Wolfden hunts for nickel in Manitoba

VANCOUVER — When nickel giant Vale (NYSE: VALE) dropped its claims over the Rice Island nickel and copper project in the highly prolific Flin Flon–Snow Lake mining district of Manitoba in May, junior explorer Wolfden Resources (TSXV: WLF) was keen to step in and resuscitate some much-needed exploration on the dormant property.

“It’s a property that we’ve had our eyes on for quite some time,” CEO George Topping tells The Northern Miner during a phone interview. “It’s an area we know has the potential to host high-grade nickel mineralization, and it hasn’t seen any exploration since the 1940s.”

Within a month after announcing its acquisition, Wolfden mobilized a drill rig into the property, 10 km southeast of the town of Snow Lake, to confirm historical drilling on the magmatic nickel-copper target across 250 metres at surface to 500 metres deep.  

All seven drill holes hit the Main zone — a blanket of massive to semi-massive sulphides at the base of a gabbroic intrusion — returning intercepts of 36.2 metres of 1.5% nickel and 0.6% copper, and 7.7 metres of 2.8% nickel and 1.1% copper.

Topping says the company is pleased with the results, but also intrigued by a sediment-hosted massive sulphide hit 50 metres below the mineralization, which returned an intercept of 4.6 metres of 3.97% nickel and 0.95% copper. 

“We think there’s a good potential here for stacked zones of great, high-grade mineralization,” he says. “Inco [now Vale] never recognized that — most of their holes stopped just after the main zone, and never went deep enough to test those lower horizons.”

He reckons that Vale has focused on building tonnes at its other properties in the nearby Thompson nickel belt — such as the T-1, T-3 and Birchtree mines — to consider Rice Island as a “core asset” that warrants more exploration.

“I think the lack of tonnes was the reason why Vale didn’t continue with the project, and allowed its licence to lapse. But we believe the property has the potential to deliver a deposit much like the Eagle mine in Michigan,” he says, referencing Lundin Mining’s (TSX: LUN) 4.5-million-tonne magmatic-nickel orebody, which hosts 2.4% copper and 2.9% nickel. 

He says that Wolfden has conducted downhole pulse electromagnetic (EM) surveys  — a geophysical technique that measures electrical conductivity underground  —  on the recent drill holes to see what else previous explorers may have missed.

Topping says that the results from the survey will help direct the next 3,000 to 4,000 metres of drilling, which will begin mid-November.

“People think that Snow Lake has been picked over for the last century, but you can still make world-class discoveries in the camp,” he says, citing Hudbay Minerals’ (TSX: HBM; NYSE: HBM) discovery of Lalor Lake in 2009 — 210 km east of Flin Flon — as an example. 

Hudbay found the rich volcanogenic massive sulphide (VMS) deposit by using an innovative adaption of an EM survey that penetrated deep below the previously defined zinc zone, and identified gold and copper-gold zones.

The deposit first produced in 2012, reaching commercial scale in the second half of 2014. 

Although the Flin Flon–Snow Lake greenstone belt is more known for its world-class VMS deposits, Topping says magmatic sulphide deposits like those seen at the Thompson district also occur in the region.

“The other reason why we’re really attracted to Rice Island is the tremendous upside potential of the property to find satellite deposits,” he says, noting that so far, geophysical versatile time domain EM data at surface has outlined at least three anomalous, untested zones that fall along the Rice Island trend, and show a similar scale of magnitude.

The company plans to test the anomalies during the next phase of drilling, and while Topping’s outlook is positive, his view of the nickel market is equally as bullish, offering the old saying that the “best cure for low prices are low prices.”

He says that “I used to be a mining analyst, so looking at commodities was one of my tasks for the last 17 years, working for stockbrokers.” He explains that a heavy oversupply in the nickel market has collapsed prices below US$5 per lb., making 40% of the world’s nickel operations unprofitable. 

As a result mines have either closed or will close, or operations will go high grade, which cuts back on production  — all of which, he says, will lead to a correction in the metal price.

“We’re already seeing nickel inventories decline over the past three to four months, and … that’s going to accelerate,” he predicts. “We could see the nickel price back up to US$7 or US$8 per lb. over the next 12 to 18 months.”

Before acquiring Rice Lake, Wolfden kept active in New Brunswick’s Bathurst mining camp exploring for polymetallic VMS deposits at its Tetagouche project, 30 km northwest of the prolific Brunswick No. 12 zinc-lead-silver mine.

Although the company’s focus has switched to Rice Lake, Topping says Wolfden is still having a “good look” for the bedrock source of boulders on the property, which returned “phenomenal” grades of up to 20% zinc and 20 oz. silver. 

“We’re not prepared to sit back and hunker down [during these market conditions]. This is the time when you get the cheapest drilling and the most work done per dollar of exploration,” he says. “We’ve been hired by our shareholders to find new deposits, and we’re intent on generating great news.”