Ready for rebirth

Published in Manitoba Mining Review:
In their only hit, quirky 1980s band Timbuk 3 proclaimed that “the future’s so bright I gotta wear shades.” Garson Gold Corp. president David Tafel has a similar assessment of the company’s future in northern Manitoba.
“From our perspective, it’s looking extremely good,” he says from the junior mining company’s Vancouver headquarters. “The junior mining market’s taken a real beating lately, but that hasn’t changed our strategy.”
Garson Gold’s primary asset is a 100 per cent interest in the New Britannia Mine (NBM) and its 2,150-tonne-per-day mill located at Snow Lake, about 700 kilometres north of Winnipeg. The property was acquired in 2006 with the goal of re-activating gold production in an area with a history of production and great potential.
“That’s still in our plans,” says Tafel, whose company also has projects in northern Ontario. “We’ve got a team of geologists and have been drilling non-stop for (several months).”
Gold was first discovered at NBM in the 1920s, and the mine’s first productive period started in 1949 as the Nor-Acme mine. From then until closing in 1958 it produced approximately 610,000 ounces of gold.
Various companies explored the 3,900-hectare property after 1958 and flirted with the idea of reopening the mine until High River Gold Mines and TVX Gold reopened it under the New Britannia name in 1995. From then until January 2005 (by which time Kinross Gold replaced TVX as High River’s partner), the mine produced 823,000 ounces of gold before being placed under care and maintenance due to a combination of a complex joint venture structure and a dip in gold prices.
Garson Resources Ltd. acquired NBM in October 2006 in a partnership with Piper Capital Inc. Piper amalgamated with Garson Resources a few months later to form Garson Gold Corp. as the property’s sole holder of mineral leases and claims. Kinross Gold maintains a connection to NBM as a major shareholder in Garson Gold Corp.
With this year’s acquisition from Hudson Bay Mining and Smelting of 100 per cent of adjacent mineral claims known as the HudBay Option, Garson’s NBM property now consists of two surveyed mineral leases and 43 unsurveyed mineral claims totaling about 4,800 hectares (including the contiguous Squall Lake property).
NBM’s mineral zones are within the Aphebian Flin Flon/Snow Lake Greenstone Belt. The McLeod Road Thrust fault in the Snow Lake area, a structural break between metavolcanic and metasedimentary assemblages, is a key structural feature. The gold-bearing zone in the main past producing mine lies along the Howe Sound fault, also called the Nor-Acme fault, where the main mineralization consists of quartz-carbonate alteration zones.
The focal point of Garson’s exploration in the NBM area has been surveyed mineral lease ML-323’s No. 3 Zone, which had an Inferred resource of 50,000 ounces of gold prior to commencement of drilling by Garson.
An updated July 2008 technical report by Micon International states that, based on 2007-2008 drilling results, the No. 3 Zone now contains 85,000 ounces in Indicated inventory and 117,000 ounces Inferred.
While the updated resource of the No. 3 Zone satellite is significant, it is just a portion of the total mineral resource inventory on the NBM property. The entire property (including the No 3 Zone) resource inventory includes 449,000 ounces of gold in the Measured and Indicated categories (2.6 million tonnes at 5.37 g/t) and 317,000 ounces of gold in the Inferred category (1.9 million tonnes at 5.22 g/t).
The Micon report endorses Garson’s three-pronged approach of drilling in places with “near-term potential,” integrating data to decide where to drill among places “with known mineralization and potential for reasonable quantities of resources,” and searching for new targets where potential might be found.
Since the past producing mine was put on care and maintenance rather than simply shut down by its previous owners, a quick return to operating status is possible. The mine’s mill and an array of related equipment and facilities remain in operating condition, ready to handle ore from a reactivated NBM.
What’s more, as Tafel points out, it’s “right on the hydro grid” and Manitoba has very inexpensive electricity.
That last point is very important. In a June 2007 opinion piece in the Winnipeg Free Press, Lakehead University economist Livio Di Matteo cited energy costs as a major drag on industry in Ontario. “The disadvantage comes particularly to the fore when Ontario is compared with Manitoba, which has electricity prices that are about half of those in Ontario,” Di Matteo noted. Manitoba has among the lowest electricity rates in North America.
As well, Tafel says he’s encouraged by Manitoba’s “pro-mining” government. The Fraser Institute in 2007 rated the Keystone Province as having the world’s best policy environment for mining investment. Manitoba has slipped a bit in the rankings, but it’s still far higher up the list than nearly every other Canadian province.
Since acquiring NBM, Garson has performed in excess of 45,000 metres of drilling -- and exploration may be conducted year-round. Tafel notes that Snow Lake’s cold winter conditions actually ease access to some of the marshy areas.
Tafel is, in his own words, “bullish on gold,” and Garson is poised at the ready for the next major uptick in the gold market.
Garson also has two projects in Ontario, at the McMillan Gold Mine property near Espanola and the Copper Prince property at Sudbury.