Canadian Royalties proves up Expo-Ungava deposit

Vancouver — The discovery of platinum-palladium mineralization associated with previously identified copper-nickel prospects has triggered renewed interest in the Ungava ultramafic belt of northern Quebec.

Leading the revival is Val d’Or, Que.-based Canadian Royalties (CZZ-V), which recently tabled drill results showing that “Raglan-type” nickel-copper-cobalt grades are associated with encouraging platinum-palladium-gold values at its wholly owned Phoenix property, adjacent to the Expo-Ungava joint venture project.

Modern-day exploration in the region began in the 1950s. Prospecting quickly identified a series of copper-nickel showings, including what was to become Falconbridge‘s (FL-T) Raglan mine, over a 60-km strike length. In the 1960s, three mineralized zones — Expo, Cominga and Mesamax — were discovered on the Expo-Ungava property. Work by Amax Minerals on the Expo prospect in the 1970s led to a resource of 19 million tons grading 0.47% nickel and 0.51% copper with significant cobalt and precious metal credits. Included in that resource are 4.2 million tons grading 0.75% nickel and 0.85% copper considered amenable to open-pit mining at a stripping ratio of 2.75:1. Explored over a strike length of 900 metres, mineralization consists of disseminated pyrrhotite, chalcopyrite and pentlandite in a serpentinite intrusive rock. In addition, previous work identified seven other mineralized zones and 11 airborne geophysical anomalies.

The high-sulphide content of the previously discovered nickel-copper deposits in the area produces a distinctive reddish-coloured rock on surface known as gossans.

“The gossans were easy to spot from the air, then prospected and developed accordingly,” Glenn Mullan, president of Canadian Royalties, tells The Northern Miner. “But the subtle features, which may hold platinum-palladium, were not of interest to anyone in the 1970s because they obviously did not contain high copper-nickel grades.”

Attracted by the region’s platinum group metal (PGM) potential, Canadian Royalties entered the picture in October 2000 by staking ground adjacent to the Expo-Ungava property. The junior then launched a small prospecting program on what it termed the Phoenix project, and, at the southern boundary of the property, came upon a small gossan that coincided with a 1.8-km-long geophysical anomaly. This became known as the TK zone, grab samples from which have returned up to 4 grams combined platinum-palladium per tonne.

“Right on the property boundary, the anomaly extended from the Expo-Ungava deposit to the Mesamax prospect with this gossan in the middle,” states Mullan.

Based on the location of the prospect, Canadian Royalties quickly inked a deal with the owner of the Expo-Ungava claims, Toronto-based Ungava Minerals (UNGV-C). Under terms of the deal, Canadian Royalties can earn a 70% stake by spending $1.7 million over four years, plus an additional 10% by completing a bankable feasibility study.

With the Expo-Ungava property tied up, Canadian Royalties shifted its attentions to the PGM potential of the known deposit.

“It’s the nickel-copper that originally attracted companies to Ungava,” said Mullan, “but its no secret Raglan is Quebec’s largest PGM producer.”

At first glance, Expo-Ungava has a long way to go to reach the scale of Raglan, which was 40 years in the making and started with a minable reserve of 14 million tonnes grading 3.17% nickel, 0.88% copper and combined PGMs in the range of 4-6 grams. Expo-Ungava hosts a lower-grade resource that, according to a 1997 calculation, has a resource of 17 million tonnes grading 0.6% nickel and 0.8% copper, including a higher-grade core of some 3 million tonnes grading 1% nickel and 1% copper.

The junior advanced the project by re-assaying core samples from some of the 140 historical drill holes.

“Because it’s Ungava and everything is frozen, the core is so perfectly preserved that you would think it had been drilled two weeks ago,” said Mullen.

The company has located all 30 historical drill holes and is not only analyzing the mineralized intervals for PGMs but re-checking the nickel-copper grades.

Initial results from assay pulps in four holes collared by a previous operator (in 1997) returned promising values. Hole 1 intersected 39.5 metres (from 41.6 metres below surface) grading 0.28 gram platinum and 1.5 grams palladium per tonne, plus 0.7% copper and 0.7% nickel, whereas hole 2 returned 47 metres (from 49.8 metres below surface) of 0.25 gram platinum, 0.99 gram palladium, 0.66% copper and 0.6% nickel. The widest interval was encountered in hole 3: 64.6 metres (from 47.8 metres) running 0.37 gram platinum, 1.5 grams palladium, 0.67% copper and 0.58% nickel. The latest hole to be re-assayed, no. 4, returned a 46.9-metre true thickness (from 65.4 metres) grading 0.24 gram platinum, 0.95 gram palladium, 0.69% copper and 0.64% nickel. Of 32 samples from that hole, 29 contained more than 0.5 gram platinum group metals. Additional results are pending.

“We were doing backflips,” said Mullan, describing his company’s response to the initial results. “The thickness of PGMs extended outside the massive sulphides ranging from 49 to 64 metres wide averaging 1.1 to 1.8 grams combined platinum-palladium-gold.”

Having confirmed that the Expo-Ungava deposit hosts platinum group elements, Canadian Royalties shifted its exploration focus back to the regional picture and the small showing at the TK zone.

“We started with a known deposit and have already shown that it contains PGMs,” said Mullan. “That already puts us ahead of most junior companies, but it’s the geological setting that’s of interest to us.”

Lying some 20 km south of the Raglan mine, the newly discovered TK zone was recently subjected to drilling. Hole 4 cut the most significant lens of mineralization. Drilled a minus 85, this hole hit 2.7% nickel, 0.78% copper and 0.13% cobalt, plus 2.67 grams combined platinum-palladium-gold per tonne, over 5.4 metres, starting at a down-hole depth of 128 metres. Just below the massive sulphide intercept, a 1.1-metre section ran 6.48 grams combined platinum-palladium-gold. The complete 6.52-metre section returned 0.42 gram platinum, 2.89 grams palladium and 0.26 gram gold.

‘Important’ discovery

“This is one of the most important discoveries in the Ungava, and in all of Canada, in recent years,” says Mullan.

The TK zone is only the third massive sulphide discovery containing significant copper-nickel values in the South Raglan trend — a 150-km belt of basalt and ultramafic rocks. The first was Falconbridge’s Delta deposit, calculated to exceed 1 million tonnes grading 2.62% nickel, 1.1% copper and 2.25 grams combined platinum-palladium; the second was Expo Ungava, 6 km to the west.

Mineralization is associated with disseminated, net-textured and even massive sulphides within, and adjacent to, an ultramafic host. The holes define a broad zone of platinum-palladium-gold and sulphide mineralization that extends from surface to a vertical depth of 130 metres and stretches in a north-south direction for some 75 metres.

Geophysical work has traced TK continuously for more than 500 metres to the east before picking it up intermittently over a total length of 1.8 km within a 3.5-km-long magnetic anomaly that extends to the Mesamax zone.

“This marks a screaming drill target for us,” said an excited Mullan. “Filling it in is a key component of our next program.”

The junior followed up on six other prospects drilled by previous operators and which cover 36 km of the belt. The most promising of these is the Mesamax zone, 3.5 km east of the Phoenix prospect. It was subjected to seven drill holes in the latest program.

“The widths are quite impressive and the early results have given us the best grades,” said Mullan.

Impressive holes

The first hole of this year’s program at Mesamax returned 0.9 metre grading 7.22 combined platinum-palladium-gold from a down-hole depth of 34.1 metres.

Hole 2 returned an impressive 0.41 gram platinum, 3.98 grams palladium, 0.65 gram gold, plus 0.91% nickel and 1.73% copper over 32 metres from 41.5 metres down-hole. Included in this section is a higher-grade interval running 6.76 grams combined platinum-palladium-gold, plus 1.65% nickel and 3.4% copper over 16 metres.

Hole 3 cut two zones of chalcopyrite-pyrrhotite mineralization, which occurs in the marginal-pyroxenite phase of the ultramafic. The upper zone returned 1.33 grams platinum-palladium-gold over 18 metres, from 121.5 metres down-hole. The lower zone averaged 2.58 grams combined platinum-palladium-gold over 3.95 metres.

Also, two shallow holes tested the northern contact of the Mesamax ultramafic. The first of these holes cut a weakly mineralized pyroxenite and crossed the pyroxenite contact at a down-hole depth of only 30 metres. Several 1.5-metre intervals returned more than 0.5 gram combined platinum-palladium-gold.

The second shallow hole hit two zones of mineralization hosted in pyroxenite. The upper zone assayed 1.68 grams combined platinum-palladium-gold over 5.5 metres from 17.5 metres, followed by a second zone averaging 1.41 grams combined platinum-palladium-gold over 3 metres.

The recent field work has convinced Canadian Royalties that the ultramafic host rock at the TK Area represents the same ultramafic body that extends easterly to the Mesamax Northwest and Mesamax Main zones.

Limited reconnaissance prospecting managed to identify a new zone, dubbed Hilltop, midway between Expo-Ungava and TK. The area is described as well-mineralized ultramafic rock that is not marked by a gossan. Assay results are pending.

“If this project does fly, it would be as a polymetallic,” said Mullan. “It’s got significant copper-nickel values, and PGMs are an awful nice sweetener.”

The junior expects to launch a major, $4-million drill program on the property next year. At Aug 1, Canadian Royalties had 12.8 million shares outstanding.

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