Expo-Ungava adds exploration dimension to Canadian Royalties

As the name suggests, Canadian Royalties (CZZ-V) began corporate life with a business plan focused on generating a royalty income stream from various mineral properties held in its portfolio. The junior receives a modest cash flow from royalty advances and option payments on some of its 80 mineral properties, but is also attracting attention for its own exploration efforts in Quebec.

Jim Mustard, mining analyst for Haywood Securities, says CRI was created out of a prospecting and staking syndicate, based in Val d’Or, and formed by principals with more than 20 years of exploration experience in eastern Canada. While most of its properties are optioned to third parties, the company has decided to operate its core project, Expo-Ungava, situated a mere 15 km south of Falconbridge’s Raglan nickel mine and mill complex in the Ungava region. The company can earn an 81% interest by spending $1.75 million over four years and completing a bankable feasibility study.

At first glance, Expo-Ungava has a long way to go to reach Raglan, which boasts grades in the range of 3% nickel, 1% copper and combined platinum group metals (PGMs) in the range of 4 to 6 grams. The property hosts a lower-grade resource, called Expo, of about 17 million tonnes grading 0.6% nickel and 0.8% copper, which includes a higher-grade core of some 3 million tonnes grading 1% nickel and 1% copper.

Mustard notes that since all of the historical work was done before the recent interest in PGMs, there was no analytical work (except for a small suite of selective surface samples and drill core) until this summer to indicate their presence, if any. “A detailed assessment of the PGM potential of the Expo deposit and several other nickel-copper occurrences over a 30-km strike length on the Expo-Ungava property is the focus of work this summer,” he adds.

The summer program consisted of prospecting, mapping, geophysical and drilling programs on several specific targets. The company also analyzed samples taken by previous operators for PGM values.

“Data from four holes at Expo indicate widespread PGM values over greater-than-expected widths,” Mustard notes in a recent market commentary. One hole, for example, returned 1.78 grams per tonne combined palladium and platinum over 39 metres of core. The best historical sample came from the Mesamax showing, where one sample gave a value of more than 15 grams PGMs. The Victor showing returned grades ranging from 0.8 to 3.7 grams palladium.

Numerous other targets are known to contain elevated PGM values, and additional showings were identified this summer, resulting in staking to expand the land position. “Of course the most significant aspect of the property is the abundance of historical drill core,” Mustard adds, “much of which dates back to the period 1968 to 1970. Combined with CRI’s own drilling this summer, re-assaying of the old core will establish a solid foundation for the project, which, despite the lengthy exploration history, has largely been overlooked for their potential.”

CRI is particularly encouraged by re-sampling results from the Mesamax showing, which was previously drilled in two areas, returning grades below 2% combined nickel-copper. The target was originally rated as low-priority, though this changed when recent surface mapping and geophysics showed that the zones may have a longer strike length than previously thought. Re-assaying of core from a historic hole drilled at Mesamax returned PGM grades ranging from 3 to 6.16 grams combined PGMs over a core length of 34.7 metres. Some 13 consecutive intervals representing 19 metres of core length assayed more than 4 grams PGMs.

In light of the encouraging results to date, Mustard rated Canadian Royalties as “a speculative buy.” The junior has about 15 million shares outstanding and currently trades at about 65 cents in a 52-week range of 20 cents and 75 cents.