Master signs deal to explore Hunter gold mine in Timmins

The gold discovery that started it all in the Timmins-Porcupine camp in 1908 — the old Hunter Gold mine — could come to life again.

Eric Davis, chief executive officer of coats-listed Wabigoon Resources and John Sadowski, president of Vancouver-listed Master Resources & Developments have negotiated a deal that will see $2.5 million spent dewatering the 75-year-old mine workings and doing extensive underground drilling.

The intention is to allow the companies to make a production decision within two years.

Under the terms of the agreement Master can earn a 50% interest by purchasing 150,000 Wabigoon shares at $1.00 each and by spending $2.5 million this year to dewater the 3-compartment inclined shaft, construct a new headframe, drive additional drifts, crosscuts and raises and carry out extensive underground drilling to place ore into the proven category.

The objective of the exploration program, according to geologist Donald Bourne, is to prove up a minimum of 300,000 tons of gold mineralization in a north-south striking gold-quartz vein system known to consist of at least four individual veins. Average grades would have to be in the order of 0.25 oz gold per ton to justify a production decision in 1988, Mr Bourne says.

At that point each company will be expected to split costs 50-50. Every $50,000 expenditure a company fails to match, results in a dilution of that company’s interest by 1%.

When the mine last produced gold — in 1941 from two shrinkage stopes on the upper two levels — proven and probable ore reserves stood at 160,000 tons grading 0.237 oz gold per ton.

Underground exploration by Wabigoon in 1985 outlined a zone about 200 ft below these levels. From 9 holes that intersected the gold-bearing quartz, the zone appears to be 1,450 ft long, dipping at about 65 degrees, with an average grade across 5 ft of 0.238 oz gold per ton. Within this zone is a 950-ft strike length averaging 0.355 oz gold per ton across a width of 5 ft. In-fill drilling will be required to establish the continuity and mineability of the zone.

Drill hole results come from intersections below the level on which two shrinkage stopes were mined in the late 1930s. The zone remains open at depth.

Once underground, the first step for the two companies will be to drive a raise to give alternative access and to provide adequate ventilation.

The Northern Miner gathers, the two companies are aiming for production in the order of 200 tons per day, producing about 18,000- 19,000 oz of the noble metal per year.

Between 1937 and 1941 the mine produced 10,821 tons and recovered 1,359 oz of gold.

Exploration work on the property has been held up by rezoning by-laws in the past.

Once the terms of the deal are satisfied Master will hold 5.5% of the total outstanding shares of Wabigoon.