Hanoi, Vietnam — With its sights set on delineating a viable skarn tungsten polymetallic deposit,
During a recent tour of the project, Kevin Flaherty, vice-president of Tiberon, said the property is representative of the country’s considerable geological potential, adding that competition for mineral prospects in Vietnam is less intense than in other parts of the world.
“The new mining law was implemented in 1996, and we were able to come in and pick up projects of a magnitude that wouldn’t be available to us elsewhere,” he said.
The Nui Phao project is in the Dai Tu district of Thai Nguyen province, about 80 km northwest of Hanoi. The property is accessible from the city via a 100-km paved road — about a 2-hour drive, though traffic congestion caused by bicycles and mopeds tends to interfere. Nui Phao is also accessible, by road and rail, to the port of Haiphong, 160 km to the east.
The property is on the northeastern side of Red River and the Tam Dao Mountains. Topography is generally flat with small steep hills and broad valleys. The Da Lien granite, immediately south of the property, boasts elevations of up to 400 metres, but locally the elevation rarely exceeds 100-200 metres above sea level.
The area is heavily populated and exploited for agriculture. The main crops include rice and tea, with eucalyptus as a longer-term crop. Temperatures vary from an excruciatingly humid 40C in the summer to 10C in the winter.
The Vietnamese government established a new mineral policy in 1996, which was designed to open its mineral sector to foreign investors. Prior to this, there had been little Western exploration for more than 50 years. In an attempt to reverse the effects of economic stagnation and military conflicts in the 1960s, ’70s and ’80s, the Vietnamese government decided to open its doors to foreign investment and set its economy on a course of market-oriented reform.
Progress over the past decade has seen economic growth average more than 7% per year, with moderate levels of inflation. By the end of 1999, there were more than 2,200 foreign-investment projects with a registered capital of US$35.4 billion. The World Bank committed US$1.6 billion in funding between 1998 and 2000 for improvements to Vietnamese infrastructure. A full 60% of Vietnam’s gross domestic product is now accounted for by the private sector. However, the country’s internal utilization of capital is poor, since many Vietnamese enterprises lack the long-term funding required to modernize operations.
Mineral legislation
Before and since the 1996 enactment of the mineral law, no mineral deposits were brought into production by foreign companies in Vietnam. Therefore, it is fair to say the mineral law is untested. However, Vietnam’s petroleum industry has gone through a similar change. Since 1989, there have been several petroleum discoveries brought to production by international companies, and Vietnam has honoured all of its petroleum commitments.
Foreign investors are allowed to invest in the country via joint ventures with Vietnamese companies or 100%-owned foreign companies, though a foreign investment licence is required to operate in the country.
Mineral rights in Vietnam flow from a licence system, rather than the claim-staking system that is common in Canada and other jurisdictions. Mineral licences tend to be selectively granted to investors who demonstrate that they have the abilities and resources to explore for or extract mineral resources.
There are four categories of mineral licences: prospecting, exploration, extraction, and processing. Each licence must be applied for separately, though there is no required sequence. An exploration licence can be granted without first obtaining a prospecting licence.
The prospecting licence is non-exclusive, and multiple prospecting licences may be granted to different organizations for the same area. The licence is valid for 12 months and can be extended for another 12-month period.
The exploration licence is exclusive, and an organization can hold up to five exploration licences at any one time. The holder must pay a deposit to ensure that exploration work is performed, and that deposit must be 25% of the estimated exploration costs for the initial year of work.
Exploration licences are limited to 100 sq. km for precious metals or minerals, 200 sq. km for coal, non-precious metals and non-metallic minerals, and 400 sq. km for minerals on the continental shelf. The licence is valid from 6-24 months and can be extended for an additional 24 months. Each time an extension is applied for, the holder is required to surrender 30% of the original exploration area. The legislation permits a licence-holder to apply for a new exploration licence for the same area if the holder can show that it has met or exceeded exploration costs and requires more time to complete a feasibility study.
The extraction licence, valid for 30 years, gives the holder the right both to extract and process minerals. In addition, the extraction licence-holder may also store, transport and export the same minerals.
The holder of a processing licence has the right to: buy minerals from a licensed enterprise; import equipment, technology and materials; process minerals; and store, transport, export and market minerals.
The Nui Phao tin polymetallic exploration licence was granted by the Ministry of Industry in November 1997. The area covers 45.9 sq. km, excluding three small areas designated for defence purposes and a previously-granted alluvial tin mining licence.
Tiberon reduced the original size of the area to 32.1 sq. km in December 1999, in accordance with the mineral laws of Vietnam, and has applied for a new licence for polymetallic minerals and gold that comprises 50 sq. km and encompasses the current licence. The company holds a 70% interest in the project, with the remainder split equally between its Vietnamese partners, Thai Nguyen Mineral and Geleximco. Tiberon must fund 100% of work to the development stage; thereafter, each party pays its share.
Drilling to date has focused on a large geophysical anomaly dubbed Da Lien. This prospect extends for 2 km in an east-west direction and is roughly 600 metres wide. A central zone measuring 200 metres wide carries the highest grades and thickest drill intercepts discovered to date.
Tiberon has drilled in excess of 20 holes along the Da Lien prospect, spanning a strike length of 1.3 km and a width of 200 metres. Drilling has delineated three main zones within the prospect: Eastern, Central and Western.
The Eastern zone measures 400 metres long and 300 metres wide, and geophysics suggest it continues east for an additional 500 metres.
Hole NP-26 penetrated the Eastern zone and intersected 20 metres grading 1.11% tungsten trioxide, 0.64 gram gold per tonne, 0.46% copper, 0.32% bismuth and 9.5% fluorite, starting at a down-hole depth of 115 metres. Another hole that cut the Eastern zone — hole NP-18, collared 200 metres to the southwest — intersected a 16-metre section of 0.9% tungsten trioxide, 0.55 gram gold, 0.45% copper, 0.21% bismuth and 10.4% fluorite, starting at 40 metres down-hole.
The Central zone measures 400 by 400 metres and has had three holes drilled into it. The best intercept was cut in hole NP-17, which returned 23.6 metres grading 0.61% tungsten trioxide, 0.55 gram gold, 0.46% copper, 0.18% bismuth and 9.7% fluorite, starting at 69 metres down-hole.
The Western zone is defined by a geophysical anomaly that measures 500 by 400 metres. This area has seen only two drill holes. Hole NP-7, the most westerly hole drilled to date, intersected 8.8 metres grading 0.66% tungsten trioxide, 0.25 gram gold, 0.35% copper, 0.2% bismuth and 17.3% fluorite, starting at 191.1 metres down-hole.
The current phase of drilling will continue to step-out with widely spaced exploration holes, as well as perform some infill delineation holes.
At last report hole, hole NP-30, collared 200 metres east of hole NP-26, was at a depth of 93 metres. The hole represents the most easterly hole to date. Hole NP-29, collared 150 metres north of NP-18, hole reached a total depth of 179 metres. The drill was moved 150 metres to the southeast and is currently drilling hole NP-34.
Hole NP-31, collared 100 metres west of NP-34, reached a final depth of 192 metres. The drill rig has been re-mobilized 150 metres to the northwest and is now drilling hole NP-32.
A fourth rig has arrived on-site and is setting up at NP-33, about 150 metres south of hole NP-32.
Samples from holes NP-27 and NP-28 were shipped to Australia for assaying, and the results are expected by mid-May.
“We are extremely happy with the progress we’ve made on the Nui Phao property,” said Flaherty. “It has obviously matured beyond just an exploration project, and we would like to pick up a couple of other projects before the competition enters the country.”
A bench-scale metallurgical program will begin sometime in the fall, to be followed by a preliminary resource calculation in the winter. The company hopes to start a prefeasibility study early next year.
In addition to the Da Lien prospect, several other prospective polymetallic targets have been identified through geophysics and soil sampling. The most promising are Roof Pendant, Nui Chiem and Con Meo.
Roof Pendant represents a style of mineralization similar to that of the Main zone, 600 metres to the southwest. The target is believed to be a wedge of country rock that projects into the Di Lien granite. The strike length of this feature is about 800 metres and remains open to the east. This prospect returned the strongest magnetic response on the property.
The Nui Chiem prospect represents a possible distal replacement target. The centre of the prospect is 1.2 km northwest of the Main gossan. Nui Chiem trends to the northeast, and has a geophysical signature that strikes 900 metres and remains open to the west and north. Geochemistry has identified anomalous gold, copper, tin, lead, tungsten, iron and arsenic over an area the measures 1,200 by 500 metres. Nui Chiem is underlain by the Da Lien granite.
The Con Meo target is thought to represent a mineralized fault or shear zone. The northeast-trending structure bounds the northwestern flank of the Da Lien granite and continues to the southwest, where it is outlined by a geochemical anomaly containing gold, copper, molybdenum, tin, tungsten, bismuth and iron measuring 700 metres long and 600 metres wide. Three reconnaissance drill holes, collared in the southwestern portion of the target, revealed a strong induced-polarization anomaly and a corresponding weak resistivity anomaly. Two of the holes intersected sulphides and minor mineralization. The third hole was barren. Tiberon says the centre of the geophysical anomaly still needs to be drilled at depth and that the highest geochemical anomalies to the south also require testing.
The rocks in the region span the Paleozoic to Quaternary age and include 11 recognized units. These units consist of varying combinations of limestones, mudstones, sandstones, pelites and greywackes, as well as marbles, shales, slates and quartzites.
The oldest intrusive rock on the property is a late Triassic-aged Nui Chua gabbro. The intrusion is both layered and massive in texture and outcrops along the northern part of the Nui Phao exploration licence.
The Nui Phao granite is presumed to be late-Triassic in age and is just south of Hwy. 13A, along the southern margin of the property.
The Da Lien 2-mica granite is estimated to be late Cretaceous in age, and is considered to be the main source of mineralization in the area. This intrusion outcrops on the north side of Hwy. 13A and covers an area of about 2 sq. km. The medium-to-coarse-grained granite consists of light-coloured alkali feldspars and micas and is enriched in tin, tungsten, beryllium, bismuth, niobium and lithium.
The region has undergone a substantial amount of faulting, with the dominant orientation trending northwest-southeast. The faults set form contacts between many of the rock units in the region and probably aided mineralization. Most of these are high-angle normal faults with varying amounts of strike-slip motion.
Both regional and contact metamorphism has occurred. The regional metamorphic grade is pegged at middle-to-high greenschist facies, and the contact metamorphism consists of a fairly wide zone of hornfels, quartzite and metamorphic skarn (calc-silicate rocks).
Mineralization on the property is hosted in skarns and their greisenized or retrograde equivalents. Greisenization refers to a replacement process whereby quartz, fluorine and micas — as well as accessory minerals, such as tourmaline, rutile, cassiterite and wolframite — replace skarns or granites. At Nui Phao, greisenization consists of high fluorine, beryllium, tungsten, tin and limited rare earth metals, which have replaced granitic dykes and earlier-formed skarn units.
The following metals are found at Nui Phao: tungsten, as scheelite and minor wolframite; copper, as chalcopyrite; bismuth in its native form; gold (form unknown); fluorite, as fluorite and minor amounts in micas; and cerium, as allanite.
Mineralization containing tungsten has been defined along the contact zone of the Da Lien and Nui Phao granites, and as a roof pendant in the Da Lien granite.
Much of the tungsten mineralization in the Main zone is characterized by coarse and medium grains of scheelite and is preferentially developed in biotite-pyrrhotite fluorite skarns. The distribution of tungsten mineralization is lithologically controlled by the occurrence and distribution of the original calcareous metasediments, and, as a result, tends to be sub-horizontal in the Main zone.
Exploration history
Alluvial tin mining on the northern contact of the Nui Phao granite has been ongoing for many years. Evidence suggests that alluvial tin was first exploited by the French, though the first definitive mining took place in 1960 by the Vietnamese. This activity ultimately led to the to the discovery of lode tin at the Tangs pit in 1990. The pit, 700 metres east of the Main zone gossan that Tiberon is currently exploring, represents a massive skarn block within the Da Lien granite. Lode tin mining at the Tangs pit kicked off in 1993, and the pit has since been mined out.
During the 1980s, alluvial gold was mined by local artisans from the many valleys in the project area. Small-scale mining continued for about a decade, until the resource was depleted. The valleys subsequently returned to rice production.
The Geological Survey of Vietnam (GSV) first mapped the area in the early 1960s. In 1978, the GSV returned to the area with geologists from the Russian Geological Survey to investigate a magnetic high at Da Lien. Over 12 years, they appraised the region for tungsten, copper, tin, bismuth, beryllium and associated minerals.
A regional diamond drilling campaign focused on the Da Lien area, where 33 holes were drilled on a 500-metre square grid over a 6-sq.-km area. Some holes collared on the main gossan were spaced 50-100 metres apart. Drilling was halted in 1992, owing to lack of funding. Only skeletized sections of a few holes of the original GSV drilling are still available at the core library.
The GSV defined mineralization in four separate zones. The first three bodies are contiguous along the main gossan trend and combine for a total strike length of 2,200 metres and vary from 200 to 600 metres in width. The fourth zone is in the roof pendant of the Da lien granite and measures 800 by 200 metres. This zone has yet to be drilled by Tiberon.
Based on 33 holes and a 0.1% tungsten oxide cutoff grade, the GSV posted a resource estimate of 84.1 million tonnes grading 0.18% tungsten trioxide and 0.17% bismuth for the four zones.
Tiberon entered the scene in 1997 and began drilling for extensions to the tin deposit at the Tangs pit. The pit turned out to be an isolated block of tin-mineralized skarn within the Da Lien granite, which had only limited tonnage potential.
Shifting its focus to the Main gossan in 1998, Tiberon started a program of pitting, trenching and sampling. Results warranted a regional aerial geophysics survey, which consisted of magnetics, electromagnetics and radiometrics performed by ACA Howe International. Encouraging results from the survey led to the first-phase drill program.
Tungsten deposits are classified into four major types: vein-stockwork, skarn, porphyry, and strata-bound. The Nui Phao tungsten mineralization is classified as skarn-type. Tungsten skarns are typically coarse-grained assemblages of ore and calc-silicate gangue minerals that form commonly in the thermal halo at the contact between felsic, calc-alkaline intrusive, and calcareous sedimentary rocks.
Grades of vein, stockwork and skarn deposits typically range from 0.3% to 1.5% tungsten trioxide. Most underground operations require average grades of at least 0.4% tungsten trioxide, whereas open-pit operations have produced below 0.3% tungsten trioxide.
The largest tungsten mine in the world is the Verkhne-Kayrakty mine, in the former U.S.S.R., where reserves are believed to be 1.1 million tonnes grading 0.13% tungsten trioxide. The past-producing MacTung deposit, in the Yukon, hosted reserves of 778,000 tonnes grading 0.88% tungsten trioxide.
Pure tungsten is a steel-gray to tin-white in colour and exhibits several important physical properties, including a high melting point (3,410C), high density, good thermal and electrical conductivity, a low co-efficient of expansion, and exceptional strength at elevated temperatures.
The metal is predominantly used in tungsten carbide cutting and wear-resistant components, and as an alloy for lamp and lighting filaments and electrodes. Other uses include electronic contact surfaces and heat and radiation shielding in high-temperature furnaces. Non-metallurgical applications of tungsten include: phosphorescent chemicals in pigments; X-ray screens; television picture tubes; and fluorescent lighting. Tungsten is also used in military applications, as a heavy-metal alloy in tank shielding.
In nature, tungsten appears combined with calcium, iron, or manganese in four major mineral forms: wolframite, scheelite, huebnertie, and ferberite. The metal is obtained commercially by reducing tungsten oxide with hydrogen or carbon.
Although found in numerous deposits throughout the world, nearly 42% of the world’s tungsten resources are in China. Other significant tungsten deposits are in Australia, Austria, Bolivia, Brazil, Burma, Canada, North Korea, Peru, Portugal, the Republic of Korea, Spain, Thailand, Turkey, the former U.S.S.R., and the U.S.
The price of pure (99.9%) tungsten at presstime was US$5.50 per lb. Over the past four months, tungsten concentrate prices have moved up from the US$4,000-per-tonne range to around US$7,000 per tonne.
A report by U.K.-based Roskill Consulting Group states that, after the break up of the Soviet Union, China became the dominant tungsten producer in the world. In 1999, Chinese production accounted for 85% of the global output. The report states that many Western producers were forced out of the market following a prolonged period of relatively low tungsten prices caused by oversupply.
The significant decline in tungsten production since the late 1980s has created a gap between output and consumption. The combined output of tungsten in 1997, 1998 and 1999 represented about 80% of the estimated consumption over the same period; the deficit was made up by stockpile supplies. Tungsten prices began to pick up in late 2000, as stockpiles declined and were not fully replaced by production.
Roskill states that the short-to-medium-term outlook for tungsten is closely linked to the production situation in China, and to the level of releases from stockpiles in Russia and the U.S. In the short term, tungsten prices should continue to rise; it is unlikely they will stabilize until production increases and supply and demand come in to balance.
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