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Plummeting gold prices doesn't deter Red Lake miners

Evolution Mining aims to boost production in northwestern Ontario
Kinross Gold Red Lake core shack
(Kinross Gold photo)

Tumbling gold prices down to US$1,670 an ounce and higher inflationary costs to do business hasn’t curbed mining and exploration activity in the Red Lake gold district.

Major, mid-tier and junior mining companies continue to make capital investments to expand production and make moves on the ground to bring the next generation of mines into existence.

Evolution Mining is laying out its vision for the next two years and beyond for its Red Lake Complex.

In an updated investor presentation, Evolution said it’s moving into higher grade sources of ore, particularly from its new Upper Campbell Mine.

Gold production in the 2022 fiscal year stood at 115,000 ounces. Evolution intends to boost that to 160,000 ounces - give or take five per cent - in the 2023 fiscal year, then push the pace to 200,000 ounces by the 2024 fiscal year.

Based on the area’s gold potential, Evolution intends to make Red Lake a 300,000-ounce-per-year gold producer by 2027.

Evolution finalized its acquisition of the series of mines from Newmont in April 2020. The company made its first foray into Canada intending to restore the shine back to the 70-year-old Red Lake camp as one of the premier gold mining regions in the world.

By making better use of people, equipment and services, the company has made a concerted effort to reduce all-in-sustaining costs (the cost of gold mining) from A $2.519 (Cdn $2,241) to $1,880 ($1,673).

The company has demonstrated it’s not afraid to invest in Red Lake, spending a combined $291 million in 2021 and 2022. In the 2023 fiscal year, the company intends to spend between A$130 million (Cdn$115 million) and $150 million (133.5 million) in major capital projects, including on the Campbell Mine and in other existing mining areas.

The company maintains it has better knowledge of the Upper Campbell ore body and is narrowing its focus there on fewer and larger mining fronts.

Beyond 2025, the company sees multiple mining and milling options to increase mining rates. There's also “significant upside” to find more gold on its 727-square-kilometre property with a “game changer” type of discovery out there.

Evolution mentioned in its presentation that it’s spent $11 million in the community during its 2022 fiscal year. About 10 per cent of its workforce is Indigenous through various agreements made with area First Nations. 

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One company that’s on the comeback trail after a rough start to 2022 is Pure Gold Mining.

The Vancouver gold company issued a news release to trumpet August as a record month for gold production at the year-old underground operation. The mine is located just southwest of the town of Red Lake at the former Madsen Mine site.

Production for the month stood at 4,595 ounces after milling 25,188 tonnes. The average gold grade was 5.9 grams per tonne (g/t), an improvement from July’s 3.1 g/t.

The company attributes its improved performance to better planning and better execution as they transition into mining higher-grade stopes.

Armed with a new gold resource estimate, the company will be issuing a new life-of-mine plan and pre-feasibility study during the fourth quarter of this year.

Kinross Gold said it expects to release the first-ever gold resource estimate for its Dixie Project with its year-end results.

The Toronto-based international miner has said little about Dixie since acquiring Great Bear Resources’ flagship project last February.

At the end of July, Kinross said it’s made “excellent progress” with its drilling results in the first half of this year, confirming the company’s belief that the property can become a top-tier deposit with a long mine life.

The much-hyped Dixie Project, which sit 25 kilometres southeast of town, was acquired by Kinross without a mineral estimate ever being published by Great Bear.

At the end of June, Kinross said 83,000 metres of exploration and infilling drilling of the LP Fault discovery zone had been completed on the way to a 200,000-metre program.

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Working to the west of Dixie, Pacton Gold wrapped up a 5,700-metre exploration drill program this month at its Red Lake Gold Project. The company has been exploring multiple gold targets on its 28,000-hectare property.

At its Boyden target in the middle of the property, Paxton said it’s hit gold with 18 drill holes, enough to form a “multi-kilometre” trend that will help guide the next round of drilling.

“Pacton continues to make solid exploration progress with the Red Lake gold project and has now intersected gold mineralization with three holes at the Boyden target,” said Executive Chairman Dale Ginn in a statement.

“We still have some important areas to drill test, including the Claremont target, and we are conducting further surface work before our next round of drilling.”

Sixty kilometres east of Red Lake, Vancouver’s Prosper Gold is reporting high-grade channel samples from its Golden Sidewalk Project.

The junior miner’s exploration focus for 2022 is the northern part of the property at a prospect called Skinner North. One sample result returned 9.29 grams per tonne (g/t) gold over three metres and 13.13 g/t gold over 1.8 metres.

Channel sampling means removing the overburden (the rock or soil layer) to expose the bedrock and making several cuts with a rock saw to take out pieces of a vein or deposit over a measured distance.

The Golden Sidewalk Project covers 160 square kilometres. Gold was discovered on the property in the 1920s. The Bathurst Mine was developed on the site in 1929 and it operated intermittently until 1937, producing 149 ounces of gold and 50 ounces of silver.

“These channel samples are the highest-grade rock samples found to date by our team at the Golden Sidewalk Project,” said CEO Peter Bernier in a Sept. 7 news release.

“Prospecting, till sampling, and geophysics brought us to this area of the project, and we have spent the summer advancing this target to a drill ready state. We will commence drilling in the coming weeks.”