GFMS focuses on Ontario and Quebec in new report

DENVER, COLO., — If you think exploring for gold in Ontario and Quebec is a yawn, think again. GFMS has just released a World Gold Analyst report on the two neighbouring Canadian provinces showing just how hot the region has become again.

Over the last decade, explorers and miners have been flocking back to historic camps like Timmins, Kirkland Lake and Val D’Or, famous for their deep hard rock gold mines, armed with new technology, new theories and lots of cash.

Paul Burton, editor of the report, focuses largely on the Abitibi greenstone belt, which stretches across the two provinces and has produced more than 180 million oz. of gold. In an interview during the Denver Gold Forum, Burton describes the region as “so, so prospective.”

The proof is in the numbers – the report looks at 160 companies operating in the region, with information on 300 individual projects, Burton explains.

“This whole revitalization of mining camps; it’s going to continue and you are going to see more mergers and acquisitions,” Burton says.

The top two producing gold mines in Quebec are owned by Agnico-Eagle Mines, a company that’s been around for about 50 years. Sean Boyd, Agnico-Eagle chief executive, says investors weren’t always so enthralled with the company’s projects.

“People used to criticize us for being boring but we continually saw opportunity there and that’s why we stayed,” Boyd says.

In 2008, the company’s LaRonde mine produced 216,000 oz. gold but an expansion has set the company up to produce an average of 320,000 oz. gold per year through 2022. From its Goldex mine, Agnico-Eagle expects to produce 175,000 oz. up until 2017 and 115,000 oz. per year at the Lapa mine until 2015. Cash costs will be around US$326 per oz. this year. 

“Quebec has been under-appreciated for many, many years,” Boyd says. “If those assets were in Nevada they’d have had a much higher profile.”

But they were in northwestern Quebec and that worked out well for Agnico-Eagle.

“We stayed when most others left and while we stayed we made new discoveries,” Boyd says. “We’ve always known it’s the best place in the world to mine and now more people are getting familiar with the region and I think that’s a good thing.”

But even new companies are finding success in Ontario and Quebec. Detour Gold listed on the Toronto Stock Exchange in January 2007 when it acquired the past-producing Detour Lake Gold mine 180 km northeast of Cochrane, Ont. Since then, the company has discovered 8.8 million oz. gold in reserves and has just released a prefeasibility study considering an open pit operation that could be in production by 2012.

Highlighting cheap hydro power, access to railroads and an experienced workforce, Detour Gold president and CEO, Gerald Panneton, says the infrastructure and the skilled workforce make operating in this region a breeze. “Everything is accessible at a very cheap cost,” he says.

But it’s really the people who make it all possible. The long history in mining has led to a huge service industry of geologists, geophysicists, drillers, miners and other consultants.

“We all love Timmins and Val d’Or,” Panneton says. “The skilled workers are there, they understand mining and they understand the development of mining.”