Since the summer, the Vancouver-based junior has been engaged in grassroots exploration on two properties covering more than 4,000 ha of the adjacent Kelly and Janes twps. The programs are being carried out as part of an agreement in which the company can earn 70% interests in both properties by spending $1 million on exploration over four years, completing a feasibility study and arranging project financing. As part of the deal, Pacific North West (PFN) can acquire a 25% equity interest in the vendor, privately owned Goldwright Exploration, by buying shares worth $200,000 in that company.
On a tour of the more thoroughly explored Janes property, The Northern Miner noted that PFN has outlined platinum- and palladium-bearing mineralization in more than 12 areas stretching along a 500-metre strike length of the diabase. Most of the outcrops were previously explored for their base metal potential by the predecessor of
PFN enlarged and resampled each of the prestripped outcrops and compared the results to those obtained by Goldwright, as well as stripped and sampled new ones. The best assays came from the centre of the zone, in an outcrop dubbed Trench 1, where 4.36 grams per tonne combined platinum, palladium and gold, plus 1.04% copper and 0.42% nickel, were obtained from channel samples taken over 13.3 metres.
Similarly, results from Trench 4, 200 metres to the north, returned 5 metres averaging 4.42 grams of combined platinum, palladium and gold. A smaller, 0.52-metre section assayed an impressive 34.3 grams combined, though this is attributed to remobilization along a local, contact-related shear abutting the sedimentary country rock.
Though exploration is still preliminary, it is providing the company with some valuable geological insight.
“The control on mineralization seems to be proximity to the intrusive contact with the surrounding sedimentary rocks,” PFN’s vice-president of exploration, Lindsay Bottomer, says. “Local shearing and faulting may have added a structural component, but at the moment our ideas our based on the intrusive contact being the major control.”
The showings found so far occur within 20-30 metres of the sedimentary contact, with the thickness of the “mineralized layer” estimated at 8-10 metres. Interpretations of an induced-polarization survey completed last August lend support to this assumption, as do results from one of 10 holes drilled by the Kennecott predecessor. The hole, which was collared roughly 90 metres west of the trenched zone, interested 10.7 metres averaging 1.2% nickel and 1.5% copper within 20 metres of the sedimentary contact, at a down-hole depth of 170 metres.
That the Nipissing Diabase can host platinum group elements and base metals, particularly nickel and copper, has been known for some time. Most of the early work was limited to the Cobalt-Gowganda region, with interest in the Sudbury district picking up in the 1980s, spearheaded by researchers such as Anthony Naldrett, professor at the University of Toronto, and Peter Lightfoot, formerly with the Ontario Geological Survey and now employed by Inco.
Geologically, the diabase is included in the Southern Province of the Canadian Shield, accounting for 20% of known outcrop areas and consisting predominantly of gabbro. Field investigations show that it was emplaced in the sedimentary and volcanic rocks of the Huronian Supergroup as undulating sills, consisting of basins, arches and, to a lessor degree, dykes. Some researchers have also noted locations in which erosion of the sills formed inward-dipping, arcuate-to-circular outcrop patterns — a characteristic observed in the Janes area and interpreted to mean proximity to a feeder system.
“The [OGS] work appears to demonstrate that there is no reason why the Nipissing Diabase could not be a host for nickel-copper and associated PGEs [platinum group elements],” says Bottomer. “The idea, however, lay dormant for some years, which, essentially, was a function of Ontario’s unfriendly attitude towards exploration in the early 1990s.”
PFN’s interest in the properties began earlier this year, when management decided that gold and base metals were being sufficiently covered by affliated companies
Platinum finds its use in the automobile (as an autocatalyst), jewelry, electronics and glass industries, as well as for investment purposes. Palladium is mainly used in the automobile and electronics industry, and in dental applications. In contrast to their wide applicability, both metals are predominantly produced in only four countries: South Africa, Russia, the U.S. and Canada (though this country’s production is tied to nickel and copper prices, as both are mainly produced as byproducts from the Sudbury operations of Inco and Falconbridge). Most of the American production comes from the Stillwater project, where output is being expanded.
According to Johnson Matthey, a London-based company that refines and markets precious metals, demand for both metals outstripped supply in 1997 and is continuing to do so in the current year, though far more so in the case of palladium. For 1998, this is attributed to two predominant factors: increased platinum orders from North American and Chinese jewelry fabricators, which, in turn, are offsetting lower requirements in the Japanese market and declining world demand in autocatalysts; and rising demand for palladium in the automobile industry as new vehicle emission laws in the U.S. and Europe necessitate the replacement of platinum in autocatalysts used in gasoline engines.
Unlike demand, metal prices fluctuate because of their intimate association with Russian sales — especially for palladium, as two-thirds of the world’s supply is produced there.
Both metals fetched hefty prices early in the year. Palladium soared to a record US$417 per oz. in mid-May, whereas platinum was trading in the US$400-per-oz. range, chiefly because of the disruption of Russian exports. Both metals have since fallen dramatically on the resumption of steady output from Russia, with platinum also suffering from negative outlook on demand combined with fears that the financial crisis in Russia might lead to higher sales.
Despite the difficulties, PFN is confident it can penetrate the market and recently widened its search to the Thunder Bay region. There, the company can earn, from a private vendor, a 75% interest in 3,500 ha situated 525 km north of the city. In return, PFN must spend $1.3 million on exploration and issue 1.2 million shares over three years. The deal is still subject to regulatory approval.
Dubbed Big Trout Lake, the property overlies 22.3 km of an intrusive complex after which the property is named. The intrusion is described by the Ontario Geological Survey as a layered mafic sill consisting of a lower ultramafic unit and a mafic upper portion, and is believed to have been emplaced in a pre-tectonic to syn-tectonic setting.
“Big Trout is one of the few major, differentiated, layered intrusions with demonstrated PGE potential in Canada,” says Bottomer. “And if you’re into the Stillwater and Bushveld models, this is the type of intrusion you want to have.”
Previous work by International Platinum — the company changed its name to
two zones in the intrusion, as well as a separate, 700-metre-long, electromagnetic conductor at its base.
Drilling in the West zone returned up to 1.5 grams PGE over 0.4 metre, whereas results from the East zone, which rests lower in the sequence, reached as high as 13 grams over 0.9 metre. Although the geophysical anomaly has not been tested directly, drilling along strike intersected 1 metre of 1.5% nickel, and 0.45 metre of 11 grams palladium.
PFN is attempting to raise funds in Canada and Europe for a drill program it hopes to begin in the new year. At Big Trout Lake, drilling will focus on the geophysical anomaly, and several showings at Janes are to be tested as well. Drill targets at the Kelly property are expected to be outlined in the coming months.
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