EXPLORATION ’95 — Search for diamonds continues in

Diamond exploration expenditures were the main area of growth in Saskatchewan in 1994, rising by more than 60% from the previous year.

The ministry of energy and mines estimates that total surface mineral exploration expenditures reached $35 million last year, an increase of $11 million, or 46%, over 1993.

While uranium exploration in Canada remained focused on Saskatchewan, the level of activity in the province was still at a low ebb, because of a local reserve base exceeding 20 years and a global supply surplus, from inventory sales both from the Commonwealth of Independent States republics and the Western world.

Exploration for uranium, which was concentrated in the eastern and southeastern parts of the Athabasca Basin, failed to produce any significant discoveries in 1994; rather, the industry was in a development phase. In March, federal government approval was received for full production at the Eagle Point mine at Rabbit Lake. The Cigar Lake test mine was on a care-and-maintenance basis pending preparation and submission of an environmental impact statement (EIS) to the federal-provincial uranium review panel, and the McArthur River test mine was undergoing development and underground exploration for production mine design purposes. New developments at Cluff Lake and McClean Lake, approved in early 1994, were under way. The Midwest project, which failed to receive approval, has been re-engineered by Cogema Resources (the operator), which envisages mining of the McClean and Midwest properties as a complementary operation. Both federal and provincial governments have agreed to a joint panel review of a new EIS. The gold sector, like uranium, is in a development phase. Exploration, focused in the Glennie and La Ronge domains, was undertaken by less than 10 companies, compared with more than 60 in 1988.

Greater Lenora Resources (TSE) was active again on the Goldfields property south of Uranium City. A 52-hole program tested the Box Mine mineralization near old workings and at depth; a 50-hole program was completed at the Athona mine.

The new Lenora drilling results should significantly upgrade the existing reserve estimate of 27 million tonnes grading 1.85 grams gold per tonne. A final feasibility study is scheduled, to be completed by mid-year, based on a 4,100-tonne-per-day (tpd) operation using total gravity separation. A joint venture operated by Cameco (TSE) has brought the Contact Lake gold mine in La Ronge Provincial Park to commercial production. It is likely that the 700-tpd mill will eventually produce in excess of 60,000 oz. gold annually from minable reserves of 1.3 million tonnes grading 8.0 grams. The mine, potentially the largest in Saskatchewan’s history, has an estimated life of six years; however, additional geological reserves and ongoing exploration will likely extend this period.

Waddy Lake Resources (TSE), 55% owned by Golden Rule Resources (TSE), successfully completed underground test mining and milling programs on its 100% owned Komis property and has estimated full production for early-to-mid-1995. Milling will be undertaken at the old Jolu mill 40 km south of the minesite.

Minable reserves are estimated to be 223,000 tonnes grading 12.45 grams. A 36-hole program, aimed at doubling those reserves, was recently completed. Komis is one of several advanced gold properties belonging to Golden Rule in the Byers Fault area.

The Seabee gold mine of Claude Resources (ASE) turned out some 50,800 oz. last year. Underground exploration significantly increased reserves which stand (as of November, 1994) at 445,000 tonnes grading 10-11 grams. Exploration will almost certainly identify additional reserves both on the Seabee property and in the surrounding area, for which Claude has a development agreement with Currie Resources.

Base metal exploration programs were undertaken primarily in the southeastern Shield area and its sub-Phanerozoic extension as well as in the Wollaston Domain.

At Denare Beach, near Flin Flon, Hudson Bay Mining and Development pursued an aggressive land acquisition program in response to encouraging results from drilling mafic volcanics. Previous massive sulphide deposits in these rocks include the copper dominant Birch, Flexar and Coronation mines. A unit of Noranda (TSE) continued its efforts to locate stratiform, sediment-hosted base metal deposits in the Wollaston Domain. Geophysical and drill programs were carried out in early 1994 in the Pendleton, Sito, Fannon and Duddridge Lakes areas in follow-up to 1993 drilling, which had intersected low-grade copper and lead-zinc mineralization over significant widths.

Noranda has been inactive on this play since the new 1994 drilling, leaving a number of discoveries inadequately tested. Detailed mapping by the ministry of energy and mines in the Janice Lake area resulted in the discovery of two new copper prospects.

Diamond exploration boomed in 1994 with more than 4 million hectares under disposition, some seven times the area of two years ago, mostly between latitudes of 53 and 56 in the Fort a la Corne, Sturgeon-Candle-Tobin lakes area (Figure 1).

In early 1994, a War Eagle Mining (VSE)-Great Western Gold (VSE) joint venture drilled 5 diamond pipes at two locations near Candle Lake. These discoveries fall within the Candle Lake magnetic low trend and form a northern extension to the Fort a la Corne kimberlite field, which contains at least 70 bodies up to 100 hectares in size.

Kennecott Canada signed an agreement with War Eagle and Great Western in January of this year to acquire a 60% interest in the Candle Lake venture for $8 million in exploration and development expenditures during a 5-year period. Kennecott, the operator, is planing a $1.5-million program for this year, including drilling and geophysical surveys.

The Fort a la Corne kimberlite field is currently under investigation by a Uranerz Exploration and Mining-Cameco- Monopros joint venture, which has been bulk sampling the most prospective targets, and by Rhonda Mining (ASE) and joint-venture partners. Uranerz reported grades of up to 11.97 carats per 100 tonnes in the 1994 drilling of 12 kimberlites, 7 of which were previously untested. A total of 30 kimberlites remain to be evaluated on the joint-venture property.

In January of this year, Kensington Resources (VSE) signed an agreement with the Uranerz/Cameco/Monopros venture to acquire 25% participating interest in the Fort a la Corne venture for $3.4 million in exploration expenditures during the next three years. The transaction will give all four parties equal shares in the project.

Kimberlite complexes in this region are almost totally preserved in the Cretaceous sedimentary sequence as kimberlite filled craters flanked by kimberlitic and reworked kimberlitic sediments. Several new low-level magnetic surveys were flown by joint ventures during the year, as this exploration method has proven most effective in locating kimberlite targets identified as bull’s-eye magnetic “highs.”

A period of ground follow-up and diamond drilling in harmony with rationalization of land holdings has begun and will escalate in 1995. Diamond exploration is also on-going in the southwest and south-central areas of the province where kimberlite indicator minerals are widespread. — A.J. Gracie and P.L. Schwann are resident geologists with the Saskatchewan Energy and Mines, La Ronge.

Exploration expenditures

1993 (actual) 1994 (estimated)

Uranium 7 (58) 11 (47)

Gold 2 (5) 3 (7)

Base Metals 4 3

Diamonds 11 18

Total 24 35

Notes:

Figures are rounded to the nearest million dollars.

Uranium and gold test mine expenditures are in brackets.