Wesdome Gold Mines (TSX: WDO) is spending more money on exploration this year than at any other time in its 29-year history.
“This has been a very aggressive exploration program for Wesdome and we have certainly seen the dividends,” George Mannard, the company’s vice president of exploration, says of this year’s $11.3 million budget.
The company is spending $6.3 million at its Eagle River mine, which consists of the Eagle River underground mine and the Mishi open-pit mine. Eagle River, 60 km southeast of Hemlo and 50 km due west of Wawa, Ontario, has operated for 21 years and produced over a million oz. of gold.
Duncan Middlemiss, Wesdome’s president and CEO, says the company has had “a good history of replacing and adding reserves there,” estimating that Eagle River’s life of mine based on reserves is seven years. Mishi, based on current mining rates, has about 13 years of mine life remaining. (Mishi supplies incremental mill feed to Eagle River.) Three underground drills and one surface drill are turning at Eagle River and another surface drill is working on Mishi.
At its Moss Lake exploration project, 100 km west of Thunder Bay, Ontario, in the Shebandowan Greenstone belt, Wesdome will spend about $1 million this year and has just dispatched a drill rig to site. The large tonnage, low-grade deposit is amenable to surface bulk mining methods and hosts an indicated resource of 40 million tonnes grading 1.1 gram gold per tonne and an inferred resource of 50 million tonnes at the same grade. In April, the company purchased adjoining properties to consolidate its land position and expand exploration potential.
Meanwhile, at the past-producing Kiena mine and mill complex in Val d’Or, Quebec, which Wesdome purchased for $2 million in December 2005, the company is spending $4 million on exploration and has four rigs turning. Earlier this year, the company made a new underground discovery at depth.
Mining underground in the North Zone at Kiena dates to the 1930s. In 1961, previous owners discovered the S-50 zone and between 1964 and 1996, a Falconbridge subsidiary, Kiena Mines, put four levels into the zone. Underground work ground to a stop later in the decade due to tricky ground conditions and a very low gold price.
When the gold price picked up in the 1970s, Kiena Gold Mines continued to develop the mine, which operated continuously between 1981 and 2003 and produced a total of 1.56 million ounces. The mine was shut down in October 2003 due to depletion of the S-Zone.
After Wesdome acquired the mine in 2005, it put it back into production, and mined it from August 2006 until the end of June 2013, producing a total of 198,747 oz. gold. The mine was put on care and maintenance due to a combination of declining gold prices and lack of developed reserves.
Over the course of its history, the bulk of production came from Kiena’s S-50 zone between depths of 100 and 1,000 metres. So it was logical for Wesdome to concentrate its exploration effort on the S-50 zone and look for repetitions of it at depth below existing mine infrastructure at around 1200 metres below surface, or about 200 metres below the current ramp.
“The whole geological thesis on this deep exploration target is that these things happen in repetitions so there were indications that there would be a repetitive structure to the northeast, so essentially that was the initial thesis of this exploration program—to test the repetition of the S-50 zone further at depth,” says Middlemiss, who joined the company in July after a stint at St. Andrew Goldfields led to that company’s acquisition by Kirkland Lake Gold (TSX: KGI; US-OTC: KGILF) in early 2016.
Highlights from the latest batch of drill results released on Nov. 15 include 32.32 grams gold per tonne over 1.50 metres from a depth of 438.4 metres in he 6124B; 71.42 grams gold over 1.50 metres from 510 metres depth in hole 6124C; and 749.96 grams gold over 0.60 metre from 478.9 metres downhole in hole 6131A.
Other drill results released earlier in the year include 94.35 grams gold over 17.4 metres from 491.5 metres depth in hole 6124; 14.25 metres of 223.12 grams gold from 695 metres depth in hole 6125; and 8.2 metres of 8.43 grams gold from 469 metres depth in hole 6130A.
“The implications are, if the dimensions and the geometry are analagous to what was known and mined at the upper levels, we could have a very considerable volume of mineralization and grades that are greater than what was experienced historically in the mine,” says Mannard. “When we target the north arm, that hasn’t been drilled from 600 metres down, because previous work was on the southeast arm, that’s where the implications of something being very big are.”
Middlemiss says one of the things he really likes about Kiena, apart from the high-grade drill results, is that there are already 450,000 oz. gold in the measured and indicated category and of that, 130,000 ounces are “proximal to where these exploration results are occurring so that gives us a bit of a head start with resource generation.”
Currently Kiena has measured and indicated resources of 2.5 million tonnes grading 5.59 grams gold for 449,300 0z. gold and inferred resources of 1.6 million tonnes grading 7.97 grams gold for 400,000 oz. contained gold.
Drilling continues northeast through the massive basalts, Mannard says, noting the goal is to “generate reasonable confidence in a critical mass to justify progressive development of a ramp system to better position drills and eventually access both known centres of mineralization.”
Middlemiss also notes that the future of the Abitibi and mines like Kiena is to explore at greater depths.
“Within the Abitibi it really hasn’t been tested that much at depth,” Middlemiss says. “You’ve got a few exceptions, like Maccassa and LaRonde, but typically when you look at the Abitibi, a lot of the diamond drilling stopped at around 500 feet or 150 metres below surface. There hasn’t been a lot of deep exploration and that’s going to be the future of the Abitibi.”
At Kiena, he adds, “1200 metres or 4,000 feet, in my mind, is not a great depth, it’s medium.”
“We have great potential on our property again because much of the drilling didn’t go much beyond the 150-metre depth, so it’s wide open in terms of the geological potential,” Middlemiss says.
The mine is fully permitted, has a 930-metre production shaft and a 2,000-tonne-per-day mill.
“The mine is permitted and ready to go and we have until mid-2019 to do any necessary amendments,” Middlemiss says. “I think as long as we keep everything in good standing we are fine to proceed with our program.”
“We feel very fortunate to have three properties, which each in their own right can add value to the company,” he says. “It’s up to us to unlock the potential.”
Integra can do the same a the Lamaque Deeps !