Fortune drilling program ignites land play in Northwest Territories

Another area play is under way, this time in the Mazenod Lake area, about 170 km northwest of Yellowknife, N.W.T.

Fortune Minerals (CDN) is the centre of attention as it completes its drill program at the Nico prospect, where it is exploring for mineralization resembling the Olympic Dam deposit in Australia.

Olympic Dam-style mineral deposits are zones of brecciation with abundant iron oxides (either hematite or magnetite) and associated copper, cobalt, uranium, and precious metals. The host rocks are volcanic rocks and clastic sediments.

Fortune Minerals came to the area following a Geological Survey of Canada (GSC) project that assessed the area’s potential for this kind of deposit.

Conscious that the deposits often have magnetite and potassium-bearing alteration minerals, the GSC also flew magnetic and radiometric surveys to detect these minerals. A large anomaly on the GSC maps caught Fortune’s attention, and the company picked up ground in the area. It subsequently found several surface showings on the property, including copper, cobalt, bismuth, and gold. One of the Nico showings, the Summit Peak zone, also had tungsten mineralization.

Fortune’s program of 10 diamond drill holes, just completed, started a stock play, with Fortune shares touching $40 on May 7. The company is awaiting assay results on the drill cores, which are expected in 3-4 weeks. The turnaround time is unusually long, but the company may be intending to announce all results at once. There may also be long mineralized intersections to sample, which would require additional field time.

Visible mineralization in the drill cores from the Bowl zone at Nico appears to be a tabular-shaped body at least 137 metres thick, over a 200-metre strike length and about 100 metres wide. Mineralization intersected in drill holes at Summit Peak is reported to be “similar to surface exposures,” which had grades of up to 9.44% copper and 0.47% tungsten.

Last March, Fortune concluded an agreement with Noranda (TSE) to earn a 50% interest in the Sue-Dianne property, 25 km northwest of the Nico property.

Fortune has work planned for this property too, where exploration over the years 1978 to 1989 established a drill-indicated resource of 8 million tonnes grading 0.8% copper, with accessory gold, silver and uranium. The deal with Noranda allows the major company to earn into the Nico property if Fortune completes its earn-in on Noranda’s ground.

Along with Fortune, the principal holder of claims in the area is the joint venture of Avalon Ventures (VSE) and Starcore Resources (VSE). Avalon holds some properties under option from Fortune adjacent to the Nico property, and both companies have properties held in joint ventures with Dragon Gem (VSE), Tyranex Gold (CDN), Broadwater Development (VSE) and Alto Resources.

Avalon’s search is being guided mainly by the geophysical signatures of the mineralization. “The GSC survey was the key event to focus attention on the area,” says Donald Bubar, Avalon’s president. “You don’t need to be a geologist to recognize the [geophysical] anomaly — it’s a big thumbprint.” GMD Resources (VSE) has a joint venture with Fortune about 10 km northeast of the Nico prospect and also holds a property covering the Rayrock mine, a former uranium producer 12 km southeast of Nico.

WMC International is completing an agreement with Moss Resources (TSE) covering its 127-sq.-km property near Mazenod Lake. Two mineralized showings are on the property, both near the eastern shore of the lake.

The agreement gives Moss an option to earn a 100% interest, with WMC reserving the right to buy back 60% by reimbursing 80% of Moss’s expenditures. Moss plans to start work on the property shortly, and has proposed to finance the work with an issue of 1 million units, each consisting of one share and one purchase warrant, at $1.25 per unit. The warrants would be exercisable for one year at $1.35.

Gregor Goldfields (CDN) has also been active in tying up a ground position, taking options on two properties. Both are crossed by faults parallel to the structures hosting the Nico and Sue-Dianne mineralization.

One, the Hislop Lake property, is a 21-sq.-km land package about 9 km west of the Nico prospect, which was optioned for $10,000 cash and 75,000 shares.

Half of a 2% net smelter return retained by the vendors can be bought back for $1 million.

Gregor’s other property, at the southern end of Mazenod Lake, 10 km northwest of Hislop Lake, comprises 20 sq. km and has been optioned for $15,000 cash and 100,000 shares, with a 2% net smelter return and a similar buy-back arrangement.

To earn its interests, Gregor must incur $100,000 in exploration expenses on each property over three years, including $25,000 on each in the first year.

The company has contracted for line-cutting and geophysical surveys.

Two Montreal-listed companies — Consolidated Oasis Resources and Orient Resources — have secured a land package on the Emile River, about 15 km southeast of Nico and 5 km northeast of the old Rayrock mine. The vendor retains a 2% net smelter return and will receive $6,000 cash, 40,000 shares of Oasis and 50,000 shares of Orient.

The land package is on the southeastern margin of the magnetic anomaly that also covers the Nico prospect. A grab sample from the property had a copper concentration of 528 parts per million, plus 4.6 grams gold and 0.6 gram silver per tonne.

Storimin Exploration (ASE) is taking the regional view — it has concluded an agreement to buy out a private company that holds a land package covering 120 km of the regional geological trend, northwest from Mazenod Lake. The private company had already undertaken an airborne magnetic survey, and Storimin says there are “numerous anomalies” to be checked out.

Other companies with holdings in the area include SouthernEra Resources (TSE), Noront Resources (VSE), Hawkeye Gold (VSE) and Corum Resources (VSE).