Dec '06/Jan '07

Northwest Territories

World-class deposits in the Northwest Territories

By Kelly Mahoney, mineral development advisor, Industry, Tourism and Investment, Government of the Northwest Territories

Canada’s North remains a hotbed of activity, with world-class mine operations flanked by scores of exploration projects. In the Northwest Territories, mineral activity is reaching exciting levels, and will continue to thrive next year.

Mining

Diavik Diamond Mines Inc. (60 per cent) and Aber (40 per cent) produced 7.337 million carats of diamonds in the first three quarters of the year. Construction of the A418 dyke has been completed and over 900 fish have been transferred into Lac de Gras.

As part of the underground feasibility studies, the A154 tunnel reached 1,400 metres from surface, and a further 870 metres of tunnel was reached on the branch tunnel, allowing workers to reach the A418 kimberlite. As of September 30, another 900 metres of tunneling were required to reach the A154 kimberlite. The decline to the A21 pipe advanced 1,300 metres and had nearly reached the kimberlite contact.

The EKATI Diamond Mine, BHP Billiton (80 per cent), Stu Blusson (10 per cent), and Chuck Fipke (10 per cent) produced 1.89 million carats of diamonds over the first three quarters of 2006 versus 3.1 million over the same three quarters in 2005.The production drop was forecasted as lower grade ore was being processed. As the mine transitions from open pit to underground production, the mill is processing a blend of ore from open pit and underground sources. A labour dispute during the second quarter did not affect production.

In June, BHP and partners approved development for the Koala underground development. The $250 million development will include access, ventilation, and a conveyor extension to recover approximately 9.8 million carats of diamonds over an estimated 11- year life cycle.

North American Tungsten Ltd reopened the Cantung mine in September 2005. In its first full year of production the mill has processed 270,074 tons of ore grading 1.19% WO3 from underground and 63,936 tons of open pit ore grading 0.51% WO3.Major projects for the year included development work to create longhole stopes within the mine, traditionally a cut-and-fill operation. A new NI 43-101-compliant mineral reserve estimate was released on October 31, which amounts to 1,030,600 tons grading 1.17% WO3. The company also worked on environmental and feasibility studies on their nearby MacTung deposit.

De Beers Canada is continuing construction at its Snap Lake Diamond Project.The construction schedule was reworked and despite the short winter road season, the project is on schedule to begin production in 2007. As of August 15, 2006, a total of $431,898,107 has been spent on contracts and purchase orders for the construction of the mine. Indicated and inferred resources are 1.4 million tonnes and 25 million tonnes respectively, at 1.2 carats per tonne, with a 20-year mine life.

Exploration

Diamond Exploration

Anglo Swiss Resources (60 per cent) and New Shoshoni Ventures (40 per cent) flew a 1,695 line-kilometre Fugro Magnetic electromagnetic survey at 100 metre line-spacing, over the eastern portion of its Fry Inlet property. The survey identified 12 high priority targets. Selected targets were followed up with till sampling.

Arctic Star Diamond Corp. (with Kennecott Canada Exploration Inc. retaining back-in rights) drilled nine holes totaling 812 metres on its Credit Lake property, 40 kilometres southwest of the EKATI mine. No kimberlite was intersected. The company carried out max-min and gravity ground geophysical surveys, a 1,008 line-kilometre, high-resolution magnetic survey, and a seismic refraction survey. A helicopter- borne magnetic survey was completed on the New-Big property, 22 kilometres southwest of the Credit Lake property. Summer exploration included additional till sampling. An in-field heavy mineral jig separation lab was set up to speed the turnaround time of heavy mineral separation, allowing indicator mineral results to guide further till sample collection.

BHP Billiton Diamonds Inc., in joint venture with Archon Minerals Ltd and Charles Fipke (10 per cent), explored the EKATI leases, and the Buffer Zone completed bulk samples on the Jay and Pigeon pipes. Delineation drilling was completed on the Sable, Jay, and other known pipes. A FALCON gravity gradiometer survey was flown and followed up with ground magnetic and horizontal loop electromagnetic surveys over several targets.

Contact Diamond Corporation (53 per cent), in joint venture with Trigon Exploration Canada (47 per cent),have carried out programs of ground prospecting and in-fill till sampling to refine drill targets on their Ram and Shu properties.

De Beers Canada Inc. (51 per cent), in joint venture with Mountain Province Diamonds Inc. (44.1 per cent) and Camphor Ventures Inc. (4.9 per cent), conducted 9,448 metres of delineation drilling, geotechnical and engineering core, in 31 holes on the Gahcho Kué Project to support a definitive feasibility study. The delineation drilling expanded the dimensions of the Tuzo pipe. A 192-kilogram sample from one of the pipes recovered 1,773 microdiamonds using a >75 micron screen.

Diamondex Resources Ltd worked on the Lena West property (100 per cent), flying 20,000 line-kilometres of high-resolution airborne magnetic survey over six target areas. Five blocks were flown at 75 metre line-spacing using Fugro’s Midas II platform, and one was flown by firefly aviation at 100 metre line-spacing. During the field season, 1,500 stream sediment samples were collected. Diamondex also explored its Lac de Bois Claims, formerly part of the Lena West permit block. Ten detailed ground gravity grids were completed over 12 magnetic anomalies. Drilling of up to 20 geochemical and geophysical targets in seven areas commenced this fall and will continue into the winter.

Diamonds North Resources and Majescor Resources are flying a 4,500 line-kilometre high-resolution geophysical survey on their Banks Island property.

GGL Diamond Corp (100 per cent) completed 16 ground geophysical surveys and five drill holes on its Doyle Lake property. Several small kimberlite dykes, up to 0.5 metres thick, were intersected in two holes.

GGL Diamond drilled five holes on its Courageous Lake claims.Three holes, drilled on the Bishop kimberlite, intersected variably textured kimberlite phases. Caustic fusion analysis of 78.2 kilograms of core recovered 11 microdiamonds. A ground gravity survey was conducted to further delineate the new pipe.

GGL Diamond flew an airborne geophysical survey over the Fishback property, and completed a ground gravity survey over portions of the Big Hole anomaly.

New Nadina Explorations (57 per cent), SouthernEra Resources (22 per cent), and Archon Minerals (21 per cent) carried out diamond drilling, ground magnetic and gravity surveys, and till sampling on their Monument property south of EKATI. A total of 1,034 metres of diamond drilling intersected three new kimberlites, the Rip, Nic, and Sonja kimberlites, and further delineated the known DD17-11 kimberlite. The three new kimberlites, in addition to the previously discovered kimberlites, coincide with a 1.2 kilometre linear magnetic low. Ninety-one till samples were also collected to follow up on unresolved indicator mineral trains on the property.

Patrician Diamonds explored its Sahtu permits with airborne geophysics and auger drilling. A 6,500 line-kilometre magnetic survey identified several magnetic anomalies aligned along two sub-parallel trends. A portable auger drill was used in an attempt to obtain bedrock samples from the magnetic anomalies. Microanalysis has returned results that indicate a kimberlite source for material collected.

Peregrine Diamonds (54.47 per cent) and partners DHK Diamonds (13.27 per cent), Archon Minerals (13.27 per cent), Aber Diamonds (7.35 per cent), and SouthernEra Diamonds (4.9 per cent) collected a bulk sample from the DO-27 kimberlite pipe.From 548 dry tonnes of kimberlite, 8,855 diamonds, with an aggregate weight of 427 carats,were collected over a base sieve with a one millimetre mesh. The program returned an average grade of 0.88 ct/tonne and tripled the known area of higher grade kimberlite. Drilling also further delineated the pipe, twinned the reverse circulation holes for petrographic work, and collected geotechnical information.

Peregrine Diamonds also conducted ground geophysics, till sampling, and drilling on its Lac de Gras East, Lac de Gras West, and Pellat Lake projects. Kimberlite was intersected in one hole on the Pellat Lake property.

Pure Gold Minerals, earning in from De Beers Canada, explored their Colville Lake property, completing ground geophysics over 16 magnetic anomalies picked from their 2005 airborne magnetic survey.

Sanatana Diamonds, exploration program focused on two main areas within the Mackenzie Diamond Project – the Kilekale Lake and the Coville Lake – Lac des Bois areas. Drill targets in the Kilekale Lake area were identified by a helicopter-borne low level magnetic survey done at 100-metre spacings as well as ground geophysical surveys in these areas; eight of 30 targets identified in the previous exploration season were drilled. Glacial till sampling, ground geophysics, and drilling on other targets were conducted within the Mackenzie Diamond Project area.

Snowfield Resources and Consolidated Gold- Win Ventures drilled 2,376 metres in 29 holes delineating their Mud Lake sill, and intersected kimberlite in 23 of these holes. Snowfield initiated stripping and blasting a decline to obtain a bulk sample of the sill. Sampling and analysis of kimberlite indicator minerals on Snowfield’s Ticho Diamond project in the Sipper Lake area have given positive results.

Stornoway Diamonds undertook drill programs on the LDG property in late 2005 and again in early 2006. Eight holes, totaling 366 metres,were drilled in 2005, and six holes, totaling 257 metres, in 2006. The company also undertook till sampling on the LDG property. Recent sampling results are pending.

Stornoway Diamonds was granted 26 three-year prospecting permits totaling just over one million acres in southwestern Northwest Territories. These permits represent three different properties, the Blackstone, Eestee, and Shegonla. Stornoway has flown airborne geophysical surveys over these properties and plans to evaluate the results of this work for potential kimberlite targets.

Stornoway Diamonds and GGL Diamond drilled one 63-metre hole to test a geophysical target on the Cris claim; the hole intersected dunite.

Metal Exploration

Alberta Star Development Corporation completed a 16,708 line-kilometre Terraquest airborne radiometric and magnetic gradiometery survey over the Eldorado Uranium Belt, east of Great Bear Lake. The survey was flown at 100 metre line-spacing. An additional 923 l ine-kilometre VTEM survey was flown over a northwest extension of the Contact Lake Claims. Drilling of the properties is ongoing, with 15,000 metres complete to mid-October.

Bayswater Uranium (formerly Pathfinder Resources) and Uranium North Resources flew 7,289 line-kilometres of MEGATEM II electromagnetic survey over their Thelon UNR property, which is prospective for both diamonds and uranium.

Canadian Zinc advanced work at their Prairie Creek zinc-lead-silver mine,driving a decline, rehabilitating old workings, and advancing an exploration drift in conjunction with a planned 10,000 metres of underground exploration drilling. Surface exploration included drilling targets near the mine site and has returned some areas of significant metal mineralization.

Eagle Plains Resources obtained 5,700 sample pulps from a regional geochemical exploration program carried out in the mid-70s. The samples cover their Selwyn Basin lead, zinc, and silver showings.The company will use the new analytical analysis of these samples and existing public analysis to guide exploration.

Fortune Minerals completed its 3,000 tonne bulk sample on its NICO project. The company also advanced a 750-metre decline to a depth of 145 metres, and completed approximately 100 additional metres of drifting off the ramp.

Great Bear Resources conducted an airborne magnetic and radiometric survey, an induced polarization ground survey, and geological mapping on its Tommy Lake, Mariner, and Sloan properties near Port Radium.

Great Northern Mining and Exploration conducted geophysics, sampling, and diamond drilling on their Umingmak Project on Victoria Island.

Kodiak Exploration continues to explore their Caribou Lake nickel-copper-PGE property through mapping, prospecting, and a 2,400 line-kilometre airborne VTEM survey, followed up with ground magnetic and horizontal loop electromagnetic surveys. More than two-thirds (33/50) of drilled holes contain sulphide intersections with more than 0.1% nickel.

Pacifica Resources continues to advance its Selwyn Zn-Pb project that straddles the Yukon-NWT border. The 2006 program has completed 116 drillholes, totaling 21,611 metres. The program is aimed at demonstrating the validity of historical data, providing in-fill drilling for resource definition and stepout drilling to expand the known resource and area of mineralization.

Phelps Dodge and Kaska Minerals explored for copper on their Keele River property conducting reconnaissance work, prospecting, sampling, and soil geochemistry.

Seabridge Gold continued to evaluate its Courageous Lake deposit, 240 kilometres northeast of Yellowknife. In June, the company commenced a 7,500-metre core drill program designed to expand the project’s known gold resource and define the new Mitchell Zone identified in previous work.

Solitaire Minerals flew a 774 line-kilometre helicopter-borne VTEM survey over their Mystery Island property, which adjoins Alberta Star’s Eldorado property.

Tamerlane Ventures entered the permitting and feasibility stage on its Pine Point property east of Hay River.The project is undergoing an environmental assessment and a Final Terms of Reference has been issued.

Tyhee Development Corporation staked a new property, the Big Sky property, 17 kilometres north of Yellowknife. Prospecting and collection of grab samples led to the latest discovery, which lies in close proximity to the Giant mine leases.

Tyhee Development Corporation also continued drilling on its Ormsby gold property and by late September had drilled 21,290 metres in 110 holes. The program is focused on extending both the Ormsby North, Ormsby South, the Bruce Lake, and West Zones. The company also released a resource estimate of measured and indicated one million ounces of gold for its Yellowknife Gold Project.

Uravan Minerals and Cameco carried out exploration on conductors identified by the 2005 Fugro MEGATEM survey of the Boomerang uranium property. The follow-up Time Domain Electromagnetic (TDEM) geophysical survey confirmed the conductors and suggests that they may be associated with basement offsets. In July, a new Fugro MEGATEM and magnetic geophysical survey was flown; 2,992 linekilometres of data was collected at 400-metre spacing. Six diamond drillholes were completed totaling 1,558 metres of drilling.

Viking Gold collected 1,034 bog and soil samples on its Viking Zone, immediately south of the Ormsby Zone, and has identified targets for a winter drill program.

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