Three zinc-copper zones in the Matagami camp of northwestern Quebec are taking the shape of a promising target for
Thirty-five holes were recently sunk in the Equinox, Perseverance and Perseverance West zones, all of which were discovered earlier this year, within 500 metres of each other, in the camp’s South Flank stratigraphy. Noranda’s Matagami mill is about 6 km to the southeast.
The latest results suggest the zones are part of a single deposit.
So far, Equinox has proved to be the largest zone, with inferred resources of 2.6 million tonnes grading 16.6% zinc and 1.1% copper, plus 34 grams silver and 0.36 gram gold per tonne. This estimate is based on results from 12 of the 20 holes drilled to date, all of which were spaced 25-50 metres apart.
Mineralization occurs between 30 and 250 metres below surface and strikes for about 300 metres before being offset to the west by a fault. The lens remains open to the east.
Among the better assays from recent drilling are: 23.96% zinc, 1.17% copper, 21.67 grams silver and 0.29 gram gold over 87.23 metres (119.77-207 metres) in hole 12; and 26.17% zinc, 1.08% copper, 31 grams silver and 0.24 gram gold over 47.9 metres (114.5-162.4 metres) in hole 16.
Results are still pending for four holes. All intersected massive sulphides.
Inferred resources in the Perseverance zone stand at 947,000 tonnes grading 19.12% zinc, 1.37% copper, 32 grams silver and 0.4 gram gold. This excludes results from the latest 10 holes, for two of which assays are now available.
Hole 39 returned 31.85 metres (92.2-124.05 metres) grading 6.61% zinc, 0.68% copper, 10.48 grams silver and 0.2 gram gold. Hole 40, collared 25 metres to the east and 90 metres to the south, averaged 15.17% zinc, 1.58% copper, 26.25 grams silver and 0.24 gram gold over 33.2 metres (180-213.2 metres).
At the Perseverance West zone, 10 more holes were drilled. Of those, seven intersected significant mineralization, including:
– 42.8 metres (161.35-204.15 metres) grading 22.18% zinc, 1.89% copper, 60.44 grams silver and 0.59 gram gold in hole 32;
– 50 metres (150.7-200.7 metres) grading 8.93% zinc, 1.3% copper, 32.48 grams silver and 0.81 gram gold in hole 33;
– 26.08 metres (149.92-176 metres) grading 17.52% zinc, 1.84% copper, 21.64 grams silver and 0.44 gram gold, as well as 3.05 metres (180.3-183.35 metres) grading 8.46% zinc, 1.37% copper, 35.44 grams silver and 0.22 gram gold, in hole 34; and
– 28 metres (160.3-188.3 metres) grading 22.45% zinc, 0.84% copper, 20.63 grams silver and 0.5 gram gold, plus 4.89 metres (203.31-208.2 metres) of 10.46% zinc, 1.18% copper, 7.33 grams silver and 0.09 gram gold, in hole 35.
Results are still pending for three holes.
A resource estimate has not yet been calculated for Perseverance West.
Mineralization remains open to the north and, as at the other zones, lies between 30 and 250 metres below surface.
Noranda currently has five drills turning and, by year-end, plans to sink 30,000 metres of definition drilling on 25-50-metre centres. The results will be incorporated into a feasibility study, scheduled for completion in the first quarter of 2001.
Noranda holds a 90% interest in the Daniel property, with the remainder held on a carried basis by a company owned by the Quebec government. Should the upcoming feasibility turn positive, the Crown corporation must participate in the project’s development or have its interest converted to a 2% net smelter return royalty, which Noranda can cut in half by paying $1 million.
Noranda has been active at Matagami since 1957, when the first discovery hole was spotted. Although the larger deposits are now depleted, a series of smaller deposits kept the company’s concentrator going until late 1997. The camp was revived early this year when Noranda turned the key on its new $119-million Bell Allard zinc-copper mine. This 2,000-tonne-per-day operation has proven and probable reserves of 3.3 million tonnes grading 12.9% zinc, sufficient for about five years.
For the three months ended June 30, Noranda earned $84 million (or 33 per share) on metal sales of $1.9 billion, compared with $30 million (10 per share) on $1.6 billion in the corresponding period of 1999. Higher metal prices and lower operating costs are responsible for the improvement.
Earnings for the first half of 2000 topped $152 million (60 per share) on revenue of $3.6 billion, compared with $34 million (10 per share) on $3 billion a year ago. Operating and material expenses were actually higher in the recent period, though they were more than offset by higher metal prices.
Cash operating margins jumped 55% year-over-year to $828 million, with
Noranda’s first-half output totalled 219,000 tonnes zinc, 159,000 tonnes copper, 29,000 tonnes nickel, 15,000 tonnes ferronickel, 34,000 tonnes lead and 4.5 million oz. silver.
Refined metal production topped 205,000 tonnes for zinc, 231,000 tonnes for copper, 50,000 tonnes for nickel, 55,000 tonnes for lead, 110,000 tonnes for aluminum, 554,000 oz. for gold and 21.4 million oz. for silver. Fabricated aluminum output topped 110,000 tonnes.
Noranda’s copper and recycling business was the only blemish, having contributed only $64 million to cash operating margins, compared with $82 million in the first half of 1999. The reduction is attributed to several factors, including low treatment and refining revenues for copper concentrates.
Meanwhile, the major has expanded its New Madrid aluminum smelter in Missouri. Annual primary aluminum production is expected to increase by 15% to 253,000 tonnes.
A developing aluminum foil plant in Tennessee remains on schedule for startup in early 2001. The first aluminum caster was successfully tested in the second quarter. The mill is designed to produce 90,000 tonnes annually.
Closer to home, at the Brunswick operations in New Brunswick, unionized workers have signed a new 3-year contract that includes provisions for early retirement and a 6% wage increase. Similarly, employees at the Gasp smelter and the General Smelting Company of Canada, both of which are in Quebec, renewed their contracts for three years.
On June 30, Noranda had $1.66 billion in working capital. Of that total, $616 million was held in cash or short-term notes.
A dividend of 20 per share will be paid to shareholders on Sept. 15.
Noranda recently raised its interest in
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