NEW MINES

The pace of mine-building is slowing. In January, 1988, we reported that 32 new Canadian mines would produce ore before year-end. In 1989, we listed 18 new mines that were being readied for start-up. This year, our count runs to 14. The trend is definitely down, but, in a post-flow-through world, this isn’t surprising.

The big new project is ABM Gold’s Colomac, it has roused skepticism, simply because it is a big-tonnage, low-grade operation situated north of the 60th Parallel — something new for this country. All the other operations are smaller, but as you will see, each has its own interesting story.

COLOMAC

The north’s next big gold mine is getting a rough ride from critics. Is the bad-mouthing sour grapes from companies who either sold or dropped an interest in the property, or is the skepticism justified?

No new mining project in Canada raises more doubts among industry observers in general and mine/mill operators in particular than the Colomac gold development. Situated 220 km northwest of Yellowknife in the permanently frozen Northwest Territories, gold was first found in the area in 1945 following World War II. The current mine development project is owned by ABM Gold, a company controlled by Northgate Exploration. Northgate took over as operator in 1989 by financing a program designed by Neptune Resources.

But one thing cannot be denied by critics. The project is a bold undertaking. If, in the third quarter of 1990, the mine does what it was designed to do (pour 200,000 oz of the yellow metal per year by treating 9,000 tonnes of ore grading 0.061 oz gold per tonne per day), the mine will become the largest gold mine (in terms of tonnes treated every day) and one of the few large-tonnage, low-grade gold mining operations in the country (others include the Pamour mine in Timmins, the Hope Brook mine in Newfoundland and the Detour Lake mine in northeastern Ontario).

Why are experienced mine/mill operators skeptical about Colomac’s success? Is it the fickleness of the price of gold? The high capital cost? The steep angles of the pit walls? Or the cost of generating electricity at the remote location? Or do they simply have an axe to grind against former Neptune president Peggy Witte, the woman who got the whole thing rolling? Whatever the reason, and there may be more than those listed here, this project is not getting any “free” publicity from industry advocates. Certainly none of the fanfare that surrounds virtually any other sizeable new gold mine in the country is expended on Colomac.

Is Canada ready for large-tonnage, low-grade gold operations of the type that prevail south of the 45th Parallel? If Colomac becomes a successful mine, at least three other low-grade gold deposits may soon follow its lead into production — the 12.5-million-tonne Box and 5-million-tonne Athona deposits in northern Saskatchewan (reported to grade 0.05 to 0.06 oz gold per tonne, and being worked by RKJ Mineral Corp. and Greater Lenora Resources) and a deposit in excess of 12 million tonnes at Frotet Lake north of Chibougamau, Que., held jointly by Minnova and Kerr Addison.

One of the concerns about Colomac is grade. But property-vendors Rayrock Yellowknife Resources and Hydra Explorations are confident that a mineable grade of 0.061 oz gold per tonne is achievable. The gold occurs in flat-lying quartz veins and on fractures within diorite dykes. The intensity of the veins varies and so, too, do the gold grades. “We had a theory that the grade of ore hauled to the mill could be improved by careful grade controls and selective mining,” says David Crombie of Rayrock.

ABM’s vice-president of operations, Ken Hill, agrees. “Detailed diamond drilling done last summer indicates there are higher-grade zones within the dyke and we hope we can high-grade the thing,” Hill says. Underground bulk samples taken on the property indicate higher grades than those indicated by diamond drilling.

Rayrock and Hydra have a net smelter return interest in the property through jointly-owned Johnsby Mines. That interest varies from 3% to 10% according to the price of gold.

What are some of the risks involved in building an open pit gold mine north of the 60th Parallel? Because of its remote location, high capital costs are to be expected. But building a $156-million mine based on only eight years of proven and probable reserves is not considered good industry practice in Canada. “If you look at capital cost per ounce of gold in the ground (about $100 Canadian per ounce), I don’t think it’s that far out of line,” Hill says. In the early going, when loan guarantees were sought, Neptune was turned down by the federal government.

Production costs are certainly another high risk of operating in the Arctic. Abm says costs should total $260 (US) for every ounce poured, or about $18 per tonne of ore treated. If market prices are $400, that works out to a pre-tax profit of $20 million (Canadian) after one full year of operation. With 25.6 million tonnes of proven and probable reserves, enough for eight years of production at a rate of 3.15 million tonnes per year, that’s just enough to pay back the initial capital cost of $156 million — if all the estimates pan out. “Our financial analysis shows the capital can be returned before eight years,” Hill says.

Operating cost estimates are neither optimistic nor conservative. They were compiled by a team of mine managers (many of whom have experience managing several open pit mines in the Yukon, northern British Columbia and northern Alberta). Senior mine engineer Stephen Johnson, who was responsible for Neptune’s computerized ore reserve and mine-planning system, worked for Cominco Ltd. at the Pine Point mine. Ross Burns, a former Cominco geologist with experience at Pine Point, and chief mining engineer Robert Leigh, who was previously involved with the Lornex open pit and the Cassiar open pit mine in British Columbia, left the project when Northgate entered the picture.

Some of the in-house metallurgical work was done by Stanley Siscoe, a consulting metallurgical engineer with 30 years’ experience. He has also left Neptune. The outside consultant was Wright Engineers. One factor that comes into the operating cost equation is power generation. Not only is the project sensitive to gold prices; it is also sensitive to the price of diesel fuel. But so is the successful Lupin mine, about 200 km farther north. It has been operating for nine profitable years on diesel-generated electricity. Electric generating costs at Lupin are about 15 cents per kilowatt hour and ABM is forecasting 12 cents to 13 cents. The same type of generator set as that used at the Lupin mine is being used, but the plant will be larger. Generating electricity is estimated to account for $4 to $5 of the $18-per-tonne operating cost.

One of the reasons ABM expects a cost-per-ounce of $260 (US) is a stripping ratio of about 3.4 to 1. To achieve this, some of the pit walls have been designed at 60^o (deg).

Delivery times can play a significant role in the success of a northern mine as well. And for a low-grade, high-tonnage operation, it is especially important that the mill be turning at all times. If a major breakdown should occur in the mill, for example, it could take weeks to bring in the necessary parts to fix it. “But delivery times are no different than for other mining operations in Canada,” Hill says. The Colomac mine has air access and the facilities to handle Hercules aircraft from Yellowknife at $11,000 per flight.

Criticism of the Colomac project has been relentless. But ABM operators should see this as a good thing. It forces them to examine and re-examine their assumptions. Knowing they are breaking ground from a technical, logistical and operational point-of-view could make them better mine- and mill-operators. When the first operating results are in this time next year, those operators could very well be industry heroes.

COLOMAC FACT SHEET

Location: . . . . . . . . 220 km northwest of Yellowknife, N.W.T.

Major owner: . . . . . . . . . . . . . . . . . . . . . . ABM Gold

Reserves . . . . . . . . . . . . . . . . . . 25.6 million tonnes at 0.061 oz per tonne of proven and probable, and 5.6

million tonnes at 0.065 oz per tonne possible reserves

based on a 0.028-oz cut-off grade.

Dilution factor: . . . . . . . . . . . . . . . . . . . . . . 15%

Metals produced: . . . . . . . . . . . . . . . . . . . . . . gold

Discovery date: . . . . . . . . . . . . . . . . . . . . . . 1945

Production decision: . . . . . . . . . . . . . . . . Dec 7, 1987

Start-up date: . . . . . . . . . . . . . . . . . . . March, 1990

Budgeted capital costs: . . . . . . . . . . . . . . $146 million

Actual capital costs: . . . . . . . . . . . . . . $155.8 million

Projected payback period: . . . . . . . . . . . . . . eight years

Cash oprating costs: . . . . . . . . . . . . . . $260 (US) per oz

Feasibility study consultant: . . . . . . . . . Wright Engineers

Means of access: . . . . . . . . . . . . . . . Fly-in year round,

winter road, January to March

Daily ramp capacity: . . . . . . . . . . . . . . . 41,000 tonnes

Mining method: . . . . . . . . . . . . . . . . . . . . . open pit

Productivity: . . . . . . . . .29 tonnes of ore per total man day

Projected mine recovery: . . . . . . . . . . . . . . 9,100 tonnes

of ore per day; 32,000 tonnes of waste rock per day,

and 200,000 oz (6,200 kg) gold per year

Mining equipment: . . . . . . . . . . . . . . . . Cat 992 loaders,

Cat 777-85T haulage trucks, Cat D8L dozer, Cat D9L

dozers, blasthole drills and a Cat 14G grader

Milling rate: . . . . . . . . . . . . . . . . 9,100 tonnes per day

Mill flowsheet: . . . . . . . . . . . . . . . . Primary crushing,

grinding, gravity separation, thickening, cyanidation,

carbon-in-pulp adsorption, carbon stripping, carbon

reactivation, gold electrowinning and electric induction

refining.

Mine construction contractor: . . . . . . . . . . . PCL Industrial

Constructors

Current status: . . . . . . . . . . . . . . 95% as at Dec 1, 1989

DOME MOUNTAIN

The on-again, off-again Dome Mountain project, owned by Teeshin Resources and Canadian-United Minerals, is on again. The owners have slated September, 1990, as the startup month. This is a small gold-silver project (reserves total about 270,000 tonnes, or 300,000 tons) just east of Smithers, B.C. And it has had its problems.

Normally, the legal action over ownership of a given property follows the start of mine development. But in the case of Dome Mountain, the courtroom drama preceeded it. Originally, start-up had been set for mid-1988. Then legal wrangling ensued among the many partners at the time over an alleged breach of confidentiality. The waters became so muddy in late 1988 that it seemed the project would never see its way clear to development. “Dome Mountain project terminated,” announced a December, 1988, headline in The Northern Miner.

Not quite. Cooler heads prevailed six months later, the lawsuits were killed and Teeshin and Canadian-United were talking production again.

Access to the Dome Mountain deposit is by a 3×3-m adit driven roughly 500 m into the mountain. The operators have drifted about 1,000 m along strike of the vein structure. At presstime, no stopes had been developed, although two raises had been excavated to surface.

The average width of the gold-bearing vein is 3 m, according to Teeshin director Stafford Kelly. Mineralization has also been encountered beyond the known strike length. “There’s an eroded valley off to the side of the mountain where our existing reserve ends,” Kelly said. “The ore zone dips in the same direction as the hillside, so we have always thought the zone extends out there.” To pick up the strike extension, diamond drilling is being carried out.

Teeshin and Canadian-United plan to build a mill on site.

BIRCHTREE

Mothballed in 1977, this former underground nickel-copper producer in northern Manitoba’s Thompson Nickel Belt struggled back to life late in 1989. Grades are low by Thompson standards, but longhole underground mining methods have come a long way in the past 13 years. A significant increase in productivity resulting from technological changes should make Birchtree a winner in the 1990s. Inco Ltd. estimates the mine will produce twice as many tonnes per manshift as it did during its last year of full production.

But a lot of work has to be done before the mine is producing at capacity. The 1,020-m shaft has to be deepened to provide access to ore reserves at depth and existing development headings have to be rehabilitated. The $58-million development is part of Inco’s $100- million mine development program in Thompson.

The other mine being prepared for production is the $42-million South pit mine (see separate story). Both mines will provide about half of the 14,000 tonnes of ore treated every day by the mill in Thompson. Constructed in 1960, that mill was expanded in 1968 when the Birchtree mine hoisted its first ore. About half the ore treated by that mill comes from the North pit. The other half comes from the underground Thompson mine.

The Birchtree orebody has an estimated 700 million lb of nickel reserves and is expected to produce for about 20 years. Ore comes from two longhole stopes, but it will be another two years before the mine is hoisting 3,300 tonnes per day up the 5-compartment, timbered shaft. Ore is trucked eight kilometres to the mill. A shaft-deepening project and level development below the 820-m level are expected to be let soon. Alex MacIntyre & Associates has completed about half of a 3,600-m-long internal ramp.

A major portion of the cost of the rehabilitation project is the cost of replacing steel rock bolts, reblasting and replacing steel tracks in some 2,400 m of drift and replacing equipment in the mine’s ore-handling system. A new crusher had to be commissioned.

BIRCHTREE FACT SHEET

Project name: . . . . . . . . . . . . . . . . . . . Birchtree

Location: . . . . . . . . . . . . . . . . . . Thompson, Man.

Major owners: . . . . . . . . . . . . . . . . . . . Inco Ltd.

Reserves and categories: . . . . . . . . about 700 million lb

(315 million kg) nickel

Dilution factor: . . . . . . . . . . . . . . . . . . . . N/A

Metals produced: . . . . . . . 30 million lb (13.5 million kg)

nickel per year

Discovery date: . . . . . . Early 1960s, developed in 1966-67,

operated to 1977, reopened in 1989

Production decision: . . . . . . . . . . . . . . . . . . . N/A

Start-up date: . . . . . . . . . . . . . . . . . . . . . . N/A

Budgeted capital costs: announced at $58 million

Actual capital costs: . . . . . . . . . . . . . . . . . . N/A

Projected payback period: . . . . . . . . . . . . . . . . .N/A

Cash operating costs: . . . . . . . . . . . . . . . . . . N/A

Feasibility study consultant: . . . . . . . . . . . . . . Inco

Means of access: . . . . . . . . . . . . . . . . . . . . shaft

Daily skip or ramp capacity: . . . . . . . . . . . .3,000 tons

(3,300 tonnes) per day

Mining method: . . . . . . . . . . . . . long-hole open stoping

Productivity: . . . . . . . 18 to 20 tonnes per total manshift

Mining equipment: . . . . . . . wide variety, highly mechanized

Milling rate: . . . . . . . . . . . . . . through Thompson mill

Mine development contractor: . . . . . . . . . . Alex MacIntyre

& Associates

Current status: . . . . . . . . . At October, 1989, completed

one year of 5-year project

SOUTH PIT

Accelerated mining of the crown pillar of the big Thompson nickel/ copper orebody by Inco Ltd. has had a spin-off effect on plans for a second, linked open pit mine to the east of this northern Manitoba city. The new South pit should come on stream in 1990 as mining in the North pit winds down. There are sufficient reserves for the new pit to continue to produce ore well into the 1990s.

The $42-million development is part of a large capital expenditure program in Thompson by Inco to develop ore reserves. The other mine being developed is actually the rehabilitation of a former producer, the underground Birchtree mine (see separate story).

South pit has been designed in such a way that the crown pillar of the 1-B orebody can be mined to a depth of 122 m in 12-m benches. An 8^o (deg), 20-m-wide ramp has been designed to provide access. But before mining becomes a reality, thousands of cubic metres of muskeg overburden have to be removed by dredging. That work has ceased for the winter but will resume in the spring. Once complete, sometime this summer, some cap rock will then be removed and the ore exposed.

As mining in the North pit progress, a crown pillar will be left between the pit bottom and the 122-m level of the underground workings in the area of the T-3 shaft. This will not be the case in the South pit. The plan there is for the bottom bench to break through into the workings below.

When it comes into production in late 1990, about 23,000 tonnes of ore and waste rock will be hauled from the South pit every day in 77-tonne Caterpillar and 59-tonne Terex trucks.

SOUTH PIT FACT SHEET

Location: . . . . . . . . . . . . . . . . . Thompson, Man.

Major owner: . . . . . . . . . . . . . . . . . . Inco Ltd.

Reserves and categories: . . . . . . about 150 lb of nickel

in reserve

Dilution factor: . . . . . inherent value within pit limits

Metals produced: . . . . . . . . . . . . . . nickel, copper

Discovery date: . . . . . . . . . . . . . . . . . . . 1956

Production decision: . . . . . . . . . . . . October, 1988

Planned start-up date: . . . . . . . . . . . . . May, 1990

Budgeted capital costs: . . . . . . . . . . . $42.1 million

Actual capital costs: . . . . . . . . . . . . . . . on plan

Cash operating costs: . . . . . . . . . . . . . . . . . N/A

Feasibility study consultant: . . . . . . . . . . in-house

Means of access: . . . . . . . . 20-m-wide ramp at 8% grade

Daily skip or ramp capacity: . . . . . . . 23,000 tonnes of

total material per day

Mining method: . . . . . . . . . . . . . . . . . . open pit

Productivity: . . . . . . . . 180 tonnes of total material

per manshift

Projected mine recovery: . . . . . . . . . . 100% recovery

(within pit design limits)

Mining equipment: . . . six 777 Caterpillar 85-ton trucks;

four 65-ton Terex trucks; two 992

Caterpillar loaders; one 151 8-cu-yd

shovel; two D8N Cat tractors; one D8K-Cat

tractor; one 760 Champion grader; three

45R 9-7/8-inch drills; two 4-1/2-inch

Tamrock drills; one 2-1/2-inch Tamrock drill

Milling rate: . . . . . . . . . . . . . . . not applicable

Mine development contractor: . . . . . . . . . . . in-house

Current status: . . . . . . . . . . . Dredging 25% complete

(as of late 1989)

GRAPHITE LK.

Gearing up for production during the first quarter of 1990 at Graphite Lake in central Ontario is Cal Graphite Corp., the Vancouver-listed junior with a high-tonnage, low-grade deposit of crystalline flake graphite. The property sits just north of Huntsville, adjacent to Algonquin Park.

The mill was near completion when The Northern Miner Magazine contacted President John Stirling, who said the project was down to plumbing and piping, and electrical work.

Discovery of the Graphite Lake deposit — 800 ha have been staked by Cal Graphite — can be traced back to the last century. The property contains proven and probable reserves of about 54 million tonnes grading almost 3% graphitic carbon. Included in that amount are three million to four million tonnes of 13% material; Stirling said this higher grade has not been averaged in with the total tonnage.

An open pit mining method is planned for the first six to seven years of the project, with an independent contractor responsible for supplying all feed to the mill ore bin to minus 3/4-inch fill. The open pit operation, Stirling said, may then give way to a decline and block-caving method.

The new mill, built to accommodate production of up to 9,100 tonnes per day, will initially operate at a daily production rate of 2,700 tonnes, with daily output of a minimum 82 tonnes graphite concentrate. To boost the daily production rate to 4,500 tonnes, another set of flotation columns will have to be added.

Mill construction underwent delays, in part because of new environmental regulations imposed by the government. While the company lost time, design alterations led to cost savings, Stirling said. Total budgeted cost for the project is close to $17 million.

Natural flake graphite is used in the manufacture of refractory bricks, crucibles, brake linings, heat-resistant lubricants and in many electrical and high temperature applications.

— David Robertson

GRAPHITE LAKE FACT SHEET

Location: . . . . . . . . . . . . . . . . . . Graphite Lake,

32 km north of Huntsville, Ont.

Major owners: . . . . . . . . . . . . 70% of the outstanding

shares are owned by John Stirling, president; Edward

Blanchard, director; and Henry Hillman

Reserves by category: . . . . . . . . . 54.4 million tonnes

(proven and probable) of almost 3% graphitic carbon

Metal produced: . . . . . . . . . crystalline flake graphite

Discovery date: . . . . . . . . . . . . . . . . . . pre-1900

Start-up date: . . . . . . . . . . . . . first quarter, 1990

Budgeted capital costs: . . . . . . . . . about $17 million

Cash operating costs: . . . . . . . . . . $363 (C) per tonne

of concentrate produced

Mining method: . . . . . . . . . . . . . . . . . . open pit;

contractor to supply feed to mill ore bin to minus 3/4-inch

fill; contractor is Ethier Brothers of Sudbury, Ont.

Milling rate: . . . . . . . . . . . . . . . . . 2,700 tonnes

of material per day (mill built to accommodate

future expansion)

Production: . . . . . . . . . . . . . . . . . . . 82 tonnes

graphite concentrate (minimum) per day

Mill: . . . . . . . . . . . . . . . . . includes autogenous

grinding, which will reduce the ore to minus 20 mesh,

ball mill and vertical column flotation cells

LANGMUIR

One successful mine often leads to others in the same area. This truism will be put to the test this year at the Redstone mine, southeast of Timmins, Ont. Developed by joint-venture partners Timmins Nickel and BHP-Utah Mines by way of ramp access, this shallow, high-grade nickel deposit has moved rapidly from prospect to producer status. Ore, mined at a rate of 270 tonnes per day, is trucked 22 km to the Government of Ontario Mill (GOMILL), which is situated in the same building that houses Pamour Inc.’s gold mill in Schumacher.

About 6.5 km from the Redstone mine is another small deposit, a former-producer in its own right. Success at Redstone could breath new life into that small deposit.

The Langmuir mine was operated by Noranda Inc. and Inco Ltd. between 1973 and 1978. Those joint-venture partners drove a 446-m shaft to provide access to 1.4 million tonnes of ore averaging 1.87% nickel in what was called the No. 2 deposit. During its 5-year life, some 1.14 million tonnes were mined from sub-level caving stopes. Milling on site returned average grades of 1.45% nickel.

There are a number of faults in the area as well, some parallel to the northwest-striking Montreal River fault, and another striking north-south.

The Langmuir deposit is on the southeast nose of the Shaw Dome, at the stratigraphic contact between the Deloro and Tisdale Group. The nickel mineralization, which has been traced over a strike length of 150 m and to a depth of about 130 m, occurs within a number of steeply-dipping zones within komatiitic rocks at the contact with felsic/intermediate volcanics. Widths range from 1.2 m to 17 m and grades range from 0.96% to 4.08% nickel.

According to a preliminary study conducted by Derry, Michener, Booth & Wahl, cut-and-fill would be the most suitable method of mining the No. 1 zone. Vertical Crater Retreat may also be considered.

Whether the mine ever made money remains unknown. But one thing is certain. The partners had agreed to drive a ramp to the nearby No. 1 deposit which, based on 30 diamond drill holes from surface, contains undiluted probable reserves of about 150,000 tonnes averaging 2.10% nickel. That ramp was started, but did not reach the mineralized zone before deteriorating economic conditions in 1977 forced a halt to the work 30 m from its target.

A preliminary study by consultants Derry, Michener, Booth & Wahl, suggests the deposit could be mined at a rate of 160 tonnes per day at a capital cost of just $1.7 million.

Two other deposits are being explored by Timmins Nickel (without its Redstone joint-venture partner BHP-Utah) in the immediate area — the Tontine and Hart properties. And the potential for finding more nickel deposits looks promising as well, according to Kenneth LaPierre, exploration geologist for Timmins Nickel. The controlling structure appears to be a large elongate feature known as the Shaw Dome. An extrusive sequence of ultramafic rocks, up to 300 m thick, dominates the base of the Tisdale Group of rocks. All known nickel deposits in the area are within this unit, perhaps at its base. Structural complexity and poor outcrop exposure in the area, however, make it difficult to trace this favorable horizon.

The ultramafic rocks sit on top of a thick sequence of volcanic and sedimentary rocks known as the Deloro Group.

SILIDOR

The joint-venture Silidor gold project, five kilometres west of Rouyn-Noranda, Que., was scheduled to enter production this month. Partners Noranda Minerals, Cambior Inc. and Nova-Cogesco Resources report they have approved a feasibility report for the project and have concluded an agreement concerning the mine’s management and operation.

Noranda Minerals, a wholly owned subsidiary of Noranda Inc., and a 55% owner of the project, will act as manager. Project operator will be a new company affiliated with Noranda Mines Silidor.

Cambior, a major gold producer, has a 25% interest in the project while Nova-Cogesco owns the remaining 20%.

In its first year of operation, the mine is expected to produce almost 60,000 oz (1,870 kg) gold, and in 1991 about 73,600 oz (2,300 kg). The initial production rate will be about 24,250 tons (22,050 tonnes) of ore per month, rising to about 440,000 tons (400,000 tonnes) per year by January, 1991.

Mineable ore reserves are estimated to be about 4.5 million tons grading 0.18 oz gold per ton (equivalent to 4.1 million tonnes grading 6.17 g gold per tonne).

The partners have spent $24.4 million on exploration work. The estimated cost of bringing the project into production is an additional $31.5 million. The mine at full capacity is expected to employ 150 to 160 workers.

Ore from the Silidor project will be milled at two locations. Noranda plans to transport its share of the ore to its Horne division facilities at Rouyn-Noranda. Cambior reports its share of ore mined will be trucked to its Vezina mill, 29 km from the mine site. Nova-Cogesco’s share will also be treated at the Vezina mill under a custom-milling agreement concluded between the two companies in 1988.

Mining equipment at the Silidor gold project includes: one CMS-CDJ1H electic-hydraulic jumbo; two CMS-CJ124 electric-hydraulic jumbos; four JCI 300M and two JCI 400M load-haul-dump machines; as well as one 6 cu-yd LHD for future use.

SILIDOR FACT SHEET

Location: . . . . . . . . . . . . . . . . . Rouyn-Noranda, Que.

Major Owners: . . . . . . . . . . . . . . . . . . . . . Noranda

Exploration Co. (55%), Cambior Inc. (25%) and Nova-

Cogesco Resources (20%)

Reserves and categories: . . . . . . . . . . . . . . . Mineable

(proven, diluted): 4.1 million tonnes grading 6 g per

tonne. Geological: 4.9 million tonnes grading 6 g per

tonne (includes 1.5 million tonnes, probable, at 6.1 g,

and 3.5 million tonnes, possible, at 6 g)

Dilution factor: . . . . . . 30% included in mineable reserves

Metals produced: . . . . . . . . . . . . . . . . . . . . . gold

Discovery date: . . . . . . . . . . . . . . . . November, 1985

Production decision: . . . . . . . . . . . . . . . . July, 1989

Start-up date: . . . . . . . . . . . . . . . . . March 1, 1990

Budgeted capital cost: . . . . . . . . . . . . . $31.5 million

(pre-production)

Actual capital costs: . . . . . . . . . . . . . . . . . . . N/A

Projected payback period: . . . . . . . . . . . . . . . . . N/A

Cash operating costs: . . . . . . . . . . . . $39.46 per tonne

at full production (400,000 tonnes per

year)(mining only)

Feasibility study consultant: . . . . . . . internal (Noranda)

Means of access: . . . . . . . . . . . . . . . . . . . ramp to

220-m level; shaft to 560-m level

Skip hoisting capacity: . . . . . . . . . . . . . 2,400 tonnes

per day (12 hours hoisting)

Mining method: . . . . . . . . . . . . . . . . . . . shrinkage,

sublevel retreat, sublevel longhole

Productivity: . . . . . . . . . . . . . . . . . . . . 23 tonnes

per manshift (underground, at full production).

Projected mine recovery: . . . . . . . . . . . . . . . . . 84%

Mining equipment: . . . . . . . . . . . . . . . . one CMS-CDJ1H

electric-hydraulic jumbo; two CMS-CJ124 electric-

hydraulic jumbos; four JCI 300M and two JCI 400M

load-haul-dump machines; also, one 6-cu-yd LHD for

future use.

Milling rate: . . . . . . . . . . . . . . . . . . . . . . . N/A

Mine development contractors: . . . . . . . . . . J. S. Redpath

(underground exploration) and Ross Finlay (preproduction)

Current status: . . . . . . . . . . . . . . . . . Preproduction

construction and development

CASA BERARDI QUEST

Gold output at the Casa Berardi East project (also known as Golden Pond East) in northern Quebec averaged just under 4,400 oz (about 135 kg) per month for the first five months of 1989. That’s somewhat lower than what was anticipated because of the mining of lower-grade ore (including development muck) and the absorption of fine gold in the milling circuit during the tune-up phase. And, indeed, production levels gradually increased throughout 1989.

The second gold mine at the Casa Berardi project (both are owned by Inco Gold, 60%, and Golden Knight, 40%) is ahead of schedule and under budget.

Named Casa Berardi Ouest, the new mine is set to start production at 40,000 oz (about 1,240 kg) of gold per year by April, 1990 — three months ahead of schedule, reports project operator Inco Gold. The 140,000-tonne-per-year operation has a capital cost of $30 million.

Situated in northern Quebec, the Casa Berardi Ouest property hosts diluted reserves of two million tonnes grading 8.1 g gold per tonne (0.236 oz gold per ton). Inco and Golden Knight began gold production from their first mine on the property in 1988. The mine produces at an annual rate of 60,000 oz. When Casa Berardi Ouest enters production next year, the two freed sources for the mill will enable the project to produce about 100,000 oz annually.

RESTIGOUCHE

One of the first mineral deposits to be found by stream sediment geochemistry might come into production in 1990. The Restigouche orebody in northeastern New Brunswick is a small, near-surface deposit, owned 100% by Marshall Minerals. It has sufficient proven, probable and possible reserves to keep a 680-tonne-per-day open pit operation running for about 4.5 years. The deposit extends to depth and could potentially support an underground mining operation as well, if zinc prices remain firm.

The deposit was initially drilled by New Jersey Zinc in 1958. Njz was following up on anomalously high assay results of samples of sediment from Charlotte Stream.

Over the years njz optioned the ground to several companies including Teck Corp., Gowganda Resources and finally Placer Dome which purchased the property from njz in 1974. But the fact that Gowganda retained a 24% carried interest in the property dogged its prospects of becoming a producer for several years. It was not until 1988 that Harry Quint, chairman of Marshall Minerals, was able to simplify the ownership structure by buying out both Placer and Gowganda.

Two more recent developments have improved the prospects considerably for the deposit’s becoming a mine. The first is improved zinc prices and the second is two new mills in the Bathurst camp, both of which have custom milling capacity. Noranda Inc. has had its mill at the Stratmat/Heath Steele mine operating since August, 1989, and has expressed a strong interest in treating ore from Restigouche. A spanking new mill at the Caribou mine, owned by East West Caribou, is also a possible toll mill. It was temporarily shut down late last year. Shipping ore to the Caribou mill seems the most logical choice on the surface since it is just 20 km east of the Restigouche deposit. But even though trucking to Noranda’s Stratmat/Heath Steele mill adds about $2 per tonne to the cost of transportation, the mill has the capacity to run an entire flotation line devoted strictly to Restigouche ore. Caribou, on the other hand, would have to run Restigouche ore for a while, then run its own ore.

The Restigouche property is the first in New Brunswick to seek approval under the province’s new Environmental Impact Assessment laws.

SUDBURY BASIN

Activity in late-stage exploration and accelerated mine development has increased markedly in the Sudbury Basin over the past few years. Firm nickel prices and the need for replacement orebodies by both Inco Ltd. and Falconbridge Ltd. are spurring growth in the basin. By our count, at least three new deposits should be yielding ore in 1990. And several mines are on the drawing board for the early 1990s. Let’s look at the less advanced projects first.

Inco recently announced it will be spending $179 million on the McCreedy East mine. The project, 50 km west of Sudbury and 1.5 km from Inco’s Coleman mine, involves the largest known undeveloped, high-grade nickel/copper sulphide deposit in the basin. In three separate but proximate deposits, Inco will mine 350 million lb (160 million kg) of recoverable copper and 675 million lb (300 million kg) of recoverable nickel. A production rate of 7,000 tons (6,350 tonnes) per day is planned, so concerns about depletion won’t surface for at least 20 to 22 years, according to Robert Purcell, manager of corporate public relations.

The hallmark of this mine will be productivity. Inco proposes to double its average Sudbury productivity (currently 14 tonnes per manshift) by incorporating advanced mining methods and modern electrified equipment. Trucks as large as 70-ton-capacity may be used. A mile-long conveyor system will probably transport ore from McCreedy East to the Lower Coleman shaft. The extended shaft bottoms 3,450 ft (slightly more than one kilometre) from surface. Production will begin in 1993. At full capacity (1996), the mine will produce annually about 40 million lb (18 million kg) of nickel and 20 million lb (nine million kilograms) of copper.

This year, Inco will bring the Lower Coleman mine (below the workings of the existing Coleman) into production. This 18-million- tonne, nickel/copper orebody will be accessible by the same extended Coleman shaft on which McCreedy East will rely. The project should be yielding ore by the fourth quarter of 1990. In full production, Lower Coleman will run at 3,000 tons (2,700 tonnes) per day. The revamped Coleman hoisting system will also be skipping 7,000 tons (6,360 tonnes) per day of McCreedy East ore, when that mine begins producing.

Over the next four years, Falconbridge Ltd. will spend $280 million (Canadian) on the Craig mine.

STRATMAT/HEATH STEELE

Brunswick Mining & Smelting has had an interesting year. Despite the fact that zinc prices were buoyant for most of the 12-month period, deepening the No. 3 shaft at the big No. 12 mine in Bathurst, N.B., served to stifle ore production for three weeks during the third quarter. At the same time, two 30-tonne skips were re-roped to reach the deeper 1,250-m level loading pocket.

Partially offsetting the production losses caused by this maintenance shutdown was the timely re-opening of the base metals mill at the Heath Steele mine, about 50 km southwest of the No. 12 mine. Noranda bought out former mine operator American Metals’ interest in the mine and Brunswick picked up Asarco Inc.’s interest.

Five zones, totalling 3.8 million tonnes of polymetallic ore, averaging 2.56% lead, 6.32% zinc and 0.72% copper have been outlined within six kilometres of the mill by Brunswick and Noranda Inc. over the past few years. That was enough to justify spending about $21 million to re-open the mill. The last time it was turning was in 1983.

At 2,150 tonnes per day, the Heath Steele mill will be operating this year well below its design capacity. But that’s good news for at least two juniors which have outlined significant open pit reserves in the Bathurst camp. Marshall Minerals, which is in the final environmental approval stage on its Restigouche property (see separate story), is one. And Stratabound Minerals, which holds the much closer Captain North Extension property, is the other. Both could use the idle flotation capacity of the Heath Steele mill. But no firm agreements have been reached yet.

STRATMAT/HEATH STEELE FACT SHEET

Location: . . . . . . . . . . between Newcastle and Bathurst, N.B.

Major owners: . . . . . . . . . . . . . . . . . . Brunswick Mining

& Smelting (25%) and Noranda Inc. (75%)

Reserves by category:

Lead Zinc Copper Silver

tonnes (%) (%) (%) (g/tonne)

B Zone 2,280,000 2.28 6.05 0.74 69.71

Stratmat Pit 238,000 4.38 9.67 0.32 59.97

E Zone 699,000 2.48 5.29 1.18 93.19

Stratmat (u.g.) 443,000 2.84 7.30 0.27 44.57

N-5 Zone 204,000 3.18 6.84 0.35 26.88

Dilution factor: . . . . . . . . . . . . . . . . . . . . . . . 10%

Metals produced: . . . . . . . . . . . . . . . . . . . lead, zinc,

copper and silver in four concentrates: lead, zinc, copper

and combined lead/zinc.

Discovery date: . . . . . . . . . . . . . . . . . . . . . . . 1954

Past production: . . . . . . . . . . . . . . . 1957-58 and 1962-83

Start-up date: . . . . . . . . . . . . . . . . . Mining started in

July, 1989; milling in August, 1989

Capital and operating costs: . . . . . . . . . . . . . . . . . N/A

Feasibility study: . . . . . . . . . . . . . . . . . . . in-house

Means of access: . . . . . . . . . . . . . . . . .shaft at B Zone,

decline at Stratmat underground, ramp at Stratmat pit

Skip and ramp capacity: . . . . . . . . . . . . . . .3,600 tonnes

per day through No. 5 Shaft (is being operated at 1,750

tonnes per day, five days a week); 1,650 tonnes per

day up Stratmat decline (is being operated at 1,120

tonnes per day, five days per week).

Mining methods: . . . . . . . . . . . . . . . . . . Longhole open

stoping with either delayed or no fill, depending on the

mining area and open pit.

Productivity: . . . . . . . . . . . . . . . . . . . . 29.1 tonnes

per mine department manshift; 13.1 tonnes per man

shift over all.

Projected mine recovery: . . . . . . . . . . . . 85% of ore-grade

material

Mining equipment: . . . . . . . . . . . . . . . . . . . . 6-cu-yd

Wagner load-haul-dump machine, Wagner 26-ton

trucks, Ingersoll-Rand CMM1 and CMM2 drills, Cat

D350C haulage trucks, a Cat 980 loader, a Hough

560 loader and a Komatsu 400 backhoe.

Milling rate: . . . . . . . . . . . . . . . . 2,150 tonnes per day

Mill flowsheet: . . . . . . . . . . . . . . . . . . . . crushing,

grinding, flotation, dewatering.

Mine development contractors: . . . . . . . . . . Aurora Quarrying

at Stratmat, Heath Steel crews at B-Zone mine.

Current status: . . . . . . . . . . . . . . operating at capacity