Noranda earmarks $200 million for ’89 exploration

“One of our key objectives,” Noranda Minerals President Keith Hendrick, 62, told The Northern Miner, “is to expand ore reserves.”

The company’s exploration budget for 1988, including the funds set aside by its subsidiaries and joint venture partners, totalled $120 million, Hendrick said, quickly rhyming off about a dozen of the projects in which the mining and metallurgical firm is involved.

He estimated about two-thirds of the total exploration budget both last year and in 1987 was aimed at finding gold, with the remaining one-third going into the search for base metals.

A company with years of international exposure, Noranda Minerals boasts 13 producing mines and five metallurgical plants among its holdings. Its prize gold asset, in which it has controlling interest, is Hemlo Gold Mines (TSE), which operates the huge Golden Giant mine at the Hemlo camp in northern Ontario. Exploration agreement

To help bolster Hemlo Gold’s future growth, Noranda last year entered into an exploration joint venture with the gold producer covering 145 precious metal properties in western Canada. Hemlo, already active in eastern Canada in exploration ventures, including the Hemlo area, bumped its 1988 exploration budget to $20 million after the deal with its parent was finalized.

One of the larger exploration plays to be covered by the agreement is the Tundra gold project in the Northwest Territories, in which Noranda has a 51% interest and Total Energold a 49% interest. Possible reserves at the project, where a $33-million underground and development program is under way, stand at 26.4 million tons averaging 0.18 oz gold per ton.

Among the current “hot” mining regions in the country is the Mishibishu area in northern Ontario, where Hemlo is involved in a joint venture with one of the area’s junior players, Central Crude (VSE). Hemlo has also acquired an equity position in Central Crude, as it has in Windarra Minerals (VSE), which has a 25% interest in the same area’s Magnacon gold project which could be in production this year.

In northwestern Quebec, among other projects, Noranda has a 25% interest in the Silidor project for which a production decision is imminent.

Newfoundland is drawing much attention these days in mining circles and in the central part of the province, Noranda is involved in a joint venture at the polymetallic Tally Pond-Duck Pond project. Also, late last year, Noranda struck up a deal with junior Noront Resources (VSE) for grassroots exploration involving about 8,000 gold claims in north-central Newfoundland. Heap leach project

In the U.S., Noranda has secured an equity position in Viceroy Resource (TSE), whose Castle Mountain gold project in California was on the verge of entering heap leach production at the time of the interview. Another of the company’s interesting gold plays south of the border is the Black Pine heap leach project in Idaho.

Back in northwestern Quebec, Noranda late last summer officially opened its Isle Dieu zinc-copper mine at Matagami, a replacement for the nearby Mattagami Lake mine which was closed in 1988 after 25 years of operation.

One of the company’s mainstay operations over the years has been the Geco copper-zinc-silver mine at Manitouwadge in northern Ontario, near Hemlo.

Affiliated companies are also active. Minnova Inc. (TSE), a subsidiary of Kerr Addison Mines (TSE), which is controlled by Noranda, last year opened its Winston Lake zinc mine near Schreiber in northwestern Ontario. The same company will soon be opening its Ansil copper mine near Rouyn- Noranda, Que., and is making progress with its (70% interest) polymetallic Samatosum project in British Columbia.

The heart of Noranda Minerals, Hendrick said, is its metallurgical plants: two copper smelters, a lead smelter, a copper refinery and a zinc reduction plant. Pollution control

The company’s Horne smelter at Rouyn-Noranda, a custom copper operation, is currently being fitted with a $125 million sulphuric acid plant to help reduce SO2 emissions. Construction of the new acid plant is about three months behind schedule, Hendrick said, adding that the company hopes to have it in operation by the latter part of this year.

In Quebec’s Gaspe region, the company’s copper smelter at Murdochville continues to function despite a fire at the minesite in 1987 which closed underground operations. (Outside feed for the smelter was secured.) Noranda has been rehabilitating the mine and hopes to have it running again this year. Brunswick Mining & Smelting (TSE), controlled by Noranda, operates the group’s lead smelter in the Bathurst area of New Brunswick. Brunswick is the largest zinc mine in Canada.

In Montreal, Noranda last year announced a 5-year, $46-million modernization plan for its CCR facility. In addition to improving the mainstay copper refining process, the modernization plan involves installation of new environmental control mechanisms. The CCR facility produces about one million oz gold annually as a byproduct.

Also, the company’s Canadian Electrolytic Zinc facility at Valleyfield, Que., is undergoing a $120- million modernization program which in part will see two existing electrolytic cell houses replaced by a new automated cell house.

Security of feed for its copper smelting operations is one of the reasons Noranda is thought to have gone to the market last year for a controlling interest in Falconbridge Ltd. (TSE) which, along with its nickel operations in Sudbury, Ont., mines copper at its Kidd Creek project in the Timmins, Ont., area. The Horne smelter processes some of Kidd Creek’s surplus copper concentrates and analysts believe Noranda wants to ensure continuity of that supply.

Playing a vital role in the future success of Noranda Minerals, Hendrick said, is the marketing expertise provided by another division, Noranda Sales. The sales people, he said, working in conjunction with the operating divisions, Noranda Research Centre and industry associations, help in the development and promotion of the various applications for the different minerals.

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