Billiton unit ties up Newfoundland land package

A unit of London-based Billiton has signed joint-venture agreements with several Canadian juniors collectively holding 343 sq. km of prospective ground in the Buchans area of central Newfoundland.

The flurry of deal-making has set tongues wagging that Billiton might be interested in establishing a long-term presence in the province, perhaps with a view to playing some role in reviving the stalled Voisey’s Bay nickel-copper-cobalt deposit in Labrador.

Speculation aside, the major does plan to carry out exploration programs aimed at finding deposits similar to the former Buchans mine, which produced 16.2 million tonnes grading 14.5% zinc, 7.6% lead, 1.3% copper, 1.4 grams gold and 126 grams silver per tonne.

Among the joint ventures is an agreement to earn up to a 70% interest in the Victoria River properties from Altius Minerals (ALS-A). This 127-claim land package covers portions of the Turk’s Hill volcanic belt in central Newfoundland. Recent prospecting, mapping and data compilation by Altius have resulted in the identification of five separate areas of hydrothermal alteration and mineralization on the properties, each of which is deemed prospective for volcanogenic massive sulphide deposits (with zinc-copper-lead-precious metals).

To earn the maximum interest, Billiton must spend $1.3 million on exploration and make cash payments of $200,000 to Altius. At least $100,000 must be spent in the first year of the option agreement.

Billiton signed two separate agreements with Celtic Minerals (CME-A). The first allows it to earn a 51% interest in the Joe Glodes Brook, Rocky Brook, Millertown, Skull Hill and Harpoon Brook properties by spending $400,000 over four years. An additional 17% stake can be earned by spending a further $1.2 million on exploration.

The other agreement allows Billiton to earn a 51% interest in the Buchans Junction property by spending $500,000 in stages over four years. An additional 19% stake can be earned by spending $1.5 million on exploration and a cash payment of $50,000. This 118-claim property is now held equally by Celtic and Jilbey Exploration (JLB-M).

Billiton also signed an agreement with Buchans River (BUV-A) to earn up to a 70% interest in the junior’s properties, which cover about 116 sq. km in the region. The land package includes several past producers. Two non-arm’s-length companies with directors in common, GT Exploration and Newfoundland Mining & Exploration, also agreed to joint-venture their properties in the region to Billiton. These properties cover much of the Buchans River formation, the geological unit hosting the former Buchans mine.

To earn a 51% interest, Billiton must spend $3.5 million on exploration over four years. This can be increased to 70% by paying $1 million and spending a further $4 million on exploration.