At the Prospectors and Developers Association of Canada (PDAC) convention in Toronto in March 2018, Rockcliff Metals (CSE: RCLF) was a struggling junior with a large land package in the lesser known but geologically rich Flin Flon–Snow Lake (FF–SL) greenstone belt, with eight high-grade, base-metal volcanogenic massive sulphide (VMS) deposits and five gold properties.
It began as a tough year for Rockcliff, and it turned even rougher the week before the PDAC convention, when Kenneth Lapierre, Rockcliff’s president and CEO at the time, slipped on freshly fallen snow when taking out the garbage at home.
Not thinking much about his sore ankle, the six-foot-three-inch, former hockey-playing, karate-practising jock then started shovelling the driveway. Twelve hours later, the swelling and pain in his ankle demanded a trip to the doctor, where he learned that it was broken, and that he had torn all the soft tissue.
For the entire PDAC, Lapierre used a knee walker that resembled a scooter to get around, plus painkillers.
To add to his misery, a failed financing with B.C. investors was confirmed during the convention.
A smaller-than-expected, mid-2018 financing that allowed exploration work and a three-to-one stock consolidation further highlighted Rockcliff’s struggles.
One of the few bright spots was that Rockcliff’s former Tower high-grade copper-zinc deposit — which had been sold to merchant bank Norvista Capital for a 1.5% net smelter return royalty — was being investigated for production by the bank’s Akuna subsidiary. Norvista has equity positions in a portfolio of four base and precious metals exploration and development projects in Canada, the U.S. and Mexico.
“The first half of 2018 was turning into one of our toughest periods, ever,” Lapierre says in an interview. “But the Flin Flon–Snow Lake camp has such enormous potential. With a hundred years of mining activity, I believe our strategically consolidated properties in that camp will favourably position our company. There are many more Tower deposits to be found, as well as our promising gold properties — two of which caught the interest of Kinross.”
Founded by Lapierre in 2005, Rockcliff Metals has followed the model of the since-acquired, Sudbury-based miner FNX Mining, which got non-core assets from the dominant producer in an established mining district.
Whereas FNX picked up nickel assets from the majors in Sudbury, Rockcliff has acquired assets from Hudbay Minerals (TSX: HBM; NYSE: HBM). The junior has also staked property in the region and secured deals with prospectors and other juniors.
Rockcliff’s fortunes turned in the third quarter of 2018, when Lapierre was approached by private equity fund Greenstone, which was attracted by the junior’s land package in the FF–SL greenstone belt. Greenstone has US$430 million in committed, long-term capital focused on the mining and metals sector.
“Greenstone liked what we had and liked what Norvista had, but loved them both together,” Lapierre says. “What a difference a year makes!”
By the PDAC convention of March 2019, Rockcliff was negotiating a return of two significant assets with Norvista, which would see Rockcliff take back the Tower deposit and its option to earn a 51% interest in the Talbot high-grade copper-zinc deposit, as well as a leased 1,000-tonne-per-day, permitted mill just up the highway from both assets for an equity position in Rockcliff.
Norvista would subsequently see its 6% stake in Rockcliff rise to 28%, after a new share issue.
Greenstone, which previously owned no Rockcliff shares, would acquire 42% from that new share issue for the aggregate value of $20 million.
Rockcliff raised another $8.76 million through a flow-through financing that transformed the junior into a fully funded mine developer and explorer, with $29 million in the bank.
Rockcliff moved from the TSX Venture Exchange to the Canadian Securities Exchange to save money, and make transactions quicker.
In April, veteran mining executive Alistair Ross was appointed Rockcliff president and CEO to lead the company in its next phase of growth, with Lapierre taking the role of Rockcliff’s vice-president of exploration.
Ross has broad experience in small and large projects, with past work at Rio Tinto in Zimbabwe, Phelps Dodge in New Mexico and as president of Lonmin’s South African operations from 2005 to 2008. He also spent a combined seven years with Inco/Vale, most recently being responsible for the team that rebuilt and introduced new mining technology into the Sudbury underground operations, which consisted of six mines and some 2,000 employees.
“Rockcliff has amassed a great tract of land, already developed several near-term production opportunities, and has many more prospective targets that are worthy of rapid and intensive exploration,” Ross said in a release announcing his appointment. “I also look forward to implementing state-of-the-art mining technology in our development projects that should see a 15% improvement in bottom line performance over conventional mechanized mining methods.”
With the new management changes in place, Rockcliff plans to complete over 100,000 metres of exploration drilling over the next year and a half.
The first property to be looked at for a production scenario is Tower, which has high-grade, excellent infrastructure, low-cost electricity, and low anticipated capital costs.
Lapierre says: “We look forward to working with our First Nations communities, and will continue to nurture a positive and productive relationship as we transition from an explorer to a developer, and finally into a producer.”
Rockcliff is considering a hub and spoke development strategy using a central mill that could help the company transition into a copper-focused producer, with relatively low capital costs. As part of the transaction, Rockcliff acquired a seven-year processing lease on the Bucko Mill and tailing-storage facilities at the Bucko Lake mine near Wabowden, Manitoba.
With 100% ownership of the Tower property, Rockcliff will develop a resource that already stands at a National Instrument 43-101 compliant 1.08 million indicated tonnes grading 3.73% copper, 1.05% zinc, 0.55 gram gold per tonne and 17.28 grams silver per tonne. Another 1.25 million tonnes lie in the inferred category and grade 2% copper, 1.02% zinc, 0.27 gram gold and 9.78 grams silver.
Rockcliff aims to grow into a 15,000- to 20,000-tonne-per-year copper producer, and its ultimate goal would be to hit 50,000 tonnes of annual copper output.
In April 2018, Kinross Gold (TSX: K; NYSE: KGC) had optioned the Laguna and Lucky Jack gold properties from Rockcliff for $5.5 million in expenses for a 70% interest. Both properties are in the historic Herb Lake gold camp — Manitoba’s first and highest-grade gold camp.
Kinross’s initial commitment of $1.25 million in exploration expenses over two years was completed within the first six months. The major will continue with the option by budgeting another $1 million during 2019, which includes more diamond drilling.
The Laguna mine historically produced 60,000 oz. gold averaging over 20 grams gold per tonne up to the late 1930s, and was last drilled in 1944. Back then, the mine was called Herb Lake, and production stopped due to its lack of exploration to replace dwindling reserves during to the Second World War and never restarted.
The Snow Lake VMS mining camp was originally known for gold. Historic gold production between 1916 and 2005 from this camp is estimated at 1.5 to 2 million oz. gold, from relatively shallow depths. There is a 2,000-tonne-per-day gold mill within trucking distance of the Laguna and Lucky Jack properties.
Rockcliff’s Bur property hosts the high-grade, historical Bur zinc deposit and is only 22 km by road from Hudbay’s copper-zinc concentrator in the Snow Lake camp. Bur is considered one of the highest-grade, undeveloped zinc-copper VMS deposits in the belt, and is open along strike and at depth.
In May, Rockcliff announced near-surface, high-grade massive sulphides at Bur from the second-phase winter drilling campaign, highlighted by 17.95% zinc equivalent across 6 metres and 15.03% zinc equivalent across 4 metres.
Rockcliff intends to drill over 10,000 metres at Bur in 2019 to prove up more resources.
The Flin Flon–Snow Lake greenstone belt is the most prolific and highest-grade Paleoproterozoic VMS district in the world, and is rich in copper, gold, zinc and silver. The belt also contains primary gold mines and gold deposits.
In Canada, the contained value per square kilometre of this greenstone belt is significantly more than the better-known Abitibi belt that crosses northeastern Ontario and northwestern Quebec.
The FF–SL greenstone belt is 250 km long (the western portion crosses into Saskatchewan), and 150 km wide.
Just as the mineral-rich Sudbury basin was the starting point for former nickel mining giants Inco and Falconbridge, the FF–SL greenstone belt provided the platform for Hudbay’s rapid growth, which started in 1930 in Flin Flon, Manitoba.
The belt has been home to over 30 high-grade, copper-zinc mines and eight gold mines over the past hundred years.
The belt is divided in two halves: the northern half of exposed Canadian Shield rock outcrops is where most exploration occurs, and where mines are found.
Lapierre describes the southern half as being “covered with limestone, and as a result, has had significantly less exploration, in spite of the fact that this greenstone belt is greater in size under the limestone cover. It is only in the last few decades that geophysical programs have been able to penetrate below the limestone and identify areas where the highly conductive mineral deposits have concentrated.”
Grade is king
Nineteen of the 30 VMS mines that have gone into production since the 1930s began with less than 2 million tonnes of reserves. And during their mine-life, the mine reserve tonnages on average grew 2.5 times, with more drilling.
The greatest example of this is the legendary Flin Flon mine, which started production in 1930. The initial resource was 14 million tonnes, but over 60 million tonnes was produced over the next 62 years, until the mine closed in 1992.
Since the first Hudbay mine went into production, the FF–SL greenstone belt has produced slightly over 200 million tonnes of VMS-hosted copper, zinc, gold and silver production.
The town and original deposit’s name is taken from the lead character in a paperback novel The Sunless City by J. E. Preston Muddock. The novel’s protagonist Josiah Flintabbatey Flonatin piloted a submarine through a bottomless lake where he passed into a strange underground world through a hole lined with gold. A copy of the book was said to have found and read by prospector Tom Creighton, who discovered the deposit.
Subsequent historical research has largely confirmed that Aboriginal trapper David Collins is the person who showed Tom Creighton the Flin Flon deposit. Creighton, being a professional prospector, immediately recognized the significance of the discovery, while Collins did not. For the record, both men deserve equal billing as co-discoverers.
The town of Flin Flon grew considerably during the 1930s as farmers, who were impoverished by the Great Depression, abandoned their farms and came to work at the mines.
Hudbay in the belt
With almost 90 years of mineral production in the FF–SL camp, Hudbay Minerals still has many ongoing operations.
Its 777 mine, which started in 2004, produces zinc, copper, gold and silver. The mine life is projected until 2021.
The Lalor mine also produces zinc, copper, gold and silver, and is in the Chisel basin of the Flin Flon greenstone belt. Initial production began in August 2012, and the mine reached commercial production in the third quarter of 2014.
The company also has processing facilities that include the Flin Flon concentrator and a modern zinc plant in the town of Flin Flon. In addition, a refurbished concentrator in Snow Lake processes 3,000 tonnes per day of ore production from the Lalor mine, and produces zinc and copper concentrates.
Manitoba is consistently ranked as one of the world’s top mining jurisdictions, according to the Fraser Institute’s annual report on global mining jurisdictions.
Highways and rail infrastructure, low-cost electric power, local mining expertise and labour, First Nations support and agreements, and several operating mines and mills all add to the appeal of the prolific FF–SL mining belt.
Over the next two years, Rockcliff will implement one of the largest copper- and zinc-focused exploration programs undertaken anywhere in the world by a junior resource company.
Kinross will advance the optioned two gold properties, and Rockcliff will further explore the company’s three other gold properties.
Comments Lapierre: “Rockcliff Metals is a de-risked opportunity, in a de-risked jurisdiction, run by mine builders and discoverers that have done it all before, and supported by a major tier-one private equity mining and metals firm as a new cornerstone investor. In this market, it doesn’t get any better than that.”
— Stan Sudol is a Toronto-based communications consultant, freelance mining columnist and owner–editor of www.republicofmining.com, a mining news aggregator website.