The National Post is Canada’s second largest national paper.
Northern Promise is a six-part series that explores the pace and progress of development in Canada’s remote communities. In this second instalment Peter Koven visits the home of the world’s richest gold mine
Fifty-four hundred feet below the surface, roughly underneath the local airport, a massive drill is pounding out a path to Red Lake’s latest set of riches.
Workers stand back and protect their ears as the driller carefully targets the sheer rock wall up ahead and begins to break it apart. It is slow and careful work; the horizontal drill makes about 15 to 23 feet of progress per day, sometimes less. But it is closing in on the destination, which will be reached later this year after more than three years of work.
The end result will be a five-kilometre drift connecting Goldcorp Inc.’s existing operations here with the Bruce Channel, a high-grade discovery that will be a flagship of the company’s Red Lake operations for decades to come. The ore from Bruce Channel (or Cochenour) will be hauled back to Goldcorp’s Campbell mill via an underground tram system, which is already running and is being expanded as fast as the drillers up ahead can open up the drift.
Bruce Channel is coming onstream at an ideal time for Goldcorp and for Red Lake, as the long-running Campbell mine is winding down and this fits in perfectly to replace it. For the locals, this is expected; in Northern Ontario’s “Golden Treasure Chest” (as author Michael Barnes described it), an exciting new gold mine always comes along when the tiny community of 5,000 people needs it. There is simply not much concern about the yellow stuff running out, no matter how deep the mines go, or, as seen recently, how much the gold price drops.
“The clock keeps moving ahead,” said Mark Vermette, Red Lake’s chief administrative officer and former head of community relations for Goldcorp.
More than 70 years after the first mine went into production, Red Lake remains, along with Nevada, one of the very best places in the world for gold mining. Goldcorp’s Red Lake complex is still the richest gold mine on the planet, with grades in its legendary High Grade Zone topping two ounces per tonne of ore. The fabulous grades lead to low cash costs of around US$500 an ounce. And the mining-friendly atmosphere is the envy of every company kicking around Tanzania or Kyrgyzstan.
This is the mine that put Goldcorp on the map. Not coincidentally, Goldcorp now has the largest market value of any gold company on earth. Rob McEwen, the former chief executive who led the discovery of the High Grade Zone, is still revered as a local hero.
But Goldcorp is not the only big game in town anymore. To the north, Rubicon Minerals Corp. is developing its high-grade Phoenix project into a $650-million mine. And of course, there are plenty of exploration companies kicking around, drilling down and dreaming big.
Yet Ontario seems to have forgotten that this world-renowned place even exists. Virtually all the talk in the province’s mining circles revolves around the dormant Ring of Fire, a middle-of-nowhere exploration site that is years away from generating a penny of revenue. Red Lake is the real economic power that fills government coffers with revenue every year, and local officials wish people would take notice and listen to their concerns.
“All you hear is ‘Ring of Fire, Ring of Fire, Ring of Fire.’ This is the Ring of Gold. It’s a living, breathing community,” said Bill Greenway, Red Lake’s economic development officer.
While Red Lake is prosperous, it is facing headwinds. Like any gold mining town, the health of Red Lake is outside of the control of the community, or even Canada. Instead, it depends on the actions of Ben Bernanke, the U.S. Federal Reserve and Wall Street traders, a group that feels about as far removed from Red Lake’s charming small-town Ontario atmosphere as possible.
For the rest of this article, click here: http://business.financialpost.com/2013/08/19/northern-promise-home-of-the-worlds-richest-gold-mine-braces-for-coming-headwinds/?__lsa=88b0-c7be