Mining News: Early birds take flight in Far North

Projects in NWT, Nunavut and Yukon see exploration activity, but few explorers jump at chance to advance 2013 programs this winter

Rose Ragsdale

For Mining News

There’s nothing like getting an early start, especially when it comes to mining exploration in Canada’s Far North.

Literally, there’s nothing like the 2013 program that Prosperity Goldfields Corp. kicked off in late February at its Kiyuk Lake Project to the east in southern Nunavut nor the 2013 field campaign launched about the same time by Kaminak Gold Corp. at the Coffee Gold Project in Yukon Territory.

In a year when many mining companies are having to scrape together enough exploration funds to even mount a field program and study ways to stretch every penny in their respective budgets, a significant number of Canada’s producers and juniors north of the 60th parallel are braving frigid temperatures to begin exploration drilling while the region is still blanketed in winter snow. Most of these savvy explorers have advanced projects and choose to capitalize on the eight- to 10-week period leading up to spring breakup to jumpstart annual exploration programs well in advance of the traditional summer field season.

“Many exploration and mining companies in Canada make the most of the winter season for their work,” Prosperity President and CEO Adrian Fleming told Mining News March 25. “It’s a bit like skating on a frozen lake. You can’t do it in summer!

“So we do a lot of our most cost-effective exploration in winter when the frozen surface and lakes allow easy access for all kinds of machines. Our airstrip is on the lake next to camp,” said Fleming of his Kiyuk Lake gold exploration project in Nunavut. 

“Once you have a meter thickness of ice you can land pretty well any kind of airplane on a cleared runway. And that is much cheaper than using floatplanes. Also access using skidoo is a good way to get around,” he explained.

Central, northern and eastern Canada traditionally have two field seasons for exploration, winter and summer, driven by the fact that many projects are only accessible by airplane, so you land on ice in winter and on water in summer, according to Fleming.

“You stay away from your project during breakup and until the fall as the ice is forming,” he added.

Early work at NWT projects

In Northwest Territories, three explorations projects currently have drilling underway – the Gahcho Kué, Nechalacho Rare Earth Elements and Courageous Lake projects, according to government officials.

At the Gahcho Kué diamond project, geotechnical drilling related to planned surface infrastructure commenced in February, and is expected to be completed before the end of April. A total of 33 sonic holes and 31 core holes will be drilled.

Gahcho Kué is owned by a 51-49 percent joint venture between De Beers Canada Inc. and Mountain Province Diamonds Corp.

Core drilling of the first phase 15 priority geophysical targets at Gahcho Kué is expected to begin before the end of March. A second core drill rig is being mobilized to site and a first phase drilling program is expected to be completed by the end of April. Based on the success of the first-phase drill program, up to a further 14 priority geophysical targets may be drill tested, the companies have said.

At the Nechalacho project, Avalon Rare Metals Inc. began a brief definition drilling program Feb. 5. The objective of the program is to complete additional in-fill drilling near the planned underground crusher location, within stopes designed to be mined in the first few years of mine life.

The program is anticipated to be completed by mid-March, with an updated resource estimate expected by mid-June. This program also will provide additional sample material from the Basal Zone for ongoing process optimization. Avalon is working toward completing a feasibility study for the program in the second quarter of 2013.

At Courageous Lake, Seabridge Gold has begun core drilling the high-grade Walsh Lake gold target. The C$3.1 million winter program is expected to complete 16 holes totaling 7,400 meters with the aim of generating an initial resource estimate for the Walsh Lake deposit which was discovered in 2012.

Activity at big projects

Sabina Feb. 14 reported opening its Goose Camp at Back River and preparing to begin drilling in late February. The junior is planning to follow up its 2012 successes with a 45,000-meter program of infill, geotechnical and geo-mechanical drilling as well as exploration drilling of high potential greenfield-type targets in 2013. Sabina anticipated getting eight drills up and running on the project by the end of March.

Sabina is focused on completing an ongoing pre-feasibility study and supporting a potential subsequent feasibility study, while moving forward with permitting initiatives and plans to file a draft environmental impact statement by year’s end. The junior also said it planned to update a resource calculation for Back River before March 31.

In 2012, Xstrata Zinc, the world’s largest zinc producer opened its exploration camp at Hackett River Feb. 20 and drilled 203 holes totaling 51,548 meters during a field program that last 219 days until Sept. 25 that focused on extensions of the Main Zone, East Cleaver, Boot and Jo Deposits along with testing new geophysical and geochemical targets on the Hackett property. Geotechnical drilling also occurred in several areas where potential infrastructure or mine workings may be located.

In addition, Xstrata’s 2012 campaign included two drill holes and field sampling/mapping work across the nearby Wishbone, Mahna Mahna, Hackett and Claim X properties.

For 2013, the major sought permission last fall from regulators to conduct another exploration campaign that includes a 50,000-meter drill program with objectives similar to those sought during the previous year.

Nunavut officials said Elgin Mining Inc. (Lupin gold project, former gold mine) farther north in the Kitikmeot region of Nunavut might be drilling at the moment, and Baffinland Iron Mines Corp. (Mary River iron ore project on Baffin Island) and Agnico-Eagle Mines Ltd. (either at the Meadowbank gold mine or the Meliadine gold project in the Kivalliq) also may be drilling in their respective Nunavut camps. These three companies have not publicly reported the start of 2013 programs on their respective large, advanced projects, but officials say they may have quietly begun drilling this winter.

Prosperity, however, is the only company seeking to capitalize on two prior successful exploration seasons by getting into the field so early. The junior reported moving personnel to Kiyuk Lake Feb. 27, in preparation for a two-drill, 4,000-meter winter drill program. Drilling was expected to commence within a few days, and assay results from the first few holes are expected in early April. Last year, the company launched a 3,000-meter winter drill program March 21, at least three weeks later in the season.

“We believe that our aggressive exploration approach (in 2013) will expand the gold deposit at Rusty, and also establish additional gold zones at targets that were identified by the summer 2012 exploration program,” Fleming explained.

Prosperity said it has several objectives for its winter program. Following encouraging results from previous drilling, the initial focus will be testing for extension of mineralization at the Rusty Zone that in 2011 and 2012 returned intercepts including 37.8 meters grading 4.18 grams per metric ton gold from surface and 61.5 meters grading 3.34 g/t from 159 meters.

While drilling will continue to work towards defining a resource at the Rusty zone, Prosperity also planned drilling for, in order of priority, the Bancroft and Rasmussen showings, and Cobalt and Amundsen zones.

The Bancroft and Rasmussen showings are new drill targets identified during the summer of 2012. The Bancroft showing was highlighted by detailed grid till sampling that outlined a well-defined gold-in-till dispersal ribbon extending in a southwest direction for 2,000 meters. This southwest oriented dispersion is consistent with the direction of ice flow and till transport. Drilling will focus at the northern limit, or ‘head’ of the ribbon which is interpreted to approximate the location of the bedrock source of the till anomaly. This location coincides with surface boulder samples that range from below detection limit and 6.7 g/t gold, and an undrilled chargeability anomaly. The gold values in till samples at the head of the dispersal ribbon at Bancroft are of the same magnitude as that found directly over the Rusty Zone.

The Rasmussen showing, also identified during prospecting in 2012, is defined by gold mineralization in frost heaved boulders which are interpreted to have undergone minimal glacial transport. Gold values in these boulders range from 0.1 to 6.9 g/t gold.

New gold grain results from till samples at the Cobalt Zone have defined a new drill target. Drilling will test an area directly up-ice of a till samples with a highly anomalous number of pristine gold grains (762 of 943 grains) and several mineralized boulders with gold grades from below detection to 14 g/t gold. One of the planned drill holes at Cobalt will test an undrilled chargeability anomaly.
Drilling at the Amundsen Zone will test for an extension to surface and along strike of the known gold mineralization (42.4 meters grading 0.97 g/t gold) intersected during drilling in 2012.

Keeping up momentum at Coffee

Two of the Yukon’s producers, Capstone Mining Corp., at its Minto high-grade copper-gold mine, and Alexco Resource Corp., at its Keno Hills silver project, also may be conducting ongoing underground drilling, according to Yukon officials.

At Coffee, Kaminak announced the start Feb. 26 of a C$11 million, 35,000 meters phase-one exploration program for 2013, just two months after releasing an initial NI 43-101 inferred mineral resource estimate of 3.236 million ounces grading 1.56 g/t gold for the property.

Field crews had been mobilized to Coffee, which is located in the White Gold district of west-central Yukon, and drilling was to begin shortly. By comparison, Kaminak did not gear up for its 50,000-meter drilling program in 2012 until late March.

“In less than three years, Kaminak has defined 3+ million ounces of shallow, high-grade gold at Coffee; an extensive, structurally controlled gold system which remains open in all directions,” said Eira Thomas, Kaminak’s newly appointed president and CEO. “Our work program in 2013 is designed to expand upon and define preliminary economic parameters for core resource areas at Supremo, Latte and Double Double, while at the same time continuing with an aggressive drilling campaign to identify additional resources over the broader, 100 percent-owned Coffee district, where less than 20 percent of the prospective geology has been systematically tested to date.” 

Thomas, who formerly was president and CEO of Stornoway Diamond Corp., also said, “The majority of the inferred resources identified to date (at Coffee) are near-surface oxide or transitional facies, with initial metallurgical testwork proving positive for high gold recoveries in oxide material using standard leaching techniques. In addition to the ambitious drilling and resource campaigns that are planned for 2013, Kaminak intends to initiate early-stage engineering studies and conduct detailed metallurgical testwork in support of a preliminary economic assessment.”

Kaminak’s strategy will continue to focus on targeting shallow, high-grade oxide and transitional mineralization, which comprises about 90 percent of Coffee’s existing 3.2 million-ounce inferred resource. To date, all deposits show good lateral continuity across more than 8 kilometers of total strike length, and remain open in all directions. 
Initial gold heap leach column tests undertaken on select samples of oxide facies material from Supremo, Latte and Double Double in 2012 were highly encouraging and resulted in 90 percent recoveries over 80 days, including 83 percent recoveries over 15 days. A comprehensive metallurgical program has been initiated for 2013 that will expand upon this work to test a broader range of samples collected from across all mineralized zones and to depth within the oxide, transitional and sulphide profiles.

Kaminak will conduct exploration drilling through the third quarter 2013 that will be incorporated into an updated mineral resource estimate and then applied to a preliminary economic assessment.  In addition to the updated resource estimate, metallurgical and geotechnical data will be collected during the year to contribute to mining and processing optimization studies.  
Soil sampling will continue to be the primary exploration tool for identifying mineralized structures at Coffee. Thus far, it has contributed to a drilling success rate of close to 90 percent. Several kilometers of priority gold-in-soil anomalies remain to be tested on the property, and in phase one, drilling will be focused within the two-kilometer by two-kilometer core resource area testing anomalies associated with Supremo’s T1, T6 and T8 structures, Latte North, Double Double South, Arabica and Mocha. 
Kaminak is also planning to collect a further 10,000 soil samples from across the property in 2013 with the goal of improving regional coverage and identifying additional priority targets for drill testing. Less than 15 percent of the 150,000-acre Coffee property has been systematically sampled for gold in soils.