El Nino Ventures posts new resource in New Brunswick

An initial resource estimate for the Murray Brook polymetallic massive sulphide deposit in the Bathurst mining camp of New Brunswick has confirmed the property’s historical resource but with better grades and confirms that the deposit is the fifth-largest in the district, El Nino Ventures (ELN-V) says.

The maiden resource estimate was based on a drill program last year of sixty vertical drill holes totaling 10,327.5 metres. The deposit remains open to the northwest and the company’s management believes there is potential to expand the resource size with continued drilling.

Measured and indicated resources stand at 18.68 million tonnes grading 2.61% zinc for 1.07 billion pounds of contained zinc, 0.95% lead for 391.2 million pounds of contained lead, 0.42% copper for 172.96 million pounds copper, 39.3 grams silver per tonne for 26.61 million ounces of silver and 0.51 gram gold per tonne for 300,400 ounces of gold at a $20 per tonne net smelter return cut-off.

Inferred resources measure 3.02 million tonnes grading 1.83% zinc for 121.84 million pounds of zinc, 0.75% lead for 49.94 million pounds of contained lead, 0.62% copper for 41.28 million pounds of copper, 35 grams silver for 3.4 million ounces of silver and 0.75 gram gold for 72,900 ounces of gold at the same net smelter return cut-off.

On a zinc-equivalent basis, the resource estimate measures 8.17% zinc equivalent in the measured and indicated category and 8.47% zinc equivalent in the inferred category. The zinc-equivalent numbers were based on a total NSR value of the constituent metals plus smelting and shipping charges divided by $14.05, the recovered value of 1% zinc.

“It’s a good start,” Bill Stone, the company’s executive vice president exploration says of the resource estimate. “The perception about a lot of these older districts is that they’ve seen their heyday and are slowly winding down, but with modern exploration and modeling techniques and the current commodity price environment what happens is that they continue going like the Energizer Bunny. They have their ups and downs but never shut down. Flin Flon is one example of that and the Bathurst mining camp is another and in five years time the district is going to look very different than what it does now.”

Stone also pointed to the latest survey by the Fraser Institute that has ranked New Brunswick as the world’s most attractive jurisdiction for exploration and development. “It was an unexpected but very pleasant surprise,” he says. “New Brunswick is a great place to work and in terms of being overlooked this is going to help the Bathurst mining camp and New Brunswick in general in the mining community.”

El Nino’s management is planning a $3 million exploration program for 2012-2103 that includes $2.5 million earmarked for drilling measured resources at the Murray Brook deposit and $500,000 budgeted for the Murray Brook and Camel Back exploration claims that are defined in an option agreement with Murray Brook Minerals, a private company.

“The deposit is open to the northwest so part of the plan is to drill over that area to see if we can increase the resource further,” Stone explains. “Most of the drilling will be devoted to converting all the indicated resource into the measured category and that will be the resource that goes into the scoping study that will begin next year.”

The company says the exploration campaign is designed to look for large VMS deposits that might occur at depths of up to 150 metres below surface. The exploration area targeted is between the Murray Brook massive sulfide deposit and the nearby Caribou deposit. “It will be the first time the property has been evaluated with modern exploration techniques,” Stone says.

The Murray Brook deposit is about 60 km west of Bathurst, which sits on Bathurst Harbour, an estuary at the mouth of the Nepisiguit River at the southernmost part of Chaleur Bay.

The Gossan zone overlying the volcanic-hosted massive sulfide deposit was mined for gold and silver during the early 1990s when Novagold Resources operated an open pit.

The operator of the Murray Brook project is Votorantim, which has an option and joint-venture agreement with Murray Brook Minerals and Murray Brook Resources to earn a 50% interest in the properties by spending $2.25 million on exploration and making payments totaling $300,000 over a three-year period, which started on Nov. 1 2010.

Votorantim can earn an additional 20% interest in the properties by funding an additional $2.25 million in exploration over another two-year period.

El Nino has a participation agreement under which it can earn half of Votorantim’s interest by paying 50% of the costs that Votorantim incurs under its option and joint-venture agreement.

The company has no debt and holds about $600,000 in its treasury. It is currently in the process of raising another $2.5 million and expects the financing will be completed in the next few weeks.

At presstime in Toronto El Nino Ventures was trading at about 14¢ per share within a 52-week range of 8.8¢-46.3¢. The junior has about 51 million shares, fully diluted.