Eagle Plains Resources (www.eagleplains.com)
A Publicly Traded Company of Geologists Exploring for Gold

Compared with the gold placers and mines of the Old World, those in parts of the New may be as ancient, although it would appear that the aborigines of North and South America placed little emphasis on gold beyond its use in ornaments, jewellery, sacrificial knives, and the like. Columbus of Genoa found the natives of Hispaniola (Haiti) in possession of gold nuggets in 1492, a fact that excited the Spaniards to later pursue their conquests of Mexico and South America, where in 1550 they found their Eldorado in the fabulous placer deposits of Colombia. In Brazil the Portuguese sought gold during the last half of the sixteenth century, but the deposits found were small and mined only sporadically during the seventeenth century. In 1693 economic deposits of gold were discovered in Minas Geraes, and for a century thereafter this state was one of the world's major sources of the precious metal. One of these deposits, the famous Morro Velho, has been mined by underground workings for almost a century and a half and is still productive.

Since the beginning of the nineteenth century prospecting for gold has ranged widely over Canada and the United States, resulting in many great placer gold rushes, first to California in 1848, then to British Columbia in 1857, and later to the Klondike in Yukon in 1896 and Nome in Alaska in 1899. After the exhaustion or near-exhaustion of many of the placers, attention turned to bedrock deposits during the last half of the nineteenth century and the first half of the present century. The Mother Lode and Grass Valley in California and the famous Comstock Lode in Nevada were discovered and developed in the 1850s. The gold telluride deposits of Cripple Creek in Colorado were located in 1892, and by 1905 the Tonopah and Goldfield districts in Nevada were under development. The Homestake mine, at Lead, South Dakota, was found in 1876 and brought into production soon thereafter.

In eastern Canada lode gold was first worked in Nova Scotia in the late 1850s, followed in 1866 by the first discovery of lode gold in the Canadian Shield near Madoc, Hastings County, Ontario. After the discovery of the native silver deposits at Cobalt, Ontario, in 1903, prospectors ranged widely over the Precambrian areas of Ontario, Quebec, Manitoba, Saskatchewan, and Northwest Territories. In Ontario and Quebec, Abitibi and Larder Lake were discovered in 1906; Porcupine, 1909; Swastika, 1910; Kirkland Lake, 1911; Matachewan, 1916; Rouyn (Noranda), 1924; and Red Lake, 1925. In Manitoba the Rice Lake district was discovered in 1911, and in Northwest Territories, the deposits in the sediments of the Yellowknife area were discovered in 1933 and those in the greenstones in 1935. The most recent discoveries in the Canadian Shield are the large auriferous orebodies in the Hemlo area, northwestern Ontario, originally indicated in 1869 and extensively developed in the early 1980s.

In western Canada the bedrock gold deposits in British Columbia first attracted attention in 1863 during the first great placer gold rushes to the province. Little work was done, however, on most of the discoveries and many were forgotten. The area in the vicinity of the Cariboo Gold Quartz and Island Mountain mines in the Barkerville district was prospected in 1860, and some mining was done in 1876 and a few years thereafter at these mine sites; large scale mining, however, did not commence until 1933 and 1934 respectively at the two mines. In 1897 the Cadwallader gold belt in the Bridge River district, containing the Bralorne and Pioneer deposits, was prospected, but it was not until 1928 that the Pioneer mine was brought into production, followed in 1932 by the Bratorne mine. Rossland in West Kootenay District was located in 1889 and brought into production in 1890, the Premier mine in Stewart District in 1918, and the Zeballos gold belt on the west coast of Vancouver Island was discovered and developed in 1934.  

History of Prospecting and Mineral Exploration in Canada

Prior to the 1870s or 1880s, nearly all of the significant mineral deposits in Canada were discovered accidentally by individuals who were not actively searching for deposits. The discovery of placer gold in the Cariboo district in 1859 resulted in gold and basemetal prospecting in the mountainous regions of British Columbia and also in gold prospecting in the Yukon Territory. Similarly, the discovery of lode-gold deposits in Nova Scotia resulted in widespread prospecting activity there. Prospecting activity slowly spread to other parts of Canada. In 1909, prospectors found high-grade gold quartz veins in the Porcupine District of Ontario (now the City of Timmins). More than 2200 t of gold have been produced from this district and production continues from mines there, both old and new. In 1911, prospectors discovered another major gold deposit, which became known as the “Golden Mile,” at what is now the town of Kirkland Lake, Ontario. Some 800 t of gold have been recovered from the six or more mines on this single gold deposit. Production had continued there until 1999 from the one remaining mine, the Macassa mine, which is currently closed awaiting higher gold prices. In the province of Quebec, immediately to the east of Ontario, many important gold deposits, the large Noranda copper-gold deposit, and other basemetal deposits were discovered, beginning in the 1920s, by prospectors working along what became known as the Rouyn–Val-d’Or gold belt. Additional discoveries are still being made along this belt. Prospectors spread through northern Quebec, Ontario, Manitoba and Saskatchewan, making discoveries and arriving at the Yellowknife gold district in the Northwest Territories in the mid-1930s. Many new orebodies were discovered in these previously unknown gold-bearing areas.

In these early days of the industry, many prospectors were “grubstaked” (that is, their prospecting expenses were financed by local business people, in some cases by individual business people and sometimes by “syndicates” of several people in return for an interest in any discoveries made by the prospectors). Small companies, known as “junior companies,” were formed to explore for discoveries and hopefully to develop mines on deposits found. They obtained the needed funding by selling company shares to the public.

Until float-equipped aircraft became generally used for transportation into remote areas of Canada, prospectors searching for mineral showings in the Canadian Shield normally traveled by canoe and lived in tents. In the 1920s and 1930s, many mining companies formed their own exploration departments, employing their own geologists and prospectors. Except for gold and silver, metal prices were low during the Great Depression of the 1930s, and, as a result, exploration for non-precious metals was severely reduced. In 1934, the United States increased the gold price from US$20.67 to US$35.00 per troy ounce (31.103 grams), leading to a major increase in gold exploration, gold mine development and gold production in Canada. In 1939, war soon brought exploration to a halt, except exploration for strategic minerals not normally available from sources in North America, such as chromite, manganese, tin and tungsten. At most mines, work to replace the ore mined by new reserves either ceased or was cut to an absolute minimum.

When the war with Germany began, the United States was a neutral nation and Canada had to pay for needed war material imports with U.S. dollars or with gold. As a result, the manpower, equipment and supplies needed for gold mining in Canada received Canadian government priority. In 1941, a lend-lease agreement was worked out so that war materials could be obtained from the United States on credit. Gold mining lost its priority and it became impossible for many gold mines to obtain the people and supplies that were needed to continue to produce. The result was rapid closure of many of the gold mines in Canada, and employment and production were cut back at those gold mines that did continue to produce. When the war ended, gold exploration resumed in Canada in 1945 and 1946, but inflation and a fixed gold price soon made it unattractive to explore for gold.  

Influences of Changing Metal Prices on Exploration

Although there are no statistical data concerning exploration expenditures in Canada during the 1930s, the increase in the gold price to US$35/troy oz in 1934 led to high levels of gold exploration in Canada. During the Great Depression of the 1930s, base-metal prices were so low that there was little incentive to explore for them. The production of nickel, copper, zinc and lead, the base metals most important to Canada, increased with the outbreak of war in 1939, then declined after 1943 or 1944 because metal stocks on hand, together with then current levels of production, were more than adequate for immediately foreseeable needs. Additional soldiers were needed in Europe, so manpower priorities shifted from mining to the military.

During the war, ore reserves at Canadian mines were allowed to decline. At the end of the war, base-metal prices were low. Demand for most metals did not begin to improve until late 1947 or early 1948 and, when mineral exploration resumed in Canada in 1945, it was chiefly for gold from 1945 until the early 1950s.

There was rapid inflation in Canada. After adjustment for inflation, the new gold price of US$35 and C$35/troy oz, set in 1934, had declined by 1949 (in terms of 1934 Canadian dollars) to only C$19.46/oz (both currencies had equal values in the 1930s), causing gold exploration in Canada to decline rapidly.

In 1940, there were some 140 producing gold mines in Canada. Gold mining was the entire basis of the economy in most of the communities these mines supported. The effective decline in the gold price that resulted from the combined effects of the fixed gold price and rapid inflation soon threatened the continued existence of many of these communities and the continued employment of their residents. To counter these problems, in 1948, the Government introduced the Emergency Gold Mining Assistance Act (EGMA).

Emergency Gold Mining Assistance Act (EGMA)