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MONTREAL — The Abitibi region of Northwestern Quebec has produced about 250 million ounces of gold since mining began there almost a century ago and the story is still unfolding despite a steep drop in bullion prices.
Many junior exploration companies have been searching in vain for capital, sending the drilling rigs back home, as investors cite high risks and favour only those projects with adequate reserves and well-defined development plans.
But Montreal’s Yorbeau Resources Inc., with a promising gold property four kilometres south of the historic Horne copper-gold mine at Rouyn-Noranda, is among the more fortunate.
Johannesburg-based Gold Fields Ltd., one of the world’s biggest gold miners and recent buyer of three Barrick Gold mines in Australia for $270 million U.S., has signed an option and joint-venture agreement with Yorbeau.
This winter, it is funding a drilling program on Yorbeau’s property 600 kilometres northwest of Montreal. Rouyn-Noranda is the heart of the Abitibi’s mining industry.
Gold Fields (via a subsidiary) can earn 51 per cent ownership of the Yorbeau property in return for spending $19 million on exploration over 4.5 years and prepaying $1 million. It is spending $4 million by next December and $5 million annually afterward.
Gold Fields has negotiated a further option to raise its ownership to 70 per cent by spending an additional $15 million on exploration and development over three years after earning the initial 51 per cent.
The Yorbeau property is a consolidation of four known gold deposits lying in a 12-kilometre stretch of the famous Cadillac Break that runs from Val d’Or southwest to the Ontario border and the Kirkland Lake mining camp. It includes two new finds made by Yorbeau in the past few years.
Two of its deposits, Astoria and Augmitto, have underground infrastructure in place, including two shafts and a ramp. Yorbeau has focused its own drilling on these two deposits and the area in between.
Under the agreement, Gold Fields also provides Yorbeau with a $40-million credit “in lieu of its future contributions to the joint-venture.” This recognizes the value attributed to the existing infrastructure.
Gold Fields is managing the field work and a joint steering committee is overseeing the full program during the initial option period. But on full exercise of the option, it becomes the joint venture’s operator.
Yorbeau CEO David Crevier said the new winter exploration program has already completed more than 20 drill holes for a total 6,000 metres and has met visible gold frequently. Assay results will be disclosed later.
The Cadillac Break’s gold is found mostly in tangled vein systems, while Agnico Eagle Mines Ltd.’s LaRonde mine northeast of Rouyn-Noranda and Osisko Mining Corp.’s Malartic mine nearer Val d’Or work deposits lying in different fault zones where the gold is much more dispersed. Those companies are Quebec’s biggest gold producers with combined annual capacity of about 800,000 ounces.
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