Drilling resumes at Voisey Bay

Drilling has resumed at the Voisey Bay project in Labrador, a nickel-copper-discovery described by mining analysts as one of the most significant Canadian base metal discoveries of recent times.

The discovery, held by Diamond Fields Resources (TSE), sparked a staking rush that attracted not only the usual flock of junior companies but also several majors, including Cominco (TSE) and Noranda (TSE). At least 20 major companies are reported to have expressed interest in the project, and speculation is that this list includes nickel producers such as Falconbridge (TSE) and Inco (TSE).

“We’re watching, but not doing anything yet,” Falconbridge President Frank Pickard recently told a group of Toronto mining analysts.

Toronto mining analyst Jonathan Challis of C.M. Oliver says

back-of-the-envelope estimates are that Voisey Bay contains a potential resource of 30 million tonnes, although he cautioned that much more drilling needs to be done to define the deposit. “That is the general feeling, and few would argue that at least 10 million tonnes (of the total) is reasonably defined,” Challis said. “There is also potential on the company’s other claims.”

Diamond Fields has a shareholders’ rights protection plan; nevertheless, one of its largest shareholders, Co-chairman Robert Friedland, has indicated that the project will likely end up being developed by a major mining company. Even so, sources close to Friedland predict that he may want to complete a feasibility study before vending the project or taking on a joint-venture partner.

Diamond Fields’ work had been interrupted by a protest involving members of the Innu Nation. The Innu and the Labrador Inuit Association both have land claims in the region.

The Innu intend to continue their protest, even though drilling has resumed. But the Inuit Association is not opposing the work program, and about half the work crew on site are from nearby Inuit communities.

The drilling is being managed by Archean Resources and its principals — Albert Chislett and Chris Verbiski, Newfoundland-based prospectors credited with the discovery of the Voisey Bay deposit.

Diamond Fields has tabled a proposal with both the Innu and the Inuit communities for the establishment of an exploration review committee which would provide for better communication between the company and aboriginal groups.

The company is also taking steps to ensure that drilling does not disturb any possible site of cultural or archaeological significance. A

ground-penetrating survey is being carried out, and results will be made available for study.