Once turned down by majors, Echo Bay’s Lupin turns ten

Despite a preliminary estimate of more than one million tons of ore grading half an ounce of gold per ton, there were no takers.

Even when gold started its upward climb from US$40 per oz. in 1970 to an average annual all-time high of US$600 in 1980, neither of the owners of what is now the Lupin mine were prepared to develop this prime, high-grade orebody in the Northwest Territories, 56 miles south of the Arctic Circle. Those owners were Inco (TSE), with a 95% interest, and Dome Mines (now TSE-listed Placer Dome), with the remaining 5%. There was no way these two well-heeled companies would be enticed into investing in such a frigid, remote land.

Then in late 1980, a small private organization, the mining subsidiary of a Delaware-based holding and management company, picked up the gauntlet. The orebody discovered in 1960 by Inco (or more accurately, by its exploration arm, the Canadian Nickel company) was developed and placed into production by Echo Bay Mines (TSE).

It is 10 years to the month that Lupin went into commercial production. In that time 5.7 million tons of ore have been milled and 1.72 million oz. gold produced.

Proven and probable ore reserves started off in 1980 at 3.45 million tons containing 1.37 million oz. gold (0.396 oz. gold per ton). Today, they are 4.24 million tons containing 1.26 million oz. (0.296 oz.). And if reserves in the “possible” category are included, the December, 1991, figures increase to 6.8 million tons containing 1.9 million oz. (0.283 oz.).

The numbers testify to the strength and continuity of an uncommon orebody. Yet, for 15 years it was no more than a modern-day Cinderella. How many more years does Lupin have left?

An outsider, not familiar with the property, might speculate that the proven, probable and possible reserves are equivalent to another 10 years’ life at present production rates. But those reserves are only calculated to a depth of 3,900 ft. and diamond drill holes show the structure makes ore deeper than that.

Of greater importance, Lupin has appointed an expansion project manager: Bill Burton. “Milling capacity is to increase from the present nominal 1,900 tons per day to 2,300 tons effective mid-1993,” Burton says.

In addition, plans are afoot to deepen the shaft to an ultimate 6,000 ft. Currently, the shaft bottoms at 3,970 ft. and deepening will entail re-design and strengthening of the present headframe to accommodate 13.5-ton skips. Also, a new, 15-ft.-diametre, 3,800-horsepower hoist is a probability for hoisting from the new tier of deeper levels.

Burton emphasizes that reserves have not been delineated below 3,970 ft. The fact that detailed planning is under way exemplifies the confidence Echo Bay has in the continuity of the Lupin orebody and in the workforce whose task it is to extract it.