Vancouver — Drill results reported by
“We’re excited about these latest results,” says Exploration Vice-President Bruce Durham. “They include what are probably two of the best diamond-drill intersections in nickel-copper-platinum-palladium to be reported in Canada in some time.” The results are based on drilling carried out at the Mesamax northwest grid area, which hosts the historic Mesamax nickel-copper prospect. Highlights are as follows:
q Hole 17 was drilled at 45 and returned an impressive 66 metres grading 2.19% nickel, 5.92% copper and 0.09% cobalt, plus 1.4 grams platinum, 2.65 grams palladium and 1.3 grams gold per tonne, at a down-hole depth of 9 metres. The hole was collared 60 metres north of last year’s hole 2, which yielded 0.91% nickel, 1.7% copper and 4.4 grams combined platinum-palladium over 32 metres.
q Drilled from the same site at 65, hole 18 returned 49.3 metres of 3.32% nickel, 4% copper, 0.13% cobalt, 1.5 grams platinum, 5.17 grams palladium and 0.26 gram gold at 5.2 metres down-hole. A second mineralized zone was encountered 76.7 metres down-hole, the results being 1.85% nickel, 2.23% copper, 0.06% cobalt, 0.58 gram platinum, 1.2 grams palladium and 0.04 gram gold over 2.3 metres.
q Hole 19 was drilled vertically from the same site and cut 21.2 metres grading 1.15% nickel, 1.68% copper, 0.05% cobalt, 0.82 gram platinum, 3.7 grams palladium and 0.14 gram gold at 5.8 metres down-hole. A lower mineralized zone was hit at 51.7 metres, yielding 2.39% nickel, 6.2% copper, 0.09% cobalt, 0.95 gram platinum, 9.1 grams palladium and 0.41 gram gold over 3.3 metres.
q Moving 120 metres southwest, holes 15 and 16 seem to mark the western limits of the discovery area. Drilled on the same site, the holes returned, respectively, 8.3 metres grading 0.47% nickel, 0.45% copper, 0.02% cobalt, 0.2 gram platinum, 1.01 grams palladium and 0.2 gram gold, and 9.2 metres of 0.43% nickel, 0.72% copper, 0.02% cobalt, 0.41 gram platinum, 1.77 grams palladium and 0.04 gram gold.
q Holes 20 and 21 were collared 75 metres east of the hot holes and are believed to mark the eastern limits of the zone. Hole 21 returned 11.4 metres grading 0.76% nickel, 0.94% copper, 0.04% cobalt, 0.42% platinum, 1.88 grams palladium and 0.04 gram gold, whereas hole 21 yielded 12.2 metres of 0.71% nickel, 0.58% copper, 0.03% cobalt, 0.5 gram platinum, 1.87 grams palladium and 0.03 gram gold.
The results received to date indicate that sulphide mineralization in the ultramafic host continues for at least 200 metres. The sulphide zone reaches a width of 60 metres near the surface, narrows with depth and dips 20-30 to the north.
Locally, the prospect contains high-grade sections of mineralization consisting of irregular lenses of mixed disseminated, net-textured and massive sulphides hosted in altered peridotite to pyroxenite.
The target is part of the 173-sq.-km Expo-Ungava property, which hosts the Expo-Ungava deposit (17 million tonnes grading 0.6% nickel and 0.8% copper). Situated only 15 km south of
In the summer of 2001, Dr. James Mungall, an associate professor at the University of Toronto’s Department of Geology, sampled the old core from the prospect and found that it generated assays exceeding 1 gram platinum-palladium per tonne. In September 2001, Canadian Royalties began drilling the target, with the first seven holes confirming the platinum-palladium potential of the nickel sulphides.
Legal dispute
However, the encouraging results were followed by a dispute between the junior and its joint-venture partner,
In early April, Ungava notified Canadian Royalties that it was in default of its option and joint-venture agreement because the border area, which includes the TK copper-nickel platinum-palladium discovery, was subsequently included into the Phoenix property.
Canadian Royalties says the land was properly transferred by Ungava Minerals when the Expo-Ungava property was expanded and the boundary repositioned in June 2001.
Earlier this month, Canadian Royalties won the legal battle in a ruling rendered by the arbitrator, Claude Bisson of the law firm McCarthy Tetrault and former Chief Justice of the Court of Appeal of Quebec. In his decision, Bisson stated Ungava Minerals “have not met the burden of the proof and have failed to establish, by a balance of probabilities, the essential facts necessary to justify the granting of any of the conclusions sought, and the claim is therefore dismissed.”
Canadian Royalties will therefore retain all its rights in the Expo-Ungava and Phoenix properties, which includes the area along the boundary, commonly known as the TK zone.
NSR
A remaining legal hurdle involves the selling of a 1% net smelter return royalty on the property by Gogama Gold, a private Alberta company controlled by the former president of Ungava Minerals, Glen Erikson.
Gogama is now seeking to have the NSR transferred back to the private company. It maintains Canadian Royalties was in possession of material information (namely that the nickel sulphides on the property held platinum-palladium mineralization) at the time the joint-venture agreement was signed. Canadian Royalties says the claim has no merit.
“Other than that,” says Durham, “we don’t see any problems on the horizon.”
The company drilled more than 100 holes into the project this past summer, and results from an additional 30 holes collared in the Mesamax area are expected before the end of November.
“We expect to do a similar, if not a bigger, program next year,” says Durham. “This year we’ve spent close to $3 million, and we’ve got our fuel shipment in for the startup of the 2003 program.”
Based on the cost of this year’s drill program, Canadian Royalties is preparing documentation to vest into the property under its 2001 agreement with Ungava Minerals. Under that deal, the junior can earn a 70% interest in the Expo Ungava property by spending $1.75 million on exploration over four years. The company can then take another 10% stake by delivering to Ungava Minerals a bankable feasibility study.
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