March 27, 2017

cloudy

Winnipeg
0° C, A few clouds

Full Forecast

Advertisement

Advertise With Us

Business

Manitoba's newest gold rush? Exploration spending

Mood optimistic despite drop in global rankings

Hey there, time traveller!
This article was published 2/3/2012 (1850 days ago), so information in it may no longer be current.

Deep in the bush about 26 kilometres south of Bissett -- a lonely 11/2-hour drive from Pine Falls -- there's a beehive of activity.

Backhoes and pickup trucks from a construction crew contracted by the province are working on capping long-abandoned gold mines from the 1930s.

Andrew Cann (centre), field supervisor for Rodren Drilling, with workers Mark Patterson (right) and George Nicholas at the Ogama-Rockland project for Bison Gold Resources.

JOHN WOODS / WINNIPEG FREE PRESS

Andrew Cann (centre), field supervisor for Rodren Drilling, with workers Mark Patterson (right) and George Nicholas at the Ogama-Rockland project for Bison Gold Resources. Purchase Photo Print

Andrew Cann (right) and Mark Patterson drill 80 metres of quartz rock core samples during every 12-hour shift.

WINNIPEG FREE PRESS

Andrew Cann (right) and Mark Patterson drill 80 metres of quartz rock core samples during every 12-hour shift. Purchase Photo Print

Further in the bush, a noisy underground diamond drilling rig is turning 24 hours a day at the mineral exploration site of Bison Gold Resources Inc.

Andrew Cann and his four-man team of workers with Rodren Drilling Inc. pull out 80 metres of quartz rock core samples for every 12-hour shift, grinding down a couple of $750 synthetic diamond drill bits in the process.

On any given day, Bison's property is home to 20 people who work and live in a handful of neat ATCO trailers.

In one of them -- the core shack -- geologists peer into the smooth quartz columns of core samples with magnifying glasses looking for specks of gold.

And with the yellow metal trading at $1,710 an ounce on Friday, it only takes a few of those specks -- less than 10 grams of gold per tonne of ore -- for a deposit to be worth mining.

Like all executives of junior mining companies, Amir Mousavi, vice-president of corporate development at Bison Gold, says his company's property will prove to be a winner.

"This is a fantastic local story," Mousavi said. "Three hours away from Winnipeg we are proving up Manitoba's next major gold deposit."

Whether or not that proves to be the case, the young geologists, drill operators, rock cutters and cooks are engaged in the grassroots activity that fuels a multibillion-dollar industry in the province.

And even though it's estimated exploration spending in Manitoba was up close to 40 per cent in 2011 to $115.7 million, industry officials say they believe there should be much more.

Manitoba's ranking in the highly regarded Fraser Institute's Survey of Mining Companies that came out last week was significantly downgraded from ninth place last year to 20th this year.

It's a humbling fall from grace for the province, which was ranked first as recently as 2007.

"Respondents blasted Manitoba for its mishandling of First Nations consultations, which they say creates excessive delays in processing permits and licences," said the Fraser Institute's Fred McMahon, author of the report.

And it may not be the end of the bad news.

McMahon said he was surprised Manitoba held up as well as it did while those problems were building over the last few years.

"Now that it has shown up in the survey, it may be a sign of worse to come," he said.

But despite a regulatory environment that's perceived to be increasingly problematic, the province is known to contain rich geological formations that have reaped some massive discoveries in the past.

But for them to be discovered, comprehensive exploration is required.

Most of the country's geologists and industry executives -- close to 30,000 of them -- are gathering in Toronto for next week's annual Prospectors and Developers Association of Canada convention.

The expectation is miners will have an easier time raising money in 2012 than last year, when global economic uncertainties caused a drag.

Even still, Bison, a tiny company with a market capitalization of less than $10 million, raised a little more than $4 million last year and intends to drill 15,000 metres of core samples by June, spending about $3.5 million.

San Gold Corp. -- the Goliath down the road to Bison's David -- sold out a share offering last month in 10 minutes, raising $22 million including underwriters' options.

Every year for the past three years, San Gold has just about doubled its gold production. It's forecasting production of 100,000 ounces in 2012, an increase of about 33 per cent from 2011.

Last year, San Gold spent $25 million on exploration -- one of the largest programs in the country -- and expects to do almost as much this year.

Dale Ginn, San Gold's executive vice-chairman, said San Gold is starting to become more attractive to larger investment funds.

"Because we are a stable company that does lots of exploration we are considered a low risk," said Ginn.

San Gold's mine and mill in Bissett employ more than 450 people -- twice the actual population of the town. It is mining and exploring a site that has been producing gold for 80 years.

Even at Bison Gold's property, prospectors were mining gold by hand 80 years ago.

But even with that historic evidence of gold in the so-called Rice Lake gold belt, the region is still considered to be under-explored.

Another junior mining company, Mega Precious Metals Inc., is further ahead than Bison at a property called Monument Bay, 340 kilometres southeast of Thompson and 60 kilometres northeast of Red Sucker Lake.

Last month it published an updated mineral resource estimate of 1.05 million ounces of gold. A week later it announced a $15-million private placement to fund Mega's exploration and development activities.

Chris Beaumont Smith, manager of mineral policy and business development for Manitoba, says it's one of the largest undeveloped gold discoveries in Canada.

That region is believed to have the same geology as the Ring of Fire region in northern Ontario that has attracted several exploration companies. Cliffs Natural Resources has a major chromite project in the pre-feasibility stage of development in the region.

"This region (in northern Manitoba) should be significantly staked," Beaumont-Smith said. "Mega Precious Metals has a significant resource and the next drill hole 165 kilometres west. That is unheard of anywhere else in the country."

Typically, exploration claims swarm around sites that likely contain large deposits.

But it's likely not just regulatory hassles that are keeping exploration companies out of that region.

Mousavi said in addition to the strong drill results Bison is harvesting from its property, he believes it's made that much more promising because of its proximity to San Gold's mill and infrastructure and it is close by existing roads.

But there are no roads or industrial infrastructure near Monument Bay.

martin.cash@freepress.mb.ca

Read more by Martin Cash.

Advertisement

Advertise With Us

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective January 2015.

Photo Store

Scroll down to load more

Top