When Osisko Mining started exploration drilling at the site of some past-producing underground gold mines near the Canadian town of Malartic back in 2008, there was very little expectation from the industry that they could succeed in applying an open pit, bulk mining concept to the lower grade material left near surface.
But fast forward to 2021 and Canadian Malartic is now the largest gold-producing mine in Canada after Osisko outlined a near-surface, lower grade bulk tonnage deposit; built the project (which involved moving parts of the town of Malartic); and sold it for C$3.9 billion to a joint venture (JV) comprised of Agnico Eagle Mines and Yamana Gold in 2014. This lower grade but exceptionally large tonnage operation has generated huge profits for both parties over the last seven years and fuelled a search for similar scenarios across the Abitibi greenstone belt, which has yielded over 200 million ounces (Moz) of gold and counting.
In the case of Agnico Eagle, their search brought them to Maple Gold Mines – a TSXV-listed gold explorer which controlled the Douay project – a 2.77 Moz gold resource in the same broad geological region of Québec as the Canadian Malartic mine. After two years of due diligence and in-depth analysis of an immense library of existing drill cores at Douay, Agnico signed a 50/50 JV with Maple Gold in February 2021. Agnico will fund C$18.25 million in exploration expenditures over the next four years for the JV to jointly explore a 400 km² property package that includes both Maple’s Douay project as well as its own past-producing Joutel project, located directly South of Douay, with the aim of establishing a new gold camp in the Abitibi.
“Agnico got involved in our project because of the existing resource there. But that’s where the story begins, not where it ends,” states Maple Gold’s president and CEO Matthew Hornor.
Hornor joined the Maple Gold team almost four years ago following a +12-year career at Ivanhoe Mines, where he worked closely with legendary mine builder Robert Friedland. Since then, he has added technical, strategic and financial expertise from major companies such as First Quantum, Inmet Mining, Wheaton Precious Metals and Ivanplats across Maple’s key management personnel to comprise a ‘formidable team’ by Hornor’s estimations.
One of the first things Hornor and his team did was to elevate the quality of previous technical work to major mining company standards. This included the transition from outsourcing technical work to the establishment of an in-house technical team, the build of a new 45-person camp and the delivery of a more conservative updated resource estimate at Douay. It was through this approach that Agnico was drawn to the table, along with the tremendous resource expansion potential that exists at the Douay property package.
“The upside potential is massive. We’ve only scraped the surface with the current resource and if you look at the profile of our current resources versus the depth of known mineralisation at other significant producing mines in Québec, we still have more than a kilometre of room beneath our current resource to search for the plumbing of the mineralised system.
“The depth potential at Douay is just one part of the growth profile, we have been leveraging a new 3D model to target lateral extensions and link existing zones where there is geological support to do so.
“We believe there is potential to define a district-scale gold resource at Douay and the opportunity to discover new high-grade gold deposits across our large land package isn’t lost on us either, so we are actively building a queue of priority discovery drill targets and excited to have an incredible partner supporting us on this endeavour.”
Maple’s president and CEO makes it explicitly clear that the JV’s goal at Douay is to grow the resource into an eventual open pit operation with a subsequent underground expansion component, much like the Canadian Malartic. “Agnico understands that type of geology, which has been wildly profitable for them in Québec. They are the number one company on Earth for gold mining in this jurisdiction.”
The project currently has an inferred resource of 71.2 Mt at 1.03 g/t gold for 2.35 million ounces, with a cut-off grade of 0.45 g/t for in-pit resources and 1.0 g/t for underground resources.
Following the Maple-Agnico JV announcement earlier this year, a resource expansion programme commenced in and around the Douay mineral resource area, with a +10,000 metres drill campaign completed in April.
The winter campaign sought to add extra resources through step-out drilling around resource zones as well as through discovery drilling outside of the resource area. The campaign also included select infill drilling aimed at upgrading a portion of resources into a higher resource category. Following completion of the programme along with receipt and interpretation of assay results, Maple Gold expects to publish an updated resource estimate sometime in the second half of 2021.
“The JV intends to grow the resource a bit further from here before we initiate more comprehensive economic assessment work, but I think on a go-forward basis it’s quite exciting. And we haven’t even talked much about Joutel yet.”
The Joutel project is a 39 km² property located immediately south of the Douay project. The project hosted Agnico’s high-grade, past-producing Telbel Mining Camp, which produced gold between 1974 and 1993 – when the gold price ranged between US$150-$360 per ounce.
With gold prices now trading at roughly US$1,750 per ounce, Maple Gold and Agnico both agree that potential remains not only for depth extensions beyond the old Telbel mine workings, but also for near-surface, higher grade mineralisation to be found above and around the old Telbel mine.
The Joutel property has seen very little exploration since the early 1990s when the mine was still in production and historical drill data for thousands of holes was stored on paper records which had not been digitised…until now.
“As everyone knows, the best place to build a new mine is in the shadow of an old headframe. In short, we think mineralisation remains open for us to pursue with improved knowledge and modern exploration approaches. We are digitising all that analog data and will be coming out with a Leapfrog 3D model, which is going to show the market why we’re so excited about that project.”
Several months have passed since the JV began working through countless boxes of analog drill core data to complete the digitisation effort, and Hornor stresses the importance of this exercise in terms of getting a consensus on what has been defined so that the companies can look to focus in on target areas that might lead to new resource definition in the future.
One of the biggest strengths of the Joutel project is the fact that it was a past producer during a time when gold was sold at a sixth of today’s price. “Undiluted gold grades at the mine when it was in production were often North of 10 g/t, with a diluted average grade of 6.5 g/t. It was profitable for almost 20 years at prices below $360 gold.
“So, we love the idea that we have not only massive resource growth potential with Douay, but also this past-producing project at Joutel which we think has a lot of untapped higher grade potential.”
The next big gold story in Canada
The ultimate end goal at Maple is to establish a new Abitibi gold mining camp underpinned by the large, lower grade bulk tonnage near-surface deposit at Douay along with its associated higher grade deeper feeder zones; the high-grade gold resource that may exist at Telbel; and potential new discoveries of different types of gold-rich mineralisation across the entire combined Douay and Joutel properties.
Hornor reveals that over the coming months investors will start to see significant news flow coming out from both projects. This will include results from the 10,000 metres winter 2021 drill programme and an updated resource estimate at Douay, results from digitisation work at Joutel and details of an upcoming drill campaign.
“Every day we wake up thinking of how we can drive shareholder value. This is the way we behave and the type of ship I like to run here. Ultimately, our aim is to drive the next big gold story in Canada and we’re aptly named as such.”