Pacifica Finding More Mineralization at Howards Pass

Large base metal deposits discovered in northern Canada during the 1970s all faced the same obstacles to development: first, the costs of building mines and mills in areas with few or no roads, and second, a long-term fall in base metal prices through the 1980s and 1990s. That two-decade-long slump in the commodity markets was enough to keep some very good discoveries firmly glued to the shelf.

The Howards Pass lead-zinc deposit on the Yukon-Northwest Territories border, discovered in 1972 by Placer Development, is huge by any standard, but has never come unstuck in spite of years and millions of dollars of work. It cannot have helped that a company committed to a future as a gold producer — as Placer’s successor Placer Dome certainly was — controlled the deposit’s future.

Vancouver junior Pacifica Resources (PAX-V, PCFRF-O), which now holds a 7-year option on the property, is not cut from that cloth. Spun off from Expatriate Resources — which in turn became Yukon Zinc (YZC-V, YZCCF-O) — Pacifica is a company purpose-built for advanced base metal exploration. If Howards Pass has a chance to come off the shelf, the combination of improved metal prices and an interested, well-financed developer may represent its best one.

Pacifica, which already held some ground in the Howards Pass area, optioned the property from Placer Dome in 2005, and Barrick Gold (ABX-T, ABX-N) and United States Steel (X-N), hold a 1% net smelter return on the old Howards Pass property and would share a payment of up to $10 million out of a 20% net profit interest. (U.S. Steel’s interest is held through its Canadian mining subsidiary, Cygnus Mines.)

Pacifica’s work obligation was $3.5 million over two years, and it must pay the optionors $10 million over seven years. Barrick and U.S. Steel have no back-in right; they can take shares in Pacifica in lieu of cash payments, but have not done that yet.

Pacifica’s strategy is not to try, try again on the deposit’s feasibility — although Placer did a definitive feasibility study in the 1980s that must badly need updating — but to drill out more resources in the hope that Howards Pass grows too large to fit back on the shelf. The zinc-lead resource, in a series of three main stratabound deposits, XY, Anniv and OP, had been estimated at 376 million tonnes at 5.12% zinc and 1.9% lead, but the shale sequence that hosts it is still studded with untested drill targets.

In Pacifica’s program, a drill target is a drill target when it shows the right stratigraphy: the Active Member of the Silurian-aged Howards Pass shale formation, which is host to all the mineralized zones. That stratigraphy has been identified along a 70-km arc of the Selwyn basin, and Pacifica’s exploration program, a $10-million effort that dwarfs its work commitment to the optionors, has shown that the Selwyn basin still has plenty of sulphides in hiding.

The effort has been concentrated on a line of stratigraphy extending about 20 km southeast from Anniv to XY. There, new mineralization has been drilled on targets in the Don Valley immediately southeast of Anniv and in the HC area, along strike from Don toward the XY deposit.

Pacifica’s most recent holes at Don closed out 39,800 metres of drilling for the year. The company has discovered five new mineralized zones between Anniv and XY since starting work in 2005. At Don, hole DON-42 intersected 39.8 metres grading 5.18% zinc and 1.86% lead, representing a true thickness of 26.6 metres, at a vertical depth about 100 metres below the deepest previously drilled intersection.

Pacifica has inferred from that that mineralization at Don becomes wider at depth, something previously seen at XY and confirmed at the Anniv Central zone by Pacifica earlier this year. What the results mean is that underground resources — which Placer’s work began to show in the early 1980s — may exist all along the Howards Pass mineralized horizon.

One of Pacifica’s drill holes at Anniv Central, which intersected the mineralized horizon at 378 metres vertical depth, cut 13.6 metres that averaged 6.97% zinc and 3.57% lead, and represented an 8.7-metre true thickness in the Active Member. Along strike, a second deep hole intersected 51.4 metres grading 3.42% zinc and 1.01% lead. The intersections are interesting from a development perspective, too, in that they are at an elevation that would allow them to be entered using an adit from the Don Valley.

Other recent drilling extended both Anniv Central and Anniv East along strike.

Shallower drilling on Don confirmed the previous year’s thick mineralized intersections. Hole DON-39 cut 37.9 metres running 4.98% zinc and 1.37% lead, and DON-40, 40.5 metres running 3.05% zinc and 0.71% lead. Both intersections represented true thicknesses of around 30 metres, comparable with the intersection in the 2005 discovery hole.

Another drill hole downdip from the discovery intersection cut 15.4 metres, or a 9.9-metre true thickness, of 5.41% zinc and 1.19% lead.

The company also recently announced a discovery hole on a new zone, Don East, about 1.4 km northwest of HC West. The first hole there averaged 5.26% zinc and 1.45% lead over 21.5 metres, which works out to a true thickness of 18.6 metres. At HC West itself, three drill holes established a mineralized zone about 8 to 14 metres thick in the Active Member, at typical Howards Pass grades around 5% to 8% combined lead and zinc. It is open along strike and downdip.

The main HC zone, discovered in 2005, has now been drilled along a 1.5-km strike length bounded by two cross faults. Again, drilling at depth has shown wider intersections, indicating some potential for underground mining.

The previously known XY zone has an indicated resource of 21 million tonnes grading 5.9% zinc and 2.37% lead, plus another 54 million tonnes inferred at 6.15% zinc and 2.77% lead. Pacifica’s drilling at XY has tested downdip extensions of the known mineralization, and suggests that the structural model of the Howards Pass area — that the deposits are on one limb of a syncline and may thicken toward the fold’s axial plane — is valid. Earlier work by Placer found similar results in deep drilling on XY.

One recent hole in the downdip extension of the XY Central zone, XY-150, intersected a 29.4-metre thickness of mineralized Active Member shale, averaging 5.8% zinc and 2.12% lead over a core length of 35.4 metres. Earlier drilling put the possible size of the mineralized horizon at just over 1 km along strike, and as much as 700 metres downdip.

Pacifica plans a revised resource estimate for the project, and initial feasibility work is under way.