MINERAL INVENTORY FILE NO.
640
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PRODUCT
GOLD
NTS AREA
64C15NW
REF.
AU 1
______________________________________________________________________________________________________
NAME OF PROPERTY
MacLELLAN MINE
OWNER OF OPERATOR ADDRESS
1993- Black Hawk Mining Inc.
2000 - 95 Wellington St. West
Toronto, ON M5J 2N7 http://www.bhkmining.com
OBJECT LOCATED
Mine shaft on J.R. No. 8
MINING DIVISION
The Pas
Latitude
5653'07" N
Longitude
10056’21"W
Uncertainty (m)
100 m
UTM Zone
14V
Easting
381300
Northing
6307100
L.S./Quarter Section
4
Section
17
Township
91
Range
22 WPM
DESCRIPTION OF DEPOSIT
The following description is summarized primarily from Fedikow (1986a, 1986c). The immediate footwall and hangingwall rocks to mineralization are 3-8 m thick units composed of basaltic and ultramafic komatiite flows and tuffs. The mineralized zone comprises an interlayered sequence of:
1) Biotite and siliceous siltstone;
1) Oxide, silicate and sulphide facies iron formation; and
1) Basaltic and ultramafic komatiite flows with minor tuffs that range in thickness from 1 cm to 2 m.
At the MacLellan deposit deformation of rocks within the Agassiz Metallotect resulted in:
1) A well developed foliation that is parallel or subparallel to bedding;
1) Tight intraformational folds; and
1) Carbonate-quartz and sulphide laminae that are parallel to and crosscut bedding.
The deposit can be subdivided into a laterally discontinuous series of mineralized zones.
Central Zone: This part of the deposit attains thicknesses of 10-20 m and is characterized by sections containing up to 1 m of 10-25% Au-bearing iron sulphides hosted in biotite-rich and siliceous siltstone. The highest Au values are associated with carbonate-quartz-sulphide veins and their silicification haloes. Persistent but lower grade values occur in silicified and sulphide-bearing komatiites. Silicification of the siltstones and patchy but locally intense carbonate alteration of komatiites represent the most common types of alteration. Probable ore reserves of the central zone are estimated at 2.6 million tonnes (t) averaging 5.38 grams/tonne (g/t) (0.157 oz/ton) (SherrGold Inc., Preliminary). The ore contains 15% arsenopyrite, pyrrhotite, pyrite and galena in convoluted, tightly folded siltstone interlayered with basaltic and ultramafic komatiites. Possible ore reserves of the West Zone deposit are 136 000 t averaging 5.49 g/t (0.16 oz/ton) (SherrGold Inc., Preliminary Prospectus, September 17, 1985).

East Zone: In the East Zone 30-40% disseminated iron sulphides in addition to arsenopyrite, sphalerite and galena occur as tightly folded conformable lenses within siltstone and basaltic-ultramafic komatiites. The mineralization is accompanied by locally intense carbonization. Deformed carbonate-quartz-sulphide veins are present throughout the east zone and contain iron sulphides, arsenopyrite, sphalerite, and galena. Gold (Au) is found in association with the highest concentrations of sphalerite and galena.

Dot Lake Zones: Exploration by SherrGold Inc. in joint venture with Novamin Resources Inc. has outlined geological reserves of 1.27 million t averaging 4.11 g/t (0.12 oz/ton) Au (Kelley, 1987).

Augsten et al. (1986) carried out a detailed study of the ore mineralogy of the deposit and found that Au is present in the ore as native gold, electrum, and aurian silver. The average size of gold grains is 20-30 microns although grains and veinlets greater than 150 microns were observed. The gold occurs as:
1) irregular shaped grains or veinlets of less than 10 microns in gangue,
1) rims on, or fracture fillings in galena, arsenopyrite and pyrrhotite,
1) inclusions in arsenopyrite, pyrrhotite,
1) inclusions in arsenopyrite, pyrrhotite and galena, and
1) sutured grains associated with galena.
Fedikow (1986a) acknowledged that the multiple deformational history of the host rocks makes determination of the genesis of mineralization very difficult. He considered that geochemical data textures observed in diamond drill core, and thin sections studies supported an exhalative origin for the deposit. He proposed the following depositional sequence:
1) Extrusion of basaltic to ultramafic komatiites followed by deposition of clastic and sulphidic chemical sediments. The sulphidic chemical sediments acted as traps for gold released during the interaction of komatiites and seawater, and by leaching of immiscible sulphide blebs;
2) Carbonatization of the volcanic units by the reaction of iron sulphides with organic carbon;
2) Extrusion of komatiite and aluminous basalts;
2) Intraformational folding accompanied by brittle deformation focused in the mineralized zone produced tight folding and dilatant zones that enabled lateral secretion of gold-enriched sulphides, carbonate and quartz;
2) Ductile deformation produced transposed stratigraphy and diffuse alteration zones; and
2) Late brittle fractures resulted in discordant sulphide-filled fractures.
ASSOCIATED MINERALS OR PRODUCTS OF VALUE
Silver, zinc, lead
HISTORY OF EXPLORATION AND DEVELOPMENT
The Agassiz property originally consisted of the 12 J. R. Claims (P22540-51) that was staked in 1950. Since then, the two J. R. fractional claims (P34156-57) were added in 1955, and the 3 Leaf fractional claims (P4828E-30E) in 1974.
The mineshaft is located on the J. R. No. 8 claim, approximately 1km east of Dot Lake and 7 km northeast of Lynn Lake. The area is accessible via Provincial road No. 391 E from Lynn Lake; the mineshaft lies approximately 3 km north of the roadway. J. W. Boiley and J. G. Webb originally staked the property, as part of the J. J. Group of 18 claims (P10416-33), in 1946. In 1947, the claims were transferred to Roy Rundle. Rundle then optioned the property to Noranda Mines, Limited. Magnetometer and geological mapping surveys were conducted the same year. The option agreement was cancelled in 1948, and the claims lapsed in 1950.

In 1950, Roy and J. W. Rundle restaked a portion of the J. J. Group as the J. R. Group of 12 claims (P22540-51). J. G. Bellamy staked the J. R. NO. 1 FR and No. 2 FR claims (P34156-57) in 1955. The property then was assigned to J. W. Rundle. Between 1950 and 1955, the stakers did some trenching and test pitting. The 12 claims of the J. R. Group were surveyed in 1954, and J. R. No. 1 FR and No. 2 FR, in 1956.
In April of 1955, Agassiz Mines Limited was incorporated to take over and develop the claims. Diamond drilling, totalling 649 m, was conducted in June and July of 1955 to test the magnetic anomalies indicated by the magnetometer survey conducted by Noranda Mines, Limited. Two drill holes, 31 m apart, showed a low content of Au, Ag, and Zn, and Ni up to 0.12%. In addition, DDH No. 3, on the boundary between J. R. No. 3 and J. R. No. 8, assayed up to 4.5% Zn, up to 2.5 g/t (0.08 oz/ton) Au, and up to 11.1 g/t (0.36 oz/ton) Ag in the upper part of the hole. In the lower part, a basic intrusive rock has a low Ni and Cu content, with some Au, and Ag up to 43.8 g/t (1.4 oz/ton).
In August of 1955, an EM survey was conducted. Later, in addition to the Au, there is approximately 34.3 g/t (1.0 oz/ton) Ag with minor Zn and Pb values (Annual Report, 1968, Agassiz Mines Limited). In 1956, a resistivity survey was completed over a portion of the property.
A drilling program, consisting of 25 drill holes totalling 3 375 m, was carried out, in 1956, to test several weak electromagnetic conductors. Four holes cut sections varying from 0.61 to 2.4 m containing encouraging Au values. Ten other holes indicated small tonnages of ore grade material containing Au and some Ag, in association with sulphides.
In 1958, the property was optioned to Central Manitoba Mines Limited, since (1964) renamed Consolidated Manitoba Mines Limited. From October 1958 to March 1959, 20 drill holes totalling 2 570 m were drilled (mostly in the area drilled by previous operators). Results were not considered sufficiently encouraging to warrant further expenditures, and the option was allowed to lapse in 1959. In 1960, Bayrock Mines Limited conducted a geophysical survey on a portion of the property with inconclusive results.
Development of the property remained dormant until the fall of 1965, when Agassiz Mines Limited initiated their own drilling program. In summary, previous drilling, totalling 52 drill holes outlined three parallel veins, two of which were ore grade. Tonnage estimates indicated 207 000 t to a depth of 244 m $20.23/t (Northern Miner, September 30, 1965).
Upon completion of the exploration program in 1967, Agassiz had completed a total 12 454 m of surface diamond drilling. The grade and tonnage estimates, based on the drilling, were made by two independent consultants, as follows:

Tonnage Uncut grade Cut grade
(t) g/t (oz/ton) g/t (oz/ton)

1 236 000 12.1 (0.356) 9.8 (0.286)
1 380 000 10.97 (0.32) 9.6 (0.28)

The Agassiz property was leased to Agassiz Mines Limited for a 21-year period on November 29, 1967 (lease number M9001).
The next stage of development involved the sinking of a 3-compartment shaft to the 149m level with stations at the 53, 98, and 137m levels. The shaft is located on the J.R. No. 8 claim. The shaft sinking was completed by early 1969.
In 1969, the name of Agassiz Mines Limited was changed to Royal Agassiz Mines Limited.
By 1971, a total of 21 350 m of diamond drilling in 105 holes had been completed on the property. In addition, a total of 712 m of underground lateral work had been completed. Due to increased Au prices in 1971, Royal Agassiz increased their ore reserves to a total of 2 097 000 t grading 11.0 g/t (0.32 oz/ton) Au and 41.1 g/t (1.20 oz/ton) Ag. The total tonnage estimates consisted of 1 425 000 t drill indicated and 672 000 t geologically inferred. In addition, the deposit is divided into an E and W zone. The Main vein plus the C, D, E and F veins comprise the E zone, and the H and H-1 veins the W zone.
On October 1, 1973, a joint venture agreement was established with Bulora Corporation Limited. The venture involved a 2-phase program in which Bulora would reassess the indicated ore reserves and conduct a feasibility study of establishing a producing gold mine. In return for this expenditure, Bulora could earn a 50% interest in Royal Agassiz Mines Limited. (Canadian Mines Handbook, 1974-75, p. 290). The option agreement was terminated in December 1975. In January 1976, the controlling interest of Royal Agassiz was passed to Bulora Corporation Limited in settlement of the $350 000 expenditure involved with the development completed on the Agassiz property. (Northern Miner, January 29, 1976). On November 21, 1975 the Agassiz property was converted from the 21-year lease status (lease no. M9001) to the 10-year explored area lease status (E.A.L. #2). That year, the property was optioned to Newkirk Mining Corporation Limited, who then assigned it to Aumaque Gold Mines Limited.
In 1977, Royal Agassiz Mines Ltd. changed its name to Agassiz Resources Ltd. In 1979, the property was transferred to Comiesa Corporation who in turn optioned the property to Sherritt Gordon Mines Limited in late 1979. From 1979 to 1985, Sherritt spent in excess of $9.0 million on diamond drilling, shaft sinking and drifting to determine the size, grade and economics of the deposit. In July 1985, Sherritt announced the approval for the development of the deposit, to be called the MacLellan mine. Kilborn Engineering (B.C.) estimated mineable ore reserves of the Main Zone to total 1.49 million t grading 7.17 g/t (0.21 oz/ton) Au (SherrGold Inc., Preliminary Prospectus, September 17, 1985).
Sherritt arranged equity financing for development of the MacLellan mine by consolidating all it’s gold programs into a subsidiary company, SherrGold Inc. A $4 million grant from the Federal government’s Canadian Jobs Strategy program and a $2 million forgivable loan from the Manitoba government also assisted development costs.
The MacLellan mine started production in late 1986, and was expected to be in full production (327 000 t per annum mill capacity, annual production 2020 kg or 65 000 oz. Au) "early in 1987" (Kelley, 1986). However, due to construction complications and the discovery of an irregular ore body, the MacLellan mine experienced difficulty in efficiently producing.
In 1987, Sherrgold’s parent company, Sherritt Gordon Mining Inc. began selling off all of its interests in the mining industry to attempt to reduce its massive debt load. This included Sherritt’s 60% interest in Sherrgold. Sherrgold was sold to Hayes Resources for $10.7 million and 2.4 million in shares (Northern Miner, May 4, 1987).
Hayes Resources renamed the company LynnGold to reflect new leadership, and changed the mining practices to lower costs. Unfortunately, the low gold prices and difficulties with the cost of mining forced LynnGold into bankruptcy after little over 2 years. The MacLellan mine closed in December 1989.
After LynnGold’s bankruptcy, the mine was held in trust by DCC equities, LynnGold’s Parent company, until 1993. At that time, Black Hawk Mining Inc. bought the property, along with several nearby properties to form the Keystone Gold Project. Black Hawk partnered with Cazador Mining, which had an option to earn 50% through a $10 million investment in this project.
Cazador Mining amalgamated with Granduc to form Granduc Mining Corporation in 1993, and attained its 50% interest in Keystone in 1995. Black Hawk ran an assessment on the feasibility of reopening the mine’s Nisku deposit in the same year. In early 1996, the assessment, while it proved favourable, was put on hold to develop the nearby Farley open pit gold deposit (Black Hawk Annual Report, 1996). Granduc and Black Hawk amalgamated into Black Hawk Mining Inc. in mid 1996, to attain a 100% interest in all Keystone properties. MacLellan mine, however, has remained closed since 1989, due to low gold prices and the high cost of underground mining.
The current measured and indicated remaining reserves of the MacLellan mine are 609 000 t averaging 5.9g/t Au for 116 200 oz Au., Inferred resources are 322 500 t averaging 6.3g/t for 65 300 oz Au (Canadian Mines Handbook, 2001-2002).
HISTORY OF PRODUCTION
N/A
REFERENCES
Black Hawk Mining Inc. 1993: Annual Reports; Black Hawk Mining Inc.

Black Hawk Mining Inc. 1994: Annual Reports; Black Hawk Mining Inc.

Black Hawk Mining Inc. 1995: Annual Reports; Black Hawk Mining Inc.

Black Hawk Mining Inc. 1996: Annual Reports; Black Hawk Mining Inc.

Black Hawk Mining Inc. 1997: Annual Reports; Black Hawk Mining Inc.

Black Hawk Mining Inc. 1998: Annual Reports; Black Hawk Mining Inc.

Black Hawk Mining Inc. 1999: Annual Reports; Black Hawk Mining Inc.

Black Hawk Mining Inc. 2000: Annual Reports; Black Hawk Mining Inc.

Black Hawk Mining Inc. 2001: Annual Reports; Black Hawk Mining Inc.

Canadian Mines Handbook 1975: Canadian Mines Handbook 1974-75, Northern Miner Press, p. 290.

Canadian Mines Handbook 2002: Black Hawk Mining Inc.; Canadian Mines Handbook 2001-02,
Northern Miner Press,

Fedikow, M.A.F., and Gale, G.H 1982: Mineral Deposit Studies in the Lynn Lake Area in
Manitoba; in Department of Energy and Mines, Mineral Resources Division, Report of Field Activities 1982, p 44-54.

Fedikow, M.A.F., and Gale, G.H.1982: Geological and Geochemical Studies at the Agassiz
Au-Ag Deposit, Lynn Lake, Manitoba, in Manitoba Department of Energy and Mines, Mineral Resources Division, Report of Field Activities, 1983, p 94-97.

Fedikow, M.A.F., et al. 1984: Geochemical Studies Along the Agassiz Metallotect, in Manitoba
Department of Energy and Mines, Mineral Resources Division, Report of Field Activities, 1984, p 29-31.

Gilbert, H.P., Syme, E.C. and Zwanzig, H.V. 1980: Geology of the Metavolcanic and
Volcaniclastic Metasedimentary Rocks in the Lynn Lake Area, Manitoba Mines Branch, Geological Paper GP80-1.

LynnGold Ltd. 1988: Annual Report; Lynngold Resources Ltd.

Manitoba Mines Branch: Corporation files, Agassiz Mines Limited, Manitoba Mines Branch.

Manitoba Mines Branch: Corporation files, Bulora Corporation Limited, Manitoba Mines Branch.

Manitoba Mines Branch: Corporation files, Royal Agassiz Mines Limited, NW 15, 64 C; Manitoba

Mineral Resources Division: Corporation File: Black Hawk Mining Inc.

Manitoba Mineral Resources Division: Corporation File: LynnGold Resources.

Manitoba Mineral Resources Division: Corporation File: Sherritt Gordon Mines Limited.

Milligan, G. R.1960: Geology of the Lynn Lake District, Manitoba Mines Branch, Publication 57.

Nielson, E. 1983: Overburden Sampling in the Lynn Lake Area, in Manitoba Department of
Energy and Mines, Mineral Resources Division, Report of Field Activities, 1983, p 98-100.

Northern Miner 1987: Sherritt Gordon to sell mining assets, May 4th, 1987.

Sherrgold Limited 1986:, Annual Report, Sherrgold Ltd.

Sherritt Gordon Ltd. 1984: Annual Reports, Sherritt Gordon Ltd.

Sherritt Gordon Ltd. 1985: Annual Reports, Sherritt Gordon Ltd.

Sherritt Gordon Ltd. 1986: Annual Reports, Sherritt Gordon Ltd.
MAP REFERENCES
Gilbert, H.P., Syme, E.C. and Zwanzig, H.V. 1980: Map GP80-1-2, Cockeram Lake; 1:50 000 scale, geological map, accompanying Geological Paper GP-80-1, Manitoba Mines Branch.

Manitoba Mines Branch 1963: Map 2382G Cockeram Lake; Manitoba Mines Branch. aeromagnetic, scale 1:63 360.

Milligan, G. R.1960: Map No. 2. Cockeram Lake; 1:63 360 scale, geological map accompanying Manitoba Mines Branch Publication 57-1.

Mining Recording, Manitoba Mines Branch: Maps, NW 15, 64 C, "Circa 1976"; Claim Map Series, Mining Recording, Manitoba Mines Branch, scale 1:31 360.



Surveys and Mapping Branch 1985: Map 64 C/15 Cockeram Lake; Surveys and Mapping Branch, Ottawa, topographic map (2nd Edition), scale 1:50 000.
URL
N/A
REMARKS
N/A
NOTES
Entry revised 05-02
Compiled/Revised by:
GRJ JDB JR JJJ
Date
02-66 09-66 03-68 06-69 09-71 03-76 09-83 08-87 05-02