Saskatchewan gold mine in production — Contact Lake

Saskatchewan’s newest and largest gold mine — and one of only two in the country to operate within a provincial park — entered commercial production last month.

The Contact Lake mine, situated 63 km northeast of La Ronge, is part of the 9,600-hectare Preview Lake joint venture, two-thirds of which is owned by project operator Cameco (TSE). The remainder is held by Uranerz Exploration and Mining.

To mark the grand opening, The Northern Miner, along with representatives of the Saskatchewan government and local dignitaries, toured the underground operations and milling facilities. The highlight of the day’s events was a gold-pouring ceremony which resulted in a dore bar containing 580 oz. gold and 280 oz. silver.

Minable reserves are 1.3 million tonnes averaging 8 grams gold per tonne, which is equivalent to 337,000 oz. (10.5 million grams). These are contained within a 600-metre-long zone extending to vertical depths ranging from 180 to 280 metres. In addition, the property hosts geological reserves estimated at 194,000 oz. (6.03 million grams).

Gold production is expected to average 60,000 oz. (1.87 million grams) per year over a mine life of six years. The operating cash cost is expected to be about US$210 per oz., and the capital cost of developing the project is projected at $36 million.

Although small by world standards, Contact Lake is the largest gold mine ever to operate in the prairie province; the previous record-holder, Jolu, produced almost 204,000 oz. before closing.

The unusual location within the Lac La Ronge provincial park meant that Cameco had to ensure the project would have a minimal impact on the local environment. Indeed, the mine is virtually indiscernible from its surroundings. Surrounded by trees, it is visible neither from the lake shore (200 metres away) nor from the access road.

Contributing to the unobtrusiveness is the fact that the floor of the 700-tonne-per-day mill was constructed 5 metres below surface, thereby ensuring, that noise is kept to a minimum.

(The only other Canadian mine situated within a provincial park is the H-W, part of Westmin Resources’ Myra Falls operation, which occupies a portion of British Columbia’s Strathcona park.)

Although gold had been discovered near La Ronge as early as the 1930s, the district underwent little exploration until the 1980s.

The original property was staked by local prospector Ronald Anderson in 1979, for Cameco’s predecessor company, Saskatchewan Mining & Development. In 1984, Cameco completed a lake sediment survey which outlined numerous anomalies, including a gold anomaly southwest of the deposit in Turtle Lake. According to Cameco exploration geologist Robert Chapman, this survey was then followed up with five bulk till samples taken around the lake shore. Two of the five samples on the eastern side of the lake were anomalous, and additional bulk till samples were collected in 1985 and 1986. Chapman told The Northern Miner that the Bakos target, which later became the Contact Lake mine, was not the primary target on the joint venture. “We were looking at several zones, including areas where we had defined resources,” he said. “At the end of each field season we kept going back there to see where this new (till-sampling) technique would take us. Contact Lake is a good example of a successful till-sampling program.”

The sampling traced the anomaly up-ice to its source, near a prominent ridge 2 km northeast of Turtle Lake.

The regional shear zone was discovered in 1987 and a 400-metre, lake-covered section of the deposit was drilled in an 11-hole program. Cameco then drilled an additional 102 holes totalling more than 18,000 metres. By March, 1989, Cameco’s efforts had led to the discovery of the Contact Lake mine. The deposit is hosted within a poorly exposed, northeast-trending regional shear which separates granite and granodiorite phases of the Little Deer Lake pluton. Sections of the deposit are locally pyritized, sericitized and hematized. Gold is typically associated with alteration in the hangingwall of the shear zone. The mineralized interval ranges between 1.5 and 15 metres and contains 5% quartz plus pyrite, chalcopyrite and minor amounts of other sulphide minerals.

Once Cameco had proved up the deposit, it held public meetings and began the permitting process — which, owing to the parkland location, proved somewhat arduous.

“Many of you can appreciate that the construction of a mine in a provincial park . . . isn’t easy,” Cameco President Bernard Michel told those in attendance at the gold pour. He acknowledged the collaboration between Cameco and the parks branch of Saskatchewan Environment & Resource Management, and stressed that the commissioning of Contact Lake “bodes well for future resource development in the province.”

Ore is mined at a daily rate of 800 tonnes using conventional underground methods. The rock is drilled, blasted, loaded on to trucks and hauled to surface. After crushing, the ore is dissolved in cyanide and passed through a carbon-in-pulp circuit. The gold is then stripped from the carbon, recovered by means of electrowinning and, finally, refined in a furnace. About half the tailings produced are used as backfill. The remaining tailings are sent by pipeline to a tailings pond at Turtle Lake.

By bringing Contact Lake to production, Cameco has taken the first step towards hitting its annual corporate target of 250,000 oz. (7.8 million grams), which it hopes to achieve by the year 2000.

To increase gold production, Cameco has gone abroad to explore for larger deposits. It is earning a one-third equity interest in the Kumtor gold deposit in Kyrgyzstan, where reserves are estimated at 80 million tons containing about 9.2 million oz,. plus additional resources. A feasibility study suggests the deposit could be developed as an open-pit mine at a cost of US$300-330 million; it would yield 500,000 oz. annually for 11 years. Financing is expected to be approved shortly.

The company also operates the Key Lake and Rabbit Lake uranium mines in Saskatchewan and is developing the Cigar Lake and McArthur River uranium projects, in the province.