EXPLORATION ’93 — Iron formation targets pursued in N.W.T.

Although diamonds are by far the target of choice for most explorers in the Northwest Territories, several companies are investigating properties containing iron-formation-hosted gold mineralization.

Considering the potential size and consistency of these so-called exhalative gold deposits, an economic discovery could prove to be a company-builder.

Echo Bay Mines (TSE), for example, owes much of its growth to the success of its Lupin gold mine, 250 miles northeast of Yellowknife.

The property was acquired in 1979 and entered production in 1982 with proven and probable reserves measuring 3.4 million tons at 0.40 oz. gold per ton, plus a further possible reserve of 480,000 tons at 0.37 oz.

Gold is hosted in a near-vertically inclined iron formation folded in a “Z” shape.

A decade later, Lupin has produced 2.07 million oz. of gold (to the end of September, 1993) at a cash cost of US$211 per oz.

Despite that impressive production record, at the end of 1992 proven and probable reserves stood at 3.8 million tons grading 0.29 oz., plus a further probable reserve of 2.9 million tons grading 0.26 oz.

The outlined reserve extends to 3,840 ft. below surface and the shaft has been developed to 4,000 ft.

Echo Bay only delineates reserves five years into the future and, with the deposit still open to depth, it is likely to continue to boost tonnage. The discovery of gold in iron formation at Damoti Lake this year by Athabaska Gold Resources caused a stir.

From its trading level of 20-30 cents earlier this year, the issue has traded as high as $1.90.

The initial discovery hole, drilled from BIF Island on Damoti Lake, returned a 31.2-ft. intersection grading 0.40 oz. gold, including a 19.4-ft. section grading 0.60 oz.

Subsequent drilling returned other good intersections, including 9.7 ft. grading 0.79 oz. in Hole D-3, 75.5 ft. grading 0.26 oz. and a further 33 ft. grading 0.47 oz. in Hole D-5.

Consolidated Ramrod Gold is earning a 51% interest in the property from Athabaska, while Gitennes Exploration (CDN) holds a 25% working interest. Although drilling on strike to the north of the discovery has returned mixed results, the joint venture believes the most prospective ground lies south of BIF Island, below the lake.

As a result, stepout drilling from the lake ice is expected to begin after freeze-up.

Cumberland Resources (VSE) and Comaplex Resources (TSE), which are merging with Comstate Resources (TSE), are exploring a large and complex iron formation system at their Meliadine River project near Rankin Inlet, N.W.T. The project covers a major west-northwest-trending structural break with a minimum strike length of 40 miles.

The break cuts meta-sedimentary and meta-volcanic rocks which host highly deformed and altered gold-bearing iron oxide formation, together with subsidiary fault zones containing shear-hosted gold occurrences. Work to date has outlined a preliminary resource of 900,000 tons grading 0.29 oz. gold per ton in the Discovery zone iron formation.

Cumberland, now the operator, shifted focus this year to the WesMeg area of the property, a few miles northwest of the Discovery zone. Drilling there has encountered gold mineralization in iron formation, as well as in shear-structures.

Two holes drilled on Target F returned three intersections, including 0.32 oz. over 6.4 ft., 0.31 oz. over 22.3 ft. and 0.23 oz. over 90.5 ft. With winter firmly setting in at Rankin Inlet, the joint venture is off the property and does not expect to be back until next March.

The two companies also have a joint venture agreement on the Meadowbank River property, about 60 miles north of Baker Lake.

Cumberland holds a 60% interest in the project, where previous exploration has identified two styles of gold mineralization. These include pyrrhotite-bearing replacement zones within magnetite-chert-iron formation, and silicified pyrite-quartz shear zones flanking the main iron formation. Previous drilling on the Third Portage gold discovery included 21 holes grading greater than 0.30 oz. gold over 10 ft.

Drilling in 1991 from Goose Island, about 3,300 ft. on-strike to the south of Third Portage, returned a 27-ft. intersection grading 0.36 oz. gold and a 57.8-ft. intersection grading 0.38 oz..

The joint venture performed no work on the Meadowbank River project this year, preferring to concentrate on the more accessible Meliadine River play. Cumberland Vice-president Glen Dickson said the joint ventures will likely spend about $800,000 on Meadowbank and $1.5 million on Meliadine next year, although the final budget has yet to be approved.

Homestake Mining (NYSE) did not do any further work this year at its George Lake joint venture with Kerr-McGee (NYSE), in the Black River area of the Territories.

Although no numbers have been released, previous press reports put the undiluted inventory at 3.4 million tons grading 0.25 oz. gold in five zones along the limb of an oxide facies iron formation.

No further work is planned for George Lake in the immediate future, though the company is planning more drilling at its Goose Lake project, 50 miles southeast.

The drilling has returned encouraging results; again, no numbers have been released.

BHP Minerals Canada completed its fifth summer drill program in June and July of this year at its Ulu claims in the High Lake belt. None of the drilling was on the main resource, but rather 16 holes were completed in five peripheral zones. An airborne survey was also carried out. The intent of the 1993 program was to test the peripheral targets, and to continue to establish an economic resource at Ulu.

Several companies active on the REN project, 55 miles southwest of Lupin, switched to diamond exploration from previous work on a gold-mineralized iron formation.

Drilling in 1990 on the Grizz zone returned six intersections in three holes. Results ranged from 1.4 ft. grading 0.40 oz. gold to 4.5 ft. grading 0.13 oz. Drilling on the Main zone returned assays ranging from 0.12 oz. over 3.4 ft. to 0.36 oz. over 8 ft.

Westview Resources (VSE) completed a 100% earn-in on the property, while Cominco (TSE) retains the right to back in for a 60% interest by spending $3.5 million.

Last year, Cominco gave Westview a 100% interest in any diamond discovery on the property (subject to a 5% gross revenue royalty) and Westview subsequently optioned a half interest to Pure Gold Resources (TSE). Westview President Roger Richer said no further gold exploration is planned on the property.