Northern Shield, South32 team up

VANCOUVER — A commitment to ore mineralogy is paying off for junior Northern Shield Resources (TSXV: NRN) at its greenfield Huckleberry copper-nickel discovery in the southern Labrador Trough. On June 7, the company struck an option agreement wherein Australia-based mega-miner South32 could earn a 70% interest in the project via $5 million in exploration expenses over three years.

Under the deal, South32 can earn a half stake for $2.5 million spent over two years, and increase that to 70% by spending another $2.5 million over the third year.

Northern Shield’s interest would be free-carried to completion of a preliminary economic assessment (PEA), and South32 has a first right of refusal on the junior’s neighbouring Séquoi property.

The two properties lie 100 km north of Schefferville, Que.

At the Huckleberry copper-nickel project in the southern Labrador Trough, from left: Ian Bliss, Northern Shield Resources’ president and CEO; Mirek Wozga, senior manager of resource evaluation with South32; and project geologist Gabriela Murray. Credit: Northern Shield Resources.

“We didn’t strictly want to negotiate that they would carry us through to the PEA because we wanted benchmarks,” president and CEO Ian Bliss said during an interview. “It’s especially important early on that money is spent, and during these preliminary stages we will continue to manage the project. That also helps South32, because they need to become more familiar with the Labrador Trough region.”

Northern Shield staked Huckleberry in mid-2014, but didn’t make a discovery until late last year, when sampling on a gossanous outcrop located at the contact between an olivine melagabbro and porphyritic gabbro returned eye-opening assays, including: 1.3% copper and 0.54 gram platinum-palladium per tonne; and 1.2% copper and 0.59 gram platinum-palladium per tonne.

The underlying geology is dominated by a thick sequence of glomeroporphyritic gabbro, which is intruded by various other mafic phases, including the olivine melagabbro. The principal mineralized target lies in the western part of the property and includes the Discovery zone, where 58 samples average 1.2% copper, 0.2% nickel and 0.83 gram platinum group metals and gold.

Magnetic geophysical survey results at the Séquoi Target 10 km east of Huckleberry. Credit: Northern Shield Resources.

“Initially we wanted to backtrack on the government data and chemically fingerprint ultramafic intrusions up and down the Labrador Trough. We identified ‘fertile’ gabbros that are enriched in platinum group elements and nickel, and the greatest concentration of these targets was right around Huckleberry,” Bliss continued.

“Late in the season our chief geologist, Christine Vaillancourt, was in helicopter and saw a massive gossan on the side of this ridge. She figured somebody must have done fieldwork there, but due to bad weather they had to land and grabbed some samples. Needless to say we realized it was a discovery, and subsequent work indicated the potential extent of the mineralization,” he said.

In addition to the good grades, Huckleberry has size potential. Northern Shield’s geological modelling indicates mineralization at the property may have resulted from a “dynamic, violent, episodic and long-lived” magmatic history.

Geologists on the Discovery zone at Northern Shield Resources’ Huckleberry copper-nickel property in the Labrador Trough. . Credit: Northern Shield Resources.

The company has identified various characteristics associated with “large-scale” deposits, including: magmatic breccias throughout the intrusion, flow-banding in some of the ultramafic layers and multiple mineralization phases.

“One of the critical things with Huckleberry are those high copper-nickel ratios, because they indicate you’re dealing with a segregated magmatic system,” Bliss said. “You generally only see that when the magma cools extremely slowly, and so either it’s a massive magma chamber that’s hot, or there’s been a constant influx of hot magma into the system. Both are good scenarios, because that’s where you find giant deposits.”

The ultimate project is likely beyond that of a junior, but Northern Shield will remain operator through the 70% earn-in. The companies plan three weeks of outcrop sampling at Huckleberry, followed by an airborne electromagnetic survey. Bliss said South32 hopes to drill as “soon as practically possible.”

The Huckleberry mineral occurrence 100 km north of Schefferville, Quebec.

Northern Shield was careful to keep Séquoi segregated from the main deal. The property covers a large, multi-lobed magnetic anomaly that is interpreted to be a flat-lying, dish-shaped mafic-ultramafic intrusion possibly related to Huckleberry, and part of a feeder system.

“On a regional scale we’re right on the transition from a gravity high to a gravity low, and when you look at analogous nickel belts they’re all similarly positioned,” Bliss said. “That tends to indicate deep-penetrating graben structures, so it’s in the right terrain. There’s also a huge swath of highly anomalous nickel-copper in lake-bottom sediments collected by the Quebec government in that part of the Labrador Trough. Somewhere there’s a source, and we believe we’re in the right area based on our interpretation of the glaciation.”

There’s virtually no outcrop at Séquoi due to low-lying terrain, so Northern Shield will fly airborne magnetics this year to line up drill targets. Fieldwork at Huckleberry was underway at press time.

Northern Shield has traded within a 52-week range of 1¢ to 22¢ per share, and last closed at 17¢. The company has 177.3 million shares outstanding for a $31-million market capitalization.