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Signs of NWT mineral exploration revival

Two juniors commence production of rare earths, gold in 2021 Mining Explorers 2021 - January 27, 2022

Mineral exploration activity in Northwest Territories showed signs of revival in 2021, coming on the heels of the slowest year in recent memory.

Excited by renewed interest in gold deposits in and around the capital city of Yellowknife and other hot spots after the pandemic-related restrictions of 2020, juniors joined longtime explorers Nighthawk Gold Corp. and Gold Terra Resource Corp. (formerly TerraX Minerals) in hunting for the yellow metal across the 1.14 million-square-kilometer (442,000 square miles) territory.

A few diamond hunters sought the next big discovery even as the territory's output slipped to fifth place from third among diamond-producing regions in the world.

Two companies seeking base metal deposits made substantial strides in advancing their respective projects, while Australia-based Vital Metals Ltd. crossed the finish line to begin producing ore rich with rare earths at its Nechalacho Project in July.

Decline in minerals output

Overall, a downturn in mining activity in Northwest Territories took a big toll in 2020, deepening an ongoing decline in the territory's yearly minerals output.

The decrease reflected COVID-19-related weakness in global diamond sales, the short-term closure of one diamond mine, and no new production from any mining sector.

Natural Resources Canada estimated 2020 mineral production in Northwest Territories fell to C$1.15 billion in value, down 25% from C$1.53 billion a year earlier and C$2.04 billion in 2018.

"In NWT and Nunavut, we are seeing opposing multi-year trends," observed Ken Armstrong, president of the NWT & Nunavut Chamber of Mines.

"Unfortunately, in the NWT, we are seeing the pattern of decline that economists have been predicting as a result of maturing mines combined with no new mineral production coming on stream," Armstrong said in July after Ottawa released annual mineral production statistics for Canada's provinces and territories.

"We very much look forward to seeing the Prairie Creek, Nechalacho, Pine Point and Nico deposits advancing to production to help mitigate some of the losses," he added.

Northwest Territories currently has three producing diamond mines – Ekati, Diavik, and Gahcho Kué. No new mines have come online in the territory since DeBeers and its partner, Mountain Province Diamonds Inc., began commercial production at Gahcho Kué in 2017.

Spurring mineral exploration

The governments of Northwest Territories and Canada continued efforts in 2021 to stimulate mineral exploration for the seventh consecutive year, awarding separate rounds of grants in the spring and the fall to help offset the high cost of mining exploration in the northern territory. The 2021 incentives totaled C$1.5 million for mineral explorers and prospectors with promising projects.

Supplementing the roughly C$1 million awarded by the territorial government last spring, Canadian Northern Economic Development Agency allocated C$500,000 during the fall to support a second call for NWT Mining Incentive Program applications in 2021-22, focusing on winter exploration.

"The NWT is a resource-rich territory, and mining is the biggest source of private-sector jobs and income for our residents," said Caroline Wawzonek, the GNWT's minister of finance, industry, tourism and investment.

Northwest Territories is home to about 44,000 residents.

"To help industry bounce back from the setbacks of the COVID-19 pandemic and to restore levels of investment, partnership, and growth in the NWT's economy, we must try to renew mineral exploration activity in the territory," Wawzonek said in October.

The latest funding, a one-time winter MIP offering, provided a maximum of five awards of C$100,000 each that focused on mineral deposit targeting, mineral deposit testing, and innovative research and development projects that support detailed exploration or early-stage mineral production.

The money provided up to 60% of eligible project expenses, and successful applicants were required to fund the remaining 40% (or more) of their proposed projects. The work must be completed by March 31.

Successful applicants for the first round of funding included Arctic Star Exploration, (C$180,000) seeking diamonds in the North Slave region; BNT Gold Resources (C$39,388), gold, North Slave; Canadian Zinc (C$96,000), zinc, silver, Dehcho region; Fortune Minerals Ltd. (C$144,000) gold, North Slave; Golden Planet, (C$120,000) gold, North Slave; Kennady Diamonds ($168,000) diamonds, North Slave; and Rover Metals, gold, North Slave. Another C$133,984 in incentives, ranging from C$9,214 to C$21,250 each, went to eight prospectors seeking gold, uranium, diamonds, barite, and rare earth elements across the territory.

Energetic gold hunters

Near-record prices stimulated interest in gold deposits, and explorers, including several newcomers, continued to chase the yellow metal.

Nighthawk Gold Corp. embarked on a two-year goal in 2021 to complete 200,000 meters of drilling focused on delineation of near-surface mineralization at its district-scale Indin Lake gold camp.

Located about 200 kilometers (120 miles) north of Yellowknife, the Indin Lake property covers 930 square kilometers or roughly 174,000 American football fields. A vast yet underexplored property, it hosts 2.3 million ounces of indicated gold resource and 800,000 oz of inferred resource, according to a year-end 2020 estimate.

Nighthawk drilled roughly 72,000 meters in two phases during 2021 in exploration focused primarily on near-surface mineralization for resource expansion and on greenfield targets across the property.

Nighthawk also earmarked completion of a preliminary economic assessment for Indin by the end of 2021.

At Gold Terra's Yellowknife City Project, exploration has identified significant zones of gold mineralization as well as multiple targets that remain to be tested. The project covers 800 square kilometers (309 square miles) of contiguous land immediately north, south, and east of Yellowknife. The district-scale property lies on the prolific Yellowknife greenstone belt, covering nearly 70 kilometers (43 miles) of strike length along the main mineralized shear system, a formation that hosts the historic high-grade Con and Giant gold mines.

A March 2021 resource estimate for the YCG project totals 1.21 million oz of gold in inferred resource in multiple zones, up 64% from a 2019 calculation.

Another explorer, Sixty North Gold Mining Ltd., worked in 2021 to advance its Mon Gold Project – the only fully permitted gold mining project in Northwest Territories – to production.

Located about 40 kilometers (25 miles) north of Yellowknife, the property hosts the historic Mon Mine, which operated between 1991 and 1997 on a summer-only basis, producing 15,000 oz of gold from 15,000 metric tons of ore. Mined at a depth of about 15 meters below surface, the earlier operation ended when low gold prices forced the mine to close.

Relatively small by NWT standards, Mon covers 622 hectares (1,537 acres) in the Yellowknife Gold District.

Having identified more gold mineralization beneath mined-out stopes at Mon, the junior is working to restart the mine. This includes the extraction of 4,000 to 6,000 metric tons of material during the summer for bulk sampling to confirm previous high grades found at the mine.

Recent metallurgical testing of a quarter-metric-ton sample yielded recoveries averaging 98.8% at a grade of 158 g/t gold. High-grade samples up to 688 g/t gold over half a meter also have been recovered on the property.

Other targets include recently discovered silver- and gold-rich volcanogenic massive sulfide targets, as well as shear zone-hosted gold mineralization similar in nature to and hosted in the same rocks like those found in world-class deposits at the historic Con and Giant mines in Yellowknife, which together produced 14 million oz gold.

Sixty North Gold also optioned the 2,394-hectare (5,916 acres) Hangstone property in 2021 from an independent prospector and identified another bulk mineable target during the summer. Hangstone adjoins the Mon property to the east and south.

Fortune Minerals Ltd., a longtime explorer in Northwest Territories, undertook a 3,000-meter drill program in 2021 to test up to five high priority targets at its Nico cobalt-gold-bismuth-copper project about 160 kilometers (99 miles) north of Yellowknife.

Fortune, which discovered the Nico deposit in 1996, is now in the final stages of bringing the asset into production. The 2021 exploration focused on additional high-value gold and cobalt resources by drilling targets identified with induced polarization and magnetometer surveys in 2020.

The Nico deposit hosts proven and probable open pit and underground mineral reserves totaling 33 million metric tons, containing 1.1 million oz of gold, 82.3 million pounds of cobalt, 102.1 million lbs. of bismuth, and 27.2 million lbs. of copper.

Fortune also owns the satellite Sue-Dianne copper-silver-gold deposit, located 25 kilometers (16 miles) north of the Nico project mine site. It is a potential future source of incremental mill feed to extend the projected 20-year life of the Nico mill and concentrator.

Other juniors that mounted promising exploration programs in the hunt for gold include:

Rover Metals Corp., which resumed its search at the Cabin Lake Gold Project located 110 kilometers (67 miles) northwest of Yellowknife at the north end of Russell Lake. The project's northwest claim block, Camp Gold, is located 20 kilometers (12 miles) southeast of Fortune's Nico project. The junior mounted a 3,000-meter drill program on the historic Beaver Andrew South zones. This program was a follow-up to a successful phase 1 drill campaign in 2020 that cut 32 meters of 13.6 g/t gold at the Cabin Lake zone in hole CL-20-08. Rover completed airborne and ground geophysics on the iron formation at the Slemon Lake and Cabin Lake gold claims to extend future exploration targets. The junior said it now plans a large induced polarization survey of all known gold-bearing zones at Cabin Lake and some new anomaly targets. Adding that a final leg of exploration during the season would set the stage for deeper drilling of all defined gold-bearing zones in the first quarter of 2022, Rover Metals CEO Judson Culter said the goal of 2021 exploration was to define at least one new additional zone open at depth. He also said the Arrow Zone discovery that Rover made in late 2020 remains open at depth and will be the junior's first drill target in early 2022. Rover Metals also controls the Up Town Gold, a 3,227-hectare (7,974 acres) high-grade gold prospect covering six claims bordering the historic Giant Mine about six kilometers (four miles) north of downtown Yellowknife and adjoining Gold Terra's YCG Project. In 2021, Rover Metals re-optioned a 75% interest in the Up Town project to Melius Capital Corp., which immediately conducted a geophysics and lidar mapping program at Up Town and planned diamond drilling to begin late in 2021 focused on highly prospective historic zones reporting high-grade gold. Initial drill targets included the J-7 Zone, the Big Vein Zone, and the No.1 Vein Zone.

Golden Planet acquired ownership of the 125-square-kilometer (78 square miles) Olympus gold project located in the Slave Corridor in April. A highly mineralized gold project in eastern Northwest Territories near the Nunavut border, Olympus has several high-grade drill intercepts, including 7.03 g/t gold over seven meters in the southeastern part of the property, 5.1 g/t gold over 5.6 meters in the northeast, and a historic grab sample of 205 g/t gold. The project is located fewer than 35 kilometers (22 miles) from the proposed Grays Bay Port and Road Project, an all-weather interior access highway being completed over the next several years in Nunavut. Golden Planet – formed recently through a business combination of Saskatchewan Gold Corp. (founded by Palisades Goldcorp) and XCorp AI Ltd. (founded by GoldSpot Discoveries Corp.) – began 2021 exploration at the Olympus Gold project in July that included regional till geochemistry, bedrock mapping, prospecting and ground geophysics over known prospects

BNT Resources Ltd. focused on the Fox Lake gold project located some 280 kilometers (174 miles) northeast of Yellowknife. The 106-square-kilometer (41 square miles) property is adjacent to the Gahcho Kué diamond mine and the Kennady Lake diamond project. BNT said the project hosts drill-tested and proven gold deposits, and recent work identified multiple gold and diamond targets at Fox Lake, ranging up to 3,500 meters in length.

Diamond explorers

Reeling from the effects of pandemic-weakened markets in 2020, diamond miners in Northwest Territories entered 2021 determined to make the most of rising prices.

Diamond production has far outstripped exploration activity in recent years in Northwest Territories, but a new owner at the Ekati Diamond Mine, the territory's oldest diamond mine, and an aggressive strategy by the DeBeers Canada-led partnership that owns Gahcho Kué, the newest mine, could herald a change in that ratio.

Ekati's ownership changed hands when Arctic Canadian Diamond Co. finalized a deal in early 2021, giving it controlling interest in the property. Arctic immediately signaled its goal to optimize opportunities that the prolific diamond asset presents. Workers returned to the mine in February after being furloughed for much of 2020 due to COVID-19 and weak diamond markets.

The Ekati mine property, located in the Lac de Gras region of the Northwest Territories, lies about 300 kilometers (186 miles) northeast of Yellowknife. The property consists of the Core Zone, which includes the current operating mine, and the Buffer Zone, an adjacent area which hosts the Jay and Lynx kimberlite pipes.

Arctic Canadian said it sees longer-term development potential at Ekati in the Sable Deep, Fox Deep, Point Lake, and Jay zones and further discovery potential in brownfields exploration.

The current mine life of Ekati, including the Misery underground and the Jay project, runs to 2034. Several exploration and project evaluation activities are ongoing, including the development of an innovative mining technique that could be used to extract deeper resources from the Sable, Fox, and Point Lake kimberlites. This could extend the life of Ekati to 2042, the company said.

Arctic also acquired 72.8% interest in the 147,200-hectare (363,731 acres) Lac de Gras property held through a joint venture agreement with North Arrow Minerals Inc., which owns 27.2% interest.

A C$3.5 million budget for exploration at Lac de Gras was planned in 2020, but the owners shut down the program in mid-March due to the pandemic. The JV partners are reviewing options for renewed exploration.

North Arrow also mounted a brief drill program at its Loki diamond project about 40 kilometers (25 miles) west and 35 kilometers (22 miles) southwest of the Diavik and Ekati mines, respectively.

A six-hole reverse circulation drill program tested, without success, recently defined gravity targets of potential bedrock kimberlite sources for a regional kimberlite indicator mineral anomaly that terminates on the Loki property. The area forms part of what has historically been known as the South Coppermine Train. The junior also collected overburden samples during the program that will be processed for indicator minerals to help with ongoing interpretation.

Arctic Canadian also owns a parcel of leases released by the previous Diavik joint venture that covers 132,560 hectares (327,556 acres) on the eastern side of the Diavik mine. The miner said it would conduct an in-depth data review of the property in 2021 to prioritize future targets.

Diavik, owned by Rio Tinto, sits on a 20-square-kilometer (7.72 square miles) island in Lac de Gras. It began commercial production in 2003 and is due to cease operation in 2025. Diavik produces about 7 million carats of diamonds annually.

At the Gahcho Kué Mine, co-owners DeBeers Canada (51%) and Mountain Province Diamonds Ltd. (49%) focused in 2021 on the positive market environment.

The upturn was forecast to continue through the second half of 2021, assuming consumer confidence and spending levels continued to recover.

At midyear, Mountain Province said Gahcho Kué had rebounded from a difficult start to 2021, with production on track to meet expectations for the year.

At the adjacent Kennady North project, Mountain Province extended its landholdings around the Gahcho Kué mine property after in-house data suggested that kimberlite indicator minerals continued up-ice and east of known kimberlite occurrences, including the ones at Gahcho Kué.

Some 22 federal leases and 97 claims that include eastern claims acquired in early 2020 extend the project's land package to 106,202 hectares (262,425 acres).

The explorer also completed a glacial geology study on the eastern claims that incorporates field mapping and remote imagery data and collected more than 600 till samples on the Kennady claims in its search for kimberlite indicator minerals.

Mountain Province also undertook exploration of the property's eastern claims using a new ground-based resistivity survey system developed by Yellowknife-based Aurora Geoscience Ltd., along with airborne and ground gravity surveys, till sampling, and limited drilling during winter 2022 exploration.

In its drive to expand the reach and impact of NWT diamond mining, the territorial government certified Diamonds de Canada Ltd. as an "Approved NWT Diamond Manufacturer." The designation ensures that Diamonds de Canada has access to NWT-mined rough diamonds for its manufacturing activities, which includes cutting and polishing, and that the work will occur within the territory. The company has entered into a monitoring agreement with the government and joined Almod Diamonds as the second of two approved NWT diamond manufacturers.

Base metals projects advance

Among companies seeking base metals in the territory, Osisko Metals Inc. was one of the most active in 2021. The junior completed a winter drill program that encountered significant zinc and lead mineralization in an underexplored area of the advanced Pine Point project, located on the south shore of Great Slave Lake near Hay River, NWT.

Montreal-based Osisko also undertook a 13,000-meter summer-fall drill program that focused mainly on infill drilling aimed at converting current inferred resources to the indicated category. Some holes also tested hydrogeological characterization of water flow in the dolomite host rock in areas not previously investigated on the project.

In addition, Osisko re-logged and re-assayed historical Cominco drill core to support completion of an updated preliminary economic assessment and mineral resource for the project in early 2022. Pine Point's current mineral resource estimate for an open pit and shallow underground mine totals 12.9 million metric tons of indicated resource averaging 6.3% zinc-equivalent and 37.6 million metric tons of inferred resource averaging 6.8% zinc-equivalent.

"Pine Point will be one of the most advanced zinc development projects globally and will stand out as a potential producer of ultra-clean zinc concentrate," predicted Osisko Metals President and CEO Jeff Hussey.

NorZinc Ltd., another base metals explorer, conducted a 736-meter surface exploration drill program at its advanced high-grade silver-zinc-lead Prairie Creek project, with above-average silver and copper grades returned.

An updated 2021 mineral resource estimate for the project includes 9.8 million metric tons of measured and indicated resources at 22.7% zinc-equivalent and 6.4 million metric tons of total inferred resources at 24.1% zinc-equivalent.

An October preliminary economic assessment that was based on this resource indicates robust economics for a 2,400-metric-tons per day mine with a life of 20.3 years.

"The completion of the PEA is yet another significant milestone for NorZinc as it showcases the true potential of the Prairie Creek deposit," said NorZinc President and CEO Rohan Hazelton.

"While the PEA considers historical data with a re-interpreted mineral resource, it (also) outlines a solid base-case for management as we continue on the planned path towards financing and development of the Prairie Creek project. The modified permits for the expanded throughput rates are well underway with approvals expected in late Q1 2022," he added.

In addition, NorZinc has identified multiple opportunities for further operational and economic optimization, which the company will continue to investigate as it moves towards completing an updated feasibility study for the project, with a keen focus on input costs for initial and sustaining capital and operations, along with ore sorting strategies aimed at optimizing processing.


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