In Canada, mining is for our economy what hockey is for our culture. There are few economic activities more Canadian than the process of exploring for and extracting natural resources.
Canadians are known around the world for their ability to find, fund and build mines. Canada’s gold mines hold a special amount of pride for citizens of this country.
We’re known in the natural resource industry as the entrepreneurial wildcatters who can be relied upon to make discoveries beneath the earth’s surface. We have the stomach for the risk involved in mineral exploration, and it’s an occupation of national pride.
As a result of our mineral exploration prowess, Canada is home to the world’s premier junior resource stock exchange, the TSX Venture. There isn’t a small cap exchange on the planet with a higher resource company concentration, or with stronger caliber juniors, than the Venture, which has given birth to multiple hundred million dollar plus buyouts over the past decade.
Canadian Explorers’ Insatiable Appetite for Gold
Canada’s top four gold camps have reaped tens of billions of dollars for investors, but make no mistake; explorers have lost hundreds of millions in the pursuit of the yellow metal. That grand element of risk versus reward is what makes this arena so enticing – it’s a speculator’s dream…
This week we are writing about the top four gold discoveries in Canada that forever changed mining and exploration in the Great White North. These world-renowned discoveries are a primary reason the TSX Venture exists today; and they are largely responsible for Canada’s global reputation for creating tremendous wealth for mining speculators.
Canada’s Gold | Top Four Gold Camp Discoveries
Canada was the fifth largest gold producer in the world in 2015, behind the U.S., Russia, Australia and the top gold producer, China. However, four of the top ten largest producing gold companies are headquartered in Canada. Few would argue that Canada does not host and inspire the top gold mining enterprises on the planet. Time and again, our country has seen junior explorers evolve into gold mining behemoths – take Vancouver-based Goldcorp as one example. At one time, this company was merely another junior exploration stock. Today, it is the world’s third-biggest gold producer by market value and just beat the street’s earnings estimate for Q4.
The Canadian Gold Monster
The top high-grade, economic gold found in Canada comes from these Provinces and Territory: Ontario, Quebec, British Columbia, Nunavut, and to a lesser extent, Newfoundland. Far and away, the greatest discoveries and most profitable mines continue to operate in the Canadian Shield…
We are referring to, specifically, the Abitibi Greenstone Belt, which stretches from Ontario to Quebec. This prolific mineral belt has produced over 180 million ounces of gold thus far, unparalleled anywhere on the planet except in the gold fields of South Africa.
The Abitibi Greenstone Belt (“AGB”) is made of volcanic and sedimentary rocks from the Archean era over 2.5 billion years ago. Before the continents of the world existed, this region was home to active volcanoes that spewed massive volumes of mafic and felsic lava up through the earth over millions of years.
Geologyforinvestors.com explains,
“There were about seven periods of volcanic activity and during the pauses in between, sediments were deposited in shallow seas.
This package of volcanic and sedimentary rocks has since been compressed, deformed and intruded by igneous rocks.
Driven by plate tectonics, the rocks were compressed in an area where one plate was being forced under another, at a convergent plate boundary.Heated and compressed several kilometers below the surface, these rocks underwent a “low-grade” metamorphism: Metamorphic rocks are created when the original sedimentary or igneous rock are changed through heat and pressure over a long period of time.”
Rich mineral deposits in the AGB were created this way and spread along two major shear zones: the Destor-Porcupine Fault Zone and the Larder Lake-Cadillac Fault Zone.
Timmins: Canada’s Greatest Gold Camp
Arguably the four greatest gold discoveries in Canadian history took place in the Abitibi and Wawa-Abitibi Greenstone Belts.
Timmins’ history begins back in the early 1900s. Provincial geological surveys and railway construction initially led to silver and cobalt discoveries. As the story goes, a railway worker at one of the silver discoveries threw a hammer or an ax at a fox in 1903. According to Python Mining Consultants,
“The hammer missed the fox and when the worker went to retrieve the hammer noticed that it had overturned a rock revealing silver. This attracted many prospectors with dreams of finding a big deposit. As a result of these prospectors and their exploration efforts, the “Golden Staircase” was discovered in 1909. This was a rich gold vein which eventually led to the Dome Mine.”
Dome Gold Mine
Harry Preston and Jack Wilson made the Dome Mine discovery. Owned today by Goldcorp, their “Porcupine” project consists of four mining operations: Hoyle Pond, Dome Underground, and the Hollinger open pit, all of which feed the Dome processing facility.
The Dome is Canada’s longest running Gold Mine. According to Goldcorp,
“In 2017, Porcupine marked its 107th year of continuous mine and mill operations and has produced more than 67 million ounces of gold since production began.”
Goldcorp announced in January of 2016 that the underground Dome Mine would be closing after 106 years. We all remember how negative sentiment towards gold miners was at that time (TSX Venture hit its all-time low of 466 on January 20th). Thankfully, and to the welcoming smiles of local Timmins residents, Goldcorp announced in July of 2016 that the mine would continue to operate through the end of 2016 and beyond.
Hollinger Gold Mine
The Hollinger Mine, also located in the vicinity of Timmins, began operation in 1910 and produced until 1968. According to Goldcorp,
“The main Hollinger Mine operated from 1910 to 1968, during which time 65,778,234 tonnes of ore was milled, producing 19,327,691 ounces of gold, making it one of the richest mines in western hemisphere.”
Discovered in 1909 by Benny Hollinger and Alex Gillies, the Hollinger Mine is likely the most significant gold mine in Canadian history. It attracted people seeking riches from all over the world to the Timmins area and to Canada.
McIntyre Gold Mine
McIntyre was originally staked by Alexander Olifant (alias Sandy McIntyre) and Hans Buttner in 1909 – the same year as the Hollinger discovery. The mine operated for more than 75 years, between 1912 and 1988. In total, it produced 10.8 million ounces of gold.
While there were dozens of small and medium-sized operations in and around Timmins, Hollinger and McIntyre were the first and most significant discoveries that made up the Timmins gold camp.
The Timmins discoveries started an exploration rush that continues to this day, with new discoveries being made seemingly every year. And Timmins’ success quickly extended to nearby Kirkland Lake, the second most significant gold camp discovery in Canada.
Canada’s Second Most Prolific Gold Camp Discovery: Kirkland Lake
The Kirkland Lake discovery begins back in 1911 when William Wright and Ed Hargreaves began prospecting. Ironically, their first real gold discovery came during some down time, while the pair were hunting…
Kirkland Lake Gold Mines tells the story best:
“Apparently, Mr. Hargreaves got lost while the two were hunting rabbit. In order to attract that attention of Mr. Wright, he fired a shot. While rushing through the bush, Mr. Wright then stumbled on a quartz outcrop with visible gold. The two then staked out several claims the following day, marking the discovery of the Kirkland Lake Gold Camp…”
Natural Resources Canada and Ontario Geological Survey 2015, explained:
“The “Mile of Gold” in Kirkland Lake was marked by the headframes of 7 major mines that dominated the town’s skyline for generations. These 7 mines each mined a part of a single orebody. Together, these mines produced over 700 metric tonnes of gold. At today’s prices, this gold would be worth about a third of a trillion dollars!
Only the Hollinger-MacIntyre Mine in Timmins, and the Golden Mile in Kalgoorie, Australia, have produced more.”
In the Abitibi Greenstone Belt, and Canada for that matter, the two largest gold camps by far are Timmins and Kirkland Lake. According to most accounts, combined they have produced between 100-120 million of the 180 million ounces of gold mined from the belt.
Red Lake: Canada’s 3rd Great Gold Camp Discovery
Dubbed by some as the “high-grade gold capital of the world,” Red Lake is home to some of the most profitable gold mines in Canada…
Gus McManus discovered gold in the area in 1922. His findings were published by the Ontario Department of Mines in a geological report two years later.
Chukuni Communities Development Corporation reported, “By 1937, at the height of the gold rush staking period, Red Lake had the busiest airport in the world. What makes this even more unique was that the Howey Bay is a float plane airport and no radios or control towers existed!”
“Prospecting was thus encouraged and in 1925 claims were staked by Lorne Howey and George McNeely. Financed through the efforts of Jack Hammell, Howey Gold Mines was incorporated in 1926 and production began in 1930. Although it ceased operations in 1941, successful mines were developed elsewhere within this region by other organizations, and by the end of 1961, gold valued at over $200,000,000 had been extracted from the Red Lake district.”
source: http://ontarioplaques.com/Plaques/Plaque_Kenora07.html
That is roughly the equivalent of $1.6 billion today…
“Since 1925, there have been 28 operating mines and 28 million oz of gold produced at Red Lake. The majority has come from four mines: Red Lake (Dickenson), Campbell, Madsen, and Cochenour.
The biggest producing mine in 2014 was Goldcorp’s Red Lake Mine, which produced 414,400 oz.”
Goldcorp refers to its Red Lake Mine as the “richest gold mine in the world.” The Red Lake mine produced a record 552,000 oz Au in 2004 at an average grade of 77.1 g/tonne (2.25 oz/ton) Au. Incredibly, at an estimated cash cost of US$92/oz sold, with a total cost of US$126/oz, it was among the most profitable mines ever.
source: http://www.canadianminingjournal.com/features/red-lake-just-hitting-its-stride/
Goldcorp lists its Cochenour project, also located in Red Lake, as one of three developmental projects, noting, “The Cochenour project is an important part of Goldcorp’s future plans in the Red Lake district…”
In respect to Goldcorp, Mining.com reported in 2015 that, “Under Red Lake, it has a projected mine life of 20 years and >250,000 oz/yr production. A high speed tram will connect this with the mill.”
It is likely Goldcorp will remain in Red Lake for a long time to come.
While the Red Lake Gold Camp has yet to produce as much as Timmins or Kirkland, its annual record-breaking production numbers, combined with dizzying high grade and low total cost per ounce, easily make it one of Canada’s top gold camp discoveries.
Hemlo: A Modern-Day Monster
Undiscovered until 1981, Hemlo is far younger than its neighboring gold camps, Timmins, Kirkland Lake or Red Lake. The other clear difference is that Hemlo lies further to the west in the Wawa-Abitibi Greenstone Belt.
For nearly two centuries, Northwestern Ontario has been known as a land of mineral riches. As early as 1869 a native prospector and guide, Moses PeKong-Gay, found gold nuggets in the Hemlo region.
In the book The History of Mining, author Michael Coulson writes in respect to Hemlo,
“The area had been thought to be prospective for gold for over a century but the gold did not outcrop, so it remained undisturbed until science and technology caught up.”
In 1979, two Timmins prospectors, Don McKinnon and John Larche, began staking claims in the region. They contacted a geologist named David Bell who convinced Vancouver businessman and promoter Murray “The Pez” Pezim to finance a significant exploration program.
A year after gold had climbed to the then-record of US$875 an ounce, their little company, known as Corona Resources, hit pay dirt.
As explained by Funding Universe,
“Finally, on hole 76 at an angle of 50 degrees and a depth of 336.5 feet, Bell found a sample that graded .29 ounces of gold per ton. On May 7, 1981, Bell had made one of the most important discoveries in the history of North American mining. With an additional $20 million from Pezim to help continue digging, by hole 120 Bell had delineated a 250,000 ton deposit grading out at .25 ounces a ton.”
Note: .29 ounces of gold per ton is equivalent to approximately 8.22 grams per ton.
Drilling in 1981 discovered the main Hemlo deposit and a gold rush of the likes not seen since the Klondike Gold Rush of the late 1890s erupted as over 180 companies joined the hunt. Ultimately, three mines were initially born out of the discovery: The Page Williams owned by Teck-Corona, Noranda’s Golden Giant and Teck-Corona’s David Bell Mine. Barrick soon acquired the Williams and David Bell mines.
Mining operations at David Bell ended in 2010, while operations at Golden Giant concluded in 2014. Barrick has done some exceptional reclamation work at the old David Bell mine, as can be seen in the below photo:
The Republic of Mining sums up just how profitable the Golden Giant was at its peak:
“From 1985 until the end of 1991, the Golden Giant mine produced 2,300,000 ounces of gold. In 1991 alone, a record 443,400 ounces of gold at an average operating cost of $126 was produced at the mine. In 1992 Golden Giant produced 492,100 ounces of gold, nearly 5 percent more than the previous year, at an average cost of $113 per ounce.”
Barrick still operates Williams, an underground and open pit mine at Hemlo. According to Barrick,
“Hemlo produced 235,000 ounces of gold in 2016, at a cost of sales of $795 per ounce, and all-in sustaining costs of $839 per ounce. Hemlo’s proven and probable mineral reserves as of December 31, 2016, were 1.6 million ounces of gold (25.8 million tonnes, grading 1.92 grams per tonne).”
It was great news for the town of Marathon, Ontario when in May of 2013 Barrick announced the extension of its Hemlo Operation from five years to twelve.
At their peak, the three Hemlo mines were producing roughly 1 million ounces of gold annually, and together made up the largest gold camp in Canada.
The Hemlo Gold Camp has produced more than 22 million ounces of gold and, without question, is one of Canada’s most important gold camp discoveries.
The CBC put together a documentary on Hemlo that takes the viewer on a journey back in time to learn what it takes to make a world-class gold discovery, and the economic and shareholder fortunes that come with it. This is a great watch…
Canada’s Gold Camp Discoveries: Honorable Mention
Since the 1930s, the Cadillac, Malartic, and Val d’Or (French for – “Valley of Gold”) camps produced more than 45 million ounces of gold, and are presently home to seven producing gold mines.
Mining in the region experienced a resurgence between 2000 and 2010 when two companies, Osisko Mining and Detour Gold, began investing heavily in two areas: Malartic and Detour Lake.
Detour Gold has become one of Canada’s largest gold miners. With 14,480,000 ounces of proven and probable reserves, the Detour Lake mine is among the largest gold deposits on earth.
According to the company, “The deposit is situated in the area of the former Detour Lake mine that was operated by Placer Dome and produced 1.8 million ounces of gold from 1983 to 1999.”
On January 30th, 2017, Detour Gold announced that, “Gold production of 143,512 ounces in the fourth quarter bringing total gold production to 537,765 ounces for the year, in line with revised guidance of 525,000 to 545,000 ounces.”
The Detour Lake mine, located in northeastern Ontario, is a monster by every measure. It is a key reason Detour Gold’s market cap sits at approximately $3.3 billion.
A special note on the Malartic gold camp, which in time may move up the ranks: From 1935 to 1983, 8.7 million ounces of gold were extracted from four gold deposits which include Malartic’s underground.
Today, Canada’s largest producing gold mine is the Malartic gold mine, which is expected to produce well over 500,000 ounces of gold per year until 2028.
The mine was developed within six years of the first exploration drill holes in 2005. The first gold pour was in April 2011; and in June 2014, Yamana Gold Inc. and Agnico Eagle Mines Limited acquired all issued and outstanding common shares of Osisko, the owner of the asset at the time.
We wrote about Osisko Mining’s friendly $3.9-billion merger deal with Yamana Gold and Agnico Eagle Gold in our Ebook focused on Canadian small-cap buyouts – a must have for any serious speculator. Osisko was led by Sean Roosen, a titan in the junior mining industry.
Wrapping Up
These all-Canadian, world-class gold mining camps from Timmins, to Kirkland Lake, Red Lake and Hemlo have one thing in common: they are located in or around the Abitibi Greenstone Belt…
The unique geology of the region has led to numerous multi-million ounce, high grade, gold discoveries. Thanks to these established gold camps, this region has the advantage of infrastructure, skilled labour, and strong political support for mining.
High grade, combined with excellent infrastructure, almost always results in low all-in sustainable production costs. From western Quebec to western Ontario, the Abitibi Greenstone Belt and the Wawa-Abitibi Greenstone Belt may well act as a springboard for the next wave of discoveries in the junior mining sector. If we’ve learned anything, it’s that Canadian prospectors will always honour our exploration heritage by continuing the search for Canada’s next great gold discovery. And there is no better place to make a discovery than near the workings of an established mine.
All the best with your investments,
PINNACLEDIGEST.COM
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