EXPLORATION 1998 — Avalon sizes up rare-metal pegmatite at Separation Rapids

Kenora, Ont. — With a follow-up drilling campaign now under way at its Separation Rapids rare-metal pegmatite deposit, Toronto-based Avalon Ventures (AVL-V) is becoming more confident that the project will develop into North America’s sole significant supplier of the lithium mineral petalite.

The Separation Rapids deposit is situated 60 km north of here, on an 842-ha property that lies within the eastern portion of the Bird River greenstone belt, near the Manitoban border. The project is accessible by road, and a major rail line passes to the south, connecting Winnipeg, to the west, with Thunder Bay, to the east.

The pegmatite dyke itself, dubbed the “Big Whopper,” ranks among the largest rare-metal pegmatites in the world. The dyke is vertical in orientation and trends roughly east-west. It measures at least 1,200 metres in length and varies in width from well over 60 metres in the middle to less than 15 metres along its western and eastern extremities. The dyke is bounded to the north by amphibolites and to the south by a steeply dipping fault. Some thin amphibolite dykes are found within the Big Whopper and several smaller rare-metal pegmatite dykes occur just north of, and parallel to, the main body.

Drilling has shown that the mineralogical composition throughout most of the dyke is quite consistent, being composed of 30% to 40% recrystallized petalite (a lithium aluminosilicate), 25% to 50% rubidium-bearing potassic feldspar, as well as quartz, albite, muscovite, rubidium-bearing lepidolite (a pinkish lithium mica) and accessory tantalum minerals.

So far, most of the value found in the deposit lies in the petalite and the rubidium-bearing feldspar, though there may yet be found significant quantities of tantalum and cesium minerals, which tend to occur in discrete zones tens of metres wide — bonanza zones that could easily have been missed during the first phase of drilling.

Lithium minerals such as petalite and spodumene (another lithium aluminosilicate) are used by glass makers to produce high-value, zero-expansion glassware such as Corning’s heat-resistant Pyrex line.

Due to its purity, lower iron content and higher silica content, petalite is the preferred feedstock over spodumene in the glass-making industry, however, petalite’s rarity often forces glass makers to settle for spodumene or lithium carbonate compounds.

Lithium — the lightest metallic element — adds strength and flexibility to glassware, permitting the walls of glass containers to be made thinner, thereby reducing production, shipping and recycling costs.

As well, lithium significantly lowers the melting point of glass, enabling glass makers and recyclers to use less-costly gas furnaces rather than the hotter electric-arc furnaces.

Lithium minerals can provide similar benefits to ceramics and fibreglass producers, which represent potential new markets. The larger lithium chemicals industry — such as the manufacture of batteries and antidepressive drugs — tends to make use of lithium carbonate compounds.

For Jan. 30, 1998, the posted price in Metal Bulletin for petalite concentrate (which grades 4.2% Li2O) was US$270 per tonne, while the price for spodumene concentrate (over 7.25% Li2O) was US$410 per tonne.

Rubidium-rich feldspars are used in the ceramics industry in the manufacture of electrical insulators and spark plug casings.

Last year’s 30-hole, 4,900-metre drilling program at Separation Rapids conservatively delineated a resource within the petalite pegmatite of 7.1 million tonnes grading 1.28% Li2O and 0.35% Rb2O over a strike length of 600 metres and to a maximum depth of 250 metres, where the deposit remains open.

The estimate uses a cutoff grade of 0.5% Li2O and the grades include internal dilution by narrow zones of barren amphibolite and feldspar-mica rock, giving an average petalite content in excess of 30%.

A separate resource was calculated for the thickest part of the Big Whopper deposit (between lines 3W and 6W), where an open pit could be developed first. This area contains a minimum of 5.2 million tonnes averaging 1.31% Li2O and 0.32% Rb2O to an average depth of 200 metres. Because the main Big Whopper zone is exposed at surface as a ridge with minimal overburden, the stripping ratio would be negligible for several years.

The potential tantalum credit at Separation Rapids would come from accessory tantalum minerals such as wodginite and tantalite, which can be sold as a concentrate for up to US$40 per lb. of 40% Ta2O5.

Tantalum is a refractory metal used in such high-tech products as capacitors, cutting tools and in the temperature-resistant superalloys of the aerospace industry.

Holes 14, 15 and 21, drilled by Avalon into the extremities of the main Big Whopper zone, all intersected economic-grade tantalum mineralization (above 0.01% Ta2O5) at shallow depths over widths of 6 to 16 metres within the petalite pegmatite.

Grab samples collected from a narrow mineralized dyke on the north side of the Big Whopper assayed up to 0.11% Ta2O5 and 0.21% Cs2O.

Generally, mineral processing of Separation Rapids ore would follow a simple circuit of crushing, gravity separation and flotation, with no hazardous products being consumed or produced.

Avalon has hired consulting firm Lakefield Research to complete a detailed metallurgical study — due shortly — using crushed rejects of core samples from the first four holes drilled into the Big Whopper to establish a flowsheet and a cost estimate for the recovery of petalite, as well as specifications on concentrate grade.

Avalon also retained the ser-vices of Ottawa-based Equapolar Resource Consultants to prepare a market study of the lithium, tantalum, cesium and rubidium minerals present in the Big Whopper pegmatite. Avalon says this study is finding that worldwide demand for low-iron lithium minerals in the ceramics and glassware industries is increasing rapidly, and that a new North American supply of high-quality petalite concentrate would be welcomed in the market.

Currently, there are only three major lithium aluminosilicate suppliers in the world: Gwalia’s Greenbushes spodumene-tantalum mine in Australia (which has a

60% market share); Boston-based Cabot Corp.’s Tanco

tantalum-spodumene-cesium mine, 80 km west of Separation Rapids, near Bernic Lake, Man. (18% share); and the privately owned Bikita petalite mine and tailings-recovery facility in Zimbabwe (17% share).

Avalon has begun examining the possibility of quarrying some of the petalite pegmatite for use as polished counter-tops and tiles. In places, the petalite is pink, blue, green, grey or translucent. The rock is generally unfractured and quite hard (petalite is roughly equal to feldspar in hardness). Because of the high degree of competency of the pegmatite, it would be possible to set aside portions of the deposit for selective quarrying of building stone while simultaneously developing an open-pit mine to exploit the petalite of the main Big Whopper zone.

Currently, Avalon is engaged in a second phase of diamond drilling, specifically, infilling on 25-metre centres in the near-surface portion of the petalite deposit. Later, the program will explore along strike to the west, where the deposit is open and several promising new targets for separate zones of economic-grade tantalum and/or cesium mineralization have been identified.

The main Big Whopper zone, with its low iron content, shows up on an aeromagnetic survey of the property as a low-magnetic bull’s-eye anomaly with a tail. Intriguingly, an aeromagnetic anomaly identical in size and shape is found on the opposite limb of an apparent Z-fold in the northwestern portion of Avalon’s property. Surface sampling over this zone has returned significant petalite and tantalite grades, so the anomaly has been designated a target for future drilling.

Ontario’s Minister of Northern Development and Mines, Chris Hodgson, who paid a visit to the deposit at the same time as The Northern Miner, said the ministry is proud that a provincial geologist, Fred Breaks, had discovered the Big Whopper deposit. The ministe
r noted that at the time of the discovery (summer 1996), there was some discussion about keeping the deposit under provincial ownership. Ultimately, he said, it was decided to release the discovery information and staking rights to the public, otherwise the government would have lost credibility with the mining industry.

Breaks remains active in the area, and continues to study the Big Whopper, running his own set of samples at the Ontario Geological Survey’s labs as well as providing analyses of the more exotic elements.

Breaks remains bullish on the tantalum potential of the property, having said that “the variation in wodginite chemistry in the Separation Lake-area pegmatites is very extensive and not found anywhere else on Earth, a feature which strongly underscores the high tantalum potential of the area.” Avalon has hired the former chief geologist of the Tanco mine, David Trueman, as a consultant, and is currently reviewing proposals from geology departments of Canadian universities for academic study of the deposit.

Avalon is well funded for this year’s exploration program, having completed two major financings totalling $2.1 million in late 1997.

In October, Avalon privately placed 1.1 million units at a cost of $1 each by issuing 800,000 flow-through shares and non-transferable warrants to purchase up to 800,000 additional flow-through shares at $1.25 each for one year; and by issuing 300,000 non-flow-through shares and non-transferable warrants to purchase up to 300,000 non-flow-through shares for a 2-year period at $1 each in the first year and $1.25 each in the second.

>From the $1.1 million in proceeds, $650,000 was earmarked for drilling at the Separation Rapids property, $150,000 was destined for the company’s other Ontario exploration projects and $300,000 was designated working capital.

Just before Christmas, Avalon entered into a brokered private placement with Triax Resource, which is managed by Altamira. Triax bought 666,667 flow-through special warrants at $1.50 each, for proceeds of $1 million.

Each special warrant is exercisable into one flow-through share for one year. Of those proceeds, $600,000 will be spent at Separation Rapids, $200,000 will be spent on drilling at the company’s Wolf Mountain platinum-palladium project, 90 km northeast of Thunder Bay, and most of the balance will be spent at its Dubenski gold project, also in northwestern Ontario.

By Jan. 20, 1998, Avalon had cash resources of about $2.05 million, of which $1.15 million was flow-through exploration money.

The company managed to survive the lean times during the spring and summer of 1997, thanks to a $2.3-million financing completed in April 1996. Avalon shares peaked then due to excitement over the proximity of Avalon’s ground in the Northwest Territories to Fortune Minerals’ Nico polymetallic property near Mazenod Lake.

Since November 1996, Avalon has been earning a 100% interest in the Separation Rapids property, subject to a 2% net smelter return royalty, by spending $600,000 on exploration (completed), issuing 200,000 shares (half-completed) and paying the vendors $100,000 over four years (half-completed).

On adjacent properties to the east, Tanco is exploring for rare metals on ground optioned from Gossan Resources (gss-v) in 1996. As well, Calgary-based Champion Bear Minerals (CBA-A) is actively drilling rare-metal deposits in the vicinity of Separation Rapids. Champion Bear, which draws much of its funding from the Calgary area, is particularly interested in finding cesium minerals that can be processed to form a lubricant (cesium formate) used in the drilling of deep oil and gas wells.

Meanwhile, Avalon has started drilling the Wolf Mountain property, which it acquired in November 1997. The property covers an airborne magnetic anomaly measuring roughly 2 km by 3 km that correlates with a broad area of anomalous platinum and palladium values found in black, sandy overburden consisting of disintegrated magnetic ultramafic intrusives (specifically, a stratified olivine-rich peridotite).

The current drilling campaign is a follow up to a program of grab and channel sampling, trenching and ground magnetics performed over the winter.

Analytical results received to date average 0.6 gram platinum and 0.5 gram palladium per tonne in samples collected from pits dug to a depth of 1 metre within a 250-metre-by-250-metre area. One sample assayed as high as 3.8 grams platinum and 3.8 grams palladium, and numerous samples have yielded values greater than 1 gram per tonne of combined platinum group metals (PGM).

The unit is enriched in chromium, nickel, cobalt and vanadium, and contains only trace levels of sulphide mineralization.

Based on the encouraging initial results obtained from the original 1,393-ha property, Avalon has staked another 10,789 ha to cover other prospective PGM and copper-nickel-cobalt targets in the area.

Avalon has the right to earn a 100% interest in the original 10-claim Wolf Mountain property by making $50,000 in cash payments, issuing 60,000 shares and making $400,000 in exploration expenditures over four years, subject to a 2% net-smelter-return royalty retained by the vendor, of which Avalon can buy back half for $1 million.

Avalon is also active at its Dubenski and Dogpaw Lake high-grade gold prospects in the Kenora area, where drilling will get underway this year.