Exploration for volcanogenic massive sulphide (VMS) deposits is showing signs of sustainable life in eastern Canada as majors
Although a “bigger is better” mentality within the exploration industry has made bulk-minable deposits more fashionable of late, VMS deposits remain attractive targets because they often contain high grades of copper, zinc and lead, plus precious metals that can be mined as a byproduct to offset operating costs. And in rare cases — the Kidd Creek and Bathurst deposits, for instance — they are not only high-grade but also contain in excess of 100 million tonnes of ore.
They also tend to occur in clusters of up to two dozen deposits. As a result, established VMS districts, such as Matagami in Quebec, Bathurst in New Brunswick and Buchans in Newfoundland, are prime hunting grounds for new discoveries.
The most advanced project is Noranda’s Perseverance, in northern Quebec. The major discovered the new deposit in the Matagami camp in March and recently announced a resource of 5 million tonnes grading 16.8% zinc and 1.3% copper, plus 34 grams silver and 0.4 gram gold per tonne.
The mineralization lies at depths of less than 250 metres, just 6 km from Noranda’s Matagami concentrator.
“We are very encouraged by the Perseverance discovery,” says Michael Knuckey, Noranda’s executive vice-president of exploration and projects. “The deposit is high-grade, has low capital requirements, is near the surface and has existing infrastructure.”
Noranda plans to conduct a feasibility study on Perseverance by the end of next year’s first quarter. The company is also exploring along the tuffite zone, which hosts the three main deposits at Perseverance, in the expectation that the favourable zone extends over a much wider area than previously thought.
While Noranda focuses on its own finds in Quebec, Billiton has been signing deals with juniors looking for copper and zinc in New Brunswick and Newfoundland.
Last year, the London-based major decided to reduce its focus on in-house exploration and redirect funds to high-quality copper and zinc exploration projects generated by the junior sector. This new strategy often involves an equity investment in the junior, with the condition that the funds from the investment be used for a particular project.
Billiton’s latest deal along those lines is an agreement to buy 1 million units of
The funds will be used to complete a surface exploration and drill program on Eastmain’s Railroad property in the Bathurst camp of northern New Brunswick. The property was previously held by BHP Mines, who found VMS (zinc-lead-silver) deposits within the same rock formations that host the nearby Brunswick No. 12 zinc mine. Drill results included a 4.7-metre interval of massive sulphide grading 10% base metals.
In addition to the equity investment, Billiton has the right to earn a half-interest in the property by spending $1.5 million over three years. The major can earn up to a 70% stake by funding the Railroad project to commercial production.
Billiton has substantial investments in Newfoundland as well. The company has optioned several properties along the province’s central mineral belt from juniors
Exploration in the province has been stimulated by persistent speculation about a massive sulphide discovery by Phelps Dodge, 5 km southwest of Buchans.
Another senior looking to Newfoundland for new base metal resources is Inmet Mining, which has forged strong ties with Altius Minerals. Inmet can earn a 55% in the junior’s Lockport and Point Leamington deposits, in central Newfoundland, by spending $2.5 million on exploration and paying $100,000 over four years. At Lockport, Altius intersected 6 metres of massive sulphides grading 1.05% copper, but recent drilling has not encountered the rock package known to host the mineralization.
Inmet’s latest deal with Altius covers the Robert’s Arm property, in the northern portion of the Buchans-Robert’s Arm volcanic belt. The major can earn a 55% interest by spending $2 million on exploration and making cash payments of $120,000 over five years.
Finally, partners
The study focused on the Upper Duck and Sleeper lenses of the Duck Pond deposit, as well as the open-pit-minable resources at the Boundary deposit. Resources for these zones total 5.5 million tonnes grading 3.5% copper, 6.4% zinc, 1% lead, 65 grams silver and 0.9 gram gold.
The study calls for a 540,000-tonne-per-year operation over a mine life of 10 years. Mining would start with an open pit at the Boundary deposit, followed by underground drift-and-fill mining of the Upper Duck lens from a ramp to a depth of about 500 metres.
A more comprehensive study, including projections of operating and capital costs and a calculation of minable reserves, will follow.
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