie and Mishibishu Lake.

In the Goudreau area, Muscocho Explorations continued underground exploration of the Magino deposit. A number of raises were drilled to test the continuity of structures and ore grades. Drill- indicated reserves are nearly two million tons at 0.25 oz gold per ton. In December, Muscocho and McNellen Resources completed installation of a 400-ton-per-day test mill at the Magino mine site at an estimated cost of $5 million.

Canamax Resources, one of the first companies to take an active interest in the Goudreau mining camp, announced production from its Kremzar deposit for September, 1988. Reserves are estimated at over one million tons at 0.235 oz. Annual production is estimated at 32,000 oz at an operating cost of $295(C) per oz. Last February the company announced another gold discovery under Goudreau Lake, two kilometres south of its Kremzar deposit.

In the Wawa area, Citadel Gold Mines concentrated its exploration programs around past producers such as the Surluga mine where drilling revealed new gold resources, adding a further one million tons to the existing estimated 1.4 million tons at 0.18 oz. Citadel is planning to rehabilitate a mill on the property to handle 500 tons per day production from its Citadel properties and include 250 tons per day for custom milling.

In the Renabie area, the Renabie mine produced about 225,000 tons grading 0.202 oz by last December. Proven ore reserves are 1.2 million tons at a grade of 0.2 oz. It continues to be the largest producer in the Wawa area.

Last year Canreos Minerals mined 65,000 tons of silica/gold ore grading 0.15 oz and another 30,000 tons of low grade material. Much of the silica/gold ore was shipped to the Kidd Creek smelter in Timmins for use as silica flux while the low grade stockpile is being considered for vat leaching. The company continues exploring its property hoping that, with gold mineralization similar to that at Renabie, it will find large orebodies.

Muscocho continued its underground exploration program at its Magnacon deposit in the Mishibishu Lake area. With the determination of proven and probable ore reserves of nearly 500,000 tons grading 0.4 oz or over one million tons grading 0.24 oz, the company will proceed with bulk testing. A production decision is expected by the spring of this year.

Granges Exploration, in a joint venture with MacMillan Energy Corp., continued exploring the western extension of the deformation zone which hosts the Magnacon deposit.

These and a host of other companies and individuals are making Wawa an exploration hot spot in the province. Their work may possibly result in four new gold mines coming into production over the next several years. Northwestern region

Gold and platinum have been the object of mineral development in the northwest part of Ontario attracting record levels of interest. Two companies have announced production decisions in the Sioux Lookout area.

St. Joe Canada continues to make progress on its Golden Patricia property. The project, worth an estimated $16 million, will see continuing underground development work and the erection of a 150-ton- per-day mill. The deposit has estimated reserves of about 293,000 tons grading at 0.88 oz. Annual production is expected to be 40,000 oz of gold.

Placer Dome’s Dona Lake mine is scheduled to start producing in the autumn of 1989. It has an estimated two million tonnes grading at 0.193 oz. The company will build a 700-ton-per-day mill that will produce about 40,000 oz of gold per year. Southern Ontario region

Reorganized in 1987 to better serve industry clients, the southern Ontario region now includes two drill core libraries and resident geologists’ offices in London, Dorset and Tweed, and a regional minerals specialist’s office in Bancroft. The mining recorder for the region recently moved to ministry headquarters at 10 Wellesley St. E. in Toronto.

While not generally recognized as a hotbed of mineral exploration activity, interest in southern Ontario is high for commodities such as gold, calcite, granite, graphite, lead, marble, mica, roofing granules, silica, silver, talc, vermiculite, wollastonite and zinc.

It is the search for graphite, however, that has highlighted activity in the southern Ontario region in 1987. Three firms are currently involved in graphite exploration — Cal Graphite, Princeton Resources and Stewart Lake Resources. Graphite is a strategic mineral and demand is expected to grow due to new technology applications. Currently China and the Malagasy Republic are the only two sources of natural graphite supply to the western world.

Graphite mining in Ontario took a significant step closer to being a reality with an announcement by Cal Graphite last October that it would bring its Graphite Lake property in Butt Twp. into production in the autumn of 1988. The property has about 29 million tons of proven reserves at an average grade of 2.4% graphitic carbon.

Princeton Resources and North Coast Exploration are currently involved in a joint venture exploration program on the Maria Twp. graphite deposit. Inferred reserves from one zone of the deposit are about 14 million tons with an additional six to eight million tons inferred from geology. An average graphite grade from the deposit is 3.5%. Stewart Lake Resources is currently evaluating its Kirkham flake graphite prospect in Bedford Twp. north of Kingston. The property consists of 30 claims covering approximately 1,500 acres. Diamond drilling has outlined over two million tons grading 10% graphitic carbon. The company is continuing with its drilling program and has announced it will soon begin underground exploration.