Vancouver — A recently completed drill program by Northgate Exploration (NGX-T) has significantly increased the size of the Kemess North deposit some 5.5 km north of the Kemess gold-copper mine in BC.
“Kemess North represents a significant potential to extend mine life at Kemess,” says Northgate’s CEO, Ken Stowe. “Its close proximity to our existing infrastructure will significantly lower the capital required to bring the project into production following the completion of mining at Kemess South.”
The newly completed 16-hole program confirmed that the gold-copper grades increase to the northeast and a depth. Highlights from the last six holes drilled include:
- Hole 12 — 111.3 metres grading 0.6 gram gold and 0.25% copper,
- Hole 13 — 210.9 metres grading 0.49 gram gold and 0.3% copper
- Hole 15 — 112 metres grading 0.43 gram gold and 0.32% copper.
Hole 17 terminated in mineralization returning 25.1 metres grading 0.46 gram gold and 0.31% copper, while holes 14 and 16 failed to cut the porphyry target.
On the back of the drill results, Northgate has increased to inferred resource of the Kemess North deposit to 442 million tonnes grading 0.4 gram gold per tonne and 0.23% copper from the previously stated 360 million tonnes grading 0.3 gram gold and 0.154% copper. Within the newly calculated resource is a higher grade core of 170 million tonnes grading 0.5 gram gold and 0.29% copper.
The geology of the deposit consists of two basic rock types, the Takla volcanics and a quartz monzodiorite. The volcanics overlie a porphyry dome, and the current resource is based on a gold-copper pyritic halo within the volcanics at a site dubbed the Centre Cirque. This year, drilling progressed northeast over a ridge and through the volcanics.
Preliminary metallurgical test work indicates that the ore is amenable to the conventional floatation processing used at Kemess South. Plans for next year include more drilling a Kemess North to further outline the extent of the mineralization, launching a scoping study and drill testing additional targets over the 308 sq. km that surround the mine site. The program is expected to begin in mid-June.
Located 250 km north of Smithers, the Kemess mine is in the mountains of north-central British Columbia at an elevation of 1,350 metres. As of the end of 2000, mineral reserves for the 48,000 tonne per day operation stood at 145.9 million tonnes grading 0.65 gram gold per tonne and 0.24% copper.
Northgate assumed control of Kemess South from receiver PriceWaterhouseCoopers in late 1999. Now-defunct Royal Oak Mines originally commissioned Kemess in May of 1998. The total development cost of the mine was estimated to exceed $600 million, which contributed to the company’s downfall.
Trilon Financial, Northgate’s largest shareholder, provided most of the cash needed for the acquisition, including a US$145-million bridge loan.
Northgate recently closed a 6-year, US$100-million syndicated project loan designed to re-finance part of the original loan. In addition, the company has raised US$10 million for working capital.
This year, Northgate hopes to produce a total of 265,000 oz. gold and 31,750 tonnes copper at a cash cost of US$190 gold per oz. (again, net of byproduct credits).
Total production at Kemess in 2000 totaled 225,994 oz. gold and 22,860 tonnes copper, while cash operating costs averaged US$248 gold per oz. The average millhead grade was 0.778 gram gold and 0.22% copper.
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