Kiena Complex

Overview

In a series of transactions at year-end 2003, Wesdome Gold Mines acquired the entire Kiena mine complex, the Shawkey and McKenzie Break properties. Combined with the Wesdome and Siscoe properties, Wesdome Gold Mines has consolidated a dominant land position in the prolific Val d'Or gold mining camp.

Wesdome's land position is centered on the Kiena complex which includes a 920 metre shaft, a 2000 tpd CIL mill and tailings facilities and extensive surface and underground infrastructure. All are permitted. The land position includes eight former underground operations which have produced over 2.5 million ounces of gold and which, for the first time, are all under one corporate roof. Never before has this pool of experience, properties and infrastructure been assembled in the Val d'Or camp. With drilling successes amounting to 230,000 ounces of mineral resources in only a short period of time, resumed commercial production at the Kiena complex will allow Wesdome Gold Mines to finance an aggressive exploration program on the wholly-owned property group. This unique gold asset in a proven gold camp has bona fide potential to become the next long-life, low cost mining operation in Quebec.

Currently, Wesdome is developing and mining the VC, North and 388 zones. Drifting 2 kilometres to the southeast will progressively explore and bulk sample the Wisik, Martin and Shawkey “22” zones. Drifting 4 kilometres to the north will resume to access and develop the Wesdome “A” zone while opening up substantial new exploration potential along the way.

There is a great future for Wesdome's collective assets. The last serious exploration took place in the 1980s and was suspended as a result of ownership differences rather than any shortage of potential. Even the old Siscoe property has excellent promise. Hopefully production can be progressively ramped up as results of the new exploration and development bear fruit.

Property History and the S-50 Zone

The Kiena mine was developed by Falconbridge in 1981 on the major S-50 Zone, which to the end of 2002 had produced 98.9% of the 1.56 million ounces of gold from 10.7 million tonnes averaging 4.75 g/t Au. The S-50 Zone at the surface is 200 metres east of Parker Island on Lac De Montigny and occurs as an irregular-shaped body roughly in a north-south trending corridor of structurally deformed and hydrothermally altered komatiitic basalt. The deposit extends over a maximum strike length of 500 metres on level 33. In cross section, the deposit dips 30 to 40° W, steepens rapidly and then rolls to a 50 to 60° easterly dip. The configuration of the deposit and the mineralogical characteristics change with depth.

There are a number of satellite deposits and by comparison, these are significantly smaller than the S-50 Zone. These include the North, VC and Hanging Wall Zones as well as the recently discovered North-east Zone and several earlier explored deposits such as the South, Northwest, 388, Wisik and Martin Zones. Geological studies to date have been concentrated on the main S-50 ore deposit, but they have also recognized that the mineralization for many of the satellite deposits are quite similar to the S-50 Zone characteristics.

Kiena Property Geology

The main S-50 ore deposit and several smaller satellite deposits North, 388 and Martin Zones occur as unique style of mineralization where the gold is intimately associated with carbonate, quartz, pyrite and minor pyrrhotite and chalcopyrite. These occur as veins and veinlets in the form of sheeted veins and stockworks, breccia filling and disseminations in carbonatized and albitized diorite dykes and mafic volcanic rocks. Veins and veinlets in the S-50 Zone are primarily calcite and other carbonates with minor quartz whereas most other deposits have quartz veins and veinlets with minor carbonate. On the Kiena property, most mineralized zones are hosted within and near the upper contact of the komatiitic basalt with the older komatiitic units. In and around the main deposit, the komatiitic basalt on a more finite scale has been deformed and hydrothermally altered to locally be defined as brecciated basalt, massive to pillowed basaltic flow and a light greyish-green carbonate talc-chlorite schist. Gold mineralization is mainly developed in the basaltic rocks in association with sodium-rich diorite dyke intrusion; the schistose unit is weakly mineralized and commonly forms the uneconomic boundary around the ore deposit.

Two other zones (P and R Zones) were identified as satellite mineralized lenses, sub-parallel to the main S-50 zone in the hanging wall (northern part of S-50 zone). The P Zone is located between 10 and 30 metres from S-50 zone in the hanging wall and R Zone located between 120 and 150 metres in the hanging wall too. The zones are lenticular and squeezed, similar to the S-50 Zone and they are traceable from the surface pillar (120 metres below surface) to below level 48 (480 metres below surface). The P Zone is most often associated with brecciated, albitized basalt, which is a maximum of several metres thick and flows a komatiite-basalt contact, though it can be situated in both the basalt and the talc-chlorite schist of the komatiites. The zone is often brecciated and/or schistose and alteration is albite and/or silica. Mineralization is predominantly pyrite, up to 15% but average 3-4%. Quartz veins and quartz-carbonate veins are very common and a mineralized, albitized dyke often occurs within the mineralized diorite envelope. The R Zone consists of quartz-carbonate-chlorite vein stockwork with occasional tourmaline often present. Mineralization includes pyrite, chalcopyrite, pyrrhotite, galena, honey coloured sphalerite and visible gold, most often associated with quartz. A mineralized, altered diorite dyke is often contained within the R Zone.

Conclusion

The Kiena complex represents a substantial asset for Wesdome Gold Mines, and through ongoing exploration and development, coupled with a sustainable and increasing production schedule, Wesdome Gold Mines intends to deliver excellent value for shareholders.