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Madsen Gold Corp. plans a return after 15-year absence from mining.

The Red Lake district of northwestern Ontario, sporting a long and rich gold mining history, is living up to its past reputation as projects and activity continue despite the overall slump in the industry.

The old Madsen Mine site near Red Lake may come back into production if Madsen Gold Corporation has its way. The company is eyeing resumption of gold mining after a 15-year absence. Madsen Mine produced 8.5 million tons of ore between 1938 and 1976.

Although Madsen estimates that the mine will produce only about 500,000 tons of ore grading at .21 ounces of gold per ton, it is looking at "the application of lower-cost, long-hole, narrow-vein mining," says president James Morlock.

The long-hole method is "labor-effective," says Morlock, and its cost-effectiveness "is crucial" to the project's success. He says the company will need to keep mining costs below $85 per ton and achieve a grade of .25 ounces of gold per ton in order to proceed with the mine.

While the mine once operated on 28 levels, Madsen Gold is basing its geological projections on the upper eight levels only, while water is being pumped out from lower levels.

The company has estimated the cost for surface rehabilitation at $1.3 million.

Morlock says Madsen Gold will proceed with a preliminary feasibility study. It has received a $57,750 commitment from the Northern Ontario Heritage Fund which represents about half the study cost.

Madsen Gold plans to have the ore custom-milled at a facility in the Red Lake area, possibly at McFinley Red Lake Gold Mine's 100-ton-per-day mill.

Meanwhile, McFinley is looking for a partner to develop its Bateman Township gold project near Red Lake.

McFinley has outlined preliminary reserves at the Bateman property of more than 800,000 tons grading at .21 ounces of gold per ton. A 400-foot shaft on site has development workings on three levels.

The Bateman reserve is within the same horizon which contains the Dickenson and Campbell mines in Red Lake.

The A.W. White gold mine in Balmertown is Dickenson Mines' biggest income earner. Although the mine took a $45-million write-down on its undepreciated carrying value, contributing to a $39.1-million loss in 1990, Dickenson has been cutting costs this year to beef up earnings.

The construction of a bio-leach plant is in the works at the Balmertown Mine, yet no official announcement has been made to date. The bio-leach oxidation system is expected to increase recoveries from 80 to 90 per cent.


The Red Lake district was delivered a blow when TVX Gold announced that it will not proceed with further development at the old Cochenour-Willans gold mine.

Inco Gold had interest in the mine site until TVX took over in a joint venture with Wilanour Resources, Pronto Explorations and Bob Fasken.

More than $9 million was spent on the mine over the past three years, including an underground drilling program below the 2,200-foot level and bulk sampling.
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Title Annotation:Mining Report
Author:Costea, Thom
Publication:Northern Ontario Business
Date:Nov 1, 1991
Previous Article:Diabase quarry reopens after 74-year dormancy.
Next Article:New president.

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