Matagami, Buchans camps highlight Canadian exploration

Embattled metal markets and investor apathy made for a drab year of domestic exploration, two exceptions being the Matagami region of Quebec and the Buchans camp of Newfoundland.

In Matagami, partners Noranda (NOR-T) and Southern Africa Minerals (SAF-T) began the year with an 8,000-metre program of diamond drilling at their Caber zinc-copper property. This was followed by the initiation of a feasibility study and a subsequent increase in resources in the main lens to 484,000 tonnes grading 11.7% zinc and 1% copper, plus 14.4 grams silver and 0.23 gram gold per tonne.

Exploration is focused on the Key Tuffite horizon, which hosts all the known massive sulphide deposits in the Matagami camp, and an underexplored area in the northwestern portion of the property. Between the Caber and Caber North zones, drilling intersected narrow intervals of up to 17.7% zinc, 5.3% copper and 91.6 grams silver, suggesting further resource updates may be in the cards.

Although results appear encouraging, Noranda has decided its earn-in requirements are too rich, and, unless the agreement is revised accordingly, the major is expected to pull out by mid-January. Noranda has already spent $3.6 million on exploration and invested $1.2 million in Southern Africa; to earn its 55% interest, it must spend an additional $2.4 million on exploration and invest $2.6 million more. An additional 15% can be earned in exchange for financing the project to production.

Also starting off with a bang was Nuinsco Resources (NWI-T), which announced in late January the discovery of high-grade nickel at its Lac Rocher property, 120 km northeast of Matagami. The discovery triggered a staking rush that saw about a dozen companies tie up more than 10,000 claims in a fortnight. However, to the dismay of investors, none repeated Nuinsco’s success, which itself eventually switched to another, “substantially larger” anomaly, which it considers a relative to the discovery intrusion yet more suggestive of economic sulphide concentrations.

Faring better was Aurizon Mines (ARZ-T), which quietly drilled off more gold resources at its Casa Berardi property, several kilometres south of Caber. Measured and indicated resources stand at 6.9 million tonnes grading 7.41 grams gold; inferred resources, at 2.2 million tonnes grading 9.18 grams gold. An internal feasibility study is under way.

Juniors Eastmain Resources (ER-T) and Virginia Gold Mines (VIA-T) announced separate discoveries in the Eastmain and La Grande greenstone belts, east of James Bay. The former, with Quebec-government-owned Soquem, uncovered several high-grade veins from which channel samples ran as high as 16.2 grams gold over 17.6 metres. The showings could add significantly to the known resource of just over 500,000 tonnes grading 11.3 grams gold.

The highlight from drilling at Virginia’s La Grande Sud project was a 23-metre interval of 0.5% zinc. The prospect lies southeast of Zone 32, which hosts 6.5 million tonnes grading 1.5 grams gold and 0.2% copper.

Cambior (CBJ-T) is earning a half-interest in La Grande Sud and plans to begin a 300,000-metre drill program in the new year to determine if the felsic volcanic-intrusive contact that runs through the property is as promising as similar geology in the Bousquet-Doyon mining camp to the south, where it operates the Doyon gold mine.

In mid-year, there were unconfirmed reports of a major zinc discovery in the Central Mineral Belt of Newfoundland, near the old Buchans mine, which produced more than 16 million tonnes of ore averaging 14.1% zinc, 7.8% lead and 1.4% copper from five high-grade massive sulphide zones. Phelps Dodge (PD-N) would neither confirm nor deny reports that it had pulled 30 metres of core sporting 22% zinc. A source close to the activities said exaggeration was likely at play, though he noted that the major had definitely had some success drilling on targets in the Buchans River formation, host to five producing deposits in the camp.

Fueling the speculation was a string of encouraging results from the Duck Pond project, 35 km southeast of Buchans. There, partners Thundermin Resources (THR-T) and Queenston Mining (QMI-T) targeted two known massive sulphide lenses in preparation for a resource update, now under way.

Drilling is set to resume in the new year, focusing on the Moose Pond and East Pond areas to the north. Both are considered to be as prospective as the known deposits.

Also new to the Buchans camp is London-based Billiton, the world’s fourth-largest nickel producer. From several juniors, Billiton has optioned 1,000 sq. km surrounding the mine, though, to date, no drill results have been released.

Roby zone

The search for platinum group elements in northern Ontario intensified with the entry of the world’s two largest producers of PGEs: Anglo American Platinum and Impala Platinum Holdings, both of which are based in South Africa. The former has teamed with Pacific Northwest Capital (PFN-V), and the latter, with Mustang Minerals (MMIN-C), to earn majority interests in selected projects in exchange for cash and millions of dollars in exploration funds.

On the heels of those deals came a substantial increase in resources at the Lac des Iles mine of North American Palladium (PDL-t), where more than 49,000 metres were drilled this year. Measured and indicated resources in the Roby zone now top 94.1 million tonnes grading 1.66 grams palladium and 0.18 gram platinum per tonne, plus 0.062% copper, 0.053% nickel and 0.14 gram gold.

The estimate is based on a palladium cutoff grade of 0.7 gram and is more than double the previous calculation. An independent firm is determining the feasibility of increasing daily milling rates to 15,000 from 2,400 tonnes.

Situated near Thunder Bay, Ont., Lac des Iles is the world’s largest open-pit palladium and platinum mine and Canada’s sole primary producer of the metals. Results from the study are expected shortly.

Activity in the gold camps of northern Ontario proved mixed: St Andrew Goldfields (SAS-T) drilled off and began mining an open-pit deposit at its Hislop property near Timmins, whereas low grades forced Claude Resources (CRJ-T) to suspend mining at its Madsen mine in Red Lake. Claude subsequently raised more than $8 million in a special warrants offering, with a portion of that earmarked for deep drilling of known high-grade quartz-carbonate veins.

In north-central Yukon, Copper Ridge Explorations (KRX-V) sank 13 holes at its Scheelite Dome project after raising $1.3 million. The program led to the discovery of a mineralized structure containing up to 10.65 grams gold over 1.5 metres.

Scheelite Dome is one of five properties Copper Ridge acquired from Kinross Gold (K-t) in exchange for 1 million shares. Kinross now holds a 26% interest in the junior.

Farther to the south, Atna Resources (ATN-T) continued its search for deposits similar to the Kupferschiefer copper-shale deposits of Europe and the copper-belt deposits of Zambia. Previous operators outlined just under 500,000 tonnes grading 5.8% copper, though metallurgical tests in the 1970s indicated that recovery of high-grade concentrate would prove difficult.

Kinross and Cambiex Exploration (CBX-T) separately pursued exploration opportunities in the newly formed territory of Nunavut. Kinross nabbed from Kit Resources (KIT-T) the right to earn a 70% interest in its George Lake gold project, while Cambiex optioned the Hope Bay project from a subsidiary of Broken Hill Proprietary (BHP-N).

Both properties are near Bathurst Inlet and already are known to host substantial resources. To earn its interest, Kit must spend $20 million on exploration over five years, whereas Cambiex must pay US$20.4 million and issue 6 million non-transferable warrants exercisable at $1.70-7.20 over three years and four months. The cash component is to be paid in three instalments over two years.

In eastern Nunavut, Cumberland Resources (CBD-T) celebrated higher-than-expected grades from infill drilling at its Meadow Bank project, plus the discovery of a new gold zone at the joint-ventured Meliadine East property, 250 km to the southeast. Results from the infill program have been incorporated into an ongoing prefeasibility study of a combined open-pit and underground operation.

The Meliadine East project is owned equally by Cumberland and Comaplex Minerals (CMF-T). The newly discovered zone, dubbed J2, consists of sub-parallel quartz veins spread over a 300-metre strike length and is expected to augment known resources of 2 million tonnes grading 6.7 grams gold in the separate Discovery zone.