As the deadline for spending approaches, it is difficult to imagine an area more active in exploration than Val d’Or, Que. Nearly every property in the camp is getting some sort of going over as the exploration industry, wallowing in an orgy of flow-through cash, finds ways to spend it. Probably half of the $250 million raised for exploration in Quebec is being spent in this camp.
Not too many people know that the first bona fide gold discovery in Canada was in 1823 when a woman found a small nugget of gold in Quebec’s Chauriere River basin. That property produced more than $2 million worth of gold around the time of the California gold rush.*
The discovery and founding of Val d’Or itself wasn’t to come for almost 100 years, after the huge finds at Porcupine had prospectors scouring the north country for new signs of wealth. A Polish immigrant named Stanley Sisco was really just trying to get away from the war when he “took to the bush” in 1914. Living with a few friends on an island north of town, he killed time by prospecting. He wasn’t the first prospector in the area, as a small rush had broken out with the discovery of gold and a subsequent small mine at Lac Fortune near the soon-to-be-founded Rouyn in 1907. Most engineers that had looked at the area already turned it down because it was widely thought (and, oddly enough, still is) that quartz veins in granodiorite were not a favorable host rock. As a result, they had trouble financing more serious exploration. The American Smelting & Refining Co. showed some interest but decided it was too small for such a large company, another xx widely held by major companies today. Next were a group of Toronto promoters. But though the values were good, there didn’t seem to be much potential for large tonnage so work stopped.
The old adage “third time lucky” seems to apply to mining more than most industries, and the Sisco was no exception. Under a syndicate headed by Thayer Lindslay, the most famous mine finder of them all, geologist Jack Forbes was assigned to the project. Observing a regularity of fracturing in the granodiorite, he modified the mining plan from one of lateral work to one of crosscuts and winzes, which later came to be known as the ladder structure. The mine became the start of a major new gold camp developed during the 1930s. From the beginning of production in 1929, the Siscoe was to produce 881,000 oz gold over a 2-decade period from an average grade of 0.27 oz.
And so Canada’s third largest gold camp was born, but of a geology far more complex than its two big sisters at Timmins and Kirkland Lake. This complexity meant that, although seven more major mines would begin production before the outbreak of the Second World War, new mines were to come into production on a remarkably regular basis all the way through the next four decades, and they haven’t stopped yet.
As Hoffman was to describe the camp geology in 1947, starting from the west:
“The Malartic area is distinguished by pyritic gold deposits lying in silicified sediments, poyphyries and lavas. The Sisco mine, a few miles northeast, departs strikingly from Malartic. Gold there is largely in the free state, and the host rock is a granodiorite. Where the zone dips into the greenstones, values disappear. The adjoining Sullivan, however, continues to disclose much ore in the lavas as well as granodiorite. A short distance southeast, the mighty Lamaque, Quebec’s largest straight gold producer, confines its ore to flat-lying quartz veins in the granodiorite. But next to it the Sigma mines a nearly vertical series of quartz veins in the lavas. Neighboring the Lamaque and Sigma, the East Sullivan has drilled a gold- copper deposit of the Noranda type (later a major mine). This lies in the so-called greenstone. So does the producing Golden Manitou, but there the ore contains zinc with the gold instead of copper.
“The Bourlamaque batholith is the ore bringer, apparently, and accounts for most of the mines in the region. However, the gold deposits of Perron, Cournor, Pascalis, Resenor and Beacon are found within the granodiorite of the batholith itself.”
It is that complicated geology combined with modern exploration methods and loose purse strings which are behind the number of new discoveries in that area in recent years. *This fact and most of the other historical points in this feature were taken from Arnold Hoffman’s Free Gold, a lively history of the Canadian mining industry, written in 1947 and still available through McGraw-Hill.
Together, the mines which have come on since the Belmoral have added more than one million tons of annual production to the camp and provided a few hundred extra jobs with the accompanying spinoff, helping ensure a healthy local economy. When I visited the area last summer residents reported housing prices were rising, which to me is one of the best barometers of the xx of any mining town. At the same time, prices in Timmins were falling.
Into its third generation of gold miners, the town knows when things are picking up. The people are aware that there have been a number of significant discoveries in recent years and that some of them are going to become new mines.
There is the Beacon No. 2, another discovery by Peter Ferderber, in the Bourlamaque Batholith. In a complicated corporate structure, a mill has already gone up even though an official production decision has not yet come. (Like many other companies, D’Or Val is extending its exploration program as long as it can, since it can use flow-though funding until a production decision is announced). Reserves are small at 312,000 tons proven and probable, with another 466,000 in the possible category. But production will also start small, at 450 tons per day.
Right next door, in similar geology, is the Wrightbar. Under option to Belmoral, gold is being discovered on that property every which way and Belmoral hopes to begin using it as a source of feed this year — perhaps at about 100 tons per day and increasing as development permits.
Malartic Hygrade has been having some luck on the portion of its property not optioned to Barrick. Last winter the company came up with what it calls the Zone 8 discovery, where it conservatively estimates 150,000 tons to the 400-ft level. It has drifted over the zone from its old mine workings to the north, and it appears the zone is intact. Recent drilling from surface below the zone cut 36.8 ft grading 0.18 oz at a vertical depth of 1,350 ft.
And then there is Aur Resources, which has discovered two new deposits locally in recent years and which currently has three underground exploration programs in the works including the former-producing Norlartic mine. Spending some $18 million by the February deadline, Aur hopes to have three feasibility studies in the works by the spring. It is pouring money into the Orenada ($6.2 million) with 750,000 tons of reserves grading 0.16 oz; the First Canadian and Norlartic (on adjoining properties) with, respectively, 700,000 tons grading 0.2 oz and 861,000 tons grading 0.13 oz not counting numerous recent intersections. Look for custom milling from this project.
Custom milling is one ace-in-the- hole that anyone finding a deposit in Val d’Or has over other areas of the province. There is lots of it. The Lamaque mine closed in 1985 leaving a 2,000 tpd mill available to process ore in the area. An exploration program is being conducted on the property, however, and it is possible the mine will eventually reopen. Tundra Gold Mines and Golden Pond Resources have each optioned part of the property.
Louvem’s Manitou mill, which processes ore from the Chimo, only operates at half of its 850-ton-per-day capacity. That company, a spinoff of the provincially-owned Soquem some years ago, has a huge land position to the east of town and hopes to find more ore. One of its most promising bets is the Pascalis North project, where it has been underground for some time. However, Louvem has had trouble raising adequate funds for its various projects. In part it has been hampered by an inability to consistently
maintain payments of the cumulative dividends on its preferred shares.
As pointed out earlier, D’Or Val Mines has put up a mill on its property, partly to service expected production from its Beacon mine. But the mill will have at least some additional capacity and the company hopes to keep it busy with some of the other new discoveries in the area.
In the meantime Belmoral wants to process a little more ore in its mill to reduce costs. It is financing another exploration in addition to the Wrightbar. The company says that it would consider shipping ore from its Vedron project in Timmins all the way to Val d’Or. It could also accept some ore from other area deposits.
These mills aren’t going to get much help from Goldex Mines if that company proves up the indicated 856,000 tons grading 0.209 oz gold per ton. A part of the Agnico-Eagle group of companies, Goldex would ship to the mill being built 30 miles west at the Dumagami mine, near Cadillac. Underground work has been going on for some time.
Two other companies plan to go underground to look over their reserves this year. Western Quebec plans to put down a ramp to look at the 540,000 tons grading 0.169 oz. The deal is being financed by Oracle Exploration, which can earn a 45% interest. Quebec Explorers, which is being financed by Cogesco Mining Resources, will be looking at its reserves through old workings. The company has announced 447,040 tons grading 0.20 oz gold per ton.
All of this is by no means the extent of the work going on in the map area on pages xx-xx. There are a number of other projects in the area, which are characterized by a growing flow- through phenomenon: going underground before a substantial reserve base has been proven up. This exploration method was popular in the 1930s but was mostly replaced by diamond drilling until flow-through came along. The reasoning is that gold deposits are some of the most difficult to prove up by surface drilling, and a look underground can be the most effective exploration method. However, a minority of industry members don’t agree with this and feel a good deal of flow-through money is being wasted by premature underground exploration. At any rate, it’s up to the investor in such projects to decide. While the chances of proving up an orebody are less by this method, it has nevertheless produced some major mines in the past. As any industry observer can tell you, going underground can tell you things about a property which you don’t want to know. Ask Soquem what happened when it put down a ramp on its New Pascalis joint venture the other year, when reserves were more than cut in half. Or Falconbridge on its Callahan property, where it had no published reserves in the first place and still doesn’t after two years underground.
Projects in the Val d’Or area going underground without reserves include Stabell Resources, which is sinking an exploration shaft. The nsr Resources property, which includes subsidiary Rand Malartic and partner Cogesco, went underground with a low reserve base and recently confirmed the 217,700 tons of reserves. The companies say the average grade of 0.17 oz has likely been increased and a new reserve inventory is being calculated. A host of other companies will be drilling more than one million feet from surface in the map area, indicating there will likely be more discoveries as the spring wears on.
Although a town like Val d’Or should consider itself fortunate for its unusually prolific exploration potential, exploration in recent years hasn’t discovered another Lamaque or Sigma or even a Kiena. The tonnages have been generally small, the grades about average for the camp. Imagine for a minute what a really big discovery would do for a camp like Val d’Or, a camp where it is almost impossible to conduct a drilling program and not get some smell of gold. The place would really take off and ensure that Val d’Or, that valley of gold, would continue to live up to its name for many generations to come.
GEOGRAPHICAL LOCATION: Val d’Or
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