Junior Explorers Just Scratching the Surface In Northern Quebec's Abitibi Gold Belt
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(Kitco News) - Northern Quebec is one of the most prolific gold regions in the world; it is home to the Abitibi Greenstone Belt, which has produced 180 million ounces of gold during the last century.
The Val d'Or/Abitibi region is also home to Canada's largest gold mine: Malartic, which is run by Agnico Eagle Mines (NYSE: AEM, TSX: AEM) and Yamana Gold (NYSE; AUY, TSX: YRI). However, junior explorers working in the area are demonstrating that miners have just literally scratched the surface and the region's potential is limitless.
Since the 1920's the region has been home to about 100 different mines; at the same time, about 300 gold deposits have been identified in the area.
"There is no doubt. This is mining country," said Philippe Cloutier, president and CEO of Cartier Resources (TSX.V: ECR), just one of the junior explores breathing new life into existing mining camps. "The mines in Northern Quebec shut down because of economics not because they ran out of ounces."
Cartier is currently revitalizing its Chimo Mine project. The underground mine produced 379,000 ounces of gold between 1964 and 1997. The mine shaft is 920 meters deep and Cloutier said that the company's exploration program over the last few years shows that there mineral potential below the initial deposit.
"This mine is alive and kicking at depth," he said. "Because of the infrastructure already in place, these are easing ounces of gold."
Osisko Mining (TSX: OSK) is another company that is highlighting the region's unlimited potential. At its Windfall project, located 200 km northeast of Val d'Or Osisko is embarking on an aggressive exploration program, drilling 1 million meters within the project.
Included in this year's drill program is a 3.5 km hole, which will be the deepest exploration hold in Canada.
John Burzynski, president and CEO of Osisko, said that they are drilling because they want to see exactly how big the project actually is. He explained that then they first started exploring Windfall they had a resource of about 1.3 million ounces, which has grown to more than 3 million ounces. Burzynski added that it looks like they could bring the resource up to 5 million ounces.
"The more we drill, the better it gets," he said. "Windfall has the potential to be a world-class underground gold mine. It's going to be a mine it just a question of how big it will be."
Looking at the entire region, Burzynski said that it difficult to measure just how much gold there is.
"Quebec is hands down the best place for exploration," he said. "There are whole belts that haven't been explored."
Windfall would be Burzynski's second top-tier mine in the Val d'Or region as he was with Osisko when it started exploring around the old Malartic camp. The exploration program began in 2005 and the mine's first gold pour took place five years later.
In 2014 Agnico Eagle and Yamana Gold Inc. acquired Osisko Mining Corporation in an aggressive bidding war with Goldcorp for the Malartic project.
Radisson Resources (TSX.V: RDS) is another junior explorer that is digging deep. Mario Bouchard, president and CEO of the company, said that they just started a 20,000 drill program this summer. The program includes a 1.5 km hole.
Radisson is looking to expand the resource at its O'Brian property, which was the highest grade gold mine in Canada. During its life, the mine produced more than 580,000 ounces, processing 1.2 million tonnes of ore at 15.25 grams/tonne.
Bouchard said that they are exploring the property to see the full potential of the mine.
"The mines in the area are at depth," he said. "The potential to find more gold is unlimited."
But it's not just Northern Quebec's gold potential that has miners excited about the junior exploration sector. Another factor that makes the Val d'Or an attractive mining area is its access to infrastructure.
Both Radisson's and Cartier's projects have highway and power access. Bouchard added that his property is within reach of five different mills, which will be looking for feed as other projects start to run down.
But it's not just the junior explorers who see the potential in Northern Quebec.
"Mining is welcome in Quebec, people see the potential this sector creates," said Kai Hoffmann, CEO of Soar Financial, the company behind the mining tour.
Hoffman added that he is optimistic that money will eventually flow into the area and all the potential will turn into working mines.
In an interview with Kitco News, Frank Holmes, CEO and chief investment officer of U.S. Global Investors, said that he likes the region from an investment perspective.
"I think you could say that Quebec is one of the best jurisdiction in the world," he said. "It has a mining-friendly government and it has developed infrastructure. We love it when companies come to us and tell us that they are exploring in the Val d'Or area."
All three mining executives said that they also expect to see renewed interest in the exploration sector. They added that the record high gold price in Canadian dollars will make Northern Canada an even more attractive region.
"We've seen a broken market for the last five years, but we think that is starting to change," said Burzynski.
Bouchard said that he also expects that it is only a matter of time before money flows back into the beat-up sector.
"With the higher gold prices, I think we are seeing a good environment for junior explorers," he said. "This is the perfect timing for Canadian junior explorers."
All three executives also highlighted the severe lack of new production in the gold mining space.
"There are limited options out there to replace depleting assets," said Burzynski.