Mining Explorers 2015: NWT exploration dips sharply
Government, industry leaders seek to draw mineral investment to territory
Last updated 11/1/2015 at Noon
Mineral exploration spending in Northwest Territories dipped sharply in 2015. While the final numbers are not in, Natural Resources Canada predicts exploration and deposit appraisal expenditures in the territory to be around C$43.6 million, or less than half the roughly C$95.8 million invested last year.
Industry and government leaders in the territory, however, have come together "to develop a robust mineral industry in the NWT."
In January, the government announced the formation of Northwest Territories' Mining Industry Advisory Board, a seven-person volunteer panel that includes Northwest Territories Minister of Industry, Tourism and Investment David Ramsay and six mining industry leaders.
During an inaugural meeting held in June, the group recommended a set of priorities for the territory that includes the creation of a leading-edge mineral resources act for NWT; a campaign to raise public awareness in support of mineral exploration and development in the territory; and active promotion of the territory to private sector investors.
"We need to ensure employment and business opportunities for our communities are realized from our resource-based economy while continuing to achieve high environmental and social standards," explained Ramsay.
To help spur exploration, Northwest Territories granted C$400,000 to prospectors and explorers under a mineral incentive program initiated in 2014. This year, the exploration incentive was divvied up among six mineral exploration companies and six individual prospectors.
"We know our territory is rich in minerals, but we are still under-explored," said Ramsay. "Prospecting maximizes the return on our investment through innovative and effective exploration. We are open for business with socially responsible companies that are willing to work with us to maximize the benefits for all northerners."
While not all that glitters in Northwest Territories are diamonds, the precious gem continues to be the most sought-after commodity in the northern jurisdiction.
Dominion Diamond Corp., which owns interests in the Ekati and Diavik diamond mines, reported continued extensions to the mine life of both operations found in the Lac de Gras region.
The company operates the Ekati Diamond Mine through an 88.9 percent ownership of the project's Core zone as well as a 65.3 percent ownership in the Buffer zone.
Roughly US$33 million was budgeted for continued exploration of the Jay and Sable kimberlite pipes at Ekati during 2015.
Jay, located in the Buffer Zone area of Ekati, is considered the mine's most significant undeveloped deposit due to its size and grade.
In January, Dominion announced a pre-feasibility study for Jay that includes 45.6 million metric tons of ore averaging 1.9 carats per metric ton for 84.6 million metric tons of diamonds in reserves. This would feed the current processing plant at its full capacity of 4.3 metric tons per year for roughly 11 years. A feasibility study is currently in the works.
This year, a 1,500-metric-ton bulk sample was collected from Sable, a pipe with 15.4 million metric tons of indicated resources averaging 0.9 carats per metric tons. A pre-feasibility study is currently underway for this kimberlite.
Dominion also owns a 40 percent in the Diavik Mine. In 2014, Rio Tinto approved the development of the A-21 pipe at Diavik, which has 3.7 million metric tons of proven reserves averaging 2.7 carat per metric ton for 10 million carats of diamonds.
The Lac de Gras joint venture property, located roughly 10 kilometers (six miles) south of Ekati and less than 40 kilometers (25 miles) southeast of Diavik, is an exploration project that covers kimberlite trends from both mines. Dominion's Lac de Gras property covers 32,780 hectares and is contiguous with a 91,459-hectare property held by North Arrow Minerals Inc. Under the terms of an agreement between Dominion Diamond and North Arrow, the two adjacent parcels are to be joined to form a joint venture property.
This year, North Arrow has been carrying out ground geophysics aimed at identifying targets for a potential spring 2016 drill program at the Redemption diamond project, located about 32 kilometers (20 miles) southwest of Ekati.
This work is being complemented by the Slave Province Surficial Materials and Permafrost Study, an ongoing Government funded research project led by the Northwest Territories Geoscience Office.
SPSMPS is evaluating the potential for new deposits by gaining a better understanding of the complex glacial sediments in the diamond-rich Lac de Gras region of Northwest Territories.
As part of the program, some 52 overburden reverse circulation drill holes were completed within and around the Redemption property in 2014 and further testing of the area is planned for this year.
Separately, North Arrow is doing its own more detailed evaluation of the surficial geology at Redemption.
North Arrow can earn a 55 percent interest in Redemption from Arctic Star Exploration Corp. by investing C$5 million on exploration by July 2017.
Beyond Lac de Gras
Throughout 2015, Kennady Diamonds Inc. poured out a steady stream of results from exploration at its Kennady North diamond project, a property that envelops the acreage south, west and north of Gahcho Kué, a diamond project being developed by a joint venture between De Beers Canada (51 percent) and Mountain Province Diamonds (49 percent).
In August, the company reported that a 433-metric-ton bulk sample from the southeast lobe of the Kelvin kimberlite at Kennady North returned 893 carats of commercial-size diamonds, or about 2.02 carats per metric ton. Of these, 35 were larger than one carat, including a 4.22 carat white/colorless, diamond with no inclusions.
Additionally, a 1.83-metric-ton sample from the Kelvin South Lobe averaged 3.64 carats per metric ton of commercial size diamonds, 2.7-metric-ton, sample collected from the north lobe of the Kelvin kimberlite averaged 2.74 carats of commercial-size diamonds per metric ton; and 1.92 metric tons of material sampled from the nearby Faraday kimberlite in 2013 and 2014 returned 6.57 carats of commercial size diamonds, or about 3.32 carats per metric ton.
"Based on drilling and sampling completed to date, we estimate that the Kelvin-Faraday kimberlite cluster has the potential to host between 12 million and 15 million metric tons at a grade of between 2 carats per metric ton and 2.5 cpt," said Kennady Diamonds CEO Patrick Evans.
The company plans to completed a maiden resource estimate for Kennady North by the end of the year and publish a prefeasibility study early in 2016. Ultimately, the company is targeting first production in 2020.
Evans, who is also president and CEO of Mountain Province, said the Gahcho Kué Mine, is on pace to begin production in the second half of 2016.
According to a feasibility study completed last year, the Gahcho Kué Mine is anticipated to produce 53.4 million carats of diamonds over a 12-year mine-life.
About 650 kilometers west of Gahcho Kué, Olivut Resources Ltd. continues to chase signs of diamonds at its HOAM project, which covers a vast region of Northwest Territories' Interior Plains region south of Great Bear Lake.
While Olivut has identified 29 kimberlite occurrences across the underexplored region, some with micro-diamonds, the company has not found the bedrock source of indicator minerals found in sediments that often accompany commercial grade diamonds.
After reviewing its extensive database of geophysical data during a program that extended into early 2015, the company identified some compelling targets for the source of kimberlite indicator mineral trains found on the property.
Olivut says detailed magnetic surveys are required to further narrow the field of targets for drilling.
Proxima Diamonds Corp., one of the six exploration companies to receive a Northwest Territories Mineral Incentive Program grant, continues to explore a number of promising diamond properties that it has acquired across the Slave Geological Province, including three high-priority targets in the Lac de Gras region and three lying between De Beers Snap Lake Mine and Gahcho Kué.
Canterra Minerals Corp., another 2015 mineral incentive program recipient, continued exploration of its South Slave properties, located between Snap Lake and Gahcho Kué. In September, the company announced a till sampling program to further refine drill targets, as well as groundwork in preparation of geophysical surveys to be completed early in 2016.
The capital of Northwest Territories traces its roots to the discovery of gold just north of Great Slave Lake. Today, TerraX Minerals Inc. is reviving this legacy with an exploration program hoping to outline at least five million ounces of gold at its Yellowknife City Gold Project, located within 15 kilometers (three miles) of the capital city.
To get its 2015 summer program started, TerraX used a C$80,000 grant from this year's Northwest Territories Mineral Incentive Program to complete mapping of structurally controlled gold targets it has identified on the property.
"The support shown through its MIP is seen by TerraX as a progressive move by the NWT government to sustain mining as an important economic driver in the NWT economy," the company commented on the program.
Osisko Gold Royalties Ltd., which has been investing heavily in TerraX's activities, lent technical expertise and staff to the field work.
TerraX followed the mapping with a 6,000-meter drill program focused on two regions within a core area of the Yellowknife property, Barney Shear, an extension of the Con-Giant shear system; and Crestaurum, a high-grade gold zone with more than 200 drill intersections from historical holes and recent drilling by TerraX.
Some 220 kilometers (135 miles) north of Yellowknife, Nighthawk Gold Corp. carried out a 3,000-meter drill program at it Indin Lake gold property.
Following up on the success it had in 2014, this year's program focused on better defining Zone 1.5 and Zone 1.0 of the Colomac gold deposit at Indin.
C14-06, the first Nighthawk hole to tap Zone 1.5, cut 52.5 meters of 7.78 g/t gold, including 21 meters of 16.73 g/t gold. This year's drilling aimed to expand upon the discovery. Zone 1.0 is located about 2,000 meters north of Zone 1.5.
"The significant results we encountered from Zone 1.5 during our 2014 drill program prove the northern portion of the Colomac sill merits further exploration," said Nighthawk President and CEO David Wiley. "Those results clearly demonstrate the potential for significant resource growth at Colomac."
Northwest Territories is also home to a number of base and strategic minerals deposits; however, only a handful of these were the target of any significant exploration in 2015.
In the southwest corner of the territory, Canadian Zinc Corp. completed a 5,484-meter underground drill program primarily focused on upgrading a portion of the large inferred resource at its Prairie Creek zinc-lead-silver mine project for potential inclusion in an update of the preliminary feasibility study.
With all 21 holes cutting the primary vein structure, it is expected this year' program will succeed in convert additional inferred resources to the measured and indicated category. Step-out holes are expected to add new mineralization to the resources as well.
PCU-15-72, the northernmost hole drilled in 2015, returned some of the highest grades and thicknesses of the 2015 program, including a 7.5-meter vein intercept grading 33.7 percent zinc, 17.8 percent lead and 247 grams-per-metric-ton silver; immediately followed by a 24.5-meter intersection of stockwork style mineralization averaging 12 percent zinc, 6.9 percent lead and 116 g/t silver; and subsequently followed by the intersection of a second vein that averaged 3.8 percent zinc, 5.6 percent lead and 88 g/t silver over 4.5 meters.
Additional indications of a second vein system were also intercepted in PCU-15-69 where an initial 10.3-meter vein intercept grading 7.8 percent zinc, 8.5 percent lead and 129 g/t silver was followed by another vein cut 56 meters further downhole that averaged 28.2 percent zinc, 21.5 percent lead and 452 g/t silver over 13 meters.
According to a new calculation published in September, Prairie Creek now hosts 8.7 million metric tons of measured and indicated resources averaging 9.5 percent zinc, 8.9 percent lead and 136 g/t silver; plus 7 million metric tons of inferred resources averaging 11.3 percent zinc, 7.7 percent lead and 166 g/t silver.
The upgraded resource is expected to result in a longer mine life and potentially an increase in high-grade mineralization available in the early years at Prairie Creek.
Canadian Zinc said it will need to raise significant capital to finish developing this mine, a dilutive endeavor that it is not willing undertake in current markets.
The company, meanwhile, is wrapping up optimization studies started in 2014.
Avalon Rare Metals Inc.' Nechalacho rare earth elements project and Fortune Minerals Ltd.'s NICO gold-cobalt-bismuth-copper project are two other up and coming mines in Northwest Territories that are now in holding patterns in the current market.
Avalon has received the permits to begin development at Nechalacho, but has decided to hold off on development of the REE project situated on Thor Lake some 100 kilometers (60 miles) southeast of Yellowknife.
"The start date for beginning pre-construction work at Nechalacho remains uncertain due to the present market conditions for raising project financing," the company explained in its second-quarter financial disclosure.
Similarly, Fortune is looking for ways to fund the development of its NICO gold-cobalt-bismuth-copper project located about 160 kilometers (100 miles) northwest of Yellowknife.
The company has already secured the permits needed to begin construction and is now looking for potential off-take agreements and other financing options that will allow it to develop the mine.
Demco Limited Partnership, a mineral exploration company formed by the Dene First Nations in the Northwest Territories, is exploring an iron oxide-copper-gold project similar to NICO.
The properties acquired by Demco cover an area south of Great Bear Lake that host four historic mines that produced silver, copper and bismuth from the 1960s into the early 1980s.
When the company was formed in 2013, Demco observed that the downturn in the junior exploration sector was an ideal time to acquire junior mining companies and/or their assets.
"The silver lining to present and initiate a Denendeh exploration and mining company at this time may help create momentum for fundamental change in First Nation participation in resource development in the Northwest Territories and Canada," the company said.
Demco's 2015 exploration of this project was partially funded through the Northwest Territories mineral incentive program.
Two other base metal explorers that received MIP funding are Panarc Resources Ltd., which is exploring the Indian Mountain copper-zinc-lead-silver project; and GGL Resources Corp., which owns claims prospective for gold, copper, nickel and volcanogenic massive sulphide deposits and in the Northwest Territories.