Increased exploration in northern Saskatchewan

Mineral exploration expenditures in northern Saskatchewan will reach $55 million in 1987, with $18 million to uranium, $2.3 million to base metals and $34.5 million to precious metals. Exploration expenditures on precious metals will surpass and be close to double those on uranium for the first time in Saskatchewan’s history. Expenditures on gold have doubled each year since 1984.

Sixty junior companies have provided much of the driving force behind this increase in precious metal exploration. Saskatchewan offers the junior company ample opportunity because historically gold exploration has been extremely limited and thereby the region, known to contain gold showings, likely has significant undeveloped potential.

Golden Rule Resources, Energy Reserves Canada, Starrex Mining Corp., Waddy Lake Resources, and the Saskatchewan Mining Development Corporation(SMDC), were among the first to give gold exploration a new and successful direction, beginning in 1980.

This was first evident in the La Ronge Domain and gathered momentum after the provincial government repealed, in 1982, the Crown Equity Participation Program. New roads, mostly constructed during the uranium boom, allow work to proceed at a modest cost in many areas.

The Saskatchewan Mineral Industry Recovery Program 1984 formulated a mineral development incentives package comprising tax benefits, regulatory changes and a 5-year federal-provincial geoscience support program.

The Crown mineral royalties covering all minerals except uranium have been revised in a manner designed to enable companies to recover most of their capital costs before being subject to royalty payments. The provincial stock savings plan offers tax credits for purchasing eligible shares. Junior companies benefit from these changes.

The Starrex Mining Corp./ SMDC joint venture first reported its 21 zone find inside the Star Lake intrusion in August, 1983. This find is now a

Mahogany Minerals Resources made a similar find close by in 1984 within the same intrusion.

These two finds clearly demonstrate that high grade, free milling gold occurs in mineable tonnages within the granodiorite plutons cutting meta-volcanic rocks of the La Ronge Domain. High assay values are quite common and very significantly enhance the value of any mineral property where they occur.

The EP (Partridge) zone is at the apex of an anomalous glacial dispersion fan grading 34.3 g gold per ton (1 oz/ton), in some sections. Golden Rule a Resources has reported a 23 m, high grade intersection containing 13 g gold s per ton (0.38 oz), and including a 3 m section of 59.4 g (1.73 oz), from the Tower East joint venture.

SMDC recently announced a 13.5 m intersection grading 7.8 g gold per ton (0.23 oz), and including a 2 m section of 25.79 g (0.75 oz), from the Oven Lake joint venture. The Oven and Tower East properties both lie on the Byers Fault, which has considerable untested potential for gold mineralization.

High grade gold values may be widespread within the Lynn Lake- Flin Flon-La Ronge triangle. The Vista Mines’ Rio zone property close to Flin Flon has mineable high grade pods. Placer Development reported a high grade hole from its more isolated Seabee property in the Glennie Lake Domain which cut a true width of 7.9 m averaging 17.4 g gold (0.51 oz), and included a 2.1 m true width section grading 14.75 g (0.43 oz).1

Junior companies were instrumental in attracting majors into Saskatchewan precious metal exploration and property development.j

In an agreement with Claude Resources with respect to its Seabee property, Placer Development agreed to make a “– $3 million pre-production recoverable cash advance to Claude, of which $2 million can be converted to a 10% a interest in the property and $1 million, including interest can be recovered from production proceeds. Placer can earn an additional 45% interest in the property by spending $2.5 million, ($1 million committed in the first 12 months), completing a final bankable feasibility study before July, 1988, and spending the funds necessary to take Seabee to commercial production. Placer shall recover Claude’s share of the project’s capital costs from the proceeds of production and thereafter Placer/Claude are 55%-45% partners in the Seabee operation.”

Placer started work on an exploration decline in April, 1987.

At the Jolu property (Rod zone), Royex Gold Mining Corp. now has a 30% interest and is the operator; Phase 1 of a decline designed to outline 250,000 tons of ore to the 250 m level has been completed. The company plans to mine these reserves over a 2-year period using the decline as a haulage ramp as at Star Lake.

The boom in gold exploration has led to a better understanding of the geological controls of gold deposition. The 21 zone is an auriferous quartz lens contained within a ductile shear zone which includes pyritic mylonitized mafic dykes.

The Rod zone is similarly structurally controlled and contains pyrite and pyrrhotite, but although mafic dykes do occur close to the Rod shear zone they are not found in it. The 21 and Rod zones lie within the compositionally zoned Star Lake pluton.

The gold in the Tower East deposit is in sheared and altered granodiorite quartz eye porphyry which intrudes metavolcanic rocks adjacent to the Byers Fault.

In the Glennie Lake Domain, at Seabee, auriferous quartz-tourmaline veins s gabbroic complex. Flin Flon area gold mineralization is found in a wide range of different environments such as the late Rio Fault, a rhyolite dome or in shear zone controlled quartz veins.

Exploration expenditures in northern Saskatchewan for platinum group elements (pge), or combined gold and pge, will reach $4 million in 1987.

In the Peter Lake Domain, which contains layered ultramafic complexes, exploration for pge is still in a preliminary stage and may require several years of effort. Tyler Resources is the only active company in this area.

Junior companies including the Kasner Group, Colchis Resources, and Athabaska Gold have developed an exciting new play in the Beaverlodge region guided by an exploration model involving the same processes which resulted in the formation of the Athabasca Basin unconformity uranium deposits.

A similarity between gold and pge mineralization at the former Nicholson uranium mine and the former Coronation Hill uranium mine in Australia has been noted by Dr I. Mason.

A 1987 diamond drill hole on the Nicholson No 2 zone cut a 6.86 m section of 16.29 g gold (0.475 oz), 1.82 g (.053 oz) platinum and 6.45 g (0.188 oz) platinum which included a 0.76 m section of 110.1 g (3.21 oz) gold, 15.09 g (0.44 oz) platinum and 54.54 g (1.59 oz) palladium.

The Nicholson property is comparable to Fish Hook Bay where gold and platinum mineralization is associated with narrow carbonate, g hematite/specularite veins in ferruginous, commonly cherty, impure dolomite e close to an ultramafic intrusion.u

The potential for gold and platinum mineralization does exist in northern Saskatchewan. Junior companies have played an active role in starting, a promoting and developing the precious metal exploration play in northern r Saskatchewan.

The potential for further development and discovery of gold and pge mineralization is promising. Dr Gracie, holder of a PhD in geology from the University of Reading, is r resident geologist in La Ronge, Sask., at the Saskatchewan Precambrian e Geological Laboratory.