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Investment in gold exploration heightens (12/02)

By GIANNI UBRIACO Gold fever has struck the North. Mining companies from around the North are coming out of the woodwork and announcing the findings of gold deposits and the potential for future gold mines.


Gold fever has struck the North. Mining companies from around the North are coming out of the woodwork and announcing the findings of gold deposits and the potential for future gold mines.

Recently, Sethu Raman, president of Holmer Gold Mines Ltd., announced the confirmation of approximately two million tonnes of gold-bearing ore within the city limits of Timmins.

“We have what I believe to be the richest unmined gold deposit in any mining camp in Canada right now,” he says. “We have completed all the drilling for our project and we expect a report from an independent consulting group. I expect they will recommend us to go underground based on the information.”

Raman, who has been involved with the mining company for 17 years, says the gold deposit at .24 ounces of gold per tonne is located about 18 kilometres southwest of downtown Timmins.

Plans for the mine include going into production within a year or two without the building of a mill or a tailings management area. Raman indicates that is because there are contractors in the middle of the Porcupine Camp who can truck the ore to one of the existing mills and process it there.

Although he points out that it is still too early to speculate how many people the mine will employ, he estimates the cost to go underground would be between $4 million and $5 million.

Even so, the company has already started to meet with a number of financing groups who have expressed an interest in their project.

The interest in gold, Raman says, is being generated largely because of the setbacks many investors have suffered with larger companies.

“I think overall the markets for gold and silver seem to be good because with all of the economic problems and other things, I think most people are losing confidence in most of the other companies,” he says. “I think most of the pundits are suggesting that the gold price could be much higher than it is today, but not many companies are involved in advanced gold projects like we are. Based on that, I think we should do well under the present circumstances.”

Currently, gold is trading at approximately $315 per ounce, but Raman says he anticipates the price of gold rising to between $340 and $350 per ounce.

“Overall in our company, we are excited about the project because we have done excellent work,” he concludes. “It is also good for this area because it needs more discoveries to keep the mines going and the economy going.”

Meanwhile, the Township of Gogama is also optimistic over the proposed mining and production of an identified 68,000 ounces of gold by Condor Gold Corp. at a site located southwest of the town along Highway 144.

“We have a major new gold camp coming to fruition,” Gordon Leliever, manager of the corporation, says. “It is a dream coming true that my father started in 1933, the year I was born.”

At that time, Leliever’s father put his first exploration shaft in one of their properties. Since that time, the company has bought up a group of small claims and three old mines in a 16 square-kilometre area, 24 kilometres south of Gogama.

Now as a result, according to information released recently at a public meeting, the mine expects to yield a million ounces of gold over the next 50 years at a rate of potentially 130,000 ounces per year.

The company is currently proposing to begin the mining and production of the gold, to develop the one million tonnes of high-grade ore they identified so far, and to diamond drill to find more ore in the three key properties in the Gogama gold camp.

Work has already begun to dewater the old mine shafts and over the next six months bulk samples will be taken to Timmins for analysis. The second phase involves developing the mine, bringing the mine into production by mid-2003 with custom drilling, and constructing a mill to allow on-site milling by mid-2004. The estimated cost of this second phase is $14 million over 12 to 28 months. In order to cover the cost, a public offering is expected to be held in the future.

Once the operation is underway, the company says it could have a life span of 40 to 50 years and provide 100 full-time jobs, but for now, the unprocessed ore would go to Timmins until they can build their own mill.

“Gold is our future,” Leliever says. “Our economy is based on gold.”

“There’s been major problems all over the world and it has created a lot of jitters,” he continues. “Now people are looking for somewhere they can put their money and invest it into something that has a future.”

Ultimately, he believes, interest in gold will rise as a result, as will the price of gold.

Meanwhile, the hamlet of Foleyet, located between Timmins and Chapleau, could also be on the verge of boom times. A gold mine is on the verge of opening there and could bring renewed life to the community of approximately 250 people.

At a recent informal session at Foleyet’s Town Hall, an official with Claude Rundle Gold Mine Inc. announced the company’s intention to bring a gold mineral deposit located 60 kilometres south of Foleyet into production in 2003.

The operation is expected to employ approximately 80 people and create a number of spinoff jobs. The mineral deposit they are after contains one million tonnes of ore from the surface level to about 300 feet below ground.

Taking into account the extra one million tonnes of ore, the mine’s potential life span could be as long as 12 years, according to an official with the company.

The company is planning to construct a milling facility by the spring of 2003, and a tailings management area would be constructed 400 metres southwest of the mill site.

A number of other mining companies have recently announced new found gold deposits, including Goldeye Explorations Ltd., which announced finding several new gold deposits 100 kilometres south of Timmins in Tyrrell Twp., and Tom Exploration Inc., which says it found substantial gold deposits near Matheson in Munro Township.