JUNIOR MINING — Bright outlook for N.W.T. exploration

Exploration activity may be on the wane in most parts of Canada, but not in the Northwest Territories. Canada’s North has been abuzz with activity in recent years, although much of it relates to significant diamond discoveries in the Lac de Gras region.

Diamonds, however, are not the only commodity providing excitement. Juniors and majors alike are taking renewed interest in under-explored regions previously identified as being prospective for significant gold and base metal deposits.

A case in point is the Izok Lake zinc-copper deposit, some 260 km south of Coppermine on Coronation Gulf, which was discovered by Texasgulf in the 1970s. Minnova, a unit of Metall Mining (TSE), reactivated the project more than a year ago. After completing infill and exploration drilling, the company reported probable reserves of 12.3 million tonnes grading 14.6% zinc, 2.5% copper, 1.6% lead and 77.7 grams silver per tonne, with another 1.3 million tonnes in the possible category.

Metall acquired Izok Lake through its recent merger with Minnova and is pushing to increase reserves this year to between 15 and 20 million tonnes. The program will include more drilling on the Inukshuk deposit, a recent discovery estimated to contain geological reserves of two million tonnes. The Minnova merger also provides Metall with exposure to two smaller massive sulphide deposits, Hood and Gondor, as well as a geologically prospective land package.

Activity in this region is being spurred by a proposal to build a shipping port at Coronation Gulf. Mining companies support this infrastructure initiative, which would open up greenstone belts that already host undeveloped gold and base metal deposits.

Earlier this year, Minnova agreed to earn a 60% interest in two properties held by Continental Pacific Resources (VSE) in the Anialik-High Lake mineral belts adjacent to Coronation Gulf. This $5-million option agreement covers two zinc-copper discoveries, the Rush and Run deposits.

Continental Pacific also plans to explore its discoveries nearby. Targets include polymetallic deposits with high precious metal content and shear-related gold deposits.

No list of promising targets would be complete without mentioning the High River project being explored by Aber Resources (TSE) and Kennecott. The property is a mere 25 miles from the coast. A limited program several decades ago outlined five million tons grading 3.5% copper, 2.5% zinc and 0.023 oz. gold per ton (0.79 grams per tonne) in two zones. Some drilling took place in 1992 and more work is expected this season.

Work will also be done this year on the Hackett River deposit, owned 54% by Cominco (TSE) and 46% by Etruscan Enterprises (VSE). A recent agreement allows Etruscan to operate the project provided it spends at least $400,000 annually and Cominco approves the arrangement.

Cominco worked the property in the early 1980s and outlined indicated and inferred reserves totalling 19.6 million tons (17.8 million tonnes) at 3.6% copper, 1.05% lead, 6.7% zinc, 0.01 oz. gold and 5.7 oz. silver per ton (0.34 grams gold and 195.5 grams silver per tonne). Hackett River is north of the two base metal properties — Yava (Westmin Resources and Conwest) and Musk (Noranda), each with about one million tons (about 910,000 tonnes). Etruscan has had considerable success raising funds for a drilling program. But the focus has broadened to include exploration for possible kimberlite pipes, as the Hackett River property is within an area of interest for diamond exploration. As an added bonus, the property is also near the George Lake and Goose Lake gold discoveries being explored by Homestake Mining (NYSE).

Homestake is planning more work this summer in the Back River area. About $25 million has been spent so far on the George Lake deposit, a joint venture with Kerr-McGee. This project has an undiluted inventory last reported as 3.4 million tons grading 0.25 oz. gold (3.1 million tonnes at 8.6 grams gold) in five deposits along the limb of an oxide facies iron formation. No resource has yet been announced for the more recent Goose Lake iron formation discovery. However, that has not prevented a staking rush by junior companies anxious to tie up ground nearby.

Kalahari Resources (VSE) has been one of the most active, picking up considerable ground in the region. This summer, the junior plans to explore its land package to outline areas prospective for gold, base metals and even diamonds. Lumina Investments (VSE) also has considerable ground in this region.

Although better known for its diamond venture, BHP Minerals is active on several gold projects in the Northwest Territories. These include the Ulu claims in the High Lake belt, where a gold deposit has been outlined. No reserve estimate has yet been released for this project; however, BHP appears to be bullish. “We like this project very much,” North American exploration manager Hugo Dummett told The Northern Miner earlier this year. South Atlantic Ventures (VSE) recently staked 210,000 acres around BHP’s Spyder Lake gold property, a more recent discovery east of Ulu. Cumberland Resources (VSE) also acquired some properties in the Northwest Territories this year. The gold and base metal properties acquired from Asamera Minerals include 60% of the Meadowbank gold property (60 miles north of Baker Lake) and the Meliadine River project (16 miles north of Rankin Inlet). Both are iron-

formation-type discoveries with some tonnages outlined by previous drilling. No drilling has been done on the Parker Lake project, 60 miles southeast of Baker Lake; however, Cumberland considers a volcanic belt in this region to be prospective for massive sulphide deposits.

Activity in the North isn’t confined to regions that will stand to benefit from the Coronation Gulf shipping initiative. About 300 miles west of Yellowknife, San Andreas Resources (VSE) is continuing to explore its Prairie Creek property. The project was developed into a silver mine in the early 1980s, only to be aborted months before production because of financing difficulties. Before recent work began, reserves were stated at two million tons (1.8 million tonnes) grading 11.8% zinc, 10.8% lead, 0.42% copper and 5.3 oz. silver per ton (181.7 grams silver per tonne) in a steeply dipping vein.

More recent exploration resulted in the discovery of a distinct form of mineralization categorized as Mississippi Valley-type, which the company says has “obvious tonnage implications.” Ongoing drilling is aimed at testing the continuity of this stratabound mineralization.