Old Gold Mines - New Exploration

The old adage is that the best place to discover gold is in the sight of the headframe of an existing mine.

Many old gold mines and mining camps ceased production as gold prices fell in the past. Some mines reached the technical limitations of the mining technology of the time or there were easier pickings elsewhere.

Which are the companies owning historically productive old mines and gold mining camps applying new modern exploration and mining techniques?

Canadian Mines
These mines tend to be deep mined workings requiring high grades.
The available skills and manual labour for deep mining can be a problem and annual production rates can be limited compared to the vast low grade open pits.
Assuming lower energy intensity of higher grade processing these deposits may have a different cost profile if we see rising energy costs.

I like the Canadian mines but would have to admit that 2011 has not been kind to similar deposits in production at Lakeshore (LSG.TO), San Gold (SGR.TO) where there have been bumps along the road to production or exploration assets at Rubicon (RMX.TO).
I feel their time will come and these types of deposits being redeveloped, below, should see dramatic revaluations. I especially like Canada as a safe jurisdiction for gold mining as it has enormous mineral potential, which it would be foolish to discourage development of, and does not appear to have some of the economic headwinds faced by other developed economies which could force desperate taxation measures.

  • PC Gold  - (PKL.TO) - Exploring the past producing Pickle Crow Mine over 4,000 Ha. Hit high grades and financed at high valuations but has slumped through lack of progress since. CEO replaced. Have been exploring for potential low grade open pits aswell as high grade veins. Ian Gordon claims to like this one. New CEO Jean-Pierre Chauvin appears to be a mine builder and operator.
  • Armistice - (AZ.TO) - Redeveloping the McGarry project and option on the past producing Kerr Addison mine (12m oz past production). 6 miles along Kirkland/Cadillac/Larder trend. Approaching production with high exploration potential.
  • Queenston Mining - (QMI.TO) - interests with KGI. Kirkland 2011 $25m exploration, 16 rigs on 8 properties. Seems a likely acquisition for Goldcorp or Agnico Eagle. In their "backyard".
  • Kirkland Lake - (KGI.TO) A Strong stock even through the 2011 downdraft in junior golds. I can imagine Kirkland and Queenston being merged to combine control of the large South mine project before being acquired by Goldcorp or Agnico.
  • Auriga Gold - (AIA.v) - redeveloping Maverick Mine Manitoba. Acquired property from Barrick who hold a 4m share stake and are an insider. Infrastructure, mine and 1000 tpd mill requiring rehabilitation. April 2012 secure additional financing
  • Elgin Mining (ELG.v) - Control the past producing Lupin mine in Nunavut Canada.
    • Infrastructure in place. Recently announced merger with Gold Ore Resources (GOZ.TO) who control a producing mine in Sweden, a safe jurisdiction. Cash and cashflow should help to put the Lupin deposit back into production.
    • Robert Buchan - Chairman was founder and CEO of Kinross until 2005 and is Executive Chairman of Allied Nevada, an extremely successful gold junior miner, and numerous other board positions.
    • Patrick Downey CEO is ex CEO of Viceroy Exploration acquired by Yamana for $600m and a number of other acquired companies.
    • Plus owns Ulu gold project, 35% interest in Auracle Resources, 60% interest in Lincoln Mining's projects Oro Cruz, La Bufa.
Mexican Mines
Mexico holds enormous mineral potential with many Canadian senior and junior companies active here. The "story" here is that the Spanish conquistadors who took gold and silver from the "new world" quickly found the easiest pickings and then abandoned these workings when the recovery became too difficult, too deep for example. By identifying old workings companies have scooped up large land packages with high potential once modern exploration and open pit recovery techniques are considered for lower grades. There are a large number of these. I attempt to consider with reference to the people involved and the promotion behind them.
  • Candente Gold (CDG.TO) - Presentation - Fact Sheet - Exploring deeper levels of a previous 6m oz producer. Own "district" scale project. Production was from 2 of 50 known veins, historically explored with old techniques. Earned 50% interest from Goldcorp, elected to continue to earn a further 20%. Peter Megaw on the board. Darin Wagner on the board. Also advisor to MAG silver. Plus properties in Peru.
Artisanal Workings With Modern Exploration - Africa / South America

Please propose companies with excellent prospects here

1 comment:

  1. The junior gold miners present the best value in the gold sector thanks for all great info