Lowlands yields more sulphides (April 28, 2003)

Vancouver — The first two holes drilled by Spider Resources (SPQ-V) and partner KWG Resources have confirmed the presence of base metal sulphides on the newly dubbed McFauld’s Lake property in the western portion of the James Bay Lowlands of northeastern Ontario.

The drill program followed up on encouraging sulphide mineralization cut by De Beers in 2002. The diamond explorer inadvertently hit base metal mineralization while drill-testing 13 diamond targets at the Spider 3 project.

One of the reverse-circulation (RC) holes intersected an 8-metre sulphide section of intermediate-to-mafic volcanics running 1.61% copper, 0.34% zinc and 0.13% lead, plus 0.13 gram gold and 9.9 grams silver per tonne, at the bottom of the hole. The 8-metre section included half a metre of 7.09% copper, 4.67% zinc, 2.68% lead, 0.76 gram gold and 150.6 grams silver.

The first hole of the latest program was drilled to the northwest and intersected mineralized mafic-to-intermediate metavolcanics over a 29-metre interval. Two sections of semi-massive sulphide material were hit; one is rich in chalcopyrite, the other in sphalerite. The copper zone ran 1.43% over 8.9 metres, while the zinc zone averaged 1.79% over 4.7 metres.

The second hole was collared to the southeast, and a number of samples returned overlimit values of more than 1% copper and zinc, which demanded further analytical work. Results released later showed the copper zone averaged 0.53% copper over an intersection 12.3 metres long. The zinc-rich section was 5.35 metres long, and it averaged 5.45% zinc. Complete results are expected before mid-month.

So far, six holes totalling 1,314 metres have been completed, and based on the available results, the sulphide body appears to strike to 65, dips 78 to the northwest, and plunges steeply to the northeast. Limited geophysics suggests a 250-metre-strike-length, near-surface body with the main part of the sulphide zone lying down-plunge.

The Spider 3 project covers a 70-by-180-km area of interest 150 km west of De Beers’ advanced-stage Victor diamond project in the Attawapiskat region.

Joint ownership

Spider 3 is held jointly by Spider Resources, with a 49% interest, and KWG, with 51%. Between 1995 and 1997, the pair spent a total of $1.4 million on regional mapping and heavy-mineral sampling, in addition to a widely spaced low-level aeromagnetic survey. The geochemical samples were analyzed for kimberlite indicator minerals, as well as multi-element suites.

In April 2000, De Beers signed a confidentiality agreement with the pair and undertook a due diligence investigation that identified more than 20 priority diamond targets in the area of interest. Before signing a formal agreement nearly a year later, De Beers staked those targets and created the property base for the joint venture.

Over the summer of 2001, De Beers explored the Spider 3 properties with low-level magnetic and electromagnetic helicopter-borne surveys, while conducting regional mapping and geochemical sampling. The company mobilized a RC rig to the property in March 2002 and drilled 13 targets without intersecting any kimberlite. De Beers, which had met its earn-in obligations for a half-interest in Spider 3, then handed the discovery over to Spider and KWG in exchange for a royalty interest.

Spider and KWG proceeded to stake a substantial land package around the discovery, and then launched a down-hole electromagnetic geophysical survey. Deep diamond drilling will follow.

Diagem International Resource (DGM-V) is a major shareholder of KWG, with a 38.9% stake.