Joint Venture Article: Pistol Bay Targets Zinc-Copper Discovery at Confederation Lake

Core racks at the Confederation Lake land package in Ontario. Credit: Pistol Bay Mining.Core racks at the Confederation Lake copper-zinc land package in Ontario. Credit: Pistol Bay Mining.

Pistol Bay Mining (TSX-VENTURE: PST; US-OTC: SLTFF) is well positioned for a zinc and copper rally thanks to a portfolio of zinc-copper prospects it has assembled along the Confederation Lake volcanogenic massive sulfide (VMS) greenstone belt, 50 km southeast of Red Lake, Ontario.

Confederation Lake experienced two major exploration waves over the past 50 years. The first wave, from the late 1960s to mid-1970s, was dominated by Selco Mining and led to the discovery of the South Bay deposit, which went on to produce 1.3 million tonnes of ore grading 2.3% copper, 14.7% zinc and 120 grams silver per tonne from 1971 to 1981. The second wave saw Noranda Exploration active in the region through the mid-1990s.

Pistol Bay has acquired a key pair of data sets from this historic work: a “whole-rock” geochemical database with almost 7,000 analyses by Noranda; and a series of Selco drill results, many of which were never in the public domain, for the Joy North property.

“It was just over two years ago when I started hearing we might be looking at a zinc market shock. It just kept coming up in my discussions despite the fact the spot price was really weak at that time,” says Pistol Bay President and CEO Charles Desjardins during an interview. “I stepped into the Confederation Lake area with the Dixie project, but then we realized there was an opportunity to consolidate this land package and systematically explore.”

The Confederation Lake VMS copper-zinc land package as of Sept. 2017. Credit: Pistol Bay Mining.

The Confederation Lake VMS copper-zinc land package in Ontario, as of September 2017. Credit: Pistol Bay Mining.

The company now controls nearly 100 sq. km along 53 km of favourable volcanic geology.

The core Confederation Lake position comprises 108 claims that include the Joy property, Garnet Lake/Arrow Zone, and Dixie blocks. The Arrow property hosts indicated resources of 2.1 million tonnes grading 5.92% zinc, 0.75% copper, 21 grams silver per tonne, and 0.58 gram gold per tonne.

Meanwhile, Joy features historic intervals that include: 5.7 metres of 3.1% copper and 0.2% zinc; and 3.35 metres of 4% copper and 0.17% zinc.

“I chased the owners of the claims around Garnet Lake for literally months,” recalls Desjardins. “It wasn’t until around one year ago I pinned it down. That brought in a lot of the land package, and we’ve completed four or five acquisitions on top of that. Then we’ve done some staking and acquired some patented land. Everything we’re picking up right now is under the airborne survey we completed, which covers around two-thirds of the belt.”

Pistol Bay started its exploration efforts across the newly consolidated Confederation Lake package earlier this year. The company noted previous discovery success based on deep-penetrating, time-domain ground surveys in areas of favourable geology, and thus opted to contract a helicopter-borne versatile time domain electromagnetic (VTEM) survey.

The 2,100 line km survey is designed to target a “depth slice” that has reportedly only been investigated by large-loop ground electromagnetic (EM) systems over “very limited areas.”

“The key thing about the VTEM is that it can essentially confirm all the conductive responses that identify the historic showings,” explains Desjardins. “It’s also showing potentially significant continuous conductive extensions, which is really key for us. There are also new clusters of conductive targets we’ve seen away from the known zones.”

Pistol Bay received initial results from its VTEM work in late August and now sees a number of anomalies where no mineralized zones were previously known, and has complete coverage of the land package.

Pistol Bay recently received the final results from a 2,100 line-km helicopter-borne electromagnetic and magnetic survey covering 40-km length the Confederation Lake greenstone belt. Credit: Pistol Bay Mining.

Pistol Bay now has the final results from a 2,100 line-km helicopter-borne electromagnetic and magnetic survey covering a 40-km length of the Confederation Lake greenstone belt in Ontario. Credit: Pistol Bay Mining.

The company is hopeful of a cash infusion later this year via a joint venture agreement with Rio Tinto (LON: RIO; NYSE: RIO) on the C-5 uranium property in Saskatchewan’s Athabasca Basin. Rio holds a 75% interest and can cement 100% by paying Pistol Bay $1.5 million by year-end, or $2 million by December 2018, or $2.5 million by December 2019. Pistol Bay would retain a 5% net profits interest.

Desjardins is also exploring potential joint venture relationships across the Confederation Lake package.

“Building a central processing facility could emerge as a viable option, but we think there’s exploration upside across the land package for a discovery with real size and grade,” he says.

“The great thing about the new zones, and all the new information we have, is that you can piece together a land package for a partner that has known drill intercepts, as well as the blue-sky upside from the VTEM. So there are lots of ways we can package it.”

On Sept. 11, Pistol Bay revealed it has identified “numerous new conductors” after receiving the final VTEM survey results.

Desjardins adds that the company has had early-stage discussions with potential partners, with all areas of Confederation Lake available for joint ventures.

Pistol Bay shares have traded in a 52-week range of 4¢ and 12¢ per share, and last closed at 5¢. The company has 43 million shares outstanding for a $2 million market capitalization.

The preceding Joint Venture Article is promoted content sponsored by Pistol Bay Mining Inc. and written in conjunction with The Northern Miner. Visit pistolbaymininginc.com to learn more.

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