Canada’s next uranium hot spot

Prospectors unafraid of inclement weather know the secret of Labrador’s Central Mineral Belt: uranium-bearing rock outcrops in hundreds of places. Thanks to precise exploration techniques, the belt has the potential to host Canada’s next big uranium producers.

Explored for uranium in the 1960s and 1970s, the Central Mineral Belt has several promising targets. The Michelin Deposit was well along the road to development in the late 1970s when uranium prices plummeted, and then-owner Brinex (British Newfoundland Exploration Co. Ltd.) abandoned it. A bankable feasibility study had been done and an offtake agreement was in place. About 500 m of underground development was completed at the Michelin deposit, but a mill was never built.

Several other uranium deposits were discovered over 30 years ago. Besides Michelin, which was the largest, the potential of the Kitts, Rainbow, Burt Lake, Inda, Gear and Nash deposits had explorers talking. Together these deposits had an estimated historical resource of nearly 23 million lb U3O8.

A NI 43-101 report released in January 2006 estimates that Michelin alone has 22.2 million lb U3O8 in measured and indicated categories, plus 13.4 million lb in inferred resources. The total is about double the older, historical estimate for Michelin.

Interest in the uranium potential of central Labrador waned during the next 20 years of low prices. The Central Mineral Belt was mostly ignored until Vancouver-based Fronteer Development Group (57% owner and operator) and its partner Altius Minerals of St. John’s, Nfld., began to explore it for Olympic Dam-type deposits in the summer of 2003. A few months later they reported encouraging copper-gold-silver results from the belt. The presence of uranium was noted.

Cutting-edge geophysics

With uranium prices on the upswing, in February 2004 the partners announced a new focus on this metal. They hired Fugro Airborne to conduct a 12,800-line-km airborne magnetic and radiometric survey of their property, including the Michelin deposit.

Today’s very precise and detailed survey techniques were unavailable 40 years ago, when the area was first explored. Modern geophysics can detect at-surface targets associated with uranium and iron. Very subtle anomalies are detected. The use of advanced GPS systems makes it possible to readily locate the anomalies on the ground.

“These techniques make it possible to detect directly the mineral we are looking for,” Fronteer president and CEO Mark O’Dea told CMJ. “It’s like flying a virtual assay machine over an area, and the results create a road map to the bedrock mineralization.”

Fronteer and Altius were the first exploration companies to apply advanced geophysics to the Central Mineral Belt. Now other companies (see Sidebar) are having their own success using similar techniques.

Michelin geology

According to an Open File available from the Newfoundland & Labrador Department of Natural Resources, the Central Mineral Belt is composed of Archean to Mesoproterozoic gneissic, sedimentary, volcanic and granitoid rocks. It forms part of the Nain and Makkovik tectonic provinces. The southern part of the belt experienced deformation related to the Grenville Province.

The belt contains several sub-belts and zones of uranium mineralization. The volcanic, shear zone-hosted Michelin deposit is probably the oldest of the deposits. It has mineral assemblages similar to iron oxide-copper-gold (IOCG) deposits. Uranium is associated with hematite, which overprints high temperature breccias. The host rock is predominantly rhyolitic ash-flow tuff.

Each drilling campaign that Fronteer mounts at the Michelin deposit expands and deepens the known mineralization. The 2005 campaign included 27 holes totalling 9,400 m. The mineralization is now outlined from surface down to a vertical depth of at least 700 m. Eight holes drilled underneath the historic resources added 450 vertical metres to the deposit. The identified dip length is approximately 990 m. The deposit is open along strike and at depth.

The last hole drilled at Michelin in 2005 intersected the deposit 700 m below surface. It also returned the second-best assay to date: 0.32% U3O8 (7.0 lb/tonne) over 0.5 m. The sixth hole returned 7.9 m grading 0.34% U3O8, the best of this year’s assays. Of the 300-plus holes drilled at Michelin, Fronteer’s deep drilling returned three of the four best uranium results.

O’Dea’s gut feeling (non-NI 43-101-compliant) is that the Michelin deposit has the potential to host as much as 80 million lb of uranium. Such numbers would make it one of the largest undeveloped uranium deposits in Canada.

Nor is Fronteer’s success limited to a single block of claims. In January 2006, the company said it had made two more uranium discoveries about 25 km east of the Michelin deposit. The Jacques Lake target returned 0.10% U3O8 in four separate holes over 9.2-, 5.0-, 4.0- and 3.0-m intersections. At the Otter Lake camp the fourth hole returned 1.0% U3O8 over 0.5 m and 0.14% U3O8 in a separate 1.0-m section. Three other holes hit 0.12% over 0.9 m, 0.11% over 0.5 m and 0.11% over 1.0 m.

Given the company’s success in finding so many surface targets, Fronteer’s problem is one every explorationist might wish for. Over the next 12 months, the company plans additional drilling and an advanced scoping study for Michelin as well as drilling in at least five other targets areas.

An optimistic O’Dea says that if the Michelin resource expands the way he hopes, it “could fly” at current uranium prices. Mining uranium in Labrador has the advantages of outcropping deposits and ready access to deep-water ports for shipping, he added.

In fact, Fronteer and Altius are so confident about their properties that they are doubling their drilling activity next year. At least 20,000 m is planned at Michelin and another 20,000 m at Jacques and Otter lakes and five other regional prospects.

It looks like central Labrador is about to become Canada’s next uranium belt. That would solidify Canada’s position as the world’s largest uranium producer.

Other players in the area

Santoy Resources (Vancouver)

Santoy owns 100% of several properties that have been covered by recent radiometric and magnetic airborne surveys, west of and near the Michelin deposit. The company completed 514 m of drilling at ANOMALY NO.7 in 2005 to follow up historically known uranium occurrences. This work extended the known radioactive zone 50 m below and 50 m farther east than was drilled by former-owner Brinex. Core taken by Brinex assayed 0.132% U3O8 over 11.4 m, but Santoy has not yet announced the assays from the core it recovered.

Equally important are the Mustang River and Bruce River properties on which Santoy is earning an initial 50% interest from Monster Copper. The Mustang River property 8 km northeast of the Michelin deposit is this winter’s drilling target.

Monster Copper (Toronto)

Monster Copper owns two uranium prospects in Labrador, the Mustang River and Bruce River claims. After Santoy earns its initial 50% interest in the properties, it may elect to earn a further 25% or the two companies may form a 50/50 joint venture.

Three target areas have been identified at Mustang River. One, the Irving zone, has a documented 500-m-long boulder train with values of between 0.09% and 6.25% U3O8. Previous drilling failed to locate the source of the boulders. Another, the South prospect, has not been drilled, but boulders from this area assayed 0.02% to 3.5% U3O8. The third area is Mustang Lake East where very little work has been done.

Crosshair Exploration (Vancouver)

The Moran Lake area is the target of Crosshair’s exploration work. Three unique uranium environments have been identified: Olympic Dam-type IOCG mineralization in the central ar
ea; unconformity or Athabasca Basin-type mineralization in the north; and structurally controlled, Michelin-type mineralization in felsic volcanic rocks in the southern part of the property.

With so much to choose from, the company had an airborne radiometric and magnetic survey flown over all its holdings. Not only was the survey successful in pinpointing the previously known areas of mineralization, but it found more than 25 new uranium and IOCG targets.

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