JUNIOR MINING SPECIAL — Espalau extends mine life at Dona

When sold last summer, Placer Dome’s (TSE) Dona Lake mine, near this northern Ontario town, appeared to be nearing the end of its productive life. But now, some 10 months later, mining operations are still going strong under the tutelage of newcomer Espalau Mining (ME).

“We originally forecast four months of production, but reserves have continued to increase,” Mine Manager Paul Bedard told The Northern Miner during a site visit. Current reserves should sustain production until at least August, he added, with a possible extension beyond that date. In October, 1993, three months after production resumed, proven reserves were estimated at 178,000 tonnes grading 7.66 grams gold per tonne. These were contained in four zones: Main, B, South Raise and West Raise. The Main zone is about 30 metres long by 4.5-6 metres wide and semi-elliptical in shape. Grades in the central portion range from 3 to 20 grams and average 7.65 grams. The north and south extremities of the zone are slightly lower in grade, averaging 4.5-5.5 grams.

The B, South Raise and West Raise zones are geologically similar to the Main zone, only smaller.

Mineralization is hosted entirely by oxide facies iron formation that has undergone “sulphidation.” Under this process, gold and iron sulphide minerals, such as pyrite and pyyrhotite, precipitate out when the ore-bearing fluids come in contact with oxide minerals in the iron formation. Gold is generally associated with pyrrhotite, which accounts for 5-15% of the ore. Bedard said free gold has been noted locally, usually in small quartz stringers.

Espalau acquired the deposit last July when the mine, a 550-tonne-per-day mill and 300 claims were sold to its subsidiary, Ross Finlay, for $2 million. Until that time, Ross Finlay had handled most of the development work at the mine.

Under the terms of sale, Placer Dome is responsible for closure of the tailings facility, while Ross Finlay will oversee closure of the mine and mill site.

In August, 1993, Societe Miniere Ecudor (ME) signed a deal to earn up to a 49% interest in the project in return for $4 million, to be paid gradually. So far, the company has paid $1 million for a 14% stake.

In the spring of 1984, the first gold-bearing intersections were pulled from the ground by Dome Exploration. Subsequent underground exploration led to a production decision in May, 1987. And under Placer’s management, commercial production of 500 tonnes per day began in March, 1989.

Proven and probable reserves were calculated at 685,455 tonnes grading 8.23 grams, with an additional 1.5 million tonnes grading 5.83 grams listed as possible.

In just over four years, Placer mined 797,522 tonnes grading 7.5 grams. In the Main zone, ore was extracted from the 40 sublevel (40 metres below surface) to the 340 level (340 metres below surface). Additional ore was taken from the B zone, between the 55 sublevel and the 220 level. Since October, Espalau has mined 115,375 tonnes grading 5.65 grams at an estimated cash cost of $304 per oz. Well over half the tonnage was extracted from the Main zone, between the 340 and 455 levels, with the remainder being mined from the crown pillar.

Access to the crown pillar was achieved via a 276-metre decline, which was driven last fall. Before it could be mined, 50,000 tonnes of rock had to be backfilled between the 40 and 70 sublevels.

With the Main zone now depleted above the 455 level, ore is primarily being mined from the 220 to 368 level in the B zone. This area contains about 60,000 tonnes grading 7.6 grams. (Ore below the 368 level in the B zone is not considered economic.)

At the South Raise zone, longhole drilling has been completed, but mining has not yet begun.

As a result of bad ground conditions in the West Raise zone (caused by abundant chloritic material), a Roger machine will be used to extract the ore. The machine is similar to a continuous miner, only the ore is excavated from the bottom up.

An additional 35,000 tonnes grading 7.5 grams are present in the Main zone from the 455 to 505 level. According to Bedard, these reserves could sustain production for an additional three months. To reach this material, however, a 300-metre decline would have to be driven, the cost of which may be deemed prohibitive.

Further reserves may be present below the 505 level in the same zone. A previous hole drilled by Placer Dome in this area intersected 4.63 grams over 9.6 metres at a depth of 550 metres.

Last December, Espalau drilled three exploration holes to evaluate this zone. The first hole intersected the Main zone at a depth of 528 metres and graded 7.85 grams over 5 metres. A second hole, at a depth of 571 metres, cut two zones — one grading 12.48 grams over 4.6 metres and a second yielding 10.1 grams over 1.8 metres. Intersections in both of these holes are considered to be true width.

The last hole in the program cut 3.38 grams over 23.79 metres at a depth of 615 metres, but this intersection runs almost parallel to the axis of the ore zone.

Additional drilling will be carried out if the ramp is driven from the 455 to 505 level.

Espalau and Ecudor are also looking at other properties in the Pickle Lake area, the focus being on near-surface gold reserves that might be minable by open-pit methods. Late last year, the partners optioned the Kasagiminnis Lake property from Wiscan Resources (ASE). Situated 25 km southwest of the Dona Lake mine, the project contains a drill-indicated geological mineral reserve of 898,182 tonnes averaging 5.14 grams.