Dec '08/Jan '09

Nunavut

Trailblazing in the tundra

By the staff of the Department of Indian and Northern Affairs Canada

A drill waterline is laid at Comaplex's Meliadine operation.

Nearing its tenth anniversary in 2009, Nunavut remains of great interest to the exploration and mining industry. Natural Resources Canada’s (NRCan) expenditure surveys, including 2008 projections, indicate that industry has invested an estimated $1.56 billion (actual dollars) in Nunavut since 1999. In 2007, exploration and deposit appraisal expenditures rose 60 per cent over the previous year to $338 million. Estimates suggest that in 2008, although expenditure will not surpass the 2007 mark, it may still reach $300 million.

According to NRCan’s 2007 industry survey, 15 of the 100 highest spending Canadian exploration projects were in Nunavut. These projects represent a wide range of commodities including iron, uranium, diamonds and base and precious metals. In 2008, there were 152 exploration properties (132 active) in Nunavut’s three regions: the Kitikmeot, Kivalliq, and Qikiqtani.

Golden opportunities

Early in 2008, Newmont Mining completed a $1.5 billion acquisition of the Hope Bay gold properties in eastern Kitikmeot, along the Coronation Gulf. Newmont’s land position covers the full 80-kilometre length of the Hope Bay greenstone belt. Three deposits contain indicated and inferred resources of more than 10 million ounces of gold — two small high-grade (4.0 to 8.0 g/t cutoffs) lode deposits at Doris and Boston and the low-grade (average 4.0 g/t), high-tonnage Madrid deposit.

Newmont’s comprehensive plan for Hope Bay follows the $34 million 2008 field program, which included exploration and geotechnical drilling of 70,000 to 80,000 metres. The Doris deposits were drilled to increase reserves locally, resource drilling was undertaken at the Boston and Madrid deposits and regional drilling was conducted elsewhere along the belt.

Agnico-Eagle Mines Ltd. continued to advance its Meadowbank gold project, 100 kilometres north of Baker Lake. Probable gold reserves stand at 3.5 million ounces; 29.3 million tonnes at 3.7 g/t, with further potential along strike and at depth. The project is under construction and initial production is anticipated for January 2010.

Agnico-Eagle’s Nunavut portfolio was expanded with the purchase of a 14.5 per cent interest in Comaplex Minerals. Comaplex’s main assets are 78 per cent and 50 per cent interests, respectively, in the Meliadine West and Meliadine East gold projects near Rankin Inlet in the Kivalliq. This year, Comaplex completed underground bulk sampling and infill drill programs on the Tiriganiaq deposit (Meliadine West).

Dundee Precious Metals’ (DPM) Back River project, a 63,229-hectare advanced exploration gold project, comprises the George and Goose lakes deposits. Indicated resources are 3.415 million tonnes at 10.9 g/t Au and inferred resources are 3.555 million tonnes at 10.2 g/t Au. Further land acquisition (the 81,895-hectare Wishbone property) covers favourable geological settings for gold, copper, silver, zinc and lead mineralization. DPM budgeted $12.8 million for gold and massive sulphide exploration in 2008. This included infill and exploratory drilling and bulk sampling at Back River and geological mapping, sampling and geophysical surveying at Wishbone.

The hunt for metals

In 2008, the Australian zinc-gold company OZ Minerals acquired several properties in western Nunavut including two massive sulphide projects, High Lake (copper-zinc-gold-silver) and Izok Lake (copper-zinc-lead-silver). High Lake, located 50 kilometres inland of the Coronation Gulf, contains known resources of 17.3 million tonnes at average grades of 3.3% Zn and 2.2% Cu. Izok Lake, located along the Nunavut/NWT border, hosts 14.8 million tonnes of resource with averages of 2.6% Cu and 12.8% Zn. OZ intends to develop the zinc-rich Izok Lake deposit first, targeting production in 2014, followed by High Lake development in 2015. A proposed Izok Lake mine-mill development plan will potentially be submitted for environmental review in early 2009.

Sabina Silver Corporation’s Hackett River silver-zinc project (western Kitikmeot) hosts at least eight known massive sulphide occurrences including East Cleaver Lake, Boot Lake and Main Zone. In the Jo Zone, results indicate excellent potential for additional resources. Reported values are 284.3 g/t Ag, 5.4% Zn and 2.6% Cu over 30 metres. A 13.6-year mine life is expected (milling rate of 10,000 tonnes per day) with anticipated average annual production of 12.4 million ounces of silver, 147,300 tonnes of zinc, 9,400 tonnes of copper, 16,800 tonnes of lead and 17,200 ounces of gold. Indicated and inferred resources are 40.1 million tonnes and 7 million tonnes, respectively.

Advised by the Nunavut Impact Review Board, the Minister of Indian Affairs and Northern Development recommended that Hackett River’s project description undergo a Part 5 environmental impact review under article 12 of the Nunavut Land Claims Agreement.

Uranium exploration continued at 44 properties, with concentrated work in Kivalliq’s Thelon Basin and Kitikmeot’s Hornby Bay Basin. In December 2007, positive results from a viability study prompted Areva Resources Canada Inc., and partners Dae Woo and JCU to announce the intended advancement of the Kiggavik uranium project (Kivalliq region) to the environmental impact assessment and feasibility phases.

Kaminak Gold Corporation and Nunavut Tunngavik Incorporated (NTI) formalized an exploration agreement on the Angilak uranium property, 335 kilometres west of Rankin Inlet. Evaluation of the Angilak property’s many uranium-copper-gold occurrences began in 2008.

Encompassing over 520,000 hectares, Ferguson Lake project is the largest nickel-platinum group elements (PGE) project in Nunavut. Here, Starfield Resources Inc. continued its drill program to define the low-sulphide, high-grade PGE potential, and to upgrade inferred copper-nickel-cobalt-PGE resources in the West Zone to indicated resources. Additional geophysical targets were identified as prospects outside the main zone. Starfield plans a test plant for metallurgical studies on a bulk sample from Ferguson Lake beginning mid-2009.

Iron-clad plans

On northern Baffin Island (Qikqitani region), Baffinland Iron Mines Ltd. completed a $70 million bulk sample program at the Mary River iron ore project, which contains high-grade magnetite and hematite deposits. The next steps are environmental review, followed by proposed construction in 2010 and proposed production in 2014. The $4.1 billion proposal includes a full-season deep-water port at Steensby Inlet and a 140-kilometre rail link to the port.

In 2008, Baffinland announced revised ore reserve figures of 365 million tonnes at Deposit 1, and 500 million tonnes at Deposits 2 and 3. The present plan calls for mining Deposit 1 at a rate of 18 million tonnes annually for the first 20 years.

Discovering diamonds

Across Nunavut, potential new “diamond districts” continued to be discovered. At its Amaruk project in the Kitikmeot region, Diamonds North discovered seven new kimberlites, bringing the total number to 29, a majority of which are diamondiferous. Encouraged by drilling results on the Darby project (which it co-owns with Indicator Minerals Inc.), Teck increased the 2008 exploration budget by 18 per cent. Additional kimberlite boulders were discovered in two new areas, which may represent new kimberlite clusters. Nine kimberlites have been discovered at Darby, five of which are diamondiferous.

At the Aviat project, Stornoway Diamond Corporation concentrated on delineating the size and grade potential of the known sheets within the Eastern Sheet Complex. The lateral extent of the diamondiferous AV267 body was doubled to 250 hectares and a new kimberlite sheet was discovered. Delineation drilling continued on the AV9 kimberlite pipe, discovered in 2007. Dense media separation results from a 203-tonne sample from AV267 are awaited.

Partners Shear Minerals Ltd. and Stornoway discovered nine kimberlites on the Churchill project, two of which (Killiq and the Kahuna breccia) were identified as being similar to other highly diamondiferous kimberlites on the property.

Peregrine Diamonds Ltd. completed a field program on their Chidliak prospecting permits, 150 kilometres northeast of Iqaluit. Airborne magnetic/electromagnetic survey and indicator mineral sampling revealed three kimberlites. Followup work in 2009 will concentrate on 65 geophysical anomalies, many of which bear geophysical signatures similar to those associated with the three new kimberlites and are proximal to known kimberlite indicator mineral trains. In addition to its diamond potential, Chidliak also hosts platinum and base metal anomalies.

In northern Kivalliq, Indicator Minerals announced the discovery of a new kimberlite at Nanuq North. Three kimberlites discovered on Nanuq in 2007(Kayuu, Natuarlik and Tudlik) returned encouraging results. Additional claims were staked in 2008, increasing the Nanuq land holdings from 201,000 to 314,000 hectares.

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