Rio Tinto seeks diamonds in high Arctic

Rio Tinto Exploration Canada Inc., 60 percent owner and operator of the Diavik Diamond Mine in Northwest Territories is quietly looking for more diamond deposits in Canada's high Arctic.

Though the company declined to confirm a start date for its 2011 exploration program or discuss its plans, officials of Indian and Northern Affairs Canada, Parks Canada, Environment Canada and other affected federal regulators signed off this spring on a new land use permit for proposed work to be carried out between March and October 2011 and potentially in 2012.

High mineral potential

The Arctic Archipelago includes a land area of 780,000 square kilometers (nearly 301,160 square miles), covering much of the Northwest Territories and Nunavut. It contains three of the 10 largest islands in the world (Baffin, Victoria, and Ellesmere) plus 22 others of appreciable size.

The Canadian Arctic Islands contain many areas that have a high mineral potential. Five geological assemblages are recognized: crystalline Archean to Paleoproterozoic basement; Mesoproterozoic sedimentary basins and volcanic rocks; Lower Paleozoic passive to convergent margin sedimentary rocks, Upper Paleozoic to Mesozoic rift basin sediments and volcanic rocks; and Tertiary passive margin sediments.

This vast area, however, is expensive to explore for minerals and to develop mines. Exploration has been hampered by its remoteness, difficult logistics, short summer, high costs of transportation and drilling, and a lack of local prospectors and infrastructure. In addition, large areas are mapped in insufficient detail, and there is a lack of digitally available topography, bedrock and surficial mapping, airborne geophysics, and hyperspectral surveys.

The feasibility of developing a deposit is also lessened by the high costs of fuel, drilling, aircraft, and labor, along with the short shipping season and environmental sensitivities. These factors likely outweigh the gaps in geoscience knowledge in continuing to limit mineral exploration, according to Natural Resources Canada.

The Arctic Islands do, however, present some opportunities, including a higher probability than in southern Canada of a new, near-surface discovery because it is poorly explored; the lack of vegetation allows rapid assessment of areas using hyperspectral surveys; base and precious metal exploration can likely piggy-back on exploration for high-value commodities, such as diamonds, oil, and gas.

There are several key geoscience gaps that could encourage future exploration, including airborne potential field geophysics; geological mapping of poorly known areas such as Victoria Island and southern-central Ellesmere; prospecting, geochemical and alteration studies and detailed mapping of specific targets such as the Sverdrup basin volcanics, Somerset-Brodeur-north Baffin copper trend, Victoria Island copper, and sandstone- hosted uranium; and continuing digital compilation of information to enable topography, bedrock, and surficial mapping, as well as comprehensive assessment files.

To date, only two mines have been put into production in the Arctic Islands: the Paleozoic Mississippi Valley-type carbonate-hosted zinc-lead Polaris Mine on Little Cornwallis Island and the Proterozoic MVT carbonate-hosted zinc-lead Nanisivik Mine on northern Baffin Island. There is high mineral exploration potential around these past producers, as well as around known showings of Proterozoic-hosted redbed copper on Victoria Island and Paleozoic-hosted polymetallic (zinc-lead-silver-gold) veins on northern Ellesmere Island.

Considerable potential also exists for as-yet-unfound zinc-lead SEDEX deposits in the Proterozoic on northern Baffin Island and in the Paleozoic on Melville, Bathurst, and Ellesmere islands; sediment-hosted uranium in the Proterozoic of northern Baffin Island, in the Paleozoic of Melville Island and in the Mesozoic and Tertiary of Banks and Prince Patrick islands; and Noril'sk-style nickel-copper-platinum group element deposits in the Proterozoic of Victoria Island and in the Mesozoic on Axel Heiberg Island.

History of diamond exploration

The Banks Island Project is located on the northeast tip of Banks Island on lands designated under the Community Conservation plans of Sachs Harbour, NT. It consists of 125 mineral claims and about 32 prospecting permits (pending application approvals). The land parcels total some 1,479,943 acres just to the east of Aulavik National Park, which is centered on Banks Island. The project's southern boundary is in line with Johnson Point and the northern boundary of the special designated land identified as 619E (Caribou calving region).

Rio Tinto completed a small exploration program on the mineral claims and pending prospecting permits application area between July 5 and Sept. 19, 2010. The program was designed as a first-pass screening process to assess the area's potential for diamond bearing kimberlite occurrences. Work included a 35,900 line-kilometer horizontal gravimetric airborne geophysical survey, a regional stream sediment sampling program to collect 20-liters of material for heavy mineral analysis, and a staking program comprising 125 mineral claims.

The major is not the first mining to explore Banks Island for diamonds. Diamonds North Resources Ltd. and Majescor Resources Inc. in a 50-50 partnership explored a 1.1 million-acre parcel, also known as the Banks Island project, located on the northeast corner of the island about five years ago.

Sampling programs recovered kimberlite indicator minerals with compelling mineral chemistry similar to the Ekati and Diavik diamond mines to the south. A geophysical survey over only 10 percent of the project area identified 65 targets, including a 12- to 14-hectare (30-35 acre) target.

Diamonds North purchased Majescor's 50 interest in the project in 2007, but subsequently allowed its 100 percent interest in the project to lapse after a lack of further exploration success.

A second year of exploration

Rio Tinto told INAC earlier this year that its 2011 program would include continued regional stream sediment surface sampling over the area of pending permits and claims. An airborne geophysical survey, about half the size of the 2010 survey, would be flown on the "pending" northern permit blocks. This would complete the aeromagnetic coverage of the area. A small reverse circulation drill rig would be mobilized to site to test a few high-priority targets identified from the 2010 airborne magnetic survey. A camp would be constructed at Johnson Point to provide safe logistical support and efficiency to the 2011 and ongoing exploration activities.

Rio Tinto said that having infrastructure local to the area will minimize air traffic across Banks Island from Sachs Harbour, reducing safety risks to passengers on board and minimizing impact to local species of the greater island.

The 2011 crews would operate from a camp located at Johnson Point, about 80-100 kilometers from the center of the planned exploration activities. Rio Tinto said it would hire contractors to assist with the construction and maintenance of the camp.

Construction was planned to begin by early June, and the camp would be designed to accommodate roughly 20- 25 people. Rio Tinto said it would open the camp as soon as practical, which would depend on flowing water or a source for drinking water to accommodate the camp.

The explorer's results from 2011 would provide good indications of whether the 2012 program would be bigger. Pending positive results from the 2011 exploration program, the company said the 2012 program, and following programs, would involve two diamond drill rigs to assess the potential of the property. This would necessitate an increase in the camp capacity to 25-35 people. The drill rigs would operate 24 hours a day and the camp would be expanded to accommodate extra crew, including additional cooks, geologists and camp support.

The major estimated that the amount of fuel and number of flights into the property would increase by about 30 percent in the 2012 program, which could start in March and finish in October.

The company said it would likely make some arrangements to expand the camp late in the 2011 field season so that the 2012 program could start as soon as practical.

Possible satellite camp

Some of the drill targets selected from the 2010 and 2011 airborne geophysical surveys may be situated under frozen lakes, which would require drilling on lake ice in early April or late March. In this situation,

Rio Tinto said it may need to set up a small camp (10 people) with good drinking water in proximity to the drilling.

This camp would be necessary only if the Johnson Point water source was frozen. There are some lakes south of the survey area large enough to be able to accommodate such a camp.

Part of the 2011 program could involve investigating camp facilities, as a contingency, for a winter program. It would require a lake large enough to land a Twin Otter on skis to provide access and transport materials in early spring. A suitable strip to land a Twin Otter on tundra tires would be another alternative.

Oil and gas exploration in the area may have used such a strip on Banks Island. This would be a better option for year-round access near the center of the operations.

If the results are not so positive in 2011, Rio Tinto said it will conduct a similar or smaller drill program in 2012, including ground geophysics, follow-up sampling and prospecting in 2012. The camp size would stay the same. Fuel and aviation activities would be similar to the 2011 program.

Summer timetable

Depending on whether the geophysical targets are on land or ice, Rio Tinto said it would start as soon as practical, in late March or late May, respectively.

"Having a suitable camp built in 2011 allows the following programs to commence as soon as there is flowing water to accommodate the camp and the strip at Johnson Point is safe for aircrafts to land. Hence, the … exploration activities could commence in early May," the company said in its filings.

Project manager Lauren Anonby told Mining News June 17 that she was not at liberty to confirm a start date for the 2011 program at the Banks Island Project, but she would ask a Rio Tinto spokesman to respond to the newspaper's inquiries. No one responded by press time.

The major's proposed program timetable for the 2011 field season called for camp construction May 15 to June 16 and possible additional construction activities July 16-30; ground geophysics June 16-30 and airborne geophysics July 20 to Aug. 20 that with success could be extended until late August. Stream sediment sampling was scheduled from July 21 to Aug. 8 with possible extension to Aug. 20.

The explorer planned to carry out diamond and/or reverse circulation drilling from June 16 to July 20 that could be extended until Aug. 20. Intermittent prospecting was scheduled throughout the program from June 16 to Aug. 30

The company also told regulators that the 2012 and following seasons would operate from the same camp with activities likely to commence in late May to early June and finish in late September, and the size of the camp would be expanded if the results from the 2011 program are encouraging.

Otherwise, subsequent field programs would be the same or smaller and the activities would commence from late May to September.

In response to a number of questions and concerns voiced by federal and local parties in the permitting process, Rio Tinto outlined numerous steps it would take to minimize or mitigate the project's impact on the sensitive Arctic environment. These include logistical innovations such as installing a combined wind turbine/photovoltaic system to provide electrical service to the camp and significantly reduce the need for diesel-generated electricity. A 20 kVA diesel generator will be installed to supply electricity during times of peak load.

The company said the system will reduce the associated risks of transporting fuel to the camp site by fixed-wing aircraft. Activities associated with aircrafts and handling fuel is considered one of the highest risk activities on the Banks Island Project. Arctic weather conditions can change dramatically within this region further adding to the risk.

As part of the 2011 airborne geophysical program, Rio Tinto also sought permission to construct small temporary chain link fence barriers to protect geophysical base station instruments from Musk ox herds in the region.

The company said previous mineral explorers have reported trampled and broken equipment reputably by Muskoxen. Given that survey data collection is dramatically improved with base stations situated within the survey area, rather than several hundred kilometers away, Rio Tinto intends to erect temporary, 5-feet-by-5-feet-by-5-feet barriers at two locations within the 2011 survey area in hopes of both mitigating potential interaction the herds and protecting the Musk ox and the sensitive instruments.

The survey would be flown on the northern permits.

Local hire

During the 2010 program, Rio Tinto said the project provided direct wages and revenue to residents and businesses in Sachs Harbour and Inuvik. Sachs Harbour (pop. 2,700), is one of several communities within the Inuvialuit Settlement Region where Banks Island is located. Though Inuvik (pop. 3,400), is located outside the settlement region, a number of local businesses are based there.

The explorer said it contributed C$183,000 of the 2010 Banks Island budget toward direct and indirect revenue to the people and businesses of the local area between July 5 and Sept 19, 2010, contracting for a variety of services, including transportation, shipping, expediting, groceries, bulk aviation fuel, gasoline for trucks, Internet access and services and accommodations, truck and office rental.

Seven local employees were hired as subcontractors to assist as wildlife monitors on the airborne geophysical survey, to help with the operation of the camp and to assist on the stream sediment sampling program.

Overall, 17 percent of the program's total 6,777 contractor-hours were represented by local Inuvialuit hires.

Rio Tinto also noted that the entire program was completed without a single health incident or personal injury.

The company said it will try to consult and work with local businesses and hire local staff whenever possible, and its budget for the 2011 program would be similar to the 2010 budget.

The 2011 program requires services and employment to assist with the construction, maintenance and operation of the camp and associated exploration activities. Job descriptions and skill development opportunities will be made available to new and returning employees, Rio Tinto added.