Manitoba Mining Information

Based on personal experience in the exploration industry I would think that a great place to look for a new gold discovery would be next to an old one. Numerous new gold finds have resulted due to the use of advanced exploration methods and a better understanding of the geology features found at old deposits.

There is a marked difference in the manner that exploration is conducted today verses yesterday. Another important fact to consider, is that ore grades that were considered uneconomical in the past can be mined at a profit today, due to the increased price of gold and improvements in mining methods.

It is clear that we have a better understanding of geology today than in the past and we are better equipped to look further and in more detail into geological structures. Those points alone can warrant a renewed exploration visit to older mines, after all there was gold found in the area. That fact gives at least a heads up as to where to start looking.

It appears that there is some agreement with this line of thinking, evidence of which can be found in the results obtained by some gold mining companies. Judging from recent press releases a closer look at old discoveries may indeed pay off.

In a February 19 press release Gold Corp announced a 9% increase in gold reserves and provided some details on it’s exploration plans.

In 2007, Goldcorp invested $134 million into exploration, of which $91 million was capitalized. Finding costs for proven and probable plus measured and indicated gold ounces amounted to less than $15.00 per gold ounnce.

One of the most interesting statements in the press release was this one:

“Exploration investment across our portfolio of existing mines and projects continues to drive organic growth,” said Kevin McArthur, President and Chief Executive Officer. “Our 2007 focus to drill in the shadows of our own headframes has delivered low cost gold ounces, not only in terms of discovery costs, but also in terms of incremental capital required to develop the resources. This strategy will serve to maximize shareholder value.”

That certainly adds weight to the the words ” the best place to look for a new gold deposit is next to an old one” anyone who has followed the history of Gold Corp will know just how real that statement can be. The spectacular early discoveries made by Gold Corp at the Red Lake Mine bear testament to that statement.

Gold Corp also acquired 100% ownership of Porcupine and Musselwhite mines in Canada to add nearly 2 million onces to reserves. The company did not have total ownership prior to 2007. To provide a little more insight into the importance of directing exploration dollars into areas of historic production we need only look at where the company plans to explore in 2008. The following is a quote from the press release at cnmoney.com

“”Goldcorp expects to invest an additional $150 million in exploration in 2008, with the goal of further increasing reserves and resources. Exploration priorities include:

- Increased drilling at Red Lake, with an emphasis on the under-explored Party Wall Zone in 2008. The Company has begun work on a 1,000 metre exploration drift above the Red Lake High Grade Zone that will allow for more concentrated drilling to the 57 level in 2009.

- Exploring the strike extent and depth potential of the ore zones at Eleonore in Quebec. Recent strong drilling results to the north and west of the Roberto Zone support accelerated drilling effort.

- Continued study of deep underground concepts at Penasquito, including concurrent high grade underground mining beneath the open pits and investigation of block caving scenarios.

- Building on recent exploration successes at Porcupine and Musselwhite mines in Ontario.

- Continued regional work around many of the Company’s mines and projects.”"”

Given the success that Gold Corp has had in finding new reserves next to older mines and deposits, it is not hard to understand the increase in exploration efforts around existing infrastructure. Read the Gold Corp Press Release

Earlier today San Gold Corporation, a company in Manitoba, announced new drill results from exploration within close proximity to their two mines at Bissett. These new results add to previously announced new high grade discoveries near the existing mines and deep underground in their Rice Lake Mine. If we look at the press releases at SangoldCorp.com we can see that San Gold is also finding excellent new gold discoveries next to an old mine. Read recent post Here

With some Due Diligence one can see a lot of similarity’s in the exploration results reported by these two companies, enough to realize that applying new strategies and exploration techniques to old mines can produce surprising results.

Sand Gold Corporation press release:

San Gold drills 2.3 m of 20.1 g/t Au at Hinge2008-02-19 10:00 ET - News Release

Mr. Dale Ginn reports

DRILLING EXTENDS NEW HINGE #3 ZONE FOR SAN GOLD

San Gold Corp.’s exploration drilling from surface has extended the new gold-bearing zones by as much as 200 metres to the north of the recently discovered Hinge No. 3 zones located northeast of the Rice Lake mine and mill. Hole GS-07-28 encountered multiple gold-bearing intersections including high-grade sections (2.3 metres of 20.1 grams per tonne) as well as a broad (4.9 metres of 7.4 g/t) zone at depth. Results from hole 28 are tabulated.

Hole No. From To Length Gold g/tonne (oz/ton)

Upper zones
GS-07-28 132.5 m 134.2 m 1.7 m (5.6 ft) 9.7 (0.29)
and 158.6 m 159.6 m 1.0 m (3.3 ft) 13.1 (0.39)
Lower zones
GS-07-28 319.9 m 321.5 m 1.6 m (5.3 ft) 9.7 (0.29)
and 324.1 m 326.4 m 2.3 m (7.6 ft) 4.7 (0.14)
and 330.4 m 332.7 m 2.3 m (7.6 ft) 20.1 (0.62)
and 346.2 m 351.1 m 4.9 m (16.1 ft) 7.4 (0.22)

Please see the news in Stockwatch Jan. 15, 2008, for the first discovery results of the new Hinge No. 3 zone. The new zones are roughly parallel and gently dipping to the north and are made up of quartz and carbonate veins containing gold mineralization. The volcanic units which contain the new veins are located in a sequence of rocks which lie approximately 1,500 metres into the hangingwall stratigraphically above and geographically to the north of the mineralized mine unit of the Rice Lake gold mine. This new zone does not outcrop at surface but drill locations are within view of the San Gold No. 1 haulage road and power line. The new zones lie between San Gold’s operating Rice Lake and San Gold No. 1 mines, an extensive area that is largely unexplored.

Much of the past exploration within the Rice Lake belt has been confined to the mine unit gabbroic rocks as dictated by a historical Rice Lake mine geological model. The model followed in this case, a model developed from observations deep underground at Rice Lake and by means of surface structural interpretations, projects a series of north-south hinges or axes along which past and current showings and small production pits and mines were located. Drilling along the third, easternmost hinge or axis which also contains the historical Wingold and Gold Standard deposits resulted in this discovery. Numerous targets have been identified within the thick sequence of hangingwall volcanic rocks. A second surface drill rig has moved to the area around this new discovery.

Please see the San Gold website for a plan view location map and cross-sectional view of this new discovery as well as selected pictures of drill core intersections.

San Gold Wesbsite

A publication from the country’s mines ministry has suggested that gold bullion production, which fell by nine per cent last year, could drop to 50.11 tons or 12% in 2008, Reuters reports.

Mali is Africa’s third biggest producer of gold after South Africa and Ghana. Mali mines produced some 56.75 tons of the gold last year. Gold is the leading export for the country accounting for 59 per cent of goods exports in 2003, according to the World Gold Council.

“Most of the big mines have reached the end of their lives and encouraging exploration is underway to find new resources and increase their lifespan,” Lassana Guindo of the Mali mines ministry told Reuters.”We’ve started the phase of lower production,” he added. Rueters Link

The forecast comes on the heels of production drops due to power shortages and recent predictions from countries and mining firms of lower gold output for the next year as a result of fewer gold deposits being found, higher costs, declining ore reserves and other factors. On a whole these factors bode well for exploration company’s and gold investors alike.

Manitoba should continue to benefit from increased gold exploration and mine development as a result. If recent news is any indication there is a renewed effort to uncover Manitoba gold deposits.