Atlantic Report Bullish on Atlantic mine growth

Optimism about mine development in the Atlantic provinces was eviden t at the District 1 meeting of the Canadian Institute of Mining held in Halifax recently. Speakers at the opening session summarized the meeting’s theme, Mineral investment in Atlantic Canada, by saying that technology, marketing and global thinking would enable Atlantic Canada to compete in the international marketplace. The region has important strengths on its side — a location on salt water, close to markets and a good geological endowment, noted Pat C. MacCulloch, president of BP Canada’s Selco division.

“By all means invest locally, but do so while thinking and planning in an international context,” Mr MacCulloch said. “In exploration, ideas are the key — invest in developing ideas.”

Because Canada is entering a world of new materials made of composites, “companies must identify future trends in end-user requirements for minerals they may produce,” he said.

Governments can encourage exploration by making mineral rights and tax regimes attractive to exploration companies, he said. “Government should also provide the same services and facilities in remote areas for mining that it provides to industries in urban areas.”

Dr Walter Curlook, president of the Mining Association of Canada and executive vice-president of Inco Ltd., said “the real problem with our industry is that we’re not always cost competitive. We’re the biggest in copper, nickel, zinc and uranium, but we want to be able to say we’re the lowest-cost producer as well.” Inco’s cost of production for nickel now is at 1979 levels — but the price for the product is at 1974 levels. Mr Curlook illustrated new methods and technology being developed by Inco which are also applicable to small-scale mining operations.

Providing a local point of view, Seabright Resources’ vice-president of finance and administration, Ken W. MacDonald, said the reason gold mining development in the Atlantic region has not kept pace with the rest of Canada is due to inability to raise sufficient capital to exploit the area’s potential properly, rather than a lack of potential for economic gold mineralization.

Seabright plans to have two gold mines in production in Nova Scotia by May, 1987. The company’s secret, according to Mr Macdonald, is its “ability to recognize and attract local sources of capital rather than conducting futile efforts attempting to convince Bay Street of the economic reality of the mineral potential which exists here.”

Seabright raised about $24 million locally and without the assistance of any exploration funds, he said. Flow-through financing, with its related income tax incentives, has been instrumental in the company’s ability to raise risk capital for exploration, he noted.

“Seabright abides by a fundamental principle — the Golden Triangle or the 3 M formula,” Mr Macdonald said. “Management plus money equals mines.”

Gold project geologist Craig Miller of the Nova Scotia department of mines and energy highlighted more than 30 locations in the province where he believes there is potential for economic gold mineralization outside the traditional gold-bearing environment of the Meguma group. “Appreciable gold concentrations occur in rocks from the Precambrian to the Cretaceous,” he said, adding that there is much evidence for primary gold of post-Carboniferous age.

Comparing the historical price of an ounce of gold in 1986 dollars to annual gold production from the province’s former Meguma-hosted gold mines, Mr Miller found that during 125 years of mining in the province, no gold was produced when its price fell below $150 per oz.

“Because the price of gold now is at the highest level ever compared to the cost of producing it over the past 125 years, there has never been a better time to be mining gold from Meguma deposits,`’ he said. “Seabright is demonstrating that the tons and grade are there too.”

A prediction that many one- to 3-million-ton epithermal gold-silver deposits will be found in Atlantic Canada was made by explorationist Avard Hudgins of Acadia Mineral Ventures of Truro, N.S. “Mineral environmment s conducive to extensive precious metals such as gold and silver occur within large areas of New Brunswick and Nova Scotia,” he said.