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Reopening of mine bodes well for town (3/02)

By Ian Ross A new sense of optimism is spreading around Kirkland Lake with the reopening of the Macassa mine and mill by a Vancouver-based company and rekindling thoughts of a return to prominence as one of the world's top gold-producing cam

By Ian Ross

A new sense of optimism is spreading around Kirkland Lake with the reopening of the Macassa mine and mill by a Vancouver-based company and rekindling thoughts of a return to prominence as one of the world's top gold-producing camps.

Foxpoint Resources Ltd. announced plans in September to acquire the Macassa mine and some adjoining properties known as Lake Shore, Teck Hughes, Wright Hargreaves and Kirkland Minerals from Kinross Gold Corp. The $5-million deal was finalized in mid-December.

It promises to create more than 200 mining jobs and make an estimated $30-million impact in the town, according to Foxpoint president and chief executive officer, Brian Hinchcliffe.

For their only Canadian asset the company expects to budget a $6-million to $8-million exploration and refurbishment plan for 2002 to bring the five former Kinross properties back to life to mine gold by year's end.

"We've jumped in with both feet," says Hinchcliffe, outlining an aggressive surface drilling program underway at the most promising targets around Macassa.

Historically regarded as prodigious producer since the First World War, the Kirkland Lake mines have produced about 22 million ounces of gold in the properties assembled.

Hinchcliffe frequently uses the word "tremendous" in describing the untapped potential of the five properties, the existing mine infrastructure and available local mining expertise.

"As we dewater the mine, we've got 300,000 to 400,000 ounces of reserve to start off with, and we’re building from there."

Kinross Gold shut down its Kirkland Lake facilities in 1999, plagued by high production costs and diving gold prices, issuing about 200 pink slips in the process while they concentrated operations in Timmins.

When Kinross put the properties on the block last spring, Foxpoint jumped at the opportunity, capping off a year-long search for a low-cost operation with developed gold assets.

"For us as a small company, we thought it would be a tremendous opportunity," says Hinchcliffe, who has worked for various mining companies mostly in Latin America.

This is the first time the entire package of the five adjacent mines will be explored as one property, in what is considered to be the largest coherent gold ore body in the world, he says.

Foxpoint walked onto a site with a large office complex, a modern mill built in the late 1980s, existing shafts with ventilation, a paste-fill plant and relatively new ground monitoring equipment.

"We're going back into business without the need for much additional equipment," he says.

The Macassa mine consists of three shafts, its No. 3 shaft being 7,200 feet deep, one of the deeper shafts in North America, and with a hoisting capacity of 1,500 tonnes per day.

Foxpoint wasted little time in launching an extensive surface drilling campaign soon after the acquisition and drilled about one-quarter of their 40,000-foot program by early February around the most promising sites.

"We've recommissioned the (Macassa) hoist down at the 3,600-foot level where the water is, and we will be pumping out to the 5,100 level."

With gold prices on the rise, new exploration technologies available and a low Canadian dollar, Hinchcliffe expects to see an evolving trend among junior mining firms to concentrate their efforts in more stable mining environments like Kirkland Lake.

"We believe this next cycle is going to be focused in Canada," which should bode well for exploration companies interested in revisiting old mining camps stretching east to Rouyn-Noranda.

"We think going back to an old camp and with the population already having tremendous (mining) knowledge is an extraordinary, valuable thing."

For the 9,000 residents of Kirkland Lake, who endured a failed attempt at economic diversification by offering to recycle and store Toronto’s garbage at the abandoned Adams mine, it has been a much needed consolation says Kirkland Lake Mayor Bill Enouy.

The town has endured a population free fall, losing almost 5,000 people in the past decade as operations like Macassa and Adams mine shut down.

Though only months into new ownership, Enouy says many in the service industry, such as drillers and suppliers, are already feeling some of the spinoff effects. As operations ramp up, he expects many out-of-town contractors and “pack sack” miners to be searching for accommodations and spending money locally.

"It can be nothing but good for Kirkland Lake," Enouy adds.

As a former Adams mine worker, Enouy says both the Lake Shore and Macassa deep shafts have been proven producers over the years, but the other three properties only reach down to the 4,000-foot level. And many old-timers, who remember an era when there were seven working mines on the downtown strip, believe these mines were closed prematurely in the 1960s after all the easily accessible high-grade ore was removed."That's the potential right there," says Enouy, "the unmined ore."