South-Malartic finds flat gold veins at Croinor property

In an ongoing drilling campaign, junior South-Malartic Exploration (MSU-M) has discovered a set of gold-bearing veins that are perpendicular to the main ore zone at the Croinor gold property, 55 km east of Val d’Or, Que.

From 1996-97, Croinor was the site of a small open-pit gold mine operated by Calgary-based Goldust Mines, which changed its name to Huntington Exploration (HEI-V) in 1997. While Huntington remains the property owner, South-Malartic can acquire a 70% interest by spending $1.5 million on exploration by mid-2002.

In its current 2,000-metre drilling program, Malartic has so far completed 10 holes totalling 790 metres and received results from the first two holes. Hole 1 was drilled in a south-dipping direction into the main ore zone at Croinor, where gold mineralization is hosted in narrow, subvertical shear veins typical of the Abitibi region. The hole, drilled 100 metres from the Goldust pit, cut 6.9 metres (from 70 metres) of 2.25 grams gold.

In contrast, hole 9 was drilled in a north-dipping direction perpendicular to the main ore zone. Collared 385 metres from the pit, this hole intersected 27.3 metres (true-width, from 33 metres) of 6.42 grams gold within a series of 11 quartz-tourmaline-carbonate veins, which includes a hydraulic breccia.

Martin Bourgoin, Malartic’s exploration manager, says the results from hole 9 show the existence of flat-lying, gold-bearing tension veins perpendicular to the main shear zone.

He says the structure and mineralogy of these tension veins are similar to those at McWatters Mining‘s (mcw-t) Sigma-Lamaque mine in Val d’Or, where Bourgoin served as chief geologist from 1997 to 1999.

Near-surface gold reserves at Sigma-Lamaque soared to 16.3 million tonnes grading 3.02 grams gold from 350,000 tonnes of 3.5 grams in less than a year, once geologists there recognized the existence of sub-horizontal gold-bearing tension veins (T.N.M., March 6/00).

Bourgoin says the first indication that Croinor had at least two distinct sets of veins resulted from mapping carried out by Cambior (CBJ-T) in 1988. Cambior stripped the whole area and collared 142 holes, but all were drilled dipping toward the south. Still, he says, Cambior did identify some flat-lying tension veins that displayed much higher grades than the vertical shear veins.

Results for Malartic’s remaining eight holes, only one of which tested for tension veins, will be released soon, and drilling is set to resume in early June. This time, 10 holes will test for the presence of the flat veins while only about three holes will test for an extension of the vertical shear zone to the west.

In a prefeasibility study completed earlier in May, Croinor’s resources were pegged at 1.1 million tonnes grading 2.44 grams gold, equivalent to 89,543 contained ounces. These figures were arrived at by using at a cutoff grade of 1 gram gold.

In another development, Malartic has acquired Cambior’s 2,000-tonne-per-day Chimo mill, 20 km southwest of Croinor, for just $375,000 and the assumption of any environmental liabilities. Earlier, Malartic had bought the Chimo property and the adjacent Nova property from Cambior for $1 and a 1% net smelter return royalty.

Malartic has hired an engineering firm to evaluate the refurbishing of the mill at a cost of roughly $3 million. The mill, insured by Cambior for $15 million, has been dormant for two years, since the closing of the Chimo underground mine.

As well, Malartic will examine the near-surface potential of several of Chimo’s ore zones, which were exploited extensively at depth.

Bourgoin says the company is also looking at several small gold deposits near Chimo and Croinor. “There’s not much you can do with them without a mill — the key is to have volume,” he says. “We may want to make a deal with the property owners that will allow us to mine these things.”

At the boardroom level, Malartic has just completed a $2.2-million financing by issuing shares priced at 48 each, accompanied by warrants exercisable at 63. Earlier in the year, the company raised $500,000 by issuing flow-through shares priced at 25 each.

About $1.2 million has been budgetted for exploration work at Malartic’s Montauban gold-silver project, 80 km northwest of Quebec City, where stripping is ongoing and chip sampling has yielded results such as 11 metres of 5.3 grams gold and 2.90 grams silver, and 6 metres of 5 grams gold and 27.7 grams silver.