The following article appeared in Northern Ontario Business as part of a series on Communities in Motion:
Soaring gold prices in recent years have changed the fortunes of communities near the northeast shore of Lake Superior.
With multiple belts of mineralized greenstone in the region, exploration companies are pouring millions into the ground to outline new deposits while established players expand and bring old mining areas back to life.
In an area that was once home to many historic gold mines, this resurgence has been an economic boon to the communities of Dubreuilville and Wawa.
Here is an overview of some of these actions.
Gold Argonaut secured desperately needed funding this week to complete construction of its open-pit Magino Mine project.
The Toronto-based mine developer has secured a financing package that includes a US$200 million term loan and a US$50 million revolving credit facility to bring the historic mine back into production.
The company announced last December that the cost of completing the mine had risen from $510 million to $800 million, attributing the rise to inflation and the pandemic.
In addition, Argonaut has entered into a 2% net smelter return royalty to Franco-Nevada in exchange for US$52.5 million and a US$10 million private placement under a common stock transaction.
In a statement, Argonaut Gold Chairman and CEO Larry Radford credits Magino’s “strong project fundamentals” with securing the financial deal. He said he was confident they had the cash in place to complete the project to be ready for their first gold pour in the second quarter of 2023.
The company’s October newsletter shows the pace of work at the site, located a few kilometers southeast of Dubreuilville.
Equipment is being installed inside the processing plant, an elevated conveyor belt system is being erected and work is underway for the construction of a liquefied natural gas power plant and on the tailings management area.
Pre-production mining is underway as contractors dig into the pit. See photos and video of the construction here.
Beneath the proposed pit, the company has not halted its exploration efforts as it continues to report high-grade gold discoveries from a deep drilling program.
A press release from early September showed the latest batch of assay results, showing “multiple zones” of gold mineralization over a strike length of 1,500 metres. Argonaut said this reinforces their belief that Magino has a future as an underground operation.
East of Magino, activity at Alamos Gold‘s Island Gold Mine is preparing to dig a new shaft to accommodate a third wave of mine expansion.
Over the next four years, Alamos will invest $756 million in this development, designed to double gold production rates by completion in 2026.
Last June, Alamos announced that it was scaling its expansion plans for Island Gold. With many high-grade gold discoveries, Alamos is making the mine bigger and more efficient on its way to becoming one of the lowest-cost producers in the industry, at an overall sustaining cost of $576 per ounce. .
Alamos calls this expansion a “radical shift” in production. Extraction rates will double from the current 1,200 tonnes per day to 2,400 when the shaft project is complete.
Annual gold production will double to an average of 287,000 ounces.
Plans call for a transition from trucking ore and mining waste up a ramp to the surface, to blast ore and waste to the surface through a new shaft. This will help increase production rates and ultimately reduce their operating costs. The processing plant will also see its capacity increased and a new pulp mill will be built.
Work began in August to clear the shaft site and begin pre-sinking, which involves digging to support the shaft shaft. Alamos said they were digging to a depth of 42 meters this fall. Concrete will be poured for the foundation of the above ground buildings to house the winch. A haul road to the shaft and all electrical work at the site was also completed this fall.
Given the strong cash flow generated from gold production at Island Gold and its other gold mines, Alamos said this expansion will be largely self-funded.
Alamos remains satisfied with the production performance of Island Gold.
During the third quarter, the mine produced 31,400 ounces and delivered 93,200 ounces in the first nine months of this year, on track to meet its full year production target.
And there is no giving up on the exploration side. Alamos spent $17.9 million of its $22 million exploration budget.
Part of it is underground where a drill rig defines new blocks that are in the queue to be mined. On surface, six platforms are looking at prime gold targets that will drive further phases of mine expansion on its 15,524 hectare property.
Further east, the junior explorer Manitou Gold added a new wrinkle to the Dubreuilville-Wawa gold camp with a “significant” discovery this year of nickel and cobalt at its Goudreau gold property.
Goudreau is a 22,500 hectare property which Manitou claims contains nickel, cobalt and platinum group elements.
That prompted the Toronto-based company to form a spin-off company, Western Nickel Corp., but Manitou insists she will continue to be a young gold-focused explorer.
The company began a nickel drilling program in August, finishing it in mid-September, with drill results spreading regularly across its newsfeed.
Just outside Wawa Township, Red pine exploration is a working land that was once home to several gold mines over the past century.
The Toronto junior miner raised $5.5 million in flow-through financing in September to seek gold extensions to its Wawa Gold project, located about 500 meters from the local airport runway.
The company has already defined two deposits on the property, Surlaga and Minto Mine South, with a combined resource of over 700,000 ounces of gold.
Red Pine maintains that there are more ounces to be had by probing deeper and predicts that their resource will grow much more. The company has released a steady stream of high-grade gold extension results and has expanded the mineral footprint around both deposits.
Next to Red Pine is another Toronto junior, Kingsview Minerals, which has added land to its portfolio of properties in the Dubreuilville and Wawa areas.
Kingsview Minerals announced on October 19 that it had reached an agreement with RT Minerals to take over the 460-hectare Norwalk project, located between its Hubcap project and Red Pine’s Surlaga deposit.
Norwalk has shown strong gold potential under previous ownership groups, based on recent drilling and surface sampling. The historic Norwalk mine once produced 60 ounces of gold from 820 tonnes crushed. There are also numerous other shafts, galleries and shafts on the property.
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Far west of Wawa, about 55 kilometers, the city of Toronto Bold ventures plans an upcoming exploration campaign on its Farwell copper and gold property, east of the Pukaskwa National Park boundary.
The company conducted airborne electromagnetic and magnetic surveys over Farwell last January to compile a list of targets for a drilling program.
Management of the company, which recently raised $95,960 through a private placement, believes there are a multitude of precious, critical and battery metals on the 7,770 hectare property, including nickel, lead, zinc, silver, platinum group metals and chromium.
Farwell is about three miles from Wesdome’s Eagle River Complex.
The Eagle River mine went into production in 1995 and has been a consistent producer over the years.
The mid-tier miner released its third-quarter production numbers in mid-October, showing more than 17,600 ounces from its Mishi pit and underground Eagle mine. Since the beginning of the year, the two operations have generated more than 56,000 ounces.
The company remains aggressive on the exploration front following the discovery of the Falcon Zones on its 11,000 hectare property in 2018, which represents an opportunity to extend the life of the operation.
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