Nickel hunting in two provinces

Two provinces–Manitoba with its producing mines in the Thompson Nickel Belt and Quebec with one nickel/copper mine on the Ungava Peninsula–are under investigation by would-be and existing nickel miners. As CMJ readers know, the best place to find more nickel is near where it is already known to exist.

The strong price of nickel, which was hovering around US$6.50/lb at the end of January, has played a part in heating up the hunt for the metal. Prices are higher than they have been for five years, and better than three times what they were in January 2002. The positive pricing is due to global demand, much of which results from strong economic growth in China.

Nickel exploration is also popular because deposits often contain substantial amounts of platinum group elements (PGE). Revenue from byproduct platinum, palladium, iridium, osmium, rhodium and ruthenium can boost a mine’s bottom line substantially.

Northern Quebec activities

Let’s first take a look at Quebec where Falconbridge‘s Raglan mine is the province’s only nickel producer. This year the project is budgeted to supply 25,000 tonnes of nickel in concentrate, which is smelted in Ontario. The company expects that reserves and resources will grow at the mine and provide the basis to increase production 20% by 2007.

The area around Raglan is a natural target for nickel hunters. Falconbridge has a large land position, and has identified several deposits near the mine.

Canadian Royalties of Val d’Or is very active on its many properties along the Raglan Trend. A preliminary feasibility study for a copper/nickel mine was done on the Expo-Ungava deposit 20 years ago, but Canadian Royalties is the first to test the PGE potential of the claims. Values of 2.60 g/t PGE over 18 m, 1.68 g/t PGE over 42.7 m and 2.39 g/t PGE over 19.1 m were identified during the 2004 diamond drilling program in the Expo deposit. At the Mequillon deposit, the company estimated inferred resources to be 1.4 million tonnes with average grades of 0.7% Ni, 0.9% Cu, 0.6 g/t Pt, 2.1 g/t Pd, 0.2 g/t Au and 0.03% Co, and those figures will be updated soon. Drilling continues and a sample has been sent for metallurgical testing.

Canadian Royalties also explored the Mesamax deposit (a joint venture with Boulder Mining) where two of the longer intersections were 53.4 m grading 3.34% Ni, 4.44% Cu and 2.68 g/t PGE and 31.0 m grading 0.84% Ni, 1.35% Cu and 3.25 g/t PGE. The company also has an option to acquire a 100% interest in Montoro Resources‘ South Trend-Overtime claim block near the Mesamax discovery.

The Belanger property south of the Raglan mine is under investigation by Goldbrook Ventures of Vancouver. It announced the discovery of a second zone of mineralization on the property last November. Last summer, the company acquired the claims just south of the Raglan mine property from Masuparia Gold. Goldbrook is reportedly the largest land-holder (including joint ventures) in the area and has an aggressive exploration program planned for 2005.

Knight Resources of Vancouver has joined the nickel search on the Ungava Peninsula. It has an option to earn a 60% interest in AngloAmerican Exploration (Canada)‘s West Raglan project, 90 km west of the Raglan mine. Sixty holes were drilled in 2004 to follow up on the previous year’s program.

Golden Valley Mines of Val d’Or, Quebec, is testing the Shoot Out claims in the Raglan Trend. Drill core assayed in the summer of 2004 returned grades of 1.10% Ni, 0.74% Cu and 3.33 g/t PGE over 12.25 m. Golden Valley has joint ventured the West Shoot Out property with Little Mountain Resources and the East Shoot Out property with Resolve Ventures. Only three of the 13 holes drilled on East Shoot Out intersected significant mineralization.

Toronto’s North Atlantic Resources has an option to acquire 100% of the Chrysler prospect, which was first tested in the 1950s, from Canadian Royalties. In 2003 North Atlantic announced that the deposit contains undiluted resources of 1.24 million tonnes at an average grade of 1.79% Cu, 0.59% Ni, 0.39 g/t PGE and 0.11 g/t Au.

Novawest Resources of Vancouver and Cascadia International Resources of Calgary have drilled mineralized zones along the Raglan Trend. Bravo, Echo and Delta are the most advanced projects, but there are seven others the partners consider promising.

Vancouver-based Thelon Ventures has two claim groups (one west, one east of the Raglan mine). The company was checking previous electromagnetic anomalies discovered during earlier airborne surveys.

Many other claims are staked on the Ungava Peninsula, thanks to the success of the Raglan mine. If some of them become producing mines, the area will be a prolific camp.

Elsewhere in Quebec

Farther south Bitterroot Resources has assembled a land package near Mistassini, which it believes may host nickel/ copper/PGE-bearing sulphides. CanAlaska Ventures has acquired the Glitter Lake PGE property 135 km from the town of Matagami.

Virginia Gold Mines of Quebec City is the operator of the Gayot and Gayot Extension nickel-copper-PGE projects near James Bay and the Grenville project in Grenville Province. Both properties are 50%-owned by BHP Billiton. The Gayot Extension and Grenville properties received reconnaissance ground surveys, prospecting and mapping in the summer of 2004, but Virginia is busiest on its 100%-owned Eleanore gold property in the James Bay area.

Aurora Platinum of Vancouver and its partner Fieldex Exploration of Rouyn-Noranda are exploring the Belleterre Greenstone Belt. They are particularly interested in the copper-nickel-PGE potential of their Temiscamingue project. Grab samples from the claims have returned bonanza gold grades as high as 59.8 g/t, 42.7 g/t and 18.35 g/t Au. Aurora has also optioned the nearby Belleterre project of Hinterland Metals. Four sulphide showings related to gabbros have been identified on the property, and Aurora has conducted drilling on them in recent years.

Toronto-based Louvicourt Gold Mines is involved in two copper/nickel/PGE prospects in Quebec, the Villebon project near Val d’Or and the Sarah Lake project near the former mining town of Fire Lake.

Marum Resources of Calgary is in the early stages of exploration on its B20 prospect on the Quebec-Labrador border. An airborne Mag-EM survey was flown in April 2004 over a zone of massive sulphide mineralization previously drilled.

Sole-interest in the Lac Paradis nickel property north of Baie-Comeau was acquired by Vancouver’s Quinto Technology in 2003. Quebec government geologists sampled grades of up to 5.25% Ni from the property. The company has sampled nickel and copper showings and says it will follow up when assays are returned.

Activity in Manitoba

Since Inco discovered the nickel deposits of Thompson in 1956, Manitoba has become a pillar of the company’s operations. The company continues to explore the Thompson Nickel Belt in search of more reserves and new deposits to feed its smelting complex.

Toronto-based Nuinsco Resources re-leased a resource estimate last summer for the Mel deposit 25 km north of Thompson. The total indicated and measured resource is 3.03 million tonnes grading 0.77% Ni and additional inferred resources of 60,000 tonnes at 0.61% Ni. Nuinsco is in the process of acquiring 100% of the property from Inco by spending $6 million within the next 18 months. Preliminary economic studies are underway in hopes of developing an open pit.

Crowflight Minerals o
f Toronto and Falconbridge have a joint venture agreement for Crowflight to explore and develop nickel properties in the province. The venture covers 190 km2 located in the Wabowden area south of Thompson. If Crowflight brings the Bucko property into production, it can earn a 100% interest. Historical resources there are believed to be 2.5 million tonnes grading 2.23% Ni and 0.17% Cu. Crowflight may also earn a 50% interest in Falconbridge’s Bucko/Bowden, Halfway Lake and Resting Lake properties. The Bowden Lake and M11A mineralized zones are estimated to contain an inferred resource of 89.77 million tonnes grading 0.64% Ni. Four drills have been mobilized on the claims to bore 15,000 m this year. Vancouver-based BHP Billiton Diamonds has flown surveys on the Stephens Lake property, which it holds under option from Cream Minerals, ValGold Resources and Sultan Minerals. BHP Billiton has chosen six targets for drilling in 2005. AngloAmerican Exploration (Canada) has also assembled a substantial land position in the area.

There were other activities around the Thompson Nickel Belt last year. Canadian Royalties is earning a 50% interest in Inco’s TNB South property. Inco, as operator, conducted geophysical surveys and tested a few initial drill targets. Mustang Minerals of Toronto acquired 100% of the former Maskwa nickel mine located 150 km northeast of Winnipeg. The Maskwa open pit was mined from 1974-76, and Canmine Resources developed a resource estimate of 2.6 million tonnes at 1.27% Ni, 0.21% Cu, 0.04% Co and 0.04 g/t PGE by the end of the last century. The estimate is being updated and the Maskwa property considered for diamond drilling.

Gossan Resources of Winnipeg has increased the size of its Bird River Sill property 40 km east of Lac du Bonnet. The company theorizes that mineralization on its property and that of the old Maskwa mine are related.

Bell Resources and Callinan Mines are earning an interest in the Fox River property, which they hope hosts a deep extension of the Thompson Nickel Belt. Two aeromagnetic anomalies have been drilled and anomalous values of nickel, silver, gold and lead were noted.

Nickel exploration in Canada is accelerating, and it remains to be seen how many new mines will be developed. Whether there will be a new nickel development in this country partly depends on the stiff competition from low-cost laterites elsewhere in the world.

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