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Vol. 16, No. 4 Week of January 23, 2011
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Drilling reveals PGE potential at Man

Platinum-palladium horizons cut in the Alpha Complex share similarities to South Africa’s Bushveld, other PGE-enriched deposits

Shane Lasley

Mining News

Though drilling at Pure Nickel Inc.’s Man project continues to cut long sections of nickel mineralization, two other metals – platinum and palladium – grabbed the spotlight during the Toronto-based junior’s 2010 exploration of the 290-square-mile-, or 750-square-kilometer, Interior Alaska project.

The 6,687-meter drill program encountered two platinum group element-enriched horizons stretching along the property’s Alpha complex that appear to share similarities with other large layered intrusions.

It was not until company geologists analyzed assay returns in November that they recognized what they had encountered with the 2010 drill program.

“They (the PGE horizons) are not visible to the eye, so there is absolutely no way anybody could pick these out of drill core. It really took the chemistry of the core to reveal this stuff,” Pure Nickel President and CEO David McPherson told to Mining News.

It was Larry Hulbert, Pure Nickel’s chief consulting geologist, who began to see striking similarities in the geochemistry encountered at Man to that of PGE-enriched layered intrusions found at the Bushveld Complex of South Africa where he worked and studied for five years while earning a PhD in geology.

“The geochemistry of the drill core is starting to reveal that PGE mineralized horizons are present and that they are remarkably similar to that of the PGE-bearing reef environments seen elsewhere in the world,” Hulbert said.

McPherson said the junior’s operating model had been focused on exploration for massive sulfide high-grade nickel-copper deposits. “When we were analyzing our results we said, ‘Oh, there is something different here,’” he explained. “We always knew there was going to be platinum and palladium, but we thought it was going to be associated with the nickel and copper, more as a credit, so it was very pleasant for us to find these PGE horizons stand alone.”

Two Horizons, maybe three

When the assay results rolled in from the 2010 drilling completed at the Man property, company geologists noted two discrete horizons enriched with platinum and palladium but relatively low in sulfides.

The upper stratum was intersected in four of the six holes drilled in the Alpha Complex and Horizon 2 was observed in two holes drilled about 2,700 meters apart. These parallel horizons appear to run east-west along the Alpha Complex and dip to the south.

Hole 36, the last hole of the season, cut 165.9 meters averaging 253 ppb (0.253 g/t) platinum plus palladium. Horizon 2, included in this intercept, returned assays of 318 parts per billion (0.318 g/t) platinum and palladium over 24 meters. The disseminated sulfides, which average 2.47 percent sulfide, was also observed in hole 28 about 1.7 miles, or 2.7 kilometers to the west.

“We can precisely correlate some of these horizons over 2.7 kilometers. I would say with subsequent drilling to the west and to the east we would be able to extend this considerably,” Hulbert said.

Thin layers of semi-massive sulfides containing high copper and mineral grades yet bereft of PGEs also have caught the attention of Pure Nickel’s geologists.

“Within Area 1 we were encountering thin lenses of semi-massive sulfides in the rocks, and some of these semi-massive sulfides were running 3.4 percent nickel and 4.2 percent copper, yet they were quite low in their PGE concentration,” Hulbert said. “This type of platinum group element depletion associated with massive sulfides is not uncommon in intrusions that have significant concentrations of platinum group elements associated with massive sulfides. In order to have these thin lenses (of semi-massive sulfides) that have good nickel-copper grades depleted in platinum group elements there has to be an earlier segregation of nickel-copper sulfides, be it massive or semi-massive, that have an enrichment of the platinum group elements associated with them.”

In other words, the Pure Nickel chief geologist believes a third deeper horizon rich in PGEs could be nearby. This prompted the company to re-evaluate core from FL-009, drilled to the northeast of hole 36 by a previous operator.

“There was a 2003 drill hole that did have some very interesting platinum and palladium values over almost three meters at about 35 meters down. Those values were extremely interesting, but there was not enough drilling around there to allow us to connect the dots. It took this year’s drilling for us to see the correlation,” McPherson said.

Hole FL-009 cut 2.7 meters of a little more than 1.1 g/t platinum and 1 g/t palladium with an average nickel content of 0.39 percent. Though it has significantly higher grades of PGEs, this historical intersect also has very similar sulfide contents as Horizon 1 and 2. Pure Nickel geologists believe this intersection could represent the third platinum and palladium horizon indicated by the PGE-depleted semi-massive sulfide zone encountered in hole 36.

“What we are seeing is it is the right type of environment – the right types of things are happening there,” said McPherson. “No reef environment is identical to the next one, and they are quite rare, but there are many common features here.”

Nickel potential

Though the company was particularly excited about the property’s emerging PGE potential, the drills continued to cut significant intersections of low-grade nickel mineralization.

Hole 28 intersected 70 meters, starting at 383 meters, averaging 0.25 percent nickel. Starting at 615 meters, a second intercept of 66 meters averaged 0.23 percent nickel was encountered in the same hole.

Hole 29 intersected 88 meters averaging 0.28 percent nickel starting at a depth of 564 meters.

Hole 30 intersected 32 meters averaging 0.24 percent nickel starting at a depth of 479 meters.

Hole 33 intersected 41.3 meters averaging 0.23 percent nickel starting at a depth of 350 meters.

Hole 35 intersected multiple horizons of nickel mineralization. Starting at 308.1 meters this hole intersected 14.9 meters of 0.25 percent nickel, another 17.7 meters of 0.28 percent nickel, 16 meters of 0.31 percent nickel and 24 meters of 0.30 percent nickel were encountered further down the hole. Starting at 600 meters, hole 35 encountered an additional 139.8 meters averaging 0.23 percent nickel.

McPherson said Pure Nickel has seen potential for a commercially viable low-grade nickel deposit at Man all along and geophysical evidence and surface showings indicate the potential for high-grade nickel, but the company cannot ignore a structural target with promising PGE potential.

“We certainly saw a lot of low-grade nickel, which could end up being commercial, but we need to be pragmatic about how we advance this property. You are talking about a precious metal that has significant commercial applications – you want to make sure you really understand that,” he said.

Itochu decision pending

How Pure Nickel approaches a 2011 drill program at Man will depend largely on Itochu Corp., its partner in the project.

Tokyo-based firm Itochu has invested about US$14.5 million in exploration at Man since it joined Pure Nickel on the project late in 2008. The US$7.5 million investment made by Itochu in 2010 earned the huge Japanese conglomerate a 30 percent vested interest in the project, a stake Itochu could increase up to 75 percent with a total investment of US$40 million.

By spending US$8 million in 2011 and another US$8 million in 2012, Itochu could increase its vested interest in Man to 60 percent. Itochu also has the right annually to opt out of the project. A decision by the company is expected in March.

Hulbert, McPherson and other Pure Nickel representatives met with Itochu in December to discuss the results of the 2010 exploration season and returned to Tokyo Jan. 15 for follow-up discussions.

Though the 2011 exploration program hinges largely on Itochu, McPherson said he would like to see a conservative drill program test the PGE-enriched structural targets encountered last year.

“If the early results continue to support with what you saw in 2010, then you become increasingly aggressive in terms of the size and the budget,” he explained.

“Everything is subject to what happens in terms of our discussions with Itochu,” he added.

Though PGE mineralization has captured the explorer’s attention at Man, the project’s enormous land package has no shortage of precious and base metals targets to investigate. In addition to the nickel-copper-PGE targets found throughout the claim block, the northern portion of the property has gold potential.

McPherson said he would like to see a mapping and sampling program in the property’s placer gold-producing regions carried out in 2011.

“As our exploration programs continue to evolve the property’s mineral potential, we will be focusing on the new horizon with a minimum 2.7-kilometer, or 1.7-mile, strike length of platinum-palladium mineralization, the semi-massive high-grade nickel-copper intersections and the emerging gold prospects in the northern section of the property,” he added.

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