[Kirkland Lake] Canada’s Mile of Gold regains its luster – by Euan Rocha (Reuters Canada – November 3, 2011)

http://ca.reuters.com/
 
KIRKLAND LAKE, Ontario (Reuters) – With a gleam in his eyes, Sidney Hamden recalls the glory days of Kirkland Lake, the little Canadian mining town in northern Ontario that was long ago dubbed “The Mile of Gold”.

Hamden, a spry 82-year-old, remembers his first big break in 1947 at the Lake Shore mine, then one of the deepest gold mines in the world, producing 8.5 million ounces between 1918 and 1965.

“We had seven mines. I personally don’t know of any other place that had seven major mines within a radius of two miles,” said Hamden. “If I’m not mistaken, in 1948 there were approximately 50 different places to buy groceries around town. We had 17 different hotels in the Kirkland Lake area alone.” But Kirkland Lake’s fortunes waned through the 1950s and 1960s, as costs rose and the price of gold stagnated.

One by one, the mines shut down, and by 2000 the town’s population had shrunk to 8,500 from over 20,000. Mining jobs vanished, shops and hotels closed and housing prices crumbled, prompting fears that Kirkland Lake – an eight-hour drive north of Toronto – could turn into a ghost town.

With gold now soaring to $1,700 an ounce and higher, the town has begun to regain some of its lost luster. Companies are reopening mines that were mothballed for decades, offering many new jobs and sparking an economic recovery in the area.

As geologists hunt for the next big gold prospect among the lakes and forests of Canada’s mineral-rich Abitibi-Greenstone belt that runs through Ontario and Quebec, housing prices are soaring and skilled mine workers are in short supply.

“I became mayor when there was not much going on, but fortunately things have perked up.” said Bill Enouy, a former schoolteacher who took office about a decade ago.

“The biggest difference I’ve noticed in Kirkland Lake now, besides the obvious positive attitude that we have now that we never had for a while, is the price of housing. It’s gone crazy.”

The gold rush here is partly driven by Canada’s political and social stability, even as problems like high crime rates, big tax grabs and political instability plague many gold mining hot-beds in Africa and South America.

“Costs of production here, on a world scale, are a little bit higher. However, geopolitically, a lot of Canadian miners have found out what all can go wrong in the world,” said Duncan Middlemiss, who manages some of St Andrew Goldfields’ mines located 65 km (40 miles) northwest of Kirkland Lake.

“Miners are certainly quite happy to be in Quebec or Ontario because they are known entities and they are mining friendly and that’s why you are seeing reinvestment.”

EXPLORATION BOOM

Metals Economics Group, which tracks data on exploration spending, notes that Canada’s share of global gold exploration spending has doubled in the last 10 years.

In 2001 projects in Canada accounted for some 10 percent of the roughly $900 million spent on gold exploration, while in 2010 they accounted for 20 percent of the $5.4 billion spent, according to analysts at the consultancy group.

For the rest of this article, please go to the Reuters Canada website: http://ca.reuters.com/article/domesticNews/idCATRE7A25UY20111103?pageNumber=2&virtualBrandChannel=0&sp=true

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