Dec '07/Jan '08


Exploration and development on the rise in Manitoba

By Dave Prouse, resident geologist, Manitoba Science, Technology, Energy and Mines, Manitoba Geological Survey 

Sustained high metal prices continued to fuel exploration spending in Manitoba in 2007. Exploration and deposit appraisal spending intentions, as reported by Natural Resources Canada in March 2007, are estimated at $49.5 million, up slightly from the $46.9 million spent in 2006.

Base metals

Manitoba’s proven potential to host world-class nickel-sulphide deposits has attracted a number of junior companies that are conducting feasibilityrelated work on previously discovered deposits and former producers.

The most advanced project is that of Crowflight Minerals at the Bucko Lake deposit near Wabowden, south of Thompson. A positive bankable feasibility study was completed in February indicating Bucko has the potential to deliver a 118 per cent internal rate of return with a US$8.00 per pound nickel price. The study used a figure of 1.8 million tonnes of measured and indicated resources grading 2.1% nickel. This figure was subsequently upgraded to 2.5 million tonnes of measured and indicated resources of 2.01% nickel. Construction of surface infrastructure and rehabilitation of the old shaft proceeded throughout 2007. The capital cost of project development to production is estimated at $64 million. Crowflight plans to have Bucko in production by the second quarter of 2008, at a rate of 1,000 tonnes per day.

In regional exploration, Crowflight conducted drilling to further define two 2006 nickel discoveries, the Apex and the M11A North zone.

Approximately $100 million in capital spending was planned for 2007 at CVRD Inco’s Manitoba operations. Capital projects consist of smelter modernization including a new dust-capturing system, continued mine development and other work throughout the mines and processing plants. In October, CVRD Inco announced intentions to work towards extending the life of its existing Thompson facilities to 2027 and beyond. The company continues to look at ways to develop new ore bodies and upgrade their surface plants.

Ongoing drilling by CVRD Inco near its Thompson mines has demonstrated significant potential for the open pit mining of two new deposits, the Thompson 1-C Surface zone and the 1-D Surface zone.Drilling projects to locate new zones of nickel mineralization are also returning encouraging results at depth at both the Thompson and Birchtree mines.

Victory Nickel completed a 13,000 metre drill program at their Minago property north of Grand Rapids.Drill results from the program are being used to upgrade the resource estimate and to provide samples for metallurgical testing and geotechnical data.One of the better holes from the program returned 36 metres of 1.4% nickel.Overall drill results were reported to support past work on the property. Wardrop Engineering is in the process of conducting a bankable feasibility study which is due for completion in early 2008. The Minago deposit hosts NI 43-101 compliant measured and indicated resources of 49.1 million tonnes of 0.516% nickel.

Victory Nickel also completed a 30-hole drill program to expand resources at the Mel deposit north of Thompson. Victory has completed necessary expenditures to earn 100 per cent interest in Mel from CVRD Inco. Mel has a NI 43-101 compliant indicated resource of 4.3 million tonnes of 0.88% nickel.

In Lynn Lake, Independent Nickel commenced a 20,000 metre drill program at the past-producing Lynn Lake nickel mine, with the objective of testing four zones. In June, the company announced that drilling of the Upper G target intersected an unexpected zone of mineralization above the target area, returning 11.9 metres of 0.7% nickel and 0.4% copper. A prefeasibility study was commissioned to determine the technical and capital requirements necessary to open the former nessessary producer.

VMS Ventures acquired a large ground position in the Flin Flon–Snow Lake Belt during the last two years.VMS completed a five-hole summer drill program on three anomalies outlined by airborne geophysics and geochemical surveys at their Reed Lake property. In October, the company announced that assays from the second hole returned 43.05 metres of 4.38% copper, 1.56% zinc plus precious metals. Holes 1 and 3, on the same VTEM target, also returned encouraging base metal values. VMS was planning to commence a secondphase drill program in early November to further define the new discovery.

HudBay Minerals boosted their 2007 exploration budget to $45.2 million.This includes $8.5 million for the Bur copper-zinc deposit east of Snow Lake,where the company is developing a decline to take a 10,000 tonne bulk sample and conduct a feasibility study. A production decision for Bur is expected in late 2007.

At their Lalor Lake property southwest of Snow Lake, HudBay intersected a new zone of high-grade zinc mineralization. The initial drillhole intersected 45.13 metres of 7.62% zinc and 0.19% copper along with significant precious metal values. Drilling with four machines continued in the fall and is returning very encouraging results. Other 2007 drill programs focused on testing, both geophysical anomalies and structural re-interpretations of known deposits to discover new ore bodies, within and around operating mines. HudBay also signed option agreements on some of their Flin Flon–Snow Lake area properties with Rockcliff Resources and VMS Ventures, further leveraging their exploration opportunities.

Murgor Resources embarked on an aggressive drill program in January on properties optioned from HudBay Minerals in 2006. Three properties, Hudvam, Wim and Snow-H, are in the Manitoba portion of the Flin Flon–Snow Lake Belt. Hudvam and Wim contain partially delineated copper-zinc deposits for which Murgor completed NI 43-101 compliant resource estimates early in 2007. Winter drilling encompassing 20 holes was completed at Hudvam and returned encouraging results. Additional drilling is planned for 2008, leading up to a feasibility study. Inferred resources at Hudvam stand at 1.19 million tonnes of 1.17% copper, 1.71% zinc and 2.94 grams per tonne gold. Initial drilling of 10 holes at Wim commenced in August to verify historical data. A more extensive drilling program to boost the resource base is planned for early 2008. Wim contains an inferred resource of 2.06 million tonnes of 1.92% copper,0.26% zinc and 1.65 grams per tonne gold.

Halo Resources was conducting an extensive 30,000 metre drilling campaign on their large Sherridon property northeast of Flin Flon.The property contains several known near-surface deposits and mineralized zones, including the past-producing Sherritt Gordon ore body.Halo conducted drilling on four of the six known deposits during 2007 including Park Lake, Bob Lake, Jungle Lake and Cold Lake. Initial drill programs are being conducted to confirm historical results and to explore for extensions to known deposits. Drilling has been successful in confirming massive sulphide mineralization and expanding the resource base. Additional drilling is planned for 2008 to help advance projects to compliant resource calculations.

Rockcliff Resources signed option agreements to acquire 100 per cent interest in seven property packages from HudBay Minerals. The properties are located within the Snow Lake area and contain the Rail, Reed, Kof and Sylvia copper-zinc deposits as well as other prospective targets. Rockcliff later acquired three exploration licences in the Snow Lake area and staked additional claims adjacent to the Rail Lake property. A 3,000 metre drill program commenced in October to explore for possible extensions of the Rail Lake deposit.

Callinan Mines and partner Bell Resources completed a VTEM airborne survey and drilled high-priority targets at their Fox River nickel property east of Gillam. Drilling examined seven separate conductive targets out of a total of 20 on the large, remote property. Drillholes intersected mafic and ultramafic intrusive rocks containing sulphide-mineralized zones of varying thickness.

Pure Nickel reached an agreement with Xstrata Nickel to acquire 100 per cent interest in two former Falconbridge nickel properties, the William Lake project and the past-producing Manibridge mine near Wabowden. Pure Nickel also signed an option/joint venture agreement to acquire 50 per cent interest in Xstrata’s Fox River project in northeastern Manitoba. A 10-hole drill program at the Fox property was completed and returned assay values of up 2.38% copper and 0.43% nickel.

In southeastern Manitoba, a scoping study released in January on Mustang Minerals’ Maskwa nickel deposit increased the total mineral resource to over 9 million tonnes enabling a nine-year mine life with initial capital costs estimated at $64.5 million.Mustang subsequently embarked on a 30-hole drill program to upgrade the reserve figure, explore for additional mineralization and assist with the preparation of a prefeasibility study. This study is in progress, with a revised mine plan that will include an initial open pit lasting six years followed by an estimated two-year underground operation. Targeted production is expected to be one million tonnes of ore per year, yielding 10 million tonnes of nickel in concentrate.

Mustang has a second nickel-copper open-pit resource at the M2 zone on the Mayville property located 35 kilometres from the Maskwa deposit. A mineral resource estimate released in January concluded that M2 contains indicated resources of 21.9 million tonnes of 0.20% nickel and 0.48% copper. Mustang is reviewing various methods in an effort to enhance the mineral potential of the M2 zone and the Mayville property.

Precious metals

San Gold Corporation conducted a vigorous exploration and development program at the Rice Lake mine in Bissett. Development work on the 28th level (4,200 feet) and the 29th level for production of the “93” and “98” veins returned high-grade gold values. Face sampling of the “93” vein averaged 60.27 grams per tonne gold over a true width of 1.5 metres and a strike length of 53.3 metres. Drilling also discovered a new high-grade vein on the 28th level assaying 39.7 grams per tonne across 1.2 metres. In addition, drilling below the 5300 level returned some high grades, including 6.8 metres of 50.1 grams per tonne within a 15.1 metre intersection of 14.6 grams per tonne gold.

The first production ore from the San Gold #1 deposit was delivered to the mill in early April. Together the two mines were contributing 725 tonnes of ore per day. Modifications to the mill’s crushing circuit are being considered to increase overall mill capacity to accomodate anticipated increased tonnage from San Gold #1 and the addition of ore from the Cartwright zone. In April, the company had their first gold sale since putting the operation back into production in 2006, thereby making the transition from developer to producer.

At their Monument Bay project in northeastern Manitoba, Rolling Rock Resources completed a 28-hole drill program consisting of infill and down-plunge drilling of the main zones. Some highlights of the program include a 4.45 metre interval of 10.17 grams per tonne gold at the C zone and a 15 metre intersection at the G zone which assayed 6.68 grams per tonne gold. The Monument Bay project has a NI 43-101 compliant inferred resource of 3.38 million tonnes of 6.45 grams per tonne gold.

Garson Resources and Piper Capital, previously joint owners of the New Britannia mine (NBM) in Snow Lake, amalgamated to form Garson Gold Corp. in April. A 10,000 metre first-phase drill program began in February starting with detailed drilling of the existing inferred resources at the NBM #3 zone, which currently stand at 220,000 tonnes of 7.10 grams per tonne gold. The drilling of deep holes revealed multiple gold-bearing intersections in some areas. Garson completed 10,000 metres by September and an additional 10,000 metres is expected to be completed by year-end.

At the past-producing MacLellan gold mine near Lynn Lake, Carlisle Goldfields completed over 12,000 metres of drilling by mid-2007. Carlisle said that the presence of the MacLellan mine horizon has now been confirmed to the east, west and up to 200 metres below the present mine workings. Many drill holes returned multiple intersections and examples of significant assay results included 9 metres of 18.97 grams per tonne and 5.75 metres of 11.01 grams per tonne gold. A second phase of drilling is scheduled to resume in early November.

Wildcat Exploration completed over 8,000 metres of drilling at their Jeep property east of Bissett in Manitoba. The drill program extended the strike length of the past-producing Jeep gold mine’s No.1 vein system to 1.1 kilometres. High-grade gold values of 56.38 grams per tonne over 0.38 metres and 36.04 grams per tonne over 0.30 metres were encountered.


The search for uranium in Manitoba is focused on the northwest corner of the province. CanAlaska Uranium conducted a surface sampling program on their North East Wollaston project and discovered a large number of highgrade surface uranium showings.

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