Bidding to extend mine life — Claude buys big land position

Having last year resolved a dispute with a major creditor, Saskatoon-based Claude Resources (ASE) is confidently building gold reserves, averaging 10-11 grams per tonne, on a ground package centred on the Seabee mine, 125 km by air from here.

While touring the 50,000-oz. producer, The Northern Miner learned that Claude’s chairman and chief executive officer, William MacNeill, had inked an agreement with Currie Rose Resources (VSE), a junior based in St. Catharines, Ont. The deal, which commits Claude to minor exploration expenditures over the next three years for a 70% net profits interest (NPI), could have significant implications for gold exploration and production in Saskatchewan. While several high-grade gold deposits, hosted in Archean intrusive rocks, have been developed in the past 10 years in the province, these projects (Jolu, Star Lake and Jasper among them) were mined for only 2-3 years. Significantly, Claude, now in its third year of operation, has the necessary ground position surrounding the Seabee mine to build sufficient reserves to keep its 500-tonne-per-day mill turning for many years.

The underground Seabee operation, which began production in November, 1991, occupies a tiny 200-hectare claim block on the northeast shore of Laonil Lake. But the company now has access to a huge chunk of favorable ground, totaling 4,458 hecatres, surrounding the mine.

“With this option agreement, we now have an excellent chance to dispel the myth that Saskatchewan geology cannot support a mine of the proportions of Con or Campbell Red Lake,” MacNeill said during an interview in Saskatoon. Robert Reid, vice-president of exploration, added: “Based on our knowledge of Seabee, from current development and drilling, we conservatively estimate that probable and inferred reserves total 692,000 tonnes grading 10-11 grams per tonne.”

In addition, there are some 195,000 tonnes of broken reserves in shrinkage stopes and 120,000 tonnes of proven reserves grading 11 grams per tonne at the mine.

The ore occurs in near-vertical shear zones within a unit of greenish dark grey, medium-to-coarse-grained, leucocratic to metanocratic gabbro of Proterozoic age. This unit is known as the Laonil Lake metagabbro and lies within the Glennie Domain. Gold occurs in quartz veins within the shear zones, and grades are highest where the shears splay or branch. Ore zones within the shears vary in thickness from 1.8 to 5 metres and dip at about 85. Gold is fine-grained and occurs with pyrite and minor chalcopyrite and pyrhotite.

Since government approval was granted in January, 1991, Claude has mined about 430,000 tonnes of ore from two separate areas on the property, each of which has its own ramp access.

The Zone 2 area, consisting of the 2B and 2C shears, has been mined most extensively — all by shrinkage stoping — to a depth of about 450 metres. As hauling ore in 26-tonne trucks up an 18% ramp from these depths is very expensive, Claude conducted a surface drilling program last winter to test the extension of the 2B shear structure to the west. Results were so encouraging that the company will begin a 350-metre-long drift this week from the 120-metre level to test the grade of the structure.

This drift will bring Claude’s underground workings to the Currie Rose boundary, thereby providing future access for underground exploration there. Drilling by Placer Development (now Placer Dome) between 1985 and 1990 on the Currie Rose ground returned ore-grade intercepts near this claim boundary. No work has been performed on the ground since 1990.

Claude has also driven a ramp to a depth of about 150 metres on shears in the Zone 5 area. It is here, in drifts and crosscuts to the west of the ramp, that Claude this spring opened up a new type of mineralized structure called the 161 zone.

Much wider and running perpendicular to the main shears on the property, this structure is being interpreted as a low-strain zone by Reid. Its potential size and near-surface location could provide low-cost tonnage for the second half of this year and next.

“Once we know in which direction this mineralization is plunging, we can quickly drill it off and develop it,” Reid told The Northern Miner. Claude has one diamond drill turning near the bottom of the Zone 2 ramp, testing for the extension of structure below areas of known mineralization. Ore in this area would be developed by sinking a winze, as the economic depth for ramp haulage has been reached, said Mine Manager Michael Kelly. All development work and stoping are done by 42 miners employed by Burnaby, B.C.-based contractor Tonto Mining. Crews are flown in from La Ronge for 35 days in camp, then flown out for 18 days off. While in camp, miners work 10-hour shifts and are paid a base salary — plus bonus pay according to footage achieved, tonnes broken or hauled and group safety records. The mine has operated for more than 970 days without a lost-time accident, according to Assistant Safety Director Dale Cliff.

“Our top miner averages 148 tonnes per manshift in a jackleg stope 3 metres wide,” added Gordon Heinbecker, underground superintendent.

Excellent meals and accommodation are provided on site by the company. Ore is trucked up both ramps and hauled to the mill for two stages of crushing. Crushing capacity is such that one shift per day is sufficient to meet mill demand for ore. Two-stage grinding in cyanide reduces the ore to 78-80% passing 200 mesh, and the resulting pulp is leached for 36 hours in three outdoor tanks.

To increase milling capacity by 100 tonnes per day, Claude would need an additional grinding mill and a larger-diameter tailings pipeline and would have to crush ore on two shifts instead of one, said Mill Superintendent Derek “Scottie” Carr.

Gold recovery is about 93% by 6-stage carbon-in-pulp, and bricks (weighing 850-1,200 oz.) are poured on site and flown out every week.

Most of the water used in the mill is recycled from the tailings pond. And during the summer, tailings water is treated at about 910 litres per minute in the mill to destroy residual cyanide and to precipitate heavy metals. This is done with peroxide and ferric sulphate.

Starting this month, treated water will be circulated through a final tank prior to discharging into Laonil Lake. The tank will be loaded with activated carbon in an attempt to recover the final traces of gold. Pilot tests by Chief Assayer Elgin Bennett show that the water contains 6-7 parts per million gold. If all goes well, by next fall the carbon in this final tank will contain enough gold for one additional bar of production, Bennett said. “There’s a reasonable chance we’ll pour 50,000 oz. this year,” Manager Kelly estimated, “but we will likely not reach last year’s total of 57,363 oz.” Claude reported earnings of $6.5 million from the Seabee operation in 1993 and $2.1 million in 1992.

Under the terms of its settlement with creditors, negotiated in 1993, Claude must make staged payments to Western Canada Shopping Centres up to 1998 to be clear of litigation. A $1.5-million payment is due Sept. 1 and another $1.5 million in January, 1995. Payments to 1998 are then made as a percentage of cash flow from the mine.

Significantly, the payments from cash flow do not apply to ore found and mined on Currie Rose ground.

Details of the Currie Rose-Claude deal on Currie’s 4,458-hectare property are as follows:

Claude must spend at least $75,000 on exploration this year and $100,000 in each of the four following years. Thereafter, Claude will, for three years, pay Currie Rose $100,000 annually and spend a further $100,000 annually on exploration. Should Claude develop an orebody, the payments and work commitments will end. The company is to pay all exploration and development costs if an orebody is brought to commercial production.

— Patrick Whiteway is editor of “Canadian Mining Journal.”