EXPLORATION ’95 — Manitoba mineral exploration expenditures

The province of Manitoba last year experienced its highest exploration expenditures in four years; ministry of energy and mines personnel estimate that $40 million was spent in this area.

By year-end, 4,724 claims and four exploration permits had been recorded, compared with 2,257 claims and 10 permits a year earlier. At the end of 1994, the total area of mineral dispositions in good standing was 3,521,046 hectares, an increase of 16% from 1993.

Towards the end of 1994, Granduc Mining (TSE) achieved its targeted production rate of 1,200 tonnes per operating day at the Keystone gold mine near Lynn Lake, and Hudson Bay Mining and Smelting brought the Westarm copper-zinc mine, 15 km south of Flin Flon, back into production. At Snow Lake, TVX Gold (TSE) continued to work on the New Britannia gold mine project, with the intention to start production late in 1995. Inco (TSE) announced the discovery of a high-grade nickel deposit, referred to as Pipe Deep, 30 km south of Thompson. At Photo Lake, 10 km southwest of Snow Lake, HudBay outlined a small, high-grade copper-zinc deposit. At Pipestone Lake in central Manitoba, Gossan Resources (VSE) and Cross Lake Mineral Exploration (a private company owned by the Cross Lake First Nations Indian band) completed a $1.5-million drilling program on a large titanium-vanadium-iron deposit with promising economic concentrations of these three elements.

The Manitoba government’s 1994 budget introduced several initiatives specifically aimed at mining, including relief of sales tax on electricity for the mining and metal refining industry, a doubling of the processing allowance, and a 7% capital investment tax credit on new mine investments. These initiatives built upon previous incentives such as the “mining tax holiday” for new mines, the Mineral Exploration Incentive Program, and the Manitoba Prospectors Assistance Program.

With the sale of its interest in the Trout Lake joint venture to HudBay and with the disposal of the rest of its holdings, Manitoba Mineral Resources (MMR) ceased its involvement in mining exploration. MMR was incorporated in 1971 and the provincial government was its sole shareholder. In base metals, HudBay conducted extensive airborne and ground surveys over its holdings in the Flin Flon-Snow Lake area. This work yielded several new geochemical, geological and geophysical targets. Drill-testing of these targets is in progress. The co-ordinated surveys were successful in identifying several new sulphide conductors.

One of these, Photo Lake, is about 10 km southwest of the town of Snow Lake. At Photo Lake, drilling outlined a geological resource in excess of 500,000 tonnes grading more than 5.5% copper and 6% zinc, with anomalously high gold values. Confirmation drilling and feasibility studies are under way to justify a production decision in 1995.

Last year, HudBay acquired the interests of Granges (TSE) and MMR in the Trout Lake mine to become sole owner of the mine. In addition to acquiring control of Trout Lake, a number of exploration properties were acquired from both MMR and Granges. HudBay is now proceeding with a shaft-deepening project at Trout Lake and an evaluation of the acquired properties.

Exploration activity at the Trout Lake and Callinan mines has been focussed on identifying new mineralized zones in addition to normal zone extension and definition work. The results of this work are preliminary but promising. At Trout Lake, two new hangingwall crosscuts on the 760-metre level were completed to facilitate deep exploration drilling of the H10, North, West, and Middle zones. At Callinan, new exploration-oriented development headings were established to provide proper drill attack positions for the North, East, and South zones.

The dormant Westarm mine, from startup in 1974 until 1985, provided about 1 million tonnes copper and zinc ore for the smelter and metallurgical plant at Flin Flon. The remaining proven and probable reserves at Westarm are about 514,000 tonnes averaging 3.46% copper and 2.16% zinc. Production is scheduled to commence this year at about 900 tonnes per day.

Granges conducted geophysical surveys and/or drill programs at Thompson Lake, Big Island and at the West Arm joint venture property (with HudBay) at Schist Lake.

In a combined diamond/base metal exploration program, SouthernEra Resources (TSE) and partners Consolidated Newgate Resources (VSE) and Consolidated Samarkand Resources (VSE) conducted a large geophysics and diamond drill program in the area extending southwest from Wekusko Lake to North Moose Lake. Canmine Resources (CDN) continued exploration at the Fer property at Kississing Lake. Canmine proposed a 13,700-metre drill program to test various targets at depth this winter.

At Lynn Lake-Leaf Rapids, airborne and ground surveys carried out by HudBay in the Ruttan Mine area provided new exploration targets that are currently being tested. Promising results have been obtained from exploration activity at the mine itself.

After an intensive exploration effort in the Pipe Mine area at its Thompson Nickel Belt and Extension, Inco announced the discovery of a high-grade nickel deposit referred to as Pipe Deep. Initially intersected in 1992, the deposit has been the subject of ongoing drill programs.

Pipe Deep is estimated to contain 3.63 million tonnes of 2.32% nickel with copper, cobalt and platinum group metals values. Additional exploration drilling and an engineering study will be conducted at Pipe Deep this year. Development work at Inco’s 1-D deposit in Thompson included completion of the 3,600 level haulage drift to the T-3 Mine workings, vent shaft installation, ore/waste pass development and drifting, as well as operating and exploration diamond drilling. Production of 510 tonnes per day is set to commence this year, and gradually increase to 3,630 tonnes by 1999.

Falconbridge (TSE) continued to conduct geophysical surveys and diamond drilling in the southern extension of the Thompson Nickel Belt in the William Lake-Cedar Lake area. The company is expected to concentrate considerable efforts in this region again this year. In the Wabowden area, Falconbridge completed drill programs at Bucko Lake and Halfway Lake.

Cominco (TSE) completed geophysical surveys and diamond drilling on its Special Permit in the Lake Winnipegosis and Swan River areas. In precious metals, Granduc experienced typical startup pains at its Keystone operation in Lynn Lake. Third-quarter results were more optimistic as targeted production of 1,200 tonnes per day had been achieved, and additional design improvements were expected to boost gold recovery and mill throughput by early this year. At this point, the operation is to be producing 33,000 oz. annually from the BT pit at a cash operating cost of US$295 per oz. Having acquired the rights to the Farley Lake gold deposit in 1993, Granduc has been conducting detailed mine planning and acquiring permits for the new Farley pit. Farley pre-stripping is to begin in the summer. When in full production, Farley is expected to be a low-cost producer of about 1,555 kg gold per year.

In June, High River Gold Mines (TSE) shareholders approved the 50/50 joint-venture deal with TVX for the New Britannia project at Snow Lake. Since then, TVX has been busy driving a decline into the No. 3 zone on the “Dunlop” property, rehabilitating underground workings, and constructing surface infrastructure at the former Nor-Acme mine.

A used carbon-in-pulp mill facility will be delivered and erected at the site this year. The project is scheduled to be up and running by early 1996 (or possibly late 1995). Minable reserves for New Britannia are currently estimated at 4.96 million tonnes grading 5.7 grams gold per tonne. Both the New Britannia and No. 3 structures remain open at depth.

Rea Gold (TSE) completed a $3-million program at the former San Antonio mine in southeast Manitoba. Referred to as the Bissett gold project, it included rehabilitation of the mine workings, 300 metres of drifting to provide drill access on the 32nd and 33rd levels of the mine, and
8,000 metres of drilling from these two levels.

The main objective of this program was to increase ore reserves along strike and down dip. Existing exploration results include several stockwork vein intersections on trend to previously discovered veining. Updated calculations will be incorporated into a feasibility study expected early in 1995. In diamonds, exploration drill programs in northern Manitoba were conducted by SouthernEra in the Wekusko Lake-Patriarche Lake area, European Ventures (VSE) at Wekusko Lake and MMR in the Patriarche Lake area.

Airborne geophysical surveys were completed by Savanna Resources (ASE) at Wimapedi Lake and MMR in the Moose Lake area.

In southern Manitoba, Winslow Gold (VSE), Northwind Ventures (VSE) and Indicator Explorations carried out ground magnetics on their respective properties.

In other mineral commodities, at Pipestone Lake, about 600 km north of Winnipeg, partners Gossan and Cross Lake have been aggressively exploring their titanium-vanadium-iron deposit. The property hosts at least four zones of disseminated and/or massive titanium-vanadium-iron oxide mineralization within a layered anorthositic intrusion.

After completing linecutting and geophysics early in the year, the partners completed more than 100 drill holes by the fall. Drilling thus far has focussed on the Main Central zone where an inferred resource of 5.4 million tonnes averaging 50% iron, 11.5% titanium and 0.7% vanadium has been determined. The combined minerals have an approximate in situ value of about US$410 per tonne.

— Bruno Esposito is assessment geologist, Winnipeg, and D. E. Prouse is resident geologist, The Pas, for Manitoba Energy and Mines.