Jury remains out as LAC drifts into Queenston’s Kirkland bet

It could be any hour of any day in any week when Queenston Gold Mines (TSE) gets a call from LAC Minerals (TSE) to say that mineable ore has been encountered deep beneath the Kirkland West property near Kirkland Lake, Ont.

Since the beginning of May when LAC began an underground exploration program about 6,000 ft below Queenston’s Kirkland West claims, Chairman Hugh Harbinson has been waiting for the phone to ring. His hopes are based on the fact that LAC is exploring the westward extension of a structure that has produced about 23 million oz gold and supported seven mines since the Toburn opened in 1913.

Queenston already knows that the famed Kirkland Lake “Main Break” extends 6,000 ft horizontally from LAC’s adjacent Macassa mine site onto its Kirkland West claims. An announcement last June that LAC had intersected the Main Break while drilling from Macassa’s 6,450 level sent Queenston’s share price rocketing up to $2.25 from $1.90. It was trading at around $2 on the Toronto Stock Exchange recently.

But no results have been released since June, and it may be a long time before any conclusions can be reached about an exploration program that is still in its infancy.

Under a joint venture agreement signed last April, LAC is conducting 5,000 ft of drifting and 15,000 ft of diamond drilling on the Main break (also called the “04”).

The agreement gives Queenston a 35% stake and LAC 65% in the first 400,000 oz of gold production before the two companies proceed on a 50-50% basis. LAC is accessing the structure via the Macassa mine’s 7,000 ft No 3 shaft which means that it would be able to begin mining ore grade material as soon as the necessary support systems are in place.

“Values have been erratic (ranging from trace to over 1 oz per ton over narrow widths),” said Harbinson who isn’t concerned that it is now nearly five months since LAC began drifting in the Main Break.

“The world has been expecting a lot of overnight miracles, but it took a lot of hard work just to get in the 04,” he said. According to LAC, it has drifted for 300 ft into the 04 break on the 6450 level where the structure is said to be strong.

The Break has also been encountered on the 5,875 and 7,050 levels where drifting is now under way. “But that doesn’t guarantee anything,” said Gerald Gauthier, Lac’s senior vice-president of operations.

The nature of the system which LAC is working in, means that the company will have to complete a lot of development work before it decides whether or not Kirkland West is mineable.

“Like many high grade, narrow quartz vein-type deposits (including the Macassa mine), gold values are sporadic and the hit ratio for diamond drilling may be as low as 18%,” Gauthier told The Northern Miner. As a result, LAC will have to drive a number of raises between separate drift levels and diamond drill before potential reserves can be placed in the proven category.

Development has been delayed because the Amicougami fault, which runs between the two properties, has displaced the Main Break system and mining crews are drifting at a rate of only 200 ft per month.

Nevertheless, Gauthier said he sees no reason why a mineable orebody won’t be found along the 6,000 ft structure. “It takes nine months to make a baby and we will have to be patient until we get out there and complete some cross cuts,” he said.