KL still holding gold.

The Holloway Mine northeast of Kirkland Lake is coming to the end of its life, but owner Newmont Mining believes that nearby ore bodies can keep the mill operating and allow for future growth.

Ministry of Northern Development and Mines resident geologist for Kirkland Lake Gary Grabowski agrees.

Mine manager Luc Guimond presented that message to the Cobalt Branch of the Canadian Institute of Mining and Metallurgy recently. He explained while the Holloway Mine would likely be mined out in two years, adjacent ore bodies can still provide feed for the mill Newmont acquired in October of 2004.

"We think there's still a lot of mining to be done at Holloway," Guimond told about 40 members of the Institute at a recent meeting. "We think that there's still more potential for gold there."

Newmont obtained the Holt-McDermott property from Barrick Gold in October of 2004, and is now pouring "about a bar and half a week." One of the main assets from Newmont's point of view is the mill, which allowed the company to transport the Holloway production across Highway 101 to the Holt-McDermott site. Production at Holloway started in October of 1996.

Between the two sites, Newmont now has 182 employees and produces about 90,000 ounces of gold a year from three operating shafts. However, the mill is only operating at half capacity, milling 1,500 tons per day. Underground operations at Holt-McDermott have been discontinued.

The goal of the company is to get mill production back up to capacity through an aggressive exploration program.

"We have to find out what we have first, then figure out the best way to extract it," he said. He noted at Holt-McDermott, Barrick worked without great results for several years after opening. "They didn't really find the mine until they found the South Zone."

Guimond's view is backed up by Grabowski. He pointed out that there is active exploration all along the Highway 101 corridor between Matheson and the Quebec border. Among companies close to production decisions are Apollo Gold and Moneta Porcupine.

Denver-based Apollo acquired the Black Fox property just east of Matheson in 2002. The company has outlined an open pit and underground reserves, and is now doing production feasibility. Apollo has done nearly 300,000 feet of drilling and, according to company information, has outlined 475,000 ounces in proven and probable gold for the open pit.

"Apollo is also moving ahead with the permitting, engineering and feasibility programs as required for the project," says Apollo president R. David Russell. "The Black Fox project continues to be one of the Company's primary focuses as the diamond drilling program is restarted after the holiday vacation."

Moneta Porcupine, in a Joint Venture with Acrex Ventures, has started a drilling program on its property to "test the lateral and vertical continuity of the '55' Zone gold mineralization as a step towards establishing a gold resource," according to the company. The project is to follow up on "significant gold mineralized resources reported previously."

Grabowski notes that the area of exploration is located along the Porcupine-Destor fault, and has similar properties to the Timmins camp. It is also similar to the Cadillac-Larder break. The major breaks in the Abitibi are "well known to host major gold deposits."

He notes that the existence of the mill owned by Newmont could assist in a production decision for other properties. A new mill could cost in the range of $70 million, but Newmont has an existing one operating at only 50 per cent capacity. As well, he says, building a new mill would result in having to jump through environmental "hoops," while the Newmont is already in operation with all necessary approvals.

There are other properties in the region that Newmont holds an interest in, and exploration and mining of those properties could result in the necessary mill feed to bring it back up to capacity.

Guimond compared the Harker-Holloway Camp to the early days of the Timmins camp. He said the ground is similar, and over the years Timmins has produced 65 million ounces of gold, and so far Harker-Holloway has produced only three million ounces.

The economics of the operation are significant for what has become a depressed mining area. With 50 contractors, as well as the 182 employees, the company payroll is in the $11 million range annually, with another $39 million in payments to suppliers and others.

The Holloway Mine has seen a number of owners, including Hemlo Gold and Battle Mountain, before being acquired by Newmont. The company's other northeastern Ontario mine is Golden Giant in the Hemlo camp. Golden Giant is expected to close in 2006.

Newmont itself has a long history. It was founded in 1929 by Colonel William Boyce Thompson. The company name comes from the Colonel's home state of Montana, and New York, where financing came from. The company moved into gold production in 1965 and has grown to become the world's largest gold producer, with 14,000 employees worldwide.

The company is producing about 3 million ounces of gold a year in North America and about 1.5 million ounces a year in South America. Guimond, a 1988 Queen's University graduate, started at the Holloway Mine in 1996 as mine engineer and was later promoted to mine manager.

www.newmont.com

By JOHN WROE

For Northern Ontario Business