Northern Dancer growing into world-class moly-tungsten deposit

Vancouver — Drill results are confirming that Largo Resources’ (LGO-V, LGORF-O) Northern Dancer project hosts one of the largest known tungsten-molybdenum porphyry systems in the world.

A recent 26-hole drill program at the project, a 15-sq.-km area straddling the B.C.-Yukon border 290 km east of Whitehorse, returned two lengthy, well-mineralized intercepts as well as several shorter, higher-grade hits.

The strongest grades came in hole 79, which cut 44 metres grading 0.22% WO3 and 0.035% molybdenum from 327 metres depth, followed by 68.8 metres grading 0.11% WO3 and 0.147% molybdenum from 405 metres. Hole 80, collared 150 metres southeast, pulled 85.4 metres of 0.11% WO3 and 0.072% molybdenum.

The long intercepts came farther south, still near the eastern edge of the deposit. Hole 75 was collared 500 metres south of hole 79 and cut 438 metres of 0.1% WO3 and 0.03% molybdenum from 3 metres depth; hole 76 was drilled midway between the two and returned 387 metres of 0.13% WO3 and 0.03% molybdenum from 1.5 metres below surface. Both of the long intercepts included shorter, high-grade segments, such as 24 metres grading 0.29% WO3 and 0.03% molybdenum.

One of a trio of results, out in early November, indicated that longer intercepts along the eastern side of the deposit might be forthcoming. Hole 73, later sandwiched between holes 75 and 76, pulled a 339-metre intercept grading 0.15% WO3 and 0.03% molybdenum from surface, including 54 metres of 0.32% WO3 and 0.02% molybdenum.

Largo believes the intercepts represent true thicknesses. The company has received results for 11 holes to date and is still awaiting results from the remaining 15.

AMAX Minerals, which, through a series of major acquisitions is now part of Freeport-McMoRan Copper & Gold (FCX-N), worked what was then called the Logtung property in the 1970s, drilling 51 diamond holes and advancing almost 500 metres of underground exploration workings. Since Largo came on scene in 2006, the Northern Dancer property has seen an additional 43 holes, producing enough data for a resource calculation last April. At that point, the deposit was estimated to hold 242 million inferred tonnes grading 0.1% WO3 and 0.047% molybdenite, which is 0.028% molybdenum. Included in the inferred resource is a higher-grade molybdenum zone hosting 36.8 million tonnes of 0.085% molybdenite.

Mineralization at Northern Dancer is porphyry-style, with metals hosted in fractures and veins associated with a northeast-trending sheeted vein system in calc-silicate or skarn rocks. The quartz-feldspar porphyry is also spatially related to a felsic intrusion. The deposit has to date been tested for 750 metres along strike, 600 metres width, and to a depth of 500 metres.

Tungsten and molybdenum mineralization are concentrated in two zones that partially overlap. A higher-grade molybdenite zone sits in the core of the deposit, where molybdenite occurs within and adjacent to the felsic intrusions. Surrounding and partially overlapping the molybdenite zone is a much more extensive tungsten zone, characterized by scheelite occurring in northeast-trending sheeted quartz veins in skarn.

The 2007 drill program was designed to define the extension of the higher-grade molybdenum and tungsten zones intersected in 2006. More specifically, Largo completed a series of angled drill-hole fences across the deposit because historical drill holes were vertical or sub-vertical, and so did not adequately test the typically steeply dipping quartz-scheelite veins with which higher tungsten grades are associated.

And soil-sampling results indicate good potential for tungsten mineralization to extend southwest from the deposit, where soils average 0.157% WO3, considerably higher than the average 0.024% WO3 found in soils from the deposit area. The southwesternmost hole to date, hole 78, returned 64 metres grading 0.12% WO3 and 0.02% molybdenum from 75 metres depth.

Largo is focused on specialty metals. The company’s other main project is Maracas, a vanadium-platinum project in Bahai, Brazil. In December, a preliminary economic assessment of Maracas forecast that an initial capital investment of US$126.2 million would generate US$683 million in cash flow over a 26-year mine life.

The assessment was based on a pit shell reflecting a vanadium pentoxide price of US$5 per lb. The pit would be mined in two phases, but the assessment included only the first phase of 14.7 million tonnes of ore grading 1.29% VO5. Total measured and indicated resources at Maracas are estimated at 22.5 million tonnes grading 1.27 VO5 and 0.28 gram combined platinum and palladium per tonne.

Two days after the preliminary assessment came out, Largo announced that a feasibility study for the project was under way.

Largo fell slightly on news of the latest drill results from Northern Dancer, closing down 4 at 46. The company has a 52-week trading range of 32.5-$1.07 and has 92.5 million shares issued.