Operational changes cut costs and boost productivity at Kerr.

Operational changes cut costs and boost productivity at Kerr

When Deak Resources Corporation president Gerry Cooper examined Golden Shield's ailing Kerr Mine in Virginiatown, he prescribed several operational changes to save the facility after Deak's takeover.

"It was a change of methods such as long-haul stoping and drilling longer and larger holes - methods that have been in the industry since 1935, but never used here (Kerr Mine)," he recalls.

Since Deak and GSR Corporation (an affiliated company) took control of the former Kerr-Addison gold mine in 1989, changes have been made to trim labor costs and increase production.

A number of small mining interests owned by Deak were amalgamated with the Kerr Mine and mill to form Deak Resources Corporation.

A transfusion of $2.1 million announced on April 19 by the Northern Ontario Heritage Fund Corporation is expected to remove Kerr from the sick list altogether. The funds will be used to increase the capacity of Kerr's Number One gold circuit and to make improvements to the mine complex.

The loan announcement made by heritage fund chairman Shelley Martel has breathed new life into the community of Virginiatown, which is located just west of the Quebec border. Virginiatown's future had looked bleak after bankrupt Golden Shield announced the mine's closure.

Tony Cliche, a mechanic leader and representative for Local 9283 of the United Steelworkers of America, says the reactivated mine has stimulated the local economy.

"Morale has been boosted. People are working on their houses again and buying cars," he adds.

"Employees are working harder now than in the past, and we hope to get more members back."

The upgrading of the gold mill will provide jobs for 200 skilled workers over the next four years as well as for 200 additional workers employed in satellite operations.

At the time of the announcement, Deak employed 130 staff at its Virginiatown operation. Increased mill capacity will permit expansion of production at the mine where employment will increase to 100 people from 55.

Representing Martel at the press conference for the loan announcement, Cochrane South MPP Gilles Bisson said the loan will be combined with other financing for a total program cost of $4.2 million. Deak's share is $800,000.

The project will increase the company's milling capacity to 2,000 tons per day from the current 1,200 tons.

The expansion provides for the processing of ore from the Kerr Mine as well as for gold ores from other properties which up to now did not have access to custom milling.

The mill went back into operation with feed from the mine last May. In late November it processed a record 1,450 tons of ore per day.

During 1990 Deak milled 5,200 tons of ore for Noranda, 12,000 tons of ore for Lac Minerals and Rouyn Resources and 7,000 tons of ore for Radisson Resources. Ore will be processed from the Cheminis and Armistice mines.

The expansion to 1,200 tons of ore per day required a lot of work, Cooper recalls. The mill had not done that capacity for more than two decades although in the glory days of the mine, first started in 1936, capacity reached 4,500 tons per day.

The rehabilitation of the mill was helped along by a $1.3-million loan acquired from FedNor in March. The loan will be paid back in the form of royalties from the mill operation.

However, it has taken more than money to revitalize the Kerr operations. Cooper also credits the participation of the mine's management and labor for the turn-around.

"When we took over we co-operated with the union. We had some disagreements, but generally the situation has worked out well," he says.

Mine manager Frank Ablett says the workers are more flexible and more willing to negotiate following the financial problems Kerr found itself in two years ago.

The operation's labor force has since been trimmed to 140, but productivity has increased so much that the workforce can accomplish as much work now as did the 340 former employees.

This philosophy of reducing overhead and maximizing production is necessary for resource-based industries to achieve a solid competitive footing, according to Cooper.

He is also calling for improved relations between industry and government, charging that governments have passed bills without looking at the effects on industry.

PROMISING FUTURE

The immediate future for Deak looks quite encouraging. Earlier this year three drilling rigs explored a huge sulphide discovery on the Magusi property 25 miles northwest of Rouyn-Noranda, where copper and zinc deposits have been found.

Drillers intersected three large sulphide areas 850 feet downdip from the Magusi ore body.

Mine manager Ablett admits a lot of work remains, but the studies conducted so far indicate that there is reason to be positive.

Only one drilling team is working now, but samples taken earlier this year debunk the theory that the ore body bottomed out, Ablett says.

The last 10 feet of the drill hole showed 8.2 per cent copper in a 70-foot package of sulphides.

The company wants to mine the upper Maguso ore bodies. The west zinc zone contains 1.17 million tons of ore grading 6.71 per cent zinc. The Magusi foot wall copper zone holds 590,000 tons of ore grading 2.86 per cent copper.

Deak has four base metal properties in northwestern Quebec. Magusi was the first one to be explored in depth. A second property, called West MacDonald, located northeast of Rouyn-Noranda has a mineral deposit of 1.5 million tons grading at 6.39 per cent zinc.

PHOTO : Electrician Benton Scott hooks up an electric motor used to drive a mill thickener at the Kerr mill in Virginatown.