by Bruce Cherney
Gold! That shiny yellow and elusive precious metal has caused good men and women to lose all sense of reason in its pursuit. That’s what happened when gold was found at Sutter’s Mill in California in 1849, when it was found in the Fraser River in British Columbia in 1858 and in the Klondike River in 1897. Manitoba even had its own gold rush, but nowhere near the scale of California’s or the Klondike’s.
In last Tuesday’s Financial Post, the front page headline was Gold-Sector Buying Spree with the subheads Return of the Gold Rush: Three Toronto Companies, Three Deals, Three Continents.
The buying spree was triggered by gold reaching US $508.91 an ounce, its highest price since 1983.
The rise in the price of gold is also what drove San Gold Corporation to recently purchase the San Antonio mine in Bissett, which owes its existence to the first provincial gold rush. San Gold bought the mine from Harmony Gold for $3.5 million in cash and $4 million in stocks.
San Gold is a Vancouver-based company created by the merge on July 1 of this year of San Gold Resources and Gold City Industries.
Bissett at one time boasted a thriving population of 1,200 people. But, the community fell on hard times when gold mining was abandoned in 2001. The community has witnessed a continual cycle of booms followed by busts since its founding.
San Gold now sees gold mining as a potentially very profitable business and will begin operating San No. 1 mine this month — it holds three deposits called SG No. 1, No. 2 and No. 3. The second mine is in the development stage, while the third mine is expected to open in the summer.
The company has also commenced drilling at the 5,300 foot level at the Rice Lake mine, targeting two veins that are expected to yield gold at 0.40 ounces per ton.
The company said it has identified enough gold to keep the Bissett mill running for at least 13 years. The hope is that prospecting will yield even more gold.
San Gold purchased the gold mines in 2004 from Harmony Canada and now employs 110 local residents and 30 contractors for mine development and eventual operations. Another 75 employees are in the process of being added. Most of the employees are from the local area and have been trained by the company. Once the company reaches 175 employees, the payroll will be $2 million.
According to a company news release, it controls 15 kilometres of mine horizon and 7,000 hectares of exploration property in the Greenstone Belt and has the ability to expand its holdings.
“The Rice Lake Greenstone Belt is geologically similar to the Red Lake Camp, one of Canada’s richest and most extensive gold deposits,” according to the company literature.
At the time of the 2001 closure, Bissett had settled into a more sedate existence with a mere 159 souls providing services for the local tourism and forestry industries. The re-opening of the gold mines means the town will be returning to the boom times of old.
By 2001, the price of gold fell to a low of $270 which originally forced the closure of the San Antonio Mine, 256 kilometres northeast of Winnipeg.
“The operation worked, but the patient died,” Ted Grobecki, executive director for South Africa-based Harmony Gold Mining Company Ltd., said when the mine last closed.
Harmony said at the time of the mine’s last closing that mining was only profitable when the price of gold was above $300 an ounce which was significantly surpassed last week.
Harmony had bought the San Antonio mine from the receiver in 1998 for $143 million and spent over $33 million upgrading the facility. The company was able to produce 110,000 ounces of gold before abandoning the property operation.
Prior to Harmony, Vancouver-based Rea Gold had reopened the mine in the mid-1990s after it had sat idle for a decade. Rea spent $88 million upgrading the mine and then went bust.
The history of full-fledged mineral exploration started when the Canadian Pacific Railway came to Manitoba in 1881. The search for gold took prospectors to the Winnipeg River and Whiteshell District and then along the shoreline and islands of Lake Winnipeg, but it remained an elusive commodity.
The 1900 Geographical Survey of Canada identified the potential for gold in the Bissett region. Gold’s existence was confirmed by Duncan Two-hearts, a Cree trapper, who, near Rice Lake in the winter of 1910-11, found some gold-rich quartz. He showed the rocks to Major E. A. Pelletier, a retired North West Mounted Police. At Rice Lake, Two-hearts took Pelletier to a boulder of rusty quartz containing pure gold. Pelletier staked a claim, calling it Gabrielle, which was followed by other claims called San Antonio, Ross Fraction and Island Fraction.
Typical of any gold discovery, word soon leaked out. And like all past rushes, riches from the ground were hard to come by because the ore was found to be low-grade. Abandoned mine shafts from this period dot the land around Bissett. The only person who seems to have gotten something out of the rush was Pelletier. He sold his claims and headed for Brazil.
The Wanipigow Syndicate was formed in 1925 to look into the San Antonio group of claims. Two years later, Wanipigow Mines Ltd. was incorporated, later to become San Antonio Mines Ltd.
This was just one of several mines in the area to open for production, starting with Central Manitoba Mines operating the Kitchener Mine at Wadhope Lake, Manitoba’s first gold mine which continued to produce until 1937. Eight separate deposits were mined and 159,252 ounces of gold was recovered.
San Antonio Mines had trouble raising capital during the Great Depression. It refinanced in 1931 and production commenced in 1932 when the company changed its name to San Antonio Gold Mines Ltd.
Over the years, the capacity of the mill operated by San Antonio increased from 150 to 550 tons per day. Gold recovered from the mine from 1932 to 1985 was 1,199,878 ounces as well as 192,205 ounces of silver. In all, 132 separate veins were worked during this period. In 1961, a mass of native gold, weighing 211 ounces, was discovered at San Antonio, although most of the recovered gold was found in quartz veins.
Between 1932 and 1934 and again from 1938 to 1940, the Solo-Oro Grande Mine, a much smaller operation than San Antonio, resulted in 5,451 ounces of gold being recovered.
Another small operation was the Diana Mine where gold recovered was 7,574 ounces between 1934 and 1936. The Jeep Mine recovered 13,629 ounces of gold between 1948 and 1950. The Gunnar Mine recovered 101,463 ounces of gold between 1936 and 1942. Between 1942 and 1951, the Ogama Rockland Mine recovered 45,343 ounces of gold.
The only remaining operator after the closure of Ogama-Rockland, San Antonio, recorded its first loss in 1955 and the company was sold to eastern interests. Throughout the 1960s the mine was in trouble, and closed in 1968 when a fire destroyed the mine’s hoist.
After the fire, San Antonio Gold Mines Ltd. declared bankruptcy and New Forty Four took over. The closure resulted in the population of Bissett dropping to 150 people.
When the price of gold increased in 1977, new exploration efforts were made and promising sites were uncovered. In August 1980, New Forty Four entered a 50-50 joint venture for development with Brinco Mining Ltd. A new mill was put into operation, but the mine was closed by May 1983 after the grade of ore proved disappointing.
San Antonio Mine remained closed until 1985 when San Antonio Resources acquired an option to undertake exploration.
Throughout the 1980s and 1990s, mining in the Bissett area was sporadic and then ended completely with the 2001 closure. Still, the mine equipment had been maintained and only awaited the arrival of San Gold to take another chance.
Until the arrival of San Gold, the only operating gold mine in Manitoba had been in Snow Lake, 685 kilometres northwest of Winnipeg. It had two producing mines where gold, silver, copper and zinc was recovered. However, the New Britannia Mine was closed last spring.
Even though gold mining has had a troubled existence in recent years, the rise in gold prices has spurred an exploration rush. In the Snow Lake area, $1.9 million in exploration has been undertaken.
Wildcat Exploration Ltd., a Winnipeg-based company, in September announced that its has found very encouraging gold assay results from its Poundmaker Property located in the Bissett gold camp (Greenstone Belt), where it holds 230 square kilometres of rights. Puma Exploration has also been exploring at its Edmond Property located to the west of Little Stull Lake (Greenstone Belt), which is near the Ontario border.
For many, “all that glitters” is still gold.