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Coast to coast, a golden land (June 09, 2010)

The Fraser River and Cariboo gold rushes opened and shaped the interior of British Columbia in the 1850s and &...


The Fraser River and Cariboo gold rushes opened and shaped the interior of British Columbia in the 1850s and ‘60s. In the 1890s, the Klondike rush carved the Yukon out of the vast expanse of the Northwest Territories. These short-lived western booms created a sustained western gold output, and as importantly, a mining fraternity. Discoveries of the 1900s and 1920s in Timmins, Ont., and Val d’Or, Que., hastened northern development in these provinces, and would turn the Canadian Shield into a major source of the yellow metal. Over the subsequent decades, gold camps sprung up across northern Ontario and in similar Shield geology of adjacent provinces and the Yellowknife belt. The main focus has been underground vein mining, with the strongest camps being those in which ore shoots could be chased to depths up to several kilometres.

These camps moved Canada to a number three ranking amongst producers with over 5% of global mine output by 1970, when gold’s price was decoupled from paper currency. Though Canada’s gold output doubled to over 5 million oz. by 1991, it has been slowly slipping since then. The country now ranks about eighth in terms of domestic gold production, but the trend may be getting ready to reverse again.

Major gains for gold’s price once it was no longer fixed by government fiat generated an exploration boom that outlined the rich deposits of Nevada. An era of winning the yellow metal from low-grade deposits mined by open pit, including at low costs from the skim of oxide material covering sub-polar deposits, opened Australia’s gold fields while the high inflation of the 1970s weighed on Canada’s remote underground mines. A freer investment climate in a number of prospective regions has prompted the development of gold mines in various districts around the globe. New deposits continue to be found and developed in these recently opened districts, but not with the frequency of a decade ago.

Canadian investors and speculators expanded into and have become a major element in the global gold boom, but their domestic plays weren’t abandoned. In the 1980s, the Lupin mine in the Northwest Territories demonstrated new potential still exists in remote locales, and the Hemlo camp in northwestern Ontario proved that large-scale discoveries are still possible. In the ‘90s, the very rich Eskay Creek mine opened in the rugged terrain of British Columbia’s northern coast range. However, the steady stream of new finds in earlier decades had seemed to slow, until recently. In the past few years, Canada’s domestic gold fields are again gaining global prominence, including two new finds in the Yukon.

Yukon gold

Kinross Gold‘s (K-T, KGC-N) takeover of Underworld Resources for the junior’s White Gold project (which we had somewhat cheekily called a possible new Klondike) is exciting interest in the Tintina gold belt that arcs though the centre of the Yukon. Underworld’s Golden Saddle discovery distinguishes itself as a candidate for bulk underground mining. Several nearby explorers, including Kaminak Gold (KAM-V), Northern Tiger Resources (NTR-V) and Silver Quest Resources (SQI-V) are attempting to emulate that success this summer. At the same time, Atac Resources (ATC-V) will be expanding its own discovery of last summer at the Rau project in a different area of this same broad belt. Rau may encompass a new district akin those that pushed Nevada to the forefront of gold production in the 1970s.

Both the Underworld and the Atac discoveries formed in older host rocks away from the intrusive “heat engines” that generated the deposit-forming fluids. These finds have renewed a focus on intrusion-related, rather than specifically intrusion-hosted, targets in the Tintina belt. Both discoveries could also be important in opening new districts to infrastructure, while companies such as Aldrin Resource (ALN-V) use the expanded tool kit in areas near historic successes. Alexco Resource (AXR-T) is in the midst of redeveloping the Keno Hill silver camp, reassessments of other earlier finds are ongoing by various companies, and improvements to the Territorial power grid are under way. The Yukon may be shifting into a gold boom not seen since the Trail of ’98.

Bountiful B.C.

In coastal British Columbia, Bravo Venture Group (BVG-V) is working on expansion and definition of high-grade resources at its Homestake Ridge project after several seasons sorting out how its details fit together. Homestake’s detail is different than the Eskay deposit 100 km north, but they are both part of the same deposit-forming episode. A number of juniors are also working on bulk-tonnage targets in the area between Eskay and Homestake Ridge that appear to be part of the same episode, but it is work along similar lines some distance to the south and inland that has been a causing a stir lately. The Blackwater project of Richfield Ventures (RVC-V) has been returning long drill intersections of bulk-tonnage gold-silver-base metals mineralization that appears to have vented into the sub-sea floor as per the high-grade systems on the north coast. Partner Silver Quest Resources is working on other targets of its own in this region, and Amarc Resources (AHR-V) amongst others is keying in on the same model in holdings farther south.

Large low-grade deposits of this sort are a new focus in Pacific Canada. They are being brought to prominence by Goldcorp‘s (G-T, GG-N) Peñasquito mine development in central Mexico and Bear Creek Mining‘s (BCM-V) pre-development Corani deposit in southern Peru. This class of deposit is benefiting from the high, long-term price projections for metals supported by the secular bull market. This may be the next iteration of the shift to bulk mining that began with copper in the 1880s and moved to gold-copper in the 1970s. For these more complex polymetallic deposits, the metallurgical details outlining the payable metals grade are more crucial to evaluation, but they are finding a place in the palette of large output precious metal deposits. At the same time, a more basic form of open-pit minable gold deposit is rapidly coming to prominence in the Canadian Shield.

The Shield

In the Shield rocks of central Canada there is a marked shift towards gold-focused bulk-tonnage deposits. Kinross Gold has been bulk mining in Timmins for years, but the new focus has been spearheaded by the hugely successful work of Osisko Mining (OSK-T) at the Malartic camp between Val d’Or and Rouyn in Quebec. Osisko has moved from concept to developing a half-million-oz.-per-year open-pit operation here in just six years. The 11 million oz. gold outlined at Malartic is obviously important to the success, but so too are significant areas of higher-grade material along the structural trends that were the focus of past underground mining. Osisko has continued bulk-tonnage evaluation by farming in projects from more junior companies in this region (not that $3-billion Osisko is all that junior anymore), including Midland Exploration (MD-V), Golden Valley Mines (GZZ-V) and Clifton Star Resources (CFO-V). Similar work is being supported by Agnico-Eagle Mines (AEM-T, AEM-N) through a placement in Alexandria Minerals (AZX-V) to further its project in Val d’Or, and a number of other juniors are testing this concept elsewhere in the district.

Osisko also recently took over Brett Resources for its bulk-tonnage Hammond Reef project, west of Thunder Bay, Ont. Elsewhere in Ontario, Premier Gold Mines (PG-T) is testing its Hardrock project in Geraldton to the east of Thunder Bay for both open-pi
t and underground bulk-tonnage material, and at Detour Lake, northeast of Timmins, Detour Gold (DGC-T) is readying its open-pit deposit for production. At its Cote Lake project located between Timmins and Sudbury, early phase testing by Trelawney Mining and Exploration (TRR-V) of a bulk zone is showing promise. These are all past-producing underground camps shifting to bulk-scale potential, across a broad sweep of the province. Aiding all of this work is the infrastructure developed over the past century, and workforces idled from lumber operations that are willing and able to shift to this new gold boom.

The high-grade model hasn’t been abandoned in the Shield. In Manitoba, San Gold (SGR-V) is revitalizing the Rice Lake camp by testing a new high-grade trend. Across the boundary in northwestern Ontario, PC Gold (PKL-T) is similarly attempting to upgrade the resource left in historic workings at Pickle Crow. In Red Lake’s famed high-grade camp, Premier, Rubicon Minerals (RMX-V) and of course Goldcorp, amongst others, continue to outline new ore. Near the Minnesota border, Rainy River Resources (RR-V) is testing a discovery of high-grade gold within massive sulphides that is atypical of the region. Near the Quebec border, Queenston Mining (QMI-T) and Kirkland Lake Gold (KGI-T) are focused on revitalizing one of the Shield’s deepest camps. And Lake Shore Gold (LSG-T) is working on a western extension of the high-grade system that put Timmins on the map as the first Shield gold camp. Success in these programs comes from reworking exploration data to locate material which could be mined using well-understood mining parameters.

From the ground up

Grassroots discovery is still very much a part the work in Canada’s Shield rocks. In Quebec’s Baie James region, Virginia Mines (VGQ-T) pushed the province’s gold mining potential north with its Éléonore discovery, which buyer Goldcorp recently announced has grown to more than 9 million oz. Exploration for new gold districts is ongoing in a number of similar greenstone belts ringing the Arctic coast. AngloGold Ashanti (AU-N) has signed a farm-in agreement with Commander Resources (CMD-V) to test a 140-km-long greenstone belt on Baffin Island. On the Nunavut mainland, recently reorganized North Country Gold, a spinoff of CBR Gold (now Niblack Mineral Development) is exploring the Committee Bay greenstone belt in a similar attempt to outline a high-grade resource, and Sabina Gold & Silver (SBB-T) is working on advanced studies of both vein-hosted gold and gold-silver enriched massive sulphide deposits. Newmont Mining (NMC-T, NEM-N) continues development planning at its Hope Bay project, east of Bathurst Inlet. It acquired the project through a takeover of Miramar Mining, one of the early developers at Yellowknife. These northern projects are attempting to emulate the recent startup of Agnico-Eagle’s Meadowbank gold mine, near Baker Lake. Meadowbank is the first new development under Nunavut regulation. An expanding Arctic sea-going infrastructure is helping this cause, but like any grassroots play, the key reason to test these projects is they have scale potential surrounding gold grades that could meet local operating costs.

Since 1970, shifting technologies and economics have brought dozens of jurisdictions into the gold-mining sector and better than doubled its output. Funding that flowed through Canada into these new regions has generated new understandings of how to locate and to develop bulk gold deposits. Improvements to underground mining costs plus the expectation of stable, higher gold pricing now that the influx of rich deposits in other parts of the world is slowing, is returning the Canadian underground mining back to greater prominence. These knowledge bases added to Canada’s ready investment market for the sector is generating what increasingly appears to be one of the most dynamic and successful domestic gold plays of this secular bull market cycle for metals.

— The author is a co-editor of the HRA Advisories newsletters (www.HRAAdvisory.com), along with his brother Eric Coffin. They are not employed by or contracted by any of the mentioned companies, but may own securities or warrants in them.


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Feature

Coast to coast, a golden land (June 01, 2010)

The Fraser River and Cariboo gold rushes opened and shaped the interior of British Columbia in the 1850s and '60s. In the 1890s, the Klondike rush carved the Yukon out of the vast expanse of the North...


The Fraser River and Cariboo gold rushes opened and shaped the interior of British Columbia in the 1850s and ’60s. In the 1890s, the Klondike rush carved the Yukon out of the vast expanse of the Northwest Territories. These short-lived western booms created a sustained western gold output, and as importantly, a mining fraternity. Discoveries of the 1900s and 1920s in Timmins, Ont., and Val d’Or, Que., hastened northern development in these provinces, and would turn the Canadian Shield into a major source of the yellow metal. Over the subsequent decades, gold camps sprung up across northern Ontario and in similar Shield geology of adjacent provinces and the Yellowknife belt. The main focus has been underground vein mining, with the strongest camps being those in which ore shoots could be chased to depths up to several kilometres. These camps moved Canada to a number three ranking amongst producers with over 5% of global mine output by 1970, when gold’s price was decoupled from paper currency. Though Canada’s gold output doubled to over 5 million oz. by 1991, it has been slowly slipping since then. The country now ranks about eighth in terms of domestic gold production, but the trend may be getting ready to reverse again.

Major gains for gold’s price once it was no longer fixed by government fiat generated an exploration boom that outlined the rich deposits of Nevada. An era of winning the yellow metal from low-grade deposits mined by open pit, including at low costs from the skim of oxide material covering sub-polar deposits, opened Australia’s gold fields while the high inflation of the 1970s weighed on Canada’s remote underground mines. A freer investment climate in a number of prospective regions has prompted the development of gold mines in various districts around the globe. New deposits continue to be found and developed in these recently opened districts, but not with the frequency of a decade ago.

Canadian investors and speculators expanded into and have become a major element in the global gold boom, but their domestic plays weren’t abandoned. In the 1980s, the Lupin mine in the Northwest Territories demonstrated new potential still exists in remote locales, and the Hemlo camp in northwestern Ontario proved that large-scale discoveries are still possible. In the ’90s, the very rich Eskay Creek mine opened in the rugged terrain of British Columbia’s northern coast range. However, the steady stream of new finds in earlier decades had seemed to slow, until recently. In the past few years, Canada’s domestic gold fields are again gaining global prominence, including two new finds in the Yukon.

Yukon gold

Kinross Gold’s (K-T, KGC-N) takeover of Underworld Resources for the junior’s White Gold project (which we had somewhat cheekily called a possible new Klondike) is exciting interest in the Tintina gold belt that arcs though the centre of the Yukon. Underworld’s Golden Saddle discovery distinguishes itself as a candidate for bulk underground mining. Several nearby explorers, including Kaminak Gold (KAM-V), Northern Tiger Resources (NTR-V) and Silver Quest Resources (SQI-V) are attempting to emulate that success this summer. At the same time, Atac Resources (ATC-V) will be expanding its own discovery of last summer at the Rau project in a different area of this same broad belt. Rau may encompass a new district akin to those that pushed Nevada to the forefront of gold production in the 1970s.

Both the Underworld and the Atac discoveries formed in older host rocks away from the intrusive “heat engines” that generated the deposit-forming fluids.

These finds have renewed a focus on intrusion-related, rather than specifically intrusion-hosted, targets in the Tintina belt. Both discoveries could also be important in opening new districts to infrastructure, while companies such as Aldrin Resource (ALN-V) use the expanded tool kit in areas near historic successes. Alexco Resource (AXR-T) is in the midst of redeveloping the Keno Hill silver camp, reassessments of other earlier finds are ongoing by various companies, and improvements to the Territorial power grid are under way. The Yukon may be shifting into a gold boom not seen since the Trail of ’98.

Bountiful B.C.

In coastal British Columbia, Bravo Gold (BVG-V) is working on expansion and definition of high-grade resources at its Homestake Ridge project after several seasons sorting out how its details fit together. Homestake’s detail is different than the Eskay deposit 100 km north, but they are both part of the same deposit-forming episode. A number of juniors are also working on bulk-tonnage targets in the area between Eskay and Homestake Ridge that appear to be part of the same episode, but it is work along similar lines some distance to the south and inland that has been a causing a stir lately. The Blackwater project of Richfield Ventures (RVC-V) has been returning long drill intersections of bulk-tonnage gold-silver-base metals mineralization that appears to have vented into the sub-sea floor as per the high-grade systems on the north coast. Partner Silver Quest Resources (SQI-V) is working on other targets of its own in this region, and Amarc Resources (AHR-V), amongst others, is keying in on the same model in holdings farther south.

Large low-grade deposits of this sort are a new focus in Pacific Canada. They are being brought to prominence by Goldcorp’s (G-T, GG-N) Peasquito mine development in central Mexico and Bear Creek Mining’s (BCM-V) pre-development Corani deposit in southern Peru. This class of deposit is benefiting from the high, long-term price projections for metals supported by the secular bull market. This may be the next iteration of the shift to bulk mining that began with copper in the 1880s and moved to gold-copper in the 1970s. For these more complex polymetallic deposits, the metallurgical details outlining the payable metals grade are more crucial to evaluation, but they are finding a place in the palette of large output precious metal deposits. At the same time, a more basic form of open-pit minable gold deposit is rapidly coming to prominence in the Canadian Shield.

The Shield

In the Shield rocks of central Canada there is a marked shift towards gold-focused bulk-tonnage deposits. Kinross Gold has been bulk mining in Timmins for years, but the new focus has been spearheaded by the hugely successful work of Osisko Mining (OSK-T) at the Malartic camp between Val d’Or and Rouyn-Noranda in Quebec. Osisko has moved from concept to developing a half-million-oz.-per-year open-pit operation here in just six years. The 11 million oz. gold outlined at Malartic is obviously important to the success, but so too are significant areas of higher-grade material along the structural trends that were the focus of past underground mining. Osisko has continued bulk-tonnage evaluation by farming in projects from more junior companies in this region (not that $3-billion Osisko is all that junior anymore), including Midland Exploration (MD-V), Golden Valley Mines (GZZ-V) and Clifton Star Resources (CFO-V). Similar work is being supported by Agnico-Eagle Mines (AEM-T, AEM-N) through a placement in Alexandria Minerals (AZX-V) to further its project in Val d’Or, and a number of other juniors are testing this concept elsewhere in the district.

Osisko also recently took over Brett Resources for its bulk-tonnage Hammond Reef project, west of Thunder Bay, Ont. Elsewhere in Ontario, Premier Gold Mines (PG-T) is testing its Hardrock project in Geraldton to the east of Thunder Bay for both open-pit and underground bulk-tonnage material, and at Detour Lake, northeast of Timmins, Detour Gold (DGC-T) is readying its open-pit deposit for production. At its Cote Lake project located between Timmins and Sudbury, early phase testing by Trelawney Mining and Exploration (TRR-V) of a bulk zone is showing promise. These are al
l past-producing underground camps shifting to bulk-scale potential, across a broad sweep of the province. Aiding all of this work is the infrastructure developed over the past century, and workforces idled from lumber operations that are willing and able to shift to this new gold boom.

The high-grade model hasn’t been abandoned in the Shield. In Manitoba, San Gold (SGR-V) is revitalizing the Rice Lake camp by testing a new high-grade trend. Across the boundary in northwestern Ontario, PC Gold (PKL-T) is similarly attempting to upgrade the resource left in historic workings at Pickle Crow. In Red Lake’s famed high-grade camp, Premier, Rubicon Minerals (RMX-V) and of course Goldcorp, amongst others, continue to outline new ore. Near the Minnesota border, Rainy River Resources (RR-V) is testing a discovery of high-grade gold within massive sulphides that is atypical of the region. Near the Quebec border, Queenston Mining (QMI-T) and Kirkland Lake Gold (KGI-T) are focused on revitalizing one of the Shield’s deepest camps. And Lake Shore Gold (LSG-T) is working on a western extension of the high-grade system that put Timmins on the map as the first Shield gold camp. Success in these programs comes from reworking exploration data to locate material which could be mined using well-understood mining parameters.

From the ground up

Grassroots discovery is still very much a part of the work in Canada’s Shield rocks. In Quebec’s Baie James region, Virginia Mines (VGQ-T) pushed the province’s gold mining potential north with its lonore discovery, which buyer Goldcorp recently announced has grown to more than 9 million oz. Exploration for new gold districts is ongoing in a number of similar greenstone belts ringing the Arctic coast. AngloGold Ashanti (AU-N) has signed a farm-in agreement with Commander Resources (CMD-V) to test a 140-km-long greenstone belt on Baffin Island. On the Nunavut mainland, recently reorganized North Country Gold, a spinoff of CBR Gold (now Niblack mineral development) is exploring the Committee Bay greenstone belt in a similar attempt to outline a high-grade resource, and Sabina Gold & Silver (SBB-T) is working on advanced studies of both vein-hosted gold and gold-silver enriched massive sulphide deposits. Newmont Mining (NMC-T, NEM-N) continues development planning at its Hope Bay project, east of Bathurst Inlet. It acquired the project through a takeover of Miramar Mining, one of the early developers at Yellowknife. These northern projects are attempting to emulate the recent startup of Agnico-Eagle’s Meadowbank gold mine, near Baker Lake. Meadowbank is the first new development under Nunavut regulation. An expanding Arctic sea-going infrastructure is helping this cause, but like any grassroots play, the key reason to test these projects is they have scale potential surrounding gold grades that could meet local operating costs.

Since 1970, shifting technologies and economics have brought dozens of jurisdictions into the gold-mining sector and better than doubled its output. Funding that flowed through Canada into these new regions has generated new understandings of how to locate and to develop bulk gold deposits. Improvements to underground mining costs plus the expectation of stable, higher gold pricing now that the influx of rich deposits in other parts of the world is slowing, is returning the Canadian underground mining back to greater prominence. These knowledge bases added to Canada’s ready investment market for the sector is generating what increasingly appears to be one of the most dynamic and successful domestic gold plays of this secular bull market cycle for metals.

— The author is a co-editor of the HRA Advisories newsletters ( www.HRAAdvisory.com ), along with his brother Eric Coffin . They are not employed by or contracted by any of companies mentioned here, but may own securities or warrants in them .


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Have your say:

Your email address will not be published. Required fields are marked *

*