By IAN ROSS
Prices for the precious yellow metal were pushing a 16-month high at $700 an ounce US in September as a Toronto junior miner is sinking close to $90 million into exploration on their high-grade Red Lake gold property.
Gold Eagle Mines is among a handful of successful juniors with recent gold discoveries in the heart of one of the camps.
Earlier this year, the company announced it had raised $89.1 million to aggressively explore their Bruce Channel Discovery Zone within their Gold Eagle Project.
By mid-2008, contractors will begin work on a $65 million exploration shaft, driving down 1,450 metres to begin underground drilling on what Gold Eagle president and CEO Simon Lawrence says is a “mineralized envelope that’s open in all directions” under the Bruce Channel waterway on Red Lake.
The company’s property, six kilometres north of town of Red Lake, sits on a southeast-to-northwest trend that hosts a cluster of some of the richest and largest producing gold mines in the world, namely Goldcorp’s Red Lake and Campbell Mines and the closed Cochenour-Willans Mine.
“It’s a huge system with all the (geological) characteristics of the Campbell and Red Lake mine,” says Lawrence. It’s not one huge ore body, but a series of structures.
“Within this envelope, we’ve identified between seven and 11 of these high grade structures. But until you get underground and drill them closer, you’re not sure how large they are and how continuous they are."
The company reported their mineralized envelope measured 1,100 metres vertically, with horizontal dimensions of 645 metres northeast-southwest by 450 metres.
Determining any kind of resource calculation “is some ways off,” says Lawrence, with an 18-month shaft construction period followed by six months of underground drilling.
This summer, the company was studying a site near a former producing mine on the property.
J. S. Redpath is performing the engineering, site investigation and planning of the underground exploration program, while AMEC Earth & Environmental is pursuing the environmental permitting and approval work.
Former Dynatec co-founder Bill Shaver, one of Canada’s most experienced shaft sinkers, has been added to the team as a consultant.
In August, five rigs were working under the Bruce Channel to expand their “regional exploration program” to test the mineral potential on the edges of their property.
“Hopefully it will prove up some mineable reserves within this very big system,” says Lawrence.
Gold Eagle is a relatively new junior, merged from two predecessor companies, Exall Resources and Southern Star Resources.
In the last few years, they’ve made two major gold discoveries, first with their Western Discovery Zone in 2003, followed by Bruce Channel in 2005.
When Gold Eagle’s predecessors decided to drill under a nearby mine, the Cochenour-Willans, they began getting some high-grade sniffs. It was enough incentive to continue drilling.
The Western zone is a promising target, says Lawrence, but most of this year’s concentration of resources is on the Bruce Channel.
The property contains a past producing mine, the Gold Eagle, from the 1930s and 1940s, but the shaft extended down only 500 feet.
Surprisingly, there’s been no previous exploration under the channel.
“Sometimes the most obvious targets get overlooked,” says Lawrence. But it’s been a can’t-miss zone for them so far.
“We find whenever we go (drill) into that Balmer, we hit gold mineralization. We haven’t really missed on anything.”
Gold Eagle’s Bruce Channel Discovery lies within the Balmer Assemblage, the oldest volcanic classification of rock within the Red Lake Camp, dated at 2.9 billion years.
“You can’t go any older than that,” says Red Lake’s Regional Resident Geologist Andreas Lichtblau. That sequence of rock hosts the Campbell-Red Lake mines. “One exploration tool is stay within that Balmer.”
Balmer is a classification of rock defined by local geologists as package of rock of submarined lavas, “same as in Timmins, with some sediments thrown in for good measure,” says Lichtblau.
In the Red Lake camp, there’s two distinct ages of rock at 2.9 and 2.7 billion years old. “All the good stuff is found in the older rock. That’s why it’s one exploration tool.”
By nature, Lichtblau says, Red Lake’s bending gold veins are hard to pin down, unlike the massive sulphides for nickel and copper found in northeastern Ontario.
At Gold Eagle, Lichtblau says because this system is so deep (more than a kilometre down), “it’s difficult to target drill holes properly.”
But he says Gold Eagle’s underground work should determine whether these multiple intersections align within one or a number of easily traceable zones.
Across the Red Lake mining district, exploration work is heavy with 15 surface drills operating on 13 active projects, three of them advanced.
Some of Gold Eagle’s neighbours are getting encouraging results.
Just southeast of their property, Premier Gold Mines, a joint venture with Red Lake Mines (a Goldcorp affiliate) are drilling and getting high grade results on their Rahill-Bonanza Project, the site of a past producing mine.
While drilling two main targets, the company says a potentially new zone was discovered in a hanging wall with an intersection of 49.00 grams per tonne gold across one metre, one of number mineralized zones there.
Two surface drills are working with a third drilling 6,000 feet underground from the workings of the Campbell mine complex.
Another junior miner, Rubicon Minerals has drills operating on two different projects with two different partners.
With joint venture partner Golden Tag Resources, Rubicon is chasing a down-dipping extension found on their highly-rated McCuaig property. “It’s a true discovery of new mineralized zone,” says Lichtblau.
Rubicon has added Goldcorp founder Rob McEwen on board as an advisor.
North of the town, Rubicon was working with Solitaire Minerals on a 3,300-metre summer drilling program near the Goldcorp/Planet Exploration’s Sidace Lake property.
Claude Resources, a Saskatchewan gold, oil and gas producer, has reacquired the former Madsen Mine from Placer Dome and is dewatering it to go underground to begin drilling.