Anglo, Knight to keep at it in Ungava

Recent drill results may have disappointed the stock market, but joint-venture partners Anglo American (AAUK-Q) and Knight Resources (KNP-V) still plan a large exploration program next year on their West Raglan property in the Nunavik area of northern Quebec.

Shares in Knight Resources fell 18, to 35, after the company announced initial results from drill holes on the Frontier prospects, where drilling in 2003 intersected several high-grade nickel and copper zones. The first set of results from Anglo’s 2004 program returned generally lower grades and, in many cases, narrower widths than the 2003 holes had shown.

Of six new holes on the Frontier Central prospect, three intersected significant mineralization. One hole, WR04-19, tested 60 metres downdip from one of last year’s intersections, where high-grade nickel and copper mineralization had been encountered over a 5-metre core length. The new hole cut two mineralized intersections, one grading 0.32% nickel, 0.13% copper and 0.21 gram palladium per tonne over 2.1 metres, and another grading 0.35% nickel, 0.09% copper and 0.16 gram palladium over 5.7 metres. All the intersections had trace platinum and cobalt credits.

Two stepouts west of WR04-19 intersected disseminated sulphide mineralization; one cut 1.8 metres that averaged 0.48% nickel, 0.15% copper and 0.17 gram palladium, and the other, 3.5 metres that ran 0.36% nickel, 0.09% copper and 0.15 gram palladium.

Core from four more holes on the prospect is out for assaying.

At the Frontier South prospect, where two drill holes had intersected wide zones of nickel and copper mineralization in 2003, a hole drilled on the same section as the mineralized holes intersected 2.9 metres of disseminated sulphides grading 0.39% nickel, 0.15% copper and 0.23 gram palladium per tonne, plus platinum and cobalt credits. Results from 12 more holes are pending.

Two of the three holes Anglo drilled at the Frontier East prospect intersected disseminated sulphides, hosted, in one case, in sedimentary wall rock as well as in the ultramafic sill target. Hole WR04-23, which intersected the mineralized sediments, cut a 3.5-metre intersection grading 0.38% nickel, 0.49% copper and 0.28 gram palladium per tonne, plus 5.6 metres in the ultramafic that averaged 0.95% nickel, 0.28% copper and 0.2 gram platinum and 0.84 gram palladium.

Another 87 metres to the west, hole WR04-29 intersected 3 metres grading 0.41% nickel, 0.12% copper and 0.18 gram palladium.

Another prospect, the Red zone, was drill-tested for the first time this past field season. There, one hole intersected disseminated, and one hole, massive sulphide material. Hole WR04-33 returned assays of 5.75% nickel, 1.35% copper, 0.21% cobalt, 0.46 gram platinum and 2.97 grams palladium in 0.55 metre of massive sulphides. Hole WR04-31 cut 3 metres of disseminated sulphides grading 0.23% ncikel, 0.59% copper and 0.17 gram palladium. There are seven more Red zone holes with core now at the lab.

Holes at two other prospects, Frontier West and Target 36, did not intersect any significant mineralization. The drill program has not found the source of strongly mineralized boulders from Frontier West.

Results from drill holes at four other prospects — Seahawk, Zone 111, CDC and Rainday — are pending.

Anglo and Knight, which is earning a 49% interest in the property, have taken encouragement from the nickel “tenor” — the nickel concentration in the sulphides alone, as opposed to the nickel grade in the whole rock. At Frontier Central and South, nickel tenors in the recent drill holes are broadly higher than in the holes drilled in 2003; they are comparable in the new drill holes at Frontier East. The higher nickel tenors suggest potential for relatively high nickel grades in disseminated sulphides.

Anglo also completed surface exploration on regional targets east and west of the Frontier area. In the Boomerang area, about 28 km east of Frontier, a surface prospect has been identified with frost-heaved sediments grading 0.77% nickel.

At Terrace, 12 km west of Frontier, Anglo has discovered surface sulphide showings in ultramafic rocks, in an area where mineralized boulders have returned nickel grades ranging from 0.12% to 1.22%. There are also mineralized ultramafic boulders at the westernmost showing, Nanuk, 8 km west of Terrace.