Crude, Hemlo ready to mill 60,000 tons from Eagle River

Hemlo Gold, controlled by Noranda Inc.(TSE), banks heavily on this area, expecting it to double its investment revenues within the next five years; for it can see similarities to the Hemlo camp itself, which lies only 35 miles away.

“We see the same geology and structure,” John Harvey, Hemlo’s president and chief executive officer, tells The Northern Miner. “Hopefully, we’re going to find more — maybe the big one. That’s why we are in there.” Harvey was primarily responsible for bringing the big Golden Giant mine at Hemlo into the Noranda fold at an early stage of that camp’s development.

Also, geologist Garth Pearce, Noranda’s divisional manager, likes the way the Mishibishu picture is developing. Both camps feature deformation zones within 25-mile long greenstone belts, lying between granite plugs which he describes as a mirror image of Hemlo. While Pearce emphasizes that there is nothing yet approaching the stature of the Hemlo ore deposit, he does point out that more showings of visible gold have been found along the Mishibishu belt than at Hemlo. “It’s hard to believe there won’t be more mines found,” he says. “We’re looking for other Hemlos.”

The sizeable test shipment of development ore from Eagle River has already been trucked to Hemlo, awaiting completion of a separate new 700-ton-per-day circuit under construction at Hemlo’s Golden Giant mill site where it will be processed to determine gold recoveries and other important metallurgical characteristics. When this fourth crushing-milling unit has served its current purpose, it will likely be used to either raise capacity and/or recovery of Hemlo’s own ore.

Initial underground work at the Eagle River mine is being concentrated on the No 8 vein, a unique gold-bearing quartz occurrence that has been traced on surface for more than 6,000 ft on which more than 200,000 ft of surface drilling was carried out.

“This vein is proving wider, stronger and much more continuous in our underground work, a picture we couldn’t have anticipated from what we saw on surface,” Pearce says. “But I’m not talking grade. That remains to be determined,” he adds.

A $10.3-million underground program was being completed at the time of our visit, consisting of a 2,000-ft decline with drifting on two levels — some 700 ft on the first and 2,300 ft on the second. And commencing immediately is a recently approved $8.4-million program which calls for a third level, additional drifting, raising, test stoping and further mill testing. It is scheduled for completion by mid-1990 after which a feasibility report will be completed.

These are major programs designed to establish continuity of ore between drill holes, gold distribution within the mineralized zone, structural or geological ore controls, average grade of ore to be mined and ground conditions. Also, this should lead to the proper choice of mining methods and possibly establish a reliability factor for surface drill holes.

The Northern Miner was particularly impressed with the thorough sampling job being done. The face of each 12×12-ft drift round, which incidentally yields 120 tons, is carefully channel sampled and photographed with a detailed recorded description. In addition, a 50-lb muck sample is taken from each round. And short bazooka holes are drilled at regular intervals into both walls to determine full zone widths which are running up to 30 ft.

As information builds, it’s beginning to look as if all vein material might be mineable. That, of course, would lower the overall grade but vastly increase tonnage.

Before going underground, reserves of 1.77 million tons to a depth of 1,300 ft were reported in three separate shoots grading 0.51 oz uncut or 0.25 oz cut. (Only 30% of the quartz included in these figures.) But in the soon-to-be-run mill test, all drift muck has been taken, including vein sections where drilling returned only low values. So it is expected the overall grade from this particular mill run will almost certainly be lower than the reserve estimate.

Chip and muck samples for the first 482 ft of drifting on the first level, taking everything across a width of 12.5 ft, averaged 0.32 oz uncut or 0.19 oz cut (N.M., Oct 30/89). Indicated grade from 643 ft of drifting on the second level averaged 0.16 oz uncut or 0.14 oz cut.

Milling of ore from the planned test stoping should run considerably higher than this initial run.

Eventually, it is expected that Central Crude will have its own on-site mill, possibly a custom one for “we would just have one mill in this area,” Harvey told The Northern Miner. A l,500-ton-per-day plant would likely cost upward of $60 million.

Because of the good widths, relatively low mining costs are expected.

Early to grasp the potential of this Mishibishu area, the Noranda- Hemlo team holds by far the largest interest in this camp, much of it through Central Crude, which holds much more than its prize Eagle River group. This is why the well- heeled Hemlo company not only holds a direct 60% interest in the Eagle River property, but makes no secret that its target is a controlling share interest in Central Crude itself.

Furthermore, Hemlo Gold has intimated that it is prepared to fund Central Crude’s 40% interest in Eagle River right through to production. Encouraged by the news, Central Crude President Richard Nemis could see his company’s issued capitalization capped at 8.5 million shares. “I doubt if you could find one to match this in the land,” he told The Northern Miner.

Nor are Central Crude’s exploration hands tied, for it has a $3-million exploration budget for the coming year. This will centre on the Falcon Creek discovery, a promising copper-gold structure three miles east of the present development. This Pearce calls “a different kettle of fish — gold in sulphides. This is not just a quartz vein camp.”

Discovered by geophysical survey, Falcon is a brand new structure that has been traced for half a mile. Grab samples have assayed 0.06-0.75 oz gold. This warrants a lot of work, The Northern Miner was told. Drilling is scheduled to start shortly.

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