Optimism on minerals seen seeping down to grassroots explorers

15th March 2017 By: Henry Lazenby - Creamer Media Deputy Editor: North America

Optimism on minerals seen seeping down to grassroots explorers

Photo by: Bloomberg

VANCOUVER (miningweekly.com) – Noting the optimism exhibited at the recent Prospectors and Developers Association of Canada (PDAC) international convention, held in Toronto, project generator Transition Metals says the fundamental shift in confidence it saw over the past year is consistent with this.

“If you look at the optimism at the conference, everyone is upbeat and excited about the months ahead. When you look at the service industry, we are just full of business right now and receiving a lot more calls right now,” Transition president and CEO Scott McLean told Mining Weekly Online in a recent interview.

“We are seeing a lot more interest in our stock and a lot more inquiries on our projects to option them. There is a fundamental difference and I feel the interest in the industry is now starting to descend down into the exploration plays as well, where we are well positioned,” he noted.

McLean is an award-winning exploration geologist with more than 25 years of experience in all facets of exploration. Transition's team of geologists includes others who have won awards for their contributions in discovering new deposits.

In total, the management team has discovered 61.7-million tonnes of combined nickel resources in the Sudbury basin, including Glencore's Nickel Rim South mine, which alone accounts for about 17.4-million tonnes of resources and for which McLean and geophysical adviser Kevin Stevens jointly won the PDAC Prospector of the Year Award in 2004.

McLean continues to believe in the project generator model, which provides the company and investors with an “optimal blend of risk and reward in a sector where both can be extreme”.

The model hinges on exploration funded by a partner, in return for a stake in the project. This diversifies risk over several projects, and increases the probability of new discoveries. The model also leverages partner capital and expertise, while minimising shareholder equity dilution, following technical due diligence completed by its partners.

Transition has been active in three general areas over the past several years, focusing on platinum-group metals (PGMs) in Thunder Bay; gold prospects in the Abitibi of Northern Ontario; and nickel/copper/PGM projects in Sudbury. Transition has 22 projects comprising gold, PGMs, copper, zinc and diamonds available for partners.

In Thunder Bay, Transition has drilled up a Sunday Lake lookalike, called Saturday Night Lake.

“Sunday Lake is a very important discovery that we made in 2013 and it is now a zone that is 800 m by 400 m in size, with world class intersections, including 43 m at 3.5 g/t PGMs, with about 10 m at about 5 g/t – so it’s a very important discovery.

“A deposit of this nature creates a very distinct magnetic feature, and so we’ve found another of these features buried beneath about 90 m of glacial till,” McLean explained.

He said the team decided to spend its own money to drill a hole on the 100%-owned Saturday Night property, which, coincidentally, is available for optioning, and could determine it is an intrusion.

“Not only was it identical to the Sunday Lake mineralisation, we even hit mineralisation in the first hole over 6 m, grading 1.07 g/t, including about 0.30 m grading 4 g/t PGMs. So here’s a brand new discovery that is garnering attention from people with platinum projects. This could be another prize winner,” McLean stated.

Transition has partnered with Impala Platinum (Implats) on the Sunday Lake project, with Implats holding a 75% interest and Transition having a 25% free-carried interest through to the feasibility phase.

Meanwhile, in Sudbury, the company has been very active through its 36%-owned private subsidiary Sudbury Platinum (SPC) on its Aer-Kidd project, where it is currently busy with an 18 000 m drill campaign to test the deep reaches of the Aer-Kidd/Worthington Offset dyke. That programme is progressing, with news flow imminent, McLean advised.

SPC also recently bought out of bankruptcy the Lockerby East property. Incidentally, that was a project McLean had sold during his tenure at Falconbridge for C$8.6-million, and now, after many years, bought back for C$200 000.

Lockerby East has a ten-million-tonne resource of both high-grade and low-grade ores, ranging between about 0.6% to 0.7% nickel equivalent (comprising nickel/copper/platinum/palladium/gold), with a 200 000 t portion grading 3.5% nickel equivalent.

To date, the company has resurveyed some historic holes with modern geophysics on Lockerby East and returned “spectacular” conductors to drill. “We’ll look to go back to the market in the Spring and raise money through SPC to drill up these conductors,” McLean stated.

Further, Transition’s 55%-owned private subsidiary Canadian Gold Miner (CGM) is involved with a cache of gold projects up in the Abitibi greenstone belt of Northern Ontario.

On March 2, 2016, the company announced that it had formed a new subsidiary and assigned a 100% interest in a 60 km² portfolio of early-stage gold exploration projects located along the Cadillac Larder and Ridout structures, in the Larder Lake mining district of Ontario.

McLean said CGM now controls 165 km² of early- to mid-staged projects along key mineralised trends, including 25 km² strike along the western extension of the Cadillac Larder Break; CGM controls the entire Lincoln-Nipissing Break (comparable in size to Kirkland gold camp); CGM is undertaking advanced-stage exploration projects with resource potential at Lafond and will be announcing a new acquisition; and the land position includes many past producers and high-grade gold showings.

He noted that a recent focus for the exploration team had been the Matachewan West project, a recent grab sample from the far western end of the high-grade showing returning up to 1 200 g/t, or 12.7 kg/t gold. A mini bulk sample comprising 1.23 t of material returned 240 g/t, which pushed the company's stock up in recent days.

Results are also pending from a 1.5 t sample of a high-grade discovery west of the Matachewan Bjorkman discovery, McLean said.

Because of the positive exploration work, the team’s focus has turned to the West Matachewan project, with CGM recently entering into two option and joint venture agreements that allow Trelawney Mining and Exploration, a 100%-owned subsidiary of Iamgold, to earn up to an 80% interest in the Jumping Moose and Elephant Head projects, located close to the Côté Gold deposit, near Gogama, Ontario.

Transition is also in the process of releasing initial assay results from drilling completed on the Gowganda gold project, located 75 km southwest of Kirkland Lake, and part of the Haultain project. The results are from the first two of eleven completed holes being drilled by Aldershot Resources, which is earning a 51% option on the property, with the potential to lift its interest to 75% if cumulative work expenditures total C$2-million by the third anniversary of the option agreement.

Further, Transition is looking forward to other early exploration-stage projects, including through its partnership with the Nunavut Resources Corporation to explore for gold, base metals and diamonds along a proposed road corridor linking far-flung northern areas with the south.

McLean highlighted work being undertaken at the Arcadia Bay project, in Nunavut, which is an intrusive-hosted gold deposit at tidewater, with an historical resource of one-million tonnes grading 6.41 g/t gold, estimated for 2 of 30 exposed vein systems.

Meanwhile, McLean said Transition and its subsidiaries continue to have a considerable inventory of projects available for option to partners. The most “surprising” project that has not yet found a partner is the Janic Lake project, in Saskatchewan. He noted that the at-surface, sediment-hosted copper project is analogous to the massive Udokan deposit, in Russia, which holds 26-million tonnes of contained copper.

Janice Lake has returned grab samples of up to 9.35% copper and 61.7 g/t silver, with large, untested mineralised target areas remaining open along strike and down dip.

“We have done quite a bit of work on that project in previous years, and we feel that it’s ready to be drilled, but we need a partner. We think that we can put the first 20-million tonnes of an inferred resource together with only a couple of million dollars,” he said.