Casa Berardi Gold Mine | Half-Billion Dollar Expansion in the Works

An American mining company is preparing a half-billion dollar expansion to extend the life of a gold deposit in Abitibi-Témiscamingue. The only downside is that the operator of the Casa Berardi mine will probably have to resign itself to taking a slight step back before bouncing back.

Hecla Mining has provided an overview of its ambitions for its complex located some 100 kilometres north of La Sarre, in the Eeyou Istchee Baie-James territory, in a project notice recently sent to the Quebec government.

Essentially, the company wants to develop two new open-cast pits, while it gradually reduces its underground mining activities. They are expected to have surface areas of 68 and 60 hectares respectively – 136 and 120 football fields.

“There are interesting revenues to be had,” explains Christophe McLean, vice-president and chief financial officer at Hecla Québec, in an interview. “Ultimately, the expansion should generate 1 million ounces of gold.”

The planned pits are expected to be mined from 2028 to 2037, which should represent an investment of around $500 million, which the mining company should finance itself, Mr. McLean points out. The first shovels are not going to break ground any time soon, however.

This project could be subject to the procedure of the Bureau d’audiences publiques sur l’environnement (BAPE), which provides for consultations in which the public can participate. The developer is currently working on setting the table for the completion of its impact study.

Last year, the mine produced 90,363 ounces of gold. In comparison, production of the yellow metal was estimated at nearly 604,000 ounces at the Canadian Malartic complex, located west of Val-d’Or, in 2023.

“Casa Berardi is a medium-sized deposit. It’s a mine that has always been able to reinvent itself. The open-pit expansion is a sort of natural evolution,” explains Eric Lemieux, mining analyst at EBL Consultant.

Decisions to come

The mining complex employs about 475 people, according to McLean. The workforce has shrunk by about 100 people in recent years as the mine gradually winds down its less profitable underground operations.

About half of the workforce is currently working underground, he adds. Hecla will re-evaluate this segment after this year. So there is some uncertainty ahead since it will be a few more years before moving forward with the new pits.

The expansion of the Casa Berardi mine comes at a time when the price of the precious metal has increased by about 13% since the beginning of the year. An ounce of gold is trading at around US$2,340. The economic climate is favourable, but Hecla had prepared its project based on a much lower price, says its Quebec manager.

“We had filed a technical report for the entire mine and we had prepared it at a price of US$1,600 per ounce,” he said.

Gold producers have not escaped the inflationary surges that occurred during the COVID-19 pandemic, which has pushed up their operating costs, Eric Lemieux points out. According to the analyst, the situation has stabilized.

“So there’s a nice window of opportunity for the deposits in operation to increase their profit margins,” he says. “Things are stabilizing in terms of inflation.”