BASE METALS — Billiton expands Newfoundland portfolio

London-based Billiton International has expanded its Newfoundland exploration portfolio by inking a deal with Rubicon Minerals (RMX-V) to acquire either the Point Leamington or Lewis Lake properties.

Over the past several months, the nickel giant has amassed more than 1,000 sq. km in the Buchans mining camp. This latest venture takes it northeast of there, near Grand Falls, as the company continues to focus on base metals.

Regionally, both properties are part of the Wild Bight group, a sequence of structurally deformed and moderately metamorphosed volcanic, sub-volcanic and epiclastic rocks of Ordovician-age. Several volcanogenic massive sulphide (VMS) deposits are known to exist, the largest being Point Leamington. That deposit was discovered in 1971 by Noranda (NOR-T) and subsequently shown to host a resource of about 13 million tonnes grading 2.25% zinc and 0.46% copper, plus 0.89 gram gold and 20.57 grams silver per tonne. (Lewis Lake contains a zinc-copper prospect but is still at the grassroots stage.)

In late 1998, Rubicon optioned the ground from Noranda and minority-owner MFC Merchant Bank. Under that deal, it must issue 100,000 shares to Noranda over four years and provide MFC with a 0.5% net smelter return royalty (NSR) on any future production. Noranda also retains a 1.5% NSR and can buy any concentrate produced from the property.

The Billiton deal, comprising separate financing and property-option components, will see the major invest $400,000 in Rubicon by way of a private placement. Once this is done, Billiton can earn a half-interest in the property of its choice by spending $800,000 on exploration, following which it can earn an additional 20% in exchange for advancing the project to production.

Rubicon will operate the project during the earn-in period. Proceeds from the placement will finance exploration of both properties, including airborne electromagnetic (EM) surveys and diamond drilling.

Meanwhile, Billiton has begun drilling on two optioned properties in the Buchans camp. The 3,000-metre program is designed to drill-test anomalies that were detected in an EM survey earlier this year.

At Victoria River, five anomalies were selected for follow-up drilling. Induced-polarization surveys, mapping and geochemical surveying will be carried out as well.

Two of the anomalies are in the property’s northern claim group, and one is believed to represent the continuation of the prospective Hungry Hill prospect, which is being explored by partners Rio Algom (RIO-T), Celtic Minerals (CME-A) and Jilbey Exploration (JLB-M). Both targets are associated with a 2-km-long zone of silica-sericite altered felsic volcanics hosting disseminated and (locally) stringer pyrite and sphalerite mineralization.

The remaining anomalies are in the southern block, and two of these coincide with outcrops displaying alteration and mineralization typical of a VMS mineralizing environment. The third is deeper-lying but underlies an area containing soil anomalous in base metals and spotted with boulders exhibiting strong alteration and sulphide mineralization.

Billiton can earn up to a 70% interest in Victoria River from Altius Minerals (ALS-A) in return for spending $1.3 million on exploration and paying $200,000 in cash.

Several targets were similarly selected for both drilling and ground geophysical surveying at the Buchans River project. That property consists of 156 sq. km and contains much of the known extent of the favourable mine sequence.

Billiton can earn up to a 70% interest in the property from Buchans River (BUV-A) by spending $7.5 million on exploration and paying $1 million in cash.

In related news, Billiton has expanded its search to British Columbia. By taking down a $450,000 private placement in Eagle Plains Resources (EPL-A), the major will acquire the right to option the North Findlay and Hap properties. These, unlike the Newfoundland properties, are considered prospective for sedimentary exhalative deposits similar to the nearby Sullivan lead-zinc deposit being mined by Cominco (CLT-T) (T.N.M., May 31/99).

Redfern gets nod

Redfern Resources (rfr-t) has been given the go-ahead by the British Columbia Ministry of Forests to build an access road to its Tulsequah Chief polymetallic mine.

Construction of the road is conditional on the mine’s final design and further geotechnical evaluations on certain sections of the proposed thoroughfare. The 160-km access road will connect the mine with a local highway north of Atlin. From there, trucks will transport concentrate to Skagway, Alaska, for storage prior to shipment. Use of the all-weather road will be restricted to mine-related traffic.

Development of the Redfern project has been slow for the Vancouver-based junior. Redfern has been working on the past producer since 1987. Years of exploration at the property led to a decision to reopen the mine, which met with some opposition from environmentalists. The environmental review process, including a public review, lasted more than three years, and Redfern finally won the right to develop the project after a court battle.

Reserves at the volcanogenic massive sulphide deposit stand at 7.9 million tonnes grading 6.35% zinc, 1.23% copper and 1.18% lead, as well as gold and silver values. The company expects to begin production in early 2000, but must first secure financing.