Manitoba's Mineral Industry
Exploration and Development Highlights 2000
Base Metals
Platinum-Group Metals
Gold
Diamonds
Specialty Minerals
Introduction
Mineral exploration expenditures forecasted for 2000 in Manitoba were estimated at $25.0 million, a slight decline from preliminary spending estimates of $25.8 million for 1999. Both figures are well below the $41.4 million spent on exploration in Manitoba in 1997, a situation being experienced across most jurisdictions in Canada for the year 2000. The root of the problem continues to be the inability of junior explorers to raise equity financing, despite the resurgence in base metal prices and booming equity markets witnessed in the last couple of years. It is hoped that the Exploration Investment Tax Credit (EITC) introduced by the federal government in the October "mini-budget" will stimulate investor interest in mineral exploration across Canada.
In Manitoba, there are other reasons to be optimistic about future exploration activity. Following significant diamond discoveries in the Northwest Territories and encouraging results from multimedia geochemical surveys conducted by the Manitoba Geological Survey, major ground acquisitions were made in the Fox River-Knee Lake-Oxford Lake area for diamonds as well as base and precious metals. An increase in diamond exploration, along with the explosion in palladium prices, is expected to boost exploration spending substantially in Manitoba over the next few years.
On the development front, Manitoba producers are in the midst of major capital expenditures in the base metal sector, including Hudson Bay Mining & Smelting Co., Limited (HBM&S) in Flin Flon and Snow Lake, and Inco Limited in Thompson. In Bissett, Harmony Gold (Canada) Inc. completed a development project to boost gold production and decrease costs. These investments will help insure the long-term viability of operations in Manitoba’s key mining camps.
Manitoba’s exploration and development incentive programs remained popular with industry in 2000. The Mineral Exploration Assistance Program (MEAP) offered $2.75 million to attract companies and stimulate exploration activity in the province. To date, $1.5 million of the $2.75 million offered has been allocated to 26 exploration projects. The MEAP projects are expected to generate $5.4 million in total expenditures. The Manitoba Prospectors Assistance Program (MPAP) offered $125,000 in funding to encourage exploration for mineral deposits by prospectors operating in Manitoba. For specialty minerals, $250,000 was offered through the Specialty Minerals Incentive Program (SMIP) to assist companies and individuals to evaluate the economic potential of existing specialty mineral deposits and to market those resources more effectively.
Base Metals
The year 2000 witnessed a flurry of development activity in Flin Flon and Snow Lake in conjunction with the HBM&S "777 Project". At an estimated cost of $400 million, it is the largest investment in the company's 70-plus year operating history. The new development includes: two new underground mines, the 777 mine in Flin Flon and the Chisel North mine near Snow Lake; expansion of the Flin Flon concentrator; expansion of the zinc plant including a new modern technology cell house; environmental upgrades to the spill gas handling system; and upgrades to the Flin Flon infrastructure to support the new projects. Some projects such as the development of Chisel North and upgrading of the spill gas handling system were completed in 2000. The 777 mine is the most costly sub-project. At approximately $200 million it will be HBM&S’s deepest mine, requiring a new 1540 m shaft and lateral development to exploit two main zones of the 777 orebody, incorporating 14.5 million tonnes of 4.68% zinc and 2.51% copper. The majority of the surface infrastructure for the 777 mine was completed in 2000. Shaft sinking commenced in the spring and full production is anticipated for mid-2004. Taking advantage of the depleted Photo Lake mine infrastructure, a 2.6 km decline from Photo to the Chisel North deposit was completed in the spring of 2000. Production from the multi-zone zinc deposit commenced in the summer and full production of 150 000 tonnes annually was to be reached in the fall. Chisel North contains proven and probable reserves of 2.4 million tonnes of 10.7% zinc and 0.24% copper.
With a large land position in Manitoba, Hudson Bay Exploration & Development Company Limited (HBED) continued to be the most active explorer in the Flin Flon Belt. The company continued to drill SPECTREM airborne targets in the Hargrave Lake, Cranberry Portage-Sherridon and Rocky Lake areas. Surface exploration drilling continued on mine stratigraphy of past and present producers in the Flin Flon and Snow Lake area.
Callinan Mines Limited conducted drilling on their group of optioned properties southwest of Snow Lake. The company encountered encouraging results at the Pot Lake zone including 6.6 m of 2.58% copper, 2.26% zinc and 2.78 g/t gold; and 3.1 m of 4.27% copper, 1.4% zinc and 3.15 g/t gold. A 4000 m drill program is planned for the Pot Lake zone and other known base metal occurrences in the area in 2001. At Callinan’s Jackfish property, north of Reed Lake, drill testing of an anomaly returned values of up to 1.83% nickel, 3.3% copper and anomalous PGE values. Follow-up geophysical and geochemical surveys were completed in the summer and additional drilling is planned in 2001.
Drilling problems at Callinan’s War Baby property in Flin Flon were rectified in mid-2000 and the company was able to complete a hole testing the down-plunge extension of the 777 deposit. The hole intersected multiple narrow massive sulphide zones. The best intercept, from assay results released in early January 2001, returned 2.4 m of 3.33% copper, 1.02% zinc, 2.19 g/t gold and 28.32 g/t silver. Two other zones, 0.95 m and 0.51 m in width, returned similar values. The sulphide zones were intersected at down-hole depths of 1763 m and 1791 m.
Berland Resources Ltd. and Fort Knox Gold Resources Inc. conducted drilling on a property optioned from HBED at Watts River, northwest of Ponton. Previous drilling by HBED had intersected economic grades of copper-zinc-gold-silver over a 1600 m strike length. Drilling by the junior partners encountered a new zone that returned 7.0 m of 3.1% copper. Another round of drilling is planned in early 2001.
Other companies conducting drill programs in the Flin Flon Belt included: Bell Resources Corporation near Persian Lake, United Development International at Mink Narrows and Marksmen Resources Ltd. at McClarty Lake.
The Lynn Lake Belt experienced modest exploration activity for base metals in 2000. Aur Resources Inc. conducted drilling at the Sherlynn project testing the property’s two zones of copper-zinc mineralization. The drill program failed to return any new encouragement. In the Rusty Lake Belt, HBED drill tested geophysical conductors in the area east of the Rat River.
With strong nickel prices, Inco announced in February that the company would proceed with the $70 million deepening of the Birchtree mine in Thompson. Although the project was shelved in 1997, a re-evaluation demonstrated that operating costs at Birchtree could be reduced by more than 25%. The project, which is expected to take to two years to complete, will nearly double Birchtree’s daily production from 1635 tonnes to 3175 tonnes. The project entails the development of proven reserves comprising 13.6 million tonnes of 1.79% nickel which extends Birchtree’s production life to 2016.
Inco Exploration continued their program of surveying the Thompson Nickel Belt with deep-penetrating geophysical surveys and follow-up drilling of high priority targets, as part of their exploration strategy to discover new mineralization near current mines or known deposits in the Thompson Nickel Belt.
Nuinsco Resources Limited focussed their exploration efforts on two known nickel deposits in the Thompson area which currently do not meet the economic thresholds of the major holders. At the Mel project northwest of Thompson, Nuinsco conducted a program of infill definition drilling on the Mel deposit optioned from Inco. Nuinsco reports that drilling has thus far outlined a resource of 550 000 tonnes of 1.69% nickel, representing 70% of the tonnage required for Mel to become a viable mining operation. Drilling also tested geophysical conductors on the adjacent Mel claims. Inco is acting as operator on behalf of Nuinsco and has the right to buy back 51% interest in the project.
Nuinsco is also actively pursuing bringing the Falconbridge Bucko deposit near Wabowden back into production. The junior explorer conducted delineation drilling which confirmed a high-grade nickel resource with widths conducive to mining. A mineral inventory of 2.0 million tonnes of 2.27% nickel was estimated by independent consultants and metallurgical tests on ore-grade material was carried out. Nuinsco followed through with their option of a purchase agreement for the Bucko deposit; environmental permits were filed and a feasibility study initiated to determine operating and capital costs to bring the deposit into production.
On the sub-Paleozoic southern extension of the Thompson Nickel Belt, Falconbridge and partner HBED conducted drilling in the William Lake and surrounding areas. Despite being a significant drill test site since the mid-1990s, activity in the William Lake area is expected to be cut back in the future. HBED also conducted drilling on their wholly-owned properties in the Fenton Creek and Ponton areas.
In southeastern Manitoba, Canmine Resources Corporation continued with the feasibility studies and environmental permitting for the Maskwa mill near Bird River. Canmine hopes to initially process 300 tonnes per day of cobalt-copper-gold ore from their Werner Lake mine property in nearby Ontario. The company also is considering bringing the Maskwa nickel deposit into production. Concentrate from the Maskwa mill will provide feed for Canmine’s cobalt refinery in Cobalt, Ontario.
Platinum-Group Elements
The spiraling cost of platinum-group metals, and more specifically palladium (testing US $1,000/oz. in January 2001), has provided a new niche for junior exploration companies. Manitoba Industry, Trade and Mines released a platinum-group element (PGE) database (OF2000-5) in June 2000 that contains geochemical data from a variety of mafic-ultramafic intrusions throughout the province. This timely publication provided an impetus for juniors to explore Manitoba’s largely untested PGE potential. The largest PGE play is the Falconbridge Limited Fox River project, located approximately 200 km east of Thompson. The Fox River Belt (300 km long by 10 to 30 km wide) comprises Paleoproterozoic supracrustal rocks intruded by coeval ultramafic and mafic sills and dykes; it is the largest and least-explored segment of the Superior Boundary Zone in Manitoba. The company holds a large land position in exploration permits and is searching for both magmatic nickel-copper sulphide and PGE mineralization. Falconbridge completed both summer and winter drill programs testing geophysical anomalies identified in earlier surveys. Detailed summer mapping in 1999 and 2000 outlined a previously unknown mineralized zone up to 3 m thick in the Marginal Zone of the Fox River Sill. Maximum metal contents obtained to date from this zone are 2.1% copper, 0.9% nickel and 4.5 g/t combined palladium+platinum+gold. Another airborne geophysical survey was flown in the fall. Ground mag and UTEM surveys followed by diamond drilling are planned for early 2001.
South of Thompson, Gowest Amalgamated Resources Ltd. followed up on encouraging PGE data obtained from OF2000-5. The company conducted stripping and surface sampling of the Cuthbert Lake dyke, resulting in palladium+platinum+gold values of 1.6 to 4.2 g/t associated with copper-nickel mineralization (1.78% combined copper+nickel). The company was conducting linecutting and magnetic surveys on the Cuthbert Lake property at year-end. Anomalous areas will be followed up with IP surveys and drilling in 2001.
In the Flin Flon area, Fort Knox Gold Resources Inc. optioned three properties from HBED that have potential to host PGE deposits. The most prospective is the McBratney Lake property situated 8 km east of Flin Flon, where a previous HBED drill hole intersected 12.2 m of 10.65 g/t combined PGEs. Follow-up mapping and re-logging of existing drill core in the fall resulted in an extension of the zone to a length of 200 m. A program of closely spaced drill holes to test the extent of mineralization at depth and along strike was planned for January 2001.
First Choice Industries Ltd. optioned the Tara Lake massive sulphide deposit property, also just east of Flin Flon, from Foran Mining Corporation. The company sampled existing drill core for PGEs within zones originally logged as ultramafic rocks. The Tara Lake deposit is a small high-grade zinc-copper orebody discovered in 1987 by Westfield Minerals Limited and Goldbrae Developments.
At Lynn Lake, Vital Pacific Resources Ltd. conducted systematic geochemical sampling for nickel-copper-cobalt and PGEs over several of the gabbroic intrusions in the area. The Lynn Lake gabbros were host to the first nickel mines in Manitoba, generating 20 million tons of 1.0% nickel and 0.5% copper between 1953 and 1976. Vital Pacific was to conduct follow-up linecutting and geophysical surveys this winter based upon analytical results. In southeastern Manitoba, Redstar Resources Corporation optioned claims covering 12 km of the Bird River Sill, a layered mafic-ultramafic sill complex where previous sampling by Manitoba and federal government geologists returned PGE values of up to 2.5 g/t. Redstar completed an initial exploration phase of mapping, soil geochemical sampling and rock saw trenching. Soil geochemical sampling has outlined a platinum-palladium-copper-nickel anomaly 150 m wide and 1000 m long.
On the Mayville property, which contains a basal breccia zone of the Bird River Sill, Exploratus Ltd. conducted stripping, trenching and sampling for PGEs and copper-nickel mineralization. Previous exploration efforts focussed more on the copper-nickel and chrome potential of the property. Exploratus intends to conduct geophysics and possibly follow-up drilling in 2001.
Gold
The prolonged slump in gold prices and the lack of equity financing again took its toll on exploration activity levels in Manitoba in 2000. The bulk of activity consisted of evaluating known gold deposits and occurrences.
Wolfden Resources Inc. conducted the largest project at Monument Bay and Little Stull Lake near the Ontario border. A winter drill program on the Monument Bay property tested the A and B zones and returned encouraging results including 4.2 m of 29.97 g/t and 4.8 m of 16.55 g/t gold. The majority of the 12 holes from the winter program contained visible gold. Highlights from summer drilling at the Little Stull property included 5.5 m of 4.88 g/t and 1.0 m of 16.28 g/t gold. Drilling during the summer at the C zone at Monument Bay intersected 3.2 m of 12.08 g/t gold. Both Monument Bay and Little Stull received significant drilling by Noranda Inc. in the late 1980s. Monument has a mineral resource of 600,000 ounces and the Little Stull resource figure stands at 448 700 tonnes of 10.5 g/t gold.
Northeast of Flin Flon, Pioneer Metals Corporation conducted drilling at their Nokomis Lake option, 8 km north of Pioneer’s dormant Puffy Lake gold mine. The company was attempting to increase a near-surface resource of 80 000 tonnes (10 g/t gold) along with the size and grade of a lower resource of 240 000 tonnes (6 g/t gold).
Other companies conducting drill programs for gold included Torch River Mines Ltd. at Island Lake and Falcon Crest Resources Inc. at Pelican Harbour.
In the Bissett area, the Hunter-Dickinson Group Inc. flew an airborne geophysical survey, conducted overburden drilling and geochemical sampling over ground held by San Gold Resources Corporation, Tudale Exploration and Harmony Gold.
In Lynn Lake, Black Hawk Mining Inc. closed the Keystone gold operation in May, the only active mining operation in the town. The last of the stockpiled ore from the Farley mine produced 9,100 oz. of gold. Keystone produced a total of 52,125 oz. in 1999 at a cost of US $236/oz.
With the closure of the Keystone operation, the Manitoba Geological Survey commenced a number of projects aimed at providing explorationists with metallogenic models for the formation of Lynn Lake-type gold deposits. These projects include regional and detailed structural mapping in the Johnson Shear Zone and Agassiz Metallotect, multimedia geochemical surveys and development of a GIS database to house new and existing data. Structural mapping conducted by the Manitoba Geological Survey in 2000 identified a previously unrecognized style of gold mineralization within the Johnson Shear Zone that has excellent potential.
On the production side, the New Britannia gold mine in Snow Lake joined the ranks of the million-ounce producers in April. This includes the 600,000 ounces produced during the 1950s combined with recent production. Joint venture partners TVX Normandy Americas and High River Gold Mines Ltd. continue to be successful in reducing costs and increasing production. To the end of the third-quarter 2000, New Britannia produced 78,467 oz. at US $210/oz.
Diamonds
In 2000, northeastern Manitoba became the site of a rush to acquire prospective ground for diamond exploration. This came on the heels of encouraging results obtained by the Manitoba Geological Survey from multimedia geochemical surveys in the northern Superior Province. The five-year sampling program, known as Operation Superior, began in 1996. Results released from the 1999 sampling campaign delineated a G10 garnet dispersion train (in association with diamond inclusion chromite grains) suggesting a source region northeast of southern Knee Lake. These results caught the attention of the heavy-hitters in the diamond industry including De Beers Canada Corporation, BHP Minerals Canada Ltd. and Kennecott Canada Exploration Inc. who have applied for large parcels of ground in exploration permits. Junior companies and individuals such as Indicator Explorations Ltd., Iriana Resources Corporation, James Brown, Harold Westdal and Jody Dahrouge have also applied for permits in the area. DeBeers acquired 23 permits in the fall, which cover 8170 sq. km. Over 50 permits covering more than 20 000 sq. km. have been acquired in the northern Superior for diamond exploration. This represents over $2 million in work commitments for the first year alone.
Several reconnaissance programs were carried out in 2000. These include till and lake sediment sampling surveys conducted by Monopros Limited in the Knee Lake and Molson Lake areas, and by Kennecott in the Oxford Lake and Atik Lake areas. Exploration activity is expected to heat up in 2001 when companies conduct airborne geophysical surveys and follow-up with ground geophysics.
Specialty Minerals
In southeastern Manitoba, Avalon Ventures Ltd. conducted linecutting and geophysics on a tantalum prospect in the East Braintree area. Emerald Field Resources Corporation and G. Royer conducted mapping and sampling of pegmatites on their respective properties east of Bernic Lake.
