BASE METALS — Exploration proves up VMS potential of Finlayson Lake camp — Juniors flock to southeastern Yukon

The potential of the Finlayson Lake area in the southeastern Yukon to host volcanogenic massive sulphide deposits was first demonstrated by two discoveries: the ABM deposit, outlined in 1994 by Cominco (CLT-T) at its Kudz Ze Kayah project; and the Wolverine deposit, partially defined in 1995 by Westmin Resources (WMI-T) and Atna Resources (ATN-T).

Discoveries in 1996 at the Fyre Lake project of Columbia Gold Mines (COB-V) and at the Ice property of Expatriate Resources (EXR-V) continued to expand the region’s potential.

The Kuroko-style deposits of the ABM and Wolverine are hosted in Devonian to Mississippian-Age, interlayered, metavolcanic and metasedimentary rocks of the Yukon-Tanana Terrane.

The ABM deposit at the Kudz Ze Kayah project is in the Pelly River region, 115 km southeast of Ross River. It hosts a reserve, minable by open-pit methods, of 11.3 million tonnes grading 5.9% zinc, 1.5% lead and 0.9% copper, plus 1.3 grams gold and 133 grams silver per tonne. The total resource stands at 13 million tonnes grading 5.5% zinc, 1.3% lead and 1% copper, plus 1.2 grams gold and 125 grams silver.

The ABM is hosted in a thick complex of felsic tuffs and sills, or flows, interlayered with minor mafic sills and sedimentary rocks. The sulphide horizon ranges in thickness from less than 2 metres to 39 metres.

In 1996, Cominco worked to advance the project by undertaking metallurgical sampling and testing, geotechnical evaluation of waste dump and tailings dam sites, environmental baseline studies and concentrate transportation studies.

It began the permitting process, with the submission of environmental assessment documentation. Regulatory approval is expected this autumn.

Cominco holds the largest land position in the Finlayson Lake-Wolverine area, with a package totalling 2,000 sq. km. The company spent $4.2 million exploring this position in 1996.

The Wolverine deposit occurs 20 km east of Kudz Ze Kayah in a similar package of mixed metavolcanic-sedimentary rocks, marked by a magnetite iron formation horizon that overlies the massive sulphide lenses.

Massive sulphide mineralization is hosted in either argillite or ryholite, with carbonaceous argillite and a porphyritic felsic volcanic unit forming the footwall, and interlayered carbonaceous argillites, felsic volcanic fragmental and tuffaceous units forming the hangingwall.

The Wolverine project is a joint venture held 60% by Westmin and 40% by Atna.

During the 1996 field season, the partners spent more than $10 million on exploration. A total of 18,810 metres was drilled in 64 holes.

Definition drilling on the Wolverine deposit resulted in the discovery of the adjoining Lynx zone on the western part of the main Wolverine zone.

By the end of the 1996 program, the Wolverine deposit had been partially defined by 49 drill holes over a strike length of 700 metres and a downdip of more than 350 metres. A geological resource estimate for the Wolverine and Lynx zones totals 5.3 million tonnes grading 12.96% zinc, 1.53% lead and 1.41% copper, plus 1.81 grams gold and 359.1 grams silver.

The Wolverine zone is still partially open to the east, while the Lynx zone is open to the south and west. The deposit occurs close to the northern property boundary shared with Cominco, and drilling to date indicates that the deposit likely continues downdip on to Cominco’s ground.

Field work in the Wolverine area has defined a near-Continuous magnetic anomaly corresponding to iron formation horizons over a 12-km strike length.

Soil sampling indicates that most of the marker is anomalous in zinc, lead, copper, gold and silver.

However, further stratigraphic drilling on the Fisher zone, 8 km northwest of Wolverine, intersected only weak zinc mineralization within the favorable rhyolite-Argillite sequence. Drilling was also carried out on the Toe claims, where a 6-km-long trend of zinc-Copper soil anomalies is defined. No results were reported.

The 1997 exploration program, budgeted at $3.8 million is already under way.

Utilizing three rigs, the partners plan to drill some 50 to 60 holes totalling 17,000 metres. The program will attempt to define the ultimate size of the Wolverine deposit, as well as test other target areas along the 20-km-long belt of favorable geology.

The joint venture holds about 1,840 claims in the region, including the 108-Claim TOE-ON property, which is shared equally with Cominco. A regional geological and geophysical program will continue to evaluate new drill targets.

.SSelenium levels

The latest metallurgical testwork on the Wolverine ore confirmed previous analysis, which indicated moderate-To-high zinc concentrate grades and recovery, as well as high gold and silver recoveries to copper-lead concentrate. High levels of selenium are reported to be of concern.

Environmental base-line studies are in progress, including all necessary information for environmental permitting.

In its 1996 annual report, Westmin said an underground development program to test mining conditions and obtain a bulk sample for final metallurgical testing and mill design will not be considered until 1999.

Besides its joint venture with Atna, Westmin holds an additional 850 claims in the immediate area, as well as option agreements with Pacific Bay Minerals (PBM-V) and Expatriate on some of their properties.

Westmin can earn a half interest in the Puck property from Expatriate by spending $2 million over two years. The Puck claims are immediately southeast of, and on strike with, the Wolverine project.

Initial work has defined the magnetite iron formation marker over a strike length of 6 km. An initial seven stratigraphic holes intersected weak zinc mineralization while testing electromagnetic geophysical conductors. A minimum of 2,000 metres of drilling is planned for this summer.

In the meantime, Atna can earn a 65% interest in three of the Finlayson Lake properties held by YGC Resources (YGC-V) by spending $1.5 million on each by 1998. Atna carried out initial drilling on each of the Argus, Money and Wolf properties last year.

The Fyre Lake project, 30 km southeast of the Wolverine deposit, is a copper-Cobalt-gold Besshi-Type deposit hosted in moderately metamorphosed chlorite schist. Columbia Gold can earn up to an 80% interest in the project from Welcome Opportunities (WLO-V) by spending $6 million on exploration before the end of 1999. Welcome holds a back-in right to increase its interest to 55% should it choose to arrange production financing.

.SKona zone

In 1996, Columbia Gold drilled 71 holes totalling 9,531 metres, which enabled it to define the open-ended Kona zone over a strike length of 850 metres within a 3.5-km-long target. The most southern hole intersected 31.1 metres grading 2.29% copper, 0.07% cobalt and 0.53 gram gold (including a 7-Metre interval grading 6.07% copper, 0.05% cobalt and 0.68 gram gold).

The property is underlain by a sequence of metamorphosed sedimentary and volcanic rocks belonging to the Layered Metamorphic Sequence of the Yukon-Tanana Terrane.

The Kona deposit consists of at least three distinct mineralized horizons of massive to semi-Massive sulphide and magnetite mineralization with a combined thickness of 70 to 80 metres.

The Lower horizon is considered to be an open-pit target and grades 1.2% copper, 0.12% cobalt and 0.77 gram gold over an average thickness of 7 metres. Most of the Upper horizon is regarded as an underground target, averaging a grade of 1.9% copper, 0.12% cobalt and 0.53 gram gold over a thickness of 13 metres.

A 20,000-Metre drill program has already begun this year at Fyre Lake, with 12 holes initially targeting the Lake zone. A second rig will begin drilling the Kona zone as soon as weather permits. Columbia Gold has budgeted its 1997 program at $5.5 million.

.SThree anomalies

The Lake zone is defined by 3-km-long, coinciding geochemical and geophysical anomalies directly south of the Kona zone. Surface samples from a large block of float in the zone assayed 1.2% copper, 1.1% zinc and 5.5 grams gold.

On trend with, and south of, the Lake zone, is th
e Dub zone, a 3-km-long geophysical target that will be subjected to initial drilling.

Expatriate is the second-largest landholder in the Finlayson-Wolverine Lake region, with 6,303 claims comprising 28 properties. Twenty-four of the properties are wholly owned. Expatriate can earn a half interest in the Lip and War properties under an option agreement with Condor International Resources (COD-V) and can earn a 60% interest in the Arm 1-12 claims from local prospectors by spending $1 million by the end of 1999.

During 1996, Expatriate spent $5 million on exploration on all but one of the properties. Fifty-four diamond drill holes totalling 6,103 metres tested six properties.

In the last hole of its 1996 drill program on the fully owned Ice property, 60 km east of Ross River, Expatriate made a significant discovery, intersecting non-outcropping, unoxidized, Cyprus-Type volcanogenic massive sulphide (VMS) mineralization in mafic volcanic rocks that are interpreted to belong to the Slide Mountain Terrane.

This terrane has seen almost no previous exploration and, prior to the Ice discovery, VMS mineralization was unknown in the Slide Mountain Terrane.

A total of 34 holes, comprising 2,704 metres, was drilled on the Ice property in 1996. The first 33 holes outlined a 450-by-200-Metre zone of secondary copper mineralization.

Hole 96-34, however, intersected VMS mineralization at a vertical depth of 65 metres below surface averaging 5.2% copper and 0.06% cobalt, plus 0.6 gram gold and 25 grams silver over an approximate true width of 20.6 metres.

The sulphides exhibit sharp contacts with the surrounding unmineralized basalt and there is no underlying stockwork or breccia that would suggest proximity to a vent.

The secondary mineralization is restricted to the zone of weathering, which extends up to 60 metres below surface. The oxide zone represents the leached, transported and precipitated product of a nearby sulphide copper deposit. The new discovery is adjacent to, but down-slope from, the oxide zone and is not believed to be its source.

Expatriate plans to spend at least $4 million exploring its Finlayson Lake properties in 1997. Drilling is already under way on the Ice property. Three holes totalling 561 metres have been completed downdip of hole 34.

Expatriate reports that none of the intersections appears to be as copper-rich as hole 34, but some are much thicker. All three holes have cut massive sulphide and fracture-filling mineralization.

.SSkate property

A scheduled 3-hole drill program has begun on the company’s Skate property, 15 km east of Ross River. The holes will test a gravity anomaly, where the past drilling of a single hole intersected a massive sulphide band grading 5.95% zinc, 6.15% lead and 102 grams silver over 0.42 metre.

Drilling is also planned for the Power Play, Arm and Goal Net properties.

Pacific Bay Minerals (PBM-V) recently optioned from Cominco 19 separate blocks comprising 518 claims in the Finlayson Lake district. The land package includes the Fret and Dot claim groups, which are near Expatriate’s Ice property.

Pacific Bay can earn a 60% interest in the package by spending $1 million on exploration over four years, including $100,000 in the first year. Cominco retains a 10% back-in right.

A summer exploration program of geological mapping and geochemical sampling is planned.

Pacific Bay’s other holdings in the region include the TY property, under option to Westmin, and the JK property, which lies outside the Yukon-Tanana Terrane, 30 km northeast of Finlayson Lake.

The TY claims cover a large gossan, 30 km south of the Wolverine discovery.

Westmin can earn up to a 60% interest in the TY claims by spending $500,000 over three years.

Westmin’s 1996 field program revealed several geochemical anomalies, but an initial 3-hole program totalling 721 metres intersected only pyritic felsic volcanic rocks, containing some anomalous base and precious metal values.

Pacific Bay President David Brett says the stratigraphic holes failed to explain the strong copper-in-soil values. Further drilling is planned.

.SBase metal target

The wholly owned JK 1-42 claims represent a base metal target rather than a VMS-style target. The property is underlain by Upper Cambrian to Upper Devonian Mississippian marine clastic sediments. In 1996, field work outlined a 1,600-by-1,000-Metre geochem soil anomaly, rich in zinc, lead, copper, silver, cadmium, molybdenum and vanadium.

Mineralization was found to occur in fault-Controlled breccia zones, characterized by altered quartz-Carbonate stockwork veining. Grab sampling assayed up to 1.6% zinc, 2.3% lead, 1.4% copper and 158 grams silver.

Further geological work, including mapping, soil sampling and ground geophysics, is planned for 1997.

Demand Gold (DOT-V) intends to test several prospective targets at its RBI property, 3 km south of Cominco’s ABM deposit, with an initial 3-hole drill program. During the past two field seasons, Demand has conducted preliminary mapping and sampling, plus geophysical surveying.

Oro Bravo Resources (ORU-V) holds 181 claims totalling 3,780 ha along a 14-km-long strike length covering Mississippian felsic-To-intermediate volcanics, 55 km south of Ross River.

A 1996 field program identified three multi-element soil anomalies associated with gossanous zones. One of the soil anomalies coincides with a very low frequency electromagnetic and mag geophysical anomaly.

Other companies with holdings in the Finlayson Lake-Wolverine region include Arcturus Resources (ATQ-V), Consolidated Shoshoni Gold (CHJ-V), KRL Resources (KRL-V), Nordac Resources (NRQ-V), Nu-Lite Industries (NLE-V) and Sunstate Resources (SUT-V).