Ontario snapshot: Seven companies in discovery and development mode

From the nickel hotbed of the Sudbury Basin to the high-grade gold of Red Lake and newer critical metal discoveries in between, Ontario hosts some of the world’s most productive mining camps and prospective mineral regions. Here are seven companies exploring for gold, nickel, lithium and palladium in Ontario.    

Canada Nickel 

Toronto-based Canada Nickel (TSXV: CNC; US-OTC: CNIKF) released a feasibility study on Oct. 12 for its Crawford nickel-cobalt project near Timmins, Ont. that revealed an after-tax net present value of US$2.6 billion (at an 8% discount) and an after-tax internal rate of return of 18.3%, including projected carbon capture and storage tax credits. 

The study outlines production of 3.5 billion lb. of nickel, 53 million lb. of cobalt, 490,000 oz. of platinum and palladium, 58 million tonnes of iron and 6.2 million lb. of chromium over a 41-year life.  

The capex over the first two phases of the operation is estimated at US$3.5 billion. With sustaining capital projected at US$1.6 billion, the total life of mine capex is pegged at just over US$5.1 billion. 

Proven and probable reserves total 3.8 million tonnes of contained nickel from 1.7 billion tonnes of ore grading 0.22% nickel. Additional inferred resources come to 3.7 million tonnes of contained nickel. Those totals qualify Crawford, 42 km north of Timmins, as host to the world’s second largest reserves and resources of nickel, the company said. 

Ore will be mined from two open pits over the first two phases of the operation, followed by 11 years of production from lower-grade stockpiled ore which will be deposited in the first pit once it has been depleted in year 17. 

Annual earnings before interest, taxes, depreciation and amortization (EBITDA) is pegged at US$811 million over the peak period and US$667 million over the project life.  Free cash flow is estimated at US$540 million annually and US$431 million over the life of the project. 

Canada Nickel CEO Mark Selby described the study “as a major step forward in demonstrating the value of our Timmins Nickel District and its potential to anchor a Zero Carbon Industrial Cluster in the Timmins-Cochrane District.” 

The company anticipates it can capture and store 1.5 million tonnes of carbon dioxide annually using its proprietary In-Process Tailings carbonation method. 

Canada Nickel has also assembled a portfolio of other properties in the region, including the Texmont project 36 km south of Timmins. It acquired Texmont, which has a historic resource estimate of 3.2 million tonnes grading 0.9% nickel, was in March. The company is evaluating the potential for near-term production from the past producing Texmont mine. 

Canada Nickel has a market capitalization of $167.3 million. 

Generation Mining 

Generation Mining (TSX: GENM; US-OTC: GENMF) is advancing its flagship Marathon palladium-copper project in northwestern Ontario, located 10 km north of Marathon and 300 km east of Thunder Bay.  

On Sept. 14, the Toronto-based company reported an invitation from Ontario’s Ministry of Mines to submit a closure plan for Marathon, one of several permitting milestones the company has reached over the last couple years.  

An updated feasibility study for the project released in March estimates production of 2.1 million oz. of palladium, 517 million lb. of copper, 485,000 oz. of platinum, 158,000 oz. of gold and 3.2 million oz. of silver (3.6 million oz. of palladium-equivalent) over a 12.5-year mine life. The study estimates a net present value of $1.2 billion at a discount rate of 6%, a 25.8% internal rate of return and a 2.3-year payback based on a price of US$1,800 for palladium and US$3.70 per lb. for copper. Initial capital costs are estimated at $1.1 billion. Approximately 58% of the revenue will come from palladium and 29% from copper. 

The project envisions three open pits and an on-site 25,200-tonne-per-day ore processing facility to produce a copper-palladium concentrate which will be delivered to a third-party facility for further downstream processing. Throughput is expected to increase to 27,700 tonnes per day following the completion of a powerline upgrade scheduled for year two of the operation. 

In November 2022, Generation received approval from both levels of government to proceed with the project subject to certain conditions. The company had filed its Environmental Impact Statement with the federal-provincial Joint Review Panel in early 2021, with public hearings concluding last May. The company acquired a 51% interest in the project from Sibanye-Stillwater (NYSE: SBSW; JSE: SSW) in 2019 and a 100% interest in January 2022. 

A production decision is dependent on the receipt of additional permits. 

On Sept. 13 Generation announced an agreement to sell its rights and interests in the molybdenum-tungsten Davidson property near Smithers, B.C. to Moon River Capital (TSXV: MOO.P) for $630,000 in cash and 9 million common shares of Moon River. 

Generation Mining has a market capitalization of $62.4 million. 

Laurion Mineral Exploration 

Northwest of Marathon, Laurion Mineral Exploration (TSXV: LME; US-OTC: LMEFF) is focused on its flagship 57.4-sq.-km Ishkoday gold and polymetallic property.  

On Oct. 11, Laurion announced the acquisition of 53 mineral claims encompassing 10-sq.-km immediately to the west of Ishkoday.  The claims were acquired from two arms-length parties for 142,857 shares at a deemed price of 70¢ apiece representing an aggregate purchase price of $100,000. The vendors were also granted a 1% net smelter royalty on gold and base metal production from the property. The previous week, Laurion began a 3,675-metre drill program at Ishkoday. 

This summer, the Toronto-based company completed a sensor-based ore sorting test of material from a large surface stockpile. In June, Laurion concluded that sorting technology “may very well improve the economics of the project and result in a more compact processing facility,” provided the company is able to define additional resources to warrant a processing plant with a capacity of over 1,000 tonnes per day. 

A 2013 technical report estimated the stockpile contained 144,070 tonnes grading 1.59 grams gold per tonne in the indicated category. 

Ishkoday is located 60 km west of Geraldton and 10 km north of the Trans-Canada Highway along Provincial Road 801. The property contains the past producing Sturgeon River mine, which operated from 1936 to 1942, producing 73,439 oz. of gold and 15,922 oz. of silver from 145,123 tonnes of ore grading 17 grams gold per tonne. In 2020, Laurion acquired the adjacent Brenbar property hosting the historic namesake mine which is thought to be on strike of the Sturgeon River mineralization. 

Laurion Mineral Exploration has a market capitalization of $165.1 million. 

Magna Mining 

Magna Mining (TSXV: NICU; US-OTC: MGMNF) holds the past producing Crean Hill nickel project in Sudbury. 

On July 31, the Sudbury-based company released a preliminary economic assessment (PEA) for Crean Hill revealing a 15-year mine life in a base case scenario. Initial capital costs were estimated at only $81 million and minimal permitting would be required before starting advanced exploration development. That scenario, which would see the sale of material to a third-party mill in Sudbury, has an after-tax net present value (NPV) of $230.4 million based on an 8% discount rate and an internal rate of return (IRR) of 23.4%. 

An alternative processing scenario, which would require the construction of a mill at Magna’s Shakespeare project, 37 km west of Crean Hill, generates an NPV of $516.1 million based on an 8% discount rate and an IRR of 38.4%. 

The scenario would also extend the mine life to 19 years and increase the total mined resource to 28.2 million tonnes from 20.1 million tonnes. 

The Crean Hill mine was operated by Inco from 1900 to 2002, with mining focused on contact style nickel-copper mineralization. Following closure, Lonmin Canada entered into an option agreement for the property and completed approximately 90,000 metres of drilling focused on the low sulphide, high PGM potential of the footwall host rocks. 

Magna assumed ownership of Crean Hill by purchasing Lonmin Canada for $19 million in September 2022. 

The Shakespeare project, which has an existing NI 43-101 resource, and permits for the construction of a 4,500 tonne per day mill and the recommencement of open pit mining, was acquired by Magna in 2017 through the purchase of Ursa Major Minerals. Magna’s portfolio also includes the Shining Tree project, 100 km north of Sudbury and the P-4 project, 5 km northeast of Shakespeare. 

A forthcoming technical study will incorporate diamond drilling completed by Magna since its acquisition of Crean Hill and further analysis of an integrated mining complex with the Shakespeare project. 

Recent drill results reported Aug. 15 and Sept. 21 at Crean Hill include an intersection of 4.2% nickel, 0.9% copper, 1.4 g/t platinum, palladium and gold over 7 metres. 

Magna Mining has a market capitalization of $77.4 million. 

Power Metals 

Power Metals (TSXV: PWM; US-OTC: PWRMF) is a Vancouver-based company with a 100% interest in the Case Lake lithium, cesium and tantalum property 100 km north of Kirkland Lake in northeastern Ontario.  

High-resolution airborne magnetic and LiDAR surveys over the Case Lake property were completed in June and were followed by a field-based prospecting and mapping program which identified the discovery of new 10 to 15-metre wide spodumene bearing pegmatites with grades as high as 1.12% lithium oxide (Li₂O). A 15,000-metre drill program is planned for this fall. 

The Case Lake pegmatite swarm consists of six spodumene dikes on the Henry Dome and the West Joe dike on a new tonalite dome collectively forming a mineralization trend that extends for 10 km. 

Previous drilling of 15,700 metres from 2017 to 2022 produced intersections as high as 14.7% cesium monoxide over 1 metre in the West Joe spodumene pegmatite, according to results reported Nov. 13, 2018. Other high-grade lithium and tantalum intervals included 3.88% Li₂O and 232 parts per million (ppm) tantalum over 0.8 metre and 3,783 ppm tantalum and 2.53% Li₂O over 1 metre in hole PWM-18-124. 

Power Metals entered into an agreement with Australia-based Winsome Resources (ASX: WR1) on Aug. 24 to acquire a 100% interest in the latter’s Decelles and Mazerac lithium properties in northwestern Quebec. 

Once executed, the transaction will increase Winsome’s ownership of Power Metals from 9.9% to 19.5%. 

The Decelles project consists of 669 claims covering an area of 384-sq.-km near Val-d’Or and Rouyn-Noranda while the Mazerac property holds 259 claims across 147 sq. km, located 30 km east of Decelles. 

According to Power Metals chairman Jonathan Moore, the company’s strong cash position allows it to expand its exploration activity to the two Quebec properties. 

Power Metals has a market capitalization of $40 million. 

Red Pine Exploration 

Red Pine Exploration (TSXV: RPX; US-OTC: RDEXF) continues to report “mineralization of significance” beyond the footprint of existing resources at its flagship 100%-owned Wawa gold project in northeastern Ontario, including one drill result of 5.1 grams gold per tonne over 19.8 metres from hole SD-23-446 reported Sept. 21. 

Another encouraging result of 10.92 grams gold over 28.1 metres, including 209.1 grams gold, 49.9 grams gold and 28 grams gold — all over 1 metre — from hole SD-23-442 was reported on Sept. 14. 

The 70.3-sq.-km property located 2 km southeast of Wawa has a 2019 indicated resource of 1.3 million tonnes grading 5.47 grams gold per tonne for 230,000 oz. and an inferred resource of 2.7 million tonnes grading 5.39 grams gold for 471,000 ounces. 

“The footprint of a new resource contained within a shallow optimized open pit and encompassing our existing resource continues to take shape,” commented Red Pine president and CEO Quentin Yarie. 

The results from Red Pine’s 20,000-metre 2023 drill program will be included in an updated resource anticipated for the second or third quarter of 2024. 

On Aug. 29, the Toronto-based company announced a 1.5% net smelter return royalty agreement with Franco-Nevada (TSX; FNV; NYSE: FNV) for its Wawa gold project in return for immediate cash proceeds of $6.75 million to be used for continued exploration and ongoing working capital. 

“On the back of this non-dilutive financing and with over $10 million cash on hand, we are well positioned to deliver on our exploration goals, including ongoing infill and expansion drilling, an updated mineral resource estimate defining the open pit exploration target and a potential preliminary economic assessment,” Yarie said. 

As of Sept. 21, Red Pine had two drill rigs on-site and was producing over 4,000 metres of core per month. 

Red Pine Exploration has a market capitalization of $25.2 million. 

West Red Lake Gold Mines 

Vancouver-based West Red Lake Gold Mines (TSXV: WRLG; US-OTC: WRLGF) holds its flagship Madsen mine and Rowan project in the prospective Red Lake gold district of northwestern Ontario.  

In an Oct. 3 project update, the company announced that it plans to put Madsen back into production in 2025. West Red Lake assumed ownership of the property on June 16 after former owner Pure Gold suspended operations on Oct. 24, 2022, and was granted creditor protection a week later. 

West Red Lake also announced that a 35,000-metre drill program for the nearby Rowan project would start in early 2024, and the completion of a PEA for its portfolio of properties in the district. It also plans to complete a resource estimate for Rowan as well as its Wedge deposit 2 km southwest of Madsen by the end of 2024. 

Ore from Rowan and Wedge will provide additional feed for the new 800-tonne-per-day Madsen processing facility. 

Over the next 12 months, West Red Lake also plans 3,200 metres of underground development to support underground drilling. 

The Madsen property has two portals and ramp access to 525 metres below surface. The operation also has an existing 1,275-metre shaft, headframe and hoist that were last operational in 2013. A resource estimate for Madsen dated Dec. 31, 2021, reported 6.9 million tonnes grading 7.4 grams gold per tonne for 1.7 million oz. in the indicated category and 1.8 million tonnes grading 6.3 grams gold for 366,200 inferred ounces. 

On Oct. 11, West Red Lake reported an intersection of 45.2 grams gold per tonne over 2 metres, 12.81 grams gold gold over 2.3 metres and 33.47 grams gold over 1.4 metres at Rowan. An earlier assay result from Sept. 12 reported 70.8 grams gold over 8.3 metres, including 1,120.19 grams gold over 0.5 metre. The 31-sq.-km property, which includes the Rowan, Mount Jamie and Red Summit past producing mines, currently has an inferred resource of 827,462 oz. in 2.8 million tonnes grading 9.2 grams gold. 

The Wedge deposit, adjacent to the past producing Starrat-Olsen mine, has an indicated resource of 313,700 tonnes grading 5.6 grams gold per tonne for 56,000 oz. and an inferred resource of 431,100 tonnes grading 5.7 grams gold for 78,700 oz. 

West Red Lake Gold Mines has a market capitalization of $114.2 million.