Century breathing new life into Sigma

Val d’Or, Que. — For as long as Val d’Or has been the heart of mining in the Abitibi, it’s been fair to say that the Sigma mine has been the heart of mining in Val d’Or.

It now falls to Century Mining (CMM-V) to keep that heart beating.

Sigma, which opened in 1937, and the Lamaque mine across Highway 101, are the two largest gold producers in the eastern Abitibi — two mines exploiting what is essentially the same gold deposit, like the Hollinger and McIntyre mines west of the provincial boundary. The old town of Bourlamaque grew up around the mines, and the economic life of the whole mining district centred on them until the 1960s, when the Camflo mine, a short distance west of town, went into production.

Lamaque lasted 50 years, up to 1985, but Sigma didn’t falter until 1996, when ground problems hurt production. That year, Placer Dome (PDG-T, PDG-N) put Sigma, and the Kiena gold mine west of Val d’Or, up for sale.

It took time and a price reduction, but McWatters Mining bought both operations for $55 million in shares and cash. McWatters sunk plenty of money into the operations, including an expansion of the mill. But costs continued to rise and in early 1999, McWatters shut down the mine, pinning its hopes on bringing a Sigma “super-pit” into production, to take advantage of the mill’s increased capacity.

In a very able feat of science, McWatters defined a new larger resource at Sigma, thanks to the discovery of a system of flat veins near the surface. That allowed geologists to prove up a low-grade, near-surface resource ideal for a pit, while the mill stayed open, fed by ore from the small East Amphi mine and from a couple of open pits on the Sigma property itself.

But the new resource didn’t help solve a basic problem: low grades in the pit meant operating problems. Sigma struggled over the next year, seeking creditor protection in early 2001 and shutting down the mine — again. Sigma ultimately had to be bailed out by Quebec government-owned Soquem, which took on a 40% equity interest in the Sigma Joint Venture. The joint venture was run by McWatters, which had emerged from a reorganization with its former creditors owning 75% of the company.

The mill started up again late in 2002, but by October of the next year the operation was shut down again by the same old troubles: production didn’t meet plans, and millhead grades were too low.

McWatters sold the Kiena and East Amphi properties, but the creditors were at the door again, and the company was forced into administration in early 2004.

That set the stage for Century to buy Sigma out of receivership. Sigma was McWatters’s principal asset, and any settlement with creditors had to mean a sale. Century paid a total of $25.9 million, $6.3 million of it in cash and the rest in shares and assumed debt, and creditors approved the plan.

Century renewed development work at the mine, reassessing the resource base and planning for a more selective approach to mining in the pit, using smaller equipment. Mindful that grade control had been the mine’s Achilles heel, Century began a program of reverse-circulation (RC) drilling on a tightly-spaced grid to guide early production.

“This is not just a re-start of a mine at higher gold prices,” Michael Werner, Century’s chief operating officer, told The Northern Miner in a site visit earlier this year.

McWatters, he said, was hamstrung by an operating model of low-grade, bulk-tonnage mining that sent large blocks of rock to the mill, only to prove lower-grade than the reserve model had predicted. “McWatters never really had any ore to feed the mill.”

Century’s model uses a larger fleet of smaller units: smaller trucks, shovels and excavators take out mineralization from smaller, more tightly defined blocks. “You’ve got to mine the ore before you do the waste,” Werner says, and Century’s small mining fleet — two excavators and a shovel — proves the point. A single excavator was taking out ore at the time of the Miner’s visit, with the other large equipment allocated to waste stripping.

Moreover, a RC drill was a few steps ahead of the excavator, providing samples for grade control. “We can’t even envision how McWatters stayed alive here” without the advantage of grade control from RC holes, says Werner. A 15,000-metre drilling program allowed Century to block out enough mineralization for a 3-month mine plan, which took production through the summer. A full reserve estimate is expected this fall; in 2004, measured and indicated resources — all underground — were pegged at 3.9 million tonnes grading 5 grams gold per tonne.

Mine geologist Paul Bdard, who started at Sigma in the Dome days, catalogues the four principal ore structures at Sigma into shear veins, north-dipping veins, flat veins, and diorite-porphyry dykes. The shear veins and dykes appear to be controlled by steeply south-dipping fracture systems, while the north-dipping veins dip about 45 and the flat veins dip very gently to the west. Any intersection of those structures forms a higher-grade shoot — hence the complex pattern of ore blocks in the pit.

With finer distinctions in grade control, and equipment small enough to operate in those smaller domains, Sigma’s early production showed signs of making the pit work. Head grades climbed steadily to 1.8 grams per tonne in May from 1 gram per tonne in March, nearing the modelled grade of 2 grams. At the same time, tonnage increased to 131,000 in May from 51,000 per month in March, suggesting that getting the feed to the mill need not force the operator to accept lower grades.

Blasting has been fine-tuned as well. “We figured blasting mats were costing McWatters about US$10 an ounce,” says Werner. Using electronic detonators has allowed Century to dispense with blasting mats in the pit, although traffic stops on nearby Highway 117 when the warning siren goes off.

At the mill, there have been fewer changes, and all of those have been done “in front” of the primary crusher. The mill can take up to 5,000 tonnes per day, and Sigma, with the luxury of simple metallurgy, has a simple carbon-in-pulp flowsheet. By May, recoveries had increased to 95%, up from 89% in March. “We go up in grade, we’ll go up in recovery,” says Adrian McNutt, vice-president of project development with Century.

The earlier years left Val d’Or with a large pool of qualified people for the mill: “This is the first mill I’ve ever been at that I didn’t have to train the operators,” McNutt says.

Century expects to produce 70,000 oz. gold by year-end, and to be at full capacity this fall.

Two areas in the pit are tagged for exploration drilling. The West Plug, where earlier drilling blocked out measured and indicated resources of 695,000 tonnes at 2.3 grams gold per tonne, will see at least 2,000 metres of core and RC drilling. Those holes will be aimed at increasing the resource and also at bringing resources into reserves, based on the results of ongoing feasibility work.

Another target is the Bdard dyke, where two earlier drill holes cut 24 metres grading 12.8 grams gold per tonne and 64 metres of 14.9 grams per tonne. The dyke is untested downdip and on its westward extension.

The money comes from $3 million in placements of common and flow-through shares, and a $1 million loan to be repaid by allocating gold production to the lender.