Majescor options Portage property to BHP

Encouraged by results from till sampling in the Otish Mountains area of central Quebec, BHP Diamonds has struck a deal with Majescor Resources (MAJ-V) to earn up to a 56% interest in the Portage property by funding all costs through to production.

The wholly owned subsidiary of Australia’s BHP (BHP-N) can earn an initial 40% interest in the grassroots-stage property by completing a minimum 200-tonne bulk sample from at least one kimberlite source within four years. BHP will then have 30 months in which to complete a prefeasibility study, including a 1,000-to-2,000-tonne bulk sample, in order to earn a further 5%. To increase the interest to 51%, the major must complete a bankable feasibility study, including a 5,000-to-10,000-tonne bulk-sample, within another 30-month time frame. And by arranging for production financing, BHP can increase its stake to an ultimate 56%, at which point, the major will be granted a 5-year term to market all of the rough diamond production.

In addition, BHP will reimburse Majescor for up to $260,000 in staking costs and transfer, at no cost to Majescor, all its 520-sq-km land position in the area. As a result, Majescor’s holdings in the Otish Mountains area will expand to 1,920 sq. km. BHP will be the operator at Portage, though half the exploration team will consist of Majescor personnel.

Ground investigations of regional airborne magnetic anomalies in 1998 led to the recovery of one garnet from each of two till samples collected in a vast plain, which stretches to the northwest of the Otish Mountains, 270 km northeast of Chibougamau. Follow-up work by Majescor in the summer and fall of 1999 generated a broad, loosely defined, 25-by-45-km corridor of anomalous kimberlite indicator minerals in glaciofluvial sediments.

This anomaly was better defined in 2000 through a program of glacial sediment sampling in which close to 600 samples were taken. In August 2000, Ashton Mining of Canada (ACA-T), in joint venture with Quebec government-owned Soquem, staked a 445-sq.-km block in the Otish Mountains area following positive results from its own reconnaissance till sampling.

Majescor responded by acquiring five exploration permits totalling 1,028 sq. km and covering a large part of the indicator mineral anomaly, down-ice from Ashton. In early 2001, Ashton picked up a further 830 sq. km of ground, much of it up-ice from its original claims.

Within the anomaly, Majescor says the indicator mineral population is dominated by peridotitic garnet (20-25% are classified as G10s), followed by picroilmenite. Only one grain of chromite was recovered from the area. However, its composition falls within the diamond inclusion field. Majescor favourably compares the indicator mineral chemistry to that of Lac de Gras in the Northwest Territories.

Outside of the immediate Portage dispersion plume, the background is barren of indicator minerals, with less than one positive sample being recorded for every 100 sites — the maximum count in any one sample being one grain.

BHP has approved a $1.1-million exploration and acquisition budget for the Portage property, including extensive airborne geophysical surveys and heavy mineral sampling.

Ashton, in turn, flew a geophysical survey over the Otish Mountains region in late 2000 and followed up with ground geophysics over eight targets in March. Several of these targets are near highly anomalous indicator mineral sample sites. Certain samples contain favourable high-chromium, low-calcium G10 pyrope garnets and picro-ilmenites. These anomalies are being further investigated this summer through sampling and prospecting, in preparation for drilling.