Barrick’s newest mine revives old gold camp

As American Barrick Resources (TSE) opened the Holt-McDermott mine 25 miles north of here recently, no-one was denying that the company’s newest gold producer is an impressive feat of engineering.

Scheduled to churn out 80,000 oz of gold next year when a sophisticated 1,400-ton-per-day milling facility is running at full speed, it is expected to be a steady, if unspectacular performer, in Barrick’s portfolio of seven gold mines.

But as the analysts and brokers among 600 guests at the opening were pointing out, the Holt- McDermott operation may mean a lot more to the long term future of the Kirkland Lake mining camp than the company which brought it into production.

Reserves of four million tons grading 0.15 oz gold per ton means that the Holt-McDermott pales in comparison to Barrick’s Goldstrike property in Nevada where the company has outlined 15 million oz of gold in situ in one huge deposit.

However, Holt-McDermott’s status as the first new mine in the Kirkland Lake camp for 25 years means that the operation, including the exploration and development work that led up to the official opening, has breathed some life into a community which is experiencing something of a revival.

Holt-McDermott alone will add at least $20 million annually to the local economy, said Mayor Joseph Mavrinac during a lavish opening ceremony for the mine attended by Ontario Premier David Peterson. New Homes

Approximately 150 new homes are being built to house some of the 250 employees, and a multi- million dollar commercial complex are just some of the expected spin offs.

“There is a new feeling of prosperity that hasn’t been felt here since the 1930s,” said Mavrinac who pledged $3 million to pave a new highway connecting the mine site to the nearby Esker Road Barrick has already spent $77 million to bring the mine into production.

“If they can get the roads paved so that the miners don’t wreck their cars on the way to work, the new mine will be a real shot in the arm for Kirkland Lake,” said Alma Grice whose son Jerry works in the Holt-McDermott core shack.

“The mine is going to be around for a while and it will bring more families back to the area,” said Grice. “Until recently, everyone has been relocating in Timmins, and we thought that Kirkland Lake was going to be a ghost town.”

According to 21-year-old Alain Bouchard, Barrick’s presence in the area has also brought the hope of higher wages. A former underground miner at the Kerr Addison mine at nearby Virginiatown, Ont., he applied for a job at Holt-McDermott after discovering that Barrick’s basic hourly wage structure was more than $3 higher — $16.20 per hour compared to $13. Excellent presence

“It’s not what I’d call a spectacular mine but it will be a steady long term producer that gives Barrick an excellent presence in the Kirkland Lake mining camp,” said President Robert Smith.

“We have traced the zone for a number of miles and as the mine matures, we will develop additional reserves along the belt,” he said.

While he is anticipating an annual production rate of 80,000-90,000 oz for at least seven years, there was some concern among analysts that there may not be enough tons per vertical ft in the orebody to support a 1,360-ton-per-day operation.

Outlined along a 35,000-ft strike length and open below 1,500 ft, the sheet-like mineralized zone is being accessed via development drifts on the 100-, 150-, 200- and 300-m levels.

Mill head grades of slightly better than 0.15 oz are significantly below the 0.192 oz gold per ton announced when Barrick made its production decision in late 1986. But a major haulage way is being driven west on the 300-m level to open up bigger stopes in the adjacent Three Star and Worvest claims and Smith is confident that the mill will be running at full capacity by December. He blamed the nugget- like consistency of the gold deposit and a high cutting factor (in the 0.45 oz range) for the current grades. Dilution factor

Barrick’s senior vice-president for development, Brian Meikle, was also unperturbed by the apparent dilution factor. “Even if the grade is 0.15, at current gold prices we will still make money,” he said.

Using a blast hole stoping method, Barrick expects to reduce its costs below $220(US) per oz and increase tonnage mined.

“We will blast hole at least 70% of the orebody and where the zones get narrower we will use shrinkage stoping,” said consulting geologist Meredith (Dit) Holt. Any additional problems, he said can be taken care of by an experienced mining staff brought in from Barrick’s Camflo gold mine to oversee the Holt- McDermott operation. Located about 140 miles further east, the Camflo mine has performed as one of North America’s cheapest gold producers since it was brought into production in the mid-1960s.

“There is a great feeling here that the people involved know what they are doing,” said Holt. A native of Kirkland Lake, he was credited at the opening ceremony for recognizing the potential of the McDermott property and keeping it on the company’s books at a time when the money wasn’t available to develop it.