Geodex readies for Sisson scoping study

Geodex Minerals (GXM-V, GXMLF-O) has contracted for a preliminary economic analysis on the Sisson Brook tungsten-molybdenum- copper deposit in central New Brunswick.

The company, which is earning a 70% interest in the property from a private Nova Scotian company, has engaged consulting firm Wardrop Engineering for the study, which will follow on a resource estimate completed in March. The scoping study should be finished in September.

The March resource estimate on Sisson, by Mercator Geological Services, considered the tungsten-molybdenum zone of the deposit, Zone III, and put the inferred resource at 167 million tonnes grading 0.021% molybdenum and 0.059% WO3 (tungsten oxide). The estimate, based on 41 drill holes, including 28 drilled in the late 1970s and early 1980s by Texasgulf, used a cutoff grade of 0.025% WO3 equivalent.

At a cutoff grade of 0.125% WO3 equivalent, the deposit shrinks to 64.4 million tonnes at average grades of 0.034% molybdenum and 0.084% WO3.

The WO3-equivalent grade was defined based on relative prices, with molybdenum weighted 2.97 times WO3. The ratio reflected price averages over about three years.

A definition drilling program is planned for this year to bring that resource up to measured and indicated categories, and drilling on the copper zones of the deposit, Zones I and II, is also planned, as are baseline environmental studies, geotechnical work, and metallurgical testing. The company has set aside $5 million for its program in 2007.

Geodex drilled 29 holes in 2006, for a total of 7,500 metres, mainly on Zone III, where drill density was brought to a 100-metre spacing. The known length of the zone was extended past 1,000 metres, and deeper holes extended it downdip.

Mineralized intervals typically went for 100- to 200-metre core lengths, with molybdenum grades clustering around 0.02% and tungsten grades around 0.05% WO3. One hole on the western edge of Zone III, SB06-28, returned 114 metres grading 0.052% molybdenum and 0.127% WO3.

Geodex’s agreement with Champlain Resources, the underlying property holder, commits it to $2 million in exploration spending to earn its 70% interest. The company expects to reach that milestone this year.

Meanwhile, Geodex has received a cash infusion from Teck Cominco (TCK.B-T, TCK-N), to finance work on its Mt. Pleasant West polymetallic project in southwestern New Brunswick. Teck has taken a private placement of 1.5 million Geodex shares at $1.00 and a $1-million convertible note exercisable at $2.00 per Geodex share or a 50% premium to the market price — whichever is greater. The money provides a budget for exploration at Mt. Pleasant West, which adjoins the formerly producing Mt. Pleasant tungsten-molybdenum mine.

Teck gets an option to earn a 51% interest in Mt. Pleasant West by spending $6.5 million on exploration and development, an option it can exercise once Geodex has spent $2.5 million on exploration, but not before the middle of 2009.

The Mt. Pleasant mineralization consists of a series of zones at the tops of Devonian-aged granitic rocks, and included tungsten and molybdenum zones, exploited by Billiton, now part of BHP Billiton (bhp-n, blt-l), between 1983 and 1985. Other zones on the property have known tin, zinc and indium resources. A feasibility study in 1997, for then-operator Adex Mining, recommended production of a tin concentrate and a zinc-copper-indium concentrate from unmined zones on the main Mt. Pleasant property. Old resource estimates put the size of the deposit’s North Zone at 7 million tonnes grading 0.62% tin and 0.65% zinc, and of the Fire Tower Zone at 9 million tonnes grading 0.03% tin, 0.08% zinc and 31 grams indium per tonne.

At Mt. Pleasant West, five of nine holes drilled this past winter and spring on a prospect called Pug Hole-Whopper intersected zinc-copper-indium mineralization. Three intersected only narrow widths, but one cut 31.7 metres that averaged 2.8% zinc, 0.14% copper and 62.8 grams indium per tonne, and a second cut 10.2 metres grading 3.45% zinc, 1.07% lead, 0.35% copper, 0.19% tin and 128.6 grams indium.

Three drill holes on the Pomeroy prospect, in the southwestern part of the Mt. Pleasant West property, intersected the downdip projection of some surface showings, generally over narrow widths. Geodex plans to test the structural extension of these intersections at depth, on the theory that mineralization may widen closer to the main part of the granitic intrusion.