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Mining Explorers 2009: B.C. explorers recover slowly
Gold prices and federal funding for power line give boost to northern miners Rose Ragsdale For Mining News
Most of the mining companies looking for minerals in northern British Columbia ushered in 2009 with high hopes and little else.
“It’s a perfect storm. The credit crunch in the world financial system has led to a worldwide recession and a collapse in commodity prices. In equities, there is nowhere to hide. Financing has become expensive and difficult to get. I have never seen more difficult conditions for junior resource companies in my entire career,” said Hard Creek Nickel Corp. President and CEO Mark Jarvis in describing market conditions.
With the abundant capital of recent years virtually dried up, only tentative progress on the proposed extension of a power line north to Dease Lake and more promising prospects elsewhere, companies working in this under-explored faced daunting challenges.
By September, some juniors had fallen by the wayside, while others sought shelter from the financial storm in mergers or alliances aimed at strengthening their asset bases or diversifying their prospects. In August Creston Moly Corp. and Tenajon Resources Corp., for example, merged in hopes of becoming a leading molybdenum miner through resource growth and acquisitions. The deal was aimed at giving three projects, including the Ajax deposit located 14 kilometers, or 9 miles, north of Alice Arm, B.C., a better chance for development. The Ajax deposit, at a cut-off grade of 0.04 percent, has an estimated inferred resource 649.8 million pounds of molybdenum contained in 483.1 million metric tons grading 0.061 percent molybdenum, and an indicated resource of 69 million metric tons grading 0.065 percent moly, representing 98.9 million pounds of molybdenum. With the current resource base, Ajax is one of the largest undeveloped molybdenum deposits in North America and the deposit remains open laterally and at depth.
A few well-provisioned companies, bolstered by high gold prices, also advanced their projects and/or reported new discoveries.
Region gets good news Perhaps the most exciting development of the 2009 field season was news that the Canadian government has agreed to help fund construction of the Northwest Transmission Line, a power conduit that will bring abundant, cheap electricity to infrastructure-poor Northwest British Columbia and could eventually connect with Alaska.
Canadian Prime Minister Stephen Harper Sept. 16 said his government approved C$130 million to aid in building the C$404 million NTL, a new 287-kilovolt line that will extend 335 kilometers, or 208 miles, from Terrace to Meziadin Junction and north to Bob Quinn Lake. British Columbia’s provincial government had already committed C$256 million to the project.
Proponents of the hydroelectric line estimate that the project will generate C$15 billion in private investment, almost 11,000 jobs, and C$300 million in annual government revenues through the development of new mines.
Gold discovery sparks interest A close second was a report from Decade Resources Ltd. that it intersected 28.4 meters grading 7.3 grams per metric ton gold in diamond drilling that tested the Montrose zone on the Red Cliff property in northwestern British Columbia. The Stewart, B.C.-based Decade junior said it holds options from Mountain Boy Minerals Ltd. to earn up to 80 percent interest in the Red Cliff property by making certain cash and share payments and exploration expenditures. Decade also has an option to earn a 100 percent interest in the Silver Crown 6 claim, which adjoins the Red Cliff property to the north.
By Oct. 1, Decade said it had completed 11 holes on the Montrose zone and received additional assay results, including 20.87 grams per metric ton gold over 24.7 meters and 38.71 g/t gold over 3.66 meters in DDH-2009-Mon-6.
Decade said it has received many phone calls regarding mineralization observed in DDH-2009-9, particularly a silicified and pyritized intrusive. This mineralized section does not appear to be related to the Montrose zone and is likely a different mineralizing event, the junior added.
Based on drilling to date, the Montrose zone is interpreted as being 20-30 meters in width with a northwest strike conformable to the overall mineralized trend in the Stewart region. Recent fieldwork by Decade also identified Premier porphyry rocks on the property. The Premier porphyry rocks are associated with the mineralization of the Silbak Premier mine located 8 kilometers, or 5 miles, from Red Cliff on the west side of the Bear River Ridge. The Red Cliff property is on the east side of the ridge. The Silbak-Premier mine has produced more than 2 million ounces of gold.
Soon after Decade’s announcement, several other junior reported the acquisition of claims adjacent to or near the Red Cliff property.
Fortunate few make progress One junior well on its way to developing a major gold mine in northern British Columbia is Seabridge Gold Inc. In September, Seabridge said its 14,000-meter drill program for 2009 at the KSM Project near Stewart is on schedule to accomplish its three main objectives: upgrading inferred mineral resources; generating geotechnical information for pit slopes, waste dumps and other infrastructure; and installing monitoring wells for environmental base-line work. Plans for a 30-year mine contained in a 2009 preliminary assessment captured 1.29 billion metric tons of mineralized material, of which 277 million metric tons were classified as inferred mineral resources. To upgrade these in-pit inferred resources to the measured and indicated categories, 12 additional holes totaling about 4,000 meters have been drilled at the Mitchell zone, 7 holes totaling 3,100 meters at the Sulphurets zone and 4 holes totaling 900 meters at Kerr zone. Conversion of in-pit inferred resources will enable Seabridge to report a mine reserve in its preliminary feasibility study scheduled for completion in March 2010. The balance of the 2009 drill program consists of geotechnical and environmental holes also required for the KSM study. KSM is one of the world’s largest undeveloped gold/copper projects.
Terrane Metals Corp. received a B.C. Mines Act Permit in September for development of its Mt. Milligan copper-gold project located 155 kilometers, or 96 miles, northwest of Prince George in north-central British Columbia. The permit moves Terrane closer to building a mine at Mt. Milligan with average annual metal production of 88 million pounds copper and 217,000 ounces gold over a 15.3-year mine life. Terrane also said it conducted an induced polarity ground geophysical survey at Mt. Milligan to help define new copper-gold porphyry targets. The survey was designed to prioritize 12 airborne geophysical anomalies identified in a June 2008, 1,452 line-kilometer HeliGEOTEM magnetic-electromagnetic survey.
Explorers work small projects Explorers of several smaller gold deposits also reported significant progress in identifying new mineralization and advancing toward production.
Prize Mining Corp. and joint venture partner Eagle Plains Resources Ltd. completed final commissioning and permit compliance requirements to allow for startup of production at the Yellowjacket Gold Mine located near Atlin in northwestern British Columbia. The 2009 mining plan includes extraction of a minimum of 32,000 metric tons of gold ore from an existing open pit. Pit excavation was anticipated to be completed and milling at a throughput rate of 350 tons per day is expected to continue until mid- to late October. Prize Mining also reported discovery of a previously undetected six-meter-wide gold-mineralized zone during ramp excavation in August. The new zone is centered on a 1-meter-wide, visible-gold-bearing silicified breccia.
Hawthorne Gold Corp. for example, reported that drill results from its phase I and II diamond drill programs identified a high-grade mineralized gold zone near surface within the Sable zone and additional high-grade mineralization at depth directly below the test pit in its Taurus deposit near Cassiar Gold Mine in northwestern British Columbia. The Taurus Deposit contains an estimated NI 43-101-compliant inferred resource of 1.06 million ounces of gold or 33.06 million metric tons grading 1.00 g/t gold.
Romios Gold Resources Inc. completed nine holes totaling 2,370 meters on its Trek property in August. The junior conducted a C$1.5 million 2009 summer exploration program at Trek and its Newmont Lake property, which are centrally located between Galore Creek, NovaGold Resources Corp. and Teck Resources Ltd.’s large gold-copper-silver deposit, and Barrick Gold Corp.’s high-grade gold mine at Eskay Creek in northwestern British Columbia.
Canasia Industries Corp. completed the first phase of drilling on the Clone gold property, located 18 kilometers, or 11 miles, southeast of Stewart, B.C. The Clone property is host to at least four separate, parallel gold-bearing shear zones, which contain both sulphide-gold-cobalt and iron oxide-gold mineralization. Altogether 20 holes were drilled testing a variety of targets along the shear zones that have been traced for more than a kilometer in strike length. Based on visible gold sightings, Canasia said it would immediately begin a second phase of drilling.
Juniors rally in late season programs A number of explorers also initiated drilling campaigns late in the season. These include Solomon Resources Ltd., which optioned the Cry Lake Gold-Silver Project, formerly known as the Nizi Creek Gold-Silver Project, from Kaminak Gold Corp. and proposed a diamond drill program to begin September. The Cry Lake Project is located 80 kilometers, or 50 miles, northeast of Dease Lake, B.C. within the Sylvester Allochthon, a set of thrust-bounded terranes which host gold-bearing epithermal type veins associated with felsic volcanic rocks.
Troymet Exploration Corp. also moved exploration crews in September to its Golden Eagle Project in northern British Columbia. Golden Eagle lies at the southern end of the Tintina Gold Belt and is believed to host numerous zones of structurally controlled gold-silver-arsenic-antimony mineralization and gold-in-soil anomalies over an area of about 5 x 5 kilometers.
Up and down results for coal, base metals In northeastern British Columbia, First Coal Corp. won a B.C. permit to extract a bulk sample of up to 50,000 metric tons of coal from its Central South property near Chetwynd in the fourth quarter of 2009. First Coal controls more than 90,000 hectares, or 357 square miles, under tenure license or under application for license in the Peace River Coalfield near Chetwynd. Historic resources are estimated at 1.6 billion metric tons of mainly metallurgical coal.
Canada Zinc Metals Corp. reported encouraging drill results from 2009 exploration programs on the Akie Property and Kechika Regional tenures in northern British Columbia. The 2009 Kechika regional program has been largely directed towards the Pie, Yuen Extension and Yuen claims that extend northwestward from the Akie Property for a distance of some 30 kilometers. Calling the results “exciting,” Canada Zinc Metals President Jim Mustard said his exploration team has always believed that additional discoveries on trend from the Cardiac Creek deposit would be made and the “very encouraging” results further confirm this potential.
In May, Hard Creek Nickel reported a new resource estimate for its Turnagain Project, located 70 kilometers, or 43 miles, east of Dease Lake, B.C., but due to depressed prices, did not mount an exploration campaign in 2009.
The Turnagain nickel deposit, using a 0.10 percent sulphide nickel cut-off, is estimated to contain measured and indicated resources at 0.174 percent sulphide nickel of 695 million metric tons and an additional 510 million metric tons of inferred resource at 0.173 percent sulphide nickel, enough to produce 44 million pounds of nickel annually for 29 years.
Jarvis told Mining News that Hard Nickel planned no drilling at Turnagain in 2009 because drilling burns up capital quickly.
“Our treasury has about C$6 million in it, but you spend that money awfully quickly when you turn a drill. We have already got more than half a billion tons in the measured, plus indicated category and another half a billion tons in the inferred category,” Jarvis explained.
The company said it would use available funds on metallurgical work, consultation with First Nations, continuing environmental baseline studies and other efforts important to mine planning and permitting.
Several companies, including Adanac Molybdenum Corp. and Redcorp Ventures Ltd., spent 2009 struggling to survive. Adanac owns the Ruby Creek Project which covers 2,300 hectares, or 5,543 acres, in five staked mineral claims in the Atlin mining division of northern British Columbia.
Adanac said in August that the courts extended its protection from creditors until Nov. 30, giving it more time for reorganization. Ruby Creek has NI 43-101-compliant measured and indicated molybdenum resources at a cut-off grade of 0.04 percent of 275.4 million metric tons grading 0.067 percent and an inferred resource of 39.1 million metric tons grading 0.062 percent. Adanac had advanced Ruby Creek nearly to production in 2008 when the bottom fell out of the markets and the junior found itself unable to meet debt obligations.
A year ago, Redcorp Ventures, working through its subsidiary, Redfern Resources Inc, appeared to be on track to develop the polymetallic Tulsequah Project in northwestern British Columbia near the Alaska border. The Toronto Stock Exchange delisted the company Sept. 23, after the junior failed to corral needed capital to resolve regulatory, environmental and legal problems that arose in pursuing the project.
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