Having confirmed the high-grade nature of its 67%-owned Nalunaq gold project in South Greenland,
Crew has enlisted the services of two Norwegian firms, Nordea Securities and Pareto Private Equity, as well as United Kingdom-based David Williamson Associates, to place 25.4 million units priced at $1.13 apiece. Each unit consists of one share and a half-warrant, with a whole warrant allowing for the purchase of an additional share at $1.47 for 12 months. At the close of the financing, Crew will have 128.4 million shares outstanding, or 146.7 million fully diluted.
Nalunaq comprises 1,080 sq. km and is a high-grade, narrow-vein, underground project. It is 40 km from the village of Nanortalik on the southern tip of Greenland, and 6 km from tidewater. Crew acquired its stake in the project in late 1999 through a merger with Mindex, a Norwegian exploration company. The remaining 33% interest is held by NunaMinerals, which is owned by the state of Greenland.
The prospect is a gold-bearing quartz vein and calc-silicate altered shear system that outcrops on the eastern and northern faces of Nalunaq Mountain. It was first discovered in 1992 by Nunaoil while following up regional stream-sediment and scree-sampling work done in the late 1980s.
The vein system is exposed semi-continuously along a 1,750-metre slope of the mountain, between a vertical elevation of 400 and 1,250 metres. The vein structure strikes northeast and dips from 25 to 45 southeast at an average of 34.
The main vein zone consists of multiple quartz veins within a strongly sheared zone of calc-silicate-altered amphibolite (chlorite, epidote and carbonate). The quartz thickness ranges from 0.01 to 0.75 metre; the zone itself has a true thickness ranging from 0.15 to 1.5 metres. The individual veins pinch and swell and are locally folded or stretched out.
Gold occurs in a free state and almost exclusively in association with quartz in veins and veinlets. A high nugget effect has caused erratic grades, creating concerns about the continuity of ore zones. Surface sampling has returned some extremely high-grade values, including more than 800 grams gold per tonne across 1 metre. In addition, underground channel sampling has yielded values of up to 5,000 grams.
Since its discovery, 78 core holes totalling 10,930 metres have tested the lower-most area of the gold-bearing structure between an elevation of 275 and 550 metres. Drilling has tested a 400-metre strike length of the zone to about 400 metres down dip. In 1998, Mindex drove a 288-metre-long adit on the vein at the 405 level (that is, 405 metres above sea level) in order to get a better handle on the structure and control.
Surface program
As part of a prefeasibility study, completed in March 1999, MRDI Canada estimated an indicated and inferred resource of 374,000 tonnes grading 26.4 grams gold, equivalent to 317,000 contained ounces. MRDI used the results from 58 diamond drill holes.
In the latter part of 1999, Mindex completed an additional 19 holes and conducted an extensive surface program of channel sampling along a 550-metre length of the exposed outcrop, between 400 and 890 metres of elevation. Based on results from the 1999 program, Mindex re-calculated the indicated and inferred resources at 455,000 tonnes grading 32 grams, for a total of 425,000 contained ounces.
During the summer and fall of last year, Crew conducted a $9-million grade verification bulk sampling, under the supervision of Strathcona Mineral Services. The objective was to identify 300,000-400,000 oz. of measured and indicated resources, enough to ensure an initial three years of mine life and thereby guarantee the payback of capital costs. This was a condition set by the banks with which Crew had been negotiating at the time for project debt financing.
The bulk-sampling program entailed more than 1,900 metres of underground development work. The original 405 level adit was extended by 150 metres, while two other adits were driven at the 450- and 350-metre levels, and connected by a network of 15 raises. The three adits were driven more than 400 metres along strike and remained in the mineralized structure.
On-site processing
As a test, some 23,000 tonnes of material from the adits and raises were processed on-site in a 3-stage, 250-tonne-per-day sample tower. Each round in the adit, representing about 60 tonnes, was first put through a cone crusher and then through the sampling tower, where a representative 28-kg field sample of minus 6-mm crush was taken. The samples were shipped to Lakefield Research, near Peterborough, Ont., for gold analysis.
While providing few details of the results of Strathcona’s bulk-sampling work and no resource estimates, Crew says the results reinforce those of the 1998 underground channel-sampling program undertaken by Mindex and confirm the high-grade nature of the deposit. The bulk-sampling program demonstrated higher-grade sections within the deposit, including 72 grams over 150 metres of strike along the 450-level adit and 156 grams over 45 metres along dip in raise 7.
The bulk samples, as calculated by Strathcona, averaged 44 grams (plus or minus a 4-gram variance) for the 450 level, whereas rock saw channel sampling averaged 52.4 grams across 1 metre, or 43.6 grams when high values are cut to 200 grams. Bulk samples from the 405 level averaged 26 grams (plus or minus 4 grams), whereas channel samples averaged an uncut 38.4 grams, or a cut 33 grams, across 1 metre. The 350-level bulk samples averaged a lower-grade 14 grams (plus or minus 2 grams), versus an uncut 16.9 grams, or 16 grams cut, from channel samples.
Bulk samples from all the raises averaged 31 grams (plus or minus 4 grams), compared with 46.1 grams uncut, or 33.3 grams cut, from channels.
Less expensive
Crew says the bulk sampling established a positive correlation between bulk sampling and the less-expensive channel sampling, which, in future, will be used exclusively to estimate mineral resources.
Based on all underground sampling work in 1998 and 2000, the mineralized structure averages a cut 42.6 grams over a 1-metre true width, using a cutoff grade of 3 grams.
A full feasibility study, including final engineering and plant design, and an environmental impact assessment are expected during 2001. A resource estimate is being prepared with the assistance of Kvaerner, which will serve as the basis for mine planning.
MRDI’s 1999 prefeasibility study examined several possibilities, including a 500-tonne-per-day operation that would produce 148,500 oz. per year at a cash cost of US$160 per oz. The mill process chosen for the study was a combination of gravity concentration followed by whole ore leaching in a carbon-in-pulp circuit, with a potential gold recovery of 96%.
The infrastructure on-site would consist of an 80-person camp, the mill plant and offices, tailings line and mixing station for proposed submarine tailings disposal, and barge supply and service from Nanortalik. Diesel generators would supply power. Capital costs for such an operation were projected at US$19.8 million.
Metorex
Crew is a diversified international mining and exploration company based in Vancouver. It holds a 52% controlling interest in Metorex, a junior South African mining house that owns and operates eight mines. Metorex, which is listed on the Johannesburg and London exchanges, reported a net income of $4.2 million on revenue of $41 million for the three months ended March 31, and a profit of $14.1 million on $117 million in revenue for the 9-month period then ended. Crew’s share of the profits amounted to $5.5 million (or 5 per share) for the nine months, compared with $2.1 million (3 per share) for the corresponding period a year ago.
For the nine months ended March 31, 2001, Crew earned $1.5 million (1 per share), versus $2.5 million (3 per share) in 2000, which included non-recurring gains on the sale of assets of $2.8 million.
Crew continues to advance its nick
el laterite project on Mindoro Island in the Philippines and recently completed a winter drilling program at its wholly owned Roros zinc project in central Norway. The power crisis gripping the northwestern U.S. has prompted Crew to re-evaluate the wholly owned Meager Creek geothermal project in British Columbia. The company has agreed to transfer its 100% interest to
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