Timmins mining camp a "fortress".

The Timmins-Porcupine belt is predicted to be one of the most "underexplored," untapped mining camps in the world, but St. Andrew Goldfields is about to change that with an aggressive plan to bring new gold mines to the region.

With a three-dimensional geological database at his disposal and a consolidated land position of 176,080 acres in the Timmins camp, St. Andrew Goldfields' president and CEO Glenn Laing believes the gold mining and exploration company is sitting on a "fortress."

"Once we got to the point where we felt gold prices had risen (high enough), it made good sense for us to start a gold mine in Timmins," Laing says.

"The Porcupine belt and the Timmins mining camp we feel is probably the most underexplored mining camp in the world."

St. Andrew is embarking on the first new major mining development in Timmins in over a decade.

The company was lured into the Timmins area in 2001 on the heels of the successful Goldcorp Challenge, launched by Goldcorp president Rob McEwen. Australian-based science and technology company Fractal Graphics, using its high-tech three-dimensional mapping system, won the Goldcorp Challenge. St. Andrew then acquired a 41.7 per-cent ownership of Fractal in 2002. The name has since changed to Geoinformatics Exploration Ltd.

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"Every thing that was started in Timmins came out of the Goldcorp Challenge," says Laing. "That's what put Fractal Graphics on the international map. We liked what Fractal did, and we started working with them. We liked it so much, we bought the company."

Their technology allows large-scale mineral and geological data to be defined in a three-dimensional modeling system. St. Andrew Goldfields holds a geological database that spans from the Quebec border to down-town Timmins.

Based on conclusions drawn from the data, and given the depressed state of gold prices in 2001-2002, St. Andrew embarked on a land-claiming spree in the Timmins belt.

"A normal geologist or exploration company would only look at its claims and work those claims to death," Laing says. "We took sort of a holistic view for the big picture. So all the land we picked up, and we are the biggest landholder in Timmins, was all selected based on more prospectivity, rather than less prospectivity, so we had the choice, and that was part of our strategy. We were picking up properties when nobody cared.

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"That has all changed now. The price of gold has changed, and it's now harder to acquire land. We have all of that and it's a question of playing it out."

The company's production assets in Timmins, dubbed the Stock Gold Complex, located about 50 kilometres east of Timmins, include the Stock Gold mill and tailings, the Taylor property and the Clavos property.

Development of the Clavos mine commenced in November 2003, with Dumas Contracting being awarded a $9.7-million contract to develop a decline ramp, and to begin underground development and drilling. St. Andrew is targeting a 100-metre-below-surface-level production startup for July of this year. Clavos mine is projected to create 100 new jobs in Timmins, says Laing.

The Clavos property has an inferred mineral resource of 452,000 tonnes of ore, at 9.0 grams per tonne.

The company intends to bring the dormant Stock mine into production in the fourth quarter of 2004.

The existing infrastructure at Stock mine includes a 900-foot shaft and underground workings. A prefeasibility study conducted in October 2003 pegged the capital cost of underground development and drilling at $3 million, and stope development and equipment at $2.7 million.

Dewatering of the mine and rehabilitation of underground workings began in January, with underground development and drilling commencing in May.

Stock mine produced 131,000 ounces of gold between 1988 and 2000, with

an average resource of 0.16 ounces per ton.

The strategy is to "put the mine back into production and get the cash flow and use the cash flow to explore our ground," says Laing.

St. Andrew is targeting to increase production capacity at Stock mine to 2,300 tonnes per day at a cost of $7 million to accommodate the Taylor property expansion.

The Taylor property has an estimated mineral resource of 2,716,000 tonnes of ore graded at 0.22 ounces of gold per tonne.

The property has an existing 565-foot vertical shaft. Plans are underway to develop a decline ramp and pursue underground development and drilling at a cost of $14.7 million, followed by stope development at a cost of $24 million.

Production at Taylor mine is forecasted to begin in early 2006.

The company estimates the Stock Gold Complex will be producting 184,000 ounces of gold per year by 2006, at an estimated cost of $230 (US) per ounce.

www.standrewgoldfields.com

By SARI HUHTALA

Northern Ontario Business