Joe Mann mine poses challenge to cost-conscious Campbell

Having been cut loose by Northgate Exploration, Campbell Resources (TSE) is confidently striking out on its own.

President John Kachmar says the company hopes to produce 55,000 oz. gold in the current year, all of which will come from the high-grade Joe Mann mine, 65 km south of this northeastern Quebec mining town. To help meet its objective, Campbell is also exploring for more ore on the same property (where current reserves stand at 2.6 million tonnes grading 0.288 oz. per tonne plus 0.3% copper), as well as outside Canada.

Northgate sold its 35% interest in the company last August, and along with its new-found independence, Campbell faces several challenges. Perhaps the greatest of these involves negotiating a 3-year contract with 25 mill employees here in Chibougamau and 175 mine workers at Joe Mann. All are members of the Quebec-based union known as CSN (Confederation des syndicats nationaux).

At stake are changes to employees base pay and benefits and ultimately the profitablility of the entire operation. The previous agreement, which included a 10% cut in pay, expired at the end of 1993, since which time workers have been drawing paycheques at higher, pre-contract rates. For the month of January, 1994, the company lost $131,046 on revenues of $2.6 million. For the year ended Dec. 31, 1993, Campbell lost $3.5 million compared with a loss of $910,000 the previous year. The loss last year includes a $1.75-million loss on the sale of discontinued operations. Mine Manager Karl Mikulash and Production Manager Alain Coulombe had completed their ninth meeting with the union when The Northern Miner dropped by the two sites recently. A vote was scheduled for March 19. At five tonnes per manshift, productivity at the 1,200-tonne-per-day underground mine is low in comparison with other Canadian gold mines where 55,000 oz. is the annual target. This is partly the result of a relatively large workforce. Productivity in the stopes is average, however, at 18.6 tonnes per shift.

Regrettably, the mine’s safety record is the worst in Quebec, which is partly a reflection of narrow mining widths (about 1.5 metres) and the manual nature of shrinkage mining (which accounts for 60% of production).

Moreover, total costs are a steep $100 per tonne, which has induced Campbell to seek a reduced rate of pay to keep the operation viable.

It costs about $2 million per year to truck ore to Campbell’s mill in Chibougamau. As a result, the company finds it cannot afford to use more mechanized mining methods such as longhole stoping, as this would create more dilution and therefore raise trucking costs. Hence, the high dependence on manual mining.

About 25% of production comes from development headings, with longhole stopes accounting for 15%.

In a feasibility study, Strathcona Mineral Services concluded it would cost $11 million to rehabilitate the idle mill, situated at the Joe Mann site. The price proved too rich for Campbell, however, which opted, instead, to continue trucking ore to Chibougamau.

This year, the company has budgeted to treat 220,000 tonnes grading 0.273 oz. gold per tonne.

Patrick Whiteway is editor of Canadian Mining Journal. A more detailed report on the Joe Mann mine will appear in the April, 1994 issue of that magazine.