June/July 2006

The golden glow from way out west

By P. Caulfield

Seen here from above, the Eskay Creek mine is located 80 kilometres north of Stewart, BC at an altitude of 800 metres.

Canada ranks seventh in the world in gold production, according to a National Research Council report published in 2004, with most of that production taking place in eastern Canada. Ontario accounts for 55 per cent, followed by Quebec at 19 per cent. British Columbia comes after Quebec with 16 per cent and the other provinces and territories combined contribute the remaining.

Although western Canada is not the centre of Canadian gold production, there is a long history of gold mining west of the Manitoba-Ontario border, beginning with the gold rushes in British Columbia and Yukon in the 19th century. Today there are several productive gold mines that are active and, thanks to the metal’s high price, it appears that gold mining will continue to be an important part of the western Canadian mining industry for years to come.

Seabee expansion

Consider, for example, Claude Resources Inc., a gold mining and oil and gas company based in Saskatoon. Claude’s principal asset is the Seabee gold mine, located 125 kilometres northeast of La Ronge, Saskatchewan. A high-grade, narrowvein underground operation, Seabee went into production in 1991 and since then has produced more than 706,000 ounces of gold.

The mill at the Seabee mine was expanded recently to a capacity of 1,100 tonnes per day, big enough to process ore expected from two recently discovered satellite deposits that are within trucking distance.

The recent discoveries, the Porky Lake zone and Santoy property, have both been advanced to the bulk sample stage. Work has begun at the Porky site; the portal has been collared and a planned decline of 880 metres underground has been started. Bulk sampling at Santoy will begin later in 2006.

Neil McMillan, president and CEO, Claude Resources, said Seabee had approximately 684,000 tonnes of reserves and an additional 1.5 million tonnes of resources as of February this year. Porky and Santoy together have another 1.4 million tonnes of reserves and up to 4 million tonnes of resources. Seabee, Porky, and Santoy are expected together to produce over 50,000 oz. of gold in 2006.

“We expect Seabee to go over 1 million ounces of production,” McMillan said. “That will make it a real world-class mine.” Claude Resources, which was started in 1980 by a geophysicist from Quebec, purchased the Seabee property from Cominco and started to put it into production. When the company couldn’t raise enough money to continue, Seabee was taken over by Saskatoon mining entrepreneur Bill McNeil in 1982 (McMillan succeeded McNeil as president of Claude in 1996 and as CEO in 2004.).

“The company began with serious financial difficulties, but we refused to quit,” McMillan recalled. “We survived through the toughest mining period in history and turned Seabee into Saskatchewan’s biggest historical gold producer.”

McMillan said one of the reasons Claude Resources has succeeded is because the company is good at what he calls ‘the lost art of narrow-vein mining.’

“It requires breaking up ore with hand-held jackleg drills,” he said. “It’s hard work and very few guys can do it anymore. There’s a whole missing generation of miners with the necessary experience. Fortunately we’ve been able to train young miners to do it.”

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