Hot Prospects (February 01, 2009)

Our world-class geologists are unravelling the secrets of Canada’s Ring of Fire, an area near McFaulds Lake in the James Bay Lowlands of Ontario. They are finding hints that may lead to a new generation of base metal, platinum and diamond mines. The potential is almost unprecedented.

Many geologists express their high hopes for the James Bay Lowlands by drawing comparisons to the Kidd Creek discovery made in the mid-1960s near Timmins, Ont. Both regions have favourable Archean greenstone belts. Moreover, McFaulds Lake is the site of numerous ultramafic intrusions. It is home to various types of sulphide deposits, some with promising copper-zinc values, others with nickel-copper-platinum group values, plus kimberlites, some of which have proven to be diamondiferous.

McFaulds Lake lies roughly 600 km northeast of Thunder Bay and 250 km west of James Bay. The terrain is typically muskeg and gravel left behind by the last glaciation.DeBeers Canada began exploring the region for diamonds in the mid-1990s. One of its projects farther east has become the Victor diamond mine, but the company chose not to continue its efforts in the Ring of Fire. Other explorers, however, are finding a wealth of metal deposits and k imb e r l i t e s missed over a decade ago.

There are a large number of juniors active in the James Bay Lowlands, and keeping track of them all could be a full-time job, particularly in light of the complex and overlying ownerships, joint ventures and option agreements that cover the properties.

Here, however, are a few of the more advanced projects and active companies.

Noront Resources of Toronto is a leader in the Ring of Fire. It began acquiring land in 2003, and only four years later discovered the Eagle One deposit that contains high-grade nickel-copper-platinum-palladium mineralization. Success for Noront comes in twos. The Eagle Two deposit was soon outlined (hence the name Double Eagle project), and a pair of high-grade chromite discoveries, Blackbird One and Blackbird Two, were soon made.

Noront describes Eagle One as having a massive sulphide core with high-grade Ni-Cu-PGE values. The core is surrounded by lower grade, net-textured sulphides. The deposit is surrounded by older felsic intrusive rocks at surface, and logic dictates that it must continue at depth, says Noront. When the company drilled below Eagle One last fall, it encountered 28.5 m of new copper- nickel sulphide mineralization.

In October 2008, the company announced the findings of a preliminary economic assessment (PEA) of the Eagle One deposit as a source of direct-shipping ore. The minable portion of the Eagle One deposit was estimated to contain indicated resources of 1.86 million tonnes averaging 1.74% Ni, 1.03% Cu, 0.14 g/t Au, 0.97 g/t Pt, 3.45 g/t Pd and 3.30 g/t Ag. In the inferred category the estimate is 1.11 million tonnes grading 2.16% Ni, 1.12% Cu, 0.12 g/t Au, 1.22 g/t Pt, 4.01 g/t Pd and 3.70 g/t Ag. The mineralization is between 90% and 95% in the disseminated sulphides and the balance is massive sulphides.

The potential of the area keeps growing. Noront has drilled promising grades at Eagle Two, including 10.2 m that assayed 0.37% Ni, 0.47% Cu and 0.23 g/t Pt+Pd+Au. A separate hole intersected 2.4 m that averaged 0.53% Ni, 0.94T Cu and 0.35 g/t Pt+Pd+Au. Three recent holes drilled at the AT12 anomaly revealed encouraging mineralization over broad intervals: 122.9 m of 0.56% Ni, 0.29% Cu plus precious metals, 122.9 m of 0.35% Ni, 0.10% Cu plus precious metals, and 74.1 m at 0.41% Ni, 0.13% Cu plus precious metals. New assay results were also received earlier this year from the Eagle Two deposit. Two separate holes there intersected 10.2 m of 0.37% Ni, 0.47% Cu plus precious metals and 2.4 m of 0.53% Ni, 0.94% Cu plus precious metals.

Nor is the Double Eagle project; the only one Noront has on the go. It is actively drilling the Blackbird One and Blackbird Two chromite deposits that lie close to the Eagle One and Two deposits. The latest drill results from those targets included 36.2 m averaging 39.33% Cr₂O₃, 26.9% Cr and 12.22% Fe, making a Cr-to-Fe ratio of 2.2: 1.0. Again the mineralization consists of both massive and disseminated sulphides.

Two names frequently spoken in the same breath are KWG Resources of Montreal and Spider Resources of Toronto. The two companies share several projects and joint ventures in the Mc- Faulds Lake region. Their Big Daddy chromite discovery is generating a great deal of interest. KWG and Spider have formed a joint venture that may earn a 65% interest in claims that belong to Freewest Resources of Montreal. The claims are located 3.8 km east-northeast of Noront’s Double Eagle project.

The initial discovery was reported in March 2006. Drilling the upper layer of the massive chromite mineralization returned assays of 22.70% Cr, 0.17 g/t Pt and 0.24 g/t Pd over 1.05 m. The lower layer assayed 23.70% Cr, 0.21 g/t Pt and 0.46 g/t Pd over 0.60 m.

Success continues at Big Daddy. The latest assays returned values of 36.30% Cr₂O₃ over 10.50 m followed by a 3.40- m-wide section that averaged 2.21 g/t Pt and 2.15 g/t Pd. Moreover, KWG says the massive chromite bed or beds con-of tinue for at least 100 m to the northeast. Both disseminated and semi-massive chromite occurrences have been noted. Preliminary metallurgical testing indicates that a gravity/flotation plant could produce a concentrate suitable for 98% the world’s ferrochrome makers.

Based on the promise of the Big Daddy deposit in late January, Cliffs Natural Resources of Cleveland, Ohio, purchased a 19.9% stake in KWG. Cliffs is an iron and coal producer with mines in Latin America, the Asia-Pacific region and North America, including a 26.8% share in the Wabush iron ore mine in Labrador.

Another joint venture of KWG and Spider at the Macfadyen property that belongs to Freewest is seeking diamonds. These claims have been tested since 1994, and five kimberlitic occurrences have been catalogued. Of them, the Good Friday Kimberlite is known to be diamondiferous; the first diamonds were recovered in 2004. Samples taken in 2007 were tested and an indicated diamond content of 46.15 carats per hundred tonnes (cpht) reported. Two white, transparent, clean and partly translucent stones were recovered, one weighing 0.425 ct and the other 0.115 ct.

Another company looking for dia- monds in the James Bay Lowlands is Metalex Ventures of Kelowna, BC. It has a 60% contributing interest in the Big Red joint venture and a 50% interest in the Dumont joint venture in the vicinity of Attawapiskat, and a 91.5% working interest in the T1 Kimberlite, in a cluster of kimberlites at Kyle Lake in the Ring of Fire. Metalex shares these projects with Arctic Star Diamond Corp. of Vancouver and Kel-Ex Development of Kelowna.

Of particular interest lately has been the James Bay Lowland property, including the 5.01 zinc-silver discovery, of Metalex and Arctic Star. White Pine Resources of Toronto can earn a 50% interest by spending $20 million on exploration over four years. So far the high-grade zone has been delineated over a north-south strike length of 200 m and to a vertical depth of 275 m. The zone reaches widths of up to 22 m. White Pine reports that recent drilling intersected a length of 19.30 m that assayed 10.02% Zn and 41.50 g/t Ag as well as 0.10% Cu and 1.85% Pb.

The list of companies active in the James Bay Lowlands just keeps growing. If the tremendous potential of the region can be proved, there will be more than one new mine in Canada’s Ring of Fire.