Linear Metals drills moly discovery at KM61

Armstrong, Ont. – If there is one character trait that a geologist must have, it is perseverance, and Matt Rees, chief geologist of Linear Metals (LRM-T), certainly possesses this quality. Without the ability to “stick to it”, he would not have managed to define a large zone mineralized with molybdenum here, north of Lake Nipigon in northernwestern Ontario. And after exploring and drilling the property since 2002, he feels he knows pretty well what Linear Metals controls here: a large molybdenum project with at least tens of millions of tonnes at, or near, surface, typically grading 0.05% to 0.07% molybdenum.

Linear Metals characterizes the project as a porphyry system, with disseminated and stockwork-hosted molybdenum mineralization. The mineralized zone has a strike length of about 1,500-1,600 metres, width of 300-350 metres, and typical thicknesses of 100 to 300 metres. Bordering the higher-grade zones, there are zones of up to 150 metres’ width with sub- 0.04% molybdenum mineralization. Some of the mineralization is open at depth, and Linear is drilling three deep holes (600 metres each) to test depth extension.

The outcrop pointing to the existence of porphyry rock at the KM61 project, named so for its location, 61 km by road east-northeast of Armstrong, was discovered in 2002 by Stephen and Michael Stares. Since then, Rees stuck with the discovery, proceeding through several rounds of exploration, until the mineralization could be defined. A National Instrument 43-101 resource estimate is due in 2008, and a scoping study in 2009.

The project was optioned to Noranda (later Falconbridge, eventually taken over by Xstrata [XTA-L]) in 2003, until it was returned to Linear Metals in 2006. Noranda-Falconbridge tested a 1,200 by 600 metre block, drilling 3,200 metres. After the project was returned to Linear Metals, the company completed an initial 4,000 metres of drilling, followed by a 25,000 metre drilling program which is close to completion. After a combined 32,000-33,000 metres of drilling in 105 holes, Rees and Linear’s president Brian MacEachen have a good idea of the molybdenum resource that the project sits on.

The property is located in the Caribou greenstone belt. A southwest portion of the belt wraps around a northwest end of a large composite felsic pluton in the property area. The property covers a 1 km by 7 km lensoid-shaped contact zone between the pluton to the south and metabasalts to the north.

The disseminated and vein-type molybdenite-chalcopyrite mineralization here is hosted by two northeast-trending, quartz monzonite porphyry dyke swarms and their flanking mafic metavolcanics. These porphyries and their wall rocks are extensively stock-worked with quartz and quartz-sulphide veins, and host-disseminated chalcopyrite and molybdenite.

Rees says that the property holds two types of rock: porphyries and mafic volcanics: “Cutting through the porphyry and through the mafic volcanics is quartz vein stockwork. Mineralization comes in the quartz vein stockwork. Mineralization also occurs disseminated in both rock types, the mafic volcanics and the porphyry.” He adds: “The quartz vein stockwork is really the key. Usually the quartz veins are not as big in the porphyry as they are in the mafics.”

There are several minerals that he is looking for: “The main minerals are molybdenite and chalcopyrite. The silver and copper are found in the chalcopyrite.” A number of drill cores have prominent solid veins with bluish metallic-looking molybdenite mineralization, and Rees knows from previous cores that these will have high grades of moly, around 0.1%, and sometimes higher. Lake dykes, also found in the core, are barren.

Rees says that the mineralization is associated with alteration: “In the mafic volcanics you get very intense biotite alteration, and also actinolite alteration. In the felsic porpyhry you get sericite alteration, and then it gets overprinted by biotite alteration.” He adds: “The key to the mineralization is the stockworking, but biotite alteration seems to be a prominent feature of the mineralization. The sericite concentrates mostly in the felsic phases in the porphyries, while the biotite can occur in both mafic volcanics and porphyries. The biotite seems to be the most critical.”

The mineralized zone, known as the main zone, has two extensions: the northeast extension and the southwest zone. The combined strike of the three zones is about 1,600 metres and is not completely closed off to the northeast. Within the strike length, there is a 100-metre section where mineralization has yet to be confirmed. In addition, the eastern half of the main zone and the entirety of the northeast extension are open at depth. In the centre of the main zone, two individual drill holes returned intersections totaling 300 metres (sum of several intersections) at an average grade higher than 0.05% molybdenum, plus silver and copper. Mineralization starts at or near surface.

Examples of long intersections highlighted by the company include hole 85, cutting about 297 metres cumulative thickness (the sum of seven intersections) of 0.061% molybdenum, 0.1% copper and 2.5 grams silver per tonne; hole 83, which intersected about 313 metres cumulative thickness (the sum of four intersections) of 0.051% molybdenum, 0.09% copper, and 2.8 grams silver per tonne; and hole 84, which returned 251 metres cumulative thickness (the sum of five intersections) of 0.07% molybdenum, 0.1% copper and 2.5 grams silver per tonne.

Not all intersections are as long as these three holes. For example, hole 76 returned about 103 metres cumulative thickness (the sum of three intersections) of 0.064% molybdenum, 0.08% copper and 2 grams silver per tonne; and hole 82 returned about 102 metres (in one intersection) of 0.053% molybdenum, 0.09% copper, and 2.9 grams silver per tonne. Meanwhile, hole 79 returned only 8 metres of mineralization.

Previous drilling on the main zone also returned shorter intercepts. In early July the company highlighted five holes with intersections of 90 metres to 206 metres cumulative thicknesses, grading 0.061%-0.079% molybdenum, plus copper and silver.

In addition to the long 0.05%-0.07% molybdenum intercepts typical of the main zone, there are five zones with short intercepts (10 to 50 metres) of about 0.1% molybdenum at or near surface (50-70 metres depth). MacEachen says that these high-grade areas should be mined first, to enhance project economics.

The site visit showed clearly how close the rock is to the surface. There are a number of outcrops, and, where the rock is covered, shallow trenching uncovers it. Initial metallurgical testwork is in progress, and moly recoveries will be reported once tests are completed. On a 10.5 km by 7.5 km land package, or 4,800 hectares, Linear’s claims cover a number of other prospective targets which have the potential to host mineralization, and geologists are investigating them this summer.

The three highest priority targets were discovered during an airborne geophysics survey using resistivity and induced polarization. Rees is looking for molybdenum in lake sediments, and one indication of possible mineralization is the presence of potassium-thorium anomalies, which may point to biotite or sericite alteration, and potential porphyry rock. So far, Linear has discovered two potassium-thorium anomalies, and will investigate them further.

Road and rail infrastructure in the area is good. A paved road, highway 527, leads from Thunder Bay north to the small town of Armstrong, a distance of about 250 km. The Jackfish road, an unpaved logging road, leads east-northeast from Armstrong, and a short bush road leads to the project from the 61 km sign on the Jackfish road. A 12 km logging road connects the project with the main CN railway line.

Currently there is no electric power in the area. However, the company says that Ontario Power Generation is planning to construct a generating station on the Jackfish river, which is scheduled for completion in 2014. This will make power available within 10 km of the property
. Should the project go into production earlier, diesel generators will have to be used.

The company rents space from a country inn, the McKenzie Lake Inn, a few km south of Armstrong on highway 527, and uses it as a base. The facility has accommodation, two saw shacks, two logging shacks, and core storage. Basic provisions, including fuel, are available at Armstrong, but any other supplies must be brought from Thunder Bay. A drillers’ camp, with mobile homes and a diesel generator, is located adjacent to the project.

To regulate relations with its aboriginal neighbours, Linear has signed a memorandum of understanding with the Whitesand Ojibway First Nation, located near Armstrong. In addition, it employs a number of First Nation people on the project.

Linear Metals holds a 100% interest in the KM61 property, subject to a 0.5% NSR royalty, half of which can be purchased for $250,000. Other areas of the property are subject to a 3% NSR royalty. (The mineralization discovered so far is in the area which is subject to a royalty of 0.5%.)

In addition to the KM61 project, Linear also holds the Cobre Grande polymetallic project in Oaxaca state in Mexico, which is in a similar stage of exploration, so Linear is planning to have two scoping studies in 2009. There are about $4 million in the treasury, and 46.8 million shares fully diluted.