Precious & Practical: Spotlight on Saskatchewan gold and base metals
Saskatchewan hosts a diverse wealth of minerals, ranging from potash to uranium, and even diamonds.
Here, we spotlight recent news from active gold and base metals projects in the province – which consistently ranks as one of the world’s top mining jurisdictions.
Foran Mining recently released a prefeasibility study on its McIlvenna Bay zinc-copper project in east-central Saskatchewan, 65 km west of Flin Flon, Man.
The study outlined a nine-year mine life and annual production of 89.2 million lb. zinc and 27.9 million lb. copper, in addition to 1,7312 oz. gold and 492,667 oz. silver. With a preproduction capex of only $261 million, the underground operation has an after-tax net present value of of $147 million and an internal rate of return of 19.2%. The study used a discount rate of 7.5%.
While the study was positive, the timing of its release could have been better. The news came out on Mar. 12, the same day the TSX fell by 12% – on coronavirus fears.
Timing notwithstanding, for president and CEO Patrick Soares, the PFS is just the beginning – “More than 16 mines have opened in Flin Flon over its 90 year history – each of those mines doubled in size from intial reserves to close,” Soares says. “We have an initial nine-year mine life but we believe like most of the mines here, that will continue to grow.”
That said, Soares notes that even at depressed spot prices in mid-May when he spoke to CMJ, the project would be cash flow positive to the tune of about $40 million annually.
The next step for Foran is to find a partner to help it take McIlvenna Bay to the feasibility stage.
The company had been planning to release a feasibility study this year that would include toll processing at HudBay Minerals’ 777 complex in Flin Flon. However, as the study came nearer to completion the team realized that tailings facilities in Flin Flon were full and it would be less expensive to build a mill onsite and build a dry-stack tailings facility. Rather than delay the release of the study, which would require additional work to meet feasibility level requirements, the company chose to release the study as a prefeasibility with onsite processing and a dry-stack tailings scenario.
Probable reserves at McIlvenna Bay are 11.3 million tonnes grading 4.01% zinc, 1.14% copper, 0.54 g/t gold and 20.97 g/t silver.
The majority of resources are contained within two lenses of the volocanogenic massive sulphide (VMS) deposit that, together, average 18 metres thick.
While the company has been focused on McIlvenna Bay, Soares says there are three existing deposits with historic resources that warrant more drilling: Bigstone, Balsam and the smaller Hanson deposit.
Soares notes that VMS deposits tend to occur in clusters and Foran has barely scratched the surface in terms of regional exploration. The Thunder zone discovery in 2015, near Balsam, returned two intercepts of better 100 metres grading 2% copper.
Also in located in the Flin Flon camp is the Knife Lake project, where RockRidge Resources released its first resource last August. The project, 130 km northwest of Flin Flon, hosts an indicated resource of 3.8 million tonnes grading 1.03% copper equivalent of using a 0.4% cut-off (or 0.83% copper, 0.17% zinc, 3.7 g/t silver, 0.1 g/t gold, and 82 ppm cobalt) totalling 70 million lb. copper equivalent. Inferred resources add 7.9 million tonnes at 0.67% copper equivalent (0.53% copper, 0.15% zinc, 2.4 g/t silver, 0.08 g/t gold, and 53.1 ppm cobalt) for 117 million lb. copper equivalent.
The near-surface deposit is interpreted to be a remobilized portion of a presumably larger “primary” VMS deposit. The mineralized zone is about 15 metres thick with an average horizontal width of 300 metres. It has been traced along 4,000 metres of strike.
RockRidge optioned the project from Eagle Plains Resources in 2018.
Murchison Minerals’ Brabant-McKenzie VMS deposit is located 175 km northeast of La Ronge, in north-central Saskatchewan.
In 2018, the junior released a resource for the deposit outlining 2.1 million indicated tonnes in two zones (Upper and Lower) averaging 7.08% zinc, 0.69% copper, 0.49% lead, 0.23 g/t gold and 39.6 g/t silver (or 9.98% zinc equivalent). Inferred resources add 7.6 million tonnes across the two zones averaging 4.46% zinc, 0.57% copper, 0.19% lead, 0.1 g/t gold and 18.42 g/t silver (or 6.29% zinc-equivalent).
Earlier this year, Murchison tested five high-priority targets at the property, drilling 11 holes totalling 2,618 metres. In March, the company announced a high-grade copper-zinc discovery at its Main Lake target, 10 km south of Brabant-McKenzie. The discovery hole hit a copper rich upper zone, which cut 3.6 metres of 0.83% copper, 0.61% zinc, and 11.8 g/t silver, starting at 140 metres depth. The hole also intersected a zinc-rich lower zone, cutting 6.6 metres of 0.09% copper, 1.62% zinc, and 41 g/t silver, starting at 170 metres depth.
In northern Saskatchewan, Rio Tinto is exploring the Janice Lake sedimentary copper-silver project in the Wollaston copperbelt. Highlights from last year’s drilling at the project, located 55 km southeast of Cameco’s Key Lake uranium mill, included a hole at the Jansem target that cut 5 metres of 1.32% copper and 3.42 g/t silver within a longer 51.8-metre interval grading 0.57% copper and 1.5 g/t silver (starting at 116 metres depth).
Rio Tinto is earning up to an 80% interest in Janice Lake by spending $30 million over 7 years. It signed an option agreement last May with Forum Energy, which optioned project from Transition Metals.
The major met its obligations for the first 18 months of the agreement by spending $3.7 million last year on work that included 21 drill holes totalling 5,209 metres. The company is planning 2,000 metres of drilling this year.
Drilling at the Jansem and Janice targets have returned copper mineralization at good grades and continuity over significant thickness, starting at surface. Jansen is currently around 650 metres long by 200 metres wide with thicknesses of up to 66 metres. The Janice target is so far 1.2 km long by 400 metres wide, with thicknesses of up to 66 metres intersected in drilling. Both targets are open along strike and at depth.
MAS Gold has a large land package in the LaRonge gold belt, about 60 km west of SSR Mining’s Seabee and Santoy gold mines. Ron Netolitzky, MAS Gold president and CEO, believes the belt to be underexplored and high potential.
“We feel that the La Ronge gold belt has a lot of gold occurrences,” says Netolitzky, who has many years of experience in gold and uranium exploration in Saskatchewan going back to the 1960s.
“They’re commonly very high grade but very rarely have any of these projects been drilled to any depth.”
With most drilling averaging less than 100 metres, Netolitzsky, a Canadian Mining Hall of Hame inductee, notes there’s enormous opporunity for expansion.
“A lot of the gold deposits in Saskatchewan, they weren’t discovered at the turn of the century or way back, a lot of them really started off in the ’70s and ’80s when the first serious work went on in some of these belts.”
In March, MAS Gold unveiled its first resource for the North Lake deposit, part of its Preview North project. The near-surface deposit hosts 14.1 million inferred tonnes grading 0.92 g/t gold for 417,000 oz. gold, using a cutoff grade of 0.45 g/t gold.
That adds to a small, but high-grade resource outlined at the company’s nearby Greywacke North deposit in 2016. The deposit has indicated resources of 255,000 tonnes grading 9.92 g/t gold for 81,500 oz., plus 59,000 inferred tonnes at 7.42 g/t gold for 14,100 oz.
The company’s objective is to build resources totalling 1 million oz. gold in deposits within a 10-15 km radius for processing at a central mill.
The junior is trying to raise some funds for a summer drill program of about 3,000-4,000 metres across several projects. Netolitzky says work at Greywacke North has been paused for several years due to legal disagreements with a JV partner that went through receivership. However, the company believes those will be resolved soon and is ready to get back to work there.
SSR Mining is exploring the Fisher property, 125 km east of La Ronge, adjacent to its Seabee gold mine. The miner is optioning the project from Taiga Gold under a deal signed in 2015. Since then, SSR has completed more than $10 million worth of work on the property, including 79 drill holes totalling 31,070 metres. SSR is spending $5 million this year on Fisher with the objective of compiling a resource estimate.
SSR can earn an interest of up to 80% in the project, which is located in the Pine Lake greenstone belt.
Recent drill highlights include a 2.3-metre interval of 13.74 g/t gold, including 0.5 metre of 55.5 g/t gold, in a new discovery made at the Yin zone, adjacent to the boundary with the Seabee mine.
In May, SSR signed an option on another nearby property, Taiga’s Leland gold project, 23 km southwest of the Seabee mine.