TORONTO (miningweekly.com) – Canada's second-biggest gold-miner, Goldcorp, expects to have a clearer picture by the end of next year of what its historic Red Lake camp, in north-west Ontario, will look like in the longer term, CEO Chuck Jeannes said on Thursday.

The Red Lake complex, which includes the Red Lake mine, as well as the Campbell operation that was formerly owned by Placer Dome but acquired from Barrick Gold in 2006, was a star performer for the company in the third quarter, for which it published results late on Wednesday.

The operation produced 178 800 oz during the period, at a total cash cost of just $255/oz. Production in 2008 was 629 000 oz.

And plans are afoot to boost production levels at what is already Canada's biggest gold mine: Goldcorp announced this week it will build a five-kilometre high-speed underground haulage drift, as the first step towards mining the high-grade Cochenour/Bruce Channel deposit (BCD) orebody, while Jeannes confirmed on Thursday that studies continue into the potential to mine from the surface at Red Lake as well.

“I am looking to see this all come together in the next year, so that by the end of the year, we will have a pretty clear sense of where we are going,” he commented.

Last year, Goldcorp acquired junior Gold Eagle Mines, which had been exploring the BCD orebody, which is in fact the down-dip extension of the high-grade Cochenour mine, that stopped producing in 1971.

The BCD is actually located under the Bruce channel waterway, shown in the photograph above.

The company still needs to do more definition drilling before it can put together a resource estimate for the deposit, but it is targeting an initial resource of around five-million ounces in its preliminary planning.

Average grades are expected to be at or around the historical levels at the old Cochenour mine, which would suggest some 20 g/t, Jeannes said.

Goldcorp has started dewatering the Cochenour shaft, and, once that is completed, plans to use the old underground workings for further exploration of the BCD.

It has been considering a number of options to access the ore, including building a completely new shaft, but announced this week that it will instead develop the underground drift and high-speed tram, between the old Cochenour shaft, which will be rehabilitated, and the Red Lake complex.

“The plan is elegant in that it leverages our existing footprint and infrastructure within the district,” Jeannes commented.

“As well, an exciting by-product of the plan is that it opens up for deep exploration over five kilometres of unexplored ground, in one of the world's top gold districts.”

The company will likely be driving the ramp all through 2010, and then start getting close to Cochenour in early 2011, COO Steve Reid said on a conference call.

Once mining begins, the Cochenour/BCD ore will be transported to the Red Lake complex and probably processed at the Campbell mill, Reid said.

The current thinking is that the material from the new development could simply take up excess capacity currently available at the mill, possibly displacing some lower grade ore from the existing operations.

However, Goldcorp also has a team looking at the possibility of developing an openpit mine at Red Lake, which would, of course, require additional milling capacity.

The company expects some scoping indications on the surface mining proposal within the next quarter or two, Reid said.

“And then, depending on how much additional analysis it requires, we would certainly have solid direction during next year.”

Depending on how the openpit pit studies play out, there are three likely options for milling the Cochenour/BCD ore, Jeannes said.

“One is to stay with the same mill and displace some of the lower grade; an intermediate step would be to add some additional grinding capacity and some tankage, and it's a very modest investment necessary to increase the capacity.

“And, of course, the third alternative, longer term, will be to build a new mill.”

Goldcorp has mines in Canada, Argentina, the US, Mexico, Honduras and Guatemala.

The company started shipping lead and zinc concentrates this week from its new Penasquito mine, in Mexico.

Goldcorp shares rose 1,3% on Thursday, to C$43,19 apiece by 16:15 in Toronto.