Wolfden steps up drilling in Nunavut

In November and December, three rigs will attempt to expand the West zone along strike as well as to depth. The program will consist of 20-30 holes in total.

When The Northern Miner visited the project late in the summer, a steady stream of float planes were ferrying drilling equipment, supplies and fuel from Kinross Gold’s Lupin mine, a staging point and about an hour’s flight to the south.

The High Lake property is in the Kitikmeot region, about 550 km northeast of Yellowknife and 45 km south of Coronation Gulf, a potential deep-water port. The closest town is Kugluktuk, or Coppermine, 175 km to the northwest.

A revised resource calculation will be performed in February and will include Wolfden’s drill results from the AB and D zones as well as the West zone. The junior will then fire up the drill rigs again in March to continue to test the West zone as well as perform an in-fill drilling campaign to kick off a prefeasibility study. During this period one of the drill rigs will test other prospective conductors on the property.

The private placement that is enabling Wolfden to finance its drilling effort was arranged with a syndicate of agents led by BMO Nesbitt Burns and Canaccord Capital. The financing consists of 2.7 million shares priced at $3.75 each.

“We’ve started the environmental baseline work and will file the documents sometime early in the next year,” said Wolfden President Ewan Downie. “We will also start consulting with the local communities to let them know how the project is going and what our plans are. A portion of the funds on hand will be used to take down the Nanisivik mill and have it ready.”

Earlier this summer, Wolfden inked a deal to acquire the mill, concentrate storage facility, power plant, and ship-loading equipment of Breakwater Resources‘ (bwr-t) closed Nanisivik mine on Baffin Island. Nanisivik shut its doors for good in September 2002.

According to the deal, Wolfden is responsible for dismantling the facilities and cleaning up the mill and storage sites. Breakwater has agreed to provide lodging for Wolfden employees during the work.

Wolfden intends to set up this equipment on-site, with the concentrate storage facility and ship-loading equipment situated at Coronation Gulf.

“We should be able to get a mine at High Lake up and running by the beginning of the third quarter of 2007,” said Downie.

In 2001, Wolfden collected samples from each of the two main zones and sent them to Lakefield Research for testing. Two surface samples were taken and combined with quarter-split drill core. For the A/B zone, this resulted in a sample grading 6.21% copper and 1.49% zinc, plus 0.64 gram gold and 47.1 grams silver per tonne. For the D Zone, the sample graded 3.15% copper, 6.21% zinc, 0.33 gram gold and 103 grams silver. Results indicated that in the A/B zone, where copper is predominant, 95% of the copper reports to a 30% copper concentrate together with 90% of the gold and 70% of the silver. For the minor metal, zinc, 70% of the zinc reported to a 50% concentrate. In the D zone, where zinc predominates, 80% of the zinc reported to a 50% zinc concentrate.

The work also indicated that both ores can be treated easily in a standard flotation plant with standard reagents, and no contaminants are associated with the ore. Previous operators did not perform metallurgical tests.

Wolfden is exploring High Lake with the co-operation of Teck Cominco (TEK-T), which provides technical and financial assistance to Wolfden at High Lake in exchange for a first right of refusal.

High Lake spans 17.1 sq. km in 15 mining leases in an area that is part of Land Claim CO-29. This claim reserves both surface and subsurface rights to the native corporation Nunavut Tunngavik (NTI); however, the mining leases are exempt from NTI ownership as long as tenure is maintained.

This past summer, Wolfden drilled the West zone, a new sulphide discovery 1.7 km west of the existing A/B and D zones. The West zone was discovered by follow-up drilling of an anomaly delineated by airborne and ground geophysics last year. In the early 1990s, Aber Resources, now Aber Diamond (ABZ-T), poked a shallow drill hole into the same anomaly farther to the Northeast and missed.

“The possibility of another discovery such as the West zone is quite favourable considering the lack of mineralization and limited alteration seen on surface, and the relatively limited exploration in the entire belt,” said Ian Neill, Wolfden’s project geologist. “The discovery of the West zone has shown us that one or two drill holes cannot necessarily write off a geophysical target.”

During the summer, Wolfden drilled 30 holes (8,500 metres) on the West zone mineralization and 55 holes (14,700 metres) over the entire property. Drilling at the West zone intersected mineralization over a strike length of about 400 metres and to depths of 425 metres. The deepest hole intersected 75 metres of semi-massive and massive sulphides (true width of 35 metres) at a vertical depth of about 425 metres. Mineralization in the West zone dips steeply to the west and appears to plunge to the south, where it remains open along strike as well as at depth. Assays are still pending for holes 39-55. Results from the West zone to date are outlined in the accompanying chart (see page 15).

Quartz flooding

Wolfden’s success this season has not been confined to the West zone. In August, the company drilled two holes to test a ground electromagnetic survey anomaly. The discovery holes, HLW-03-30 and 32, cut a zone of intense quartz flooding with disseminated pyrite, chalcopyrite, sphalerite and rare visible gold. Assay results from hole 30 returned 11.9 grams gold and 66.7 grams silver over 5 metres starting at a down-hole depth of 43 metres. This included a 3-metre section that averaged 17.8 grams gold and 98.1 grams silver over 3 metres.

This new zone is on a separate stratigraphic horizon, parallel to and 200 metres east of the High Lake A/B and D zones. Hole 32 tested the downdip extension of the vein and cut 2.9 grams gold and 50.9 grams silver over 1.9 metres, starting at 62.1 metres down-hole. The company plans to step-out on both sides of the gold discovery and drill-test it along strike later this winter.

Immediately to the south of the High Lake ground, Wolfden inked a deal to earn a 70% stake in two adjoining mining claims held by Blackstone Ventures (blv-v).

The property, described as geologically similar to High Lake, hosts several gossans, base metal showings, and conductors that Wolfden believes might represent the southern extension of the favourable horizon at High Lake.

Wolfden paid Blackstone $6.5 million on signing and is required to cover future cash payments to the underlying property vendors. Wolfden must also sink $2 million into the property over four years and fork over $50,000 in cash to Blackstone following its earn-in. The property is subject to a 2% net smelter return royalty, which can be halved at any time for $1 million.

Geology

Wolfden’s High Lake project lies within the High Lake greenstone belt, in the northern part of the Slave structural province. This province consists of 3-billion-year-old basement gneisses overlain by younger, 2.7-billion-year-old sedimentary and bimodal volcanic rocks. The High Lake belt stretches south from Coronation Gulf for 140 km and varies from 5 to 30 km in width. The central part of the property is underlain by north-trending Archean-aged basaltic-to-rhyolitic flows and fragmental volcanics.

Argillites and greywacke underlie the eastern portion of the property and are cut by the Kennarctic River. Along the western part of the property, Late-Archean-age plutonic rocks intrude the volcanic pile. North-trending Proterozoic-aged diabase dykes of the MacKensie dyke swarm intrude all units.

Structurally, the property hosts northwest- and north-trending brittle faults, including the regionally significant High Lake fault. These structures indicate variable amounts of displacement prior to the emplacement of the diabase dykes.

Stratiform and stringer sulphide mineralization typical of volcanogenic massive sulphide deposits occur as discrete north- and northeast-striking, steeply dipping bodies.

History

Kennarctic Exploration discovered the property in the mid-1950s through airborne reconnaissance prospecting. In addition to mapping, sampling and geophysical work, the company drilled 52 holes (7,149 metres) in 1956-57.

This work led to a resource of 1.2 million tonnes averaging 5.37% copper and 1 gram gold per tonne in the A zone, 580,000 tonnes of 6.09% copper in the B zone, and 1.8 million tonnes of 2.51% copper, 4.2% zinc and 29.6 grams silver in the D zone.

The property then remained dormant until 1991, when Kennecott Canada and Aber Resources tried their luck at a second round of exploration. Over the next few years, the companies performed magnetic, electromagnetic and gravity surveys, along with surface mapping, sampling, and re-logging of drill holes. Also, 63 holes were drilled on the property and surrounding showings.

This work further delineated the known mineralization in the B zone and led to a resource of 5.3 million tonnes averaging 4.05% copper, 2.36% zinc, 1.76 grams gold and 31.73 grams silver.

At this point, the Northwest Territory diamond rush was in full bloom, and Aber changed its focus following the discovery of the A-154 kimberlite pipe on its Diavik property.

Wolfden entered the scene in 2001 and drilled 16 holes into the A/B zone with the goal of infilling gaps within the mineralization and verifying the grades. The most significant results that year occurred when Wolfden intersected mineralization where previous modeling had predicted it would be cut off by the large granitoid intrusive that marks the western extent of the property.

Exploration last year extended the main B zone at depth where it remains open. Wolfden also performed a regional airborne geophysical survey, which identified several anomalies that were tested this year.

In addition to Nunavut, Wolfden has advanced projects in Manitoba and Ontario, and has been raising money to fund its various exploration programs.

In early September, Wolfden completed an offering of 1.6 million flow-through shares priced at $5 apiece. The gross proceeds, $8 million, will be used to explore High Lake, as well as the Monument Bay property in Manitoba.

A month earlier, Wolfden closed a $14.7-million financing. It sold 2.7 million units priced at $2.60 apiece. A unit consisted of one share and half a warrant, with each whole warrant entitling the holder to buy another share at $3.25 any time prior to Jan. 31, 2005. An additional 2.75 million flow-through shares were sold at $2.75 apiece.

In July, Wolfden announced a $13.4-million bought-deal financing consisting of 2.5 million units priced at $2.60 apiece. Each unit consists of one share and half a share purchase warrant, with a whole warrant entitling the holder to subscribe for one additional share of Wolfden at $3.25 for 18 months from closing. Aggregate gross proceeds total $6.5 million. Another 2.5 million flow-through shares were priced at $2.75 each for aggregate gross proceeds of $6.8 million.

After all the financings, Wolfden has 40 million shares outstanding (46 million fully diluted). It has $34 million in cash and if all the warrents are exercised, it will get an additional $10-12 million.

WEST ZONE