Equitas hunts next Voisey’s Bay

Junior Equitas Resources (TSXV: EQT; US-OTC: EQTRF) has kicked off a second phase of exploration at its Garland nickel-copper-cobalt property in Newfoundland and Labrador, with the hope of discovering deeper Voisey’s Bay-style mineralization. 

The underexplored property sits 30 km southeast of Vale’s (NYSE: VALE) Voisey’s Bay nickel-copper-cobalt mine in northern Labrador. Before Equitas optioned into the consolidated 200 sq. km package last year, 10 companies had explored fragments of the property in the late 1990s. Their work included the now-outdated electromagnetic (EM) surveys that penetrated 75 metres deep.

From 2000 to 2007, Vale and its predecessors looked at parts of the Garland property, carrying out a regional airborne gravity gradiometer survey, induced polarization ground-EM surveys and ground reconnaissance sampling. They pinpointed several targets, with Vale drilling the first and only hole in 2008.

The hole failed to hit significant nickel-copper-cobalt mineralization, but it showed the region could host Voisey’s Bay-style deposits.

Following a share consolidation, Equitas agreed to buy a 100% interest in the Garland property last September from Zimtu Capital, Dahrouge Geological Resource Management and Ridge Resources — i.e., the three groups that had consolidated the land package.

As part of the agreement, Equitas paid $80,000 over the past year, and has so far issued 2.7 million shares of the nearly 8 million shares required. It also granted DG Resource Management a 2% gross overriding royalty.

Earlier this year, Equitas carried out a more advanced versatile time domain electromagnetic airborne survey on the property that the company’s president Kyler Hardy says gave it “visibility down to 350 to 400 metres.”  

“Right now, we’re on the cusp of a discovery,” Hardy says. “That is highlighted by the nine targets that we outlined with our geophysics, and just simply the fact that we were able to get financing done in a difficult market.”

In July, the junior closed a non-brokered private placement for gross proceeds of $521,000 for its exploration activities and general working capital. Earlier this year, it raised another $441,200.

The company is building a 20-person camp to support its phase-two program, which will include mapping and prospecting, 30 line km of a large loop EM survey and up to 4,000 metres of diamond drilling. Equitas is confident it can raise enough funds for an initial drill program.

With exploration underway, Equitas is set to move along the value creation cycle. “The truth is in the drill bit, which we will see hopefully in the next few months,” Hardy adds.  

Along with using new exploration techniques to find deeper targets, the company has kept nickel veterans Alan King as its contracted geophysicist, Everett Makela as vice-president of exploration and Raymond Goldie as a director.  

King formerly worked as chief geophysicist for Vale’s global exploration, while Makela retired as Vale’s principal geologist for North America in 2012. Goldie is currently a senior mining analyst and vice-president of Salman Partners.

Commenting on why Garland has been largely underexplored, Hardy says that after Voisey’s Bay came online, “the hype wore off” and companies left the area, particularly after the 2008–09 recession. He adds that interest in nickel also faded due to declining prices.

Despite the market oversupply, Hardy says prices should stabilize once the global economy picks up, increasing nickel consumption.

There have not been many nickel discoveries globally, and areas like Sudbury, Ont., and Thompson, Man., are “getting very long in the tooth,” Hardy says, noting that the nickel deposits tend to occur in clusters. This adds weight to the company’s theory that there should be other nickel deposits near the Voisey’s Bay mine.  

Equitas is focussed on making a discovery at the Garland property. “We are not going to dilly-dally … we’re just going to make it happen, or move on,” Hardy says.