EXPLORATION ’94 — Quebec exploration activity — Kennecott

An option agreement withVirginia Gold Mines (ME) will allow Kennecott Canada to explore two properties in the Labrador Trough area of northern Quebec.

Exploration work is planned or is under way at numerous projects in the province.

Kennecott may earn a 50% interest in the SAGAR-III and Romanet properties by spending $3 million on exploration work during a 5-year period and paying $225,000. The company may earn an additional 1% interest by preparing (at its own expense) a feasibility study.

The two properties cover 170 sq. km and are characterized by two major regional faults and by numerous showings and boulder trains indicating the presence of gold, silver and uranium mineralization.

Virginia says Hemlo Gold Mines (TSE) withdrew its option on SAGAR-III. Elsewhere, a third phase of drilling, representing 2,900 metres, is further testing the Caber base metal project of Southern African Minerals (ASE) near Matagami, Que. BHP Minerals Canada is earning a 70% interest by spending $3 million on exploration during a 7-year period and paying $250,000 cash. Meanwhile, at the Lac Marcaut gold property, 150 km north of Matagami and owned jointly by Southern Africa and Fancamp Resources (VSE), Cambiex Exploration (ME) has an option to earn a 70% interest by spending $3.5 million on exploration work and making cash payments totalling $475,000. With a positive prefeasibility study for the Natashquan mineral sands project along Quebec’s North Shore in hand, management of Tiomin Resources (ME) has turned its attention to defining the ore reserve (for the initial 10-20 years of operation) and constructing a pilot plant for synthetic rutile production. The company is examining markets for its products and is seeking joint-venture partners, mainly in the iron and titanium dioxide industries. Gearing the Troilus gold project, 110 miles north of Chibougamau, for open-pit production is Metall Mining (TSE).

The Toronto-based company’s board of directors has approved a feasibility study for the project, where minable reserves of 4.6 million tonnes grading 1.37 grams gold and 1.37 grams silver per tonne and 0.11% copper have been identified. The deposit is open at depth and there is potential for new reserves to be delineated to both the north and south.

The capital cost of developing Troilus is estimated to be $150 million. Planned is the construction of a 10,000-tonne-per-day mill.

Annual production during a 14-year minelife is projected to average 4.3 million grams gold (138,250 oz.) at an operating cost of US$173 per oz. In Clairy Twp. north of Chibougamau, Inco (TSE) continues to explore a 752-claim property where sampling has returned zinc, copper and silver values. Inco geologists have been active there since 1991; more work is planned for 1995.

This year the company evaluated about 25 anomalies, having trenched and channel-sampled eight of them; the company also drilled five holes between two showings, Monique and PK. Results are pending.

Grab samples of the Monique showing returned values as high as 16% zinc, while channel-sampling (along 9.8 metres) of the PK showing returned 4.7% zinc, 0.6% copper and 16.8 grams silver.

Also contemplating a work program in Clairy Twp. on two base metal properties (De Maures and Regnault) is Fort Knox Gold Resources (TSE), which is 40% owned by Inco. A Fort Knox spokesman said no work was undertaken this year.