After losing ground to their trendy laterite cousins a few years ago, nickel sulphide deposits — hosts of the giant Sudbury, Voisey’s Bay and Norilsk orebodies — are back in fashion.
Nickel sulphide camps from Manitoba to Labrador, some of which have long histories while others are relatively new, may rival gold camps for spending in the coming field season as juniors raise funds for new projects.
The activity stems from several factors, including:
n a surging nickel price, which analysts say could average more than US$3.75 per lb. in 2004;
n the attraction of a platinum-palladium kicker in many of these deposits; and
n an intriguing new discovery in the Raglan camp.
A decrease in competition from nickel laterites, which have lost some of their appeal because of metallurgical headaches, has also given the sulphide sector a leg up.
Most of the recent attention has focused on the Cape Smith (Raglan) belt in northern Quebec, home of the Raglan mine, where junior
The discovery, highlighted by a shallow 49-metre intersection grading 3.32% nickel, 4.01% copper 0.13% cobalt and 32.15 grams PGMs per tonne plus gold, prompted a staking rush in the remote area, where at least a dozen companies now have landholdings, including
The market reacted positively. Shares of Canadian Royalties soared from a summer low of 55 to a high of $3.08 on the news, before slipping back to the $1.50-to-$2 level as investors sat back to await the 2003 field season.
The Cape Smith belt, where Falconbridge is mining the Raglan nickel-copper-cobalt-PGM orebody, is an early Proterozoic fold and thrust belt that runs east-west across the Ungava Peninsula. The ultramafic belt contains two main horizons, north and south. The Raglan mine falls within the northern horizon, while ground optioned or wholly owned by Canadian Royalties covers a 100-km stretch of the southern horizon.
“There are few, if any, geological regions on the globe where the combined nickel-copper and PGM grade approaches that of the North Raglan trend,” states a 2002 report by Haywood Securities, which served as an agent for Canadian Royalties in a private-placement financing. “The presence of significant widths of mineralization in the south [horizon] confirms our belief that this is one of the best exploration terrains in the world for copper-nickel plus PGM deposits.”
Mineralization within both horizons consists of disseminated, net-textured and massive sulphide flows positioned in the basal portions of ultramafic flows and/or intrusions. In the southern horizon, the sulphide zones occur at the transition from shallow sub-volcanic feeder sills to lava flow channels, according to James Mungall and Anna Catovic of the University of Toronto, who will present a technical paper on the subject at the upcoming Geological Association of Canada Symposium in Vancouver, B.C.
The authors say this type of mineralization represents an unrecognized variant on the magmatic sulphide deposit, with form and structure resembling Kambalda-type deposits (such as Raglan) but with compositions more like Norilsk (a large Russian nickel-copper camp that is also the biggest palladium producer in the world).
Aside from the Mesamax prospect, Canadian Royalties has identified several other sulphide zones within its 108,000-hectare claim group and plans to spend about $4 million on exploration during the upcoming field season. The work will begin in April with airborne and ground geophysical surveys, followed by diamond drilling as soon as weather conditions allow. The fuel and drills required for the program are already on-site.
Meanwhile, the number of companies holding claims in the area has at least tripled since the Mesamax discovery in November. A recently published claim map of the area reveals that 12 companies, together with a group called the Ungava Syndicate, have joined longer-term landholders such as Falconbridge, Anglo American, Canadian Royalties and
As happened during the Voisey’s Bay rush a decade ago, some of these newcomers will drop out of the game before the end of the field season as the cost of exploration in the remote and inhospitable region becomes apparent.
Another nickel hotspot is the Sudbury basin in Ontario, where nimble juniors have staked claims within the vast tracts of prospective ground that surround past and current nickel-copper-PGM producers owned by Falconbridge and
Judging by the appreciation in Wallbridge’s share price over the past two months (the junior has doubled to $2), the market is speculating that an ongoing 10-hole program on the company’s Windy Lake property, which covers about 5 km of the metal-rich Sudbury igneous contact, will hit sulphides within a classic Sudbury embayment structure identified under the lake.
London-listed
Closer to the production phase of the cycle is
McCreedy West, one of several properties that form a 75-25 joint venture between FNX and
Other active players include:
n
n
n
Aurora can earn a 60% interest in Nickel Lake from Inco by spending $2 million over four years and another 10% by completing a feasibility study. The drill program recently intersected a zone of massive sulphide from surface to 18 metres that grades 1.69% nickel, 0.43% copper, 0.07% cobalt, plus gold and PGMs, including a 6-metre zone grading 4.38% nickel and 0.93% copper.
Juniors are also active near Inco’s Voisey’s Bay deposit in Labrador and along the Thompson belt in Manitoba.
Donner Minerals and Falconbridge, for instance, are continuing work on the South Voisey’s Bay project
and have entered into a separate joint venture to explore for Voisey’s Bay-type deposits in other parts of Labrador.
In Manitoba, the partners have launched a 1,400-metre drill program to test four targets on their Stephens Lake property, a possible extension of the Thompson nickel belt that is mostly covered by till.
— The author is a Toronto-based freelance writer specializing in mining and the environment.
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