Staking Intensifies For Potash, Lithium

At the end of last year, 100,000 sq. km had been staked for industrial and metallic minerals exploration in Alberta –about 24,000 sq. km of that during 2009.

Mineral assessment reports, which are prepared and submitted by mineral exploration companies as a requirement of holding a metallic and industrial mineral permit in Alberta, are now available in scanned format at www.ags.gov.ab.ca. These reports are confidential for the first year, and then become public to further the geologic and economic diversification potential of Alberta.

Industrial Minerals

Parsons Creek Aggregates, a joint venture between Graymont Western Canada and Lehigh Hanson Materials, started an environmental impact assessment application to produce limestone at its Parsons Creek quarry, north of Fort McMurray. The high-quality limestone will be used for construction, industrial and environmental applications, including removal of sulphur dioxide from flu-gas streams associated with the oilsands operations.

Athabasca Minerals’ Susan Lake aggregate operation, located 85 km north of Fort McMurray, supplied about 11.8 million tonnes of aggregate for the year ending Nov. 30, 2008, and was ranked number one by the Aggregates & Roadbuilding Magazine in its annual ranking of sand and gravel suppliers (June 2009). Athabasca Minerals holds more than 80 sq. km of land to the south, northwest and east of Fort McMurray. In addition to aggregate, Athabasca Minerals and Parallax Resources are evaluating this ground for salt within the Devonian Prairie Evaporite Formation and industrial-grade silica sand within the Cretaceous Pelican Formation.

Diamonds

The Buffalo Head Hills kimberlite field, about 380 km north of Edmonton, is the third-largest known district of significant diamond-bearing kimberlites in Canada after Lac De Gras in the Northwest Territories and Fort la Corne in Saskatchewan. To date, 41 known occurrences of kimberlitic rocks have been discovered in the Buffalo Head Hills field, 28 of which are diamondiferous.

During 2008, two drill programs by Grizzly Discoveries completed 12 holes totalling 2,270 metres in the northwestern part of the Buffalo Head Hills kimberlite field. The drilling discovered three previously unknown kimberlite bodies (BE-01, BE-02 and BE-03). Positive diamond recovery results from the 2008 winter drill program yielded 54 diamonds greater than 0.075 mm and 26 diamonds greater than 0.106 mm from a 56.6 kg sample of BE-02. This finding encouraged a larger campaign by Grizzly Diamonds and a fall 2008 drill program collected an additional 563 kg of kimberlite material from BE-02 and 365 kg from BE-03, which yielded 316 diamonds (five exceeding 0.5 mm in one dimension) and 218 (five exceeding 0.5 mm), respectively.

During 2008, Diamondex Resources — now Canterra Minerals — and Shore Gold grid drill-tested the K14, K252 and K6 kimberlite bodies with 41 holes totalling 6,818 metres to allow for the identification of different kimberlite phases and microdiamond content. Six distinctive eruptive phases were identified within the K14 complex. In addition to this drill program, an aggregate sample of 369 tonnes of kimberlite was recovered from surface trenches at K14 and K6. One hundred thirty nine stones were recovered from three separate trench samples from K14 yielding estimated diamond grades of between 7.4 and 8.8 carats per hundred tonnes (cpht). A single trench at K6 returned 85 diamonds and an estimated grade of 7 cpht. A 1.07-carat stone is the largest recovered from K6. The results of the bulk-sample program need to be viewed in context of new geological modelling because the trench samples represent the near-surface portion of a complex multi-phased kimberlite.

West of Buffalo Head Hills, United Uranium and Star Uranium completed a six-hole drill program. While none of the holes penetrated kimberlite, till and shale core samples yielded high numbers of kimberlitic-indicator minerals (greater than 100 grains of pyrope, olivine and chromite). In addition, caustic fusion analyses of a basal till unit resulted in the recovery of one diamond within the 0.15-0.212 sieve.

About 80 km east of Buffalo Head Hills, Shear Minerals has started drilling at the Liege diamond project, which was acquired from an oil and gas company. Shear will be testing three initial priority targets based on pipe-like features identified from seismic surveys, and the results of high resolution airborne and ground geophysical surveying completed between 2006 and 2008.

Base Metals

Ivany Mining continued exploration of its northwestern Alberta lead-zinc Zama Lake property, 20 km north of Zama City, using HeliGEOTEM electromagnetic and magnetic surveys. The property covers an area of anomalous concentrations of sphalerite and galena grains discovered in glacial drift by the Geological Survey of Canada and Alberta Geological Survey (AGS). Based on surficial geology and isotopic analysis, the Zama Lake detrital sphalerite grains are unlikely to be related to the Pine Point Mississippi- Valley Type lead-zinc deposit, 330 km northeast.

In July-November 2008, Dumont Nickel acquired the SBH property in northeastern Alberta, about 120 km north of Fort McMurray, to explore metalliferous black shale previously explored by Tintina Mines and NSR Resources. The SBH property is underlain by Late Cretaceous Second White Specks and Shaftesbury formation shale that is locally enriched in molybdenum, nickel, vanadium, zinc, uranium, copper, cobalt, silver, gold, platinum group elements and organic carbon. Two potential black shale-hosted polymetallic prospects, which are identified as sedimentary exhalative (Sedex) in nature, include the Buckton and Asphalt zones.

The Buckton zone is comprised of a 21-to 22-metre-thick section over about 26 sq. km, estimated to contain 1.2 to 1.3 billion tonnes grading 623-776 ppm vanadium, 282-360 ppm zinc, 121-160 ppm nickel, 62-86 ppm molybdenum, 70-83 ppm copper, 25-37 ppm uranium, 19-24 ppm cobalt, and 0.3-0.8 ppm silver.

The Asphalt zone, about 30 km away from the Buckton zone, is a 7-12 m thick section over about 4.5 sq. km and estimated to contain 109- 132 million tonnes grading 664-690 ppm vanadium, 282-376 ppm zinc, 122-144 ppm nickel, 89 ppm copper, 63-73 ppm moly, 31-47 ppm uranium, 20 ppm cobalt, and 0.3 ppm silver.

In 2009, Dumont resampled available historic drill core. In addition, field samples were collected for bioleaching test work to determine the metal recovery parameters from the black shale.

Placer gold and magetite

Gold as a byproduct from sand and gravel operations is the only metal currently produced in Alberta. Alberta Energy estimates the province’s production of placer gold in 2008 at about 65 kg.

In southwestern Alberta, Micrex Development continues to move towards mine permitting of the Burmis magnetite deposit. At full production, Micrex hopes to mine between 20,000 and 40,000 tonnes of finished magnetite product per year. A 10-12 year mine life is anticipated. Via public consultation, Micrex has revised its proposed production system to use no water, process 100% of the raw ore, eliminate tailings issues and extend the life of the proposed mine.

Titanium, zirconium and iron ore

Titanium Corp. continued research and development on the separation of titanium and zirconium minerals from oilsands operations in the Fort McMurray area. Heavy mineral concentration and separation programs were carried out at the company’s Regina facility to increase the recovery of high-grade zircon products using various oils and surfactants.

During 2008, Ironstone Resources drilled and recovered 385 metres of unoxidized iron ore from 47 out of 51 holes that tested the Clear Hills ooidal ironstone deposits in northwestern Alberta. Ironstone is conducting research to determine the most
efficient procedures for beneficiating the Clear Hills ore.

Uranium

Fission Energy Corp.’s North Shore property is situated along the northwestern margin of the Athabasca basin, about 10 km southwest of Cameco’s Maurice Bay uranium deposit (which contains 1.3 million lbs. at 0.6% U3O8 ). A high-resolution magnetic and electromagnetic (VTEM) survey and a seven-hole program totalling 1,260 metres were completed during the 2007-08 winter season. The exploration program successfully identified a hydrothermal system associated with a major northeast-trending structure. Strong alteration and radioactivity were intersected along this structure at down-hole depths up to 185 metres, with widths ranging up to 8.5 metres. The basement-hosted alteration zone contained highly anomalous concentrations of geochemical pathfinders, including up to 70.5 ppm uranium.

In southern Alberta, water samples collected by the AGS near the Whiskey Gap property (close to the United States border) returned values as high as 160 ppb uranium, 420 ppb molybdenum and 140 ppb arsenic. GeoMinerals Ltd. followed up these results by drilling five holes totalling 378 metres. Drill results are pending.

Potash

APEX Geoscience, Cloudbreak Resources, Dahrouge Geological Consulting, Grizzly Diamonds, Landis Energy, Rich Resource Investments, Shear Minerals, Solitaire Minerals, Utah Uranium and several numbered Alberta Limited companies have staked metallic and industrial mineral permits on the Alberta- Saskatchewan border south of latitude 55 degrees. The staking has developed because of the vast potash resource in the Prairie Evaporite Formation of neighbouring Saskatchewan. The same formation is present in much of eastern Alberta, but has yet to be evaluated for potash potential. Some historical drill-holes such as Vermilion Consolidate Oils #15, which was spudded in 1944, has yielded potash minerals.

Lithium

Several companies, including Channel Resources, Dahrouge Geological Consulting, First Lithium Resources, Habanero Resources, Headwater Mineral Exploration and Development, Ivey Canadian Exploration, MGK Consulting, Ultra Lithium and WestStar Resources have expressed interest in lithium from formation waters in the Swan Hills area of northwestern Alberta.

The interest is due to mid-1990s government reports that have shown lithium concentrations in formation waters of up to 140 mg per litre. The lithium appears to be associated with carbonate build-ups of the Leduc Formation in the Woodbend Group and the Swan Hills Formation of the Beaverhill Lake Group. In October, Channel Resources verified the lithium potential of its Fox Creek project when it announced lithium contents of between 77-112 mg per litre from its brine-sampling program of 13 producing wells in the Beaverhill Lake gas field. Channel intends to generate resource estimates for lithium, potassium and other elements of interest at Fox Creek, and to extract a bulk sample of formation water for process testing.