JUNIOR MINING — Juniors make foray into industrial minerals

At a time when it is difficult to finance, develop and operate a hardrock metal mine, some junior mining companies are opting for less cost-intensive projects in the industrial or specialty mineral sectors.

Toronto-based Tiomin Resources (ME), which came into being late last year, is completing a $2 million-$4 million feasibility study on the Natashquan heavy minerals sand deposit on the north shore of the Gulf of St. Lawrence in Quebec.

This specialty mineral deposit is estimated to contain a resource of 1.3 billion tons averaging 6% heavy minerals, including iron (magnetite), titanium (ilmenite), zircon and garnet.

Iron is chiefly used for construction; titanium as a pigment for paint and plastics; zircon for furnace bricks, molds and glass; and garnets for sand blasting, water filtration and water-jet cutting.

Company President Oliver Lennox-King told The Northern Miner the nice thing is that, unlike a major base-metal mine, specialty-mineral mines can generate a healthy cash flow from a small initial capital outlay.

Lennox-King feels there recently has been “a change in the perception of industrial minerals in North America.” Institutional investors are now looking more favorably on industrial minerals because of the strong performance of the Potash Corporation of Saskatchewan (TSE). The mineral sands industry, which basically comprises titanium and zircon, had worldwide revenues in 1990 of US$5.8 billion (compared with copper at $17.7 billion, zinc at $6.7 billion and nickel at $5.2 billion). Current world supply comes primarily from Australia and South Africa. Assuming a yearly production of 13 million tonnes of raw sand, and current levels of world demand, the company feels it has the potential to supply 4% of the titanium market, 0.06% of the iron market, 4% of the zircon market and 52% of the garnet market.

Tiomin was formed primarily to develop this deposit and acquire similar assets around the world.

Joint-venture partners, Highwood Resources (TSE) and Platinova AS (TSE), also have a specialty mineral property, known as the Gardar project in southwest Greenland. The deposit, located in the Illimaussaq intrusion, contains a large resource of zirconium, yttrium and rare earths, which are hosted in the readily soluble mineral eudialyte.

The deposit has indicated reserves of 1.3 million tonnes at 3.3% zirconia (ZrO2) and an additional mineral resource well in excess of the indicated reserves.

Because of its solubility, eudialyte is easier to process into high-purity zirconium products than conventional zircon mineral sands.

Currently, the main supply of zirconia for the high-purity markets is a South African mine which is scheduled to close due to depletion within the next five years. The companies feel that the Gardar deposit could have the potential to replace the South African supply.

Highwood also has a very large beryllium resource at Thor Lake in the Northwest Territories, 65 miles southeast of Yellowknife. A company spokesman said the project is on hold due to poor market conditions. Beryllium is a “high-tech” metal used by the U.S. defence industry.

Platinova has additional exposure to industrial minerals through its interest in Gitennes Exploration. Gitennes, which is expected to trade on the Canadian Dealing Network shortly, has a 100% interest in a wollastonite property near Madoc, Ont.

Wollastonite is used as a mineral filler in paint, plastics, and thermal board. It also can replace asbestos in ceramic and wall tile. A feasibility study indicated probable reserves in four zones of 2.1 million tons grading 30% wollastonite; an additional one million tonnes are in the possible category.

Gitennes is planning additional work on the property subject to financing. Exploration is also being carried out on a wollastonite property near Seeley’s Bay, Ont. (just north of Kingston) by Pacific Coast Mines. Pacific Coast is a unit of California-based U.S. Borax, which is a wholly-owned subsidiary of British mining conglomerate RTZ.

Pacific Coast has delineated a wollastonite-diopside unit that contains up to 80% wollastonite. The company believes the deposit will rival producing operations in New York State.

Pacific Coast is currently evaluating the deposit and hopes to have a feasibility study completed by the end of 1993.

Just north of Chicoutimi, Que., Orleans Resources (ME) has outlined proven and probable reserves of 8.7 million tonnes grading 37% wollastonite at its St-Onge project. President Jean-Guy Masse says results of recent lab tests indicate that the purity of concentrates produced by flotation ranges between 97.5% and 99.5%.

Fortune Minerals (CDN) is involved in industrial mineral exploration through its 30% interest in Formosa Environmental Aggregates. Fortune is managing Formosa’s high-purity, calcium-rich limestone project in southwestern Ontario and a gypsum project 100 km south of Moosonee, Ont.

A feasibility study is now underway on the limestone project, where initial testing has indicated grades in excess of 95% CaCO3. High-purity calcium limestone has a number of industrial, chemical, agricultural, and environmental applications.

Previous work on the Moose River gypsum property identified a 35-ft-thick gypsum unit with significant lateral extent. The company is planning to drill and bulk-sample the gypsum horizon to further evaluate its economic potential. Fortune President Robin Goad said the company is pursuing industrial mineral projects because they are “manageable from a technical and financial point of view.”

Fortune’s portfolio also includes a diamond property and base and precious metal properties in the Northwest Territories.

Up until three years ago, Jarvis Resources (VSE) was a junior mining company focused mainly on precious metal exploration. Now the company is well on its way to becoming one of North America’s leading marble producers. At present, about 60% of the marble used in North America is imported from Italy. Jarvis hopes to crack the Canadian and U.S. markets with a product quarried just outside of Sudbury, Ont.

Jarvis quarries calcitic marble from three pits in Parkin Twp. The marble is extracted in 15-18-ton blocks, which are then cut into slabs of various sizes for polishing. The finished products have both residential and commercial applications.

The project, which took just over two years to develop at a cost of $3 million, should be generating cash flow by August of this year, reports director Debra Dupuis.