St Andrew focuses on West zone

Since opening its Stock Twp. gold mine near here in July, 1989, St Andrew Goldfields (TSE) has been fighting an uphill battle against low gold prices and a severe shortage of cash. With the recent mining of higher-grade ore from the newly developed West zone, the fortunes of the junior gold producer are now looking brighter.

The company estimates that 1992 production will top 35,000 oz. gold at a cost of about $295 per oz. This outout represents an increase of almost 60% from 1991. Since the company’s cash flow is based entirely on gold production, 1992 is shaping up to be a record year for the company (final figures are still being tallied).

Net earnings for the first nine months of 1992 were $123,211, compared with a loss of nearly $2.5 million for the same period in 1991.

President Herbert Gasser told The Northern Miner during a recent site visit that financially, St Andrew has some breathing space until June, 1995, when the remaining 3-million Swiss Franc Bond issue comes due. During the past two years, Gasser has successfully managed to get investors to convert some 22 million CHF bonds into the company’s preferred shares.

When asked about future gold prices, Gasser said he remains cautiously optimistic, but added that the upside potential is far greater than the downside risk.

The mine property, about 35 miles east of Timmins, Ont., straddles the prolific Porcupine-Destor Fault zone which has hosted some 50 other gold producers in the Timmins area.

The bulk of the underground production comes from the N-2 and West zones. Additional tonnage is mined from the Satellite and M-2 zones. All of the ore zones occur between subsidiary splays off the Porcupine-Destor fault zone. The N-2 zone, about 300 ft. long and 18-20 ft. wide, strikes at 62 and plunges 40 to the southwest. The ore is hosted in narrow dykes and stringers of sheared and altered albitite porphyry. Gold occurs with pyrite and in fine quartz veinlets. Pyrite content ranges from 15% to 20%, but locally can reach up to 35%. The porphyry bodies are surrounded by pyritic carbonate-rich ultramafic rocks that also contain gold. Current reserves for the N-2 zone are 161,107 tons grading 0.15 oz. gold per ton.

At the West zone, mineralization occurs both at the contact between altered ultramafic and mafic volcanic flows and within mafic volcanic units north of the contact. Mineralization primarily consists of free gold in brecciated quartz veins. Locally, gold occurs with pyrite. The West zone is about 300 ft. long and averages 28 ft. in width. Material mined to date from this zone has averaged 0.35 oz. gold, which is 75% higher than the grade indicated by drilling.

Jaan Aaviku, general mine superintendent, says that underground development work in 1993 will focus on the West zone. The first priority is to deepen the ramp access in the zone. This development should be sufficient to supply the tonnage needed to meet the company’s production quotas for 1993. The company is also planning to improve the sump system for waste water removal and install a new electrical sub-station in the West zone. As the new year progresses, the company is facing production delays because of access problems at deeper levels in the mine. Access is currently via shaft to the fourth level and then by an internal ramp to the lower working levels.

General manager Edward Bettoil said the company is looking at three options to alleviate the current access problems:

— Refurbishing and possible deepening of the existing shaft. (Bad ground conditions are present in the shaft below the 5th level.)

— An internal winze from the 4th level, west of the shaft.

— A new surface shaft to service the west zone and other new exploration areas.

In 1992, St Andrew received a $300,000 grant under the Ontario Mineral Incentives Program (OMIP) to help cover the exploration costs for the West zone. The company has applied for a similar grant in 1993 to continue exploration on the West zone and along strike to the west where a Hollinger Mines drill hole from the mid 1960s intersected 0.18 oz. gold over 25 ft. The company also plans to drill a series of surface holes on its Taylor Twp. property about 6.3 miles to the east of the mine site, where two mineralized zones have already been outlined. Chief geologist Otto Zavesiczky said the aim of the program will be to locate the eastward extension of the West Porphyry zone where current preliminary reserves total 274,000 tons at 0.21 oz. gold. Although termed the West Porphyry zone, mineralization occurs in quartz veins in altered mafic volcanics sandwiched between carbonate-rich ultramafic flows.

A third priority target is the East zone, about 0.5 miles east of the Stock mine shaft. If funding is available, the company hopes to drive a development heading into the zone to evaluate the drill-indicated reserves of 650,000 tons at 0.08 oz. gold.

On surface, St Andrew is looking at upgrading the crushing plant and ore storage facilities. Ultimately, the company would like to reach its approved 1,000-ton-per-day mill capacity so that it can handle custom-milling projects.