Flush with a fresh injection of $55 million in newfound cash and a budding partnership with mining giant Agnico-Eagle Mines Limited, Queenston Mining Inc. is marching through the Kirkland Lake camp with far more swagger in its step.
“We’ve been kind of moving the company forward here over the last few years from more of a pure exploration play to more of an advanced exploration and development story,” said president and CEO Charlie Page, whose company has five fully owned properties in the area.
“We think we’ve got the goods right now to advance this to more of a feasibility and production scenario.”
In a three-week period stretching from the end of October to early November, Queenston announced a double-barrelled shot of financing to help advance its five gold properties in the historic camp.
The first, a $35-million deal with Agnico-Eagle, gave that company an 11-per-cent stake in Queenston.
The move follows more than a year’s worth of discussions between the two companies and brings a strong degree of validity and notoriety to Queenston’s efforts, while also marking the first time “in many years” that a major miner has set foot in the camp, said Page.
This financing was accompanied by a separate deal to make use of Agnico-Eagle’s geological and engineering mining team through a technical services agreement. Although it has worked in recent years to develop new mines in places like Finland, Mexico and Nunavut, Agnico-Eagle’s flagship property is its LaRonde Mine. This underground mine, located roughly 80 kilometres east of Kirkland Lake, is host to the company’s main mining team.
This proximity has given the team has an understanding of the types of deposits Queenston is looking to develop.
The agreement means the team could be used to help with Queenston’s plans, said Page.
In particular, he said they would help with the company’s most advanced project, the Upper Beaver property, for which they could design the underground development, and assist with matters such as the bidding process for shaft-sinking.
This temporary addition of outside expertise won’t keep the company from gradually swelling its ranks with staff, especially as Queenston moves towards its idea of building a milling facility by its Upper Canada site.
This would be fed from ore from its various local deposits, all of which are located within five kilometres of one another.
Page hopes to be able to put together six million ounces worth of deposits, with an eventual production target of 250,000 ounces a year.
“We still intend to beef up our management team towards more of a mining team, but this fills something in very quickly, and these guys are some of the best underground miners in the world, in our opinion.”
The second financing announcement, announced Nov. 8, provided Queenston with $20 million through a private placement bought-deal agreement. All told, Queenston now has some $90 million in cash, providing it with plenty of room to continue chipping away at its ambitious goals.
Part of this includes spending $20 million on exploration and development in 2011, up from the $18 million expected to be spent through to the end of 2010.
Even this year’s total is $2 million more than initially anticipated, due in part to positive exploration results. As of mid-November, 14 drills were turning away across Queenston’s five Kirkland Lake properties.
“I’ve realized you can’t find anything drilling five or six holes a year on a big property package like that, unless you’re really, really lucky. You gotta pound it with drilling to find new things and define things. It just takes a lot of work.”
Baseline studies and permitting are currently underway at the Upper Beaver property in anticipation of possibly beginning the process of sinking a shaft by the third quarter of next year. An updated resource calculation is also expected by the first quarter of 2011.
The Upper Canada project, which Page sees as having the potential for a large-tonnage, low-grade open pit, is being drilled off in anticipation of completing a resource calculation by early 2011.
Queenston’s other prospective properties include the Anoki and McBean sites, which are host to past- roducing mines. Also being examined is the Bidgood property, which was acquired earlier this year through a merger with Vault Minerals.
Two drills are turning at the site, which Page says to have some high-grade potential underground and some lower-grade open pit potential on surface.
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