JUNIOR MINING SPECIAL — Musselwhite a hotbed of activity

Perched on the southern shore of Opapimiskan Lake in the remote bush of northwestern Ontario is a project that Placer Dome (TSE) believes will be Canada’s next bullion producer.

Musselwhite, a joint venture between Placer Dome (68%) and Toronto-listed TVX Gold (32%), has been a veritable hotbed of activity. In March, huge quantities of fuel and equipment were trucked to the site via a 75-km winter road and, at presstime, a surface diamond drill program involving six rigs was close to winding down.

In April, mining contractor J.S. Redpath dewatered the existing 239-metre shaft, set up a new headframe and hoist, and began underground work for the purpose of mining a bulk sample and establishing drill stations. That activity — coupled with a working agreement with the local First Nations and plans for upgrading the winter road to all-season status — is quickly advancing Musselwhite toward the construction stage. According to Colin Seeley, Placer Dome’s Thunder Bay-based manager of public relations, Musselwhite is proceeding on schedule with favorable results. “What we have seen so far has been very encouraging,” he says. “It certainly puts Musselwhite at the forefront of Placer Dome Canada’s exploration projects.”

Momentum has been increasing since March, 1993, when Placer Dome acquired Homestake Canada’s 25% interest in the property for $5 million. Late that same year, Placer Dome and TVX committed $12 million to Musselwhite for 1994, which they later revised to $19.7 million. This, according to Seeley, should finance all planned expenditures up to, and including, the first quarter of 1995.

Since upgrading of the winter road has been postponed until 1995, it was decided that more money could be concentrated on diamond drilling and underground development.

With 20,000 metres of surface drilling budgeted for 1994, the company is attempting to increase the known reserves (4.2 million tonnes grading 9.6 grams gold per tonne) in the East Bay deposit.

Another deposit, the West Anticline zone, is reported to host 2.9 million tonnes grading 5.9 grams.

And although Seeley describes the orebody as “not straightforward,” underground infill drilling has been scheduled.

Diamond drill contractor N. Morrisette, using equipment and crews from its nearby Cochenour-based complex in the heart of the Red Lake camp, will be undertaking at least 18,000 metres of underground drilling.

“Surface drilling was done at 50-metre intervals along strike, and the underground program will consist of infill drilling between those stations,” Seeley explains. “Although all the data have not yet been compiled, we suspect the drill programs will be successful.”

Establishing underground drill stations is only one task which faces mining contractor J.S. Redpath. Priorities involve driving a development ramp and extracting a 37,000-tonne bulk sample, all of which is to be completed by next October. Bulk testing will occur on site using a sample tower, whereas assaying will be conducted off the property.

However, Seeley says the remoteness of the project has posed some challenges. “Power for the project is something the company is working on,” he says. “We have an expert coming to help us determine whether we should tie ourselves to the Ontario grid or use diesel generation.”

Placer Dome has also been conducting discussions with First Nations groups in the area. In fact, the Thunder Bay public relations office was created partly for the purpose of dealing with the arrangements negotiated with local bands and tribal councils.

Seeley says some native workers are already on site, in the core shack and office. “We have had a very good working relationship with the area’s First Nations,” he says, “and we have a clause in the agreement to employ First Nations people.”

This season should prove to be a watershed for the project, as operators set about preparing for a feasibility study, scheduled to begin in the first quarter of 1995.

“We are looking at a construction decision to come down late in 1995, perhaps in September or October,” Seeley says. “The actual construction would take about 15 months, so we are tentatively looking at starting production early in 1997.”

The construction phase of a planned 2,000-tonne-per-day operation could create about 600 jobs, Seeley claims. The total expenditure for construction would be in the order of $150 million and the mine would employ about 275 people full-time.

(The previous preliminary Musselwhite study, which was shelved after the project was put on hold in December, 1989, called for the production of about 110,000 oz. annually).

— The author is a freelance writer and resident of Red Lake, Ont.