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St. Andrew positioned for mid-tier status.

St. Andrew Goldfields Ltd. is well positioned to become a mid-tier gold production and exploration company within the Timmins mining camp over the next four years.

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Within the last year alone, the company has been busy consolidating its properties and assets with the acquisitions of Newmont Canada Ltd.'s Holloway-Holt gold mines and Kinross Gold Corp.'s Aquarius deposit. St. Andrew now owns more than 100,000 hectares. Its regional office is located in Matheson where the engineering and administration is conducted.

The company's exploration properties span about 120 kilometres. Central Timmins properties extend from Night Hawk Lake across to Matheson, and the Golden Reward project extends from Matheson to the Quebec-Ontario border.

As well, the Stock mill on the west side of Timmins is running at 1,000 tonnes per day, receiving ore from the Clavos and Hislop mines.

At September's end 2006, approximately 79,000 tonnes of ore was mined from Clavos at 5 grams of gold per tonne (g/t Au). This production was below company expectations with a nine-month net loss reported at almost $40 million, according to a Nov. 15,2006 news release. However, future gold production from Clavos is projected to increase to about 1.1 million grams (40,000 oz) of gold per annum over the next three years.

The mine's narrow, high-grade veins have proven difficult to access due to a lack of experienced miners.

"They are a dying breed," says President and CEO Glenn Laing. "The production at Clavos is hampered by the availability of shrink miners. It is a tough physical job and is not mechanized at all."

Like many of the mining companies in northeastern Ontario, St. Andrew is training about 20 per cent of its 300 employees and continues to look for experienced and new miners to fill 45 vacancies.

Lower-grade ore from the open pit Hislop mine is also supplying the Stock mill. It has an expected gold production of 567,000 g (20,000 oz) per annum at 3 g/t Au.

The Taylor mine are also part of the operation. Currently the Taylor mine is being developed with a 3,300-metre underground ramp to access the Taylor shaft, and Upper and West Porphyry Zones for delineation and drilling. Laing says it will be the next source of ore for the Stock mill running at a higher grade of approximately 8 to 9 g/t Au.

"We are forecasting the third half of next year (2008) that we'll be sending ore from Taylor into the Stock mill," he says.

In 2009, ore from the Aquarius open-pit mine will also feed into the Stock mill. Strategically acquired in May 2006, the deposit is eight kilometres by road from the mill. It will be largely bulk mining at a rate of 33-million tonnes of ore per year with a grade of 1.8 g/t Au, producing 5.1 million g of Au per year (180,000 oz) with a five-and-a-half-year mine life.

"There is a $100 million of infrastructure in place there at the moment," says Laing, "and a one million-ounce resource."

The high price tag is attributable to a project that enables the water surrounding the resource to freeze during the warmer season. The deposit sits along a large regional esker that acts as a major groundwater aquifer. To keep the pit dry, a brine solution is pumped into the wells to freeze the ground forming an ice curtain. As the largest in the world, according to Laing, it is like working in permafrost during the warmer seasons.

Presently, a feasibility study is being performed on the deposit. If viable, construction on the Stock mill will occur in 2008, to increase the 1,300-tonne capacity to 9,000 tonnes of ore per day to accommodate tonnage from the Aquarius deposit.

St. Andrew's second production piece and most recent acquisition are the former Newmont Holt McDermott and Harker Holloway gold mines, east of Timmins. Left on care and maintenance, all the plant infrastructure and equipment remained along with a total gold resource of 34.9 million grams (1.23 million oz). A measured plus indicated resource of 4 million tonnes grading 7.4 g/t Au for 27.3 million grams (963,000 oz) contained gold and an inferred resource of 1.2 million tonnes grading 7.3 g/t Au for 7.6 million grams (270,000 oz) of contained gold.

"It was an open bid process and St. Andrew won it," says Laing. "We took it over in Nov. 2006, with no employees. So we're starting from scratch, but now we're building up that labour force."

Although Newmont only ran the Holloway mine, Laing says they will run both, with a projected production rate of 2.1 to 2.8 million grams (75,000 to 100,000 oz) per year. The on-site mill has a capacity of 2,721-tonnes per day Underground development and diamond drilling is in progress until March 31, 2007, with the intent to begin production in the second quarter.

Laing sees this property as having "a lot of exploration upside potential to expand the reserves and resources."

At the same time, the company plans to spend $4 million this year toward exploration on the Golden Reward project.

By ADELLE LARMOUR

Northern Ontario Business
COPYRIGHT 2007 Laurentian Business Publishing, Inc.
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Title Annotation:SPECIAL REPORT: TIMMINS
Author:Larmour, Adelle
Publication:Northern Ontario Business
Date:Feb 1, 2007
Words:884
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