Hemlo to drill Northfield holdings

Toronto-listed Hemlo Gold Mines will conduct surface drilling on several deep gold targets on Northfield Minerals’ (TSE) holdings in northern Ontario.

Hemlo can earn a half interest in 46 claims, which include the Fernland, Cheminis and Bear Lake properties. In return, it will pay $400,000 cash and spend $4 million on exploration over five years.

Situated in McVittie and McGarry twps., the properties cover a 4.2-mile strike length along the Kirkland Lake-Larder Lake break. (The Kerr Addison mine, which produced about 11 million oz. gold over the past 50 years, is only a mile east of the Northfield properties.)

Northfield retains ownership of the mining rights from surface to a maximum depth of 2,200 ft. beneath the Cheminis mine. Similarly, it holds the mining rights from the Cheminis mine eastward to Bear Lake, to a vertical depth of 1,035 ft.

Northfield is currently undertaking surface bulk sampling on a quartz-carbonate-hosted gold zone on the Bear Lake property. “This is a great deal for us,” Northfield Chairman Dale Hendrick tells The Northern Miner. “We retain full ownership of the production from the existing ore zones at the Cheminis mine, and can continue exploration and development down to 2,200 ft., while Hemlo takes on the risk of exploring for larger deposits at depth.”

The new agreement replaces the previous joint venture, under which Hemlo spent more than $500,000 on surface-drilling in the Bear Lake area. Under the proposed program, which is to begin in the spring, Hemlo will drill several deep holes to explore gold targets beneath the Fernland and Bear Lake zones at vertical depths of 1,500 to 2,300 ft. below surface. In the Fernland area, drilling will test an area where a previous hole, 87-1, cut 0.23 oz. per ton over a true width of 10 ft. Near Bear Lake, drilling will follow up on two Hemlo holes, 94-11 and 94-11a (which returned 0.204 oz. over 9.6 ft. and 0.16 oz. over 5 ft., respectively), in Kerr Addison “flow-type” host rocks.

The Cheminis is producing 8,000 tons of ore per month, with annual output for 1995 expected to reach 15,000 oz. gold. Operating costs are projected to be US$290 per oz., and reserves stand at 1.8 million tons grading 0.162 oz.