Saskatchewan, exploration and development highlights

Year-end estimated exploration and predevelopment expenditures in northern Saskatchewan in 1989 were $71 million, compared with $105 million in 1988. While expenditures on uranium rose, those on gold were down by about 65% (see Table 1). The forecast for 1990 suggests a further decrease in gold exploration activity and also a decrease in grassroots uranium exploration.

Saskatchewan remained the focus of uranium exploration in Canada in 1989. Although markets continue to be soft and spot prices have sunk below the US$10-per-lb. mark, surface exploration was maintained and expenditures of close to $21 million were similar to those experienced for the last five years.

Some dozen companies are currently involved in exploration within the Athabaska Basin. Cameco, the new Saskatoon-based resource giant controlled by the federal and Saskatchewan governments, is the key player and commands a uranium reserve base in excess of 50% of the currently identified reserves in the basin.

Test mining projects were ongoing at Cigar Lake and Midwest Lake, accounting for the $25 million of underground exploration expenditures. The Cigar Lake Mining Corporation was established to manage the development of the giant Cigar Lake deposit with reserves estimated at 150,000 tonnes.

The corporation is sinking a 510- metre deep shaft and developing two levels from the shaft, one above and one below the orebody, to test various mining methods, the most favored being raise boring. The operation is on schedule to begin test mining in 1990, with an anticipated completion date of late 1991 when the owners will review potential production scenarios.

At Midwest Lake, water inflow and ground problems have been overcome to complete a $17.5-million test mining project by the Midwest joint venture operated by Denison Mines (TSE). The project involved sinking of a 185-metre deep shaft, driving of a crosscut above the orebody, and drilling and recovery of cuttings from two, 1.2- metre diameter blind bore holes.

Reserves at Midwest are claimed to be 21,500 tonnes at a grade of 1% and plans for a mine/mill complex with a production capability of 1,350 tonnes per year are being developed.

Exploration at Cluff Lake has added to the reserve base in recent years and there have been successes at the grassroots level elsewhere in the eastern part of the Athabaska Basin.

In the southeast, exploration is aimed at the discovery of another major deposit of the Key Lake — Cigar Lake type.

Mineralized holes are common in this region, even in deeper parts of the basin.

In 1989, McArthur River project partners — Cameco, Agip Resources, Cogema (Canada) and Uranerz Exploration and Mining — cut 10 metres of 3.6% and 14.4 metres of 12.2% beneath some 500 metres of Athabaska Group on the P2 north grid. Mineralization has been traced in 17 holes over a strike length of 1,100 metres and to a depth of 550 metres.

Minatco Ltd. announced the discovery of ore grade mineralization at shallow depths near McClean Lake in the Wollaston Lake area. Minatco is working under a farm-in agreement with Canadian Occidental Petroleum Ltd. and Inco (TSE).

Two separate mineralized areas, first discovered early in 1988, occur along a 4.2-km long trend known as the Sue zone trend. The new deposits are 2.5 km east of the McClean deposits.

This discovery is a positive event on a property where the partners have been considering underground work on the McClean deposits and an open pit on the JEB deposit for some time.

Meanwhile, Saskatchewan’s gold exploration sector last year spent $55 million, amounting to some 5% of national expenditures. Expenditures in 1989 decreased to about 35% of last year’s figure, although some 50 companies remained active. The outlook for 1990 is for a further decline in expenditures.

The La Ronge, Glennie and Flin Flon domains are the most prospective parts of the Saskatchewan Shield, although some work was carried out in the Mudjatik Domain and at Goldfields.

Irrespective of exciting developments in the grassroots exploration sector, the success story of 1989 was the Jolu mine, owned 30% by Corona (TSE) and 70% by International Mahogany (TSE). It exceeded all expectations since pouring its first gold bar Nov. 15, 1988.

The $18.3-million mine and 400-tons-per-day mill complex produced some 75,750 oz. of gold in 1989 at a cost of less than US$200 per oz. Proven and probable ore reserves stood at more than 37,700 tonnes grading 13.7 grams gold per tonne to the 450-metre level on Jan. 1, 1989.

The deposit is developed by a ramp to 290 metres underground and is open at depth. Deep drilling to the 650-metre level is planned to test the down plunge extension of the orebody.

Mining of the Star Lake 21 zone, owned 50% by Cameco, 35% by Starrex Mining (TSE) and 15% by Uranerz, was completed in November, 1988; the mill was shut down in June, 1989. The Star Lake mine and nearby Rush zone produced some 75,000 oz. of gold during 1987-1989. Production cost in 1987-1988 averaged $177 per oz.

Nearby at Fork Lakes, a $6-million underground exploration and development project completed on the Fork Lakes joint venture Jasper orebody in 1988 was on hold throughout 1989, because 36% owner Cameco (the operator), 30% owner Golden Rule Resources (TSE), 19% owner International Mahogany and 15% owner Shore Gold Fund (ASE) failed to reach an agreement on a production plan involving custom milling at the Star Lake mill.

This issue has now been resolved, and ownership of the Fork Lakes and adjacent Transom Lake properties has passed to Cameco (80%) and Shore Gold Fund (20%) for a financial consideration of $10.6 million. Minable reserves are estimated at around 200,000 tonnes grading 17 grams in the combined Jasper-James orebody which straddles the property boundary.

New exploration drilling results from the Bakos zone on the Preview project, owned 50% by Cameco (the operator), 30% by Uranerz and 20% by Windarra Minerals (TSE), in the Lac la Ronge Provincial Park were the most promising in 1989. The shear-hosted, 2.5-km- long Bakos zone lies within the Contact Lake Pluton.

To date, drilling has tested the deposit over 500 metres of strike length to a depth of 250 metres with the zone open both along strike and to depth. Estimated probable reserves are 1,089,000 tonnes grading 9.9 grams gold with an additional 209,000 tonnes grading 10.6 grams in the possible category. The deposit is undergoing fast-track evaluation for a possible production decision in 1990.

Nearby, the Preview project joint venture has identified a further 490,000 tonnes of reserves grading 12.3 grams in the PAP zone.

Further north in the La Ronge Domain, the Byers Fault area offers considerable potential for new gold finds. Golden Rule and partners continued drill testing of the Kaslo, Tower East and Weedy properties. At the east end of the Byers Fault, Tyler Resources (TSE) reported winter drilling has extended the Golden Heart deposit, a higher- grade zone within the Weedy Lake deposit.

Other positive developments include a new $1.8-million program of underground exploration and development adding to underground work already in place at the Seabee deposit, now wholly owned by Claude Resources (TSE).

The program is suggested to have added significantly to the previously defined reserves of 919,000 tonnes grading 12.5 grams. The program remains ongoing with further deep and infill drilling, extension of the decline and bulk-sampling planned.

Placer Dome (TSE) and joint venture partner Currie Rose Resources (VSE) continue to conduct an aggressive exploration program on the surrounding property. Placer Dome is also active in the Prongua Lake area to the southeast.

RJK Mineral (ASE) completed 4,236 metres of reverse circulation drilling program at the Box and Athona mines to produce large samples, from which gold will be leached to provide reliable grade figures. These will allow revision of ore reserve calculations as a base line for a full-scale feasibility study of these low-grade high-tonnage deposits.

On the negative side, in th
e Flin Flon area, Vista Mines (VSE) has closed the Rio mine and mill, and Cameco and Husky Oil Ltd. have discontinued underground exploration at Laurel Lake.

In the search for base metals, results from exploration activity, mostly around Flin Flon, were encouraging although expenditures only amounted to $5 million in 1989. A similar level of activity is forecast for 1990.

Of principal interest is the Hanson Lake joint venture of 67.1% owner Cameco (the operator) and 32.9% owner Trimin Resources (VSE), which have been evaluating the McIlvenna Bay zinc-copper volcanogenic massive sulphide discovery made in 1988. The deposit is under 15 metres of Ordovician limestones, five kilometres south of the former Hanson Lake zinc- lead mine.

To date, drilling has outlined 9.8 million tonnes grading 0.95% copper, 5.76% zinc, 25 grams per tonne silver and 0.52 grams gold in Lens 2 to a depth of 500 metres. Additional reserves are present in Lenses 1 and 3 and in copper-rich stringer mineralization underlying the massive sulphides.

The deposit is undergoing a feasibility study and development will proceed pending a positive outcome. Exploration on the property in general continues.

This success, together with earlier finds at McDermott and Bigstone Lakes, indicates the high base metal exploration potential of rocks underlying the sedimentary cover west and southwest of Flin Flon.

A discovery of lead-zinc mineralization in metasedimentary rocks of the Rottenstone Domain by prospector D. Partridge at Deception Lake has promoted activity in an area of little previous exploration interest. Mineralization has been exposed over a strike length of 250 metres and a width of 10 metres.

The best results from recent drillling of the joint venture owned by Pine Channel Gold (VSE) and Northair Mines (TSE) are reported at 12.8% zinc over 0.8 metres.

At Brabant Lake in the La Ronge Domain, Gamsan Resources (ASE) published a new reserve figure for the McKenzie orebody of 3,695,380 tonnes grading 4.84% zinc, 0.55% copper, 0.27% lead, 18.63 grams silver and 0.18 grams gold based on a winter drilling program.

Elsewhere, the search for diamonds in Saskatchewan during 1989 captured the public’s interest.

More than 650,000 hectares of southern Saskatchewan are currently held under disposition, mostly as a result of the news of a kimberlite discovery at Sturgeon Lake, north of Prince Albert, in the summer of 1988. Attention which initially focused on the Prince Albert area, has spread southward with staking activity near Diefenbaker Lake and south of Swift Current.

Major players have included Corona, Monopros Ltd., Cameco, Uranerz and Claude. Corona terminated its option with Claude irrespective of the discovery of a microdiamond-bearing kimberlite body. So far, nine kimberlites have been discovered, and three of them are reported to contain microdiamonds.

In the Prince Albert area, the kimberlite pipes are hosted by Cretaceous strata with which they show a strong magnetic contrast. Discovery rate has been high, a reflection of the effectiveness of airborne magnetic surveys in detecting the pipes below the prevailing glacial cover.006 A.J. Gracie and P.L. Schwann are resident geologists, La Ronge, for Saskatchewan Energy and Mines. TABLE 1: EXPLORATION EXPENDITURES SurfaceUndergroundTotal Uranium 21 (20) 25 (24) 46 (44) Gold/Platinum 18 (42) 2 (13) 20 (55) Base Metal 5 (6) 0 (0) 5 (6) ——

53 (68) 31 (37) 71 (105) Exploration and predevelopment expenditures, 1989 and 1988 (bracketed).