Gold was first discovered in Val d'Or in northwest Quebec in 1923. Today, with gold above US$1,000 an ounce, it is experiencing a bit of a boom, with companies like Agnico-Eagle, above, going deeper underground to pick over old deposits and find new ones.

Even after all these years, the town of Val d'Or is proving it is still the place to be for gold mining.

It was back in 1923 that gold was first discovered around Val d'Or in northwest Quebec. And long after many companies gave up on it, the soaring gold price has brought new excitement to the community of more than 30,000 people.

"This is an established mining camp. What was near-surface has mostly been discovered, but there is a lot of potential underground," says Martin Rivard, chief executive of Richmont Mines Inc.

The companies active in the region today are convinced that more gold will be found. They point out there are many projects that are economic now that were not when gold was below US$300 an ounce. New technology is also helping them identify ore bodies missed in the past.

"We're in a new paradigm in the gold price environment now, where we're clearly above US$1,000 an ounce," says Bill Biggar, chief executive of North American Palladium Ltd., which operates the Sleeping Giant mine in the area.

"It's unleashing a new era of exploration in Val d'Or."

The undisputed leader in Val d'Or gold mining is Agnico- Eagle Mines Ltd., which has been there since the 1960s and has three mines in the region. The company stayed throughout the lean years in the 1990s when many rivals left for greener pastures, and it continues to find more gold.

CEO Sean Boyd agrees with Mr. Rivard that the next frontier at Val d'Or is going deeper underground, which the company has done successfully at its flagship LaRonde operation.

"When the mines in that area were first put on the drawing board, ever yone thought they were all going to be shallow deposits. We proved everybody wrong with LaRonde," he says.

Many others agree, and the region is now full of little companies that have popped out of the woodwork to pick over old deposits and find new underground gold.

That creates plenty of M&A opportunities, and Mr. Biggar expects to be one of the consolidators.

"Inevitably, there has to be consolidation. There is not an interest on the part of institutional investors today to invest in these illiquid junior gold companies," he says.

But the market should also watch Richmont for M&A activity. It has been in Quebec since the early 1980s and knows the region as well as anyone.

"We're on the trail for potential acquisitions, and we're having a very good response because of our profile in the Quebec market," says chairman Greg Chamandy.

pkoven@nationalpost.com