Gold Development and Exploration
An ideal place to build a gold mine
Even in the context of the critical minerals frenzy, gold remained the most sought-after commodity in Québec in 2022, according to the Government’s latest figures published in November 2023. Sustaining a year-long trend, investments in the precious metal represented 64.1% of exploration and deposit appraisal work expenditures in 2022, for a total of US$585 million.
Reviving dormant deposits
Looking ahead, several projects have the potential to increase the province’s output of gold. Having produced over 200 million oz/Au since 1901, the Abitibi Greenstone Belt remains a hub of mining activity, with a handful of new projects eyeing production before the end of the decade. With a track record of 124 operational mines, the geological marvel formed over 2.6 billion years ago still holds approximately 100 million oz to be tapped. Some juniors are therefore seeking to awaken existing assets, while other explorers drilling near past-producing camps are relying on the old saying that the place to dig up the best results is in the shadow of a headframe. Couple that geological potential with existing infrastructure and world-class talent, and one quickly concludes that 1 g/t Au in Québec goes further than anywhere else.
Québec’s history of gold mining, coupled with gold prices stable at above US$2,300/oz for the better part of 2024, offers a breeding ground to restart past-producing mines. Having completed a PEA in 2023, Abcourt Mines is looking to awaken the Sleeping Giant gold mine in the Abitibi. The firm restarted the process plant in 2016, and will now be looking to enter commercial production by the end of 2025. In Rouyn Noranda, Falco Resources is focused on the world-class Horne 5 deposit, a vertical extension of the former Horne mine, operated between 1926 and 1976. The asset holds 6.1 million oz AuEq in reserves and 9.3 million oz AuEq in resources, and would produce over 220,000 oz/y. Importantly, Falco Resources can leverage the century-long culture of mining at Rouyn-Noranda. As put by president, CEO, and director Luc Lessard: “Rouyn-Noranda is probably the best place in the world to build a mine, with access to skilled mining labor and an incredible network of contractors and suppliers.”
“Whereas earlier discussions primarily revolved around project grades and technical aspects, inquiries about social acceptance now often rank among the top concerns. Ensuring community buy-in is critical, because even the most promising projects can face insurmountable challenges if local stakeholders are not on board.”
Marcel Robillard, President, Exploration Puma
The existing infrastructure in the Abitibiti makes the often perilous leap from a developer to a producer less threatening for mining CEOs. There are 14 mills within 200 km of First Mining’s Duparquet project in the Abitibi, ideal for a developer eyeing production. The firm put out a PEA for the project in September 2023, which showcased that the Duparquet could produce over 200,000 oz/y over an 11-year mine life. Vancouver-based Dan Wilton, president and CEO of First Mining, said: “The project being in the middle of the Abitibi with significant infastructure, service providers, and human resources – the quality of work we get from contractors and people in the Abitibi region is phenomenal.”
Emperor Metals is another firm focusing on reviving an idle project. Having acquired Duquesne West, a project with a historical resource of 727,00 oz/Au, in 2022, the company then proceeded to the first AI-based 3D and geological models of the property before drilling 8,579 m to grow the resource. Emperor is working towards an updated NI 43-101 MRE by Q1 2025. John Florek, president and CEO of the firm, said: “The project can benefit from great infrastructure such as a highway that leads to Rouyn-Noranda International Airport, access to local power supply, and year-round maintained road access. One g/t in this jurisdiction is equal to 3 g/t in the North as we do not have to build camps, a mill, or even a tailings dam as we can use the already built infrastructure surrounding our project.”
“Québec has been very supportive of exploration companies. The general market is not supportive for juniors, but Québec is one of the better jurisdictions to be given these funds due to their level of support.”
Rick Breger, President and CEO, Harfang Exploration
Collaboration and consolidation to navigate tough market conditions
Partnerships, JVs, and M&As have been common strategic moves in the current inflationary environment. In Canada particularly, large mining firms found that acquiring new properties or partnering with explorers was more cost-effective than developing new infrastructure repeatedly. The 50/50 JV between heavyweight Gold Fields and Osisko Mining will likely result in the first gold poured in 2026 at the Windfall project. The South African brought valuable processing expertise to Québec, which, coupled with Osisko Mining’s local strengths, make for a winning collaboration. Current guidance is at 306,000 oz/y as per the PFS.
In 2024, Québec was part of a larger trend of Canadian gold acquisitions. Shifting priorities on the majors’ and juniors’ side means that the gold development and exploration scene will likely have a new face next year. Fury Gold Mines acquired Newmont’s Eleonore South project for US$3 million, O3 Mining sold its Louvem property to Eldorado Gold, providing the junior with additional cash to advance other exploration targets in Val d’Or (in April, O3 reported bonanza grade of 119.1 g/t gold over 2.5 m from its Marban Alliance project), Maple consolidating its JV with Agnico Eagle at Douay and Joutel.
The Chibougamau camp could also become another highly value-generative area of Québec in the coming months. Having been consolidated recently by players like Northern Superior Resources and IAMGOLD, the camp is gearing up towards an unprecedented wave of exploration. IAMGOLD consolidated its Nelligan project by acquiring Vanstar and plans to aggressively drill the Chibougamau camp to unlock Nelligan’s potential 10 million oz. Following a 2023 MRE, Northern Superior launched a nine-month exploration program at its Philiber property. According to president and CEO Simon Marcotte: “The Chibougamau gold camp will soon join the ranks of the most active and favorite destinations for gold activities globally.”
For earlier-stage juniors, collaboration for improved discovery success rates will likely be the way forward. The inability of gold juniors to raise funds forced executives to rethink their approach to collaboration and come up with innovative partnerships. Although still competing for capital, juniors are now pooling and sharing resources, splitting costs, and most importantly, better understanding each other’s geology. Indeed, the latter does not change on the other side of the claim. A perfect case in point is the commissioning of a joint study between Québec Precious Metals (QPM) and Harfang Exploration which showcased significant potential for high-grade gold and lithium at their Serpent-Radisson and Sakami properties. As put by Normand Champigny, QPM’s CEO: “Collaborating with Harfang Exploration has been instrumental in our exploration efforts. Moreover, by sharing resources like camps and helicopters, we significantly reduce our discovery costs.”
Despite difficult capital markets, current gold prices remain attractive for the investment community, which should spark renewed exploration activity in the coming years. Agnico Eagle maintained its exploration budget between US$45-60 million in Québec, further highlighting majors’ confidence in the provinces’ resources. Several new juniors entered the gold scene in 2023-2024, in areas never having been drilled before. With the gold price forecast to keep increasing, gold exploration in Québec will continue to gain momentum.
Article header image courtesy of AEMQ