Confederation gets to know Newman Todd

VANCOUVER — Two years into exploring the Newman Todd gold project in Ontario’s Red Lake district, Confederation Minerals (CFM-V) has a handle on how to hit the project’s gold-bearing carbonate zones. The result is a high drilling success rate that is providing piles of data for the project’s initial resource estimate and preliminary economic assessment (PEA), both already underway.

Confederation is earning a 70% stake in Newman Todd from Redstar Gold (RGC-V) under a deal signed in 2010 that requires Confederation to complete a resource estimate and a PEA before 2017.

The biggest challenge in meeting the mark is not finding enough gold to support its efforts. The company is aiming to focus in on a manageable portion of Newman Todd’s alteration zone, which stretches along 1.8 km of strike and across 70 metres to 200 metres width.

In its first year exploring the site in 2011, Confederation covered the zone with widely spaced drilling.

Last year the company followed up on the best results from this initial program. The two programs showed that there were multiple gold-bearing carbonate lenses within the quartz-carbonate breccia.

This year Confederation is focusing on the Hinge zone, a 200-metre portion of the Main zone where the alteration bends slightly. With just 25 metres between holes, the company is seeking out detailed information about the shape and size of each gold-bearing lens.

This information will be useful in two ways. First, Confederation’s geologists will gain a deeper understanding of the geological controls on mineralization, which can be extrapolated along the Newman Todd alteration zone to get a rough idea of the volume of mineralization. Second, the drill data will be used for the resource estimate.

“In Red Lake it is well understood that mineralization will likely extend to depth, with relatively modest lateral dimensions,” says Brian Bapty, president of Confederation. “However, within that context, our 1.8 km strike length at Newman Todd is simply immense. By focusing our exploration efforts during the winter program on a small area in the centre of the property, we were able to better understand the geologic controls, confirm the local dimensions of these structures and extend them along strike and to depth.”

A constrained drill plan is also helping Confederation test for near-surface gold. Earlier drill efforts focused on intersecting the structure at depth, and did not probe its near-surface projection.

Results from the winter drill program suggest that Confederation’s drills hit both shallow and deep gold. In the near-surface category, hole 142 returned 6 metres of 13.2 grams gold per tonne from 52 metres depth, followed by 18 metres of 3.11 grams gold from 79 metres.

Hole 131 produced similar intercepts: 1.82 grams gold over 16 metres from 5 metres downhole, and 1.30 grams gold over 38 metres from 75 metres depth. Hole 135 returned two near-surface hits, cutting 18 metres of 1.47 grams gold from 43 metres depth, followed by 13 metres of 1.40 grams gold from 71 metres downhole. Hole 135 also intersected 36 metres grading 1.92 grams gold from 103 metres downhole.

The higher-grade hits, however, occur at depth. The most significant result from the latest set came from hole 148, which was collared on the northern end of the Hinge zone. The hole cut through 8 metres of 3.2 grams gold from just 10 metres downhole, but the high grade came almost 200 metres later when the drill intersected 7 metres of 32.6 grams gold. Thirty metres later the drill encountered a one-metre interval carrying 174.1 grams gold.

“The current results — in particular, the seven-metre-wide zone — continue to indicate that wide, high-grade zones exist within the system,” Bapty says. “Adding further high-grade near-surface intercept, thereby increasing the potential for something of significant size and economics, is on our near-term exploration agenda.”

While drilling progresses, Confederation is advancing a PEA for Newman Todd that focuses on the Hinge zone. The company expects to finish this study by year-end. The study will assess whether to develop a small open pit as a starter operation, or use underground mining alone for Newman Todd.

Confederation’s share price was unchanged at 15¢ after news of its latest results from Newman Todd. The company has a 52-week trading range of 10¢ to 45¢, and 55.3 million shares outstanding.