Juniors test waters in British Columbia

A recent change in government is fuelling optimism and a modest revival of exploration in British Columbia. Mining executives say the government’s promises to streamline permitting procedures and improve access to land are making it easier to finance work programs.

Robert Dickinson of the Hunter-Dickinson Group is confident the province will regain its stature as a good place to do business, though he concedes it won’t happen overnight. “There’s been a real attitude adjustment,” he says. “You can feel it in the air. There are also some great opportunities that had been dropped and forgotten over the past nine years. We’re seeing quite a few submittals, and we’re looking at some of them.”

Dickinson says exploration should improve once additional land is opened up for exploration, including ground held in special management zones, which had suffered from the perception that they were parks-in-waiting and therefore off-limits for development. “It’s the number-one issue, but the government’s election platform was based on opening up the province for resource development. We’re encouraged by that.”

The Hunter-Dickinson group — a major player on the exploration front in past years — has since broadened its horizons to Mexico, South America and South Africa. However, several juniors are active in the province, including Taseko Mines (TKO-J), which aims to revive the dormant Gibraltar copper mine, near Williams Lake, using a hydrometallurgical process that would produce cathode copper from concentrates.

A scoping study showed that cash costs could be cut by as much as 20 per lb., mostly by eliminating shipping, smelting and refining charges.

A feasibility study will be completed by year-end, with costs shared by technical partner Cominco (CLT-T). Recent exploration, while limited, has identified geophysical targets that suggest the project’s potential goes beyond existing resources.

“The goal over the longer term is to build a significant copper complex at Gibraltar,” Dickinson says. “We expect to be there for a very long time.”

Earlier this year, Taseko inked a deal to acquire the Harmony gold project (formerly Cinola) in the Queen Charlotte Islands. The property hosts a resource of 64 million tonnes grading 1.53 grams gold, though no work is planned for this year. However, the Hunter-Dickinson group intends to explore a new exploration target in northern British Columbia. The drill program planned for Westgarde will test geophysical anomalies, coincident with scattered mineralized outcrops, in a search for porphyry copper deposits.

Eastfield, Lysander

Dickinson’s optimism is shared by other mining professionals, particularly in the hard-hit junior sector. “It’s been a long dry spell,” says William Morton, president of Eastfield Resources (ETF-V), “but now that we have a new government, major and junior monies appear to be available.”

Eastfield has already started a summer exploration program at the Lorraine-Jajay copper/gold/platinum-group-metals (PGM) prospect, north of Fort St. James. The junior can earn up to a 75% interest from Lysander Minerals (LYM-V) by spending $4 million on exploration, paying $550,000 in cash or shares, and completing a feasibility study.

Previous work on the property focused on a deposit hosting a resource of 32 million tonnes grading 0.66% copper and 0.6 gram gold per tonne. Eastfield notes that this is a higher grade than at any currently operating mine in province. Head grades at the nearby Kemess mine, for example, averaged 0.778 gram gold and 0.2% copper during 2000.

While this year’s work program is aimed at enlarging the deposit, which remains open in at least two directions, the project has taken on a new dimension with the recent discovery of highly anomalous values for platinum and palladium. The PGM discoveries were made at two separate sites, with the best values coming from the BM Breccia zone, which yielded samples that averaged 1.9 grams combined PGMs, along with values of 29.9% copper and 14.5 grams gold.

Another target yet to be fully tested is the Page zone, discovered in 1999, which returned an average grade of 0.86% copper and 0.47 gram gold from five consecutive samples.

Mineralization at the Lorraine-Jajay property is described as similar to the Ernest Hendry mine in Australia, which is notable for its high grades (122 million tonnes of 1.1% copper and 0.6 gram gold).

Although access was a problem in the past, recent logging activity has pushed logging roads to within a few kilometres of the property from several directions.

Stalwarts

Exploration in British Columbia has long been dominated by juniors, and this year is no exception. Although levels of spending are expected to recover somewhat from the dismal $30 million spent last year (well below the $226 million spent in 1990), several advanced projects are taking the lion’s share of dollars, and making the most news.

International Wayside (IWA-V) is continuing to explore the high-grade Bonanza Ledge gold zone in the historic Wells-Barkerville camp. Last year’s discovery sparked a modest staking rush, with more than 6,000 new claims recorded along a northwest-trending belt of rocks.

The project contains a resource at Cow Mountain, which, at last report, stood at 6 million tonnes grading 2.23 grams gold per tonne, plus an additional 1.5 million tonnes grading 1.85 grams. Although Wayside intends to subject Cow Mountain to a scoping-level study, work will continue at Bonanza Ledge, where higher-grade mineralization was encountered. Two of the best holes returned 25.8 metres grading 24.6 grams and 33.2 metres of 10.6 grams. However, recent work has shown that the higher-grade zones are structurally complex, with limited continuity. Even so, the discovery is one of the more interesting targets found in recent years in the province.

Another high-profile project is being explored by DRC Resources (DRC-V) near Kamloops. The past-producing Afton property holds an indicated resource of 25 million tons averaging 0.2% copper and 0.045 oz. gold per ton. A scoping study showed positive economics, though a feasibility study still needs to be completed to confirm the project’s viability.

In the Nelson region, Sultan Minerals (SUL-V) continues to test a bulk-tonnage target at the Kena gold property. Recent results include 106 metres of 1.16 grams gold and 58 metres of 1.21 grams. The current round of drilling is aimed at expanding this mineralization along strike.

Gitennes Exploration (GIT-T) was heartened by last year’s discovery of a zone of high-grade zinc-copper mineralization at the Fox property, near Merritt, though subsequent drilling returned only modestly encouraging results. The best hole cut a 0.7-metre interval grading 16.5% zinc and 1.18% copper, plus 87.4 grams silver and 0.45 gram gold. Gitennes returned to the property this spring to carry out mapping and geophysical surveys.

For the most part, majors and smaller producers are confining their exploration programs on ground near their existing mines. For example, Kemess operator Northgate Exploration (NGX-T) plans to spend $500,000 this year to expand the Kemess North deposit. The existing resource at Kemess North stands at 360 million tonnes grading 0.154% copper and 0.3 gram gold.

Several juniors are also working in the remote Iskut region, where the main target is high-grade gold deposits similar to the highly successful Snip and Eskay Creek operations.

Cominco (CLT-T), on the other hand, is winding down operations and exploration near its venerable Sullivan zinc-lead-silver mine, near Kimberley. The province’s best-known miner is now generating big profits by curtailing zinc production at its Trail smelting complex in order to boost power sales to energy-starved Americans.

Pongo discovery

Larry Reaugh’s Verdstone Gold (VGV-V) and Molycor (MOR-V) recently started a drilling program a
t the Pongo massive sulphide discovery in the Adams Plateau-Barriere Lakes area. It’s a district Reaugh knows well. In the 1980s, one of his juniors optioned the nearby Samatosum project to Minnova, which developed it into a silver-rich base metal mine.

Reaugh says Pongo and Samatosum are both covered by northeast-trending, shallow-dipping thrust faults that have deformed the sulphides but have not controlled the original mineralization.

Although the project is still at an early stage, recent excavator trenching of the Ovington discovery at Pongo has exposed a 9-metre-wide zone of stratabound massive and disseminated sulphides hosted by Devonian Eagle Bay sediments and volcanics. The 9-metre zone returned values of 0.15% copper, 10.7% lead, 4.45% zinc, 4.45 oz. silver and 0.17 oz. gold, which includes 1 metre of 0.39% copper, 5.01% lead, 5.15% zinc, 5.15 oz. silver and 0.8 oz. gold.

Mineralization is hosted in quartz vein/veinlet fragments in a strongly sheared, predominantly argillite sequence of rocks. The main stratabound sulphide showing will be tested downdip and downplunge with at least five vertical holes.