Abitibi gold project may live again
A team of mining engineers and geologists is determined to relaunch the historic Horne mine in northern Quebec, which produced 11.6 million ounces of gold and 2.5 billion pounds of copper from 1927 to 1976, when reserves ran dry.
They believe the Horne 5 deposit, located immediately below the old Horne mine workings, holds reserves that could make it one of Canada’s top gold- silver- copper producers.
In 2012, their company, Falco Resources Ltd., acquired a 100 per cent interest in 74,000 hectares and effective control over most of the historic Noranda mining camp at Rouyn- Noranda, the Abitibi regional centre 630 kilometres northwest of Montreal.
Last year, Horne 5 exploration showed an initial inferred mineral resource of 2.8 million ounces, with an average grade of 3.4 grams per tonne of ore. An initial mine information report was based mainly on pre- 1976 drilling data generated by Noranda geologists.
This year, Falco plans 16,000 metres of drilling down to about 1,500 metres to confirm existing data and assess Horne 5’ s silver content. Metallurgical tests will show new mineral recovery rates and studies will begin into hydrology ( the old mine may have to be dewatered), ore hoisting and rock mechanics.
The Falco team, led by president Luc Lessard, a former Cambior mine- finder and key Canadian Malartic executive, and chair Sean Roosen, who led the $ 1- billion Malartic open- pit gold mine into production in 2011- 12, is targeting a five- million- ounce resource number.
“Horne 5 may well prove to be one of several future Canadian gold mines and we’re working day and night to realize our dream ... the Horne mine’s rebirth,” Roosen said in a recent interview. “To get development and permitting done over the next three to five years will need investment of about $ 500 million, but there’s also real potential in the other Noranda camp properties, including Quemont, a former producer very near Horne 5.”
Horne 5 will face underground cost challenges and grade is criti- cal, he added, but the proximity of road, rail, air and other infrastructure is highly favourable. “The social and environmental issues should be easier to handle with an underground project than at Malartic, where the open pit is among the world’s largest.”
Roosen, a geologist and former CEO of Osisko Mining Corp. ( Malartic’s original owner- developer), heads Osisko Gold Royalties Ltd., a fast- growing royalty and stream finance company spun off from last year’s $ 3.9- billion takeover of Osisko Mining by Agnico Eagle Mines Ltd. and Yamana Gold Inc.
Roosen then merged the royalty company with Virginia Mines Inc., led by geologist André Gaumond, whose team found the Eléonore gold mine in the James Bay area. Eléonore is now owned by Goldcorp. and has reached commissioning.
The old Horne mine at Rouyn-Noranda was the foundation for Noranda Mines Ltd.’ s growth into an international mining and metals giant after the Second World War. It merged with Falconbridge Inc. in 2005, and in 2006 Swissbased Xstrata PLC bought Falconbridge, as the merged company was known. Xstrata is now part of Glencore PLC, the global mining and metals group. The Noranda name continues in a Quebec metal refining operation.
Some mining analysts, including veteran Eric Lemieux, a former project geologist, believe the Horne 5 project’s gold potential has been overlooked. But Roosen’s team will face some technological challenges, not least from Horne 5’ s location very near the Xstrata copper smelter at Rouyn- Noranda.
“The project’s feasible, but they’ll have to find a place for acidic water and tailings disposal and deal with the risks of underground blasting for the smelter and nearby homes,” said Quebec City geologist and consultant Jacques Bonneau. “But this is the team that overcame Malartic’s technical, financial and social challenges and they can do it,” he added.
“These are early days, but you can have pleasant surprises as you go deeper in the Abitibi region,” said Don Robinson, CEO of Eastmain Resources Inc., with two potential gold producers in the James Bay region. “Falco’s team has the experience and capacity to do something with this asset.”
But he noted a growing public distrust of new mining projects in Rouyn- Noranda on social and environmental grounds. “That’s extraordinary for a provincial centre with such a long history of mining and Falco may have some convincing to do,” he added.