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Region buoyed by gold rush (3/03)

By DEAN LISK Donald McInnes says there are a few reasons why the Red Lake area is receiving a lot of attention from gold exploration companies, the media and industry analysts. “It is fair to call it a gold rush,” says the CEO of Red Lake Resources.
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By DEAN LISK

Donald McInnes says there are a few reasons why the Red Lake area is receiving a lot of attention from gold exploration companies, the media and industry analysts.

“It is fair to call it a gold rush,” says the CEO of Red Lake Resources.

“It’s like the planets coming into alignment,” he adds, explaining the current buoyant price of gold, which averaged $335 US an ounce over the last year. A big discovery, and a lot of activity in the region is increasing the publicity of mining activity in the region.

“There are 20 companies with decent properties all telling the same story,” adds McInnes. “It seems to be a big shot in the arm to the local economy. It is very hard to find an available drill contractor right now.”

The Red Lake area of Northern Ontario is experiencing a new gold rush at an old camp after a major discovery by an established mining company resulted in around 50 major and junior mining companies exploring the area.

“The hotels are full and geologists are crawling everywhere,” says Andrea Lichtblau, a regional geologist with the Ministry of Northern Development and Mines. “It is a boom to the local economy.”

Lichtblau says the recent increase in activity is due to Goldcorp Inc.’s discovery of high-grade gold mineralization at its camp in 1999.

Although in production for over 70 years, the new ore find signaled a renewed jump in activity in the area around the Red Lake-Greenstone Belt area, and in the Birch-Urchi Greenstone Belt 75 kilometres to the east and a continuation of the Red Lake belt.

Lichtblau says companies are searching for another mine like Goldcorp’s, which is considered to be one of the richest gold mines in the world.

At one point, Goldcorp is said to have processed an 82-pound ore sample with an estimated content of 298 ounces of gold, or the equivalent of 7,268 ounces per ton. Gold grades at the Red Lake mine have traditionally run about 0.3 ounces per ton, however recent deeper drilling has apparently encountered 1.86 million tons with a gold grade of 2.02 ounces per ton.

“It started about a year ago with people staking claims in the area,” says Lichtblau, referring to the renewed activity in the region, which saw its first real gold rush in the early 1930s.

“Conditions seem to be favorable belt wide, not in just one spot,” adds Lichtblau. “We find big producers in the eastern part, but the entire area is good.”

He says 10 drills are active in the area right now and notes “junior companies have been able to raise capital” for their projects.

A gold producing area since 1931, McInnes says the Goldcorp discovery was only part of the increase, explaining that in an unprecedented move the company posted its exploration data online in order to get prospectors to provide ideas on where the company could find more lodes.

“Everyone took the data and expunged their own ideas,” says McInnes. “It was unprecedented for giving data away.”

Red Lake Resources presently controls 20 properties covering 36,000 acres in the Red Lake/Birch Uchi area. The Birch Lake Option comprises five properties under option from the Fronteer Development Group, while the other 15 were acquired from prospectors and other property vendors.

“They earn interest in the properties and take away some of the risk from us,” says McInnes.

Two exploration projects have already been completed by the company on the Mink property and the Swain Est, Sol D’Or and Grace properties, after successful financing of $300,000 in June and $420,000

in August.

“In each case we did surface work, prospecting, rock sampling, trench sampling and drilling,” says McInnes, adding a new drilling phase is going to start at the end of February.

The CEO says the company was able to follow a four-kilometre geophysical anomaly, and a number of samples have shown gold at one ounce per tonne.

“We already know gold is in the property,” says McInnes. “We are going to go in and get data on a lot more.”

In mid-February, the company announced it started raising money to begin drilling on the Mink and Swain Est, Sol D’Or and Grace properties by selling additional shares in the company.

He says they will drill seven to 10 holes per property and if results show the anomaly is four kilometres long and graded at more than one tonne, the company “will gear up and drill more exhaustively.”

McInnes points out that former Goldcorp exploration vice-president Dutch van Tassell, who was responsible for the discovery at the Red Lake mine, has come out of retirement to join the company as a special adviser.




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