Knight, Anglo report high grades in Ungava

Anglo American geologist Dan MacNeil examines the Discovery gossan at the Frontier South property in far-northern Quebec.Anglo American geologist Dan MacNeil examines the Discovery gossan at the Frontier South property in far-northern Quebec.

The Raglan area in the Ungava Peninsula region of northern Quebec is emerging as a highly prospective nickel camp in light of discoveries by Canadian Royalties (CZZ-V) and, more recently, Anglo American (AAUK-Q) and Knight Resources (KNP-V).

Early last year, the Canadian exploration division of Anglo American map-staked an initial 680-sq.-km package of contiguous claims on the western end of the Cape Smith fold belt after identifying this domain as having the best potential anywhere in the world for the discovery of a new nickel deposit. The eastern edge of the property, called West Raglan, is 80 km west of Falconbridge‘s (FL-T) 5-year old Raglan nickel mine. Raglan is an open-pit/underground mining and milling operation that hosts proven and probable reserves of 18.1 million tonnes grading 2.88% nickel and 0.79% copper, with significant credits in cobalt and platinum group elements (PGEs).

Anglo American conducted a preliminary field investigation across the property in the summer of 2002 before farming out an interest in the project to Knight Resources, a Vancouver-based junior led by Harvey Keats and David Patterson, the same team that heads Donner Minerals (DML-V).

Knight’s president, Keats, says Anglo was looking to spread the risk in a manner similar to that of Teck Cominco’s working relationship with junior companies. “I was convinced that the Chukotat formation and the Raglan horizon did go through the property they had picked up,” Keats said, when asked why Knight did the deal. “I was absolutely intrigued by the fact that there had been no drilling done, nor had there been any large modern airborne survey done over the area. I found it hard to believe that you had the same rocks over there without any nickel sulphides in them.”

Keats didn’t do the Donner deal because the company had 70 million shares outstanding and close to 100 million fully diluted. “It was much easier to finance in Knight,” says Keats. Instead, Donner took a big piece of Knight in the early financing, and currently it holds a 28-29% stake on a fully diluted basis. At present, Knight has 36 million shares outstanding, or 56 million fully diluted.

Knight can earn a 49% interest in the project, which has since been expanded to 720 sq. km, by making cumulative expenditures of $11.8 million before the end of 2006, including at least $1.7 million this year and $2.3 million in 2004. Anglo will participate in any of the exploration budgets approved by the management committee to the tune of 20% each year through private placements in Knight.

Anglo American can increase its interest to 70% by completing, at its own cost, a bankable feasibility study. At Knight’s election, Anglo can further increase its interest to 75% by arranging production financing for both parties.

Anglo is in charge of exploration under the direction of a management committee consisting of two representatives from each of the companies. Knight has the right to appoint one full-time geologist to the project.

Raglan camp

The nickel deposits in the Raglan mining camp stretch across 55 km, east-west, and consist of clusters of discrete, sulphide lenses associated with peridotitic flow bodies at the base of the Chukotat rock group. The individual ore lenses, which number more than 60, consist of a narrow zone of massive sulphides along the footwall contact overlain by net-textured and disseminated sulphides. The sulphide lenses are in channels or troughs at the base of the peridotitic flow, and they vary considerably in size and shape, ranging anywhere from a few metres to tens of metres thick and with a strike length of tens of metres to 200 metres.

The Katinniq deposit alone contains more than 20 discrete lenses that vary from 10,000 to 1.4 million tonnes in size. By comparison, Canadian Royalties’ newly discovered, partially defined Mesamax deposit is one lens containing 1.45 million tonnes of 2.1% nickel, 2.7% copper and 0.08% cobalt, plus 0.3 gram gold, 1 gram platinum and 4.2 grams palladium per tonne.

Canadian Royalties has been exploring the Povungnituk group, a parallel belt of mafic volcanics and related sediments into which a series of ultramafic rocks have intruded, some 15-20 km south of the Raglan trend or horizon. The Val d’Or-based junior has proved the southern trend is just as prospective as its counterpart, with the discovery of several new high-grade PGE-enriched nickel deposits, along with a multitude of encouraging prospects.

The Raglan area occupies the central-eastern part of the early Proterozoic Cape Smith fold belt, a rifted continental margin and arc-continental collision zone that strikes in an east-west direction across the Ungava Peninsula.

The stratigraphy of the Cape Smith belt is broadly subdivided into a lower sedimentary group, a central division of tholeiitic basalts and sediments (Povungnituk group), and an upper division of komatiitic basalts (Chukotat group). Mafic-to-ultramafic flows and sills are abundant in the east-central portion of the belt.

The Povungnituk group consists of a lower sedimentary sequence into which several gabbro sills intrude the upper part. This sequence is overlain by a volcanic stacking of bimodal composition that includes tholeiitic basaltic flows, rhyolite horizons, and thin interbedded volcaniclastic and sedimentary horizons. Several mafic-to-ultramafic sills intrude the upper part units of the Povungnituk group.

The Chukotat group consists almost exclusively of basaltic flows, with a chemical composition varying from komatiitic to tholeiitic. Mafic-to-ultramafic sills and flows cut the basaltic stacking, especially toward the base, where this group rests on a fault contact with the Povungnituk group.

The West Raglan property is 80 km south of the coastal community of Salluit in the sub-Arctic region of Nunavik. The property covers over a 70-km-long strike projection of the western extension of both the northern Chukotat and the southern Povungnituk formations. In this western part of the Cape Smith belt, the two formations are only a couple of kilometres apart.

In the Raglan mine area, the Cape Smith belt is a folded syncline sequence that ends west of Cross Lake. Anglo American’s geologists believe the syncline is followed by an anticline fold that ends east of Chukotat Lake and is in turn followed by another syncline on the western end of the Cape Smith belt.

“Preliminary investigation confirmed that the property contains the same horizon as the one hosting the Raglan deposits and that the ultramafic formations hold good potential to be mineralized at depth,” states Anglo’s senior project geologist, Richard Dufresne, in a technical report dated March 7, 2003.

The West Raglan property has seen only sporadic and reconnaissance-style exploration through the years, with no evidence of any prior drilling. A 3-frequency helicopter-borne survey was flown in 1987 on behalf of Ateba Mines and Jascan Resources. West Raglan is largely covered by overburden. Outcrops of ultramafic, gabbro and volcanics range from 40% in the north to just 5% in the south. Of the southern exposures, only a few in the east are ultramafic.

During the summer of 2002, Anglo spent 24 days on the property conducting preliminary mapping and sampling. Reconnaissance traverses were done at irregular spacing varying from 0.5 to 2 km, with some helicopter-borne traverses to cover specific sites on the property. In total, 165 samples were taken. Several new disseminated sulphide occurrences in mafic and ultramafic bodies were found.

Preliminary fieldwork confirmed the presence of favourable stratigraphy and identified high-magnesium ultramafic rocks in at least two different stratigraphic positions. Regional magnetics showed an “excellent” correlation with known ultramafic bodies and confirmed the extension of Raglan-lookalike ultramafic bodies on the northern portion of the project.

After hooking up with Knight, Anglo kicked off the 2003 program in mid-April by flying the project area with its proprietary deep penetrating Spectrem airborne electromagnetic and magnetic survey, for a total of 4,800 line km. High-priority targets were then followed up by ground geophysical surveys, geological mapping, prospecting and geochemical sampling.

Surface sampling uncovered high-grade massive sulphides and net-textured sulphides in boulders at several sites along a 1.6-km portion of a 3-km-long conductive trend, labeled the Frontier zone. The best grab sample assayed 3.41% nickel, 2.91% copper and 0.09% cobalt, plus 0.84 gram platinum and 3.3 grams palladium.

Th discovery of massive sulphide mineralization at surface is quite rare, considering that Canadian Royalties has found only surface showings of disseminated sulphide mineralization along the South trend in three years of exploration. “All along our properties, some ninety kilometres, I have never seen massive sulphides on surface; I have never seen even the net-textured stuff,” Canadian Royalties’ project geologist, Todd Keast, told The Northern Miner during a site visit.

Eighteen holes were drilled in the late summer by Anglo, 16 of which were drilled in the Frontier area, 7 km west of Lac Chukotat. Half of these holes returned exceptional nickel-copper-PGE values, including a 0.67-metre section of massive sulphides in hole 16 that ran 11.83% nickel, 2.03% copper and 0.23% cobalt, plus 0.91 gram platinum and 5.6 grams palladium per tonne. “We were really lucky we found sulphide boulders on surface and that we found the source of those boulders in the first drill program,” says Knight’s Harvey Keats. “We are in the Chukotat formation, and we have the same type of sulphides and the same nickel tenure as at Raglan.” All of the mineralization encountered occurs in or immediately adjacent to ultramafic rocks near the base of the Chukotat formation.

The Frontier area, which extends over 3 km east-west by 1 km north-south, has been divided into four zones: Frontier East, Central, West and South.

Frontier South

Anglo drilled seven of the early holes into the Frontier South showing, testing an initial 100 metres of strike length. Only two of the seven holes recorded hits. The near-vertical hole 8 intersected a 14.7-metre-thick sequence of net-textured sulphides grading 3.04% nickel, 1.13% copper and 0.08% cobalt, plus 0.87 gram platinum and 2.93 grams palladium, starting at a depth of 17.2 metres.

Hole 9 was collared at minus 60 to the south, from the same setup, and encountered 6.9 metres grading 1.05% nickel, 0.92% copper and 0.03% cobalt, plus 0.27 gram platinum and 0.92 gram palladium, at a depth of 3.1-10 metres. This was followed down-hole by a high-grade 3-metre section averaging 3.69% nickel, 0.86% copper and 0.07% cobalt, plus 0.36 gram platinum and 2.28 grams palladium, at a depth of 24.3 metres.

As it turns out, several of the early holes were apparently drilled in the wrong direction. Anglo started the campaign by aiming the holes in a southerly direction beneath the mineralized ultramafic showings based on the orientation of the stratigraphy in the Raglan mine area, which dips moderately to the north. Keats says it soon became obvious that the Frontier sequence is locally overturned and dips steeply to the south, resulting in several misses as the holes were being drilled parallel to the stratigraphy. Anglo corrected the situation mid-way through the program by drilling the remaining holes in a northerly direction.

Frontier Central

The best results come from Frontier Central, where Anglo tested the showing with three holes correctly aimed in a northerly direction from two sites spaced 100 metres apart. The holes were designed to test subcrop exposures of mineralized ultramafic and mineralized boulders that ran between 1.9% and 3.4% nickel. Collared at minus 45, hole 14 intersected a near-surface 8.7 metres of net-textured sulphides grading 3.26% nickel, 1.4% copper and 0.06% cobalt, plus 0.33 gram gold, 0.95 gram platinum and 3.22 grams palladium per tonne. The mineralization was encountered 20.7 metres down-hole at the margins of a steeply dipping peridotite body.

Steepened to minus 70 from the same setup, hole 15 hit 2.7 metres grading 2% nickel, 0.99% copper and 0.05% cobalt, plus 0.29 gram platinum and 1.75 grams palladium, at 26.2 metres down-hole. Anglo stepped-out 100 metres to the west with hole 16, which was drilled at minus 45. The hole encountered a narrow, 0.8-metre interval of massive sulphides grading 7.15% nickel, 3.56% copper and 0.16% cobalt, plus 1.21 grams platinum and 2.99 grams palladium, at 19.1 metres of depth. This was followed down-hole by 5.1 metres of massive and net-textured sulphides averaging 4.16% nickel, 1.64% copper and 0.09% cobalt, plus 0.6 gram platinum and 2.48 grams palladium, starting at 64.3 metres of depth.

Frontier East

Moving 1.1 km to the east, five holes tested the Frontier East prospect, where boulder samples returned up to 3.4% nickel. After determining that hole 2, the first hole drilled in the Frontier area, was collared in the wrong direction based on a reinterpretation of the dip, Anglo collared holes 12 and 13 from the same setup 100 metres farther to the east and pointed them north. Hole 12 was angled at minus 45 and cut 15.5 metres grading 1.2% nickel, 0.81% copper and 0.04% cobalt, plus 0.28 gram platinum and 1.03 grams palladium, starting at 15 metres down-hole. Hole 13 was steepened to minus 70 and intersected 8.4 metres of 2.32% nickel, 1.4% copper and 0.08% cobalt, as well as 0.38 gram platinum and 1.49 grams palladium, at 41 metres of depth.

Collared at minus 45, hole 17 stepped-out 50 metres to the west and hit 4.2 metres grading 2.85% nickel, 1.3% copper and 0.07% cobalt, plus 0.61 gram platinum and 2.03 grams palladium, from 51.8 metres down-hole. Hole 18 was steepened from the same site but did not intersect any significant mineralization.

Knight and Anglo have already begun planning next year’s exploration program, which will include follow-up drilling on the known zones, while field crews conduct further assessment on the rest of the property, especially the southern Povungnituk group. “We hope that as we go along, we find multiple deposits,” says Keats, adding “I still think there is really good potential in the Povungnituk, as Canadian Royalties has demonstrated.”

Canadian Royalties

In the meantime, Canadian Royalties has taken advantage of favourable weather conditions and extended its 2003 field season by continuing to drill full-blast with two rigs at the Expo-Ungava joint venture on the Raglan South trend. The company has completed well over 200 holes totalling more than 20,000 metres since the start of the season, including 40 at Expo. The latest batch of drill results from infill and exploration drilling on the Expo deposit indicates Canadian Royalties may have discovered a new mineralized zone along side the northeastern boundary.

A fan of three holes into this area has cut wide swaths of disseminated sulphides, including several zones of higher-grade massive sulphides, that are outside the historic Amax resource boundary. Hole 03-25, at minus 65, intersected 116 metres of 0.5% nickel, 0.36% copper and 0.02% cobalt, plus 0.2 gram platinum and 1.14 grams palladium, starting at 9.7 metres from surface. Higher-grade sections include 4.8 metres grading 2.86% nickel, 1.46% copper and 0.12% cobalt, plus 0.97 gram platinum and 3.44 grams palladium, and an 11-metre interval at the bottom averaging 1.45% nickel, 1.08% copper and 0.06% cobalt, plus 0.53 gram platinum and 5.41 grams palladium.

“This is probably the first direct benefit of the 2003 Aerotem airborne geophysical survey because the data were showing us something that had not been tested previously,” says Canadian Royalties President Glenn Mullan. (Aerotem is a proprietary helicopter-borne electromagnetic and magnetic survey flown by AeroQuest, with an exploration depth of up to 250 metres.) “It led to a greater definition on the ground to resolve this area along the north contact. It’s a strong max-min [standard-frequency horizontal loop-electromagnetic] anomaly that is 400-450 metres long. There are implications for adding to the Expo tonnage and even changing the overall grades.”

Canadian Royalties holds interests in 38 properties covering a 1,074-sq.-km package in the Raglan camp. The properties are positioned mainly along the South trend. Several of the satellite properties have been farmed-out to Boulder Mining (YBR-V), Montoro Resources (MNQ-V) and Little Mountain Resources (LIT-V). By completing exploration expenditures of more than $1.7 million, Canadian Royalties has earned a 70% interest in the 206-sq.-km Expo-Ungava project, under option from Ungava Minerals. A further 10% can be acquired by delivering a bankable feasibility study.

Virtually the entire Cape Smith belt has now been staked by either companies or individual prospectors. NovaWest Resources (NVE-V) has taken seven years to assemble a land position covering 661 sq. km in the Raglan assemblage. In April, Cascadia International Resources (CJ-V) optioned a half-interest in the project by agreeing to fund $12 million in exploration expenditures over three years, as well as pay $300,000 in cash and issue 1.5 million shares over the same period.

This property package surrounds the Delta-Kent property, owned 51% by Falconbridge and 49% by Melkior Resources (MKR-V). Delta hosts a historically calculated geological resource estimate of 817,000 tonnes grading 3.05% nickel and 1.26% copper, plus 0.22 gram gold, 1 gram platinum and 1.65 grams palladium.

NovaWest and Cascadia added to their holdings in August by acquiring a 100% interest in the 35-claim Thunder property strategically positioned on the main Raglan trend between Falconbridge’s Cross Lake and C2 deposits.

A $3.5-million exploration program was budgeted for this year; it included a large-scale logistical move and camp construction phase, extensive helicopter-supported prospecting and sampling traverses, a 6,600-line-km Aerotem airborne survey, gridding and ground geophysics, and the initial drilling of 13 holes, for which results are pending.

The surface sampling identified anomalous mineralized trends, with the best grabs yielding 9.6% copper, 0.05% nickel, 2.65 grams gold, 1.49 grams platinum and 6.92 grams palladium, plus 1.33% copper, 1.85% nickel, 0.1% cobalt, 1.28 grams platinum and 0.32 gram palladium.

Goldbrook Ventures (GBK-V) is one of the larger landholders in the Raglan camp, with a 100% interest in 1,240 sq. km strategically situated at both ends of the belt. In addition, Goldbook has teamed with Inlet Resources (INS-V) and Masuparia Gold (MPG-V) to earn up to an 80% interest in a 589-sq.-km land package. A 4,200-line-km Aerotem geophysical survey was flown early in the summer, with follow-up groundwork consisting of geological mapping, prospecting, sampling and ground geophysics. Goldbrook focused on two known showings on the Belanger property, which adjoins the southern and eastern boundaries of the West Raglan project.

The showings, consisting of blebby chalcopyrite and pyrrhotite hosted by peridotite, were traced over a length of 400 metres. The best grab samples returned 4 grams combined palladium and platinum.

Other juniors holding interests in the Raglan area include: Bayfield Ventures (BYV-V), Beaufield Consolidated Resources (BFD-V), Volcanic Metals Exploration (VME-V), CanAlaska Ventures (CVV-V), Thelon Ventures (THV-V), Golden Valley Mines (GZZ-V), Regent Ventures (REV-V), UC Resources (UC-V), Minera Capital (MNL-V), Acrex Ventures (AKV-V), VVC Exploration (VVC-V) and Consolidated Gold Win Ventures (CGW-V).


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