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Exploration

New life for former gold producers

December 1, 2010
by Adelle Larmour
In: Exploration with 0 Comments

Several new mines are coming on line in northeastern Ontario in response to soaring gold prices.

Vancouver-based Northgate Minerals Corporation held a ground-breaking ceremony September 10 at its Young-Davidson site in Matachewan, Ontario, approximately 60 kilometres west of Kirkland Lake. It marked the start of a two-year construction project that will bring two adjacent past producing mines into production by 2012.The aggressive mid-tier miner acquired 11,000 acres in 2005 and has proactively performed exploration work, proved up a resource and obtained the required permits to initiate this US$339 million project.The estimated 15-year mine life will consist of open-pit mining for the first three years, following which the operation will go underground. The average annual production rate is estimated at 180,000 ounces at a cash cost of $350 per ounce over the life of the mine.Six hundred people will be employed during construction and 275 once production begins. The company is sinking a new 1,500-metre shaft between the two past producing mines, and has ramp access down to 590 metres for its development work.

Shaft rehabilitation

The former Matachewan Consolidated production shaft is currently being rehabilitated and dewatered. The old timbers are being removed and steel sets are being installed, said project manager Andrew Cormier. The shaft will be used for ventilation for the underground work.  As it’s deepened, it will be used to raise-bore the new production shaft.

“The fact that we have these historic openings gives us an advantage in developing the mine both in (terms of) schedule and cost,” said Cormier.

Other construction projects will include a new mill with a 6,000 tonne per day (t/d) capacity. A three-kilometre stretch of Highway 566 will be realigned and a tailings-impoundment area will be built. Hydro One will be upgrading the existing 47-kilometre transmission line to the site.

Approximately $140 million in contracts have been awarded. AMEC is performing the engineering and procurement work. North Bay’s Cementation will perform the shaft deepening and raise boring, and Quebec-based Orbit Garant has the diamond-drilling contract. Thunder Bay-based MLA Northern Contracting Ltd. will be constructing the tailings dam. Toromont CAT will supply the equipment for the open pit and MacLean Engineering will provide the underground mining equipment.

An Impact Benefit Agreement with the Matachewan First Nation addresses employment opportunities and training. Northgate Minerals will initiate various training programs throughout the life of the mine to develop its workforce.

Presently, Northgate employs 60 people, of which some 25 have a First Nation affiliation. More than 150 contractors are on site. Funding was secured in mid-October.

“The good news story is that this will be a big mine for the region, fully funded, on budget, on schedule, with lots of activity and our key permits are in place,” said Cormier. “We have experience as mine operators. We feel that is our strength. That is why we have accomplished what we have to date.”

Detour Gold

Detour Gold Corporation, another junior miner, has moved from exploration to feasibility within the short span of three years. Located about 180 kilometres northeast of Cochrane, the open-pit project is situated on the site of Placer Dome’s former Detour Lake Mine, an historic producer of 1.8 million ounces of gold.

Since the company acquired the property, more than 450,000 metres of drilling has proved up a mineral reserve of 11.4 million ounces with an estimated mine life of 16 years. It is projected to produce an average of 650,000 ounces annually. The mill’s throughput will begin at 55,000 t/d and increase to 61,000 t/d based on a gold price of US $850/oz.

A satellite office within a municipally-owned building in Cochrane, Ontario, will serve as a base for the engineering and procurement work.

“As we move into full-time operations, Cochrane will likely be our administrative office/logistics port,” said Derek Teevan, vice president, Aboriginal & government affairs. He sees the town as a natural stepping off point to the mine, particularly with access to the rail line.

The company is expecting provincial permitting approvals in December, according to Teevan. The $1 billion construction project will create 1,200 direct jobs. By 2013, when the mine is in operation, it will employ approximately 500 people.

The work schedule will be seven days in and seven days out, so an on-site residence will be built to accommodate its workforce.

Detour Gold Corp. is finalizing impact benefit agreements with three First Nation groups.

“We look to maximize local Aboriginal employment as we look to maximize local northern employment,” said Teevan.

Because it is an open pit operation, heavy equipment operators will figure prominently in the workforce.Recruiting efforts will solicit people from construction, smelter closure, forestry and plant environments. As well, upgrading and training will occur.

“All the northern mayors are fundamentally supportive of the mine and seeing the development happen,” Teevan said. “They are taking a regional approach to development, which is important. We can draw on the various communities and keep folks in the North.”

He also said it is the philosophy of the company to support local and northern businesses in terms of contracts and hiring. At the time of the interview, the company was in the process of tendering contracts.

Infrastructure

Existing infrastructure consists of a 151-kilometre paved road and a 34-kilometre gravel road off Highway 652, as well as a gravel airstrip. A 230-kilovolt power line 180 kilometres long will be required from Island Falls to link up with the Fraserdale Power Station, just north of Smooth Rock Falls.

A recent agreement with Toromont Industries Ltd. will provide the company with a fleet of eighteen 320-tonne haul trucks, The agreement also includes approximately 15 pieces of mine support equipment prior to the end of 2010, totalling in value  to Cdn $125 million.

The economic impact for Ontario over the life of the mine will be in excess of $8 billion.

www.detourgold.com

www.northgateminerals.com

 

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