With an infill drilling campaign nearing completion,
The 13,000-ha McIlvenna Bay property is 95 km west of Flin Flon, Man., in the Saskatchewan portion of the Flin Flon greenstone belt. A classic zinc-copper volcanogenic-massive-sulphide (VMS) deposit, it consists of one large zinc-copper massive-sulphide lens (lens 2, which has a zinc-rich zone to the southeast and a copper-rich zone to the northwest) and two smaller lenses (1 and 3), which are underlain by copper-stringer zones.
The deposit strikes roughly east-west, dips 65 to the northeast and is overlain by 15 metres of flat-lying Paleozoic sedimentary rock. The lenses vary in width from 1 to 20 metres, and the underlying copper stringer zone is up to 60 metres thick.
Work in the area dates back to the mid-1980s, when the predecessor of
In 1988, the company discovered the McIlvenna Bay deposit and followed up with a 67-hole, 30,000-metre drilling campaign that delineated 13 million tonnes grading 4.95% zinc and 1.26% copper, plus 0.3 gram gold and 24.3 grams silver per tonne.
During the drilling campaign, Billiton subsidiary Billiton Metals Canada joined in and acquired a 33% interest in the property for $17.5 million.
However, Cameco spent much of the 1990s focused on its uranium and gold production, and sat on the property until April 1998, when Foran acquired an option to buy 100% of McIlvenna plus the surrounding properties for $10 million with no underlying royalty. The company has already made its first $3-million payment and has until April 2001 to pay the balance.
Foran’s next step was to commission an independent resource calculation from Dale Rusk of GeoSight Consulting Canada. Rusk confirmed Cameco’s work and boosted inferred resources to 27.2 million tonnes grading 3.27% zinc, 0.9% copper, 0.37 gram gold and 16.63 grams silver, including resources within Lens 2 of 13.5 million tonnes grading 5.86% zinc, 0.57% copper, 0.33 gram gold and 22.38 grams silver. GeoSight’s 14-million-tonne resource increase is largely due to the inclusion of lower zinc-grade material from the footwall copper-rich stringer zone.
Since December, Foran has been carrying out a 15,000-metre drilling program. The first phase (5,500 metres) was designed to upgrade most of the upper 650 metres of the deposit into the probable-reserve category, whereas the second (9,500 metres), now under way, is attempting to delineate the deposit, which remains open in all directions.
The latest highlight from the infill work came from hole 99, which tested the upper-western portion of the deposit. The hole cut 9.7 metres (from 300 metres) grading 5.4% copper, 5.2% zinc, 1.6% lead, 5.38 grams gold and 112.2 grams silver within Lens 2, plus 3.2 metres (from 287 metres) of 4% copper, 3% zinc, 0.05% lead, 2.78 grams gold and 32.6 grams silver in Lens 3.
“Gold hasn’t been a factor until now,” says Stephen Masson, vice-president of exploration. “But this is a hint of what may be there if we hit the gold-rich portion of the stockwork.”
To round out the infill phase and further define the limits of the upper west phase, nine more holes are planned, to be spaced at 50-75 metres.
“We’ve essentially completed what we needed to design the upper portion of the deposit for mining,” says Masson. “One of the things that has come out of this infill drilling is that the deposit is absolutely one big continuous sheet, which is a real pleasure because it’s going to make mining much more efficient and cheaper,” says Masson. “We’ll use bulk mining methods, and the amount of development will be considerably less.”
Also of significance, he adds, is stepout hole 82, which was drilled below what was thought to be the bottom of the deposit’s plunge at a 700-metre depth. After drilling through 50 metres of gabbro, the hole encountered 12 metres of massive sulphides in Lens 2, extending the eastern boundary of the deposit by 150 metres and leaving this boundary completely open. A similar hole, No. 88, will test this plunge at the 900-metre level.
The upcoming phase of stepout drilling is nothing if not ambitious: “We’re trying to get to a 50-million tonne figure by November,” says Masson. “Once we reach a certain critical mass of about 50 million tonnes, we become a world-class deposit.”
So far, the deepest drilling has extended to almost 900 metres below surface, and Foran hopes to drill to a depth of at least 1,400 metres.
The upcoming phase will also attempt to locate the deposit’s potentially gold- and copper-rich stockwork zone — a feeder zone typically associated with base metal VMS deposits. Already, the higher copper and gold in the stringer zone suggest that drilling is progressing towards the core of the deposit. Comments Masson: “This mine will still be economic on what we have, but finding this gold-copper zone is going to make it a bonanza.”
Foran proposes that a ramp be driven down to the 520-metre level, allowing for production to come on-stream during the second year, after mill construction begins. For mining below the 520-metre level, a shaft is proposed, with development to begin in year 3.
The company envisions building a 6,000-tonne-per-day mining and milling operation at McIlvenna, with mining to take place over at least 16 years. Capital costs are estimated at $107 million during the first two years, plus another $21 million to sink the shaft.
As well, several smaller, marginal deposits in the immediate area could become economic once a mill is established at McIlvenna Bay.
Next winter, Foran plans to build a 9-km all-weather road to McIlvenna and then put down a ramp.
Stephen Davies, Foran’s vice-president of engineering and development, says the Saskatchewan government has been supportive of the company’s work and will not require Foran to deliver a full environmental impact statement (EIS) either for the road-building or the underground test mining.
Still, Foran must go through some public hearings in June, and the company is already proceeding with a comprehensive EIS that will accompany a bankable feasibility study.
Says Davies: “A year ago, we were a wallflower. Today, Foran has Canada’s foremost zinc property, and, in terms of leveraged pounds of zinc per share, we’re the best in North America. Two years from today, we’ll be making a production decision.”
Davies says the key to success at McIlvenna Bay project is its proximity to a copper-zinc smelter near Flin Flon. The smelter, owned by
“Where is Hudson Bay going to be getting its feed for the next 13 years?” asks Davies. “There are some big financial commitments to be made, and we all understand that. The ability of Foran to partake in a larger strategic relationship with Hudson Bay is definitely on the table.”
Davies also applauds the Saskatchewan government, which introduced several incentives for base metal and gold projects in the spring provincial budget. Of note, the government is now allowing a 150% tax writeoff on all expenditures leading up to production, and the province’s 12.5% royalty has been lowered to 5% for the first million tonnes of metal produced.
“Those are significant numbers for Foran, conservatively somewhere in the neighbourhood of $30 million, on a direct-cash basis,” says Davies.
Foran recently closed a $1.5-million financing, which will keep the company going into the autumn. Comments Masson: “We’ve grown to the point where we need to align ourselves with a brokerage house that has institutional backing. We’ve outgrown the Vancouver market, and we’re looking for a Toronto ho
use that will back us and sponsor us for a Toronto listing.”
Be the first to comment on "BASE METALS — Foran expands McIlvenna Bay deposit — Exploration program targets gold-rich portion of stockwork"