Slump in exploration activity in Sioux Lookout.

Slump in exploration activity in Sioux Lookout

What started out as the continuation of a four-year trend of active gold exploration and production in the Sioux Lookout mining district ended abruptly during the second quarter of last year.

Exploration activity in the area is about one-third of what it has been in the previous four years, says resident geologist Don James.

According to his report, during the final three quarters of 1989 and the start of 1990 the end of flow-through financing for the mineral exploration industry resulted in a slowdown in activity for the area.

Up to the time the flow-through program was cancelled, during the spring of 1989, exploration activity was "running full-bore," said James. "Now it is about 50 per cent of what it was just last year."

Although the level of exploration in the area has dropped off from the previous four years, it is still equal to the 10-year average.

"I think for the remainder of this year, we will see things continue along the way they are now," commented James.

The slump in exploration activity in the Sioux Lookout district is being attributed to the inability of junior mining firms to locate funding for new and existing programs.

The report states that junior mining firms were responsible for half of the exploration activity in the area last year. James reported that their share has slumped to approximately one-third.

At present the largest gold exploration activities are being carried out by Placer Dome Inc. at the Musselwhite Mine north of Pickle Lake. Placer Dome is the major player in this joint venture with Inco Gold and Lacana Mining (Corona).

Currently on hold due to a lack of hydroelectricity and road access to the site, the Musselwhite project has a substantial enough deposit to warrant further drilling throughout the summer.

Placer Dome completed evaluation of the East Bay gold zones in March of 1989. The project included the sinking of a 235-metre shaft, approximately 1,800 metres of drifting, underground diamond drilling, a bulk sample and surface diamond drilling.

Bulk sampling indicated reserves of 7.4 million tons at .2 ounces of gold per ton. In addition, another zone is estimated at 3.4 million tons grading at .15 ounces per ton.

The Musselwhite property is located on the south shore of Opapimiskan Lake, with Moss-Power Resources holding the other three shorelines.

Harry Hodge, president of Moss-Power, says $1 million will be spent on definition and surface work this summer, with drilling likely beginning in the fall. Hodge says Moss-Power has conducted a drilling program at Opapimiskan Lake since 1986.

Moss-Power also holds the Kasagiminnis Lake property near Dona Lake. Reserves of 1.1 million tons grading .19 ounces per ton are indicated at the site.

"Usually we would be spending $3 million to $4 million on exploration, but some companies aren't doing any exploration this summer, so we're happy to be spending $1 million," says Hodge. "We've had land holdings in the Pickle Lake area since the early 1980s. We have a half-dozen properties with potential commercial reserves, now we're trying to zero-in on the better results."

Starting up during February of 1989, the Dona Lake Mine is currently in full production. It is owned by Placer Dome Inc. and is located 12 kilometres southeast of Pickle Lake.

Operating at a rate of 550 tons per day, the mill processed approximately 170,000 tons of ore in 1989. The mine has reported reserves of 754,000 tons grading at .24 ounces of gold per ton, with another possible 1.12 million tons grading .17 ounces per ton.

The bulk of activity is reported to be taking place below the 200-metre level, where the grade levels are better than the ore mined to date. The mine is expected to produce 40,000 ounces of gold annually.

Located near Muskegsagagen Lake, some 75 kilometres southwest of Pickle Lake, the Golden Patricia Mine started production in October of 1988.

Operated by Bond International Gold Inc., which is 65-percent owned by Lac Minerals, the mine currently employs approximately 120 people.

Bond expects the mine will produce 76,000 ounces of gold annually with its 350-ton-per-day mill. Proven and probable reserves are 446,000 tons grading at .61 ounces of gold per ton. Another 164,000 tons of possible reserves grading at .64 ounces appear to be available.

Chief geologist Ron Little estimates the recovery rate at 95 per cent.

According to the resident geologist's report, the mine is accessed by two separate ramps located approximately one mile apart.

Utilizing a shrinkage mining method, said Little, the company is mining approximately a three kilometre strike zone. Little said that this mineable reserve zone has an estimated life of five more years.

Meanwhile, Lac Minerals is continuing an exploration program in the region.

A spokesman with Lac says $1.7 million will be spent this summer on underground drilling, and another $1.7 million will go towards surface work. The program is showing "encouraging results," according to the spokesman.

Camreco Inc. of Toronto is developing the Goldlund and Windfall mine properties south of Sioux Lookout. However, plans for a 300- to 400-ton-per-day mill were mothballed late last year after a feasibility study indicated the reopening would be $4.9 million.

The second phase of the study is now in progress.

Located approximately 26 kilometres south of Sioux Lookout in Echo and McAree townships, the mine had operated briefly between 1983 and 1985, producing approximately 15,000 ounces of gold.

PHOTO : Placer Dome's Dona Lake Mine, located south of Pickle Lake in northwestern Ontario, started production in February of 1989 and is expected to produce 40,000 ounces of gold annually.