Minnova uncovers new zone near Winston Lake mine

Persistent exploration efforts by Minnova (TSE) around the company’s Winston Lake mine near Schreiber, Ont., have resulted in the discovery of a significant new zinc-copper zone about 1.5 km southwest of the main shaft. After completing more than 21,000 metres of surface exploration drilling in recent years, Minnova has come up with what it considers to be a significant new base metal deposit in the deep Pick zone.

Hole 67, completed recently in the zone, returned an impressive 13.4 metres grading 25% zinc, 2.6% copper, 106.1 grams silver and 0.4 grams of gold per tonne. The intersection was obtained at a depth of 1,050 metres below surface and is thought to represent the true thickness.

An earlier hole, drilled last year, yielded 18.3% zinc, 0.5% copper, 26.2 grams silver and 0.04 grams gold over 2.9 metres about 400 metres updip from the recent intersection.

“We initially discovered our first indications of the Pick zone back in 1984, and we’ve been picking away at it ever since,” said Dave Watkins, vice-president of Minnova.

The new mineralization occurs on claims that are 100% owned by Minnova. The regional strike is roughly north-south and the Pick zone dips about 50 degrees to the east.

News of the recent discovery pushed the company’s shares up by more than $1 to $19.75. That’s near the high end of their 52-week trading range of $16-21. Minnova is 50.4% owned by Kerr Addison Mines (TSE) which in turn is a subsidiary of Noranda (TSE).

Although the Pick zone is nearly three times deeper than the Winston Lake deposit, which lies at about 300 metres below surface, Watkins says the company could eventually drift across from the existing shaft to explore the new zone.

Watkins compares the Pick discovery with Minnova’s other deep mine, the Ansil copper deposit in Quebec, which occurs at a depth of 1,200 metres below surface.

A second drill rig is being mobilized into the Pick discovery while a third machine is expected to be added later, said Watkins.

While it’s still too early to predict the potential size of the Pick deposit, a minimum of about two million tonnes would be necessary at that depth to justify developing the deposit.

The nearby Winston Lake deposit was brought into production in 1988 at a cost of $72 million based on an ore reserve of nearly three million tonnes grading 15% zinc, 1% copper, 31 grams silver and 1 gram of gold per tonne. Last year, the company experienced some difficult ground conditions at the mine, but these problems have been largely overcome by cable bolting.

Meanwhile, a legal dispute with Zenmac Zinc (ASE) over its interest in the Winston Lake mine is continuing. Minnova’s 100% ownership of the mine is subject to a 10% net proceeds royalty to Zenmac which alleges it is entitled to purchase a 20% working interest rather than the 10% net proceeds royalty.