Editor’s Note: I’ve never run a guest article like this, but my friend Jim’s three discovery stories are as educational as they are fascinating. Jim is a mining consultant based in Asunción, Paraguay, where he’s active in mining, oil, and gas exploration and hopes to have one more “eureka” moment.
It’s stuff like Jim’s stories that make me love geology. Being able to participate in these literal treasure hunts, in my small way as an analyst and an investor, is a big part of why I love my work so much.
As for why this should matter to anyone else, one key takeaway is that the three mines Jim tells us about averaged just over nine years from discovery to production. That was back in the 20th century, when mines were far easier to permit than they are now. This is an important point to keep in mind, especially when a company transitions from exploration to the “boring engineering phase” of development.
I hope you enjoy these stories as much as I do.
My 3 Eureka Moments
I’m 77 years old now, so some of the details might be a bit misted by time, but the big picture is correct.
My first trip down a mine was in the spring of 1947 when I was 7 years old. I made a second trip that summer. The mine manager who took me down was Bruce Alexander. Aime Ethier and Johnny Lunic were the two miners who showed me around. Bob Browning was the geologist on the property and taught me what gold looked like. I also saw the assay office and how assays were performed. I really enjoyed those trips, liked the “feel” of the underground, and made a career decision that I wanted to be in this business. I’ve been in it for more than 50 years. Most of my time has been satisfying and like most careers, it has had its moments of frustration. It was not always easy. I’m happy I made that decision and wouldn’t change it.
When we are active in exploration programs, there is no sensation like the “EUREKA!” moment when a discovery is made. Most discoveries include a team of people. Following are the memories of my 3 “EUREKA!” moments and the teams of which I was fortunate to be a part.
Falconbridge Nickel Mines
Manibridge orebody, nickel, March 1963
Joe Brummer hired me in November 1962 to work for him on a nickel exploration project with headquarters in Wabowden, Manitoba. It was my first real job in mining. It was a formative experience. My job was to look after expediting, core management, sampling, and X-ray analysis using a Philips portable X-ray spectrometer. Some of the other members of the exploration team during that winter drilling program were Dr. Colin Coates, Bill Dales, Dr. Dave Emery, Dr. Lionel Kilburn, Max Good, Roy Saukko, and Pete Potapoff. At one point in the winter program, we had 15 drills operating. Joe’s method was to drill each anomaly to determine what was the cause. During the summer of 1963, I carried out a reconnaissance geochem (stream sediment & water sampling) program across Manitoba from Ontario to Saskatchewan. We lived in a tent and travelled by 14’ canoe.
One of my responsibilities was to manage the sampling program of the sample sections of drill core that the geologists had marked for assay. With a diamond-impregnated grinding wheel, the operator, Alf Baer, would grind a uniform groove along the sample length of the core. He’d give me the grindings in a paper sample bag. I’d roll and cut a small sample for analysis in a Phillips Portable X-ray spectrometer. It was a new tool at that time and good for quickly determining the grades of the metals in core samples without sending samples to a lab for expensive analysis, the results of which would be received several weeks later. I did Ni and Cu analysis. The results were in percentages for each element. We had standard check samples for daily calibration.
One morning in early March 1963, Max Good was planning to fly out to check on the progress of one of the drills he was overseeing at an anomaly being tested. I got an early morning start and ran assays on the core he had recovered to date on that anomaly, and “EUREKA!”—we had some 6%+ Ni assays. I saw Max going toward the airbase to get the plane and called him over to my workplace to see the results. We took the results to Joe. He was pleased. There was excitement in the air. We had a discovery!
This discovery eventually became the Manibridge Mines orebody. In the summer of 1970, I was employed as a mining engineering student to work there. Bill Case was the mine manager, and Lorne Taylor, the mine superintendent, was my boss. He let me supervise the changeover from shaft sinking to development and do the mine scheduling and preliminary mine layout for production. Al Williams was the mill super. The mine was operated by Falconbridge Nickel Mine Ltd (now Xstrata) between 1971 and 1977[1]. The mine had a mineral inventory of 1,409,000 tons (including 15% dilution) at 2.25% Ni, 0.27% Cu to a depth of 1,250 feet and recovered grades (including smelting and refining losses) of 1.65% Ni, 0.125% Cu, and 0.02% Co.
It was approximately eight years from discovery to start of production.
Leitch Gold Mines
Newfoundland Zinc, zinc, 1966–1968
Charlie Pegg, the exploration manager for Leitch Gold mines, had an idea that there might be a geological environment on the Great Northern Peninsula in Newfoundland similar to that which hosted the lead-zinc mines in Ireland. A syndicate of three equal partners—Leitch Gold Mines, Highland Bell Silver Mines, and American Metals Climax—formed what became Newfoundland Zinc Mines as the operating entity.
In the spring of 1963, he commenced regional geochem soil and streambed sediment sampling and prospecting programs in the area around Daniel’s Harbour. One summer day at noon, Mike Labchuck, a prospector, stopped on the shore of a large pond for lunch. After lunch, he smoked a cigarette and like most experienced prospectors butted his cigarette in the ground to be sure it was out. When he looked at the place where he was butting it, the rock was cauliform honey jack sphalerite! When he looked around a bit further, the entire outcrop where he had stopped was the same. He had a discovery. “EUREKA!” He ran most of the ~5 miles through the bush and swamp back to the coastal road and sped to Angus Wentzel’s motel at Portland Creek where the crew was staying, only to find no one there! He had to wait several hours until early evening when the rest of the crew returned from the field to share his excitement. A rum or two was splashed over the lips that evening. The pond was later named Mike Lake. Mike’s prospecting partner was John Maher. Floyd Hussey and Charlie were also on that team.
A followup program of sampling and prospecting ensued. Geophysics was tried to check for anomalies, but there was no geophysical expression detectable. Drilling commenced in early 1964 and continued to the end of 1965. Ivor Watson was the geologist in charge of the project for two years and then decided to move on early in 1966 to new challenges. He left a solid technical base of 50,000’+ of core and core logs from which to go forward. Charlie hired me four days after my graduation from The Haileybury School of Mines in late May 1966. During the exploration seasons of 1966 and 1967 we drilled 52,000’ of X-ray core. My “EUREKA!” moment occurred in September of 1967 when we intersected 111’ (true width) of 11.7% zinc on the “L” Zone, which was the largest orebody on the property. This hole was a scientific lucky hit. At that time, we were near the end of our budget and just completing a near end of season final drill hole. I directed Jim Decker, our drill foreman, where to spot the next one. He went to move the drill to the desired location, but lo and behold, there was a large brush pile in the way, so we moved the hole about 50’ to save time, work, and money. Presto, with great scientific accuracy we intersected the thickest part of the orebody!!
Newfoundland Zinc Mines was acquired by Teck Corporation around 1970–’71. Teck commenced production at 1,500 tons per day in 1975[2]. When production ended in 1990, the mine had produced about 7 million tons of zinc ore at an average grade of 7.8% Zn—a billion (+/-) pounds of zinc!
The time from Mike Labchuck’s initial discovery to start of production was 12 years.
Bitech Energy Resources Limited
Nugget Pond, gold, 1988[3]
I was president, CEO, and controlling shareholder of Bitech Energy Resources Limited when in the spring of 1988, Dr. Derek McBride, our consulting geologist, called me from the field to say he had come across an area near Betts Cove, Newfoundland which looked like it matched a geological theory he had about gold deposition. The area was open for staking, and 64 claims were staked. A few weeks later, Greg Ovens, another geologist on the team, was panning at the outlet of a small creek draining into a pond. He recovered some beautiful gold flakes that still had crystal markings on them. They hadn’t migrated very far. He named the pond “Nugget Pond.”
There was a covered boggy area with cedar and spruce trees about 25m from the creek. Followup geophysics & trenching uncovered a 500-ft long and up to 23-ft wide gossan zone. “A soil sample assayed 0.44 oz gold per ton while grab samples from a trench across the zone assayed 0.12, 1.29, and 2.5 oz gold per ton. Additional channel sampling in the trench returned 0.45 oz gold over 23 ft.”[4] By the end of the summer, a gold-bearing zone had been outlined, and drilling was the next step. We raised ~$1.5 million from Alex McDonald’s flow through fund in Vancouver and commenced a seven-hole drilling program in the fall of 1988. The first holes under the trenches returned encouraging results of 8.5 ft grading 1.66 oz gold and 6.6 ft grading 0.71 oz gold per ton (N.M., Nov 7/88)[5] It was a “EUREKA!” moment. “Holes 9 and 10 which cut 6.6 ft grading 0.2 oz gold and 4.9 ft grading 0.178 oz gold per ton respectively. Hole 11 intersected 3.3 ft assaying 0.11 oz gold whereas hole 12 cut 12.1 ft grading 0.4 oz gold per ton.”[6] In early 1989, we agreed with Terry Heard to enter into an option agreement to form a joint venture with Equity Silver to continue the exploration and development of the discovery. Equity decided not to continue with the program after completion of the initial drilling. The orebody was a bit small for them.
In the spring of 1991,[7] we optioned the property to National Minerals Corporation, whereby it would make option payments of $600,000, provide an 8% NSR, and spend $5.2 million in exploration and production financing. The Bitech estimated reserves at that time were 499,000 tons averaging 0.37 oz per ton. National Minerals Corporation was related to Noveder.
In May 1995, Richmont Mines first acquired from Noveder a 60% interest in the Nugget Pond gold project, then the remaining 40% in January 1996. On December 31, 1995, Richmont estimated the ore reserves totaled 430,000 tons at a grade of 10.5 g/t. Nugget Pond began commercial production in April 1997, and produced a total of 168,748 ounces, depleting its reserves by 2001.
Its acquisition, development, and construction represented an investment of $27 million. Commercial production began April 1, 1997, only ten months after the feasibility study was approved.[8]In nine months in 1997, production was 94,000 tons grading 0.38 ounces per ton with a recovery of 97.3%. producing 34,300 ounces at a cash cost of US$149. In 1998, its first full year of production, the mine produced 44,000 ounces of gold at a cash cost of US$144 per ounce. Given the fact that the ore graded 15% lower in 1998 than in 1997, keeping the operating costs so low was a significate achievement. In 2000, 139,000 tons of ore was mined grading 0.32 ounces per ton with a recovery of 98.0%.
The time from discovery to production was 9 years.
A big “thank you” to George Agelopoulos at The Northern Miner for providing archived articles containing details about Nugget Pond. They were invaluable for this essay.
[1] http://www.purenickel.com/s/Manibridge_Project.asp
[2] https://www.fscwire.com/newsrelease/minfocus-exploration-grows-mvt-zinc-portfolio-agreement-earn-100-interest-daniels
[3] http://www.nr.gov.nl.ca/nr/mines/geoscience/publications/currentresearch/1990/swinden.pdf
[4] Northern Miner article, August 8, 1988
[5] From Northern Miner article, November 28, 1988
[6] Northern Miner article, November 28, 1988
[7] From Northern Miner article, April 15, 1991
[8]http://www.virtualmuseum.ca/sgc-cms/histoires_de_chez_nous-community_memories/pm_v2.php?id=story_line&lg=English&fl=0&ex=00000342&sl=1635&pos=1
