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Slam, which is based in Miramichi, N.B., will spend $2.5 million each year for the next five years, or $12.5 million in total, to earn a half-interest in Noranda’s 2,911 mineral claims. Under a new incentive program designed to stimulate exploration in the Bathurst region, the New Brunswick government will match the joint venture’s exploration expenditures on a dollar-for-dollar basis, up to $7.5 million over the first three years. The government incentive program may be extended for an additional two years and a further $5 million.
The goal of the program is to ensure the future of mining in Bathurst, says Natural Resources Minister Keith Ashfield, and in particular to find orebodies to maintain the nearly 1,000 jobs at Noranda’s Brunswick operation.
First brought into production in 1964, the Brunswick No. 12 mine currently has about five years of life remaining. Proven and probable reserves at the end of 2002 amounted to 21.1 million tonnes grading 9.12% zinc, 3.64% lead and 0.36% copper, plus 106 grams silver per tonne (equivalent to 1.9 million tonnes zinc, 766,000 tonnes lead, 75,000 tonnes copper and 71 million oz. silver). Additional measured and indicated reserves total 3 million tonnes grading 8.69% zinc, 3.34% lead, 0.34% copper and 95 grams silver.
During the 3-month period ended Sept. 30, the Brunswick underground operation produced 69,629 tonnes zinc contained in concentrate, 19,023 tonnes lead, 2,120 tonnes copper and 1.5 million oz. silver, bringing year-to-date output to 214,369 tonnes zinc, 57,359 tonnes lead, 6,699 tonnes copper and 4.6 million oz. silver. Mill throughput averaged 9,744 tonnes per day, a 10% increase over the third quarter of 2002.
The mine produces separate zinc, copper, bulk and lead-silver concentrates. Only the lead-silver concentrates are refined in-province by Noranda at Belledune, 45 km away from the mine.
Current reserves at Brunswick will be depleted at the end of 2008, says the mine’s general manager, Al Coutts, though he expresses hope that the new exploration program will prolong the mine’s life.
Noranda will operate the Bathurst exploration joint venture from its offices at the Brunswick mine. A management committee consisting of two representatives from each of Noranda and Slam will oversee the program.
Slam’s president, Michael Taylor, is a geologist who has been working in the Bathurst camp since 1989. Slam will add 129 of its own mineral claims to the joint venture.
Using airborne and ground geophysical technology, the partners will re-examine some 485 sq. km in the Bathurst region. These sophisticated surveys, such as the MegaTEM system, can penetrate much deeper than previous ones. In 2000, the MegaTEM system was used by Noranda to find the Perseverance zinc deposit in the Matagami camp of northern Quebec.
The high-grade deposit consists of three zones containing resources of 5.1 million tonnes grading 15.82% zinc and 1.24% copper, plus 0.38 gram gold and 29.4 grams silver per tonne.
About $5 million will be spent on the exploration program in the first year of a 5-year program.
Slam has engaged Dundee Securities and Haywood Securities to raise up to $7.5 million by way of a private placement. The offering is for up to 6.25 million flow-through shares priced at 80 apiece and 3.1 million units at 80 each. A unit will consist of one share and one full warrant allowing for the purchase of an additional share at $1 for 24 months. At present, Slam has 12.1 million shares outstanding, or 15 million fully diluted.
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