Manitoba suffers slowdown in drilling activity, spending

Since the mid-1980s, Manitoba’s mineral exploration industry has been showing strong growth in activity and spending. As a consequence of increased exploration since 1986, four new mines were put into production and large areas of previously open ground were being actively explored. However, as a result of falling gold prices and a change in flow- through financing methods, the preliminary estimated exploration expenditures of $35 million for 1989 are well below the estimated $42.5 million spent in 1988 and $50 million in 1987. These amounts correspond with surface exploration diamond drilling figures estimated at 178,000 metres in 1989, 270,969 metres in 1988 and 278,537 metres in 1987.

The number of claims recorded in 1989 decreased by about 45% compared with 1988. However, if one compares all mineral dispositions (claims, permits, and leases) in good standing, an average of 27% more land area was being worked throughout 1989. This substantial increase is attributed largely to new exploration permits acquired in the southern extension of the Thompson nickel belt.

The strong emphasis placed on gold exploration for most of the 1980s shifted toward base metals which, contrary to gold, exhibited price strength in the late 1980s. In Manitoba, five of the eight advanced mining projects are for base metal deposits.

Once again base metal exploration and development programs were dominant in the prolific Flin Flon-Snow Lake belt and its extension below the Paleozoic to the south. The new Namew Lake nickel- copper mine of Hudson Bay Mining & Smelting (TSE) and Outokumpu Mines was officially opened in November, 1988. Full production, expected by April, 1989, was delayed to the end of the year because of unexpected ground water problems. With reserves of 2.04 million tonnes of 2.47% nickel and 0.8% copper, Namew is expected to be a low-cost producer when fully operational.

At the Callinan copper-zinc property, just north of the main Flin Flon mine, Hudson Bay Mining conducted lateral development on the 2,210-ft. and 2,750-ft. levels. A ventilation raise from the 1,690- ft. level to surface was completed. Undercutting of the ore commenced in 1989 and production is scheduled to begin in April. Proven reserves stand at 2.36 million tonnes of 1.5% copper, 4% zinc, 1.89 gold per tonne and 22.62 silver.

In the Snow Lake area, HudBay began producing from the Chisel Lake open pit in February, 1989. The pit is designed for removal of the one-million-tonne Chisel Lake mine crown pillar. With grades of 10.5% zinc, this operation will supply the company with a low-cost zinc supply for the next 3-4 years.

To the north of the Chisel Lake mine, Hudson Bay Exploration has roughly outlined a new discovery, the Chisel North deposit containing 2.45 million tonnes grading 0.2-0.3% copper and 9% zinc. In October, the company began a program of infill drilling on this deposit and other targets in the vicinity.

During the summer, Minnova (TSE) conducted an extensive mapping and sampling program on the Big Island property optioned from Westfield Minerals (TSE) and Goldbrae Developments (VSE). Minnova began a 4,500-metre drill program on the property in January.

Other noteworthy base metal exploration projects in the Flin Flon-Snow Lake belt in 1989 include: Hudson Bay Exploration in the Clearwater Lake, Namew Lake and Snow Lake areas; Granges (TSE) in the McClarty Lake, Athapapuklow Lake and Snow Lake areas; Falconbridge Ltd. in the Herblet Lake, Norris Lake, Cook Lake and Dickstone mine areas; and Cominco (TSE) in the Clearwater Lake and The Pas areas.

In the Lynn Lake belt, base metal exploration was carried out by Manitoba Mineral Resources in the Granville Lake-Laurie River area and by Hudson Bay Exploration at the West anomaly of the Ruttan Mine. Hudson Bay is conducting a large underground and surface exploration program at Ruttan to extend the operating life of the Leaf Rapids operation.

Inco (TSE) continued with the exploration and development of new nickel reserves in and around Thompson. Development work at the 4.5-million-tonne 1-C deposit of the Thompson mine consisted of 1,200 metres of drift and ramp advance. The remaining 350 metres of drifting and raising will be completed by 1991. The 1-C is expected to be producing at a full capacity of 1,350 tonnes per day in 1993.

Dredging work to remove overburden for Inco’s new South pit in Thompson commenced in 1989. Five million cubic metres of overburden and 800,000 cubic metres of caprock are to be removed by August. Full production at a rate of 3,630 tonnes of ore and 10,900 tonnes of waste per day is forecast for October. Total capital appropriated for this project is $42.1 million.

The Birchtree mine, just southwest of Thompson, is another project Inco is bringing on stream. On standby since 1977, the Birchtree is estimated to contain reserves of 700 million lb. nickel. Development work scheduled for completion by the end of 1989 included 1,675 metres of drifting, 135 metres of raises and the reopening of all major levels and ramps. Full production of 2,725 tonnes per day is planned by 1995, compared with 1,100 tonnes by the end of 1989.

The extension of the Thompson nickel belt received a good deal of new activity in 1989. Sparked by strong nickel prices, Falconbridge acquired three exploration permits covering ground in the William Lake, Moose Lake and Cedar Lake areas, and Manitoba Minerals Resources (MMR) acquired two permits in the Minago River area.

Both Falconbridge and MMR flew airborne surveys over their permit areas. That was to be followed up by ground geophysics. Falconbridge began drilling some targets in the Moose Lake area before Christmas, and MMR will commence drilling before breakup.

In June, Black Hawk Mining (TSE) purchased the rights of the Minago nickel property from Canamax Resources (TSE) and Granges. Discovered in the late 1960s by Amax, subsequent drilling had outlined a geological reserve of two million tonnes grading 1.64% nickel in five zones, with 65% of the known mineralization in the Main zone.

By mid-December, Black Hawk had completed an 8,200-metre drill program which has apparently doubled the reserve base from 3.6 million tonnes of 1.28% nickel to 7.5 million tonnes grading 1.29% nickel. Black Hawk resumed drilling a series of long holes in 1990 designed to test the deposit at the 600-metre level and to follow up on the best results thus far encountered at the property. These include hole 50 which intersected 30.48 metres of 1.5% nickel and hole 49 which intersected 16.76 metres of 2.1% nickel.

In southeastern Manitoba, Quillo Resources (VSE) flew an airborne geophysical survey and conducted a diamond drill program in the Black Island-Manigotogan area. Milestone Resource (ASE) conducted separate drilling programs in the Bird River area and Granges Inc., carried out geophysical surveys and a substantial drill program in the East Braintree-Whitemouth River area.

Meanwhile, the gold mining industry in Manitoba experienced major setbacks in 1989. Pioneer Metals (TSE) closed the Puffy Lake gold mine in May, and Granges indefinitely suspended operations at its Tartan Lake gold mine beginning in October and LynnGold Resources shut down the MacLellan mine in November. These mining operations fell victim to falling gold prices and high production costs.

News was more encouraging at the old Nor-Acme mine in Snow Lake, where Inco Gold completed a $6.5-million exploration and development program. Inco Gold is attempting to earn a 50% interest in the property from High River Gold Mines (VSE) by placing the former producer back into production. The 1989 program consisted of 18,000 metres of drilling, 730 metres of drifting and crosscutting and removal of a 7,930-tonne bulk sample.

A feasibility study prepared by Inco Gold and Wright Engineers released in November estimates it will cost $50 million to put Nor- Acme back into production. With a production rate targeted at about 410,000 tonnes of ore per year, this would produce 68,000 oz. of gold at a cost of about US$250 per oz. However, with such
a high capital cost to put Nor-Acme into production, Inco Gold will likely go back underground to outline more reserves and increase the viability of the project.

Two other former producing properties in the Flin Flon-Snow Lake belt received considerable attention in 1989. At the Ferro mine, southeast of Snow Lake, Pierce Mountain Resources (VSE) was to have spent $1 million to obtain an 80% interest in this property. Encouraging drilling results were encountered at the Ferro main zone and at the newly discovered Gold Dust Shear zone.

These results caught the interest of Placer Dome (TSE), which is attempting to obtain an interest in a portion of the Ferro property. In the fall, a stripping program was conducted and in January drilling resumed on the Ferro as well as on the nearby “NOC” claims.

Near the old Gurney mine site, east of Flin Flon, operator Granges and partner Mid-North Resources (VSE) completed a 28-hole drill program on known zones and anomalies. Better results include 7.25 metres of 6.09 grams gold at the Gossan Hill showing and 9.62 metres of 5.46 grams gold at the Contact Lake showing.

The Lynn Lake belt, which was active in 1988, received far less attention in 1989. After reducing production costs at its MacLellan operation, LynnGold was hard hit by falling gold prices. As a result, LynnGold announced on July 31 it would close the MacLellan mine in November if it could not gain access to ore from the Crown-controlled (MMR) Farley Lake gold deposit. Numerous negotiations between LynnGold and the provincial government failed to reach a compromise and the Lynn Lake operation was closed in November.

LynnGold conducted detailed drilling on The Rainbow deposit, adjacent to the MacLellan Main zone, earlier in 1989. The 875,000- tonne deposit grading 7.5 grams gold was to be in production during the fourth quarter of 1989. Also in 1989, LynnGold completed a prefeasibility study of the Burnt Timber deposit, 12 km from the MacLellan mill. The Burnt Timber deposit, amenable to open pit mining, hosts reserves estimated at 740,000 tonnes of 3.4 grams. Adjacent to the Burnt Timber, LynnGold conducted drilling on the North zone, where reserves are reported at 124,000 tonnes grading 9.4 grams.

A feasibility study completed in 1989 on the Farley Lake deposit, on behalf of co-holders MMR and Mingold Resources, suggests a gold price of slightly more than $400 per oz. is required for the project to be profitable. The deposit is estimated to contain 2.23 million tonnes grading 3.6 grams gold of open pit reserves in two zones. There are no plans to put the deposit into production at the present time.

At the Little Stull Lake property, close to the Ontario border, operator Westmin Resources (TSE) and partner Tanqueray Resources (VSE) conducted a 10,000-metre drill program. Since 1986, 184 holes have been drilled, outlining gold in at least four zones. Better results from drilling on the West zone in 1989 include four metres grading 15.8 grams and 1.9 metres of 18.4 grams gold. Drilling resumed on the property in January of this year.

As in previous years, Noranda Exploration was again active in the Gods Lake belt in 1989. Geophysical and/or drilling was conducted at Knee Lake, Knight Lake and Gods Lake. Early in 1989, Noranda conducted a drill program at their Lynx Bay property at Oxford Lake. A recent report claims that a gold zone has been discovered and gold values intersected over a 400-metre strike length at Oxford Lake. Noranda recently signed an agreement with Lithium Corp. of Canada (COATS) which give Lithium the right to earn a 50% interest in the Oxford Lake group of properties. Drilling at the Lynx Bay property resumed in January.

In the southeastern region, in the Rice Lake belt, Rea Gold (TSE) has purchased the former San Antonio Gold mine at Bissett from Cassiar Mining for $3.2 million plus other considerations. Rea has started a detailed feasibility study of the property where recent estimates give reserves of 1.1 million tonnes grading 7.6 grams gold below the 26th level.

Bakra Resources Ltd. completed 16 holes on the Sannorm property near Bissett, with one intersection returning 7.92 metres averaging 5.24 grams gold. The company has outlined about 180,000 tonnes grading 4.18 grams gold to a depth of 150 metres.

Drilling programs were carried out by Crack Resources (VSE) at Wallace Lake and at Moose Lake, Quillo near Rice River, Dynamic Consolidated Resources (ME) at Wanipigow Lake, Grizzly Creek Resources at Gem Lake and H. Steinleitner at Mabel Lake. Overburden drilling was conducted on properties near Bissett by Tulsa Resources.

Companies involved in various prospecting, geological and geophysical programs included Noranda Exploration, Crack, Quillo, International Falcon Resources (VSE) and Westshield Consulting.

South of the Rice Lake belt, Maskwa Nickel Chrome Mines carried out diamond drilling in the Cat Creek area and Noramco Mining (TSE) geological mapping, geophysics and diamond drilling at Falcon Lake.

Elsewhere, exploration for pegmatites took place in the Bird River area with Tantalum Mining Corporation of Canada doing diamond drilling, and Springsyde Resources (ASE) a geochemical survey.

D.E. Prouse and Bruno Esposito work for the Ministry of Energy and Mines, Manitoba. Prouse is resident geologist in The Pas. Esposito is senior geologist in Winnipeg.