Exploration and Mine Development Highlights in 2006

British Columbia has seen a resurgence in mining and mineral exploration during 2006. Investor confidence is solidly behind new exploration and mine development, and the province is experiencing a boom in related activities. Demand for metals and minerals remains high as China and India, in particular, continue to show record levels of economic activity and development. British Columbia is well poised to take advantage of this demand.

It has been an exceptional year for exploration resulting in an impressive list of projects being proposed for further development (see p. 15). Proposals for 27 new mine developments have been submitted to government for approvals. Exploration expenditures in 2006 for over 600 projects are estimated in excess of $220 million, including 40 which each exceed $1 million. Mineral tenure acquisitions in 2006 are expected to exceed 4.8 million hectares, matching the all-time record established in 2005. During 2006 there were two industrial minerals projects that moved to the mine construction stage, and two new coal mines opened up in the northeast. The activities are summarized below, by region.

With its demonstrated geological potential for new resources, positive government policies toward resource development, a deep pool of geoscience and engineering expertise, as well as one of the best geological databases in the world, British Columbia is expecting yet another exciting year for the mining industry in 2007.

Northwest British Columbia

Based on robust metal prices, mine-life was extended by a year at the Eskay creek gold-silver mine, and by two years at the Huckleberry copper mine. Seven copper, gold, molybdenum, zinc or coal mine developments are under study in the mineral-rich northwest region. Cusac Gold Mines reactivated the small, high-grade Table Mountain mine and expects to produce gold by year-end. A mine permit was awarded, and Ascot Resources started development in October on its Swamp Point aggregate quarry south of Stewart.

Porphyry copper-gold projects in the Stikine district top the exploration list. NovaGold Resources submitted plans for a 60,000-tonne/day mine at Galore Creek. At Schaft Creek, Copper Fox Metals’ confirmation drilling continued, and work began on project feasibility and permitting. Step-out drilling at Red Chris focused on a westerly extension of the deposit, and bcMetals negotiated with offshore copper smelters pending a decision on extending the BC power grid. Drilling on the GJ property by Canadian Gold Hunter found the Donnelly North zone on the Kinaskan Plateau. The value of contained gold far outweighs copper at Kerr-Sulphurets (Seabridge Gold), Snowfields (Silver Standard) and Bronson Slope (Skyline Gold), all of which saw sizeable drilling programs. Other significant projects in the Stikine porphyry district include Ball Creek (Paget Resources), Eaglehead (Carmax Resources) and Copper Creek (Firesteel Resources).

Hard Creek Nickel conducted a 13,000-m drill program on its Turnagain bulk-tonnage nickel prospect.

The highest profile molybdenum development, among many, was acquisition of controlling interest in the Endako mine by Blue Pearl Mining, which the company plans to integrate with development of its Davidson deposit near Smithers. Molybdenum intercepts from a deep satellite zone increased the already substantial resource at Davidson. Adanac Molybdenum proposed to mine Ruby Creek near Atlin. Resource definition continued at the Lucky Ship (New Cantech Ventures) south of Houston, with encouraging results, and the company began on the Storie deposit (Columbia-Yukon Explorations) near Cassiar. Tenajon Resources explored Ajax, near Alice Arm.

Copper-molybdenum porphyry prospects along the Skeena Arch were also popular drill targets, such as Big Onion near Smithers by Eagle Peak Resources, the Seel (Gold Reach) and the Berg (Terrane Metals) near the rejuvenated Huckleberry mine and, farther south, Coles Creek by Calinan Mines.

Redfern Resources discovered copper and zinc massive sulphides in a faulted extension of the Tulsequah Chief A-Zone and drilled a possible extension of the nearby precious metal-rich Big Bull. On the North Coast, Kenrich-Eskay Mining explored near Anyox, in particular the Double Ed copper-zinc deposit, and Bell Resources drilled for an extension of the Granduc copper deposit. Eskay-type, gold- enriched massive sulphide mineralization was targeted at Corey (Kenrich-Eskay) and RDN (Northgate). Activity at the Kutcho copper-zinc property shifted from exploration to permitting.

Among gold projects, Canarc Resources is encouraged by its New Polaris project, and Bravo Ventures expanded its program on Homestake Ridge. In the Stewart area, Pinnacle Mines explored an extensive epithermal stockwork at Silver Coin, and Sabina Silver drilled the Del Norte gold-silver vein. At Golden Eagle, near the Yukon border, Signet Minerals tested mesothermal to epithermal veins. In the Atlin district, Prize Mining extracted a bulk sample at Yellowjacket.

North-Central British Columbia

Mineral exploration increased significantly from 2005. Most exploration targeted porphyry copper-gold within the Quesnel Terrane, but there was renewed interest in other deposit types including mesothermal and epithermal gold, porphyry molybdenum, SEDEX zinc-lead-silver and gold-enriched skarn systems.

Imperial Metals evaluated alkalic porphyry copper-gold targets near Mount Polley, and received encouraging assays from the C2 and Boundary Zones. Several companies explored north of Mount Polley, including Valley High Ventures (Lloyd-Nordik) and Richfield Ventures (Mouse Mountain).

Taseko Mines conducted a large diamond drilling program on the margins of the Pollyanna and Granite Lake pits at the Gibraltar copper-molybdenum mine. The work extended known mineralization, which will support recalculation of resources.

Cross Lake Minerals commenced drifting towards North zone gold-bearing skarn mineralization at its dormant QR gold mine, north of the Quesnel River, which it plans to reopen in 2007.

Skygold Ventures and partner Wildrose Resources utilized three drills on their Spanish Mountain property near Likely. The program confirmed grade and tonnage potential. Nearby, Acrex Ventures evaluated similar style mineralization on its Hepburn Lake property.

North of Horsefly, NovaGold Resources completed a modest geochemical sampling program on the Shiko porphyry copper-gold prospect. South of Horsefly, Wildrose teamed with Fjordland Exploration to further evaluate the Woodjam porphyry gold-copper property. East of Likely, Barker Minerals completed a small drilling program on its Frank Creek VMS prospect.

In the Wells-Barkerville gold belt, International Wayside Gold Mines drilled several high grade mesothermal vein and/or replacement style prospects including the Bonanza Ledge deposit on its Cariboo Gold Quartz. Sister company Golden Cariboo Resources evaluated several properties centred on Grouse Creek.

In the Nechako Plateau area Silver Quest Resources explored several epithermal gold-silver prospects including 3TS and Davidson. Leeward Capital drilled the Nithi Mountain molybdenum deposit located immediately east of the operating Endako molybdenum mine.

North of Fort St. James, Terrane Metals, new owner of the Mt. Milligan gold-copper porphyry, commenced a program for a feasibility study and environmental assessment.

In the Omineca Mountains area, Yankee Hat Minerals explored the porphyry-related gold on its Fran property. Alpha Gold continued to evaluate the Canyon Creek zone on its Lustdust gold skarn property. Serengeti Resources completed limited drilling programs on its Kwanika and Tchentlo porphyry copper-gold properties. Geoinformatics Exploration explored several porphyry copper-gold targets on its vast Redton property and its Kliyul porphyry copper-gold prospect. Teck Cominco evaluated its Lorraine-Jajay and Misty alkalic porphyry copper-gold properties northwest of Germansen Landing. Lysander Re
sources drilled the nearby Osilinka-Cat Mountain gold-copper porphyry.

In the Toodoggone, Northgate Minerals explored the Kemess North Offset and Kemess East targets not far from its Kemess South gold-copper mine. Farther north, Finlay Minerals drilled epithermal gold-silver and porphyry copper-gold targets on the PIL. Sable Resources drilled its Shasta epithermal gold- silver deposit and prepared to commence mining and milling. Bishop Gold and Guardsmen Resources tested epithermal gold-silver target deposits on the Lawyers and Albert’s Hump properties. Starfire Minerals and Stealth Minerals conducted induced polarization surveys on their Porphyry Pearl and Sickle properties, respectively, near the Toodoggone River.

Northeast British Columbia

Exploration activity in the Peace River Coal Fields declined from 2005, in part because of softening metallurgical coal and pulverized coal injection (PCI) markets.

Northern Energy & Mining (NEMI) opened the small Trend metallurgical coal mine in January 2006, and continued to explore the Roman Mountain area to increase reserves.

Western Canadian Coal commenced shipping metallurgical coal from the Perry Creek deposit of its Wolverine mine in September. A small drilling program evaluated the western margin of the Perry Creek deposit, but a much larger exploration program was completed by Western Canadian Coal on the nearby Hermann property. This work was conducted in support of an application for environmental assessment certification.

Elk Valley Coal completed a rotary drilling program on the Babcock Mountain area of the idle Quintette minesite. Hillsborough Resources continued to evaluate the Horizon. Anglo Coal Canada optioned properties from Hillsborough Resources and conducted resource definition drilling on the South Ridge metallurgical coal property. Anglo Coal also completed small drilling programs on the Reesor and Tentfire/Prospect properties. Hillsborough Resources also renewed exploration on its Wapiti thermal coal deposit northeast of Tumbler Ridge.

Western Canadian Coal received an environmental assessment certificate for its Brule PCI deposit, adjacent to the Dillon PCI mine, and applied for a Mines Act permit to develop a 1.6-Mtpa operation.

South of the Willow Creek mine, First Coal conducted major exploration drilling on its Goodrich-Central South and South Cirque properties.

Kennecott Canada Exploration completed drilling on the Hudson’s Hope and Murray River projects, located northeast of Hudson’s Hope and south of Tumbler Ridge, respectively.

South-Central British Columbia

The Highland Valley copper-molybdenum mine (Teck Cominco/Highmont Mining) continues a trend of exceptional profitability in light of high metal prices and mine efficiency. A decision on the development of a hydrometallurgical smelter is pending, and if it proceeds the economics of metal production at the mine could enter a new era.

Porphyry deposits attracted the bulk of the region’s exploration spending. The New Afton copper-gold project (New Gold) near Kamloops entered the mine development review process and was proceeding to a feasibility decision in late 2006. The Ajax West and Ajax East pits were the primary focus of Abacus Mining & Exploration’s program. The Prosperity project (Taseko Mines) re-entered the environmental assessment review process. Near Little Fort, drilling occurred on the Crazy Fox molybdenum-tungsten project of Newmac Resources. Other active properties include the Newton Hill (High Ridge Resources), Dobbin II (Molycor Gold/Goldrea Resources), Isintok (Jasper Mining), Newmac (Newmac Resources), Lac La Hache projects (GWR Resources) and Rateria (Happy Creek Minerals).

Stratiform base metals received considerable exploration attention highlighted by significant programs at Ruddock Creek (Selkirk Metals), Harper Creek (Yellowhead Mining), Big Bend (Goldstream, Rain et al.) (International Bethlehem Mining) and the LJ (Cons Venturex Holdings). At the Red Hill project near Ashcroft, Avalon Ventures reported encouraging drilling results.

The Spences Bridge gold belt has been very active, with epithermal, bulk mineable, high-grade gold deposits being the target. The camp saw large programs at the Skoonka (Strongbow Exploration) and Prospect Valley (Consolidated Spire Ventures) properties. Generative work continues to lead to new discoveries such as the Axel Ridge showing at the Ponderosa property by Almaden Minerals, which has pioneered much of the exploration interest within the belt. Other companies include Tanqueray Resources and Williams Creek Explorations.

High grade gold-silver veins remain a popular target, and the Elk project of Almaden Minerals is moving toward a second era of production. Positive results are also reported from drilling the New-Noelton veins at the Bralorne mine (Bralorne Gold Mines). The Jake (Rimfire Minerals) near Clearwater received additional exploration after encouraging gold values were discovered earlier in the year.

The Hedley (Nickel Plate) camp had exploration on a gold-skarn at the Panorama Ridge (Goldcliff Resource).

Northeast of 100 Mile House, Argent Mining and Eastfield Resources drill-tested the Iron Lake property for magmatic massive sulphide mineralization.

Noteworthy advancements are being made at the Verity, Fir and Upper Fir tantalum- niobium properties (Commerce Resources).

Kootenay Region

Exploration in southeast B.C. continued and activities focused on a variety of commodities, including molybdenum, coal, gold, zinc, lead and silver. Exploration took place in areas such as Rossland, Camborne, Jersey-Emerald, St. Eugene, Beaverdell and Sandon.

In late 2005, a subsidiary of Roca Mines received a production permit for its MAX molybdenum property. The company carried out development and construction throughout 2006.

Sultan Minerals continued to evaluate its Jersey-Emerald molybdenum-tungsten property near Salmo. Eagle Plains Resources undertook a second drilling program on its Sphinx molybdenum prospect, and immediately to the west Jasper Mining drilled the McFarlane molybdenum property.

Large-scale exploration for metallurgical coal was carried out for the third consecutive year. Elk Valley Coal drilled the Castle and Bare Mountains (potential expansion areas for the Fording River operations) and Mount Michael (Line Creek operations). Cline Mining’s proposed Lodgepole PCI coal mine entered the environmental assessment process.

West High Yield Resources (WHY) undertook a major drilling program on its Midnight and IXL gold properties at Rossland. Elsewhere in the Boundary District, Merit Mining continued to advance its Greenwood gold project, including assessment of the Lexington-Grenoble deposit, and Anglo-Canadian Uranium drilled the Lucky Boy gold prospect near Beaverdell. Gold prospects in the West Kootenays, including JJ (Astral Mining) and Goldsmith (Cream Minerals), were also evaluated. La Quinta Resources drilled the Howell gold property southeast of Fernie, and Ruby Red Resources drilled the Gar and Wyald gold prospects in the Cranbrook area.

Stikine Gold’s third deep drill hole in the Sullivan Deeps project near Kimberley was collared in early fall. This initiative targeted the core of a potential new SEDEX-style zinc-lead deposit, a counterpart to the Sullivan. St. Eugene Mining Ltd. drilled vein-type silver-lead-zinc targets on the St. Eugene and other properties. Klondike Silver continued to evaluate the Sandon silver-lead-zinc camp in the Slocan.

Southwest British Columbia

Programs in the southwest were varied and targeted a variety of metals as well as coal, industrial minerals and aggregate.

At Myra Falls on Vancouver Island, Breakwater Resources continued underground development northwest to the Marshall zone. Mill upgrades are said to be on schedule and on budget: new copper and zinc circuits improved recoveries by approximately 5% and 3%, respectively.

Hillsborough Resources’ Quinsam t
hermal coal mine near Campbell River benefited from increased contract prices and increased its resource base.

Compliance Energy tested the Raven metallurgical coal deposit near Comox, employing a high resolution seismic survey and drill program aimed at a prefeasibility study.

At the Merry Widow skarn project southwest of Port McNeill, Grande Portage Resources completed 3,400 m of drilling and reported significant intersections, including 47.32 m of 5.16 g/t Au. At the Mineral Creek gold project near Port Alberni, Bitterroot Resources drilled 70 holes totaling over 9,700 m. Bitterroot and Mineral Creek Ventures Inc. are preparing permit applications to collar a portal for bulk sampling of the Lower Linda vein. Also near Port Alberni, SYMC Resources is drilling the Macktush property.

Near Hope, Imperial Metals drilled the AM zone breccia pipe at their Giant Copper property.

Pan Pacific Aggregates completed airborne magnetometer and EM surveys over its Sechelt carbonate property and reported initial success in identifying areas underlain by carbonate and skarn assemblages.

The authors are on the staff of the BC Ministry of Energy, Mines and Petroleum Resources. Brian Grant can be reached at Brian.Grant@gov.bc.ca. For more information visit www.em.gov.bc.ca/geology.

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