Ly Page 2B July 1986 Cassiar Courier Section’ B Exploration con tinues at Bissett Mill and Mine Head Frame at San Antonio Gold, Bissett, Manitoba. San Antonio is an historic gold mine owned by Cas- siar Mining Corporation and is located in Bissett in south- eastern Manitoba, 260 kilometres northeast of Winnipeg. From 1932 to 1968 over 1.35 million ounces of gold were produced from 4.87 million tons of ore mined for an average grade of 0.277 ounces gold per ton. Workings extend to a depth 1490 metres below surface. A modern 450 tonne per day mill and associated surface and under- ground facilities were built in 1982 and have been main- tained in working condition. Production at San Antonio has been from two series of veins and over 60 individual veins have been identified, the largest of which belong to a group referred to as “stockwork veins” because of extensive brecciation and alteration. As they are lensoidal-shaped their thick widths allow accumulation of substantial tonnage. Eight “stockwork veins” have produced over 60% of the gold. An independent geological engineering study in 1984 has confirmed that proven and probable geological reserves are 501,936 tonnes grading 7.47 grams of gold per tonne (0.22 oz. gold per ton) and possible reserves are 251,218 tonnes grading 7.2 grams of gold per tonne (0.21 oz. gold per ton). It is recognized, however, that operation of the San Antonio Mine would be dependent upon higher grade reserves and, as a result, exploration activity since 1983 has focused on the lower levels, part- icularly within a thick vein referred to as the “97” vein. Underground diamond drilling by Cassiar in 1983 indic- ated reserves of 191,000 tonnes of 8.57 grams of gold per tonne (0.25 oz. gold per ton) in the “97” vein, with strike and depth extensions open. Inco Limited, through an exploration subsidiary, can earn 50% of Cassiar Mining Corporation’s interest in San Antonio by spending $7.5 million before the end of 1988. They have just recently completed a $2.0 million 20,000 foot underground diamond drilling program in the lower levels of the mine. The drilling has intersected numerous potential economic gold values. Results from the first eight drill holes have returned twelve inter- sections from the “97” vein that average 0.26 oz/ton gold over a 12 - 16 foot width. Preliminary results indicate that the strike length and width of the stockwork “97” vein will increase and potential exists to define substantial additional reserves . of gold mineralization. : The results for all drilling are currently being com- piled and evaluated. by A. Burgoyne New equipment installed by Jim Callow On Janury 11, 1986, a new engine installed in the Powerhouse turned’ a crank for the first time. It is a new generation of diesel engines developed by Caterpillar Trac- tor in Peoria, Illinois, produced for power generation, mar- ine and locomotive applications. This is the Cater cpus 3600 series engine, which comes in many sizes by adding or angling the number of cylinders. The unit we have in Cassiar is a conventional in-line six cylinder turbo charged engine with a continuous rating of 2100 h.p. Slightly larger than what you find under the hood of your auto, it is compatible in capacity with the elderly ‘“‘Ruston” engine it replaced. Attached to the eng- ine is an alternator capable of 1500 kw continuous output and to date it has demonstrated that capability adequately. It has not been without problems. With any proto- type machine, a certain amount of teething problems must be expected, and this engine is definitely in the pro- totype category. Being aware of this, the Company wisely leased the set, and contracted the maintenance out on a ‘no power — no pay’ basis, which has kept the downtime to a minimum. Though the cost of fuel has dropped a little recently, it is still a major cost item, so naturally fuel efficiency played a big role in the selection of the new engine, as did on-shore parts and service availability. There is no denying that since the installation of the Cat.-3606 unit, the over- all plant efficiency has improved because of it. Their spec- ified fuel consumption is considerably better than the Ruston engines — but then, so it should be. There are about 30 years of technological progress between the con- ception of each engine, and Caterpillar Tractor has been able to incorporate the beneficial advances made in this time. They have accomplished this well, producing a small- er engine with more power, or put another way, increasing the power/weight ratio — a desirable objective. The _Cassiar townsite consumes on the average 664,296 kilowatt hours of electrical power per month and the total average consumption for the entire operation is 4,267,544 kilowatt hours per month. Time alone will be the best judge of this engine, but if first impressions are worth anything — it ae good. PROFILE ----- PETER JONES Peter Jones is Executive Vice President of Cassiar Mining Corporation and he is optimistic about Cassiar’s future. During a recent visit to the mine site Jones said, “Everyone is aware of our cost cutting measures and our attempts to increase production...During the first quarter of the year there was a significant increase in production reflecting better grade from the open pit ... This has meant lower unit costs and that means we can remain competitive in world markets.” Jones has been with the company since November, 1976, when he hired on as Plant Superintendent at Cassiar. He originally hails from the United Kingdom: he was born in England, did his schooling in Wales and went to university in England. He graduated with a degree in electrical engineering from Rugby College of Engin- eering, and subsequently worked in nuclear power stations in the U.K. In 1969 he joined the Anglo-American Corp- oration in Zambia where he worked in both underground and open pit copper mines. Moving to Canada in 1972 he worked for Newmont Mining Corp. of New York at Granduc Mine near Stewart, B.C. as Plant Superintendent, and later as Plant Supt. at Similkameen, an open pit copper mine in southern B.C. Jones joined Cassiar as Plant Superintendent in 1976, became Production Supt. in- 1978, and mine manager in 1979. In the summer of 1983 he was appointed General Manager and became Vice President Mining at the begin- ning of 1984. In March, 1985, he was appointed Execu- tive Vice President. In speaking of his duties as Executive V.P. Jones said, “My responsibilities are fairly broad...I’m a generalist. The manager at the mine reports to me, while other areas are covered through vice presidents of finance, market- ing and exploration and a ‘corporate lawyer who looks after the litigation cases in the U.S.” Taking a general overview of the company today Jones said, “Things are going pretty well ... Everyone is aware there’s still a lot of downward pressure on prices from oversupply, however, from recent market inform- ation we still believe there are opportunities in the market. for our fiber.” To try to take advantage of all opportun- ities the company has increased its sales force by two’ sales people.” Jones said, “We want to tell our customers and potential customers how to get the best out of our fiber... Also if they’ re looking for Somerhine different such as a different grade, we want to hear from them...In other words we're becoming more customer service oriented.” Jones added, “Things at the mine are going well.” The change in the bunkhouse and cafeteria system will save the company about $1 million a year. As of Sept- ember all employees will be living in either houses, trailers or apartments and the cafeteria will be a user-pay opera- tion. The waste in the pit is currently being reduced, and since Cassiar are in the final phase of stripping this will mean less expenditures on waste removal between now and 1991 when ore in the pit is expected to be exhausted. There is also a general reorganisation at the mine. There are fewer people and people are doing more varied tasks. In addition to these changes the company has ap- proached the government and the people of Cassiar (through their unions) about incorporation of the town. If this comes about the government and not the company would be responsible for snow removal, garbage collection, hydro, sewer and water services. ‘The’ recent teduction in fuel ; aac has resulted ins significant savings to the company. Jones said, “Every cent decrease in fuel costs per litre is worth about $200,000 a year to us.” Jones has seen a lot of changes in the structure of the company during his time with Cassiar. In 1980 Cassiar Resources were taken over in a leveraged buy-out by Brinco and amalgamated with a Brinco subsidiary, Brinex, to form Brinco Mining. He said, “Brinco Mining pursued a fairly aggressive exploration and acquisition program which led to the purchase of the Loftis Coal Mine in Kentucky by Brinco Ltd. and a joint venture on the San Antonio Gold Mine in Bisset, Brinco Mining Ltd.” “However,” he added, “like many other mining companies we got caught by the increased cost of borrow- ing and the downturn in the minerals market. In 1985 control of Brinco was acquired by Dorset Resources, a Calgary-based oil and gas company and subsequent to that the mining and the oil and gas interests were split — with the idea of enabling each company to raise equity financing in the financial markets. Because of this ap- proach we were able to finance the current McDame project.” “Cassiar Mining began to trade in December, 1985, and traded around $1 for several months. However,” he said, “the progress the company is making has been recognized by investors and the share price has climbed.” Looking ahead to Cassiar’s future Jones is very enthusiastic. ‘The McDame deposit is just a super de- posit,” he said. The fiber produced from samples taken from the McDame deposit in 1985 has been tested by both an outside laboratory and by a user company and Jones said, “The results have justified our enthusiasm.” Diamond drilling and further exploration of the - deposit will continue this summer. Jones said he would expect a production decision to be made by the end of 1988. He anticipates the project could be on stream by late 1990 or early 1991. Overall Jones is looking ahead with guarded optimism to a successful future for Cassiar Mining Corp. In a recent message to financial analysts he said, “...There is no doubt that as oil prices decline and so do, interest rates many economies will improve. This will give positive impetus to the construction industry which is the main- Stay for our espace PURO, Absent from the picture is the Manitoba, by . Team competes in Northern Zone. The Roadheader Cassiar Mine Rescue Team Back row left to right: Al Johnson, Scott Smith, Dale Ritter, Rick Prosser, Burns. i Front row left to right: Dar- ren DeCecco (Captain), Dan- ny Harrison (Vice-Captain) Bruce coach, Kinky Borsato. The Cassiar Mine Rescue Team participated in the Northern Zone Mine Rescue and First Aid Competition in Prince George on June 7, 1986. The competition roster consisted of six teams: Cassiar, Quintette Coal, Bullmoose Coal, Gibralter Mines, Equity Silver and Granisle Mines. The winner in Mine Rescue was Quintette Coal and Gib- raltor Mines places second. Equity Silver placed first in 3 Person First Aid and second place went to Quintette Coal. Cassiar didn’t place. However, they were a very strong contender and they will be back again next year. Coach Kinky Borsato said he was very proud of them for a job well done. The competition took on a new format this year and consisted of a series of tasks with a maximum time of 30 minutes per task, and a schedule where all teams particip- ated at the same time by performing different tasks. No. 1 and 2 tasks were a 50 question written exam and a bench equipment demonstration for each team member. No. 3 task was a first aid problem with three victims that required rescue, treatment and transportation to an ambulance area. No. 4 task was to don breathing apparatus and search a large maintenance shop filled with smoke and res- cue an unconscious victim. No. 5 task was a rope problem in two parts. The team plan was to split up in two groups of three: (a) Group 1 was to build a tripod to support a boom over a 40’ drop to lower a victim in a stretcher. (b) Group 2 was to stabilize a vehicle on a 50° bank using steel pins and rope and rescue a very frightened driver from the cab. a No. 6 task was to extinguish two fires. One was a burning car (gas fire) and the other was a pile of wood burning. The teams were marked on their step by step fire fighting procedure. No. 7 task was a3 Person First Aid Competition that involved the team members. One was the patient, an- other had an injured hand and his help was limited and the third member performed the First Aid treat- ment. This new format has a great deal of potential for al- lowing the participants to display their skills in a-series of tasks that will become very technical and demanding in future competitions. The Cassiar team members look forward to next year’s competition with eagerness. They feel they can make the necessary adaptions and be more competitive than ever. Congratulations to Quintette, Gibralter and Equity Silver and good luck in the Provincial Final Competition in Kamloops. New Concept For Conveyor Extensions by Guido DeCecco Summer returns once again to Cassiar Country and al- most everyone is eager to start holidays. Unfortunately, a few employees are required to stay on and perform essen- tial services such as the Retail Store, Cafeteria, Power- house, etc. There are also a few employees who stay over three to four weeks to do project work that cannot be per: formed during regular operations of the Mine and Mill. One such project is the yearly extension of tailings conveyor T6B. During the past five years approximately 400 feet of extensions have been added to this conveyor. The work involved includes not only adding the exten- sions, but also requires relocating the drive section, which it very time consuming and can only be done by utilizing heavy equipment such as the P & H crane. This year, how- ever, a new drive section and counterweight assembly will be installed, thereby eliminating the need to relocate the drive section in future years. This new concept was init- iated by Cassiar employees, drafted up, and sent out for construction quotes. The new drive, counterweight and all related components were awarded to Dominion Construc- tion in Vancouver. The installation of these components will be done in July by four millwrights, two fab/welders, one crane and operator, one D6 Cat and operator and one laborer. The total cost of these conveyor extensions and components, including installation, will be in the region of $120,000 to $150,000. However, by incorporating this new design, it will al- low us to do future extensions on a need basis only, which can’ be accomplished on a regular mill maintenance two- day shutdown. This will also allow us to extend in increm- ents of twenty feet on a regular basis and will ne longer require the services of the P & H crane. Further costs sav- ings will be realized by using this design as the services of a contractor’s D6 Cat will be discontinued. This D6 is cur- rently being used approximately four to six hours per day, five days per week, at a cost to Cassiar of $80.00 per hour. Future moving of tailings will be accomplished using Cas- siar equipment and a Cassiar employee on a need basis only. This year’s extension of the tailings conveyor T6B will be 160 to 200 feet. ‘Sections B Cassiar Gaicias huly 1986 Page 3B arrives by Keith Minty During the current exploration program of the Mc- Dame Project, a Voest-Alpine AM75 Continuous Miner (Roadheader) will be employed to develop underground ALPINE MINER AM 75 Machine and system ‘workings. Currently all explomtion development is performed by conventional trackless methods (i.e. drilling, blasting, loading and hauling). The Roadheader eliminates the re- quirement for specialized underground equipment to per- form the drilling and loading operations and also the use of explosives. ; The Roadheader, in one operation, excavates rock by the means of a boom mounted rotating head fitted with tungsten-carbide bits. Two gathering arms are located on an apron chute located below the rotating head which gathers the mined rock and feeds the rock onto a chain discharge conveyor. The discharge conveyor transports the mined rock into a waiting underground haulage truck, where it is then removed from the area. In addition to the Roadheader’s ability to replace underground equipment and several mining operations, openings can be shaped by the rotating head, which will assist in controlling ground conditions. The Roadheader arrived on site on June 20, 1986. It will be moved to the adit and commence operations as soon as it is assembled. John Oughtred -- man on the move John Oughtred is the man in charge of sales for Cassiar Mining Corporation. The Vice President Market- ing has been with the company for almost ten years, He signed on as Sales Manager in October, 1976, when Cassiar took on its own sales. Oughtred was born in Thetford Mines, Quebec, and has worked in the asbestos industry since he left school. He oversees the Marketing Department which is composed of a marketing manager, technical sales man- ager, traffic co-ordinator, the people at Asbestos Wharf and several clerical staff. In order to serve Cassiar’s customers and to seek new markets Oughtred spends four to five months each year on the road. The company has a standard group of cus- tomers who buy from Cassiar each year on an annual commitment basis. Oughtred visits these customers, usually in the fall, to sell asbestos for the coming year. He also actively seeks new buyers through selling trips to potential customers. The product from the Cassiar mine is sold to nearly 50 different countries all over the world. Europe is the biggest regional market at the present time with France as the largest single buyer. Cassiar produces an average 90,000 metric tonnes of ' asbestos’each year. The asbestos-cement market represents —_. 80% of the company’s sales. Markets for asbestos are down right now; however, the company is predicting some good possibilities for our product because of the decrease in oil prices. Lower prices mean less currency outflow, and, for third world countries in particular, these spare finances tend to be channeled into construction. That benefits the asbestos cement industry. Cassiar also holds a competitive edge in the market- place because of the quality of our long fiber. Asbestos has not only been affected by the world economic recession but also by the asbestos and health issue which has been given wide media coverage. The Environment Protection Agency in the United States has proposed a total ban on the importing of asbestos into the U.S. There are many arguments against the E.P.A. position — The E.P.A. have assumed there is no safe limit for asbestos exposure. This is in contradiction to the position taken by the Simpson Commission in the United Kingdom, the World Health Organization and the Ontario Royal Commission on Asbestos and Health. — The E.P.A. has failed to make any distinction be- tween different types of fibre or fibre use. — The E.P.A. has made the assumption that all cur- tent uses for asbestos can either be performed by substi- tutes at present, or substitutes can be developed during the phase out period. Oughtred said, “If the market in the States was lost it wouldn’t hurt us that much. But other countries look to the States as a big brother. That’s our biggest worry... that other countries will follow whatever the States decides to do.” He added, “‘We agree on stricter standards in the work place — we can live with that...but we’re fighting politics... we're trying to expose the fact that this is a political endeavor — there’s no scientific base for it [the ban on asbestos] .” Producers and users in both the United States and Canada are contesting the E.P.A. proposal in its current form and there seems to be a certain amount of optimism that any rule making which may stem from the E.P.A. proposal will be rather Kaa than ae which is cur- a pronoeed. ; ‘