Grassroots mineral exploration withered in past year

In 2001, metal prices fell to some of the worst levels ever, so junior explorers can be forgiven if virtually the only thing they developed in 2001 was the blues.

New venture capital all but dried up, major producers tightened their purse strings, and new area plays failed to emerge. Moreover, the skyrocketing palladium prices that carried the sector last year came to an abrupt halt in February, when a renewal in Russian exports yanked the market back down to earth.

Here at home, an eerie silence settled across the land as few companies were able to raise the necessary funds to let geologists loose in the countryside. Management resigned itself to paper pushing in hopes of better times ahead.

A few companies managed to hold their own, Sultan Minerals (SUL-V) being among them. The junior kept itself busy at a new copper-gold prospect in the northwestern portion of its Kena property in British Columbia.

Drilling has so far revealed grades of more than 280 grams gold in a large, low-grade porphyry system. By year-end, four of the 18 holes for which results were available had traced a high-grade shoot over a vertical extent of 150 metres, starting at 40 metres below surface.

Results are pending for several holes, and mineralization remains open to the north and south.

At last report, Sultan was tracing the contact between the Silver King porphyry and older Elise volanics using geophysical techniques. The contact has a spatial relationship with the zone of enrichment and will be the focus of future drilling.

Taking top prize for the best international discovery were partners Metallica Resources (MR-T) and Noranda (NRD-T). At their El Morro project in Chile, the two discovered a copper-gold prospect and then impressively turned it into an inferred resource of some 410 million tonnes grading 0.61% copper and 0.56 gram gold per tonne.

More recently, the partners uncovered several hopefuls using remote-sensing and geophysical surveying techniques. Metallica believes the targets “could have a major impact on the potential economics of the project, should they represent additional porphyry-style mineralization.”

Farther abroad, Minotaur Resources stirred things up Down Under with the discovery of an Olympic Dam-style prospect more than a hundred kilometres northeast of the famous deposit. So far, all signs point to a lookalike, though this is based on the one hole drilled.

Minotaur zeroed in on the area during a gravity survey that was following upon earlier drilling by Normandy Mining (NDY-N). Hole URN1 averaged: 3.03 grams gold from 107.8 to 128 metres down-hole; 1.94% copper, 0.65 gram gold and 1.6 grams silver from 200 to 307 metres; and 1.1% copper, 0.61 gram gold and 2.6 grams silver from 429 to 581 metres.

Mineralization is hosted by massive hematite-supported breccia, with the original rock textures having been replaced by siliceous, sericitic clasts up to several centimetres across. From 581 metres onward, the rocks are dominated by volcanic lavas intercalated with barren silica-hematite breccia, suggesting a volcanic orifice geological setting.

Chalcocite is the predominant copper sulphide, though visible bornite and chalcopyrite appear at deeper levels in the matrix and clasts. Rare earth elements (cerium and lanthanum) and uranium occur throughout the mineralized section, becoming more concentrated below 450 metres.

Minotaur Resources is listed on the Australian Stock Exchange and is 70%-owned by BHP Billiton (BHP-N).

In the Magadan region of far-eastern Russia, Kinross Gold (K-T) announced a blind discovery bearing similarities to its nearby, producing Kubaka gold deposit. Dubbed Birkachan, the zone comprises several rich veins that were formed in a larger altered and mineralized struture about 2.5 km in length, 150-200 metres in width and 350 metres in depth.

Capping the year off was Falconbridge (FL-T), which turned industry attention back home with the discovery of a rich base metals prospect in the Sudbury camp of northern Ontario. Grades in the two discovery holes, 100 and 100A, exceeded 5% nickel and 20% copper, plus 20 grams platinum, 26 grams palladium and 20 grams gold per tonne.

Borehole geophysics suggest that mineralization may continue to the north, east and south. Accordingly, three drill rigs are now chasing the zone.

Falconbridge notes that the prospect is near its Rim deposit, where inferred resources are pegged at 1.6 million tonnes grading 1.6% nickel, 10.1% copper, 4.2 grams platinum, 3.5 grams palladium and 2.5 grams gold.

Although there was a paucity of new discoveries, there was certainly no shortage of expansions at advanced projects. Northgate Exploration (NGX-T) perked investors’ ears with a significant increase in the size of the Kemess North deposit in north-central British Columbia.

Kemess North now hosts 442 million tonnes grading 0.23% copper and 0.4 gram gold — a significant increase from the 1998 estimate of 74 million tonnes grading 0.18% copper and 0.34 gram gold.

At the year’s closing, Northgate said it was attempting to raise $140 million through equity financing and restructuring. Some of the funds would be funnelled to Kemess North and its producing sister deposit, 7 km to the south.

In Nunavut, Cumberland Resources (CBD-T) sank a series of stepout holes from the Vault zone to expand it to 850 metres in length, 300 metres in width and 120 metres in vertical extent. The results are expected to augment the deposit’s inferred resource of 3.4 million tonnes grading 3.9 grams gold.

Vault is one of five near-surface gold deposits that comprise the Meadowbank project. All are being incorporated into a revised feasibility study that is scheduled for completion in mid-January.

Also in Nunavut, partners Miramar Mining (MAE-T) and Hope Bay Gold (HGC-T) continued their pursuit of new zones at the Hope Bay project. The pair were rewarded with the discovery of the closely spaced Naartok and Suluk zones.

Miramar and Hope Bay believe the new zones represent a third high-grade area. The project’s other two deposits, Boston and Doris, have measured and indicated resources of 2.5 million tonnes grading 16.9 grams gold. Within Doris, a further 1.1 million tonnes grading 16.8 grams, or 579,000 oz., are categorized as inferred.

A scoping study, which was scheduled to have been released by year-end, was unavailable at presstime. The study will form the basis for work programs and budgets for 2002.

Back in the Sudbury region, Pacific North West Capital (PFN-T) tabled a resource at its River Valley platinum group metals project. Partner Anglo American Platinum has since provided an additional $2.3 million for follow-up drilling.

Combined in situ resources in the Dana Lake and Lismer’s Ridge zones are pegged at 12.7 million tonnes averaging 1.04 grams palladium, 0.35 gram platinum and 0.07 gram gold, plus unspecified copper and nickel values. Future drilling could augment the resource, according to consultanting firm Derry, Michener, Booth & Wahl.

Across the Atlantic, in Namibian coastal waters, Namibian Minerals (NMR-T) made enough exploration headway to turn the heat off its earlier brush with bankruptcy. Between September and mid-November, the company recovered 1,007 stones, weighing 362.1 carats, from 610,000 sq. metres spread across four features.

The company says the results confirm the continuation of mineralization in an area that has yielded more than 400,000 carats. They also highlight a new zone of mineralization.

Activity on the African continent itself continued to recede from the heyday of the mid-1990s. A notable exception was the Zambian copper belt, where a renewed sense of interest was sparked by the activities of such companies as First Quantum Minerals (FM-T).

In the fall, First Quantum announce
d a 390% increase in the size of the Lonshi copper deposit. The deposit is on the Democratic Republic of Congo’s side of the mineral belt, though any mined material would be processed at the Bwana Mkubwa plant across the border.