“If we hadn’t found this zone . . .Holt-McDermott gets more ore

The Mattawasaga discovery, east of American Barrick Resources’ (TSE) Holt-McDermott mine in northeastern Ontario, has quickly grown into a sizable ore zone accounting for 45% of the mine’s reserves.

Anxious to secure future feed for its 1,800-ton-per-day mill, Barrick has plugged about 50 holes into the underground zone since hitting an 85-ft. intersection averaging 0.23 oz. gold per ton last summer.

To date, about two million tons of new reserves have been outlined at a grade of 0.18 oz. gold. The zone, lying about half a mile east of the mine shaft, remains open to the east, west and at depth.

“This zone is the biggest (at Holt-McDermott) in terms of width, grade and strike length,” said mine manager John Haflidson. Recent intersections, including a 32-ft. length grading 0.22 oz. gold at about 1,640 ft. below surface, suggest that grade improves with depth. Average thickness ranges between 30-80 ft.

Other zones on the mine property include, from west to east, Worvest — the major production source in 1990 — Three Star, McDermott, Cahill, and Barrick. Total reserves, including two small surface pits, are estimated to be 5.1 million tons grading 0.15 oz. gold.

The Mattawasaga discovery was a timely one for Barrick, which missed its 1990 production target by 10,000 oz. as a result of lower-than-anticipated head grades and a shortfall in milled tonnage. While the mine produced 59,164 oz. last year and is on line to produce 60,000 oz. this year, production from Mattawasaga is expected to boost annual production to 75,000 oz.

In 1991, the new underground zone will contribute about 5,400 oz. to total production. Ore extracted from a pit above the zone will add another 10,000 oz.

“If we hadn’t found this zone, the property would have been in a difficult situation at present gold prices,” Haflidson told The Northern Miner during a recent site visit. “We would have intensified our exploration.”

Sandwiched between two major faults, the McKenna and Ghostmount, Mattawasaga consists of mineralized, altered (silicified, carbonitized) basalts. Gold is rarely visible, occurring almost entirely within finely disseminated pyrite.

Barrick is currently drifting out to the Mattawasaga on the 350-metre level and expects to reach the zone in September. Drilling continues in a fan-like pattern from the 250-metre level. Meanwhile, across the street and a stone’s throw from Barrick’s mine office, two rigs are testing eastern extensions of the Lightning zone, a 5-million-ton gold deposit outlined by partners Noranda (TSE) and Freewest Resources (TSE) on their Holloway project.

While Noranda holds a 60% interest in most of the Lightning zone, Barrick’s future demands for mill feed combined with Noranda’s heavy debt load have some analysts speculating that the former will make an offer on the Holloway project. Indeed, the Lightning zone could be easily reached by a drift extending from the Holt-McDermott shaft.

Haflidson was unwilling to comment on the possibility of a Barrick buyout.

For now, Barrick will settle for an enhanced shaft-deepening program at Holt-McDermott. Instead of deepening to 1,870 ft. below surface, as originally planned, the shaft will extend to 2,115 ft. in order to reach known depth extensions of the Mattawasaga.

Moving at a rate of 7.2 ft. per day, Barrick expects to complete the $2-million shaft project by August.

Production costs at Holt-McDermott, which increased by US$14 to US$298 in 1990, are expected to drop to US$291 in 1991, primarily because of the influence of production from the two open pits, one on the Mattawasaga property. Recent layoffs, affecting 20 employees from a workforce of about 200, will also reduce unit costs.

“It’s a challenge this year to operate at lower grades while maintaining our costs,” said Haflidson. But he added that the pit production will make it easier to realize tonnage projections. “This year, we are blessed by stockpiles.”

Both Haflidson and chief geologist Murray McGill are optimistic about finding similar zones, not only within the mine property but along the string of Barrick properties covering about four miles of favorable geology.

When The Northern Miner was on site during the third week of May, two drills, one surface and one underground, were testing eastern extensions of the Mattawasaga. With the surface hole completed to a depth of 1,300 ft., Barrick will move the rig to a collar midway between the shaft and the new zone.

“Our primary focus is to define reserves that we will be mining over the next few years,” said Haflidson. “We’ve got some tremendous exploration potential.”

Canamax retains a 10% net profits interest in the Mattawasaga property after the first 690,000 tons of ore have been milled.