Unusual and exotic deposit types compete for attention at Roundup

With 56% of juniors listed on the TSX Venture Exchange focused on precious metals, it’s no surprise that gold and copper-gold projects dominated Mineral Exploration Roundup held here in late January. But some unconventional projects were showcased, too, ranging from rare earths to a novel nickel deposit.

At the B.C., Yukon and Alaska Exploration Highlights session, First Point Minerals (FPX-V) was the only company of eight not featuring gold or large-scale copper projects.

The company describes its Decar project as “outside the nickel box,” which is fitting as the exploration target is awaruite, a naturally occurring nickel-iron alloy named after its occurrence in Awarua Bay on New Zealand’s South Island.

First Point has eight nickel-iron alloy properties covering large ultramafic complexes in central and northwestern B.C. Five, including Decar, are north of Fort St. James and three others are west of Dease Lake.

First Point first optioned Decar in 1997, but dropped it a year later as nickel prices were low and the mineralization was difficult to detect. But the company saw favourable characteristics, including potential for mining on the same scale as B.C.’s large open-pit copper mines, and revisited this concept after reacquiring the ground in 2007. 

The alloy is 75% nickel, 25% iron, very magnetic and dense, and widely disseminated. The absence of sulphur makes this deposit type suitable for the production of a concentrate that could be sold directly to steel mills without incurring smelting charges, thus reducing operating costs as well as environmental risks.

First Point tried to find a nickel producer as a partner, but found them “entrenched inside their nickel box” and unwilling to “lift their eyes above the rim.”

In 2009, Decar caught the attention of Cliffs Natural Resources (CLF-N), which inked a deal to earn an initial 51% interest by spending US$5 million on the property over four years. This can be increased to 75% by completing a feasibility study.

Cliffs is North America’s largest producer of iron ore pellets and a major supplier of direct-shipping lump and fines iron ore out of Australia, where it also produces coal. The company has operating experience with large-scale magnetic and gravity processing that could be applicable to Decar, and as part of the due diligence, tested the nickel-iron alloy mineralization at its metallurgical test facility.

First Point, as operator of the joint venture, completed 10 holes totaling 2,573 metres during the 2010 work program. Seven returned long continuous intersections of nickel-iron alloy mineralization, with grades ranging from 0.105% to 0.147% nickel over lengths of 163 to 328 metres.

In late 2010, Cliffs notified First Point that it would continue funding the Decar project this year. First Point is also planning a $370,000 work program for five other nickel-iron alloy properties, which are at earlier stages of exploration.

Exploration for rare earth elements (REEs) has picked up steam in recent years, according to government geologists reviewing exploration activity in their jurisdictions.

The Bokan Mountain project in Alaska was among those cited. This project, owned by Ucore Rare Metals (UCU-V, UURAF-O), has been a newsmaker since the U.S. Department of Defense set out to document domestic sources of strategic REEs in response to concerns that China, which supplies 97% of this global market, might cut exports. Particular attention was paid to the heavy REEs such as dysprosium, terbium, europium and yttrium, some of which have more than doubled in value in the past 18 months in response to supply concerns.

The U.S. Geological Survey, tasked to assist with this effort, identified Bokan as among the three largest domestic rare earth deposits in the U.S. Of those three, Bokan was found to have the highest relative skew of the heavy REEs specified as being most critical to U.S. defence applications and most at risk of suffering cutbacks from China. An independent REE expert also found that Bokan has the best potential to achieve production with three or four years at a much lower cost than its U.S. competitors.

The Bokan Mountain project is located 60 km southwest of Ketchikan, has deep water access, favourable metallurgy and other advantages; however its historic resources are not yet compliant with National Instrument 43-101 standards.

B.C. government geologists also note that exploration for REE deposits has picked up in the province, largely focused along the length of the Rocky Mountain carbonatite belt, which hasn’t had much attention in the past. One such project, Carbo, is being explored by Canadian International Minerals (CIN-V) as a 75%-25% joint venture with Commerce Resources (CCE-V, CMRZF-O). The project is located roughly 80 km northeast of Prince George.

A nine-hole drill program totaling 1,938 metres was completed at Carbo in late 2010, and results are pending. This year’s proposed drilling will test targets widely dispersed along a 5-km-long trend of the Wicheeda carbonatite complex.

Commerce also has a rare earth project in Quebec, but its flagship is the Upper Fir tantalum-niobium project near Blue River, B.C., about 90 km south of Valemount. A preliminary economic assessment is now underway, focused on a large indicated resource within the tantalum and niobium-bearing carbonatite.

Commerce recently announced a new NI 43-101 compliant resource estimate for the Upper Fir deposit. Indicated resources total 36.35 million tonnes containing 195 parts per million (or grams per tonne) Ta₂O₅ and 1,700 ppm Nb₂O₅ and inferred resources total 6.4 million tonnes containing 199 ppm Ta₂O₅ and 1,890 ppm Nb₂O₅.

Taseko Mines (TKO-T, TGB-N) was also cited for its Aley niobium project near Mackenzie, B.C. Interest in this deposit type is spurred by robust demand from the steel industry (niobium is used to strengthen steel) and the strong performance of Iamgold‘s (IMG-T, IAG-N) Niobec niobium mine in Quebec, which is one of only three significant niobium mines supplying the global market.

Taseko’s recent drilling at Akie (23 holes in 2010) has confirmed an extensive body of niobium mineralization, open to expansion in three directions and at depth. Some notable high-grade drill intersections include 125.3 metres at 0.53% Nb₂O₅ and 207.3 metres at 0.66% Nb₂O₅. (Niobec’s grades average 0.45% to 0.55% Nb₂O₅.)

There are other unconventional projects in Western Canada and Alaska beyond these few presented or cited in Roundup’s technical sessions. This sampling shows the growing diversity of mineral targets now being pursued by junior companies, as well as the merits of taking innovative approaches to mineral development.

– The author is a freelance writer based in Vancouver, and a former editor of The Northern Miner.