Having established a resource, partners
Except for an 8-year hiatus in its early years, Levack operated continuously from 1915 to 1999, yielding about 64 million tons of ore averaging 1.88% nickel, 1.3% copper, 0.056% cobalt and 0.049 oz. combined platinum-palladium-gold (TPM) per ton. The mine remains accessible from the No. 2 shaft and the 1600 level haulage drift, which extends to the McCreedy West ramp, about 8,000 ft. to the west.
The pair, which put McCreedy West back in action earlier this year, estimates Levack’s measured and indicated resources at 5.06 million tons grading 1.9% nickel and 0.9% copper. Another 980,000 tons at 2% nickel and 0.9% copper are classified as inferred.
The updated resource, which has been audited by consulting firm Roscoe Postle Associates, mainly sits in remnants and extensions of mined areas still easily accessible from existing workings. Two zones excluded from the historic database but included in the inferred resource are 1300 and 1900.
Zone 1300 is a typical contact-type deposit, consisting of semi-massive-to-massive and blocky sulphides in the form of pyrrhotite, pentlandite, millerite, chalcopyrite and pyrite. It sits at the contact between an ultramafic-gabbroic breccia unit of the footwall Sudbury Breccia and overlying Sudbury igneous complex (SIG).
Zone 1900 occurs at the lower end of the ultramafic-gabbroic unit and is more akin to footwall deposits, though its western and updip margin may connect with the 1300 zone. Mineralization occurs in narrow veinlets and locally massive zones of chalcopyrite, pyrrhotite and pentlandite. Here, drilling returned a best result of 1.37% nickel, 1.33% copper and 0.07 oz. TPM over 22.3 ft.
Resources in both zones were tallied using block modeling techniques similar to those used at McCreedy West, as opposed to the sectional polygonal method used to assess the historic areas. Block modeling was used for those portions of the No. 7 zone where recent drilling was carried out.
Cobalt and precious metal assays are excluded from all estimates, as they could not be verified in the historic database to the satisfaction of regulators. Nevertheless, each is almost certain to come out as a byproduct should mining resume.
The mine remains dry down to the 2600 level, and surface infrastructure remains intact. Still, the shaft and underground workings need to be rehabilitated before exploration or production can proceed.
The feasibility study is scheduled for completion in 2004.
Shipments resumed
Meanwhile, FNX and Dynatec have resumed regular ore shipments from McCreedy West to Inco’s Clarabelle mill. Shipments had been disrupted by the recent strike at the major’s Sudbury operations and are now expected to average 400 tons daily, incrementally rising to 1,000 tons per day by mid-2004.
Between 1970 and 1998, McCreedy West pumped out nearly 16 million tons of ore averaging 1.7% copper, 1.44% nickel and 0.04 oz. TPM. Nickel-bearing ore was pulled from the lower contact of the SIG, whereas relatively richer copper- and precious-metal-bearing ore came from the footwall Sudbury breccia.
During the work stoppage, Dynatec mined and stockpiled 4,040 tons of 700-zone material and 1,500 tons of Upper Main material. The company, which manages mining and development, also continued development work on the Inter Main and East Main deposits, so mining at each is still expected to begin early in the new year.
Combined probable reserves in the Upper Main, Inter Main and East Main zones (collectively, the contact deposits) now stand at 1.24 million tons grading 1.91% nickel and 0.23% copper. About 86% of the minable volume is in the Inter Main deposit, which FNX discovered in 2002.
Similar-type reserves in the 700 zone stand at 119,000 tons grading 0.75% nickel, 6.83% copper and 0.17 oz. TPM. The deposit’s higher tenors of copper and TPM reflect its deposition in the footwall of the SIG.
Combined, reserves in all four deposits can sustain full-scale mining rates until 2008. This may be extended if mineralized projections to the deposits, particularly Inter Main, pan out.
Assumed metal prices are as follows: US$3.50 per lb. nickel; US90 per lb. copper; US$525 per oz. platinum; US$350 per oz. palladium; and US$350 per oz. gold. Also, an exchange rate of US67 was used.
Cutoffs vary
Cutoff grades in the contact zones vary from 1% to 1.4% nickel-equivalent, depending on the mining method used, whereas a straight 1.6%-nickel-equivalent cutoff was applied to 700 blocks. The cutoffs were determined on the basis of net smelter returns, based on offtake agreements with Inco.
The contact deposits also host 316,300 tons of inferred resources averaging 1.7% nickel and 0.44% copper. The inferred resource in the 700 zone is 8,220 tons grading 0.85% nickel, 7.44% copper and 0.26 oz. TPM.
Reserves have not yet been tallied for the 950 deposit, also in Sudbury Breccia, though it is known to host an indicated resource of 520,000 tonnes grading 0.27% nickel, 1.44% copper and 0.16 oz. TPM. The figure is based on the same metal prices and exchange rate applied to the other zones, as well as a minimum mining width of 8 ft. — equivalent to that used for the contact deposits but 1-2 ft. greater than that applied to the 700 zone. The cutoff grade is 0.75% nickel-equivalent.
The 950 deposit is believed to connect with the PM zone downdip. Inco had tested that zone with 44 drill holes prior to the sale, and FNX has since sunk more than 79 stepout and infill holes, resulting in an expansion to a strike length of 1,500 ft. and a width of 1,000 ft.
Excluding the 950 zone, PM now extends from the 900 to 2200 levels. The thickness of mineralization varies from a few metres to 150 ft.
The latest results also confirm the PM zone’s rich tenors of copper and TPM, with hole 151 returning some of the highest grades: 17.3% copper and 5.96% TPM, plus 0.5% nickel, over 1.5 ft. The interval is part of a longer section of mineralized core that averages 0.1% nickel, 0.8% copper and 0.02 oz. TPM over 175 ft. Other highlights include the following:
— Hole 256 — four separate intervals, including 10 ft. grading 0.1% nickel, 0.3% copper and 0.14% TPM and 0.5 ft. grading 0.7% nickel, 19.8% copper and 3.63% TPM.
— Hole 152 — 160 ft. averaging 0.2% nickel, 0.5% copper and 0.11% TPM, including 35 ft. at 0.8% nickel, 1.4% copper and 0.27% TPM.
— Hole 241 — 5 ft. averaging 0.1% nickel, 2% copper and 0.42% TPM, plus 7.4 ft. of 1.8% nickel, 8.3% copper and 1.26% TPM.
— Hole 243 — 10 ft. grading 0.2% nickel, 0.5% copper and 0.01% TPM, plus 30 ft. of 1.4% nickel, 0.2% copper and 0.36% TPM.
— Hole 254 — 3 ft. averaging 4.3% nickel, 4.2% copper and 1.27% TPM, plus 76.5 ft. of 0.3% nickel, 2.2% copper and 0.26% TPM.
True widths are generally 75-100% of reported core-lengths.
Mineralization is associated with high and low concentrations of sulphide, and is either disseminated in the host rock or confined to fractures and stockworks.
Drilling continues, and by year-end, about 30,000 ft. are expected to have been sunk, all from the 1600-Level drift, which runs roughly along the centre of the zone. The footage will add to the 12,438 ft. of surface drilling that was completed in 2002.
Holes are being collared on 50-to-80-ft. centres.
The partners also are driving an exploration ramp from the 1600-level to enable the extraction of bulk samples. By presstime, the ramp had advanced 300 ft., putting it within 450 ft. of the zone.
A feasibility study will follow.
FNX owns a 75% stake in the joint venture, leaving Dynatec with 25%. FNX manages exploration.
In addition to McCreedy West and Levack, the partnership includes the Victoria, Norman and Kirkwood properties, where drilling is under way. All were worked by Inco, and the major retains the right to process any ore pulled from the properties.
FNX is well-funded, having raised $48 million in early July. The bought-deal financing, arranged by BMO Nesbitt Burns, Griffiths McBurney & Partners, Dundee Securities and CIBC World Markets, saw 7.5 million shares printed at $6.45 apiece, expanding the company’s treasury to $67 million.
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