McWatters eyes Kiena revival (December 18, 2002)

A 5,012-metre, 38-hole surface and underground drilling campaign by McWatters Mining (MWA-T) has outlined new measured and indicated resources near the production infrastructure at the idled Kiena mine near Val d’Or, Que.

In all, the resources, found in two zones, total about 1.2 million tonnes running 4.25 grams gold per tonne, for just short of 162,000 oz. of gold.

Based on a cutoff grade of 2 grams gold, measured and indicated resources at the P zone amount to 846,500 tonnes of 4.4 grams gold over an average width of 3.1 metres. The P zone measures about 650 metres horizontally and 150 meters vertically, and averages about 5.5 meters in width. The zone lies around 10-30 metres above the previously mined S-50 deposit, which has yielded 10.7 million tonnes of 4.81 grams gold since commercial production began in 1981.

Selected results from underground drilling on the P zone include:

• Hole 240 – 12.38 grams gold per tonne over a true thickness of 8.1 metres;
• Hole 740 – 11.53 grams gold over 6.4 metres
• Hole 2309 — 5.03 grams over 14.5 metres; and
• Hole 3681 – 3.84 grams over 22.6 metres.

None of the intersections run deeper than 90 metres below surface.

The R zone is home to an estimated resource of 332,200 tonnes averaging 3.86 grams over an average width of 6 metres. The R stretches 410 metres horizontally, 150 meters vertically and has an average with of 30 metres. The zone is around 150 metres above S-50. Historical data suggests that the zone reaches down to 480 metres below surface.

Drill highlights from the R zone include:

• Hole 902 – 3.54 grams gold over 2.3 metres;
• Hole 954 – 2.35 grams over 29.4 metres;
• Hole 1693 – 5.93 grams over 7.1 metres; and
• Hole 3095 – 4.49 grams over 11.3 metres.

The two zones are found in a sub-horizontal mineralized corridor (Hangingwall zone) hosted schistose and locally brecciated rocks also containing veins and stockworks. McWatters says the mineralization’s continuity and grade are similar to the upper portion of S-50 orebody.

The recent drilling followed up on targets identified by previous owners in the 1970s and 1980s, and focussed on the hangingwall, between the surface pillar and the 330-metre level.

The drilling was the first phase of a $1.8-million program partly funded by $650,000 in financial assistance from Quebec’s Ministry of Natural Resources.

McWatters plans another 7,500 metres worth of follow-up drilling from ice early next year.Kiena is situated on Parker Island, just off the shore of Lac Demontigny, about 10 road-km west of Val-d’Or.

McWatters halted production at Kiena, its only producing asset, in late September.

During the third quarter, Kiena produced 9,511 oz. gold at a cash operating cost of US$258 per oz. and a total production cost of US$287 per oz. During the comparable period of 2001 (prior to a major corporate restructuring in the first quarter of 2002), the mine yielded 18,332 oz. gold at a cash cost of US$223 per oz. and a total production cost of US$270 per oz.