Exploration pays off in triplicate

Sultan Minerals Inc. is another Canadian junior with ambitious plans to cash in on higher prices by taking up where others left off in British Columbia.

Sultan, a publicly held company in the Lang Mining Group, is hoping to revive tungsten and lead-zinc mining at the historic Jersey-Emerald property in southeastern B.C. The Vancouver, B.C.-based junior mining company is also eager to exploit a potentially larger molybdenum mineralization encountered beneath the other metals deposits.

Incorporated in 1989, Sultan has focused on expanding its gold, silver and base metals portfolio, primarily in British Columbia. This year, the company is chasing three different minerals - tungsten, lead-zinc and molybdenum - on the same property, the historic Jersey Emerald claims near the Canada-Idaho border in southeastern British Columbia.

The junior also has outlined a drill program to expand the gold resources at its Kena Gold Property near the town of Nelson in southeastern British Columbia.

Deposits stacked like a layer cake

Once home to the Emerald Tungsten Mine, Canada's second largest tungsten mine and the former Jersey Lead-Zinc Mine, which was British Columbia's second largest lead-zinc producer, Jersey-Emerald has languished, all but forgotten for more than 35 years. Low metals prices forced Placer Dome, now part of Barrick Gold Corp., to close the two mines in 1973 after more than three decades of production.

Sultan purchased the property from a prospector in 1993, and now believes its previous owners left considerable reserves of both tungsten and lead-zinc ore in the ground as well as a bonus deposit of molybdenum.

Sultan is aggressively exploring for all three mineral types at Jersey-Emerald, a property it also expanded to encompass 56 square miles.

President and CEO Arthur Troup described mineralization on the Jersey-Emerald property as resembling a layer cake. Lead-zinc deposits are close to the surface with wide bands of molybdenum at depth and tungsten between them.

Sultan estimates a measured and indicated resource of 2.5 million metric tons, grading 0.38 percent for the tungsten deposit, with an inferred resource of 1.2 million metric tons with about the same grade for the property.

Sultan would like to take the Jersey-Emerald's tungsten reserves into production after completion of a feasibility study.

It would likely take three years to complete the feasibility study along with permitting and environmental work needed for the project, according to Sultan spokesman Marc Lee.

A scoping study completed by the company favors development at today's prices of a 1,000 metric ton-per-day tungsten mining operation. But Sultan would like to prove up another 2.5 million metric tons of tungsten reserves and develop a 2,000 metric ton-per-day mine because it would achieve better economies of scale, Lee said.

Work under way to assess lead-zinc potential

Sultan, meanwhile, is doing additional drilling and cavity monitoring to obtain a resource estimate for the lead zinc ore in the old Jersey mine and in numerous undeveloped targets on the property. In the past, some 8 million metric tons, grading 6 percent, of the metals were mined from Jersey.

The company aims to follow up existing development to extract the lead-zinc in conjunction with the proposed tungsten mining operation. Earlier development work included about 10 miles of underground haul roads, Troup said.

In trenching this summer, Sultan discovered a western extension of the Jersey lead-zinc mine, exposing a stratiform band of lead-zinc-silver mineralization that has now been traced along strike for more than 1,200 feet.

Troup said the attitude of the mineralization discovered to date suggests a considerable portion of the area of the deposit might be extracted by surface mining methods.

Moly mine could stand alone

Sultan also envisions developing a separate 20,000- to 30,000 metric ton-per-day molybdenum mine at Jersey-Emerald.

"We believe the molybdenum deposits could support a standalone mine," Troup said.

Sultan has estimated an indicated resource of 28,000 metric tons of molybdenum, grading 0.1 percent, with 480,000 metric tons inferred.

Situated in granite, the moly deposit's "potential is quite large," but the company has yet to do enough infill drilling to move the much larger resource estimate into the measured category, Lee said.

While at least one recent drill hole encountered a whopping 1,500 feet of moly mineralization, Lee said he believes it is more significant that 580 feet of that interval graded at 0.1 percent molybdenum.

Reopening the tungsten mine will require Sultan to raise C$60 million to C$120 million in new capital, depending on whether the company purchases new or used equipment for the project.

Troup said Sultan aims to pursue the development on its own with the help of bank financing, but exploiting the potentially much larger molybdenum deposit would require the company to attract a joint venture partner.

If the molybdenum deposit proves to be as big as exploration results indicate, Sultan and a partner likely would need to raise C$500 million to C$600 million in capital, Troup said.