Dec '06/Jan '07


Alberta continues its strategic growth plan

-Information provided by Alberta Department of Energy and Alberta Economic Development

Alberta continues to boom with resource development, and the world is watching as the oil sands industry stakes its claim as a world-class oil producer. But, it’s not all fossil fuels in the province—oil and coal is joined by industrial minerals and other mineral exploration initiatives, promising continued growth and potential diversification for Canada’s producing giant.

Oil sands empire

Oil sands is, of course, the primary industry, with approximately 174 billion barrels of proven reserves, totalling a potential 500 years of supply at the current production rate of about 1 million bbls/day. From 1996 to 2005, $44 billion was invested in oil sands development. The Alberta oil sands are centred in three locations:Peace River,Athabasca, and Cold Lake.

A number of oil sands construction projects were completed or ongoing throughout 2006.

• The construction of the Syncrude Upgrader Expansion 1 (UE1) component of the Stage 3 project, completed in May. The Stage 3 expansion is designed to increase Syncrude’s production to 350,000 bpd.

• Suncor has two projects under construction: the Millennium Cokey Project will bring the plant upgrading capacity to a nominal 350,000 bpd,and Firebag Phase 3 construction commenced.

• Building of the Long Lake Project by OPTI Canada and joint-venture partner Nexen Inc. is progressing— an integrated SAGD in situ project with upgrading facilities.Total design capacity is 70,000 bpd. First steam was scheduled for late 2006 and upgrader startup for mid-2007.

• Canadian Natural Resources Ltd. is well underway with Phase I of its Horizon Project, a $10.8 billion integrated mine and upgrader to produce 232,000 bpd, scheduled to enter production in the second half of 2008.

• Construction began this summer for Access Pipeline, a joint venture between MEG Energy Corp. and Devon ARL Canada Corp., to transport production from the companies’ Christina Lake and Jackfish developments.

Coal power

Coal is the runner-up for Alberta’s minerals activity, as the province’s coal contains more energy than all other provincial hydrocarbons combined, with 33.5 billion tonnes of remaining reserves.With 1,000 years of supply available at the current product rate of approximately 30 million tonnes per year, and innovative technologies on the horizon such as gasification, the future of coal remains confident.

There are 11 major coal mines in the province, typically producing around 30 million tonnes of marketable coal. Approximately 12 million tonnes comes from the Highvale mine alone. Over 85 per cent of the 30 million tonnes of coal mined annually in Alberta is used in power plants.

Industrial minerals and metals activity

The primary industrial mineral of importance produced in Alberta is limestone for cement, lime, and crushed stone. There has been an increase in Alberta’s crushed stone aggregate production to supplement the large and increasing demand for sand and gravel (granular) aggregate.

Sulphur, as a by-product from oil and gas production, ranks third with respect to production of non-metallic minerals in Alberta. Other industrial minerals include salt, silica-sand, building stone, and clay products.

During 2006 several companies actively explored two regions of the province for uranium.In the northeast, unconformity-type and vein-type uranium deposits of the Athabasca Basin are being targeted with airborne, electromagnetic, radiometric, and magnetic surveys, and detailed marine seismic data was gathered. Potential targets for unconformitytype uranium deposits have been identified.

In southern Alberta, sediment-hosted uranium deposits are the target, with recent exploration activities including reconnaissance prospecting, rock and water-well sampling, geological examinations, and a small-scale Track-Etch cup survey. At least two com- panies have conducted follow-up drill programs during the past year.

Diamondiferous kimberlites were discovered in northern Alberta in 1997 and an estimated $100 million has been spent on further exploration for diamonds since.Approximately 48 kimberlites have been discovered, with 38 of them occurring in the Buffalo Head Hills area. Mini-bulk samples have yielded diamond grades from about 4.4 carats per hundred tonnes (CPHT) to 55 cpht; one breccia showed an estimated grade of 85 cpht. In 2006, exploration for diamonds has also focused on several other areas such as the Birch Mountains, the Pelican Mountains, the Peace River area, and east-central Alberta.

In east-central Alberta, near Cold Lake, 31,000 linekilometres of high-resolution airborne magnetic surveys have been completed and plans are to conduct sampling of surficial materials and drill testing of selected targets. In the Piche Lake area of east-central Alberta, a 14,760 line-kilometre airborne magnetic survey was conducted to follow up on eight highpriority targets that were identified. Companies actively exploring for diamonds in 2006 include Ashton Mining of Canada (JV with Encana Corp. and Pure Gold Minerals Inc.), Grizzly Diamonds, Stornoway Diamond Corp., Diamondex Resources, Shear Minerals, and Carina Resources.

Some staking activity has occurred over the last year in the Zama Lake area to delineate possible Pb-Zn mineralization; airborne geophysical surveys and overburden drilling programs were planned for late 2006.

Magnetite-bearing sandstones in southwestern Alberta continue to be explored and assessed, along with proximal titanium and zirconium-rich mineral occurrences. Exploration for iron in Cretaceous sandstones is continuing in northwestern Alberta; a drilling program was conducted in 2006.

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