This year’s $16.4-million exploration campaign at the Hope Bay gold project, north of the Arctic Circle, will culminate with an independent scoping study sometime before year-end.
Joint-venture partners
At a recent mining investment forum in Denver, Colo., Miramar President Anthony Walsh said the potential for development is enhanced by the recent discoveries of the Naartok and Suluk deposits at the northern end of the Hope Bay belt, and by the definition of a near-surface resource of 300,000 oz. gold grading 31.5 grams gold per tonne at the Doris Hinge zone. That zone is envisaged as an open-pit mine, which would enable the partners to begin paying back their initial capital investment.
The scoping study will evaluate possible approaches to mining, both by open-pit and underground methods, as well as the feasibility of using small, pre-built modular mills, which would be brought in by barge and moored on the coast. The high-grade Doris deposit is just 6 km from tidewater, and ocean-going barges or ships can reach Hope Bay and Roberts Bay from mid-July to the end of September.
The Hope Bay project is in Nunavut, 685 km north of Yellowknife and 170 km southwest of the community of Cambridge Bay. There, Miramar and Hope Bay Gold control 1,117 sq. km, which includes virtually an entire, 80-km-long greenstone belt along the Arctic coast. The belt comprises mafic metavolcanic (mainly metabasalts) and metasedimentary rocks that are bound by Archean granite gneisses and intrusive bodies. The package has been deformed during multiple events and is transected by major north-south-striking shear zones that appear to exert significant control over mineralization, particularly where major flexures are apparent and coincident with antiforms. Mineralization appears to be localized along second-order structures that are coming off the major Hope Bay break.
Montreal-based Hope Bay Gold (formerly Cambiex Exploration) purchased the project from BHP Diamonds in late 1999 for US$18.5 million in cash. In addition, BHP was granted 6 million share purchase warrants exercisable at prices varying between $1.70 and $7.20 per share over 40 months.
BHP had spent $85 million on exploration and underground development at Hope Bay between 1991 and 1998. In the process, it outlined an inferred resource of 4.3 million oz. in three separate mineralized trends along the Hope Bay belt, namely Boston, Doris and Madrid. The decision to sell the project was made when BHP deemed gold a non-core asset and withdrew from the gold business worldwide.
Vancouver-based Miramar, the owner and operator of two gold mines in Yellowknife, came on board at the end of 1999 and gained a half-interest in the project by paying US$13.3 million to Hope Bay Gold and contributing $2.9 million to exploration.
Last year, the Hope Bay joint venture spent $17 million on a 46,000-metre program of core drilling, designed primarily to confirm and upgrade the higher-grade component of the Boston and Doris deposits. The joint venture defined, in all three deposits, a measured and indicated mineral resource of 1.4 million oz. contained in 2.8 million tonnes grading 15.7 grams, as well as an inferred resource of 1.8 million oz. contained in 4.6 million tonnes grading 12.5 grams. The overall resource base includes 1.9 million oz. of near-surface, high-grade material averaging 16.9 grams.
The total resource figure of 3.2 million oz. was lower overall than that calculated by BHP (4.3 million oz.), reflecting more conservative measures, including: tighter geological constraints; the capping of higher-grade assays; a higher cutoff grade; and the elimination of certain deeper drill holes with poor survey control.
The biggest of the three gold deposits defined is Boston, which is adjacent to Spyder Lake, near the southern end of the belt, about 65 km south of tidewater. Gold mineralization at Boston is associated with three sub-parallel and steeply dipping quartz vein zones hosted principally by hydrothermally altered and foliated metabasalt. These zones have been termed B2, B3 and B4. Gold is spatially associated with coarse pyrite. About 85% of the gold occurs as coarse discrete grains and is free-milling. The remainder is in the sub-micron fraction, occurring within pyrite grains.
The B2 zone shows the best continuity and contains most of the mineralization. B2 is a 25-to-50-metre-wide zone consisting of numerous steeply dipping and parallel en echelon quartz-carbonate veins developed at lithological contacts between metabasalt and graphitic metasediment. Individual quartz veins vary from 20 cm to 3 metres in thickness and extend up to 50 metres along strike. The zone has been drill-tested 1,000 metres along strike and to a vertical depth of up to 780 metres.
BHP sunk 462 holes at Boston and went underground to define the deposit’s geometry and grade. A decline was driven to a depth of 185 metres below surface, and a total bulk sample of 27,000 tonnes from the B2 and B3 vein zones was collected from three different levels.
A scoping study by BHP evaluated the economics of a 190,000-oz.-per-year underground mine at Boston, based on a potential minable reserve of 1.2 million oz. at an average grade of 13.8 grams and a projected cash cost of US$162 per oz. This proposal did not provide an adequate rate of return on BHP’s capital estimate of US$219 million. The scoping work highlighted the need to discover additional ounces.
In the first half of 2000, Miramar and Hope Bay drilled 134 holes into the B2 zone on a tight 10-by-15-metre grid. This work outlined some 650,000 oz. within 250 metres of surface and along a strike length of 450 metres in a measured and indicated resource of 1.3 million tonnes grading 15.2 grams. A further 895,000 oz. in 2.6 million tonnes grading 10.9 grams are categorized as inferred.
This year, the partners tested the area south of the Boston ramp by drilling 30 holes (8,138 metres). The program extended the high-grade mineralization within B2 more than 225 metres south of the Boston decline and to depths of up to 250 metres below surface. The mineralization occurs in at least three sub-parallel en echelon lenses.
The Doris deposits are in the northern end of the belt, within a 4-km-long, steeply dipping quartz vein system in folded and metamorphosed pillow basalts. Like Boston, it is on an inferred inflexion in the regional Hope Bay break. BHP tested the area with 57,800 metres of diamond drilling in 201 holes.
Several parallel vein systems have been identified to date, the most important being the Lakeshore and Central veins. These have been traced over a strike length approaching 3 km and to depths of up to 530 metres. Most of the mineralization lies above a sub-horizontal diabase intrusive body, though some intercepts below the diabase have yielded significant grades.
Most of the gold occurs along quartz-vein and wall-rock contacts in association with dark-coloured tourmaline-pyrite septa or ribbons.
In 2000, the joint venture drilled 91 holes totalling 12,000 metres in the northern end of the deposit. Drilling showed that the Lakeshore and Central veins come together to form the Hinge zone, a thickened, high-grade, near-surface anticlinal fold closure. The Hinge zone, which was traced along a strike length of 325 metres, forms a large component of Doris North’s overall indicated resource, estimated at 710,000 tonnes grading 21.2 grams, or 483,000 oz.
About 1 km south in the Doris Central area, beneath Doris Lake, the joint venture discovered the Stringer zone of mineralization associated with the Lakeshore vein. The Stringer zone contains multiple quartz veining within a dolomite halo in the hangingwall of the Lakeshore vein. An indicated resource of 418,000 tonnes grading 14.9 grams containing 201,000 oz. spans 525 metres of strike at Doris Central.
This year, Miramar and Hope Bay tested a 500-metre gap between the Doris Central and Doris North areas, with seven holes totalling 1,423 metres. Drilling confirmed the presence of a shallow, sub-horizontal mineralized shoot in the Doris Connector area.
The Madrid deposit, 9 km south of Doris, received little work in 2000. It is a lower-grade deposit containing indicated resources of 328,000 tonnes grading 7.3 grams, plus inferred resources of 744,000 tonnes grading 9.3 grams. The total number of contained ounces is 300,000. Last year’s resource calculation was based on the joint venture’s reinterpretation of some 95 holes totalling 18,100 metres done by BHP.
The mineralization is related to carbonate alteration of mafic volcanics interlayered with sulphidic sediments. The Madrid deposit contains three main zones — Perrin, Matrin and Rand — each of which exhibits shearing and brecciation, iron-carbonate alteration, quartz veining and variable-grade gold mineralization.
One of the higher-priority targets of the 2001 program was an area 250 metres west of Madrid, where a hole drilled at the end of the 2000 field season hit 34.8 metres (true width) grading 6.9 grams from surface, including 7.6 metres of 21.4 grams.
This previously unrecognized area, dubbed Naartok, was tested by the joint venture with 67 holes totalling 12,558 metres that defined a broad east-west trend of mineralization with significant resource potential. The mineralization occurs in the hangingwall of a zone of intense ductile deformation, which extends for up to 8 km from the southeastern shore of Windy Lake to south of Patch Lake.
Mineralization at Naartok occurs in three steeply dipping lenses within brecciated basalts containing minor sulphides and variable amounts of visible gold. Drilling traced the zone more than 200 metres along strike and to depths of up to 400 metres. The A lens in the immediate hangingwall of the Deformation zone has yielded the best results, with gold values running 15-25 grams over widths of 5-25 metres.
With the discovery of the Naartok zone, the joint venture began targeting the Deformation zone, a major structural break that appears to represent an important mineralizing system. A second area of high-grade mineralization was subsequently discovered in the Suluk area, 1 km southeast of Naartok, under Patch Lake.
The drilling of 15 holes has traced at least three parallel, steeply dipping lenses adjacent to the Deformation zone, a setting similar to that at Naartok. Gold mineralization occurs in altered, brecciated basalts interbedded with minor amounts of sediments. Better values are associated with higher percentages of fine-grained disseminated pyrite in altered horizons, and with horizons of pervasive silicification. Preliminary metallurgical testing identified active carbon in a sample of strongly graphitic sediment from the Suluk zone. This could potentially affect gold recovery in a conventional cyanidation circuit. Miramar said this was the first occurrence of this type of material in the Madrid area or in any of the other gold deposits in the Hope Bay belt.
Metallurgical tests on each of Boston, Doris and Madrid have shown that gold recoveries in the range of 88-98% could be expected from a combination of gravity and whole-ore cyanidation processing. Up to 40-45% of the gold in the Boston and Doris deposits could be recovered by gravity methods alone.
Said Walsh: “Through the discovery and definition of the Naartok and Suluk deposits in 2001 and the identification of significant but lower-grade mineralization in the Rand, Perrin Bulge and P112 areas, we now recognize that the Deformation zone is a major locus of mineralization.
“We are continuing the hunt along this and related structures for possible further deposits. The recognition of multiple mineralized zones within just a 1.5-km segment of this system provides encouragement that more deposits may remain to be discovered along the remainder of the trend.”
Toward the end of the summer, the joint venture drilled three holes in the South Patch area, where four earlier BHP holes intersected narrow high-grade intercepts close to the Deformation zone. Highlights from the three holes included 1.6 metres grading 9.3 grams gold, 2.4 metres of 40.6 grams and 1.4 metres of 19.1 grams. Although further drilling is necessary to confirm continuity, the partners believe South Patch has good potential to add high-grade ounces.
An updated resource estimate based on the results of this year’s drilling, together with the results of the scoping study, should be available by year-end. The scoping study will form the basis for planning work programs and budgets for 2002.
Earlier this year, Miramar and Hope Bay Gold spun off a separate package of mineral claims covering 100 sq. km on the Elu belt of rocks, 40 km northeast of the Hope Bay belt.
Elu is a greenstone belt of rocks comprising mafic and felsic volcanics, with minor sediments. It is about half as big as the Hope Bay belt and of higher metamorphic grade. BHP spent only $600,000 superficially exploring this package, whereas Miramar and Hope Bay Gold spent a further $100,000 on limited reconnaissance in 2000.
Given the focus on the Hope Bay project, and with no work planned for the Elu belt in 2001, the partners decided that the property’s potential could be better evaluated by vending it to a third party.
Sherwood staked additional ground in the area this summer, boosting its land holdings to 445 sq. km. Using field staff on loan from the Hope Bay joint venture, Sherwood carried out two rounds of reconnaissance field work in the late summer and early fall. The programs, which cost about $450,000 in total, were designed to evaluate the potential for gold and base metal mineralization. The fieldwork consisted of mapping, prospecting, trenching, channel sampling and the re-evaluation of previous airborne geophysical data.
This summer’s work resulted in the discovery of several gossanous sulphide-bearing showings along a 12-km-long north-south-striking zone of felsic volcanics within the predominantly mafic Elu greenstone belt. Massive and semi-massive sulphide mineralization was discovered in two outcrops spaced 8 km apart.
The northernmost prospect, dubbed Peninsula, yielded an initial grab assay of 10.3% copper, 5.2 grams gold and 150 grams silver in oxidized subcrop. Subsequent channel samples in two blasted trenches yielded values of 0.16% copper over 1.9 metres and 0.51% copper over 2 metres. Precious metal values in both trenches were anomalous with values of up to 0.34 gram gold and 28 grams silver.
Channel samples from a blasted trench on the second showing, called Elu 1, ran 0.45% copper over 1 metre and 0.23% copper over 4 metres. Both prospects coincide with airborne electromagnetic conductors.
A second parallel felsic trend was identified a further 4.5 km to the east. At the northern end of the 8-km-long eastern trend, numerous showings of disseminated pyrite and pyritic gossans were noted in a brecciated rhyolite and lapilli fragmental horizon, near the contact with overlying sedimentary units. Locally disseminated chalcopyrite and malachite were observed in many of the outcrops.
Two trenches were blasted in gossanous pyritic horizons, yielding 0.1% copper across 9 metres in one trench and 0.12% copper over 10 metres in the other, a further 1 km to the south.
Sherwood is reviewing its plans for the 2002 winter season. At least five drill targets have been identified, and more will likely be developed once geophysical surveys have been completed over the whole area.
Be the first to comment on "Hope Bay partners evaluate project’s economics"