Ontario gold producer Wesdome’s expansion supports new opportunities in Algoma

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Like people, mine developments come in all shapes and sizes.  They are diverse.  Gold producer Wesdome’s recently announced re-starting of its Mishi Pit near Wawa on a year-round basis is an example that proves even small operations can offer major positive contributions to host communities. 

Wesdome recently had its amended closure plan for the Mishi open pit approved, which gave the green light to expanding production from the Mishi pit to a 12-month-a-year operation.  Ore from the Mishi surface mine will be shipped two kilometres to the Eagle River Mill and mine complex.

The initial five year expansion plan will boost Eagle River production by 1,000 ounces of gold per month and the $48 million expenditure for labour and equipment will be a boost to Wawa.  Donovan Pollitt, Wesdome President and Chief Executive Officer, says the expansion will lead to 16 new people being hired at the mine and a second shift will be run at the mill.  He added that a contractor has been hired to drill, blast and haul the ore to the mill and it is expected 10 to 15 people will be added to its payroll for this project. 

“We are excited to be proceeding with the Mishi Pit on a full-time basis and we believe the economics of this project are compelling at current gold prices and could grow our production profile as soon as the fourth quarter of 2011,” said Mr. Pollitt.  “It is important to note that our five-year mining scenario will involve processing about 710,000 tonnes of ore, which is a fraction of the estimated resources.”

Wesdome currently has about 200 employees in Wawa.  “The Mishi Pit will provide a nice organic increase to our gold production and we are now one of the biggest employers in the Wawa area,” added Mr. Pollitt.  “We are trying to turn this into a success story and we see excellent expansion potential for this asset going forward.”

Wawa, which is approximately two hours by road north of Sault Ste. Marie has a population of about 3,500 people.  Gold mining began in the area in 1896 and iron ore mining also has taken place nearby.  Mining operations in Ontario acquire more than 90% of their input costs in Canada and export more than 80% of their products.  Operations like Wesdome’s Eagle River Mine and Mill and Mishi Pit support regional development and infrastructure support in the areas where they produce minerals.   

An economic study by the University of Toronto, Ontario Mining: A Partner in Prosperity Building, demonstrates that mining multiplies jobs.  This study shows that for every direct mining job in Ontario 3.75 indirect jobs in the supply and service sector are created.  This means 30 new mining jobs at Wesdome’s Eagle River and Mishi Mines could mean more than 100 jobs locally and elsewhere in Ontario.

Wesdome’s Eagle River mine near Wawa started commercial precious metal production in 1996 and Wesdome began production from the former producing Kiena property near Val d’Or, Quebec in 2006. The company produced 52,500 ounces of gold in 2006, 72,085 ounces of gold in 2007, 90,004 ounces of gold in 2008, 96,152 ounces of gold in 2009 and 70,000 ounces in 2010.  The company’s head office is in Toronto.

Since starting operations in Wawa in 1995, Wesdome has produced more than one million ounces of gold from three mines that it has developed in the region.  Its assets have demonstrated the strength to survive very low gold prices in the late 1990s.  With economic conditions now more favourable and its mines still at relatively shallow depths, the company is investing to secure a bright and long future.

July 19, 2011

In 2010, Ontario produced more than 50 million grams of gold for a value of $2.3 billion.

This is the highest value of gold production ever recorded in this province.