New nickel showing at Powderhorn Lake

Road construction for logging has enabled a prospecting syndicate to locate a showing of copper-nickel-cobalt mineralization in Newfoundland’s Central Mineral Belt.

The showing, at Powderhorn Lake, about 15 km north of Badger, was discovered when the prospectors traced sulphide boulders in glacial drift back to an outcrop of gabbro exposed by recent bulldozing for a logging road. Grab samples taken from the outcrop contained 10% to 15% sulphide minerals, and assays showed nickel contents up to 0.62%, copper up to 0.12% and cobalt up to 0.09%.

On a second outcrop, about 300 metres south of the showing, a short packsack-type drill hole intersected 7 metres of sulphide mineralization grading an average 0.4% nickel.

Vancouver-based Canaco Resources (CSE-M) now has an option to earn a 100% interest in the 83-claim property hosting the showings, subject to a 3% net smelter return retained by the vendors. To earn 80%, Canaco must pay $290,000 and issue 300,000 shares to the vendors over two years; to earn the remaining 20%, the company must pay cash or issue shares equal to a fair market value for the property.

Canaco has not released any information about work commitments undertaken as part of the option agreement, but the company has started magnetic and pulse-electromagnetic surveys over the property.

Another 15 km north along the Trans-Canada Highway is the site of the old Gullbridge mine, a copper producer from 1967 to 1971. Gullbridge, then owned by First Maritime Mining (FMM-T), produced about 22,500 tonnes of copper from 2.8 million tonnes of ore, mainly in sheared volcanic rocks.

Canaco’s other projects in the Central Mineral Belt were acquired in a reverse takeover by a private company, British Canadian Mines. The four properties include a land package on Sunday Cove Island, two blocks covering rocks of the Lush’s Bight Group extending northeast from Springdale, and a property on the southeast shore of Green Bay.

In the reverse takeover, British Canadian received 16.7 million shares of Canaco, representing two-thirds of the outstanding stock.

In a separate transaction, Canaco acquired the Lady Pond property for $25,000 cash plus 476,190 shares and has made a work commitment of $1 million for the project.