RED LAKE GOLD AREA.

New Zealand Herald, Volume LXIII, Issue 19453, 8 October 1926, Page 14

RED LAKE GOLD AREA.

SET-BACK TO THE FIELD.

IMPORTANT OPTION CANCELLED. DECISION BY DOME COMPANY. [FROM OT7R OWN CORRESPONDENT. ] TORONTO, Auk. 28. The Red Lake Mining Gamp in Northwestern Ontario, which caused a sensational gold rush last winter, has received i set-back by the cancellation of its >ption on the Howey property by the Dome Mines. The Howey property was the original discovery in Red Lake and was said to carry surface indications not surpassed in Canada. When the Dome Mines, which is one of the leading goldproducing companies in the Porcupine field, after preliminary investigation, obtained options over the Howey claims, at i price which involved payments in cash Df between £200,000 and £400,000, the public was tremendously impressed. Now that the Dome Company after payments af £SOOO to the Howey syndicate and ifter spending perhaps twice that amount on development, has thrown up its option altogether, the public thinks that the whole Red Lake project has collapsed. In both cases, probably the public was wrong. R/fld Lake at the height of its boom, which was enhanced by the spectacular character of a rush of prospectors in mid-winter, over a long mushers' trail, was never better than a prospect, though it was as good as the best prospect Canadian mining men had seen. It is still a good prospect despite the collapse of the deal with Dome Mines. Story of a Hard Bargain, The whole story of what was behind the Dome deal has not been revealed. Rut one or two points are obvious. The deal that Jack Hammel, prospector de lux, head of the Howey syndicate, made with Dome Mines, was a "stiff" one. It secured for the original owners not only big cash payments during the development and non-productive stage, but also retained a large share of ultimate profits. Moreover, in this quartz gold mining game returns to the actual mining companies do not come quickly. It is not like "placer" mining where anyone with a pan can wash out gold nuggets, or like a rich silver camp like Cobalt where a labourer who strikes a. rich vein can, with a pick and a wheelbarrow, cart off a fortune. Quartz mining is a rich man's game. A great tonnage of ore has to be excavated and expensive machinery set up to treat it. When to this is added the fact that Red Lake is 100 miles from a railway some of the obligations imposed upon Dome, if it went on with the option, may be realised. It is said by one authority that tinder its option, the" Dome Company could not hope t« produce a dollar's worth of gold at Red Lake before it had spent two million dollars and that it would not have been justified in going on unless it could block out £1,000,000 of ore before making further payments, that is, in a few weeks. To block out £1,000,000 worth of ore in a few weeks in a virgin forest, at the end of a hundred mile canoe trail, is no easy task, as any mining engineer will testify. Another thing' no doubt influenced the Dome Company. All around their property were thousands of other .claimholders. But none of them with one or two exceptions was doing any development. AU were holding back awaiting the result of the Dome Company's work. If it developed a great mine all the surrounding claims would bring fortunes to their owners without the expenditure of more than a few dollars' work necessary to bold the claims. Other :aed Lake Claims. Dome Mines has other claims of its own in the Red Lake area. So has McIntvre Mines, another of the big gold producers in Ontario. The Howey Syndicate, released from the Dome Company, it is rumoured, ma.y make a deal with the Insull interests of Chicago, the Guggenheims, or the Hollinger, or it may develop its properties directly. It would be unwise to assume that the collapse of the Dome deal, though it was the one great reality in connection with Red Lake development, means the failure of the field. It does mean that more time will be required to bring it into the field of producers than enthusiasts thought would be necessary. They forget that it wiis many years after the discovery of I'orcupine Camp before its gold production attained any significance.