20 companies involved in Lac St. Jean nickel play

Interest in the area stems from optimism regarding the potential of surface findings on the 40-claim McNickel property in Twp No. 234, west of the Mistassini River.

As reported previously (N.M., Mar 27/89), trenching on that property has uncovered widths of up to 300 ft containing nickel-copper sulphide mineralization. Although the area has been subjected to only limited exploration work to date, a 10 km-long airborne electromagnetic and magnetic anomaly is co-incident with the showings, suggesting the over-all extent of the findings could be substantial.

The geophysical anomalies are reported to have characteristics associated with sulphides, but since no drilling has been done it is uncertain whether graphite is present or not. Graphite is also a strong conductor.

The only publicly available results from the McNickel property are contained in a joint information circular for the amalgamation of Perch River Mines, a private company, and Hanson Mineral Exploration (COATS). These two companies are controlled by John McAdam and Terrence Flanagan of Toronto and were recently amalgamated to form McNickel Inc, which has an option to earn a 60% interest in the discovery claims. The remaining 40% interest has been optioned by Vancouver-based St. Philips Resources (VSE).

According to the Hanson-Perch information circular, a series of channel samples from surface trenches across the width of the deposit on the McNickel property included the following results:

Width Nickel Copper Trench (ft) (%) (%) A 52.4 0.35 0.17

14.7 0.91 0.39 B 124.6 0.22 0.09

6.5 0.33 0.07

19.6 0.37 0.12

13.1 0.26 0.14

13.1 0.22 0.10 C 149.2 0.35 0.22

8.3 0.54 0.32

24.6 0.21 0.15

11.4 0.92 0.36

The spacing between the three trenches along strike was not specified. A 136- kg composite grab sample from trenches A and B assayed 0.94% nickel and 0.15% copper.

Reports indicate the mineralized zone trends roughly north-south and has a shallow dip of between 20-30 degrees to the southeast.

The massive sulphides on the McNickel property consist primarily of pyrrhotite (93%), pentlandite (3%), and chalcopyrite (2%). The amount of pyrrhotite present is an important factor to consider because its abundance could suggest a high sulphur content in the metallurgical recovery process. For example, Inco Ltd. (TSE), the Western world’s largest nickel producer, is spending $500 million to reduce sulphur dioxide emissions at its Sudbury operations. Inco plans to implement, among other things, a new milling technology to reject certain amounts of pyrrhotite, the high sulphur-bearing portion of the ore, prior to smelting.

According to one industry source, there are already substantial existing reserves of nickel in other deposits with grades of 1% nickel. Just a few years ago it was difficult for even major mining companies to make money with nickel deposits at those grades. However, current nickel prices are more than double what they were during the early- and mid-1980s, although analysts are divided on how long current high nickel prices will hold out.

A spokesman for Falconbridge Ltd. (TSE), confirmed that his company made an unsuccessful bid for control of the McNickel property last year. He said Falconbridge was interested in the property as a raw prospect. Geologists from Teck Corp. (TSE) also made a visit to the McNickel property last fall, but the company did not obtain an option to explore the claims.

A recent compilation by The Northern Miner of some of the companies currently holding claims in the Lac St. Jean nickel-copper play includes the following: Achates Resources (ME), Aston Resources (VSE), Black Cliff Mines (TSE), Diana Resources (VSE), Fancamp Resources (VSE), Freewest Resources (ME), Golden Myra Resources (TSE), Hawk Resources (VSE), Ramcor Resources (VSE), Regal Goldfields (COATS), St. Philips Resources (VSE), Sparton Resources (TSE), Ventex Energy Resources (VSE), and Yellow Band Resources (VSE).

Several large blocks of claims directly on strike to the north and south of the original discovery are held by numbered company 133872 Canada Inc. This company is owned by a Val d’Or, Que., businessman. The claims were staked last year after the original discovery was made on the adjacent McNickel property. Unconfirmed reports say sulphide zones have been found on the 133872 Canada Inc. properties and several company’s have made offers to option the claims.

A prospectus is being prepared for a public share offering of McNickel Inc. shares. It could be ready by late April, according to one source. A listing of McNickel’s shares on The Toronto Stock Exchange is expected to follow.

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