Giant Yellowknife 'doing well' in battle to reduce costs.

Giant Yellowknife `doing well' in battle to reduce costs

The resident geologist in Timmins district is predicting about the same level of mining activity this year as in 1989.

However, Lorne Luhta noted the decline in the price of gold is an important negative factor for mines.

"It undoubtedly has an effect on high-cost producers," he said. "Unfortunately, our mines here in Timmins are not as rich as the Hemlo mines, but we've been in the business for a long time."

For example he pointed to Giant Yellowknife Mines Ltd., which is currently up for sale and in a state of uncertainty.

"Giant Yellowknife is a high-cost operation," said Luhta, adding that its position is not that of the low-grade of ore.

GIANT YELLOWKNIFE

"Giant Yellowknife is doing very well in lowering the price per ounce, which is the name of the game," said Frank van de Water, the company's chief financial officer in Toronto.

Van de Water noted that the employment level at the mine has been cut by more than half. At the beginning of 1989 there were almost 900 employees, but now there are about 378.

The mine produces a relatively low grade of ore - .08 underground and .06 in its two pits.

However, van de Water noted, "The grade in the pits is going up."

In 1989 Giant Yellowknife began mining from its new No. 5 pit on Pamour's No. 1 property.

Giant Yellowknife also hopes to reopen a mine soon in the Nighthawk Lake area. Reopening the old workings could mean employment for about 50 miners.

The company is trying to arrange financing for the operation, said van de Water. "I think it is quite close and we hope to be able to start this summer."

PLACER DOME INC.

Placer Dome Inc. owns two mines in the area - Dome Mine and Detour Lake Mine.

Henry Brehaut, senior vice-president of Canadian operations with Placer-Dome, said, before an early-May strike by unionized employees, that Dome Mine was looking to match 1989's production this year.

When interviewed late in May, Brehaut couldn't predict how long the strike would last, or how much production would be affected this year.

Dome, which employs about 750 people, produces .114 ounces of gold per ton.

Noting that the mine has been operating for 80 years, Brehaut said it still has a future. "It has good potential."

As for the Detour Lake Mine, Brehaut expects production similar to last year's.

The mine, which employs about 350 people, has an ore grade of .155 ounces of gold per ton.

"Reserves are close to 10 years there, and there's potential to find more," Brehaut said.

However, he said the profitability of both mines depends on the price of gold. "They're marginal."

FALCONBRIDGE GOLD CORP.

The Hoyle Pond Mine of Falconbridge Gold Corp. is producing 450 tons of ore five days a week at a grade of about .5 ounces per metric ton.

Mine manager Peter Blakey noted that there are about three and a half years of ore reserves remaining, although he joked that the amount is about the same as when the mine started operation in 1985.

Blakey said 1990 will be a fairly routine year. "No major changes are coming up."

Falconbridge Gold Corp. finished open pit mining at its Owl Creek operation in June of last year. The mine had operated intermittently since 1981.

Blakey noted that the operation has stockpiled 140,000 tons of ore which will be milled over the next 12 months.

The stockpile has a grade of between .15 and .2 ounces of gold per ton.

A feasibility study is currently underway on going underground at Owl Creek.

"Bell Creek is a good little operation," said Rick Mazur, business development analyst with Canamax Resources Inc. in Vancouver.

The mine, which opened in 1987, is located northeast of the centre of Timmins and has a workforce of 125 people.

In 1989 its grade was .25 ounces of gold per metric ton.

"That mine has been very profitable for us," said Mazur.

There are about five years of proven, probable and possible ore reserves remaining at the operation.

The Aquarius Gold Mine ceased operation in last August and is currently on a care and maintenance program.

"For now it's closed," said mine manager Juri Houtman, adding that surface drilling is underway to study the possibility of restarting the operation in the future.

The mine is owned by Lake Asbestos Canada Ltd., whic is in the process of changing its name to LAQ Canada Ltd.

When it was operating, the mine produced about .2 ounces of gold per ton through a 300-ton-per-day mill, which ran five days a week.

There are currently seven people employed at the site.

The following are highlights taken from the resident geologist's report.

- Except for the closure of ERG Resources Inc.'s gold tailings project, the overall level of employment in district mines has remained similar to last year's, Luhta said.

ERG Resources Ltd. began a large tailings recovery program (40,000-tons-per-day) in late 1988. In 1989 tailings came from Pearl Lake, Gillies Lake, Carium and McIntyre tailings. The project was stopped in November for the winter and has yet to resume because of financial difficulties.

- Giant Yellowknife Mines Ltd. sold the Ross Mine in Holtyre in 1989, and the new owner closed the operation.

- St. Andrew Goldfields began production in Stock Township near Matheson last October at a production rate of 500 tons per day.

- The Timmins open-pit gold mine of Giant Yellowknife (formerly the Hollinger Mine) closed in 1989.

- At the end of 1989 Placer Dome and American Reserve Mining Corp. were dewatering the former Paymaster Mine.

EXPLORATIONS

In 1989 most of the 47 companies and individuals exploring in the Abitibi greenstone area around Timmins were looking for gold.

However, Luhta said exploration for gold in the area is in a downturn.

This year will see a decline from 1989, which was worse than the year before, he said.

Exploration has suffered because of the reduced price of gold and the cancellation of federal incentives for junior mining companies, Luhta said.

"The federal government has really cut down incentives for mining exploration."

However, he noted that the provincial government has tried to pick up the level of exploration with the Ontario Prospectors Assistance Program and the Ontario Mineral Assistance Program.

Luhta said the stock market crash of several years ago is still having a negative effect on the junior companies. "They still haven't recovered from the crash of 1987."

However, Luhta noted that the larger companies are still exploring.

PHOTO : Seventy exhibitors took part in the Timmins Mining and Exploration Equipment Exhibition at the McIntyre Community Centre on May 23 and 24. Some of the displayed equipment included, clockwise from right, skyjacks from Four McK Parts Ltd. of Timmins, a reconstructed mine transformer displayed by project manager Sever Bodea of Vardic Limited of Pickering, Ont., bobcats (seen here with four-year-old Lee Sabourin of Timmins at the stick), an electric hydraulic jumbo drill from Continuous Mining Systems Ltd. of Sudbury and model buildings used by Giles Hachey of Pre Design Metal Buildings Inc. of Willowdale of explain his company's products.

PHOTO : A polyethylene pipe system, above, was shown in North America for the first time during the Timmins Mining and Exploration Equipment Exhibition by Martin Tretheway, general sales manager of B&B Distribution of Chatham, Ont. and David Brumby, sales manager for the pipe's manufacturer, Milnes Fusionmaster Ltd. of Australia. Jim McCreadie, left, technical service representative with A&I Inspection Services Ltd. of Cambridge, demonstrated how a black light can detect small cracks in equipment. Dave Schultz, below, a planning engineering at Placer Dome Inc.'s DomeMine, took in the show with his daughter Alana. The exhibits included a rough-terrain, fork-lift vehicle displayed by the Manitou company of France and a safety mask and helmet displayed by Timmin's Norox, a division of Liquid Carbonic Inc.