The Red Lake gold camp is one of the most prolific gold regions in the world. The area hosts several gold mines, where the combined production and remaining proven resources are more than 30 million ounces of gold. Initial gold production occurred at the Howey mine in 1930, and two mines (Campbell and Red Lake) remain in operation today. The largest gold mines historically were Placer Dome’s Campbell Mine (cumulative production and remaining resources of 13 million ounces), Goldcorp’s Red Lake (10 million ounces) and Madsen gold mines (2.5 million ounces).
MPH Ventures Corp. was among the first juniors to recognize the high-grade gold potential of the Red Lake mining camp in northwestern Ontario and has been a significant landholder there since 1994. The company expanded its holdings along the trend that hosts Goldcorp’s Red Lake Gold Mine, the highest-grade gold mining operation of its size anywhere in the world.
Today more than ever gold mining companies are emphasizing cash production costs in an effort to maximize profits and become more attractive to large investment funds. Not surprisingly, the Red Lake camp, with its high-grade gold deposits, is unique and has attracted worldwide attention. In its size category, Goldcorp ranks among the highest grade mines in the world with mill feed averaging 2.0 ounces gold per ton and reported cash costs of approximately $100 per ounce. With this cost structure, it’s not surprising that Goldcorp has become a core investment in most of the world’s leading gold funds.
Adjoining Goldcorp’s Red Lake Gold Mine is Goldcorp’s Campbell Gold Mine (formerly owned & operated by Placer Dome), which historically has also been a relatively high-grade, low-cost gold producer. Given the reputation of the Red Lake gold camp, it’s understandable why so many companies want to duplicate Goldcorp’s operating performance by exploiting the high-grade gold exploration potential in the region. In recent months, market interest in companies with exploration assets in the camp (including MPH Ventures) has reached unprecedented levels and will likely grow exponentially with the anticipated improvement in bullion prices over the next few years. And it’s easy to understand why! Goldcorp’s high-grade discovery has grown to 4.6 million ounces, more than two times larger than the reserves at Campbell and its grade is 4.5 times higher.
Goldcorp is forecast to produce 555,000 ounces of gold for the twelve months ended December 31st, 2005 at a cash cost of less than $100 per ounce.
Classic Greenstone Gold Belt
The Red Lake gold district is situated in a classic Achaean greenstone belt within a series of metavolcanic and metasedimentary rocks. Most of the gold production in this district has come from structurally controlled vein-type gold deposits hosted in sequences of ultramafic mafic to felsic volcanic and sediments. Regionally, the belt exhibits a system of five northeast and northwest-trending deformation zones with associated hydrothermal alteration. All of the key producers in the district are located close to a regional mafic volcanic-sediment contact or ‘break’ – which for years may have been overlooked as an important control on gold mineralization.
Gold deposits in the district have been classified in three categories: mafic volcanic-hosted; felsic intrusive-hosted; and, stratabound. The majority of the productive zones in the Red Lake camp are of the mafic volcanic-hosted type and occur as vein systems within a lower mafic to komatiitic and ultramafic volcanic sequence. Goldcorp’s Red Lake Mine lies in the eastern section of the Red Lake Precambrian Greenstone Belt, an older assemblage of mafic and felsic volcanic rocks within a sedimentary sequence.
Major gold camps in the Timmins and Kirkland Lake areas of northeastern Ontario also show a close association with similar breaks. The most prolific gold producers in the Red Lake district are hosted by the northwest-trending Cochenour-Gullrock Deformation Zone and are situated within the well-established “mine trend” of the Red Lake gold district.