Nunavut explorers fired up for 2012

Nunavut has been a tough place for gold companies of late, with Newmont Mining (NMC-T, NEM-N) shelving its Hope Bay gold project and Agnico-Eagle Mines (AEM-T, AEM-N) cutting years off its new Meadowbank gold mine in the face of cost overruns.

But it is still early years for the territory and for gold exploration there, with encouraging news already coming out this season from several advanced explorers in the region.  

Sabina Gold & Silver (SBB-T) has reported several high-grade hits from the Llama deposit on the Goose claim block of its Back River project. And while the results are part of an infill program to upgrade inferred resources, they are some of the best to date from the deposit.

Hole 141, targeting the south end of the deposit, cut 36 metres averaging 15.16 grams gold per tonne from 81 metres depth, and then 41 metres carrying 7.15 grams gold from 169 metres downhole. Hole 153, collared roughly 50 metres north of 141, returned 13 metres carrying 21.58 grams gold from 64 metres depth. Hole 152, collared 200 metres north of hole 153, hit 20 metres carrying 8.58 grams gold from 78 metres downhole.

Company president and CEO Rob Pease states that the complex structure of the deposit, marked by faulting and displacement of the host iron formation to the south, has made expanding the Llama deposit difficult, but that the latest results should enhance the resource.

The open-pit Llama resource stands at 1.86 million indicated tonnes grading 9.41 grams gold for 562,000 oz. gold, and 981,000 inferred tonnes averaging 5.71 grams gold for 180,000 oz. gold. The total Back River resource, including the Goose, Llama and Umwelt open-pit and underground deposits, stands at 22.3 million indicated tonnes grading 5.62 grams gold for 4 million oz. gold, and 10 million inferred tonnes averaging 6.23 grams gold for 2 million oz. gold.

Sabina ended 2011 with $160 million in cash and plans to spend $70 million on exploration and project advancement this year, including 76,000 metres of drilling. 

Roughly 40% of the drilling will be focused on expanding the Llama and Umwelt deposits, 30% on infill drilling and the rest on finding new discoveries on Sabina’s Wishbone, Goose, George and Boulder Pond properties.

Announcing its first 2012 exploration results on the same day as Sabina, North Country Gold (NCG-V) reports it has extended gold mineralization at its Three Bluffs gold deposit by 200 metres depth.

Deep-hole 12TB134, drilled at the eastern end of the deposit, hit 17 metres grading 6.74 grams gold per tonne from 578 metres depth within a wider interval of 104 metres averaging 2 grams gold from 492 metres depth. The hole tested an area 200 metres below hole 05TB038 — which was previously one of the deepest holes at the project — and hit 5 metres averaging 36.25 grams gold.

The latest hit points to the potential of extending the resource at depth, and reinforces findings from a Titan 24 geophysical survey which showed that resistivity lows correlating to known gold zones extend to at least 500 metres depth over wide areas.

The Three Bluffs deposit, as of an early April update, hosts 4.3 million tonnes grading 4.9 grams gold for 678,000 oz. gold in a combined open-pit and underground resource. Total inferred resources, also combining the two categories, stand at 4.5 million tonnes grading 5.69 grams gold for 829,000 oz. gold. 

The deposit, a structurally controlled lode gold system hosted within oxide-facies iron formation and greywackes, is based on 52,000 metres of drilling between 1994 and 2011.

For 2012 North Country plans to drill 12,000 metres, targeting exactly the kind of high-grade hits at depth that hole 12TB134 encountered. 

The company raised $12 million at 75¢ and 90¢ per common and flow-through share last December.

Finally, Elgin Mining (ELG-T) released drill results from its past-producing Lupin mine in Nunavut only a few days before the results from Sabina and North Country.

Results conformed with expectations, with holes in the West zone south shaft returning 5 metres grading 22.45 grams gold and 2 metres averaging 11.1 grams gold, and holes in the L19 zone returning 9 metres averaging 10.34 grams gold and 15 metres carrying 5.58 grams gold.

As of a late March estimate, the West zone hosts 1.1 million inferred tonnes grading 11.32 grams gold for 403,600 oz. gold. 

Kinross Gold (K-T, KGC-N) and its predecessor Echo Bay Mines operated the mine until shutting it in early 2005, by which time the mine had produced 3.3 million oz. gold at an average head grade of 9 grams gold.

The company is working to develop the Lupin and Ulu gold deposits in Nunavut that it acquired in mid-2011. 

Elgin has also closed its merger with Gold-Ore Resources, with shareholders voting in favour of the deal on April 30.

All three Nunavut-focused companies have seen significant pressure on their stock price in the past year, with Elgin dropping from a high of $2 a year ago to a recent low of 76¢, North Country dropping from a high of $2.05 last May to a recent low of 28¢ and Sabina from a high of $7.32 a year ago to a recent low of $2.27.

The latest news has breathed some life into the stocks, though, with Sabina up 34¢, or 14.2% to $2.74; North Country up 9¢, or 31% to 38¢; and Elgin up 5¢, or 6.3% to 85¢.