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Gold exploration in Wawa steady, but less intense.

Gold exploration in Wawa steady, but less intense

Mining and exploration continue in the Wawa district, but at a less intense rate.

Ed Frey, staff geologist in the Wawa district resident geologist's office of the Ministry of Northern Development and Mines, noted that the number of projects last year remained about the same as 1988.

However, he said that many of the projects were more modest in scope, with less spending and hiring.

"The intensity of activity is somewhat reduced," he explained.

Frey said companies attribute that to the cancellation by the federal government of the flow-through shares incentive program.

However, about 10 local propectors have received grants under the new Ontario Prospectors Assistance Program.

Despite that, Frey isn't predicting a great year. "As measured by the last few years, it will be slightly below average."

To assist development, the provincial government is also building a road to the Goudreau area mines by way of Highway 519 from Dubreuilville. Completion is expected by this fall.

Over the past year exploration and mine development activity focused primarily on the Mishibishu Lake, Goudreau and Michipicoten mining camps.

An increase in the number of active projects was also noted in the Kabinikagami Lake-Dayohessarah Lake area. As well, there was a significant increase in claim-staking activity immediately north of White River.

MUSCOCHO EXPLORATIONS

In the Goudreau area, the Magino Mine is jointly owned by Muscocho Explorations Limited (50 per cent) and McNellen Resources Inc. (50 per cent).

Estimated ore reserves stand at 1.6 million tons with an average head grade of .16 ounces of gold per ton.

Last year 23,139 ounces of gold were produced from 140,000 tons, at a grade of .172 ounces per ton.

The mine and mill, which are located 60 miles north of Wawa, have 132 employees and went into commercial production in 1988.

The current reserve base should be good for 10 years, said Steve Brunelle, vice-president for corporate affairs with Muscocho Explorations Ltd. in Toronto.

However, the future of the company's Magnacon Mine in the Mishibishu Lake area is not certain.

The mine is not in commercial production, noted Brunelle.

However, the mine produced 14,865 ounces of gold from 102,000 tons of ore from June to December of last year for a grade of .171 ounces of gold per ton.

Brunelle said the mill has caused a lot of problems.

Currently, it has a 90-per-cent recovery rate (compared to 96 per cent for Magino), and last year it was considerably less.

"At the moment, it has been operating at a loss," explained Brunelle, adding more openings need to be developed underground for it to become an operating mine.

However, operations have been scaled down until more funding is obtained, he said. "We can't make firm plans."

The operation employs more than 120 people. It is jointly owned by Flanagan-McAdam Resources Inc. (50 per cent), Muscocho Explorations Ltd. (25 per cent) and Windarra Minerals Ltd. (25 per cent).

Brunelle said Muscocho is looking for more money for both mines. "We are undercapitalized at the moment."

An arrangement with Echo Bay Mines for $20 million in financing fell through on April 30. However, Brunelle noted there is interest from other companies.

KREMZAR MINE

Canamax Resources Inc.'s Kremzar Mine in the Goudreau area north of Wawa is doing well.

Rick Mazur, Canamax's business development analyst in Vancouver, said the operation is aiming to reach the target mill-head grade of .18 ounces of gold per ton.

"Other than that, we're just chugging along," Mazur said.

The mine and mill, which began production in December of 1988, employ about 125 workers.

At current gold prices, the mine's current proven, probable and possible ore reserves give it a life of three more years.

The company is in the process of conducting an underground exploration program on a different ore zone, the Lochalsh gold deposit under Goudreau Lake northeast of the Magino Mine. It would provide additional ore for the Kremzar mill.

Mazur said the mineralized area was reached in mid-May and diamond drilling is currently underway.

SURLUGA MINE

Last September Citadel Gold Mines Inc. ceased underground development work and laid off 80 workers at the Surluga Mine and mill in the Wawa-Michipicoten area.

It is now being maintained by three permanent and six seasonal employees.

Although the mine has not been flooded, there are no plans to reopen it in the foreseeable future, said exploration manager Roy Rupert.

The price of gold would have to be in the $550-to-$600 range to make the mine feasible.

The Citadel mill was operated as a test facility from mid-April to the end of November of last year. The estimated head grade was .1053 unces per ton.

Currently, exploration is underway to find ore prospects for the mill, or customers to use it.

Citadel Gold Mines has signed a memorandum of agreement with PanOrvana Inc. of Vancouver for exploration on part of the property.

Rupert said the property has 21 "holes in the grounds" that were once mines.

"There's a tremendous amount of gold in the area," he said. "The problem is we haven't found the concentration that is profitable.

"There's an awful lot of smoke."

Citadel Gold Mines Inc. has also acquired Park Hill Mine, a historic producer of gold, and has undertaken a stripping program at the site.

Corona Corporation celebrated the pouring of the one millionth ounce at Renabie Mine in May. The mine employs about 175 people.

PHOTO : Canamax Resources Inc.'s Kremzar Mine north of Wawa began production in December of 1988 and is expected to produce its target mill grade of .18 ounces of gold per ton this year.
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Title Annotation:Gold Mining Report; Wawa, Ontario
Author:Bickford, Paul
Publication:Northern Ontario Business
Date:Jul 1, 1990
Words:944
Previous Article:Exploration by junior firms reduced despite interest generated by mapping.
Next Article:Shoal, Cameron Lake properties halted by environmental concerns and price of gold.
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