Perron gears Sleeping Giant for early ’88 production

Output of 50,000 oz gold is expected during each of the first two years of operation of Perron Gold Mines’ Sleeping Giant mine in northwestern Quebec which is expected to go into production early in 1988, Fenton Scott, a director and consulting geologist for the company, recently told a group of analysts. Third- and fourth-year production levels are expected to reach 80,000-90,000 oz.

The gold-silver mine, located about 40 miles north of Amos, has developed reserves of 1.5 million tons grading 0.3 oz gold per ton. Those reserves have been calculated from exploration down to about 800 ft (vertical); Scott said veins on the property have been followed down to 1,750 ft.

Vein structures numbering 35- to-40 have been identified ranging in width from six inches to 40 ft and with an average mining width of about six feet, Scott said. The veins travel in two or three directions, he said. Strike length is about 11 miles.

Overburden on the property varies in depth between 35 ft and 300 ft, and averages about 100 ft. Area terrain is fairly flat.

Two shafts have been sunk, one in 1984 which reaches 750 ft and hosts four levels and which will serve as the ventilation shaft for the new mine, and the other which was completed in June of this year to a depth of 1,600 ft and has eight levels.

A mill at the site is 80% complete, President Richard Hughes said. The mill, purchased from a company in the eastern United States, is eight years old and cost Perron less than $1 million, he said. The mill will have a capacity of 1,000 tons ore per day. $55-million mine

Total cost of putting the mine into production is estimated to be $55 million; Hughes said about $40 million has been spent to date. A final feasibility study is expected to be completed during the latter part of this month.

Projected production costs are between $225(C) and $275 per oz, Scott said. “It’s a real example of the use of flow-through money,” Scott said of the Sleeping Giant property, adding that when production begins, a lot of the underground mining development will be complete.

Perron, a member of the Vancouver-based Hughes-Lang group, has sent a 35,000-ton bulk sample to the D’Or Val Mines’ mill, near Val d’Or, Que., for testing. (D’Or Val is another Hughes-Lang company.)

The Sleeping Giant property was earlier explored by a Noranda Inc. affiliate, Mattagami Lake Exploration; Hughes-Lang has acquired all of Noranda’s interest in the property. Quebec-based Nova-Cogesco has a 2% net profits interest in the mine. Beaufor joint venture

Meanwhile, Perron is earning a 50% interest in the Beaufor gold property near Val d’or from Louvem Inc.; Perron will earn its interest by spending $7 million on exploration work. Joining Perron in exploring the property and funding the work is D’Or Val Mines.

Drilling to date from the property has returned encouraging values, including, from hole No B87-8, 0.59 oz across 10.9 ft at the 1,082-ft level, 1.36 oz across 0.5 ft at the 1,213-ft level and 4.9 oz across 5.3 ft at the 1,542-ft level.

Another Hughes-Lang company, Arbor Resources, is earning a 50% interest in 96 claims on the eastern section (about six miles from the main shaft) of Perron’s Sleeping Giant 47-sq-mile property; to earn its interest, Arbor must spend $2 million on exploration work.