GREENLAND FLASHES THE GREEN LIGHT

In Greenland, a part of the Kingdom of Denmark, the red carpet has been rolled out for explorationists. Corporate tax structures have changed for the better, production under the new rules should follow successful exploration as smoothly as it once did throughout Canada, and state “back-in” ownership provisions have been erased from the books.

Thus the prohibitive human factor no longer stands between explorationists and the enticing geology, unobscured by overburden — and all of it within a short truck haul (if that) to tidewater.

This policy U-turn sprang from a deep concern over the island’s ailing fish-based economy. The fishery is suffering. The mines that once were heavy revenue generators are now closed. The former Black Angel zinc/lead mine on the west coast, another on the east coast and a third, a cryolite mine in the south, have all run out of ore. Not a single mine came into production under the old rules to fill the gap. So the Greenland Home Rule and the Danish government changed the rules to what they are today:

An effective corporate tax rate of 35%. No royalties or production fees of any sort and companies choose the rate of asset write-down.

Post-production back-in rights by the state have been abolished.

A stable, helpful political system in Denmark and Greenland that promises to keep red tape to a minimum.

An indication of Greenland’s keen interest in mineral exploration: the premier himself, Lars Emil Johansen, chairs the key Joint Committee on Mineral Resources, an 11-member, Danish-Greenlandic political forum that monitors mineral resource development and forwards recommendations to the Greenland Executive and the Danish Minister of Energy, which jointly make final decisions.

A “single-window” approach to regulatory approvals. The Mineral Resources Administration (MRA) handles all communications from an applicant company, processing licence applications, granting licences, regulating exploration and development, and so on. MRA is the central Danish/Greenlandic authority dealing with mineral resources. It is assisted by The Geological Survey of Greenland (GGU).

Potential tax breaks for mining companies that build on- or near-site mineral processing plants.

“We did all this to become competitive on the international scene, to attract mining,” Ove Rosing Olsen, Minister of Trade and Industry, told The Northern Miner Magazine on a visit to Greenland late last summer.

Of course, Greenland is competing with many other countries — most intensely, with practically every Latin American state and some countries in the former Eastern Bloc. But it is doing so at a time when base and precious metal exploration in Canada seems to be withering on the vine. So several Canadian firms (and a few large foreign companies) are actively engaged in exploration in Greenland.

Platinova Projects

A prominent player is Platinova A/S, a Danish-registered and Greenland-based company with roots in Canada and a listing on the Toronto Stock Exchange. (Please see accompanying story on Platinova and Nunaoil A/S, an aggressive government-run exploration company.) In joint venture with Falconbridge, Platinova is examining a nickel/copper prospect in flood basalts of the Disko Bay area in central west Greenland. Platinova President Bob Gannicott refers to this as a Noril’sk-type prospect because of certain physical and chemical similarities to the Siberian deposit.

Airborne geophysics were conducted in late spring and drill targets have been pinpointed. The $800,000, 1992 program of airborne EM surveys, and basic ground work has identified several drill targets for 1993, said Tony Green, regional exploration manager for Falconbridge, the operator.

In central west Greenland, only 30 km. from the Black Angel mine, RTZ has discovered an interesting stratiform zinc prospect. Surficially, it appears as a gossan 15 m. wide and one km. long. Grades and thicknesses, so far, do not warrant drilling, reports Platinova.

On its own, Platinova is following up work done in 1991 by the Geological Survey of Greenland (GGU) on the Nuussuaq Peninsula at Saqqaq. Platinova is testing this gold-mineralized zone in Archaean supracrustal rocks. The GGU had traced the zone over a strike of 1.6 km.

Skaergaard Prospect

Perhaps Platinova’s most publicized play is the Skaergaard Intrusion of eastern Greenland. This gold, platinum-group and ilmenite (titanium-dioxide) resource has been tested with 27 holes and seven wedge cuts. Drilling has confirmed continuity of two mineralized layers, but values are low and the widths narrow, although the resource in areal extent is huge.

Lakefield Research is studying the potential for co-production of ilmenite to supplement revenues from gold. J.S. Redpath has been commissioned to examine the potential for low-cost, bulk-mining methods. Pegasus Gold can earn a 51% interest in the project.

Platinova is also in joint venture with Highwood Resources and Calkas A/S investigating the Ilimaussaq intrusion in the Gardar province for rare earths, yttrium and zirconium. Project manager, Strathcona Mineral Services, has spent $500,000 drilling the prospect. A Japanese ceramic maker has shown interest in it.

At the other geographic extreme, the far northwest, Nanisivik Mines and Platinova have sampled gossans on a zinc-mineralized massive sulphide showing. Gannicott told The Northern Miner Magazine that the 1992 summer program revealed a 100-km.-long horizon of mostly low grade and narrow width mineralization.

Nunaoil is owned 50/50 by the governments of Greenland and Denmark. But it’s a state-owned enterprise with a difference. “We’re not just another government company,” says John Gowen, Nunaoil’s Nuuk manager. “We’re as aggressive as any junior company can be.”

Nunaoil operates in the mining sector on a level playing field with other private companies. It tries to develop grass roots projects and then seek out partners to advance the play to production, if warranted. Joint ventures are sought, openly and competitively, and agreements are not subject to any government policy with regard to control, says Gowen. In other words, a partner can make an agreement with Nunaoil on the same basis as with any private sector company. Nunaoil has formed joint ventures so far with Australian companies, Coffs Harbour Rutile and Pasminco Australia Ltd. It is currently negotiating with several North American companies.

In southern Greenland, 35 km. northeast of Nanortilik, Nunaoil A/S discovered several gold-bearing quartz veins in the Kirkespir valley. Mapped and sampled over an 800-m. length, the Main Vein varied in thickness from 1.66 m. to 0.05 m. The grade averaged 51.45 grams per tonne over 0.46 m.

“Visible gold is common and high-grade portions with abundant VG (visible gold) have been noted in four places,” said a Nunaoil press release. The quartz veins are found within a thick sequence of fine- to medium-grained mafic rocks.

Thirty kilometres to the north, at Nanisiaq, Nunaoil continues exploring a series of structurally-controlled quartz veins in amphibolite and granodiorite. Gold values range from 55 grams per tonne over 7 m. down to 0.01 over 1 m.

In the Archaean Taartoq greenstone belt in southwestern Greenland detailed sampling, mapping and geophysical surveys have led to the discovery of two separate occurrences of stratabound zinc and copper mineralization.

SouthernEra Resources, the company with hot diamond properties in the Northwest Territories, prospected on ground held by Platinova recently. SouthernEra was poking about in two different areas of Greenland — for diamonds, of course.

Both Lac Minerals and BHP Utah had sent geologists on field excursions to Greenland sponsored by the GGU last summer. In talking with the BHP people, The Northern Miner Magazine learned they were primarily interested in the Caledonian fold belts in the northeast part of the island. Lac’s focus was greenstone belts. Neither has announced any new projects yet.