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Mining the Northwest: Northern Ontario gold miners find challenges, opportunities in releasing quarterly results

Evolution Mining exhibiting patience in restoring Red Lake operations to a premier mining camp
Evolution Mining Red Lake camp aerial
(Evolution Mining photo)

Australia's Evolution Mining is very keen to open up mining on "multiple" fronts within the next few years at its Red Lake complex.

Executive chair Jake Klein delivered those remarks Oct. 20 in releasing quarterly results which included 23,768 ounces of gold production from its combined operations in the northwestern Ontario camp during a three-month period, ending Sept. 30.

Evolution was among a handful of gold mining companies across Northern Ontario to post its third-quarter results within the last couple of weeks. Gold prices were trading in the range of US$1,775 an ounce this week.  

At Red Lake, Klein said Evolution geologists continue to hunt for high-grade zones, underground mine development rates are "hitting their targets," and the company is still working its newly-acquired neighbour, formerly Battle North Gold Bateman Mine, into the fold.

"There is still a lot of work to do at the operation but the turnaround to restore Red Lake to a premier Canadian gold mine is gaining momentum," said Klein.

"We know what to do, we know how to do it; it is now a case of execution and delivery."

One of those new mining fronts is tapping into new gold systems at the Upper Campbell area of the Red Lake Mine and finishing a decline over the next 12 months to open up that area to production.

The company is making huge investments in major capital projects in Red Lake this quarter with more than $27 million (in Australian dollars), including $10.8 million on underground development at its McFinley deposit. Klein said Evolution's geologist still need time to better understand this ore body with a bulk sample to be extracted next year.

Evolution, which is celebrating its 10th anniversary in November, acquired the Red Lake Complex from Newmont in late 2019.

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To the south, New Gold ran into issues this summer with lower than anticipated gold grades at its Rainy River open pit and underground mine, 50 kilometres northwest of Fort Frances.

Mining at its ODM (East Lobe) Zone resulted in 20,000 fewer ounces than planned during July and August.  As a result, the company elected to drop its gold production targets this year from 275,000 to 295,000 ounces to a revised guidance of 240,000 to 250,000 ounces.

During the third quarter, Rainy River Mine produced 60,785 gold equivalent ounces, down from the 64,221 ounces produced during the same period in 2020.

New Gold brought the drills in to get a better handle on the mineralization at ODM and to improve the predictability of its geological block model.

The third quarter had its challenges, particularly as Rainy River addressed the grade reconciliation issues experienced in July and August," said company president-CEO Renaud Adams in an Oct. 13 news release.

"Rainy River's third quarter gold grade was up 10 per cent compared to the first half, and with lower contribution expected from the East Lobe in the fourth quarter compared to the third quarter, we should see a step-up in production and a stronger finish to the year at Rainy River," he said.

"We remain on track to deliver on our updated guidance, and we continue to make progress toward securing the company's future growth at both assets. Our liquidity position improved for a third consecutive quarter, and I continue to expect meaningful free cash flow generation from our operations in the near-term."

From now until of the year, this area of the mine is expected to deliver 35 per cent of Rainy River's production.

On the year-to-date totals, the mine has produced 172,462 ounces, up from the 164,960 produced through the first nine months of last year.

Rainy River contains a measured and indicated resource of 1.8 million ounces as exploration drilling ongoing this year. The company expects an underground optimization study for Rainy River to be out by year's end. It will contain updated mineral and life-of-mine estimates."

New Gold also runs the New Afton underground mine outside Kamloops, BC.

On the north shore of Lake Superior, Barrick Gold reported that gold production at its Hemlo Complex could fall short of its anticipated 2021 target.

In an Oct. 14 news release of quarterly results, Barrick expects production to be below its annual guidance range following a slow ramp-up of underground development due to pandemic movement restrictions. Barrick began the transition from open-pit mining to underground at Hemlo in 2020.

Hemlo produced 26,000 ounces during the third quarter, ending Sept. 30, and 115,000 ounces through the first nine months of this year. The operation consists of the Williams Mine, located on the Trans-Canada Highway, 35 kilometres east of the town of Marathon.

Wawa-area gold miner Wesdome reported 23,621 ounces produced during the third quarter, 20 per cent off the 29,836 ounces produced during the previous quarter.

Company president Mr. Duncan Middlemiss attributed that to two weeks of scheduled downtime to install a new cone crusher along with annual mill maintenance.

"Year-to-date production at the Eagle River Complex of 76,773 ounces leaves us very well positioned to achieve the mid to high point of our guidance range of 92,000 – 105,000 ounces," he said in an Oct. 14 statement.

The Eagle River Complex is located 50 kilometres west of Wawa. It consists of an underground mine, an open-pit operation and a processing located on more than 11,000 hectares. The underground portion produces at a rate of between 92,000 and 105,000 ounces per year.

Closer to the Timmins gold mining camp, McEwen Mining recorded 8,300 ounces at its Fox Complex near Matheson during the quarter, up from 5,800 ounces during the same quarter in 2020.

The company just started tapping into its Froome deposit, where commercial production started Sept. 19. The underground infrastructure at Froome is expected to be fully developed by June 2022.

Although early in the overall mining process, the company said "there have been positive trends in metallurgical recovery, which is 2.2 per cent above plan, and average gold grade, which is 3.8 grams per tonne (g/t) versus plan of 3.2 g/t.

Encouraging exploration drill results were received in a campaign to extend the Froome resources and mine life, and provide a bridge to future production to the next deposits in the pipeline at Grey Fox and Stock. A new resource estimate for Froome and a life-of-mine plan and preliminary economic assessment for the Fox Complex will be released during the fourth quarter.