Staking rush in Labrador

A staking rush is taking place on the east coast of Labrador, triggered by drill results that have confirmed a significant nickel-copper-cobalt discovery on Diamond Fields Resources’ (TSE) Voisey Bay project, 35 km southwest of Nain.

The most impressive results were from hole 2, which intercepted 71 metres (232 ft.) of base metal mineralization grading 2.23% nickel, 1.47% copper and 0.123% cobalt. This includes a 33.2-metre (108-ft.) massive sulphide (95%) zone.

“This is a significant discovery, just 10 km from deep tidewater, with open-pit potential,” says Diamond Fields President Jean-Raymond Boulle. The company is already gearing up for an expanded stepout drill program in conjunction with additional ground geophysics.

The discovery was big news in St. John’s, Nfld., where companies and individuals must register their claims. “We are in the middle of a staking rush,” asserts Noel Gover, mineral claims recorder. “Over 5,000 claims were staked by the 21st, and we’ve handled another 1,000 this morning. Labrador will never be the same.”

Noranda is believed to be the most aggressive major, although sources say much of the staking being done is by individuals or junior companies, mostly Vancouver-based. Diamond Fields also has a sizable land package, which now encompasses 1,800 sq. km (four claims being equivalent to 1 sq. km). The company has a 100% option on the Voisey Bay project, subject to a 3% net smelter royalty payable to Archean Resources.

Michael McMurrough, Diamond Fields’ vice-president of operations, says the company’s original interest in Labrador was triggered by age-dating and rock studies that suggested potential for kimberlitic or lamproitic occurrences. But the ground the company considered prospective was already staked by Archean, a private company exploring for base metals. Archean is held by two prospectors from St. John’s, Albert Chislet and Chris Verbiski. After entering an agreement with Archean, Diamond Fields designed a heavy mineral sampling program for 1993 which focused on the search for diamonds, as well as gold and base metals, within Archean terranes. The budget was a mere $100,000, as Diamond Fields had other priorities, namely advanced diamond projects in Africa.

“The exploration work was carried out by Archean and grub-staked by Diamond Fields,” McMurrough says. “They (Chislet and Verbiski) deserve credit for the discovery, which resulted from their prospecting techniques and keen eyes.” More than 700 heavy-mineral samples were collected during the initial program and processed at year-end. Grab samples were also collected, and several of these returned values of up to 6% copper and 2-3% nickel.

Those results prompted more sampling this year, along with geophysics. Four holes were spotted (based on the positive results of an electromagnetic survey, the sample sites and the outcrops), with 200 metres between each hole. Based on drill hole information and ground geophysics, the base metal mineralization appears to be contained in a basic intrusive that strikes east-west with a northerly dip (estimated at 40-80 degrees). Sulphide mineralization is continuous over a strike length of more than 700 metres (2,300 ft.). The holes were drilled perpendicular to the strike of the tabular zone, and all contained mineralization, although grades vary. The average thickness of the zone is about 41 metres (134 ft.).

“We plan to do stepout drilling to the east of hole 2 to see if the mineralization continues and expands to the east, which we believe it does based on the geophysics,” says Joe Kajszo, vice-president of exploration for Diamond Fields. “We also want to probe the mineralization to the west and to depth.”

Watts Griffis McOuat, a consulting firm retained to review the technical data, considers the project a “major discovery.” Jack McOuat explains that the discovery differs from the Ungava nickel belt of northern Quebec, which hosts the undeveloped Raglan deposit. One difference is that the new discovery contains cobalt; another is that, so far at least, the sulphides do not appear to be as finely grained. “These are still early days, but this project looks cents less complex] than Raglan from a metallurgical standpoint, as well as logistically,” McOuat says.

He adds that he knows of no other deposit in Canada which might serve as a geological model, but speculates that the zone may possibly represent the root system of a layered intrusive that was eroded away. The rocks north and south of the zone are Archean gneisses.

The mineralization includes pyrrhotite and pentlandite (which carry the nickel and cobalt values) as well as chalcopyrite (copper). With cobalt currently fetching US$27 per lb., Diamond Fields believes cobalt will probably be of more economic importance than the copper, but less significant than the nickel.

So far, no tests have been performed for platinum group elements, although plans call for such work to be carried out at a laboratory specializing in this type of analysis.

A $1-million program is expected to start immediately on the discovery area. Kajszo says the company’s land position was expanded based on a review of work done by government geologists. The staking was done to cover known mineral occurrences and similar-aged rock types as well as other layered intrusive complexes within the Nain plutonic suite that also encompasses the discovery zone.

Results from drilling are as follows:

(metres) (metres)

Hole From/To Intercept % nickel % copper % cobalt

1 34.5 – 075.0 40.5 0.83 0.63 0.042

incl. 48.0 – 073.5 25.5 0.95 0.71 0.048

2 34.0 – 105.0 71.0 2.23 1.47 0.123

incl. 56.1 – 097.3 41.2 2.96 1.89 0.161

3 38.0 – 074.0 36.0 0.87 0.62 0.046

incl. 39.5 – 059.0 19.5 1.08 0.75 0.059

4 57.0 – 067.5 10.5 0.74 0.45 0.038