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Vol. 12, No. 8 Week of February 25, 2007
Providing coverage of Alaska and Northwest Canada's mineral industry

MINING NEWS: Explorers going wild in British Columbia

As the value of B.C. copper production exceeded that of coal for the first time, more and more companies looked for metals in 2006

Sarah Hurst

For Mining News

Exploration spending in British Columbia hit a record high of C$265 million in 2006, a figure that the province’s mining minister, Bill Bennett was proud to announce at the recent Mineral Exploration Roundup in Vancouver. Unfortunately for Bennett, he probably won’t be invited to boast about the industry’s successes next year, since he was forced to resign in early February after sending an obscenity-laced email to a gun club member.

“British Columbians want good jobs, and they also, frankly, want the tax revenues that come out of successful mining,” Bennett said at Roundup Jan. 29. He identified four challenges facing the industry — the federal approvals process, which Bennett described as “dysfunctional” and “slower than a herd of turtles”; the provincial government’s lack of capacity; British Columbia’s lack of infrastructure; and the shortage of skilled people to find, build and operate mines.

The “Mining Rocks” career and job fair made 24 stops around the province last year, Bennett said. “Many people who were working in the service sector making minimum wage got good jobs and changed their lives,” he added. During Roundup Premier Gordon Campbell announced that the province and the federal government would invest C$2.8 million to help youth from rural and First Nations communities in northwestern British Columbia get the hands-on experience they need to develop careers in mining, in a Reclamation and Prospecting Program.

Terrane has one of more advanced projects

One of the more advanced projects in British Columbia is Mount Milligan, owned by Vancouver-based Terrane Metals. Terrane was formed in 2006 after the divestment of some of Placer Dome’s assets from Barrick Gold. Another mining major, Goldcorp, owns 70 percent of Terrane’s shares. The Mount Milligan porphyry copper-gold deposit is in the feasibility and permitting stage, the company’s chief geologist, Darin Labrenz, said at the Roundup.

Mount Milligan is 96 miles northwest of Prince George and 59 miles west of Mackenzie in central British Columbia, within easy access of infrastructure such as roads, a railway and the power grid. The property hosts a measured and indicated resource totaling almost 206 million metric tons grading 0.6 grams per ton of gold and 0.247 percent copper, containing 3.7 million ounces of gold and 1.12 billion pounds of copper.

More than 900 holes have been drilled at Mount Milligan, 700 of which were drilled in the two-year period 1989-1990. “Mineralization on the property is associated with hydrothermal alteration of intrusive bodies and the surrounding host rocks,” Labrenz said. The Witch Lake succession hosts the Mount Milligan deposit, and is characterized by augite-phyric volcaniclastic and coherent basaltic andesites, with subordinate epiclastic beds.

In 1993 Placer Dome obtained permits to place Mount Milligan into commercial production, but after metal prices declined the project was shelved and the permits expired in 2003. “There has been extensive 3D modeling completed on the project and we are working to improve this model,” Labrenz said. Terrane is currently completing a 22-hole, 8,200-meter drill program to convert inferred resources into measured and indicated.

Bell Resources working Granduc

In northwestern British Columbia, 25 miles northwest of Stewart, Vancouver-based Bell Resources is hoping to bring the historic Granduc copper mine back into production. Granduc operated under Newmont and subsequently Esso Minerals Canada between 1968 and 1984. Low copper prices forced the closure of the mine and demolition of the mill facilities in 1985.

Glen Zinn, a former vice president for corporate development and exploration with Hecla, came out of retirement in 2004 and revived Granduc’s prospects while the copper price was less than $1 a pound. “He knew Granduc was sitting up there in the frozen north, and when the time was right and Granduc was on the auction block for a few pennies, he picked it up and put it into Bell Resources,” Bell’s vice president for exploration, Tim Marsh, said at Roundup. Zinn also became Bell’s CEO and president.

“It’s been Bell’s intent all along not to re-drill what was known in the past, but to step out along strike and down dip and show just how big this Granduc really is,” Marsh said. “Today all that infrastructure underground, much of it is still in place, it needs a fresh coat of paint. The rails have been ripped out of the tunnel, so we’re thinking of converting to rubber tires and a slurry pipeline system to get material out.”

Granduc is a Besshi-type massive sulfide deposit, a kind of deposit that is named after Besshi copper mine in Japan, which Sumitomo operated for 283 years from 1691. Windy Craggy, 125 miles north of Granduc, is the largest known Besshi deposit to date. “These deposits start out on the sea floor and end up on continental crust and through the process of accretion and obduction they generally suffer quite a bit of metamorphism,” Marsh said. Bell plans to produce a copper concentrate and a magnetite concentrate at Granduc.

Some of Bell’s drilling has been on the South Leduc glacier, at times through 400 feet of ice. The glacier has been melting rapidly and has retreated about 700 feet southward and 400 feet vertically downward. The company has also been drilling on steep mountains, but this year Bell will be drilling underground, so it will be possible to work 12 months of the year instead of just four, and to avoid hazards above ground and get closer to the ore body, Marsh said.

Seabridge working Kerr-Sulphurets

Close to Granduc, Toronto-based Seabridge Gold has been working on its Kerr-Sulphurets project, another former Placer Dome asset. Three gold-copper deposits known as Mitchell, Sulphurets and Kerr have been identified on the property. Modern exploration at Kerr-Sulphurets began in 1960, when Granduc Mines staked claims there, and continued with the involvement of several companies until the mid-1990s, when exploration ground to a halt in British Columbia. At the same time, several research projects on the district came to a conclusion, Bill Threlkeld, a senior vice president with Seabridge, said at Roundup.

“These studies, among other results, postulated the occurrence of a significant gold and copper ore body on the order of 200 million tons in the Mitchell Creek drainage,” Threlkeld said. “There are several styles of mineral occurrence in the district and this diversity of styles is indicative of an extremely large, multiphase hydrothermal system with the capacity to produce significant economic mineral deposits,” he added.

Seabridge acquired Kerr-Sulphurets in 1990, and with limited capital at its disposal the company optioned the property to Noranda from 1991 to the fall of 2006. Last year Seabridge jointly explored the Mitchell target with Falconbridge (which had merged with Noranda, and has now been purchased by Xstrata), and they obtained encouraging results. “Copper and gold are associated with fine-grained sulfide minerals disseminated in the rock and in stockwork veins,” Threlkeld said.

“Copper and gold are extremely consistent from the drill hole results we have so far,” Threlkeld continued. “For example, in drill hole number 9, a 299-meter core hole was sampled on two-meter intervals. The lowest gold grade reported is 0.19 grams per ton and the highest is 2.89 grams per ton. The drill hole average is 0.97 grams or about 1 gram per ton over 300 meters at this point. The homogeneity of the grades and the lack of sharp grade contrast across the Mitchell deposit are relatively unique in the district and in my experience. We’ve not adequately explained the reason for this homogenous grade distribution. One possibility could be that the regional deformation of the system provided a mechanism to homogenize the metal concentration, but we remain open to other ideas to explain this phenomenon.”

Skygold Ventures working in Cariboo region

In the Cariboo region of south-central British Columbia, Vancouver-based Skygold Ventures is advancing its Spanish Mountain gold project. Spanish Mountain is a joint venture between Skygold and Vancouver-based Wildrose Resources, in which Skygold has a 70 percent participating interest and Wildrose has a 30 percent participating interest. Last November Skygold appointed Jeff Pontius, former North American exploration manager for AngloGold Ashanti, to its board of directors.

Skygold believes that Spanish Mountain could host a sediment hosted vein deposit, based on its proximity to a continental margin and the presence of multistage deformation and thrust deformation. SHV deposits consist of gold in quartz veins hosted by shale and siltstone sedimentary rocks. Many of these deposits are located in the former Soviet Union, including Muruntau in Uzbekistan, the largest gold mine in the world, and Sukhoy Log in Siberia, Russia’s largest gold deposit.

An airborne electromagnetic survey conducted in June 2006 produced a resistivity map of the property, Skygold’s project geologist, Colin Russell, said at Roundup. “Overlaying the resistivity and the geology shows excellent correlation between resistivity highs and the greywacke units. This should definitely help us to lay out the drill targets with continued success,” he said. “Since drilling to date has only covered about 20 percent of the property, or an area roughly 500 meters by 1.2 kilometers, we definitely have a huge area to explore,” Russell added.

“For the future, metallurgical testing is under way,” Russell said. “We’ll continue with regional litho-geochemical sampling, prospecting and mapping and follow up on several new showings discovered outside the current known trend. We hope to complete a minimum of 50,000-plus meters of diamond drilling to expand the main zone and test the 4-kilometer-square geochemical and geophysical anomaly and continue working towards a preliminary resource.”

Abacus working in the Afton area

Adjacent to New Gold’s New Afton property near Kamloops in south-central British Columbia, Vancouver-based Abacus Mining & Exploration is also hard at work in the Afton area. In 2005 Abacus acquired the past-producing Afton mill infrastructure, tailings pond, and related permits and surface rights from Teck Cominco. Mine production at Afton ceased in 1997, but an independent assessment valued the infrastructure on the property at between C$35 million and C$39 million, Scott Weekes said at Roundup.

“Part of that infrastructure was the Ajax haul road which connected the mill area to the Ajax pits, two pits that were in operation up until the late 1990s,” Weekes said. “The total land package now controlled by Abacus is in excess of 8,000 hectares and to date we’ve completed just under 70,000 meters of drilling.”

All the main copper-gold mineralization on the Afton property is hosted within the Jurassic-age Iron Mask batholith, and is associated with the contact between the older and younger phases. “Mineralization is very strongly structurally controlled, often by structures that have been very long-lived and were probably very important during the emplacement of the batholith,” Weekes said. “It’s a very metallogenic-rich area,” he added.

Afton consists of three main areas, known as DM/Audra, Rainbow and Ajax. DM/Audra is on the northern edge of the property and has the most favorable infrastructure. “It’s a stone’s throw from the existing mill building,” Weekes said. “It sits right along the existing haul road to the Crescent pit and it sits between the past-producing Crescent and Afton pits. ... We believe there’s still significant room to expand that resource, and because of the proximity to the mill building, we believe that this DM/Audra area is going to be very important as we move forward in production in the camp.”

Rainbow is the only area of the three that doesn’t have a past-producing open pit. “The Rainbow Zone sits within a poorly-explored 2 kilometer- by 1 kilometer-long IP chargeability anomaly; we’re going to do a bunch more work on that in 2007,” Weekes said. “The resource is open, and like just about all of our zones, has very high grade copper-gold mineralization at depth. ... certainly the potential of a possible underground target.” Rainbow is not on an existing haul road, but it is less than 2 kilometers from the Ajax haul road.

Ajax is the area that Abacus is most excited about, according to Weekes. “The focus of Abacus’s work in 2006 was Ajax West, where we intercepted our best grades and best widths,” he said. The company completed 28,000 meters of drilling at Ajax in 2006. Past production was from two pits, and Abacus has also been drilling at Ajax East. Highlights from Ajax West included drill hole AW-06-034, which intersected 0.58 percent copper and 0.22 grams per ton of gold over 156 meters; and drill hole AW-06-039, which intersected 492 meters of 0.34 percent copper and 0.30 grams per ton of gold.

“We plan on a continued aggressive diamond drill program to expand the known reserves and to move inferred resources to measured and indicated categories, and the whole idea of this is to complete a feasibility study by the end of 2007,” Weekes said. “We believe that this is a very aggressive timeline, but we believe it’s achievable because of the existing infrastructure, the location, and the fact that we’re looking at a simple open pit operation at each one of these deposits,” he concluded.



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