Inco, Golden Knight plan second mine

Scheduled to be up and running by July next year, the 60% Inco, 40% Golden Knight joint venture should be capable of producing 40,000 oz of gold annually at an undisclosed cost per oz.

Over the next 16 months, operator Toronto-based Inco will spend $30 million to build the surface and underground infrastructure needed to turn the exploration project into a producing mine.

The task will be made much easier by the fact that the joint venture already has one mine and a 1,320- ton-per-day mill located on the same Casa Berardi property.

The East zone mine, which went into production in September, 1988 at a rate of 55,000 oz annually, is situated about three miles from the orebody which Inco is developing. While the two mines will remain quite separate, the West zone will bring production at Casa-Berardi to around 95,000 oz, Inco says.

Having driven a ramp to the 200-m level, and drifts on five levels, Inco is using cut and fill methods (plus some blast hole stoping) and 43-ton trucks to extract ore from the East zone.

“The West is not a mirror image of the East but there are no significant differences between the two mines,” said Frank Jay, Inco Gold’s director of engineering. The West zone strikes for approximately 350 m and is still open at depth, he told The Northern Miner.

Following phase one of a $23.7- million program, diluted, mineable reserves to the 300-m level of the West zone are estimated at more than two million tonnes grading 0.24 oz gold per ton. According to Inco, those reserves are sufficient for a 12-year mine life.

But as detailed exploration in the area continues, it is expected that sufficient additional reserves will be proven from known drill- indicated reserves of 10 million tons grading 0.22 oz to support future production.

Under phase one of underground exploration on the West zone, Inco drove a ramp to the 200-m level where it carried out 12,500 m of diamond drilling. It then took a bulk sample.

In the second phase of underground exploration, the ramp will be extended to 300 m to allow Inco to explore below that level.

Between now and next June, Inco will spend about $30 million to build surface infrastructure including a sand plant, heating and ventilation systems.

Having outlined three separate zones within the West zone, Inco will use a mixture of cut and fill and some blast hole stoping to mine the deposit. But the order in which the three zones will be mined has yet to be determined, Jay told The Northern Miner.

In other news, Golden Knight Vice-chairman Brian Keevil has asked the Ontario Securities Commission to speed up a review it is conducting into a complaint relating to insider trading of Golden Knight shares.

A broker from eastern Canada complained recently about the number of purchase orders made by insiders of Teck Corp. (TSE) which has increased its stake in Golden Knight to 38.8% from 29% a year ago.

“Teck stated its intent last year to increase its position in Golden Knight over time,” said Keevil. “There was nothing untoward about the purchases.”

Inco has held a 12% stake in Golden Knight since last September but the Toronto company has not increased its interest since then.

]]>