CMP ponders joint mill in Rouyn-Noranda area

An affiliate of the CMP Mineral Partnership is negotiating to build a major gold mill in the Rouyn- Noranda area that would serve up to four different properties. And, as The Northern Miner learned during a recent tour of the area, the plan has the endorsement of most of the property owners.

CMP Milling Corp. is hoping to build a 1,600-2,400 ton-per-day operation that would serve Yorbeau Resource’s Astoria property, Sullivan Mines’ Eldrich property, the Peel-Elder property being explored by Aunore Resources and Nova Beaucage Mines and any production coming from the properties held by Rouyn Resources. The cost of the mill is estimated at $15-$24 million. All four companies are in the underground development stages and are hoping to make production decisions by next year.

Rouyn-Noranda is one of the few gold camps in Canada that has little in the way of custom milling nearby. And since none of the companies have large reserve inventories, an arrangement like this might just be the catalyst necessary to bring them all into production. All of the properties are within 15 miles of each other.

Although the financing arrangements for the proposed mill are being kept secret until some contracts have been signed, CMP Milling President Jean-Guy Masse says it will not likely be a custom milling arrangement. Stressing that the proposal is only in the negotiation stage, Mr Masse admits that one of the major hurdles is going to be to get four companies to agree on the location and technical aspects of the mill. “You have to make everyone happy, and making a mining man happy is not an easy thing,” he says.

The four companies being considered for the mill have more than 5 million tons of reserves between them in the proven and probable categories, and a lot more in the potential classification. And three of the four companies are enthusiastic about a joint milling arrangement.

Karl Glackmeyer, president of Yorbeau, says that such an arrangement is the most attractive option for his company, which will have spent $13 million on its Astoria property by the time it is ready for a feasibility study next year. The property has 1,259,000 tons of reserves grading 0.179 oz gold per ton. “The feasibility study will have to take into account milling options,” he says, adding that it would make sense from a cost standpoint to link up with another producer since the Astoria would probably be mined at about 500 tons per day.

Martin Walters, chief geologist with Aunore, agrees. “A 1,500 ton per day mill would not cost appreciably more than a 600 ton mill,” he points out. “And one would have to be built because the closest mill capacity to Rouyn is probably too far to ship.”

The director of the Eldrich project for Sullivan, Richard Dionne, supports the idea, but wonders if shipping costs wouldn’t be excessive. He says that a portable mill idea should be considered.

But Jean-Guy Rivard, President of Rouyn Resources, says his company is envisaging its own mill, possibly providing some custom capacity for one of the other operations. His company has three properties, two of them former producers under option from Lac Minerals.

“I doubt you would see a group of companies run a mill as one happy family,” says Mr Rivard. He adds that the former Wasamac mill could be rehabilitated. Even though only the building is left, the tailings pond would be appropriate, he explains.