Pamour still a survivor after 52 years of gold mining

Pamour is a fun place to work because ideas aren’t squelched.– Robert McBean, superintendent of technical services.

Pamour Inc. has always been something of an oddball on the Canadian gold mining scene. Mining an average grade that is well below cutoff in most Canadian gold operations, it has somehow managed to outlive most of the super- orebodies in the Timmins-Val d’Or gold corridor. Never a huge money- maker, Pamour nevertheless published its 52nd annual report this year. And unless gold were to take a really serious tumble, it looks as though mining operations will be continuing for many years to come.

Pamour has long been regarded by the rest of the gold mining fraternity as the poor cousin, little more than a salvage operation. It was ignored by mining analysts and avoided by investors. The kinder people called it “highly leveraged.’ Yet the company continues to produce from six separate mines in the Timmins area, making a profit on each one where many other operators would have closed up shop a long time ago.

And now that Dennis MacLeod and Australian-based Jimberlana Minerals have taken control, capital spending is increasing and new ideas are being taken a lot more seriously. While former parent Noranda can be credited with fostering the tight ship attitude, Jimberlana is looking at it as much more than just a salvage operation.

Next year Pamour plans to mine and mill 1.9 million tons averaging 0.076 oz gold per ton (not including heap leach material), most of it from underground operations. Total production should be about 110,000 oz. This will be accomplished with only 760 employees, compared to the 1,350 in 1981 when it mined 1.75 million tons to produce 103,232 oz. The ore will be coming from the following sites:

*The No. 1 (underground), the original Pamour mine, will produce a bout 720,000 tons grading 0.074 oz.

*The No. 3 pit, really the surface extension of the Pamour No. l, will produce 430,000 tons grading 0.056 oz next year as well as about 200,000 tons of lower grade material for the company’s first commercial heap leach operation.

*The Timmins Surface (formerly the Hollinger) and Delnite pits are expected to yield 188,000 tons grading 0.075 oz.

*Mining at the Schumacher underground operation (formerly the McIn tyre) will produce 314,000 tons grading 0.073.

*At the Ross mine, another underground producer, Pamour expects to mine 249,000 tons grading 0.119 oz. This is Pamour’s “high grade’ producer, but the benefits are offset somewhat by hauling distance, nearly an hour’s drive to the east of town. Lower costs

Despite these impoverished grades, the company can produce an ounce of gold for about $321 (US), including all site and head office expenses. Why is Pamour so different? Why can it process a ton of ore for $27 while across the street Dome Mines, itself a reasonably low cost producer, spends nearly double that?

“We’ve been mining low grade material for longer than anyone else,” explains Mines Manager Peter Rowlandson. “The whole cost-conscious thing is built right into everyone who works here. Everyone is in tune with the economic situation.”

There is more to it than that, however. While outside observers have long regarded Pamour as a staid, conservative operation, it is in fact in a constant state of flux. Note Robert McBean’s statement at the beginning of this article.

“Certainly the central milling concept is critical to keeping our overheads low,” says Mr. Rowlandson. In the mid-1970s Pamour had five mills going in the Timmins area. It closed three of them and increased capacity at the Pamour No. 1 mill.

Pamour was also one of the first companies in Canada to follow Inco Limited’s lead in switching to bulk mining methods, going to vertical crater retreat beginning in 1981. Second time around

Pamour’s operation at Schumacher has to be one of the more bizarre recovery operations in the history of mining. The old McIntyre produced about 40 million tons of ore, most of it from a cut- and-fill mining method. It is the fill part that Pamour is taking advantage of. A good percentage of the fill was supplied by “waste’, which often contained some gold because of McIntyre’s cutoff grade of about 0.15 oz. Now, Pamour is taking out that waste, re-mining more than 200,000 tons per year from stopes that McIntyre cleaned out in the first half of this century. The rest of the production will come from pillars and other low grade reserves.

All the years that Pamour mined at its No. 1 operation, a key plot of land known as the Drew claim sat right next to the shaft but out of reach of mining.

Its owners and Pamour could never reach an agreement, something which was accomplished early this year. From that one claim Pamour plans to extract 52,000 tons grading 0.163 oz, helping considerably with the average grade of Pamour No. 1. Upping production

While the Delnite and Timmins Surface pits could well be running out of ore next year, the company is hoping to begin upping production from its Ross mine. The ore zone there consists of four pipe- like structures which have been outlined to a depth of 3,150 ft, although there have been drill intersections as deep as 3,750 ft. The company has received the go-ahead to put a ramp down below the deepest level (3,l50 ft to 3,375 ft) and from that point exploration would then go as deep as 5,000 ft. If things pan out the company could increase production, although current skipping capacity is a maximum 288,000 tons per year. This could be increased by extending an existing winze to surface and using it as a service shaft.

Pamour has studied the option of building a mill in the Matheson area for the Ross mine, but has come to the conclusion that it would need one or more other ore sources to make it pay. It is currently hoping to team up with one of the other companies with a deposit in the area (these include Canamax in the Harker Holloway, which is already an indirect partner with Pamour on the Bell Creek Mine in Timmins, and possibly the nearby New Kelore). Pamour would either build a custom mill or put together a joint facility. Timmins Surface

Mining from the Timmins Surface pit has been a big help to Pamour. Originally planning to remove 50,000 tons from the surface around the old Hollinger mine, the company has mined 2 million tons since the mid-1970s. Although current reserves are only sufficient for a few more months, the company is optimistic it will be able to mine there for some time to come, especially with the new heap leach option. Pamour is currently computerizing all Hollinger data down to the 200-ft level in hopes of generating new drill targets.

Not all of the company’s activities at the Hollinger turned out as well. In 1980 Pamour rehabilitated the underground workings at a cost of $15 million when the price of gold was above $500(US). But markets plummeted and the company was forced to abandon the project in 1984, after suffering continuous losses.

Pamour is hoping that heap leaching will become another important source of revenue beginning next year. As reported a couple of weeks ago, the company completed a successful 10,000-ton heap leach test this past fall and is going into commercial production with at least 200,000 tons next year, from which it hopes to recover 5,000 oz gold. The test was done on low grade waste from the No. 3 pit, and a second 10,000-ton test is ready to go on Timmins Surface ore next spring. Lab testing has indicated a quicker recovery from the Timmins Surface ore (volcanics) than from the No. 3 pit (greywacke), and a successful test from that property could turn a lot of rock into ore. NorDev grant

The total costs of the test are expected to come in at $230,000, of which up to $75,000 will be coming from the provincial government under a NorDev grant. Manager of Pamour’s business development group, Roy Lindsay, who initiated the original idea, says that if the high recovery continues in the second test, the company could break even on the test project, and is poised to make a substantial profit from the commercial run next year.

Pamour will be building a 500,000 ton leach pad with the final pile expected to be 600 by 425 ft at the base and 50 ft high. It will be laid down in a single lift with conveyors and mobile equipment. A site has yet to be chosen. (As previously reported, the company obtained a 68.4% recovery over about three months by crushing the ore to minus 3/8 in.)

Total costs are expected to be $7.60 per ton, including $1.69 for handling. Total capital costs for the heap leach project over four years (for a total of two million tons) are expected to be $4.4 million.

As soon as reasonable recoveries were obtained from the test heap, Area Exploration Geologist Jacques Houle was instructed to begin looking for lower grade deposits. “We started looking for deposits lower than 0.1 oz,” he explains. He says that Pamour is spending $2.7 million in the area on exploration before the February cutoff, substantially higher than in recent years. One of the main targets will be the old Porcupine Peninsular property on Nighthawk Lake. Huge tailings project

Then there is the huge tailings project, which attracted Dennis MacLeod to Pamour in the first place. Subsidiary ERG Resources Inc. (65% owned) has just received a final feasibility study from Kilborn Ltd. and the company will be deciding next week whether to go ahead and try and remove gold from the 57 million tons of tailings it has tied up in the Timmins area, grading about 0.01 oz gold per ton. Plans would be to mine one million tons per month for eight months of the year, and capital costs are estimated to be about $65 million. Production would begin in the second half of 1988.

Pamour has not been able to cash in as much as most other companies on the rise in gold prices the last half of this year. Maintaining a policy of selling 75% of its gold forward, it will realize an average price of only $485(C) this year. However, as Mr. Rowlandson says, selling forward gives the company peace of mind, letting it plan its capital spending for the next 12 months confident the money will be coming in. It expects an average price for 1987 of $535.

Although Pamour has always been a survivor, those interviewed on site feel the company has a better chance to expand now that Jimberlana has control. Not that there was a problem under Noranda. But when cash was tight at the parent, as it has been for most of this decade, it was hard to put ideas to work at Pamour. (When everybody was making money hand over fist in 1980, it was easier for Pamour to finance its ideas. Note the Hollinger underground.)

As Mr. Rowlandson explains, “in the past we were very tight for capital. It is now showing up in ore reserves and ounces of gold production, which have been going up every quarter.”

Or as Nick Resetar, manager of services, puts it, “The new owners are looking at us from a different perspective than Noranda. We are no longer a salvage operation. The new management has a long term view. They are developing things. It is very exciting at this point in time. We are doing more in 1986 than has been done in the past three years together. We are finally looking outside the boundaries of our present day orebody.”