Joe Mann mine adds Chibougamau glitter

It has been drowned and dewatered three times in its troubled 30-year history, but the Joe Mann gold mine here in northwestern Quebec is once again producing the yellow stuff.

Moreover, production at 700 tons per day grading 0.22 oz gold per ton is expected for the next 5-6 years.

Maybe longer.

“In addition to diluted and mineable reserves of 910,000 tons, surface drilling has indicated that there may be at least another two million tons of ore both to the east and west of the shaft,” says Richard Lister, president and chief executive officer of Campbell Resources, the mine’s operator. “The lower we go, the wider the ore. And the grade here is equal to, and probably better than, the grade in the upper levels.”

The mine, which began production April 2, is owned by Montreal- based Meston Lake Resources. That company, in turn, is 65% owned by Toronto-based Campbell which operates the mine under contract. In addition to 0.22 oz gold, reserves have an average grade of 0.18 oz silver and .30% copper per ton.

Also in the Chibougamau camp is Campbell’s S-3 mine, which began production in January. Reserves here are 474,024 tons grading 0.159 oz gold and 0.46% copper. Campbell reports that initial grade was slightly lower than projected, but production has exceeded the scheduled 500-ton-per-day rate.

“I don’t know of any other company in Canada that has been able to start up two gold mines, as successfully, in such a short period,” Mr Lister proclaims. “We are very proud of that achievement.”

Long-hole mining at Joe Mann is being carried out east of the shaft on the 900, 1,000, 1,200, 1,300 and 1,600 levels. The shaft extends to 1,650 ft and drifts have been extended 900 ft to the east, towards Norhart Lake. Campbell is drilling below and to the east of the existing shaft and plans to eventually drill to the west.

“The orebody is subvertical and very steep, in the order of 85-88 degrees and the widths are in excess of 6 ft,” says Raymond Fournier, Meston Lake’s chief geologist. “This makes it ideal for long-hole mining — the cheapest mining method there is.” He adds that at least one additional shaft may be necessary in the future. Operated twice

The Joe Mann mine, under various names, has operated twice before, with 869,000 tons having been mined out of the upper levels. But production was hampered by financial and metallurgical problems and lack of reserves.

In 1984 Meston Lake became the 100% owner of the mine and entered into an agreement with Camchib Mines, a wholly-owned subsidiary of Campbell, to assess the prior workings of the then dormant mine. The mine was dewatered in January, 1985, and, since June, 1985, has been studied extensively for new sources of ore.

“The success of the operation is that we have proceeded to understand a complex reverse fault system,” Mr Fournier explains. “We now know that a young fault, which dips to the east, displaces the old fault, which dips to the west. They meet at the 600-ft level, causing a real turmoil. We are progressively expanding this mass of ore.”

A total of three zones has been outlined: the Main zone; the South zone, 300 ft to the south; and the North zone, 300 ft to the north. While it will be easy to pinpoint good stoping targets on these zones, work so far has been concentrated on drifting to the east, Mr Fournier says. Free gold

He estimates that between 30% and 40% of the Joe Mann gold is in the form of free gold. That’s one reason why ore is processed using a gravity concentration circuit (pinched sluice boxes with Knelson concentrators), at the nearby Camchib Mines mill. Recovery is 90%. The mill also processes ore from three other Campbell mines: the S-3; the Henderson 2 mine (500 tons per day grading 0.033 oz gold and 1.79% copper); and the Cedar Bay mine (350 tons per day grading .110 oz gold and 1.62% copper).

Mr Fournier says the operating cost for the Joe Mann mine alone, including drifting, raising and exploration, is probably around $350(US) per oz. Without development, he says, the cost is likely $300. Mr Lister adds the operating cost for all four mines combined is $310 per oz, including $45 per oz for development.

At Campbell’s annual meeting, Mr Lister said Campbell produced 21,000 oz of gold during the fiscal year ended June 30, 1986. Because the Joe Mann mine and the S-3 mine were put into production during the first four months of 1987, he said Campbell’s 1987 production will be 43,000 oz, lower than the current 55,000-oz-per-year rate.

He expects Campbell will produce 60,000 oz of gold in 1988.

Campbell arranged for $10 million in flow-through financing for Meston Lake over a 5-year period from 1983 to 1987, Mr Lister says.

“This has been spent exploring the mine and has resulted in slightly less than one million tons at 0.22 oz gold. The financing has directly led to Meston Lake being a producer today.”

The company now has $17 million of total debt; two years ago it had $162 milllion of debt, including bank obligations, debentures and preferred shares. Mr Lister expects the company to be debt- free within the next three years.