Diamonds, Gold And Rare Earths Apples Of NWT’s Eye

The year started with high commodity prices encouraging exploration in the Northwest Territories for diamonds, uranium, and precious and base metals. The optimistic spirit culminated with the opening of the Northwest Territories’ third diamond mine. Falling stock markets and economic uncertainty in the latter half of the year have dampened exploration efforts with many companies planning reduced field seasons for 2009.

Exploration and deposit appraisal expenditures in the N. W. T. for 2008, as posted by Natural Resources Canada, are estimated at $129 million.

Mining

Four mines are operating in the N. W. T., three diamond mines and one tungsten mine. Snap Lake, Canada’s first fully underground diamond mine, was officially opened in July 2008 by De Beers Canada. The deposit an indicated resource of 1.4 million tonnes and another 25 million tonnes are inferred, with a recoverable grade of 1.2 carats per tonne. The annual production rate is expected to be 1.4 million carats over 20 years.

The Diavik diamond mine produced 6.6 million carats of diamonds, predominantly from the A154 South and North pipes, over the first three quarters of 2008. Open-pit mining from the A418 pipe started, and underground development continued on the decline to access the A154N, A154S and A418 pipes, with underground mining of these pipes expected to begin in 2009.

BHP Billiton and partners produced 2.8 million carats from the Ekati diamond mine in the first three quarters of 2008. The operation is undergoing a transition from open-pit mining to underground mining: mining continues in the Fox and Beartooth open pits; and underground mining continues from the Panda and, more recently, from the Koala pipes.

North American Tungsten production during the first half of 2008 was 1,316 tonnes of tungsten concentrate from the Cantung mine. Definition diamond drilling is ongoing at Cantung and delineated a high-grade portion down dip of the western extension of the E-Zone deposit. Farther north, infill drilling on the Mactung deposit continued; an integral part of a feasibility study.

In spite of the ebullience of the opening of a new mine, the tone for mining in the Northwest Territories has become much more subdued in the latter half of the year. Major expansions to infrastructure have been deferred with some operations scaling back contracts and instituting planned shutdowns.

Diamond Exploration – Slave Province

Diamond exploration continued in the Northwest Territories with the most advanced projects being located in the Slave Province.DeBeers Canada and Mountain

Province Diamonds bulk-sampled the Tuzo pipe of the Gahcho Ku project, using large diameter reverse- circulation drilling. The first 715.6 tonnes of kimberlite yielded an average grade of 2.16 carats per tonne. An exceptional 25.13-carat stone was also recovered. Diavik Diamond Mines also bulk-sampled the A21 kimberlite pipe, using large-diameter, reverse- circulation drilling. Diavik completed an additional 7,100 metres of exploration and delineation core drilling on its lease block around the Diavik mine. One new kimberlite was discovered. In the Ekati core zone, BHP Billiton and partners completed reverse-circulation drilling and delineation diamond drilling on the deep portions of the Misery pipe.

Due south of the Ekati leases, New Nadina Explorations and partners completed 4,223 metres of drilling at their Monument property, discovering four new kimberlite pipes (Bling, Trio, Gemini and Sparky) and delineating three previously known pipes. Macrodiamonds were recovered from the Trio (16 of 106 stones from 1,015 kg), Bling (1 of 28 stones from 38 kg) Gemini (8 of 147 stones from 348 kg), Sparky (15 of 207 stones from 412 kg), Genie (6 microdiamonds from 18 kg), DD39 (3 of 91 stones from 192 kg), and Sonja (3 of 100 stones from 198 kg) kimberlites.

Southeast of Yellowknife, Snowfield Development and Dave Smith collected a 500-tonne bulk sample of the Mud Lake kimberlite in 2007; one hundred tonnes of the sample were processed in 2008. Three macrodiamonds were recovered. Two diamonds larger than 0.4 mm were also recovered from 154 kg of kimberlite core from 2008 delineation drilling on the sill extension. Snowfield and partners also carried out 2,141 metres of exploration drilling east of the Mud Lake kimberlite.

Consolidated Global Diamond drilled 850 metres into fine-grained pyroclastic kimberlitic rock at Courageous Lake. This material yielded micro diamonds.

At Afridi Lake, Shear Minerals and partners drilled 12 priority geophysical targets including the previously discovered DA1 and DA2 diamondiferous kimberlite pipes. A total of 175 metres of the DA1 pipe was intersected in the first drill hole. Ground geophysical surveys were also carried out. Almaden Minerals and partners collected till samples using sonic overburden drilling and defined a target area beneath MacKay Lake.

Diamond Exploration – Slave Craton

In the HOAM project areas, both near Fort Simpson and along the southern edge of Great Bear Lake, Olivut Resources drilled 23 holes, 16 of which intersected kimberlite. Eight new kimberlite bodies were discovered. Airborne magnetic and ground gravity surveys were also completed.

North of Great Bear Lake in the Hornby Bay basin, Sanatana Diamonds and Kennecott Canada Exploration discovered a new kimberlite on the Greenhorn Project. Six holes were drilled in this kimberlite, named the Dharma Uttar. Thirteen additional magnetic anomalies were drilled using a helicopter-portable, reverse-circulation rig. The Dharma Uttar kimberlite occurs 50 metres north of 2007’s Dharma discovery and together they appear to form a kimberlite complex of dykes, sills and pipes. A 449-kg sample of the Dharma Uttar pipe yielded eight stones greater than 0.85 mm. Ground geophysics was also completed. At Colville Lake, Sanatana drilled 1,200 metres on 12 targets, however no kimberlites were intersected.

Near Norman Wells, Patrician Diamonds drilled the Hillside kimberlite and obtained microdiamonds from a 173-kg sample. Other exploration projects involving ground geophysics and/or till sampling were completed by Diadem Resources and Darnley Bay Resources (Parry Peninsula); Diamonds North Resources (Hepburn Lake and Banks Island); and Great Northern Mining and Exploration (Victoria Island).

Gold

Gold exploration activity in the Northwest Territories was focused in areas with historical potential.

Eighty kilometres north of Yellowknife, Tyhee Development reported measured and indicated resources for its Ormsby, Nicholas Lake and Bruce Lake zones of 14.425 million tonnes grading 3.43 grams gold per tonne. Drilling continued at all three zones. A project description report has been submitted to the Mackenzie Valley Land and Water Board outlining a combined open-pit and underground operation planned at 3,000 tonnes per day to recover an average of 163,500 oz. gold annually for the first seven years. Operating costs are estimated at US$384 per oz. Tyhee also explored other properties in the Yellowknife greenstone belt. North of Dwyer Lake, Tyhee drilled the “BigSky” zone, a 500-metre-wide zone of anatomizing shears. More than 35 drill holes were completed with results that include 2.9 metres of 5.57 grams gold per tonne. This exploration has extended the mineralized segment of the WK shear to a strike length of 370 metres. At Clan Lake, drilling extended the Main zone by 30 metres, including intersections of 134.9 metres grading 0.81gram gold per tonne.

On the Morris Lake gold property, just south of the former Discovery gold mine, Viking Gold Exploration drilled 2,689 metres over 12 holes. Ten of the 12 holes intersected the mineralized Viking Zone, extending it to a vertical depth of 210 metres.

Base Metals

Tamerlane Ventures completed
confirmation drilling for a feasibility study the Pine Point lead-zinc project, east of Hay River. The new proven and probable reserve estimate is 7.8 million tonnes grading 6.16% zinc and 3.01% lead; measured and indicated resources are 8 million tonnes grading 2.26% zinc and 1.13% lead. Permitting was obtained to begin mine construction activities. Tamerlane also drilled 5,371 metres, to test 16 nearby previously known deposits. In the southern Mackenzie Mountains, Canadian Zinc advanced its Prairie Creek zinc-lead-silver project towards production. Applications for the main operating permits needed for mining, entered the environmental assessment stage. A prefeasibility study is under way, focusing on detailed process design, underground tailings disposal and mine planning and scheduling.

Exploration in the mountains for zinc-lead was completed by Eagle Plains Resources and Teck, which carried out geochemical and ground geophysical surveys, and Aurora Resources, which did soil geochemistry on the Wrigley property. West of Norman Wells, Freeport-McMoRan Copper and Gold and Kaska Minerals explored for sedimentary-hosted copper deposits with silt sampling on their Keele River property.

Nickel and copper exploration took place at Thye Lake on the Nickel King property of Strongbow Exploration, which drilled 9,200 metres over 44 holes, 31 of which tested the Main Zone. As a result the zone has been extended by an additional 400 metres, bringing the total strike length to more than 2,600 metres. Notable intercepts included 12.5 metres grading 1.07% nickel, 0.26% copper and 0.041% cobalt, and 9 metres grading 1.16% nickel, 0.24% copper and 0.051% cobalt. Airborne geophysics and lake-sediment sampling were carried out to the south. Forty kilometres southwest Ekati, Arctic Star Diamond announced a new nickel sulphide discovery, near Credit Lake: magmatic nickel-copper-cobalt-platinum group elements (PGEs) massive sulphide mineralization, which was tested with 1,650 metres of drilling. Notable intersections included 5.1 metres of massive sulphide yielding 1.73% nickel, 1.75% copper and 0.17% cobalt. Targets in this zone have been developed from reconnaissance mapping, sampling and airborne geophysics. Farther west, in the Providence greenstone belt, GGL Diamonds drilled for nickel in two locations. Massive to stringer pyrrhotite-pyrite mineralization was intersected in six of the nine drill holes over apparent true widths of between 1 and 13 metres. Airborne geophysics and prospecting was also carried out. On Victoria Island, Great Northern Mining and Exploration drilled and prospected for nickel and platinum group elements.

Uranium and Polymetallic Targets

Avalon Ventures drilled 11,947 metres over 50 exploration holes on the fergusonite-bearing Lake Zone of the Proterozoic Thor Lake Rare Earth Element deposit, 100 km southeast of Yellowknife. An additional drilling program of closely spaced holes provided 800 kg of mineralized material for bench-scale metallurgical process development. Significant intercepts included 6 metres of 4.15% total rare earth oxides and 14 metres of 2.54% total rare earth oxides. A revised resource estimate for the Lake Zone deposit is being prepared.

East of Great Bear Lake, Alberta Star Development drilled 2,700 metres over 17 holes exploring for copper, gold and uranium at its Eldorado and Contact Lake properties. Notable intercepts included 40.5 metres of 0.361% copper and 2.83 grams silver per tonne in the K2 iron oxide-copper- gold target. Cameco explored uranium and gold showings on its claims on the Leith Peninsula, on the south shore of Great Bear Lake.

Fortune Minerals updated its feasibility study of the NICO gold- cobalt-bismuth deposit, located in the southern Bear Province. Fortune began to move the mine buildings, equipment and spare parts from the Golden Giant Mine at Hemlo, Ont., for use at Nico.

In the Thelon Basin area, Uravan Minerals and Cameco explored for uranium, collecting 2,500 soil and 2,500 vegetation samples over the G, F, H, T and Edge-conductive trends of the Northern Boomerang project area. Farther southeast, Great Bear Uranium and Hillcrest Resources flew an airborne magnetics, radiometric, and VLF geophysical survey over their Thelon uranium project area.

While exploring for uranium in the Proterozoic Hornby Bay basin, Uranium North Resources prospected and collected samples for lithogeochemistry on the Hepburn project area.