Dickenson branches out to widen earning base

With over $40 million in cash equivalent assets, and its main Red Lake operation now back on a sound footing, Dickenson Mines is seeking other avenues for additional gold production, as well as expanding other earnings bases.

The company is currently putting about $2 million a year into grass roots exploration. This is mainly being spent in the Red Lake area itself through closely associated Goldquest Exploration Inc., shares of which are listed on the Toronto Stock Exchange and in which Dickenson holds 3,019,513 shares (43.1%) and Sullivan Mines 1,500,004 shares (21.4%). As well, Dickenson has a 32% participating interest in a 3-year exploration program for precious metals in Nevada.

The Goldquest company holds an unusually large spread of ground at Red Lake, by far the largest of any in that area. “We consider this lion country, but it will take a lot of work and money to explore,” says Peter Munro, a mining engineer who is president of both Goldquest and Dickenson. “We are finding a lot of gold, but as yet haven’t been able to put it together.”

The two most advanced properties in the Goldquest fold are the Abino and Rowan. A small underground crew is currently working from a decline on the former, mining out a small high grade ore shoot that will be trucked to the Dickenson mill.

“We think we have a small mine at the Rowan, economic at $400 gold,” Mr Munro says. That project, which is located at the far west end of the camp, is currently on hold pending completion of a road to the site that had to be stopped at the height of the forest fire season.

Work at Dickenson’s wholly- owned Silvana silver mine in B.C., which has been generating profits for the past two years in spite of the low price of that metal, continues apace trying to rebuild a declining ore inventory.

While mill heads at the company’s 100-125-ton concentrator are currently running 19 oz of silver per ton, grade of the 1 year remaining ore supply is only 12 oz. And it needs a 14-oz grade to break even. “But we are confident this operation will continue,” Mr Munro told The Northern Miner. As the parent operation, major changes have also been made at Silvana to trim costs and increase exploration and development, including a conversion from high cost diesel power to hydro.

Dickenson’s Havelock Lime division continues to do quite well. In fact that New Brunswick operation, which is a major supplier of lime and limestone products to the Canadian Maritime provinces and the State of Maine, is to be expanded.

Profitable from the start, this Havelock operation generated one- third of Dickenson’s operating income last year. It will be recalled that the company purchased a 60% interest in this project Jan 1, 1984, and agreed to purchase the remaining 40% Jan 1, 1987, for $3,520,000.

Employing 42 persons at this time, the Havelock works has limestone reserves of 2.4 million tons grading better than 95% calcium carbonate.

Still another venture that is almost certain to turn a profit for Dickenson was the purchase of a stockpile of magnetite concentrate from the Griffith iron mine near Red Lake just before that closed down earlier this year. The company now has a firm 5-year contract for the sale of this entire purchase at a price that will generate a profit of $300,000 annually, i.e. $1.5 million on this deal.