Red Lake Gold Mines

Headnote

1-million-ounce/year target in sight

Rivals since 1949 when they began pouring gold, the Campbell and the Red Lake mines have at different times each been called the "world's richest gold mine". Now a single owner, Goldcorp Inc., is combining the adjacent operations in Balmertown, Ont., reducing costs and nearing its 1-million-oz/year target.

Combining two mines, mills, cultures and workforces that have fostered a rivalry for over 50 years does not happen automatically. Red Lake Gold Mines (RLGM) mine general manager Dan Gagnon said the cultures are melding. "We are slowly growing together. This is a small town of 4,600 people and they see each other at the rink and the bank, so they talk about what is happening and this helps with integration.

"Everything at Campbell and Red Lake used to be done separately and differently. We've had to look at everything and choose the best options to go forward, and this by taking the best of both worlds." The two mines and mills had differing wage and benefit packages, differing approaches to labour (contract vs. full-time employees), and in the warehouse commonality extended to only 11% of the parts and supplies.

Now, as the Red Lake complex and Campbell complex come together under the same management, plans call for gold output to be 786,000 oz in 2007 (70% from Red Lake and 30% from Campbell). By 2011 that number will reach 1 .0 million oz, thanks to continuing production efficiencies and the superior exploration potential of the Red Lake camp.

US$26-million exploration budget

Goldcorp has drawn up a US$26-million budget for exploration this year in the area of RLGM. With that investment the company plans to keep 15 rigs busy with 180,000 m of drilling and complete 610 m of underground exploration development. Targets have been chosen in five key areas.

High Grade zone (HGZ) and footwall sulphides in the Red Lake mine

The HGZ is a particular priority because grades are going up as drilling goes deeper. The HGZ above 37 level averages 51.4 g/t (1.5 opt) Au, and between 37 and 47 level averages 115.9 g/t (3.4 opt) Au. Proven and probable reserves at the end of 2006 to the 47 level totalled 1.4 million tonnes grading as high as...