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Winnipeg Free Press - PRINT EDITION

Gold mine a boon for Snow Lake

Reincarnated property set to start production in 2011

By: Martin Cash

23/10/2009 1:00 AM | Comments: 0

JOE BRYKSA / WINNIPEG FREE PRESS ARCHIVES Enlarge Image

Gold bar produced at mine in 1998.

The New Britannia gold mine property in Snow Lake appears to be on the verge of another reincarnation, heightening expectations of boom times in the northern Manitoba mining town.

The gold property, which first started producing the yellow metal in the 1940s, is now tentatively scheduled to start production once again early in 2011.

That is the plan after Alexis Minerals Corp. of Toronto made a $32-million offer this week to acquire the remaining shares of Garson Gold Corp., the company that has owned the New Britannia property since 2006.

New Britannia has been closed since 2005, but prior to that it had produced about 100,000 ounces of gold a year for 10 years.

Before that, New Britannia was a producing gold mine from the mid-'40s to the late '50s.

David Rigg, Alexis's CEO, said a drilling and feasibility study will begin in the fourth quarter of this year with pre-production beginning in the second half of 2010.

The news of the possible reopening of that mine comes only weeks after HudBay Minerals announced it was committing $85 million to start construction of what could become the next big North American mine at Lalor Lake, about 15 kilometres outside of Snow Lake.

That early construction of an underground ramp is likely just the first stage of a $450-million investment the company is planning to make on a massive gold/zinc project at Lalor.

HudBay still has further regulatory and development work to complete, but has made it clear Lalor is the focused priority for the company.

Snow Lake Mayor Garry Zamzow said there is a lot of excitement in the town.

"This New Britannia announcement came out of nowhere," he said. "No one was expecting it."

Zamzow said HudBay's early work on Lalor is already making a difference in the town of 1,000.

"It's much busier here than it was a month ago," he said.

"There are more people and more vehicles all over."

That's just the beginning of what will certainly become a major growth surge for Snow Lake that will probably be felt throughout the north.

"I don't know how much of the province realizes how huge the Lalor project will be," Zamzow said. "There have been drills running there for all these months. There has to be something down there."

New Britannia employed about 250 people when it last operated and estimates are the Lalor project could employ more than 400 people when it is fully developed.

In addition to those developments, HudBay has also said it is studying the possibility of reopening its Chisel North zinc mine in Snow Lake that it put on care-and-maintenance in early 2009.

That zinc mine employed about 100 people.

Ed Huebert, executive vice-president of the Mining Association of Manitoba Inc., said the developments in Snow Lake will focus a lot of mining activity on the town.

"There are two extremes going on there," Huebert said.

"The Lalor project is a whole new deposit and New Britannia is just some smart thinking to find additional reserve within the existing New Britannia structure."

The fact gold is selling for $1,000 an ounce -- it closed at US$1,057 on Thursday -- certainly helps that process.

In the last 10 years of New Britannia's production, from 1995 to 2005, the price of gold rarely peaked above $400 an ounce.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition October 23, 2009 B4

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