Mining Explorers 2014: Big projects dominate field season

Mineral exploration activity is holding its own in Nunavut this year, despite a tough funding environment and stiff competition from other attractive mining jurisdictions around the world.

Although the Far North territory has only one operating mine, Meadowbank, at least eight mineral projects are currently hurtling through development and the permitting process on their way to production. Of these, two projects - one gold and one iron - have project certificates, and six projects are progressing through the environmental assessment process.

Mineral exploration activity, meanwhile, is fairly robust, particularly in Nunavut's westernmost and central regions where companies continue to seek diamonds and a variety precious and base metals.

Nunavut is expected to attract about C$166.5 million in exploration and deposit appraisal expenditures in 2014, down significantly from C$313 million in 2013 and from the territory's 16-year average of C$220 million, according to Natural Resources Canada estimates.

Exploration and deposit appraisal expenditures are estimated to decrease in every sector, except for uranium where spending is expected to climb about 27 percent to C$22.6 million. Precious metals projects will attract about half the spending, with C$86 million invested primarily in gold and silver projects, while spending on base metals projects will total an estimated C$40.5 million. The remaining outlay will go to diamonds (C$10.5 million) and iron (C$6.6 million) projects.

In 2014, exploration and deposit appraisal spending in Nunavut is projected to decrease substantially, plummeting to C$166.5 million in total with corresponding declines in every sector, except uranium where expenditures are expected to jump to C$22.6 million.

Regional geologists recently summarized mineral exploration, deposit appraisal, development and related activities throughout 2013 and predicted that the territory's active exploration projects in 2014 across the territory will focus on gold, uranium, diamonds, copper, zinc, iron diamonds, rare earth elements and platinum group elements.

Gold projects

Perhaps the busiest explorer in 2014 is Agnico-Eagle Mines Ltd., which has undertaken new gold exploration programs at the 408-square-kilometer (157.5 square miles) Amaruq (formerly known as IVR) property located about 50 kilometers (31 miles) northwest of the Meadowbank Mine - Nunavut's only operating mine, and on the Greyhound Property, which the company optioned from Aura Silver. Greyhound is located about 35 kilometers (22 miles) south of Meadowbank.

"The new IVR (Amaruq) discovery has yielded some very exciting results for Agnico Eagle this summer," Sean Boyd, the company's president and CEO, said in late August. "We are particularly interested in the project because of its proximity to our Meadowbank mine and mill, which is currently our best cash flow generator," Boyd added.

In addition, the company is continuing to explore the Meliadine and Meadowbank properties. At Meliadine where Agnico Eagle is currently in the permitting phase for the development of a mine, the company anticipates spending C$45 million in 2014 on exploration and extension of an underground exploration ramp from which deep exploration and conversion drilling of the Tiriganiaq and Wesmeg/Normeg zones will occur. The company is targeting startup at Meliadine in 2018, and it could surpass Meadowbank as Agnico Eagle's largest gold producer.

In Kitikmeot, Nunavut's westernmost region, exploration in 2014 centered on gold and base metals projects.

TMAC Resources Inc. is exploring the 80-kilometer (50 miles) long and seven to 20 kilometers (4.5-12.4 miles) wide Hope Bay greenstone belt located in the northeast Slave Structural Province for gold.

The junior raised C$78 million in equity financing last spring, net proceeds of which will further advance exploration and other work at Hope Bay in 2014. Pending 2014 results, TMAC plans to conduct a pre-feasibility study by early 2015, which, when completed, will allow the company to consider equity and debt project-financing options.

"A large portion of the approved 2014 plan and budget will consist of surface drilling to upgrade the mineral resource estimates to higher classifications and to add to our global gold resource," TMAC President Catherine Farrow said in May.

Six diamond drill rigs are expected to complete a total of 57,000 meters at a cost of about C$28. Work is underway to re-open the Doris portal and ramp to facilitate future underground mapping, underground drilling and mine design. In addition, work has begun on environmental permitting of the Madrid and Boston trends for advanced exploration, engineering and project execution planning and will continue throughout 2014.

"We are very fortunate in having regulatory approvals in place that allow us to put Doris North into production and other permits that allow underground advanced exploration including bulk sampling at Boston and surface exploration drilling at Doris, Madrid and Boston," Farrow added.

Combined with the Doris North project certificate already in place, all necessary permits are secured to allow mining and milling to start at that deposit as early as the fourth quarter of 2015.

Sabina Gold & Silver Corp. continues to aggressively advance its Back River gold project in 2014. The company has initiated a feasibility study, and was expected to submit a draft Environmental Impact Statement to Nunavut regulators in early 2014. Sabina planned a C$19 million 2014 work program at Back River $19 million, including a modest drilling program following up on earlier discoveries.

The Back River gold project comprises six properties, Bath, Boot, Boulder, Del, George and Goose. In late July, Sabina reported completion of nearly 9,000 meters of infill definition and expansion drilling program at the Echo deposit, one of four deposits that comprise the Goose Property.

Sabina is also exploring the 79,000-hectare (195,209 acres) Wishbone Gold project located in the southeastern portion of the Wishbone greenstone belt that also hosts the Hackett River deposits. In addition to Hackett River, Sabina sold a substantial portion of Wishbone to Glencore Xstrata, but retained claims viewed as prospective for banded iron formation-hosted gold, analogous to the primary host rocks at the Back River project. Sabina also acquired additional claims to bring the property to its current size of roughly 79,000 hectares (195,209 acres).

A reconnaissance surface exploration program was carried out on three blocks of claims within the property in 2013, and included prospecting and geological mapping. Further mapping and follow-up of gold anomalies is planned for 2014.

The Itchen Lake gold project, which straddles the Nunavut-NWT border, is also being explored under a strategic alliance between Transition Metals Corp., newly merged with HTX Minerals Corp., and Nunavut Resources Corp. The alliance planned to follow up in 2014 on a modest C$1.0 million reconnaissance surface exploration program conducted a year earlier. More than 60 conductivity anomalies were identified in 2013, with some located along the same trends as known gold occurrences.

Base metals projects

To the south, Glencore Xstrata plc, a company formed in May 2013 from a merger of Glencore International plc and Xstrata plc, is exploring the Hackett River and Wishbone projects, from Sabina Gold & Silver Corp. in 2011.

Hackett River is considered one of the largest undeveloped VMS deposits in Canada, and possibly the world. With three main silver-rich zinc deposits, the property has a NI 43-101 resource estimate of 25 million metric tons of indicated resources grading 4.2 percent zinc, 0.6 percent lead, 0.5 percent copper, 130 grams per metric ton silver and 0.3 g/t gold, and 57 million metric tons of inferred resources grading 3.0 percent zinc, 0.5 percent lead, 0.4 percent copper, 100 g/t silver and 0.2 g/t gold.

Glencore has indicated that submission of a draft environmental impact statement to the Nunavut Impact Review Board will await the completion of a pre-feasibility study.

The Wishbone property spans the 115 kilometers (71 miles) length of the Hackett River greenstone belt, alternatively referred to as the Wishbone greenstone belt, and is comprised of 238 mineral claims with a combined area of almost 200,000 hectares (494,200 acres).

The property also encloses the Musk VMS deposit, discovered by Noranda Mining and Exploration Inc. in 1979, and owned by Glencore. Exploration on Wishbone in 2013 was limited to electromagnetic and gravity airborne geophysical surveys to expand the geophysical coverage of the property and to generate targets to follow up in future programs

MMG Resources Inc. continued work at on its High Lake and Izok Lake volcanogenic massive sulphide deposits, known collectively as the Izok Corridor Project, and the Hood zinc-copper project.

The 2014 program on the Izok Corridor project were anticipated to follow up on efforts in 2013 to prepare for regulatory review of the projects.

Proposed plans includes a mine and mill at Izok Lake, a mine at High Lake, and a port at Grays Bay on the Coronation Gulf from which mineral concentrates would be shipped seasonally, all connected by a 325-kilometer (202 miles) all-weather road.

Much of the work completed on the Izok Corridor project in 2013 was focused on engineering studies to assess design alternatives.

The exploration program, which included geological mapping, prospecting, and ground and airborne geophysical surveys, concentrated on regional target identification along the proposed road route.

No exploration results have been released.

The company originally planned to submit a revised project description with alternative engineering options to the Nunavut Impact Review Board in late 2013, but since has indicated that the submission will take place in the fourth quarter of 2014 at the earliest. MMG said the revision would be submitted after the completion of the 2014 exploration program which is intended to identify more mineral resources within the Izok Corridor. However, the company said it likely will need partners to finance construction of a road and port system that would make the Izok Corridor Project economically viable.

At the Storm copper-zinc-silver project, located on the northwest coast of Somerset Island, Aston Bay Holdings recently reported completion of a joint summer exploration program at the 139,633-hectare (345,033 acres) project conducted in conjunction with a subsidiary of Antofagasta plc. Outcomes from the program include new discoveries of copper-bearing frost heaved subcrop and float that increase the distance over which copper mineralization has been found at surface on the project.

"The presence of copper-bearing subcrop and float in new areas re-affirms our belief that mineralization on the property may be more extensive than what has been defined to date by drilling," said Benjamin Cox, chief executive officer of Aston Bay.

The joint exploration program was conducted over a three-week period by technical professionals from Aston Bay, Antofagasta and consulting company APEX Geoscience Ltd. Work completed at Storm included geological mapping in the vicinity of the known mineralization as well as prospecting and soil sampling in areas where little or no mineralization had been previously identified.

The strike length of surface mineralization was increased to 30 kilometers (18.6 miles) from the seven kilometers (4.34 miles) previously identified.

Targeting for the prospecting and soil sampling was driven by results from a Versatile Time Domain Electromagnetic survey conducted in 2011 and previous soil sampling programs.

Copper-bearing minerals, including malachite and chalcocite, were discovered in frost-heaved subcrop and float in several areas where no previous drilling or surface sampling had been conducted.

Samples of the copper-bearing material were collected for assay and results will be released once obtained.

The completion of the 2014 summer field program was an important milestone in progressing towards a proposed definitive agreement with Antofagasta, which the parties have agreed to complete by Dec. 1.

Iron and diamonds

Of the advanced mineral projects edging closer to production in Nunavut, the Mary River iron project is likely the closest to startup. For the past two years, the venture, spearheaded by Baffinland Iron Mines Corp., has headlined mining news coming from the Qikiqtani, the territory's easternmost region.

Baffinland planned to focus work in 2014 on Deposit No. 5 at Mary River, including geophysical surveying and additional surface sampling. Construction of mine-related infrastructure and work on the mine site is underway and is expected to continue through 2014.

Located in northern Baffin Island, the iron mine project is expected to produce 3.5 million to 4.2 million metric tons of iron ore annually when it begins operation, potentially in 2015. The ore, which will require little or no processing will be shipped from Milne Inlet to markets in Europe.

On southern Baffin Island, Peregrine Diamonds Ltd. continued work in 2014 on its Chidliak diamond project, beginning in March with an exploration and diamond resource definition program.

Chidliak is a 7,989-square-kilometer (3,087 acres) property comprised of Crown land and IOL (surface) parcels and located 120 kilometers (74 miles) northeast of Iqaluit, on the Hall Peninsula of Baffin Island.

The primary objective of the 2014 program is to advance three to five kimberlites showing economic potential to the bulk sample stage and to commence logistical preparations for the 2015 bulk sampling program.

The objective of the 2015 bulk sampling program will be to confirm sufficient diamond resources to enable commencement of a pre-feasibility study for Baffin Island's first diamond mine.

The approved budget for the 2014 program is C$7 million.

Peregrine planned to advance additional kimberlites to the bulk sample stage in 2014 by completing a program of core drilling on these pipes. In addition, thorough exploration will be focused on discovering new kimberlites with economic potential in a priority area that includes the CH-6, CH-7 and CH-44 kimberlites. The 2014 program was expected to be completed in September.

In May, Peregrine reported a maiden independent NI 43-101-compliant inferred mineral resource estimate for the top 250 meters of the CH-6 kimberlite pipe and additional tonnage as a target for further exploration. Key elements of the CH-6 estimates included an inferred mineral resource of 7.47 million carats of diamonds in 2.89 million metric tons of kimberlite to a depth of 250 meters, an estimated 2.60 million to 3.47 million metric tons of kimberlite classified as a target for further exploration and the kimberlite is open at depth.

In addition, Peregrine reported estimates for the CH-7 and CH-44 kimberlites. The CH-7 kimberlite tonnage estimate is between 2.75 million and 3.97 million metric tons from surface to a depth of 280 meters. The CH-44 tonnage estimate is between 1.16 and 2.05 million metric tons from surface to a depth of 230 meters. Both CH-7 and CH-44 are open at depth. The tonnage estimates that have been identified at CH-6, CH-7 and CH-44 are classified as targets for further exploration and are conceptual in nature.

Peregrine also said insufficient exploration has occurred to define a mineral resource on those targets, and it is uncertain if further exploration will result in the tonnage estimates being delineated as a mineral resource.

North Arrow Minerals Inc. also conducted a bulk sampling program at the Qilalugaq Diamond Project located near the hamlet of Repulse Bay (Naujaat), Nu. The intent of the program was to recover a diamond parcel of about 500 carats for the purpose of determining an initial value estimate for the diamonds in the Q1-4 kimberlite. North Arrow is funding the bulk sampling program as part of an 80/20 percent option agreement with Stornoway Diamond Corp. A total of 1,688 megabags of kimberlite have been collected from the 12.5-hectare (31 acres) Q1-4 kimberlite.

North Arrow also explored its Mel and Luxx diamond projects in 2014. The Mel project consists of five prospecting permits covering about 73,865 hectares (182,520 acres), and is part of an option agreement with Anglo Celtic Exploration Ltd., along with the Luxx project. At Mel, work included prospecting of targets identified from 2013 magnetic surveys and additional till sampling. At Luxx, follow-up to a substantial 2013 surveying and sampling program included additional till sampling and detailed prospecting of the highest priority target areas, as well as the acquisition of required permits for a spring 2015 drilling program.

Uranium

Uranium mining activity, while mainly in the early stages in Nunavut, advanced at an encouraging pace in 2013, but slowed significantly this year. The territory boasts vast potential for economic uranium deposits and at least 10 active uranium projects, most of which are located in the south-central Kivalliq region near Baker Lake. The area hosts a number of deposits similar to those found in the Athabasca Basin region of Saskatchewan.

Nunavut's most advanced uranium project, Kiggavik, is inching closer toward potential development within a couple of years. The project, located about 80 kilometers, (50 miles) west of Baker Lake, is owned by Areva Resources Canada, one of Canada's largest uranium producers.

Several other companies are targeting deposits and prospects clustered nearby, though little activity has been reported in 2014. The uranium explorers include Cameco at the Turqavik-Aberdeen claims, located some 85 kilometers (53 miles) west of Baker Lake, where exploration has focused on finding mineralization in the southern portion of the two claims similar to that found within deposits at Areva's Kiggavik and Sissons properties to the east. Forum Uranium Corp. is exploring the North Thelon Project , which covers 50 kilometers (31 miles) of the eastern extension of the trend that hosts the Kiggavik deposits, and potentially hosts similar-style uranium deposits.

In February, Forum consolidated its North Thelon property interests by entering into a purchase and sales agreement with Agnico Eagle Mines Ltd. to acquire a 100 percent interest in Agnico Eagle's Judge Sissons and Schultz Lake claims. Sufficient work has been done by Forum to keep the claims in good standing with minimal expenditures for three years.

Another junior, Kivalliq Energy Corp., was the first company to explore for uranium on Inuit-owned lands in Nunavut, a move that could pay off handsomely for the company. Five years later, Kivalliq has identified the 340,268-acre Angilak property which is believed to host Canada's highest grade uranium resource outside Saskatchewan's Athabasca Basin. Angilak, located 225 kilometers (140 miles) south of Baker Lake has a 2.8-million-metric ton inferred resource grading 0.69 percent U3O8, totaling 43.3 million pounds.

Advancement of Angilak has evolved to focus on de-risking the project by evaluating potential extraction and processing options for the Lac 50 uranium deposit.