Alexis Minerals - David Rigg, President & CEO speaking at Lac Herbin Official Mine Opening

Since we last talked with David Rigg, president and CEO of Alexis Minerals at the end of 2007, his company has moved into the enviable position of actually producing gold from its Lac Herbin mine in Val d’Or, Quebec, Canada.

“We are officially a gold-producing company, starting early December 2008,” Rigg said. He joined Alexis in 2003, when it was just a shell company, and is proud to have reached the milestone of actual production.

“We're very pleased by that. It gives us the ease of market, and stability with positive cash flow generated by the mine. We've also now grown to about 80 employees at the mine and another 12 in exploration,” he said.

Because the mine is just eight kilometers out of Val d'Or; it’s been easier to attract staff. “We've got a very dedicated and experienced crew that averages about 42 years old.  All hourly and staff positions are filled. We replaced the underground mining contractor with our own fleet, so we're doing all our own work now,” he said.

Two Mining Camps in Canada

Alexis Minerals Corporation is a Canadian mining and exploration company listed on the Toronto Stock Exchange (symbol ‘AMC’) with more than 1,000 square kilometers in their two major mining camps in Canada at Val d’Or and Rouyn-Noranda, Quebec. The firm’s current gold resource base of 615,000 ounces has the potential to expand to 1.5 million ounces. 

Alexis has explored for both gold and base metals in the Val d’Or region, where it has 100 percent ownership of the largest land position in the region (covering more than 212 km²).  The property hosts eight former gold and base metal mines with historical production from this area of 27.2 million oz. of gold, 50.0 million oz. of silver. 0.7 million tons of copper, and 0.7 million tons of zinc.  Alexis also has the right to earn into a 100% interest in the Lac Pelletier gold property in Rouyn-Noranda and is focused on advancing this project to a commercial production decision in 2010.  Historical production from the camp is 2.4 million tons of copper, 1.9 million tons of zinc, 19.5 million ounces of gold and 94.4 million ounces of silver.

A History of Successful Finds

David Rigg has 30 years experience in the mining industry; a strong legacy in exploration and early mine production.  He was first introduced to the Quebec mining region when working as exploration manager and chief geologist with Agnico-Eagle in Val d'Or Quebec.

Rigg ran the program that found the Musselwhite deposit in Northwestern Ontario and proved the down-plunge extension of the Dona Lake gold Deposit. He was on the discovery team that found the current LaRonde Mine, the team that was awarded Prospector of the Year award by the QPA in 1995; the Goldex Extension Deposit in Val d’Or and the Eagle West deposit in Joutel.

After a few successful explorations while working in Africa, Rigg moved onto Sweden for four years. There he discovered Latbatayet, along with extensions of several mines in the Skellefte District and a lead zinc deposit on the Norwegian border.

Predicting 40,000 Ounces a Year  

Lac Herbin started at full production during the last quarter of 2008, and produced 18,115 ounces of gold for 2008. The mine is positioned to produce 40,000 oz. a year going forward. Alexis estimates cash costs of $536.00 (Canadian) for the life of the mine.

“We expect to produce about 190,000 ounces from Lac Herbin over the next five years and in 2009 it should generate about $16 million free cash flow (at C$850 Gold) per year.” Rigg said. “So, it gives us the stability to move the company forward, and in these times I think that is significant.  It’s quite a reassuring position to be in.”

Over the last 18 months, Alexis has enhanced its employee and community relations practices. They consider the environmental side of the business important and the company has introduced new health and safety rules in the mine, the first firm in Quebec launch this particular approach.  Led by Chief Operating Officer, Keith Boyle, Alexis is striving for a zero lost-time accident rate on an annual basis.

The average for Quebec is about eight lost time accidents per 100,000 hours of work and Alexis had about four for 2008, with one month at zero. They are working with contractors and drill contractors to modify safety practices, in order to operate a mine that has as close to zero as can be.

Progress at Lac Pelletier

Alexis has a second mine program, the Lac Pelletier project near Rouyn-Noranda, which moved ahead in April 2008 with the addition of electricity and other infrastructure to the site. In seeking bids from six underground contractors in the area, Rigg found that costs would be higher than initial studies had indicated. The contractors’ engineering studies suggested a different approach toward mining the deposit and with high labor costs at the time Rigg saw too many risks in proceeding. 

Instead, he decided to advance a full prefeasibility study. “I think it's the kind of deposit that we want to be ready with if gold prices go higher since total ounces produced are leveraged to higher prices. The study is well advanced and will be reported very shortly. Costs have declined by approximately 15% since we delayed the project and we are back on track for a $12 million bulk sample and refurbishment program, which could generate about 10,000 ounces in 2009,” he said.

“If I could forward-sell the 10,000 ounces, combined with the Quebec exploration rebate, getting underground and refurbishment of the ramp and two levels will be zero cost to our investors. It's really a question of timing to maximize the benefit of this deposit for our shareholders and its interesting to be in this position,” he added. “Pelletier can add between 35,000 to 45,000 ounces of gold to our production levels.”

Exploration Continues

With cash flow of $60 million over the next five years (at C$850/oz gold) coming from Lac Herbin, and potential for additional cash flows from Pelletier, Alexis Minerals can afford to focus on long-term exploration of Val d'Or and Rouyn-Noranda, looking for world class deposits.  In 2009, Rigg expects to spend $5 million on exploration. 

In October 2008, Alexis reported a copper discovery in drilling in at Deep West, located on the wholly-owned Dunraine property at Val d’Or and 1.5 km west of the Louvicourt Mine. A wedged hole intersected volcanogenic massive to semi-massive sulphides grading 6.81% Copper (Cu) over 3.45 meters. Directly above a substantial 54.0 meter-wide, alteration and copper-rich stringer sulphide zone, this classical association characterizes many Volcanogenic Massive Sulphide (VMS) deposits in the region.

“We’ve got some very exciting things happening with this Deep West copper discovery.  I really like that target because it’s the first-time we can see where the stringer system intersects the Archeon sea floor and the system formed massive sulphides.” he said. “It’s a new, metal rich, find at the same stratigraphic location within the Louvicourt Mine Sequence as the Louvicourt Mine,”

The mineralization is 1720 meters vertically below surface and 1.5 km west of the former Louvicourt Mine in Val d’Or, Quebec [Past Production: 15.65 million tons (Mt) @ 3.42% Copper (Cu), 1.59% Zinc (Zn), 25.8 gpt silver (gpt Ag) and 0.92 gpt gold (Au)].

“We also have some very good geophysical targets and some really new ideas that seem to be working very, very well and rejuvenating the interpretation of the whole Val d’Or camp. We seem to be having the breakthroughs that are common in advance of significant change in ideas and, indeed, changes that can lead to the discovery of new deposits. We are at a very exciting stage of exploration.”

Stability, Expertise and Vision

For potential investors, Alexis is attractive in terms of its stability, principally from cash flows and from operations. In addition, the firm’s expertise among its 90 employees allows it to deal with challenges as they arise. “We have the expertise to take whatever the mine throws at us and overcome those difficulties,” Rigg said.  “Our exploration group knows the Val d'Or area, and has the ability to find mines.  Combined experience and team work will lead us to additional success.”

Our expertise and approach unifies our team and is driving David Rigg and his people toward a world-class discovery. He stated, “We are working with models that suggest the last massive sulfide deposit in Val d'Or has not yet been found. We all share the same long-term view for Alexis and where Alexis can go.”

“In the last 17 years, no company has ever put together the package of properties that Alexis has right now, in two of the principle mining camps in Canada.” Rigg concluded. “So, I feel very, very fortunate that our strategy of bringing Lac Herbin into production to support Alexis long-term is paying off for us right now.  It's working very well for us.”

For more information

Locations & Contacts

Head Office
65 Queen Street West, Suite 815, P.O.Box75
Toronto, Ontario
Canada M5H 2M5

Telephone:                416-861-5888        , Fax: 416-861-8165
Toll Free Telephone, within North America:                1-877-717-3027        
Website www.alexisminerals.com
info@alexisminerals.com