Good news for the Sudbury Basin

Mike Cosec, Sudbury district geologist for the Ontario Geological Survey, is probably the expert concerning the Sudbury area exploration boom. According to Cosec, the number of claims staked and the number of claims actively being explored in that region is unprecedented. What was once considered the private domain of Inco Ltd. and Falconbridge Ltd. is now being explored by numerous juniors, in many cases with the co-operation and encouragement of not only Inco and Falconbridge, but overseas major mining companies as well.

The recent surge in exploration activity resulted from a combination of factors. The price of platinum group elements (PGEs) began to rise in the 1990s, at about the same time Crown land that had been closed to staking began to come open (such as the Temagami area, which included the River Valley area). In the East Bull area, west of the Sudbury Basin, ground that had been controlled by Atomic Energy of Canada was opening up for staking.

There is now renewed interest in the assessment files for old, forgotten showings, and in the ownership of patented claims that had been granted generations ago.

At the same time, Falconbridge and Inco have begun to shed some of their non-core assets and have made innovative deals for properties. Juniors with land positions containing prospective geology have made deals with South African PGE producers who were looking to expand out of South Africa.

Geophysics can be very successful in a place like Sudbury, with its pervasive sulphide ores. Advances in geophysical techniques such as down-hole electromagnetics (UTEM) and audiomagnetic tellurics are being used to find new deposits. Advances in assaying techniques have lowered the cost of PGE assays leading to the resampling of old core and showings that had not been tested previously for PGEs.

John Royall, vice-president of business development for Pacific North West Capital, credits the provincial government’s prospectors grant program for his company’s move into the Sudbury area. Pacific’s acquisition of the River Valley property was a direct result of prospectors who were on government grants bringing their discoveries to Royall’s company.

These factors have combined to make Sudbury a very active exploration camp to the benefit of the mining industry in Ontario and around the world.

Many Successful Partnerships

Undoubtedly the most innovative deal in the camp has been struck between Inco and joint venture partners FNX Mining Co. (75%) and contract miner Dynatec Corp. (25%).

When Inco decided to vend some of its inactive and/or non-core assets, FNX was selected to make a deal for five formerly producing mines in the Sudbury Basin. FNX signed the Sudbury Joint Venture Agreement with Inco in January 2002. For the right to acquire 100% of the McCreedy West, Levack, Norman, Kirkwood and Victoria properties–all of which are former nickel-copper-platinum-palladium-gold producers–FNX must spend $30 million by May 2006 on exploration, and issue enough common shares of the company to give Inco 19.9% ownership of FNX.

In return, Inco can buy back 51% of any new deposit discovered by FNX that contains in excess of 600 million pounds of nickel equivalent by carrying FNX through to production, and it has the right to process the ore and market the nickel and copper.

The deal brings FNX’s exploration expertise (president Terry McGibbon is former director of exploration for Inco) together with Dynatec’s mining know-how. In addition Inco provided the joint venture with over $120 million in surface infrastructure and underground development and a digital database containing over 8,000 boreholes with logs and assays, and it has seconded an exploration manager to maximize the effectiveness of the exploration program.

FNX is currently spending about $2 million per month on exploration. Up to November 2002, 13 surface drill rigs had completed 270,500 feet of drilling in 241 boreholes, and two underground rigs had completed 8,000 feet of drilling. UTEM geophysical surveys had been completed on 85 of the boreholes and around 12,000 samples had been submitted for assay. At this rate, FNX will have exceeded its $30-million expenditure commitment by late 2003, two-and-a-half years ahead of schedule.

Wallbridge Mining Co. Ltd. has been exploring for copper-nickel deposits in the Sudbury area since 1997. In 1999 it signed agreements with Falconbridge giving it the right to earn 50% interest in the Parkin, Frost Lake, Wisner and Sheppard and Frood-Stobie Northeast properties, and a 65% interest in the Creighton South property. The earn-in was completed in June 2001.

Wallbridge’s second major joint venture was signed in January 2002 with Lonmin Plc, a major producer of PGEs from South African operations. The joint venture covers 19 of Wallbridge’s wholly-owned properties in the Sudbury Intrusive Complex (SIC) and obliges Lonmin to spend US$4.5 million in the first two years of the agreement. Lonmin can eventually earn up to 65% interest. The exploration budget for the joint venture in 2002 was US$4.1 million, with US$1.5 million of that allocated to the Windy Lake project.

The Windy Lake property, on the North Range of the SIC, was withdrawn from staking in 1917, but in 2001 Wallbridge obtained an Exploratory Licence of Occupation covering all the land under the lake. The property covers 4.8 linear kilometres of the SIC contact.

Drilling in 2002 indicated the presence of a large embayment structure that is open to the east, south and southwest. Wallbridge will place an additional seven drill rigs on the lake this winter to maximize information-gathering while the lake is frozen over.

Consolidated Venturex Holdings Ltd. is earning a 50% interest in four Inco properties on the North Range of the SIC. Prospecting and mapping by Venturex has focused on known geophysical anomalies and mineralization followed by four diamond drill holes and down-hole geophysics. Anomalous or low values of base metals and PGEs were intersected.

On its 100%-owned Dension property east of the Worthington dike in the southwest part of the SIC, Consolidated Venturex completed IP and magnetometer surveys in the vicinity of surface mineralization, followed by a five-hole diamond drilling program in the summer of 2002. Low copper and nickel and anomalous values of platinum, palladium and gold were intersected.

Tearlach Resources Ltd. has been conducting exploration on its Mystery offset dike property. The property was originally patented in 1890; ownership changed hands in 1912 and the property went into a family trust. Local prospector Tom Poupore, the driving force behind the acquisition, tracked down the beneficiaries of the trust in the United States, after researching the assessment files and following up on information from the local tax office.

Located to the west of the Worthington offset dike, the property contains a newly-discovered offset dike parallel to known diabase dikes. Eleven shallow drill holes last year tested the down-dip extension of a 200-m-long mineralized envelope found in the core of a quartz diorite offset dike. The drilling intersected low values of copper, nickel and precious metals. The company plans to probe the mineralized area with UTEM down-hole geophysics.

Aurora Platinum Corp. can earn 60% interest in the Foy and Footwall properties from Falconbridge by spending $6 million over three years. The Foy property, on the North Range, covers 10.5 km of strike length along the Foy offset dike.

The best potential on the Footwall property is the possible down-dip extensions of mineralization from the past-producing Falconbridge, Falconbridge East and Cryderman mines. Drilling to test down-hole geophysical targets commenced in September. At the same time a review of data from the past-producing mines confirmed the presence of unmined ore. Potential also exists between the Falconbridge and Garson mines, an area that has seen little past exploration but is known to host seven mineralized shoots.

Aurora can earn 60% interest in Inco’s Nickel Lake property along the North Range where drillin
g last spring intersected sulphide mineralization 400 m below Nickel Lake. Mineralization is open in all directions and the company will continue investigating its initial discovery.

Farther afield, Pacific North West Capital Corp. has two projects of note. The River Valley project, about 50 km northeast of Sudbury, covers most of the contact of the River Valley layered mafic intrusive.

Following the recently-completed Phase V drill program, the company announced measured and indicated resources of 825,900 ounces of palladium, platinum and gold in 18.053 million tonnes of ore and an additional 200,600 ounces of palladium, platinum and gold in 5.382 million tonnes of ore in the inferred category. As a result the joint venture partner, South African-based Anglo American Platinum Corp. Ltd., which is the world’s leading PGE producer, approved a $5.3-million Phase VI exploration program on the property.

Anglo Platinum and Pacific North West Capital each hold a 50% interest in the River Valley project. Anglo may earn 60% by completing a feasibility study and 65% by funding the project through to production. Including the 2003 budget, Anglo Platinum will have provided $12 million in funding.

Agnew Lake 60 km west of Sudbury is Pacific North West’s other project. It is earning a 50% interest from Platinum Group Metals Inc. which holds 15 km of prospective PGE ground along the Agnew Lake intrusion. Concurrently, Anglo Platinum can earn a 49.5% interest in the entire property from Pacific North West and Platinum Group Metals by spending $6 million by the end of 2004 or can earn 60% by bringing the project into production.

One of the first companies to stir up renewed interest in the Sudbury area was Mustang Minerals Corp. South African-based Impala Platinum Holdings Ltd. (Implats), can earn 60% interest in Mustang’s River Valley project by funding $6 million in exploration by the end of 2004 and paying $255,000 by the end of 2003. Implats is the world’s second largest primary producer of PGEs.

At its East Bull Lake project, 80 km west of Sudbury, Mustang has explored the East Bull Lake gabbro-anorthosite layered intrusion for PGEs since 1998. Falconbridge had an option to earn 50% interest in the property, but withdrew from the project in September 2002.

Ursa Major Minerals Inc. is searching for PGEs on the Shakespeare property 20 km west of the Sudbury Basin. It can earn 75% interest in the property from Falconbridge to add to its 100% interest in an adjoining 116-claim-block property.

In October the company confirmed the presence of near-surface mineralization in a newly-discovered mineralized zone after completing seven drill holes.

Montreal-based Namex Explorations Inc. entered the Sudbury exploration play in June 2002 with the acquisition of the Post Creek and the Woods Creek properties.

The little-explored Woods Creek property, about 50 km west of Sudbury, contains a Nipissing diabase known to host copper-nickel-cobalt-PGE mineralization. This target is similar to the mineralization encountered by Ursa Major.

The Post Creek property, about 30 km north-northeast of Sudbury in Parkin Township, is thought to be on strike with the Whistle offset dike that hosted Inco’s Whistle open pit mine.

George Werniuk (werniuk@cs.com) is a Toronto-based geologist and freelance writer.

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