Soquem emphasis on Chibougamau area

A slowdown in mining exploration coupled with recent mine closures in the Chapais-Chibougamau region has forced the Quebec government’s mining exploration company Soquem to revise its exploration strategy in that region.

To avoid witnessing a medium-term and long-term reduction in mineral production, the provincial Crown corporation plans to spend $15.7 million in exploration in the region during the next 3-5 years. That’s almost half of its annual exploration budget, says Jacques Bonneau, Soquem’s vice-president of exploration.

Bonneau says Soquem did a study that found that mills in the region are being used at only 38-50% capacity. Soquem has concluded that unless exploration begins anew, treatment facilities that are only being used at a fraction of capacity risk being moved or dismantled.

Dismantling mills will further reduce the attraction for an area whose high mining potential could end up being ignored, Soquem says.

“The region is suffering more (than others in Quebec),” Bonneau says. Where there used to be seven or eight mines in operation in the region, now there are only three or four.

But, “in terms of exploration, the potential for Chapais-Chibougamau is as good as or better than anywhere in the Abitibi,” he says.

Soquem plans to cooperate with companies interested in the region to speed up exploration work on the most promising sites for base and precious metals, to ensure discoveries are made as quickly as possible and that jobs are protected. Soquem is actively pursuing investment deals with major companies in return for obtaining stakes in ownership.

For the year ended March 31, 42% of Soquem’s $6.9 million exploration budget was spent in the Chibougamau-Chapais region, far more than any other region. Among the deals Soquem has made in the region:

— In June, Soquem acquired a 50% interest in the land surfaces covered by the Chibougamau and Joe Mann properties of Meston Lake Resources. Soquem has agreed to invest $4 million over five years at the Joe Mann mine to obtain a 50% share. The 60-sq.-km Chibougamau property, five kilometres south of the town of Chibougamau, has several good base metal showings and a good potential for new discoveries. Soquem must spend $3 million during the next five years to obtain 50% rights.

“That gives us access to two very well-placed properties,” Bonneau says. Infrastructure, such as electricity, roads and mills, is already in place. — In August, Soquem reached an agreement with Minnova (TSE) to obtain a 50% interest in six mining properties covering a 66-sq.-km area between the Lac Shortt and Bachelor gold mines, 80 km west of Chapais. Soquem will spend $1.8 million in exploration during the next four years.

Soquem is hoping to find a tangible discovery on the property as quickly as possible, to ensure the mill on the site is not dismantled.

— In April, Soquem reached a deal with Corner Bay Minerals (TSE) in which it will fund $1.2 million of exploration during the next 18 months to earn a 30% interest in the company’s gold and copper properties.

Elsewhere, under the provincial government’s Mining Exploration Incentive Program, which provides financing to juniors, Soquem was granted a total of $4.4 million for 29 projects by March 31, 1992. The program continues, with $5 million available for 1992-93.

Among other recent moves made by Soquem elsewhere in the province: — In April, KWG Resources (ME) signed an agreement giving Soquem 50% of the Louvax gold property in exchange for guarantee of $350,000 in exploration work before March 28, 1994. The site is five kilometres from the Louvicourt property owned by Aur Resources and Societe Miniere Louvem.

— In September, Soquem and Noranda Exploration negotiated a deal giving Noranda the option to earn a 50% interest in the Dussault and Lescarbot properties, 100 km northwest of Quebec City, by funding $1.2 million in exploration work during the next four years. Soquem will obtain 50% of the St. Sylvestre and Sutton properties and 50% of Noranda’s rights in the Coleraine property by funding $900,000 in exploration work during the next three years.