Target "494": Goldcorp’s Eleonore Set for Resource Expansion
Issue 72, February 2014
Goldcorp’s Eleonore mine, Quebec, is set for a reserve expansion later this month that could position it to become Canada’s largest gold mine.
Eleonore is due to enter production later this year at an initial rate of 4,000 tonnes per day, before ramping up to 7,000 tonnes, or 600,000 ounces per annum. Many however believe that the figures undershoot both the deposit’s potential and Goldcorp’s expectations. “They haven’t even started mining yet and it’s evident that it’s a big one,” says one geologist based in the region. “Most of us believe it’s well in excess of 10m ounces.”
Based on Goldcorp’s current resource estimate, Eleonore hosts 7.7m gold ounces, versus 21m for Detour Lake in Ontario and 23m for Osisko’s Malartic mine, Quebec, currently being bid for by Goldcorp.
Detour and Malartic have both jockeyed for the title of Canada’s largest gold mine, but facing grades of around 1 gram per tonne, have so far left the title with Goldcorp’s Red Lake operations, producing 493,000 ounces in 2013.
Grades at Eleonore conversely sit above 9 grams per tonne, allowing the mine to shift one-tenth the tonnage of rock for an equal output of ounces. As Eleonore has moved towards production, it has also enjoyed an intensive drilling campaign, with six rigs each turning at over 1,300m per month.
100,000m of drilling was completed in 2013, with a further 100,000 budgeted for the current year. Eleonore remains open at depth, but most promisingly, underground drilling has hit a new ore shoot called “Target 494”, which also outcrops at surface only 500m north of the main Roberto zone.
According to one analyst restricted from discussing the stocks concerned, initial estimates suggest 494 could mirror Roberto, effectively doubling the size of Eleonore.
New Gold District
Eleonore sits to the north of Quebec’s James Bay, an endless shore of woodland, islands and lakes that remains largely unexplored. “It’s definitely positive for the district,” says Dr. Don Robinson, president of Eastmain Resources, which has a joint-venture with Goldcorp on a 150 sq km property block immediately south of Eleonore. “It’s demonstrating that we’re in an area where there are mines to be found and these are huge pieces of real estate.”
Goldcorp expects final cap-ex of up to $1.9bn, with $570m falling in the current year. The total bill comes in on top of $346m previously spent exploring Roberto and with infrastructure now largely in place, Goldcorp seems heavily incentivised to invest further in expanding the resource, especially in a virginal territory that has borne such high grades.
“Infrastructure is everything on these projects,” says Robinson. "When you have to build a 600km-long power line, it just puts so much pressure on the capital costs.” Eleonore may therefore serve as a leg-up for surrounding properties, Robinson says.
"I think history will demonstrate that he bought it before the lid of the can tore off…"
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