“Marginal” Phoenix gold mine holds great promise
Mike Lalonde is a mining industry veteran and he’s a well-travelled one at that. “I’ve been in operations for more years than I care to admit,” he says. “I’ve worked all over Canada and as far north as Greenland. I’ve spent time in the U.S. and Central and South America.”
Born and raised in Timmins, he followed in the footsteps of several uncles who were miners. He was involved in the development of Kidd Creek’s underground mine in Timmins in the 1980s, Franco-Nevada’s Ken Snyder Mine in northern Nevada in the late 1990s and Goldcorp’s Marlin Mine in Guatemala. Lalonde was director of underground mining at Goldcorp’s Red Lake operations in northwestern Ontario before becoming chief operating officer of Vancouver-based Rubicon Minerals Corporation in June 2012 and, for now, his mining-related travels appear to be finished.
Lalonde took over as Rubicon’s president and chief executive officer in January 2013 with a mandate to put Rubicon’s Phoenix gold project, also located in the Red Lake district, into production by early 2015.
The company expects to produce 165,000 ounces annually for 13 years from an underground mine or deposit that lies beneath the East Bay of Red Lake and within sight of the headframe of Goldcorp’s Cochenour mine, which is now in development.
The Phoenix property is also some five kilometres from Goldcorp’s two other Red Lake mines, one of which is the Campbell mine that has been producing since 1949.
Lalonde took a risk in jumping from a major producer like Goldcorp to a startup like Rubicon, which is–at this point–a one-asset company but he’s confident the move will pay off and that he’ll be staying put for a while.
“I recognized that Phoenix would be a long-term prospect given the history of the Campbell and Red Lake projects,” he says. “The Campbell mine had a resource of about 200,000 ounces when it went into production. It wound up producing seven million ounces and it’s still going strong today.”
Rubicon’s Pheonix project is based on a newly discovered deposit located in the heart of one of the world’s most productive gold-mining districts. The company’s chief geologist, Mark Ross, worked at the Campbell Mine from 2000 to 2006 when it was owned by Placer Dome. “We used to call it the jewelry box,” says Ross. “It’s amazing the grades that come out of this place. It doesn’t make any sense. It boggles the mind. You can make a lot of mistakes and still make a lot of money. In a marginal mine, every mistake is counted ten times.”
Rubicon holds title to claims totalling 100 square miles in the Red Lake district, which were assembled by former president and current chairman David Adamson, but for now it is focussing all its resources on putting the Phoenix project into production.
The company has drilled 412,000 metres of core samples since 2002 and explored the narrow, near vertical F2 deposit to a depth of 1,400 metres. The drilling was done on the ice from mid-January till early April most years and from barges when the lake was ice-free.
Lalonde says the exploration program has revealed that the F2 is a lode deposit containing a resource estimated at 3.3 million ounces, and the grades delivered to the company’s mill will be in the range of 8.1 grams per tonne.
Rubicon is fully permitted to begin producing at a rate of 1,250 tonnes a day. It has sunk a shaft to a depth of 730 metres and has blasted tunnels out to the deposit at the 240-metre and 305-metre levels.
Construction of the surface infrastructure is also well advanced. The company has built a two-kilometre access road, erected power lines from the grid, and built an electrical sub-station on site. The headframe and high-speed hoist were finished in the spring of 2012 and a tailings management facility capable of handling the first two years of production is also complete.
The company will process the ore on site and has finished the mill building while the interior is still under construction. It has been designed to handle 1,250 tonnes per day, but can be expanded to put through twice that amount daily. Lalonde says that the ore will be crushed underground before being hoisted to the surface. It will go to a grinding circuit first, where approximately 40 per cent of the gold will be recovered by gravity, and the balance will be processed in a carbon-in-leach circuit.
The total cost of putting the mine into production, as of October 2013, was $210 million.
Rubicon has already raised $77 million and, as of year-end, was in negotiation with various parties to raise the additional $133 million.
Both Lalonde and Ross are confident that there is more gold to be discovered below the 1,400-metre level of the F2 deposit and additional exploration will be conducted from underground platforms. As well, there may be considerable untapped potential on the claims the company holds.
“We’ve got a lot of good prospects on that land, but we’ve got to concentrate our expenditures on the Phoenix property” says Lalonde. “We’ve got to manage the purse strings so we can move this thing to production.”
Rubicon expects to employ 200 people when the mine is up and running and will draw some, but not all, its personnel from the Municipality of Red Lake, which actually consists of four small urban areas with a total population of 4,600.
The company will also look for workers in several First Nations communities in the vicinity and, if it cannot meet all its requirements locally, it may have to fly people in and out from Winnipeg, which is about 250 kilometres by air or a 40-minute flight.
In any event, Lalonde is confident it is only a matter of time before the company pours its first Phoenix gold and he’s got a hunch that there’s a lot more to be discovered on the site.
“Sometimes it’s difficult to uncover the full potential right off the bat,” he says. “The resource right now is good for 13 years at 1,900 tonnes per day, but that doesn’t mean it stops there.”
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