Dec '06/Jan '07


Nunavut has it all

By Karen D. Costello and Linda J. Ham, district geologists, Indian and Northern Affairs Canada, Iqaluit, Nunavut

The diverse geology within Nunavut continues to attract exploration companies. Diamonds and gold are the main commodities sought after, with nickelcopper- platinum group elements (PGEs), base metals, precious metals, and uranium enjoying renewed interest, due in part to increased commodity prices. Exploration companies reported expenditures of $171 million by late fall 2006; 2005 expenses totalled $193 million and current activity suggests this value will be surpassed. Gold and diamonds are the two top mineral exploration targets, with companies having spent $68 million on gold and $38 million on diamonds.

Indian and Northern Affairs Canada (INAC) administers mineral tenure on Crown land in Nunavut. The Canada Nunavut Geoscience Office (CNGO), in partnership with INAC (Iqaluit), and the Geological Survey of Canada (GSC) recently launched, a web-based geoscience data-delivery platform where companies can now access non-confidential assessment reports. The Nunavut Mining Occurrence Database (NUMIN) will be online soon.

Nunavut’s three regions, Kitikmeot, Kivalliq, and Qikiqtani, all show activity and many companies have projects in each of the three regions.

Kitikmeot Region

Tahera Diamond Corporation opened Nunavut’s first diamond mine, Jericho, in 2006. The first diamonds were produced in January and commercial production officially started July 1. The nine-year mine life has a planned average rate of 2,000 tonnes per day. A highlight is a 59 carat stone recovered, valued in excess of US$400,000.

Tahera, De Beers Canada, and Nordic Diamonds are exploring for additional diamond-bearing kimberlites adjacent to Jericho in hopes of extending the mine life. Partners Tahera and De Beers recently took a 900-tonne bulk sample from the nearby Muskox kimberlite.

Ashton Mining of Canada is joint-ventured with Vaaldiam Resources Ltd on several properties and collected a 100-tonne mini-bulk sample from the Artemisia kimberlite.Other exploration companies— Diamondex Resources Ltd (Heequo project), Stornoway/Nordic/International Samuel Exploration Corporation (Jubilee), and Strongbow Exploration (Napaktukik, Bear)—are searching for diamonds in the Coronation Gulf region.

The Kugaaruk area on Boothia Peninsula has emerged as a potentially significant diamond district, with discoveries in 2006 of several diamond-bearing kimberlites and float. Indicator Minerals Ltd/Hunter Exploration Group and Teck Cominco Limited have discovered five large kimberlite bodies on the Darby project. Diamonds North Resources Ltd drilled five kimberlites discovered on its Amaruk property. Diamonds North, International Samuel, and Arctic Star Diamond Corp. are exploring on the ground south and west of Amaruk. Trigon Exploration Canada Ltd, Contact Diamond Corporation, Shear Minerals Ltd, and Diamonds Exploration Canada Ltd, Contact Diamond Corporation, Shear Minerals Ltd, and Diamonds North have grassroots projects nearby.

Miramar Mining Corporation’s Doris North gold project in the Hope Bay greenstone belt is on its way to becoming Nunavut’s second operating mine and first new gold mine. The high-grade, open pit mine is scheduled to open mid-2008 with a two-year mine life. The company is actively exploring the rest of the Hope Bay Belt with two more gold deposits (Madrid and Boston) anticipated for future development. Current resource estimates are: total indicated of 3.4 million ounces at 6.0 g/t, and inferred of 5.4 million ounces of gold at 4.9 g/t. Miramar’s 2006 exploration budget was approximately $31 million. Maximus Ventures Ltd, with Miramar, is also exploring on the belt.

Wolfden Resources expanded their property holdings in the High Lake area east-southeast of Kugluktuk. These projects, the Amaqqut Group, include the base metal deposits of Izok (100 per cent owned), High Lake and Hood, Ulu gold deposit, and Gondor base metals project (60 per cent owned with Xstrata). Izok has indicated resources of 14.4 million tonnes grading 2.52% Cu, 12.94% Zn, 1.28% Pb, and 71.0 g/t Ag plus inferred resources of 0.37 million tonnes grading 3.79% Cu, 6.40% Zn, 0.27% Pb, and 54.2 g/t Ag.

Wolfden recently began regulatory work for its High Lake deposit. The project proposal includes two open pits, three underground areas, a mill processing up to 4,000 tonnes per day, tailings management facility, and a 53-kilometre, allseason road from High Lake to the Coronation Gulf. Indicated reserves are 14.3 million tonnes of 2.34% Cu, 0.32% Pb, 3.53% Zn, 1.01 g/t Au, and 75.7 g/t Ag; inferred reserves are 1.3 million tonnes of 1.17% Cu, 0.28% Pb, 3.36% Zn, 0.78 g/t Au, and 64.6 g/t Ag.

Wolfden acquired the former Lupin gold mine, east of Izok, from Kinross Gold Corporation. Wolfden is assessing the potential of both reopening Lupin and processing its other deposits (Izok, Ulu).

Other advancing gold projects include the Back River Project (George Lake/Goose Lake; Dundee Precious Metals), Ulu South (Strongbow Exploration), and Ulu (Wolfden Resources). Dundee Precious Metals acquired 100 per cent ownership of the Back River project in July 2006, and budgeted $15.6 million for extensive drilling.

Committee Bay Resources conducted drilling, detailed mapping, and rock and till sampling along the Committee Bay greenstone belt, eastern Kitikmeot. The best prospects include Three Bluffs, Raven, Antler, Anuri, and West Plains. An inferred resource of 1.897 million tonnes at 8.0 g/t Au (487,000 contained ounces) was determined for Three Bluffs, using 2005 drilling results.

Other grassroots gold projects include Strongbow’s Committee Bay program and exploration in the Yathkyed (Nowyak Lake), Back River (Regan Lake), and north Slave (Anialik, Tree River) areas.

Sabina Silver Corporation had significant results from drilling at its Hackett River silver-zinc gold-copper- lead project in 2006. One highlight was a new massive sulphide zone termed the Boot Lake Deep trough; drilling returned true-width intercepts up to 50 metres wide grading 12% Zn and 300 g/t Ag. Another zone at Boot Lake deposit returned 42.95 metres of 8.35% Zn and 180.5 g/t Ag, and a second hole containing 49.85 metres of 9.18% Zn and 141.6 g/t Ag. The project’s three deposits (Boot Lake, Main Zone, and East Cleaver) remain open.

Strongbow, exploring for base metals in the Coronation Gulf area on its Canoe Lake project, is also investigating the base metal potential of the Musk, Anialik, and Napaktulik properties. Adriana Resources and 50/50 Nunavut Ltd are exploring for base metals- precious metals-PGEs related to the Muskox Intrusion. Allyn Resources Inc. conducted diamond drilling and prospecting for Cu-Ni-PGEs on the Booth River Intrusive Complex west of Bathurst Inlet.

Uranium exploration in Nunavut’s Proterozoic basins is seeing a resurgence. With a commodity price in excess of US$60/lb for U3O8, these basins are re-attracting interest. Exploration knowledge developed in Saskatchewan’s Athabasca Basin is now being applied to Nunavut’s basins. In the Hornby Bay Basin of western Kitikmeot, UNOR Inc.’s (formerly Hornby Bay Exploration) $6 million Coppermine River exploration program consisted of geophysics, geological mapping, sampling, and drilling. Early in 2006, Cameco acquired a 19.5 per cent interest in UNOR and staked 190 claims in the surrounding area. Adriana Resources Inc., joint ventured with UNOR, recently added to their claim holdings and conducted airborne geophysical surveys. Triex Minerals Corporation and Pitchstone Exploration Ltd drilled and confirmed uranium mineralization on their Mountain Lake deposit (50:50 joint venture project), the only identified uranium resource (8.2 million pounds U3O8) in the basin.

Kivalliq Region

The Churchill Diamond Project, located between Rankin Inlet and Chesterfield Inlet, continued to shine in 2006 with Shear Minerals as operator and Stornoway Diamond Corporation and BHP Billiton as partners. The 2006 program added to the kimberlite tally, bringing the total to 45, including a kimberlite dyke-trend with a minimum 5.5 kilometre strike length. Three outcrop sources were discovered for distinct kimberlite indicator mineral trains (e.g. Josephine and Sedna) found within the property.The majority of diamonds, micro and macro, are clear, colourless, and dominated by octahedron shapes.

In 2006, BHP Billiton entered into a joint venture with Stornoway on its Qilalugaq Project—407 claims straddling the Rae Isthmus, northern Kivalliq/western Qikiqtani. Stornoway completed a short reconnaissance program and discovered two new kimberlite dykes.Mini-bulk samples were collected for diamond analysis; results are pending.

Grassroots diamond exploration projects in the Kivalliq are: Churchill West (Shear and Stornoway), KMD Project (Ripple Lake Diamonds), Pitz Lake (Kennecott), Nanuq and Nanuq North (Peregrine Diamonds), and Tasiq (Diamonds North).De Beers has optioned some of its prospecting permits to Majescor Resources.

Cumberland Resources Ltd is advancing its Meadowbank gold project north of Baker Lake towards production, as the project is proceeding through regulatory processes. Meadowbank represents Canada’s “largest pure gold open pit gold reserve,” with measured and indicated resources of 22,190,000 tonnes at 4.8 g/t Au, for 3.4 million contained ounces. Mine production is estimated at 330,000 ounces per year over an 8.1 year mine life. Drilling on the Cannu gold zone, discovered in 2005, returned encouraging results suggesting additional resources.

Cumberland sold its Meliadine project interests to Resource Capital Fund for $23 million. The proceeds of the sale will be used to cover Meadowbank costs.

The Meliadine West gold project, located north of Rankin Inlet, is operated by Comaplex Minerals (78 per cent); Resource Capital Fund owns 22 per cent. The most recent resource estimate for the Tiriganiaq deposit, incorporating underground and open pit resources and based on a 2.5 g/t cut-off are: indicated ounces gold 1,193,000 and inferred ounces gold 1,552,000. The 2006 exploration program included diamond drilling (18,000 metres) focused on defining mineralization continuity.

Starfield Resources’ Ferguson Lake Project, south of Baker Lake, represents Nunavut’s largest and most advanced Ni-Co-Cu-PGE exploration project. Their 2006 drill program was designed to enhance resources in a 2.6-kilometre strike extent of West Zone’s Pit area and covered West Zone extension. Recent resource figures, based on inferred resources from all zones and a 1% Cu+Ni cut-off, estimate 1.5 billion pounds copper, 875 million pounds nickel, 101 million pounds cobalt, 3 million ounces palladium, and 0.5 million ounces platinum.

Grassroots exploration is underway in the southern Kivalliq for two mineralization types: Tri-Origin> Exploration on the Keewatin Project (optioned from BHP Billiton) is searching out gold and Sedex-type base metal mineralization; other companies (Pacific Ridge Exploration, Brilliant Mining, and Newmont) have staked ground prospective for an auriferous quartz-pebble conglomerate within the Proterozoic Hurwitz Group.

Other companies exploring are Brilliant Mining Corporation, for Ni-Cu-PGE mineralization in the Chesterfield Inlet area, and Jaguar Nickel Inc./BHP Billiton for large-volume magmatic sulphide deposits in the southwestern Kivalliq. Greyhound Lake is a high-grade silver and base metal prospect located north of Baker Lake and acquired by Aura Silver Resources in 2006. Kaminak Gold Corporation acquired the non-diamond rights to many properties of Hunter Exploration and Shear Minerals. Kaminak is looking for gold, uranium, and nickel and holds several properties in both the Kitikmeot and Kivalliq regions.

Since 2005, exploration rights for uranium mineralization in the Kivalliq have been secured through staking, acquisitions of prospecting permits, or by option agreements with junior exploration and international mining companies. All companies are targeting unconformity-related mineralization associated with the Thelon or Baker basins. There were many active uranium projects in 2006, with the largest programs being Titan Uranium’s Thelon project, Cameco’s Aberdeen project, and Pacific Ridge Corporation’s Baker project.

Areva’s Kiggavik and Sissons properties, west of Baker Lake, represent Nunavut’s largest known uranium resources. Four deposits, hosted in Archean basement rocks, contain an estimated 140 million pounds of U3O8, with associated gold-platinum mineralization. In 2006, Areva commenced a one-year viability study on the combined properties and opened a public information office in Baker Lake.

Other companies active include: Cumberland Resources, Forum Development Corporation, Strongbow and Bayswater Ventures Corporation, Superior Diamonds, Ruby Hill Exploration (under option to Western Uranium Corporation), Uranium North have grassroots projects nearby. Miramar Mining Corporation’s Doris North gold project in the Hope Bay greenstone belt is on its way to becoming Nunavut’s second operating mine and first new gold mine. The high-grade, open pit mine is scheduled to open mid-2008 with a two-year mine life. The North, Ur Energy, and Uranium World Energy Inc. (under agreement with Majescor). Field programs are expected in 2007 on most of this ground.

Qikiqtani Region

The main focus of exploration in the Qikiqtani Region is diamonds. Diamondex Resources Ltd recently completed their second season on the Brodeur Peninsula, following up on 2005 targets.Pure Gold Minerals and De Beers Canada have an exploration agreement for projects including Baffin Island, Prince of Wales Island, and Devon Island. They consider Baffin Island to be one of the most prospective exploration areas in northern Canada.

Patrician Diamonds Inc. recovered a 0.31 carat diamond in the northern part of their Borden Peninsula property on northern Baffin Island. Indicator Minerals Inc. is also looking for diamonds on the Borden Peninsula, south of Arctic Bay.

On the Melville Peninsula, the Aviat Joint Venture, a partnership between Stornoway, BHP Billiton, and Hunter Exploration Group, was Stornoway’s 2006 focus. Eleven kimberlites have been discovered, all significantly diamondiferous with average grade of 0.86 carat per tonne. Stornoway, Hunter Group, and Indicator have interest in the Baumann Project, Ellesmere Island.

True North Gems expanded their Beluga sapphire property near Kimmirut on southern Baffin Island. They conducted detailed mapping and mini-bulk sample evaluations of gemstone potential from each of the known occurrences.

Commander Resources Ltd has encouraging gold values from highly silicified iron formation in central Baffin Island. A 13.7-metre wide mineralized zone, with values up to 113.95 g/t gold,was intersected at the newly discovered Brent Showing; two other prospects (Ridge Lake and Durette) are also returning encouraging values.

Intrepid Minerals Corporation, with partner BHP Billiton, continues their search for Broken Hill-type silver deposits on southern Baffin Island.

With the increased value of iron ore, Baffinland Iron Mines Corporation has revamped their Mary River Iron project south of Pond Inlet, on northern Baffin Island. In 2006, Baffinland doubled the size and tonnage of the high-grade deposit through diamond drilling and completed a scoping study, to be followed by a feasibility study. Current estimates suggest a mine would process 10 million tonnes per year for over 35 years. The company hopes to deliver an iron ore bulk sample to market as early as 2008.

Roche Bay PLC is actively exploring iron ore deposits on Melville Peninsula with mining leases covering one of the largest known magnetite iron bodies in the world; the Western deposit contains three billion tonnes and the Eastern deposit has 1.3 billion tonnes. For 2007, the company plans a 40,000 metre drilling program to revise the mineral resource estimate.

There is interest in coal on Axel Heiberg and Ellesmere islands in the high Arctic with several companies and individuals having obtained coal exploration licences.

Trends for 2007

January 31, 2007 marks the expiry date for 153 prospecting permits issued in 2002 (59) and 2004 (94); these permits represent part of Nunavut’s recent diamond rush. Some ground is expected to be retained as mineral claims; however, a reduction of claimed ground is expected as companies conduct more focused exploration.

In 2006, there was a shift from diamond exploration to gold re-emerging as the dominant commodity of interest. If high commodity prices are sustained, traditional metals such as gold, base metals, and uranium are expected to attract more exploration interest in 2007. Of the 161 prospecting permits issued by INAC in 2006, 26 (about 380,439 hectares) covered ground with geological settings favourable for uranium mineralization, with an additional 460 mineral claims staked to cover 480,000 hectares of prospective ground.

Post a comment


PDF Version