Not your grandfather’s Abitibi

Malartic, Que. — When James Norrie sent his steam drills up the trails from the railway line in the 1930s, the only exploration model in his head was the wildcatter’s principle: drill it and see. Seventy years later you still have to drill, but ideas about where gold can be found in the Abitibi are much more plentiful.

What marks out a difference in Malartic-area explorers Northern Star Mining (NSM-V) and Osisko Exploration (OSK-V) is that they are following some new trails into the bush, cut by a different understanding of the local geology. At the old Malartic Goldfields property — which produced about 1.7 million oz. gold between 1939 and 1965 — Northern Star has drilled off new mineralization well south of old stopes, confirming a suspicion that the mineralized structures there are part of a much wider deformation zone. Meanwhile, about 9 km west at Canadian Malartic — a million-ounce producer between 1935 and 1965 — Osisko has reinterpreted the deposit as a porphyry system, with porphyry-style low grades and large tonnages.

Explorers in northwestern Quebec have long recognized a difference between the deposits around Val d’Or and those around Malartic. In Val d’Or proper, the gold deposits were typically in high-grade veins, controlled by faults parallel to the main Cadillac Break. But those in Malartic were pyritized bodies in the contact zones of porphyry dykes that intruded sedimentary and volcanic-derived schists. The Break sliced through the schists, but did not control the orebodies, though all the dykes and contact zones ran parallel to the Break.

The earliest thinking in the Malartic camp disregarded the Break entirely in favour of an association of gold mineralization with the contacts between the porphyry dykes and gabbro or peridotite bodies. At Malartic Goldfields virtually all the ore was blocked out in two zones, each zone a little to the north of each of the mine’s two shafts, and each yielded about half the mine’s total production, down to about a 2,700-ft. (900-metre) level.

There was more at depth, but there was little point in looking; 6-ft. hoist drums and the limited pumping technology of the time made mining below that level uneconomic.

The simple restrictions of the mine layout also constrained mine exploration. Structural analyses late in the life of the mine suggested there was mineralization south of the mine — in the area below Halet, the townsite built to service the mine in the 1930s, and in a porphyry intrusion called the “Mill porphyry.” But drilling below the town or the mill wasn’t on; even if there was anything worth finding, it wouldn’t have been worth the expense of moving the town or the mill to mine it, particularly at the US$35-per-oz. prices of the time.

Long Lac

So it was that by the late 1950s, management at Malartic Goldfields — then under the banner of Little Long Lac Gold Mines — decided to mine out the existing reserve. The mine closed in 1965, and Long Lac relinquished part of the property.

Long Lac did keep the ground around the mill. It kept the mill open until 1996, processing ore from the Bousquet mine, a Lac Minerals asset that passed to Barrick Gold (ABX-T, ABX-N) in a 1994 takeover.

A handful of companies poked at the property through the 1970s and 1980s, with some success in drilling from surface. Most prophetically, Golden Briar Mines drilled beneath the Halet townsite, blocking off around 600,000 tonnes grading about 6 grams in the days before National Instrument 43-101. During the operating era, Long Lac’s own drilling from a haulageway on the 1,200-ft. level (365 metres deep) tested strike extensions between the two known orebodies without success — but that in itself was a hint: there was no gold, and there were no porphyry dykes either.

The typical shape of Goldfields orebodies was an elongated, sigmoid lens, usually about 120 to 150 metres in height, 15 metres wide, and perhaps 250 metres along strike. They might be longer, but if so, they thin out; almost all made about 300,000 to 400,000 tonnes at grades around 6 grams per tonne. The main mineralization was in gabbros, but it was associated with later porphyry dykes parallel to the mineralized zone, and the contact zones between the two. There was mineralization in the competent and easily mined porphyries, although it ran about half the grade of the zones in the country rock; that marked it out as a blending material for the mill. The gold occurred with, but not in, disseminations of pyrite — gold grade is “essentially a straight-line function of the amount of pyrite,” says Michel David, Northern Star’s president. There are “some areas of quartz veining, but this is not a quartz-vein deposit.”

What appeared from drilling and structural analysis was that the porphyry near the No. 2 shaft does not continue east toward the No. 1 shaft, but swings south under the old townsite, now abandoned. “It’s a tension feature,” says David. Rather than being purely contact features, or purely southeast-striking fractures, the mineralized bodies are around porphyries that intrude open zones in a deformation zone about a kilometre wide.

Northern Star was financed in 2003 after David went on a door-pounding expedition to Vancouver. A 9-hole program that year “hit nine out of nine,” and allowed the company to finance a larger program. Drilling from surface, since that time, has established a zone of mineralization below the old townsite, and putting $13 million in the treasury, largely thanks to backing from funds, has given the company enough flexibility to start plans for underground drilling and development.

Louvicourt headframe

At the same time that getting underground became necessary, the Louvicourt copper-zinc mine east of Val d’Or closed, and operator Aur Resources (AUR-T, AZK-X) was happy to sell the headframe, hoists, and surface infrastructure to Northern Star for $575,000.

When The Northern Miner visited, the old Louvicourt headframe was erected, hoists had been placed, and the old workings were pumped out down to 300 ft. (90 metres). The project has a detention pond for the water, and plans for a string of several to allow suspended solids to settle before discharging to the environment.

Northern Star had earlier planned on calculating a resource, but David says “we’ve bitten the bullet now,” on underground work, and so the project will go direct to a reserve calculation. David expects to have the mine dewatered and equipment ready to start drifting at the 425-ft. level (130 metres) in April, and to have reached the mineralized zone for bulk sampling in June. Metallurgical tests are planned, but the simple mineralization is already well known from previous mining.

With about $6 million spent, and another $5 million to go to bring the project essentially to a prefeasibility stage, Northern Star has $7 million in the bank.

While Northern Star’s model for Malartic Goldfields is not so much new and different as it is the old style of Malartic mineralization in a new and different place, Osisko Mining’s model for the Canadian Malartic property presents a new idea about Abitibi gold — a gold porphyry deposit, on the pattern of the Troilus deposit near Chibougamau, which Inmet Mining (IMN-T) has been mining since 1996.

Ore zones at the old Canadian Malartic — in its time, the only underground bulk-tonnage gold mine in eastern Canada, moving 2,000 tons per day — occupied silicified and pyritized zones in diorite porphyry and in the surrounding metamorphosed sedimentary rocks of the Pontiac Group. The mine, which produced just over 1 million oz. between 1935 and 1965, was well south of the Cadillac Break, and the mineralization may be older than the break.

In those days, geologists recognized features common to porphyry-type deposits. Contemporary descriptions note that “small intrusive pipes or dykes surrounded by schist may be entirely converted to ore. Shattering in the larger intrusio
ns and greywacke is more localized, but commonly occurs at the contacts.” The leap to recognizing a gold porphyry is not a long one.

Osisko’s president Robert Wares made the leap; Osisko’s drilling started in March 2005, building on work done by Lac Minerals in the 1980s. Lac, which operated the mill on the adjacent East Malartic property, was looking for relatively low-grade feed from surface pits, and put together five resources in the 1980s. The largest, the Wolfe zone — named after a Malartic street that sits atop it — is 3.9 million tonnes grading 2 grams gold per tonne; the F zone at the western end of the porphyry, contributes another 2 million tonnes grading 1.8 grams per tonne, and three other zones carry about 2.2 million tonnes together, at 2.1 grams per tonne. The Lac resources all stop at a vertical depth of 100 metres.

Osisko’s first phase of drilling, 30 holes for 8,000 metres, confirmed the earlier drilling and demonstrated long intersections — from 14.6 metres grading 1.6 grams gold per tonne up to 316 metres of 0.9 gram — in culvert-like structures at the tops of the porphyry intrusions. The porphyry body appears to be funnel-shaped, and the mineralized zones are deeper near the centre of the porphyry. It is just shy of 1,400 metres long, about 350 metres at its widest, and anywhere from 50 metres to 270 metres thick.

It was in hole 661, about 200 metres east of the near-surface F zone, says Wares, that “we realized the vertical extent of this system,” after intersecting 193 metres grading 1.2 grams gold per tonne, from a down-hole depth of 129 metres.

Porphyry system

Gold grades are low, and consistent, just as would be expected in a porphyry-type system, and so is rock density, which is in a narrow range around 2.7 tonnes per cubic metre. Drill holes have hit mineralization 52 times out of 56.

Like most porphyry-type deposits, there is a strong potassic alteration zone, stronger in the porphyry itself than in the sediments around it. Still, unaltered greywackes in the sequence carry 1% to 2% K2O, but in the mineralized zones that rises to 5%. (Not enough fresh porphyry has been sampled to give a good handle on the chemistry of potassic alteration in the intrusion.)

Grades are not spiky; 1 gram to 1.5 grams per tonne is typical, and with little pyrite in the mineralized rock, perhaps 1% to 5%, “anything that shows even the slightest alteration is being assayed,” says Wares. “The one thing we can say is that if we’ve got 1% to 2% pyrite we’ve got grade.”

Late-stage silicification — making the rock look like a chert — brings the grade down locally below 1 gram per tonne, simply as the result of siliceous fluids displacing both rock and gold. There are local quartz-feldspar veins with visible gold, probably remobilized, and three “late magmatic” minerals: muscovite, molybdenite and scheelite.

With the advantage of Lac’s old database, Osisko’s drill targets are mostly based on old drilling and “all preordained,” says project geologist Jean Berger. What is planned are three new phases of drilling, 37,000 metres altogether, to block out the deposit on a 60-metre grid pattern. That should allow outside consultants to put together an indicated resource by early 2007, with an inferred resource ready by mid-2006. What Osisko is looking for, assuming the porphyry is as big as indicated so far, is a resource of about 100 million tonnes grading just over 1 gram per tonne — a pure arm-wave at this stage, rather than a resource.

As a mining exercise, a large low-grade deposit at Canadian Malartic would be comparable to Troilus, where Inmet produced 159,500 oz. gold in 2005 at a cash cost of US$313 per oz., mining at 0.94 gram per tonne and stripping 1.6 tonnes of waste per tonne of ore. Another point of comparison in the Abitibi is the Placer Dome (PDG-T, PDG-N) super-pit at the Dome mine in Timmins, Ont., which mined at a grade of 1.3 grams with a stripping ratio over 6. Drill sections at this stage suggest a pit at Canadian Malartic could have a stripping ratio around 3.

Like Malartic Goldfields, the deposit’s metallurgy has already had large-scale testing — the Canadian Malartic mill obtained 88% recovery in the later years of the mine’s life. Gold exists as fine inclusions in pyrite, but the mineralization is not refractory. (In contrast, at Malartic Goldfields, the gold is free-milling as grains on pyrite.)

Both operations see the Malartic area as an easy economic environment for a mine, with Quebec power costs down around 4.2 per kilowatt-hour and readily available infrastructure.

The East Malartic mill is currently under care and maintenance, having been taken over by the Quebec government after the bankruptcy of McWatters Mining. East Malartic was last operated by Barrick Gold, processing ore from the Bousquet mine, and can handle up to 3,000 tonnes per day.

Relocation

An open pit at Canadian Malartic faces one other hurdle, in that a pit outline takes in 183 houses at the south end of the town, where around 400 to 600 people live. The municipality is supportive, having an old infrastructure in the area that is difficult to maintain; there are plans for new residential areas north of the main highway. Some of the area sits over old underground workings, and one street is already shut down because it runs above an old stope.

Community concerns, so far, have been limited to requests for information, and after the suspension of operations at a local pulp mill, a new employer may be welcome enough that residents won’t mind moving. The houses represent about $9 million in assessed value.

Osisko’s plans — assuming all goes quickly — include a prefeasibility study for the middle of 2007, and a production decision by the end of that year. Construction through 2008 could mean a gold pour by early 2009.

The most recent drill results from the project are consistent with previous ones. The first phase of the 37,000-metre program is a 14,000-metre campaign to drill out the western part of the porphyry.

Nine infill holes returned several long intersections, including 304.5 metres grading 1 gram per tonne, 253.5 metres grading 1.1 grams, and 56.5 metres grading 1.9 grams.

Osisko also recently optioned two properties in the area from Golden Valley Mines (GZZ-V). Osisko committed to spending $2 million and paying Golden Valley $150,000 over a 4-year option period to earn a 70% interest to take over the Malartic CHL property, north of Osisko’s land package. Osisko will also earn a 100% interest in a claim block on the southeast boundary of the property, with Golden Valley retaining a 2% net smelter return.

NioGold Mining (NOX-V) has moved to expand its holding in the area. It optioned the Gold Hawk, First Canadian, Norlartic, and Marban properties immediately east of the Camflo mill and about 4 km north of the Malartic Goldfields property.

For Gold Hawk, NioGold is committing to $250,000 in exploration work over three years and issuing Thundermin Resources (THR-T) 400,000 shares over two years. Thundermin also gets $50,000 cash and keeps a 2% net smelter return. For the other three properties, Aur Resources gets 500,000 shares.

Richmont Mines (RIC-T, RIC-X) started production from its East Amphi gold mine in January, and expects to be in full commercial production by the end of March.