Pelangio seeks to revive Detour Lake

Pelangio Mines President and CEO Ingrid Hibbard examines core at the Detour Lake camp in northeastern Ontario.Pelangio Mines President and CEO Ingrid Hibbard examines core at the Detour Lake camp in northeastern Ontario.

Detour Lake, Ont. — Among junior resource companies, Pelangio Mines (PLG-V) is in the enviable position of having a substantial (521,965-oz.) measured and indicated gold resource on its property, site of the past-producing Detour Lake gold mine, 220 km northeast of Timmins, Ont.

Pelangio’s 80-sq.-km property encompasses the mine site and extends over prospective swamp and muskeg that hosts numerous induced-polarization (IP) anomalies.

Placer Dome (PDG-T) operated the Detour Lake mine between 1983 and 1999, producing 1.7 million oz. gold from 7 million tons of ore. It mined the Main zone and identified several other gold zones that remain undeveloped.

On July 1, 1999, Placer estimated the gold resource of five en echelon zones, which included the mine itself, to be a measured 1.2 million tonnes grading 5.19 grams gold per tonne (or 203,776 oz. gold) and an indicated 1.5 million tonnes grading 6.5 grams gold (or 318,189 oz.). In addition, there is an inferred resource of 5.3 million tonnes grading 6.19 grams gold (1.06 million oz. gold).

A smooth road leads directly into the property. Just outside the mine site, a widening of the road doubles as an airstrip. Placer Dome has reclaimed the site, so the headframe no longer stands at the site of the shaft, the open pit is a grass-shored lake, and other infrastructure has been removed. Placer is still responsible for rehabilitation work, which is due for completion in 2005.

Pelangio is being systematic in its exploration, using extensive data purchased from Placer Dome that includes information from 5,500 drill holes and 550,000 assays. Placer Dome had focused its exploration on a 1.2-by-9-km deformation corridor, and Pelangio intends to explore further along this zone, which extends for 14 km west of the mine.

A scoping study is incorporating three-dimensional modeling, the interpretation of which is helping guide exploration. East of the mined area, exploration has been negligible, yet gold values have been intersected and further work is warranted. In addition, a camp-wide evaluation away from the existing resources is being conducted. Mobile metal-ion geochemistry surveys are being used to determine drill targets in the western part of the property. Pelangio intends to drill 10,000 metres this year.

The Sunday Lake Deformation zone crosses the open-pit area and traverses the property. Regional-scale folds are indicated by the west-trending Detour Lake syncline cored by metasediments, with volcanic rocks found on the northern and southern limbs. The northern limb has been overturned and faces north. Gold mineralization occurs in dilational zones at the contact between the ultramafic intrusives and mafic volcanic rocks.

A cherty marker horizon — the so-called CMH at the project — is also key to the gold mineralization; flexures, rolls or folds in the CMH have historically been the source of the highest-grade gold zones on the property. Locally, gold mineralization splays off the CMH into the hangingwall. En echelon mineralized zones are found adjacent to the deformation zone.

In September 2003, Pelangio optioned a portion of its property, west of the mine site, to Trade Winds Ventures (twd-v), which has agreed to spend $7.5 million over four years and pay Pelangio cash and shares in stages in return for a half-interest.

Trade Winds intends to drill 30,000 metres this year, mostly on the M zone. The first two holes confirmed that the structure is vertical. The first hole intersected the mineralized zone 165 metres vertically above a historic Placer intersection. In at least seven intercepts within these holes, quartz veins contained visible gold. Minor sulphides are associated with the quartz veining at the mafic-ultramafic contact.

Highlighting Trade Winds’ drilling to date is an intersection of 8.8 grams gold over 11 metres. This included a 1.75-metre intercept that graded 44.22 grams gold. More than 30 specks of visible gold were observed in this interval.

Trade Winds has drilled several holes in fences at about 450-metre spacing along the strike of the M zone and intersected the mineralized horizon over a strike length of almost 1 km. Beyond the footwall, the company has found additional gold not previously identified. Infill drilling will test the continuity of the zone and define the resource.

Visible gold

Visible gold is present in the area; the challenge is to define proven reserves. Geologist Philip Olson, a director of Pelangio, believes exploration will reveal that there are a lot more ounces to be mined: “This camp will be resurrected. That is the feeling.”

Pelangio and Trade Winds are co-ordinating exploration and have set up a core logging facility, with a central core-splitting room that they share.

Pelangio has drilled 26 holes since mid-January, concentrating on the mine site area and primarily targeting IP anomalies. Four shallow holes tested the Main mine horizon above the mined-out zone. A couple of the holes intersected significant grades: up to 9 grams over 0.3 metre and 6.1 grams over 0.54 metre.

Two holes were targeted at the eastern extension of the Northwest zone. The best intercept graded 2.67 grams gold over 1 metre. Five of the holes targeted strong IP anomalies at the footwall of the mafic volcanic-metasedimentary contact; they intersected pyrite and graphite, which explained the anomalies, but failed to return significant gold.

High-grade values

In early July, Pelangio reported more high-grade values from the last seven holes. Highlighting this drilling is a 1-metre intercept grading 18.95 grams gold, encountered at 183 metres down-hole, under the open pit. Another significant intercept beneath the open pit graded 5.19 grams gold over 2 metres at a down-hole depth of 160 metres. In all, 15 intersections graded greater than 1 gram gold per tonne. Two holes contained intersections less than 1 gram gold.

The geology was more complex than expected east of the underground workings. The cherty marker horizon was not intersected at the mafic-ultramafic contact in this area, though it was found farther to the east. An alteration zone in the mafic volcanics, up to 155 metres wide, was intersected in the upper portion of all the holes.

High River Gold Mines (HRG-T) has a business arrangement with Pelangio and owns about 25% of the company. Since September 2003, High River has provided technical expertise and managerial assistance.

The property is subject to a 2% net smelter royalty payable to Newmont Mining (NEM-N). In addition, a 1% NSR (or an optional pre-negotiated buy-out of the NSR) is payable to Placer Dome on 36 sq. km of the property.

Apart from the Detour Lake block, Trade Winds has an option on Pelangio’s Birch Lake property, in the Red Lake area, where drilling is under way.

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