Follow-up underground drilling has extended the newly discovered D zone at the Macassa mine, west of Kirkland Lake, Ont.
Gold values varied from 5 to 94 grams over 0.3-3.5 metres (true width). The longest mineralized interval sits 43 metres above and north of the discovery interval and includes a 0.5-metre section (true width) that ran 87 grams.
Kirkland Lake discovered the D zone earlier this year while testing for parallel structures south of the main ’04 Break and lessor but parallel South zone. Unlike them, the D zone strikes north-south, not east-west, and is hosted by conglomerates, as well as tuffs and porphyries.
Gold-mineralization is associated with quartz veining.
Drilling has traced the zone for 396 metres down-dip and 244 metres along strike. The zone is about 150 metres south of the main structures and remains open in all directions.
(Historic drilling had intersected a northerly-trending structure between 305 and 396 metres downdip of the discovery interval, but the grades were considered low and the host conglomerate, an unfavourable host rock when compared with the higher-grading tuffs and porphyries.)
Kirkland Lake picked up the Macassa mine and mill in December 2001, along with four contiguous former gold-producing properties: Kirkland Lake Gold, Teck-Hughes, Lake Shore and Wright-Hargreaves. The company agreed to pay $5 million to
Also, Kirkland Lake assumed $2 million in closure bonds, plus all rehabilitation and environmental liabilities.
Kinross closed Macassa in mid-1999, two years after a series of rock bursts caused damage to the No. 3 shaft and hindered production. The major retains a sliding-scale net smelter return royalty that kicks in when gold prices exceed US$300 per oz. and expires after $15 million has been paid.
Kirkland Lake re-started the mill in May 2002, first by feeding it tailings and surface ore. Underground mining got under way earlier this year, but was suspended in early March after a seismic event damaged an 61-metre vertical section of the No. 3 shaft’s south wall (T.N.M., March 10/03). Mining is to resume in mid-April.
Macassa, which first produced gold in 1933, had yielded 3.5 million oz. to the end of 1998.
At last report, proven and probable reserves stood at 726,000 tonnes grading 15.4 grams per tonne. An additional 2.8 million tonnes, grading 10.6 grams, were classified as a measured and indicated resource, and 407,000 tonnes grading 9.3 grams as inferred.
The reserve/resource estimates are based on cutoff grades of 8.6 and 12 grams, depending on the location of the mineralized zone.
Kirkland Lake may drive a new level on the 1,036-metre horizon in order to facilitate mining and exploration. The company has dewatered and rehabilitated the 1,036- and 1,295-metre levels. The former is the uppermost working in the mine, and the latter extends for 1,524 metres to the No. 2 shaft.
Future drilling in the D zone will target its possible lateral extension westward toward the No. 3 shaft. As for the ’04 Break and South zone, holes will be aimed at possible up-plunge extensions, beyond the 183 metres delineated to date.
Kirkland Lake lost $2 million in the three months ended Jan. 31, bringing its 9-month loss to $2.2 million. Revenues for the periods were $2.2 million and $10.2 million.
Kirkland Lake attributes the quarterly loss to delays in dewatering the workings and to the transition to underground mining. Also, $551,251 was spent on drilling and exploration.
The mine cranked out 2,110 oz. in the quarter and 22,611 oz. during the 9-month period. Over the longer period, 69,319 tons were hoisted to surface and 123,709 tons of tailings were trucked to the mill. The average grade for the fresh rock during the quarter was 3.26 grams per tonne.
Kirkland Lake now expects to have produced 30,000-35,000 oz. by the end of its fiscal year. It had projected production of 50,000-70,000 oz.
On Jan. 31, Kirkland Lake had a working capital deficiency of $769,350. Among its current assets was $4.3 million in cash, and among its current liabilities was $2.5 million in convertible debentures that mature in June. The maturity date can be extended a year, and had this been done before the quarter’s end, the company would have reported $1.4 million in working capital.
Kirkland Lake has roughly 22 million shares outstanding, or nearly 27 million on a fully diluted basis.
Be the first to comment on "New Macassa discovery shapes up"