Exploration And Development Pace Cools Down

The Minister for Natural Resources and Wildlife, Serge Simard, unveiled the first mineral strategy for Quebec on June 29, 2009. This strategy is based on three major policy directions: creating wealth for Quebec and preparing the future of its mineral sector; ensuring environment-friendly mineral development; and fostering integrated, community-related mineral development.

With this first mineral strategy, Quebec proposes measures, new social and environmental requirements, and framework initiatives in order to prepare the future of its mining sector. This strategy will contribute in maintaining Quebec’s position among industry leaders. It is but one of the government’s actions aimed at developing a new economic space, namely by stepping up the pace of mining development in Quebec’s north. The full text of Quebec’s Mineral Strategy, Preparing the Future of Quebec’s Mineral Sector, is available on the web at www.QuebecMining.gouv.qc.ca.

Mineral exploration

Over the past six years, Quebec has benefited from a very favourable investment climate for mineral exploration. As at Dec. 31, 2009, 203,739 active mining titles were recorded throughout the province, covering a total surface area of 92,000 sq. km. Based on data from the Institut de la statistique du Qubec, exploration and deposit appraisal expenditures in Quebec remained above the $200-million mark in each of the last five years: $227 million in 2004, $205 million in 2005, $295 million in 2006, $476 million in 2007, and reaching $526 million in 2008. This enthusiasm peaked in June 2008, with the drop of most metal prices (except gold), and the worldwide economic crisis. Thus, revised intentions for 2009 have dropped to $244 million despite an upturn in the price of several metals, namely copper.

According to the results of the 2008 annual survey, 213 mining establishments reported conducting exploration or deposit appraisal work in Quebec as project manager: 20 major companies ($111 million) and 190 junior companies ($411 million). State- owned corporations accounted for $4 million. Exploration and deposit appraisal activities were largely focused on precious metals, primarily gold ($263.3 million, 50%), base metals ($122.4 million, 23.3%), uranium ($87.3 million, 16.6%), ferrous metals ($23.5 million, 4.5%) and diamonds ($12.8 million, 2.4%). The last bull cycle, from 2004 to 2008, was characterized by a spectacular increase in exploration spending for uranium (to $87.3 million from $1.4 million) and ferrous metals (to $23.5 million from $300,000). In 2008, investment increases were most notable for rare earth elements (REE) ($1.3 million) and lithium ($300,000).

Gold

Northeast of Opinaca Reservoir, Les Mines Opinaca, a subsidiary of Goldcorp, continued drilling to improve the continuity of mineralized zones in the Roberto system. On the Aquilon Main property, at the eastern end of the La Grande area, Golden Tag Resources and Sirios Resources reported several drill intercepts with more than 1 oz. gold per ton in the Lingo vein.

At the Casa Berardi mine north of La Sarre, Aurizon Mines conducted exploration drilling from an exploration drift on the 810-metre level to probe the extensions of zones 118- 120. North of Amos, North American Palladium acquired Cadiscor Resources and in October, resumed production at the Sleeping Giant gold-silver mine. East of Lebel-sur- Quvillon, Metanor Resources intersected gold mineralization along the extensions of the Main zone at the Barry open-pit mine. The deposit contains an indicated resource of 269,000 tonnes at 4.1 grams gold per tonne.

Near Rouyn-Noranda, Alexis Minerals received positive results from a prefeasibility study on its Lac Pelletier gold project. Underground workings were dewatered in order to collect a 40,000-tonne bulk sample. The company expects to achieve commercial production in 2010. Richmont Mines launched an exploration program at its Francoeur project, where a probable reserve of 615,664 tonnes at 6.91 grams gold is defined. Dewatering of workings at the former mine should be completed in the first quarter of 2010 and production is slated to begin in 2011. Aurizon Mines received a positive prefeasibility study on its Joanna project and launched a feasibility study. The deposit contains 33.8 million tonnes of measured and indicated resources at a grade of 1.4 grams gold and an inferred resource of 28.4 million tonnes grading 1.4 grams gold. Drilling completed by Clifton Star Resources on three projects located in the Duparquet area yielded several interesting intercepts: 17 metres at 7 grams gold on the Beattie project, 8.2 metres at 9.04 grams gold on the Duquesne project, and 4.7 metres of 4.19 grams gold on the Donchester property.

West of Cadillac, Iamgold advanced construction of infrastructure on the Westwood project, located east of the Doyon mine. Inferred resources are estimated at 9.4 million tonnes grading 11.4 grams gold. On its LaRonde Extension project, Agnico-Eagle Mines continued sinking of the internal shaft to its final depth, at 2,854 metres. The company also launched a drilling program targeting the extensions of the Westwood deposit on its Ellison property, located just east of Westwood. Finally, the company began production at the Lapa mine near Cadillac, which is expected to produce more than 1.1 million oz. gold.

In Malartic, Osisko Mining began construction of the Canadian Malartic open-pit mine (which hosts reserves of 183.3 million at 1.07 grams gold per tonne). The company also reported significant results on its South Barnat project (with measured and indicated resources of 29 million tonnes grading 2.09 grams gold) and in the Jeffrey zone with partner Golden Valley Mines. Farther east on its Malartic- Midway property, Northern Star Mining continued development of an exploration decline to reach the Chabela and Briar gold zones. About 3 km east of the Kiena mine, Wesdome Gold Mines intersected 10.3 metres grading 26.1 grams gold per tonne in the Dubuisson zone. On the Wesdome project, located 4 km north of the Kiena mine, inferred resources stand at 1.56 million tonnes grading 7.97 grams gold per tonne and indicated resources at 275,800 tonnes grading 7.73 grams gold.

East of Val-d’Or, new measured and indicated resource estimates were calculated on various projects, including: 6.5 million tonnes grading 5.02 grams gold per tonne at Century Mining’s Lamaque; 4.6 million tonnes grading 1.82 grams gold at Orenada, owned by Alexandria Minerals; and 810,000 tonnes grading 9.11 grams gold at Croinor, held by First Gold Exploration and X-Ore Resources.

At Alexis Minerals’ Lac Herbin mine, reserves have nearly doubled to reach 610,000 tonnes at 7.36 grams gold, and are now sufficient for five years of production. On the Sleepy property, Alexandria Minerals established an inferred resource of 1.56 million tonnes grading 3 grams gold per tonne.

In the Tmiscamingue region, on the Conway-Paquin project, Conway Resources collected a sample weighing 527.7 kg from the Conway vein, which yielded an average grade of 18.6 grams gold and 69.4 grams silver per tonne. In November, the company announced plans to extract a 3,000- ton sample from the two veins.

Base metals and PGEs

About 20 km south of the Raglan mine on the Nunavik nickel project, Jien Canada Mining (formerly Canadian Royalties Inc.) released new indicated resource estimates for the Allammaq deposit (3.67 million tonnes at 0.9% nickel, 1.12% copper, 0.04% cobalt, 0.5 gram platinum per tonne, 2.18 grams palladium, and 0.1 gram gold) and the Puimajuq deposit (209,000 tonnes at 1.64% nickel, 2.73% copper, 0.06% cobalt, 0.92 gram platinum, 2.48 grams palladium, and 0.09 gram gold).

In the Chibougamau area, recent drilling by
Cogitore Resources on its Scott Lake property led to a new inferred resource estimate of 3.6 million tonnes at 1.1% copper, 5.2% zinc, 0.3 gram gold, and 36 grams silver per tonne. Farther west in Matagami, Donner Metals and Xstrata Zinc Canada are conducting a feasibility study on the Bracemac-McLeod project. Indicated resources are currently estimated at 3.6 million tonnes grading 11.52% zinc, 1.6% copper, 31.55 grams silver, and 0.49 gram gold.

In the northern Outaouais region, northeast of the Cabonga Reservoir, Cartier Resources reported 1% copper over 6 metres from channel samples collected on its newly acquired Dor property.

Iron

In the Labrador Trough, Adriana Resources released an indicated resource for the South zone of the Lac Otelnuk iron ore deposit totalling 4.29 million tonnes grading 29.08% iron, plus an inferred resource of 1.97 million tonnes at 29.24% iron. Near Schefferville, New Millennium Capital Corporation and Tata Steel Global Minerals Holdings continued work on a feasibility study on the DSO project located along the border between Newfoundland and Labrador and Quebec.

In the Cte-Nord region, Consolidated Thompson Iron Mines released a new resource for the Bloom Lake property, with measured and indicated resources totalling 827 million tonnes at 29.3% total iron and inferred resources of 47.2 million tonnes at 29.32% total iron. The company also released a new indicated resource estimate for the Lamle (641.7 million tonnes grading 30.3% total iron) and Peppler (293 million tonnes at 28.46% total iron) deposits. In November, Champion Minerals announced a new resource estimate on its Fermont iron project, located near its namesake town. Based on a cutoff grade of 15% iron, the two mineralized claim blocks contain 503.3 million inferred tonnes grading 28% iron.

Uranium

North of Chibougamau, in the sedimentary Otish basin, Strateco Resources released a new resource estimate, totalling 436,000 indicated tonnes grading 0.78% U3O8 plus 1.16 million inferred tonnes grading 0.5% U3O8 on the Matoush project. The company also filed an environmental impact study for the sinking of an exploration ramp to conduct a feasibility study on the project. At the northeast end of the sedimentary Otish basin, Abitex Resources discovered a new surface showing, dubbed Epsilon-B (with grab sample B-02 returning 3.54% U3O8, 46.85 grams gold per tonne, 1.2% lead, and 89.8 grams silver) on the Epsilon property.

East of Havre-Saint-Pierre, Uracan Resources established a global inferred resource for three zones (Double S, Middle zone, and TJ zone) of 40.7 million lbs. U3O8 at an average grade of 0.012% U3O8.

Others

On the Strange Lake REE property in the Labrador Trough, Quest Uranium extended the strike length of mineralization along the B zone to a minimum of 1.1 km. Several drill holes yielded high grades in REEs over vertical thicknesses ranging from 6 to 66 metres.

About 280 km north of Matagami, Lithium One conducted an aggressive drilling program to test about 15 different pegmatite dyke swarms with spodumene on the James Bay lithium property. Several intercepts ranging from 3 to 64 metres with grades of up to 1.98% Li2O, were obtained along a 1.2-km-long corridor. About 250 km north of Matagami on the Pontax- Lithium property, drilling by Sirios Resources and Dios Exploration intersected several lithium-bearing pegmatite dykes over 425 metres strike length, including one interval grading 0.97% Li2O over 21 metres.

On its past-producing Quebec lithium property, Canada Lithium conducted metallurgical test work by conventional processing of an ore sample, which yielded a concentrate grading 99.6% Li2CO3. Pilot-scale tests are planned for 2010.

On the Anita project, about 80 km north of Saint-Flicien in the Lac-Saint- Jean region, MDN Inc., in partnership with Iamgold and private investors, is investigating open-pit mining of tantalum-niobium ore from the Crevier Carbonatite.

Arianne Resources continued exploration work on its Lac Paul phosphate-titanium deposit, 200 km north of the town of Saguenay, in the Saguenay-Lac-Saint-Jean anorthositic Complex. Inferred resources are estimated at 304 million tonnes grading 6.18% P2O5 and 7.81% TiO2.

Exploration Orbite V.S.P.A. continued work on its red clay deposit, near Grande-Valle in the Gaspsie region, to further delineate reserves.

On their property located northeast of Chibougamau, joint-venture partners Stornoway Diamond and SOQUEM quadrupled the tonnage in the Renard 2 kimberlite following a summer drilling program. Resources at Renard are now estimated at 23 million carats of indicated resources and 13.3 million carats of inferred resources, based on a diamond valuation of US$117 per carat.