Newfoundland and Labrador’s mineral industry had another busy year in 2008, with expenditures on exploration and deposit appraisal estimated at $148 million, similar to 2007 levels. The larger exploration projects targeted uranium in Labrador and base metals in Newfoundland.
New claims staked declined to 33,158 in 2008, from 79,206 in 2007. This is likely a consequence of the record-high staking levels of recent years; however a high turnover of claims is seen as healthy in the exploration industry. As of year-end 2008, there were 172,228 claims in good standing in the province.
The Department of Natural Resources supports prospectors and junior exploration companies through its Mineral Incentive Program, budgeted for $2.528 million in 2008-09. The popular program was fully subscribed, and in addition, 2-week prospector training courses were conducted in both Stephenville and Goose Bay.
Mining and Development
Anaconda Mining began operating the Pine Cove gold mine in northeastern Newfoundland in 2008: the open-pit deposit has probable reserves of 2.3 million tonnes grading 2.76 grams gold per tonne. The Beaver Brook antimony mine was reactivated in 2008, after a 10-year shutdown. The underground mine operates at 450 tonnes per day.
Two major projects with capital expenditures totalling $3 billion were announced in 2008. Vale Inco Newfoundland and Labrador will build a hydrometallurgical nickel processing plant on the south coast of Newfoundland to produce finished nickel from Voisey’s Bay ore, at a projected cost of about $2.2 billion. In western Labrador, Iron Ore Co. of Canada embarked on a planned $800 million expansion of its large-scale, open-pit iron ore operations in 2008. Work on the expansion is currently suspended pending the return of more favourable market conditions.
Exploration Highlights -Labrador
Recent exploration in Labrador has focused on three main commodities; uranium, iron and nickel. Exploration for uranium is concentrated in the Central Mineral Belt (CMB) in eastern Labrador. This prolific belt contains numerous prospects discovered during the uranium boom of the 1950s to 1970s. In 2008, Aurora Energy Resources announced total measured, indicated and inferred resources of 134 million lbs. U3O8 from six uranium deposits on its CMB property. At the junior’s flagship Michelin deposit, total measured and indicated resources are 67.4 million lbs. U3O8. Also in the CMB, Crosshair Exploration & Mining has reported total indicated and inferred resources of 9.6 million lbs. of U3O8 in the C Zone (Upper and Lower) and 6.1 million lbs. of U3O8 at the Two Time Zone. The latter is a joint venture with Silver Spruce Resources.
In western Labrador, historic iron ore deposits in the extensive sedimentary iron formations of the Labrador Trough are being re-assessed for near-term production. New Millennium Capital and Labrador Iron Mines Holdings each plan to mine direct shipping (DSO) iron ore products from deposits explored and previously mined by the Iron Ore Co. of Canada. Both projects have been registered for environmental assessment. In related developments, Tata Steel Global Minerals Holdings has acquired almost 20% of the common shares of New Millennium Capital, and has the option to acquire an 80% equity interest in the company’s DSO Project. Also, New Millennium has agreed to the future sale of up to 3 million tonnes per year of direct reduction grade pellets or raw iron ore to the Saudi Arabia-based Al-Tuwairqi Group of Companies.
Altius Minerals has signed an iron ore exploration and royalty agreement with Kennecott Canada Exploration whereby Kennecott may earn up to a 70% interest in 8 mineral licences, covering 103.25 sq. km, held by Altius in the Labrador City area.
Elsewhere in the Labrador Trough, early stage exploration for sediment-hosted base metals and uranium has created interest. Joint-venture partners Cornerstone Resources and Altius Minerals have acquired a large land position and launched an airborne survey and reconnaissance prospecting.
In central and northern Labrador, several companies are exploring mid-Proterozoic mafic-ultramafic intrusions for magmatic nickel sulphides similar to those at Voisey’s Bay. Joint-venture partners Nortec Ventures and Vulcan Minerals reported drill intersections of 14 metres and 9 metres, each grading 1% nickel and 0.5% copper, on their TL property.
Exploration Highlights –Newfoundland
Most exploration in 2008 focused on base metals, gold and specialty metals in central and southern Newfoundland. Several base metals explorers are in the advanced stage and have recently published resource estimates.
Rambler Metals and Mining continues to develop the Rambler copper-gold project on the Baie Verte Peninsula. A 2008 resource estimate reports measured reserves of 484,000 tonnes grading 2.98% copper and 2.28 grams gold per tonne, indicated reserves of 9.6 million tonnes at 1.78% copper and 0.20 gram gold, and inferred reserves of 3.1 million tonnes grading 1.57% copper and 0.58 gram gold. A prefeasibility study is in progress. Rambler has encountered some high grades in recent drilling of the 1806 Zone, including intersections of 30.9 grams gold per tonne, 2.1% copper and 7.9% zinc over 8.7 metres, and 20.3 grams gold, 4.2% copper and 4.3% zinc over 9.5 metres.
Following a merger with Buchans River, Royal Roads Corp. now controls both the Tulks North and Buchans properties in central Newfoundland. At Buchans, the company is evaluating the historic, near-surface Lundberg and Engine House deposits for their open-pit mining potential. Royal Roads reported that at a 2% zinc cutoff Lundberg has an inferred resource of 5.34 million tonnes grading 4.76% combined zinc-lead-copper, whereas Engine House has an inferred resource of 370,000 tonnes grading 5.86% zinc-lead-copper.
Mountain Lake Resources has updated the resource estimate for its Bobby’s Pond deposit in central Newfoundland. At a cutoff grade of 1.1% copper-equivalent, the deposit contains 1.1 million tonnes grading 5.91% combined zinc-lead-copper, 16.6 grams silver per tonne and 0.20 gram gold, and an inferred resource of 1.2 million tonnes at a grade of 4.97% combined zinc-lead-copper, 10.9 grams silver and 0.06 gram gold.
Prominex Resources has reported a resource estimate for the T-3 lens of its Tulks Hill deposit. At a 1.1% copper-equivalent cutoff grade and a minimum 2-metre horizontal thickness of mineralization, the T3 Lens contains some 431,000 tonnes of indicated mineral resources at an average grade of 3.97% zinc, 1.61% lead, 0.89% copper, 35.09 grams silver per tonne and 1.17 grams gold.
Golden Dory Resources has reported the discovery of new bedrock uranium occurrences on its Burin property in southern Newfoundland. Assays up to 1.88% U3O8 have been obtained from hematized fracture zones in the St. Lawrence Granite. Golden Dory has signed an agreement with Cameco that would allow Cameco to earn an interest in the property. On the same property, Golden Dory has reported the discovery of significant skarn-type mineralization. Results include an assay of 6.7% zinc, 2.42% copper, 74.7 grams per tonne silver, and 0.11% bismuth from a grab sample.
There has been renewed interest in certain specialty metals and minerals including molybdenum, tungsten, fluorspar, rare earth elements and potash. Drilling is being conducted on several properties to enable resource estimates.
Burin Minerals is conducting a 15,000-metre drill program at the former St. Lawrence fluorspar mine on the Burin Peninsula in southern Newfoundland. The drilling is designed to upgrade the historic resource at the mine site, and support a feasibility study.
Playfair Mining has completed additional drilling at its Grey River tungsten deposit on the south coast of Newfoundland and extracted a 5.6-tonne bulk sample for metallurgical test
ing. The results will be used to update its 2007 inferred resource estimate. The drilling has extended the No. 10 vein an estimated 250 metres down dip below the previously defined deposit.
Tenajon Resources completed a 10,000-metre drill program on its Moly Brook molybdenum prospect near Grey River on the south coast of the island. Results included some thick intersections of near-surface mineralization, including 213-metres grading 0.10% molybdenum, starting at 130 metres below surface. A preliminary resource calculation is expected in the first quarter of 2009.
Trends and New Discoveries
There is continuing interest in specialty products such as molybdenum, tungsten, fluorspar and potash on the island, and emerging interest in copper and uranium in the Labrador Trough. New discoveries of note in 2008 include separate showings of uranium and skarn-type base metal mineralization on Golden Dory Resources’ Burin property; the latter is a new exploration concept for the area.
New uranium occurrences in the CMB were reported by Bayswater Uranium, Mega Uranium and Silver Spruce Resources, and high-grade rare earth oxide mineralization has been discovered by Ucore Uranium at Lost Pond, in western Newfoundland. New precious metal occurrences include gold showings in the Baie D’Espoir and Dover Fault areas, optioned by Mountain Lake Resources and Silver Spruce, respectively, and new, high-grade platinum-palladium assays from the past-producing Betts Cove mine, now held by Metals Creek.
Outlook
Record metal prices in the past few years have contributed to unprecedented growth in the province’s exploration industry, with a number of projects advancing to prefeasibility. The recent downturn in equity markets will have a negative impact on program spending in 2009 as companies seek to conserve cash. However, it is believed that the strong pace of exploration will resume as market conditions recover.
For a more information, visit www.nr.gov.nl.ca
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