THE GLOBAL SEARCH FOR GOLD — Queenston looks where others did not in Kirkland Lake

Many Canadian exploration companies have gone to the ends of the earth for gold, bringing back tales that gave the market a taste for the exotic.

Investors were less excited about companies like Queenston Mining (QMI-T), which has concentrated on Canadian projects clustered along the Kirkland Lake-Cadillac break in Ontario and Quebec, and farther north in the Harker-Holloway camp in Ontario.

Queenston already had a presence in the Kirkland Lake camp when the present management, under president Charles Page, took over the company at the end of 1989. It had held a royalty interest in the Macassa mine and was also Inco’s (N-T) partner at the McBean open pit, which operated in the mid-1980s. By 1989 the company had substantial land holdings along a 17-mile (27-km) strike length of the Break in Teck, Lebel and Gauthier twps.

Aware that a junior with a large land position in a single camp wields more power than one with widely dispersed properties, management began the slow process of consolidating the Kirkland Lake holdings by acquiring land in the gaps between its properties and buying out joint-venture partners. “It was difficult to put together a land package,” says Page, but the effort was worth it. “The majors wouldn’t waste their time putting a land package together, but we knew the importance of it.”

The final step came when Franco-Nevada Mining (FN-T) became a joint-venture partner in late 1995, bringing a cash infusion for Queenston in the form of a $1-million share and warrant purchase. This allowed Queenston to buy out Inco’s position in the McBean and the surrounding properties and begin serious exploration along the full length of its land holding.

Franco-Nevada kicked in its own Kirkland Lake land holdings, and the two companies have operated a 50-50 joint venture since the middle of 1996. One advantage to the large property holding is that assessment work on the property package can be credited to contiguous claims. As a result, the company can concentrate on its best targets without worrying about outlying ground coming open for staking.

The backing from Franco-Nevada has also given Queenston a chance to pursue the real exploration that the stock market seems to find so tedious: detailed drill programs aimed at the extensions of known gold structures.

“That’s the luxury we have — we’ve got the land, we’ve got $11 million, and we’ve got a partner with cash that likes this kind of exploration and has had success with it.”

“This kind” of exploration focuses on careful interpretation of geological structure. Kirkland Lake has historically been a camp of deep mines: Macassa, for example, still has North America’s deepest operating shaft, at 7,200 ft., and Lake Shore went to 8,000 ft.

The nearly vertical plunges of the gold orebodies are matched by limited surface expression; William Wright and William Hargreaves sank a shaft on a gold showing 6 inches wide at surface, with a little rusty weathering and virtually no wall-rock alteration. But the Wright-Hargreaves mine produced close to 5 million oz. gold, and is generally considered to have mined a single 17-million-oz. deposit it shared with the Lake Shore and the Teck-Hughes.

Queenston has concentrated much of its effort along the down-plunge extension of the McBean, where a “green-carbonate” mineralization type has been discovered. The green carbonate rock, usually interpreted as a highly altered ultramafic flow, made up a large proportion of the ore at the Kerr-Addison mine, about 12 miles (19 km) to the east. It is interfingered with talc schists which are clearly the metamorphic equivalents of komatiites, and intruded by any number of felsic dykes.

The green carbonate was loaded with quartz veins and often carried visible gold, but only about 20% to 25% of the drill intersections showed mine grades. The coarse, nuggetty gold in the unit would frequently be missed in sampling. The problem even extended to underground workings. “You’d be in a stope and the face would be barren,” recalls consulting geologist Dale Hendrick, who worked at the Kerr. “But you’d take another round and it would be reeking with gold.”

The unpredictable gold grades and the erratic distribution of the rock unit itself infuriated one mine manager after another at the Kerr, but there was no denying its value. “A lot of people forget there was a lot of carbonate at the Kerr,” says Queenston geologist Frank Ploeger. “Once they found the flow ore [gold ore in silicified basaltic flows], they began to neglect the green carbonate.” But the neglected ore type contributed about 14 million tons of the 37 million the Kerr hoisted.

Ploeger and other Queenston geologists have found that a myriad of intersecting structures cross the green carbonate they are seeing in the McBean area. Frequently, too, sets of intersecting veins expand into a material more like a vein breccia. The veining always shows up in the same place as the felsic dykes, and it was a rare stope in the Kerr green carbonate that did not take out some dyke material as well.

Offshoot

The McBean, during its short lifespan, operated on mineralization in a felsic dyke. Queenston’s drill holes below the pit have begun to suggest that the mineralization in the dyke is an offshoot of a much wider altered and deformed zone, with typical green carbonate in its footwall and more gold mineralization hosted in volcanics and dyke rocks in the hangingwall.

The gold has frequently reached underground-mine grades (the highest was 2.75 oz. per ton over 21.4 ft.), but that tells only part of the story, given the history of green carbonate as a sampler’s nightmare. The type has a typical “hit ratio” of one in five holes, but Queenston’s drill program on the McBean extension hit in about 60% of its holes. “We couldn’t have been that lucky,” says Page.

Like the Kerr, the McBean shows the same association between the felsic dykes and the mineralization. Geologist Murray McGill notes that “there seems to be some joy when you get green carbonate and felsite developed together.”

Queenston has a preliminary resource of 1.1 million tons grading 0.22 oz.

per ton (1 million tonnes at 7.5 grams per tonne) in the green carbonate below the McBean, in addition to 1.7 million tons grading 0.15 oz. in the dyke material. To the west, the Anoki deposit sits in the hangingwall of the deformation zone, and holds 1.2 million tons grading 0.12 oz.

The drilling on which the Anoki resource is based stopped at the deformation zone, making the zone itself an untested target both on the property and along strike to the McBean. Two scout holes, MB97-15 and MB96-06, have intersected the structure, and some mineralization, between Anoki and McBean and the new “Deep zone” at Anoki is much farther back in the hangingwall than the known resource.

Princeton

Drilling has started on the Princeton property, immediately east of McBean.

Its target is the extension of the McBean green carbonate in a 1,000-ft.-wide package of ultramafics and green carbonate rock, intruded by more felsic dykes. Two shafts were put down on the property in the early days of the Kirkland Lake rush, but there is little evidence of old work on the green carbonate. The mines of the western part of the camp may have given the oldtimers the impression that the felsic dykes were the best host rock for gold, suggests Ploeger: “I think they were looking more for the Kirkland Lake style [gold in felsic dykes] than the Kerr style.” The first drill hole intersected the ultramafic-green carbonate package over a 900-ft. core length, representing at least 500 ft. of horizontal width.

Queenston geologists are also using backhoes and water pumps to good effect.

Outcrop stripping has revealed the same ultramafic package at surface, complexly intruded by the felsic dykes. “You’re shoving felsite through a chemical jungle here,” says geologist Dale Alexander, pointing out complex veining and alteration patterns.

“You’ll never die for new projects or ideas around here,” says Hendrick. The technical success and new gold resources that have come out of Queenston’s ideas m
ust please its partner. And doubtless Franco-Nevada is also happy to see some of its royalty revenue going back into the ground, rather than to the Receiver General of Canada. Says Page, “That’s what the money was raised for: to do deep drilling on good geological targets.”