A 2-year exploration program by
Active during the winter months on the ice of Lac de Montigny, McWatters drilled 20 holes totalling 9,033 metres into the 1-km-long Northeast Dilational zone, which is along strike and 300 metres east of Kiena’s producing North zone.
Another seven previously drilled underground holes were added to these latest holes in order to calculate a new resource figure.
Within the NE Dilational zone, indicated resources now stand at 971,000 tonnes grading 4 grams gold per tonne (123,000 contained ounces), whereas inferred resources are pegged at 3 million tonnes of 3 grams gold (287,000 oz.).
The indicated resource compares favourably with Kiena’s main S-50 and North zones, where reserves grade 4.1 and 4.0 grams gold, respectively.
Mineralization in the NE Dilational zone consists of gold associated with carbonate veins, albite bleaching and 2% to 10% pyrite-pyrrhotite. Gold mineralization is hosted by ultramafic rocks and diorite dykes in a setting similar to Kiena’s main ore material.
Within the NE Dilational zone, three gold-rich lenses were identified, along with five subsidiary structures. The three lenses are named 438 North, South and North Branches.
Over the past two years, McWatters has been exploring the NE Dilational zone — a blind deposit — using a lithogeochemical approach that targets alteration halos and subdivides existing rock units. In particular, McWatters’ geologists have found that the higher the ratio of sodium and potassium to aluminum in the rock, the more favourable the gold mineralization.
Based on 1,300 samples subjected to whole-rock analysis, geochemical ratios suggest that mineralized lenses are developed at or near contacts between two specific rock units.
“The lithogeochemical approach is important because, before at Kiena, there was no understanding of whether we were going to hit [gold mineralization] in a drill hole or not, and why,” says McWatters President Claire Derome. “Now, there is a rate of success in drilling that we never had before.”
Adds Chief Operating Officer Donald Brisebois: “What is very nice [about the new zone] is that the grade and the width could be mined easily with the same type of equipment we already have at Kiena.”
The company says it is now evaluating the impact of this new zone on future developments at Kiena, and more exploration is planned for later in the year.
On Dec. 31, 1999, proven and probable reserves at Kiena stood at 3.4 million tonnes grading 4.43 grams gold per tonne, equivalent to 481,890 contained ounces. In the possible category, there was a further resource of 6.5 million tonnes of 3.59 grams gold, or 752,315 contained ounces.
Kiena produced 86,602 oz. gold last year at a cash operating cost of US$212 per oz., and in 2000, its 18th year of operation, the mine is set to produce 80,000 oz. gold at a cash cost of US$225 per oz.
Mining is carried out by longhole stoping, using trackless equipment, whereas milling is based on standard crushing, grinding, cyanidation and carbon-in-pulp recovery at a rate above 95%. Kiena’s mill has a daily capacity of 1,750 tonnes, and McWatters is considering expanding this to 2,000 tonnes for 2001.
In September 1997, McWatters acquired the Kiena and Sigma gold mines in Val d’Or from Placer Dome and then promptly launched a $10-million program at Kiena to develop satellite orebodies and sink the mine’s access ramp from level 81 to level 94.
McWatters continued its financial turnaround during the first quarter of 2000, posting a net income of $534,470 (or nil per share) on revenue of $18.8 million, compared with a loss of $5 million (11 per share) on revenue of $16.8 million during the corresponding period last year.
McWatters produced 22,498 oz. gold at Kiena during the fist quarter at a total production cost of US$271 per oz. (19,000 oz. at US$265 per oz. last year) and cranked out another 19,017 oz. gold at Sigma at a total cost of US$251 per oz. (21,233 oz. at US$345 per oz.)
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