Falconbridge joins Labrador nickel search

Having lost the only “sure-Thing” nickel project in Labrador — Voisey’s Bay — to arch-rival Inco (N-T), Falconbridge (FL-T) has decided to spend a small portion of its $101-Million consolation prize on what some regard as one of few promising longshots in the region.

The longshot in this case is the VBE-1 project, situated immediately east of the Voisey’s Bay property, a joint venture of equal partners International Canalaska Resources (ICA-V) and Columbia Yukon Resources (CYR-A).

Two fruitless seasons have driven away many of the juniors that followed Diamond Fields Resources into central Labrador. But not these two, which have been planning a deep drilling program to test the theory that the Eastern Deeps zone does not end where Inco’s property ends — it just extends farther east and deeper.

The roughly rectangular VBE-1 property is 3 km from east to west, and 6 km from north to south. Inco has drilled as near as 6 km west of the VBE-1 property, and assays of core with economic concentrations of nickel, copper and cobalt have been released for holes drilled 10 km east of VBE-1.

Last year, Canalaska and Columbia Yukon drilled one hole on the VBE-1 property. They attempted to drill down to 1,000 metres but gave up after the drill rod broke, not far from that depth. Geophysical surveys were completed, but the near-surface targets which such surveys might have delineated simply were not there.

The goal of the 1997 drill program is to test for an eastern extension of the Voisey’s Bay mineralization, specifically the 600-To-900-Metre-deep Eastern Deeps zone. The involvement of Falconbridge should help the companies achieve that goal.

The Falco deal will see the major cover a third of the costs of the $3.3-Million, 13,500-Metre drill program planned for 1997. In return, the two juniors have granted Falco an option to earn a 51% undivided interest in the VBE-1 project.

To maintain its working right and option, Falco must spend $3.3 million by the end of 1998, an additional $6.7 million by the end of the following year, and a further $12 million by the end of 2000. At that point, the company will have earned a 25% undivided interest in the VBE-1 property.

Falco can increase its interest to 51% by completing a bankable feasibility study by Dec. 15, 2003, and to 60% by arranging financing and bringing the project into production.

Says Canalaska President Harry Barr, “We’ve got a company [Falconbridge] that tried to get Voisey’s Bay . . . and now it’s willing to take a risk with us.” And if the project pans out, Barr adds, “Then we have a company with the technical and financial ability to take this thing right through to a mine.

We’re pretty excited about it.”

Canalaska had been the operator during the first two years before Columbia Yukon took over. What would have continued to be a schedule of 2-year terms will be replaced next year by continuous Falconbridge operatorship. What was a 2-company management committee will simply be replaced by a 3-company committee.

Once deep holes are completed, down-hole geophysical surveys will be employed to search for mineralized bodies too deep to be detected using other methods.

As for drill collar locations, Cavalero says, “Frankly, we don’t really know where to drill. But we know that our targets are approximately 1,000 to 1,500 metres down.”

Adds Barr, “A lot of it is geological intuition.”