Base metal, diamond plays boost Saskatchewan while gold falls

Exploration and pre-development expenditures in Saskatchewan are estimated at $45 million for 1991 compared with $57 million in 1990, and $105 million in the recent peak year of 1988. While base metals have been maintained as a result of the McIlvenna Bay zinc-copper discovery and diamonds have continued to add a new facet to Sask-atchewan’s exploration scene, gold exploration activity has tumbled to 10% of the 1988 high.

Underground test mining at Cigar Lake has helped uranium activity; however, funding for surface exploration has fallen to 50% of that in 1988 and less than 10% of that of the uranium boom of 1980.

In 1990, Saskatchewan remained the focus of uranium production and exploration in Canada. Major discoveries continue to be made in the Athabasca Basin in spite of poor uranium spot prices below US $10 per lb. and declining surface exploration.

Some dozen companies operate uranium exploration joint ventures in the Athabasca Basin. Among these, Camreco is the key player with 50% of the basin’s currently identified reserves of around 350,000 tons uranium metal.

Exploration in the southeastern part of the Athabasca Basin is aimed at the discovery of another major deposit of the Key Lake-Cigar Lake type.

Cameco, as operator of the McArthur River joint venture, confirmed the McArthur River P2 North find as a high-grade uranium deposit possibly containing more than 77,000 tons uranium at an average grade exceeding 3.4% uranium. Uranium mineralization occurs at a depth of 1,650-1,800 ft. It is geochemically simple, in contrast to that of many other unconformity type deposits, and is hosted by silicified sandstones that lack the clay alteration which has created problems underground at the Cigar and Midwest Lake test mines.

Minataco announced the acquisition of the interests of its joint venture partners, Canadian Occidental Petroleum Ltd. and Canadian Nickel Co. Ltd., in the Wolly Project and now owns 100%. The company has submitted an environmental impact statement containing plans to mine the McClean Lake, JEB and Sue trend deposits based on reserves, estimated at some 16,530 tons uranium grading around 2.5% uranium.

The Sue trend deposits and the previously discovered JEB represent open pit prospects, whereas the McClean Lake deposits, at 500-550 ft. below the surface, are considered an underground operation. Exploration is continuing on the property.

Gold exploration continued in the La Ronge and Glennie Lake Domains at a much reduced level. The reduction in activity since 1988 does not tell the whole story, as during this period two new gold mines, Jolu and Jasper, have opened and two, Seabee and Bakos, are under development or planned.

The Jolu mine will probably close in the next few months due to reserve depletion. During the 12 months ended Dec. 31, 1990, the mine produced 74,032 oz. gold, at an operating cost of US$166 per oz. Total production since start up in November, 1988 stands at 159,986 oz. from 390,000 tons of ore grading 0.42 oz. gold per ton. An underground diamond drill program to 2,300 ft. below surface has failed to locate any significant additional mineralization.

The Jasper mine, discovered in June, 1987, began production April 15, 1990. The mill head grade has exceeded expectations and production totalled around 33,700 oz. in 1990. Ore is processed in the nearby 250 ton-per-day Star Lake mill. At the outset of mining, reserves of 180,000 tons grading 0.47 oz. gold were expected to yield about 85,000 oz. over a 2-year mine life. A new exploration program has been undertaken to probe for additional ore at depth and down plunge from the mine’s main and 104 zones.

In the Glennie Lake Domain, Claude Resources (TSE) has commenced construction of a 400-ton-per-day mine/mill, $22-million facility at the Seabee deposit. Annual production of 52,000 oz. at a cost of around US$210 per oz. is forecast for five years, based on current reserve levels. Startup is envisaged in November, 1991.

During 1989-90, an underground exploration program for Seabee was initiated, comprising drifting, raising, bulk sampling and drilling, to confirm the reserve grade as well as upgrade ore reserve categories. Reserves in all classes in all zones were estimated at 1.14 million tons grading 0.4 oz. gold, proven reserves in zones 2 and 5 at 380,000 tons grading 0.49 oz., and proven and probable reserves in the same two zones at 660,000 tons averaging 0.45 oz. The 4,500-ton bulk sample taken from the sill drifts and raises in zone 2 confirmed the grade of the deposit indicated by the uncut drill hole assays.

The Bakos Zone at Contact Lake is located within La Ronge Provincial Park, 40 km north of La Ronge. The deposit lies within a shear zone, which cuts the granitic phases of the Little Deer Pluton. A preliminary feasibility study estimates mineable reserves within the BK 1 and BK 2 zones of the Bakos structure at 1.46 million tons grading 0.24 oz. gold, to a depth of 820 ft. The recently drilled BK 3 zone shows possible reserves of 250,000 tons grading 0.35 oz. gold, and the newly discovered Upper Structure holds considerable potential for additional reserves. High gold values were intersected in five holes in this new structure, four of which averaged over one ounce gold over significant widths. To date, drilling has investigated only one-half mile of the 1.5-mile-long shear structure.

The feasibility study calls for a 700-ton-per-day, $39-million mine/mill complex producing 64,000 oz. gold annually at a cost of US$250 per oz. Further north in the La Ronge Domain, numerous gold showings are located along the Byers Fault and associated fault structures. The fault system has a strike length of 15 miles and a width of 1.2 miles. Golden Rule Resources (TSE) is the main operator of properties in the Byers Fault area following an exchange agreement effective Jan. 1, 1990, with joint venture partners Goldsil Resources (TSE) and Cameco.

In 1990, Golden Rule drill tested the Tower East and the Niko prospects. At Tower East, reserves are now estimated at 600,000 tons grading 0.2 oz. gold. At Niko, the Red Cube and Cornflake zones contain 180,000 tons grading 0.14 oz. gold.

The new drilling made numerous significant intersections, including 125 ft. of 0.50 oz. gold and has led to a new reserve estimate of 560,000 tons grading 0.43 oz. gold, compared with a previous figure of 1.6 million tons grading 0.15 oz. gold. These programs are designed to build reserves in the area under a central mill concept, which would also include reserves from the Golden Heart and Weedy “B” deposits at the eastern extension of the Byers Fault.

Regarding base metals, shareholders of Trimin Resources (TSE) recently accepted an offer by Billiton Metals Canada to purchase Trimin’s 32.9% share in the McIlvenna Bay zinc-copper deposit for $17.5 million. This discovery was made by joint venture partner Cameco (67.1%) in 1988. The sulphide mineralization, which occurs in conformable lenses, is part of a typical volcanogenic zinc-copper deposit comprising massive and stringer sulphides hosted by variably altered felsic metavolcanic rocks.

Mineralization persists over a minimum strike length of 2,000 ft. and to a vertical depth of 2,900 ft. The main number 2 ore lens remains open below the 2,900-ft level and continues to plunge to the northwest at roughly 45 with an apparent consistent grade and thickness.

A newly discovered fourth sulphide lens, mainly of copper, has been intersected at the 1,300-ft. level. Reserves from Lenses 1-3 are calculated from 54 drill holes and do not include additional reserves identified in the final seven drill holes (55-61) completed in 1990. These may add 40% to the reserve base of 11.8 million tons grading 1% copper and 5.4% zinc.

The search for diamonds continued to hold the public interest in 1990. Exploration has been undertaken across the province, from the southwest into the Precambrian shield. Major players included Monopros, Cameco, Uranerz Exploration and Mining, Claude Resources and Corona (TSE).

Andrew Gracie and Pamela Schwann are resident geologists with Saskatchewan Energy and Mines at La Ronge, Sask.