Canadian Royalties tags hot holes

Vancouver The latest results from this year’s drill program by Canadian Royalties (CZZ-V) continues to show the economic promise of the Expo-Ungava nickel-copper-platinum-palladium project in northern Quebec.

The new values, some of the best yet obtained from the property, come from the historic Mesamax nickel-copper prospect, where the junior has been determining the platinum-palladium potential of the area.

Hole 17 was drilled at a 45 degree angle and returned an impressive 66 metres grading 2.19% nickel, 5.92% copper, 0.09% cobalt, 1.4 grams platinum, 2.65 grams palladium and 1.3 grams gold per tonne from 9 metres downhole. The hole was collared 60 metres north of hole 2, which yielded 0.91% nickel, 1.7% copper, and 4.4 grams combined platinum-palladium over 32 metres.

Drilled from the same site at a 65 degree angle, hole 18 returned 49.3 metres grading 3.32% nickel, 4% copper, 0.13% cobalt, 1.5 grams platinum, 5.17 grams palladium and 0.26 gram gold from 5.2 metres downhole. A second mineralized zone was encountered 76.7 metres downhole, yielding 1.85% nickel, 2.23% copper, 0.06% cobalt, 0.58 gram platinum, 1.2 grams palladium and 0.04 gram gold over 2.3 metres.

Hole 19 was drilled vertically from the same site and cut 21.2 metres grading 1.15% nickel, 1.68% copper, 0.05% cobalt, 0.82 gram platinum, 3.7 grams palladium and 0.14 gram gold from 5.8 metres downhole. A lower mineralized zone was hit at 51.7 metres, yielding 2.39% nickel, 6.2% copper, 0.09% cobalt, 0.95 gram platinum, 9.1 grams palladium and 0.41 gram gold over 3.3 metres.

Moving 120 metres southwest, holes 15 and 16 are thought to mark the western limits of the discovery area. Drilled the same site, the holes returned 8.3 metres grading 0.47% nickel, 0.45% copper, 0.02% cobalt, 0.2 gram platinum, 1.01 gram palladium and 0.2 gram gold, and 9.2 metres grading 0.43% nickel, 0.72% copper, 0.02% cobalt, 0.41 gram platinum, 1.77 gram palladium and 0.04 gram gold, respectively.

Holes 20 and 21 were collared 75 metres east of the hot holes and are believed to mark the eastern limits of the zone. Hole 21 returned 11.4 metres grading 0.76% nickel, 0.94% copper, 0.04% cobalt, 0.42% platinum, 1.88 grams palladium and 0.04 gram gold, while hole 21 yielded 12.2 metres grading 0.71% nickel, 0.58% copper, 0.03% cobalt, 0.5 gram platinum, 1.87 grams palladium and 0.03 gram gold.

The results received to date indicate that sulphide mineralization in the ultramafic host continues for at least 200 metres. The sulphide zone reaches a width of 60 metres near surface, narrows with depth and dips 20-to-30 degrees to the north. Locally, the prospect contains high-grade sections of mineralization comprised of irregular lenses of mixed disseminated, net-textured and massive sulphides hosted in an altered peridotite to pyroxenite.

The target is part of the 173-sq.-km Expo-Ungava property, which lies 15 km south of Falconbridge‘s (FL-T) Raglan nickel-copper mine. Resources at the Expo-Ungava deposit are pegged at 17 million tonnes grading 0.6% nickel and 0.8% copper. Included is a higher-grade core of some 3 million tonnes grading 1% nickel and 1% copper.

The property, which extends for 35 km along a favourable ultramafic horizon, hosts at least eight separate, partially evaluated copper-nickel mineralized zones. One of these is the Mesamax prospect, which was discovered in the 1950s. Five historic diamond drill holes in the 1970’s returned nickel-copper values comparable to the Expo-Ungava deposit. The historical drill holes on the property were never assayed for platinum group metals.

In the summer of 2001 Dr. James Mungall, an Associate Professor at the University of Toronto Department of Geology, sampled the old core from the prospect, which returned over 1-gram platinum-palladium per tonne. By September of last year, Canadian Royalties had a rig turning on the target with the first 7-holes confirming the platinum-palladium potential of the nickel sulphides.

The encouraging results subsequently lead to a dispute between the junior and joint venture partner Ungava Minerals (UNGV-CUB). The bad blood between the two companies stems from the inclusion of a 4-sq.-km piece of land that borders Canadian Royalties’ wholly owned Phoenix property and Ungava Minerals’ Expo Ungava property.

In early April, Ungava Minerals notified Canadian Royalties that the junior was in default of its option and joint-venture agreement because the border area, which includes the TK copper-nickel platinum-palladium discovery, was subsequently included into the Phoenix property.

Canadian Royalties says the land was properly transferred by Ungava Minerals when the Expo-Ungava property was expanded and the boundary repositioned in June 2001.

Canadian Royalties wins dispute

Earlier this month, Canadian Royalties won the legal battle when the Arbitrator, Claude Bisson of the law firm McCarthy Tetrault and former Chief Justice of the Court of Appeal of Quebec, rendered a ruling, in favour of the junior. In his decision, the arbitrator ruled that Ungava Minerals “have not met the burden of the proof and have failed to establish by a balance of probabilities the essential facts necessary to justify the granting of any of the conclusions sought, and the claim is therefore dismissed.”

Canadian Royalties will, therefore, retain all of its rights in the Expo-Ungava and Phoenix Properties, which includes the area along the boundary, commonly referred to as the TK Zone.

Assay results from an additional 30 holes collared in the Mesamax area are expected before the end of the month.

Canadian Royalties can earn a 70% interest in the Expo Ungava property by spending 1.75 million. The company can then take another 10% stake by delivering to Ungava Minerals a bankable feasibility study.