Project generator unfazed by tough finance and partnering market

5th September 2013 By: Henry Lazenby - Creamer Media Deputy Editor: North America

TORONTO ( – TSX-V-listed project generator Transition Metals is progressing exploration activities at several of its projects, with the aim of weathering the market’s down cycle and emerging in a stronger position.

Transition president and CEO Scott McLean this week told Mining Weekly Online that, despite signs being visible that the soft market has turned a corner and is slowly improving, potential partners were not in a hurry to acquire stakes in its exploration projects.

The company, which recently merged with private Sudbury, Ontario-based firm HTX Minerals, currently has 30 projects on its books, comprising more than 2 000 km2.

The company’s most promising prospects include the Itchen Lake gold property, located 365 km north-east of Yellowknife, in Nunavut, along the Nunavut/Northwest Territories border, which the company is exploring in collaboration with Nunavut Resources Corp (NRC); the sedimentary-hosted Janice Lake copper deposit in Saskatchewan; the Haultain gold project in the southern Abitibi region; a pipeline of six gold projects within the Abitibi area, each with gold mineralisation at surface; and Aer-Kidd, a 260 ha nickel/copper/platinum-group metals (PGM) property 25 km south-west of Sudbury, Ontario.

Transition has strong regional and strategic alliances, including with Impala Platinum (Implats), the world's second-largest platinum miner, to explore the Mid Continent Rift (MCR) region, in Ontario, for PGM deposits, as well as with the NRC for mineral project generation and exploration, including precious, base and strategic metals, and diamonds in the Kitikmeot region, in Nunavut.

“There is a lot of interest in the technical aspects of our projects but, at this point, time is not of the essence to potential project partners. Many also do not currently have the cash to get onboard new projects right now,” McLean said.

He added that Transition’s projects are all available to market and that the company is open to negotiations on terms of joint venture (JV) partnerships. “We like to retain an interest in projects; it’s an element of the project generator model.”

With C$2.3-million of cash in the bank, the company is well financed to complete its summer exploration activities and to start winter drilling programmes.

McLean, an award-winning exploration geologist with more than 25 years of experience in all facets of exploration, manages a team of eight geologists, of which three are prize winners for their critical contributions in discovering new deposits.

In August, Transition expanded the exploration programme on the Itchen Lake project, after HTX completed a number of exploration activities on the property, the results of which were expected in the fall.

These exploration activities comprised an airborne versatile time domain electromagnetic (VTEM) surveying programme and magnetic survey, starting a remote predictive mapping (RPM) research project, compiling past exploration and drilling results, and following this up with a field mapping, ground verification and sampling programme during August.

The Itchen Lake property is located about 60 km west of the past-producing Lupin gold deposit, which produced 3.36-million ounces at a grade of 9.3 g/t.

McLean noted that the large number of high-grade gold occurrences in a favourable geological environment, in relatively close proximity to a major past producer, made this an attractive property.

"With new geophysical data and detailed geological and structural mapping, we expect to be able to identify new targets for drilling. The prospect of future road access through the property further adds to its attractiveness,” he said in a statement.

Despite being remote, access to the Itchen Lake property could improve significantly, should MMG Resources move ahead with its Izok Corridor base metals project. MMG is currently completing a definitive feasibility study that includes the construction of a 325 km all-weather road to connect the proposed Izok lead/zinc/copper mine to a new port at Grays Bay, along the Coronation Gulf.

The proposed route passes through the Itchen property and could significantly improve the economics of any future resource development at Itchen, provided that an agreement could be reached to allow third-party access.

Meanwhile, in cooperation with the NRC, HTX had started a one-year RPM research project in an effort to better understand the vast mineralogy of the territory.

Transition said the territory’s size and the relative lack of good, detailed geoscientific information across much of the area had prompted the project, which would entail compiling and interpreting data from a variety of sources, including satellites, and geophysical and geochemical surveys, to produce predictive maps containing structural, lithologic, geophysical and surficial information for geologists, in support of field activities.

Further, the company in January expanded the size of the Janice Lake property to 11 684 ha, from the original 6 880 ha it had staked in March 2012.

The company said the additional land was staked in December 2012, after a comprehensive data review indicated the geological environment that hosts the copper and silver mineral occurrences at Janice Lake extended to the north-east and south-west of the property, and that there was potential to discover additional sediment-hosted copper/silver mineralisation in this underexplored area.

"When you consider the widespread occurrence of copper mineralisation at surface and how little drilling has been done, you get the sense that the potential for a significant discovery is high," McLean said.

Drill results on the original property by Noranda, from 1993, include 0.77% copper over 33 m, including 1.6% copper over 6 m, within 35 m of the surface.

Grab samples collected over a 30 km2 broadly mineralised region by Transition Metals, during an August visit to the original property, returned values ranging from 0.34% to 9.35% copper and 0.7 g/t to 61.7 g/t silver, confirming previous reports of high-grade mineralisation at surface, and highlighting the potential for the discovery of multiple near-surface, sediment-hosted copper deposits.

The next $2-million exploration phase would include three-dimensional induced polarisation modelling, airborne and ground geophysics, mapping and prospecting, relogging drill cores and measuring the physical rock properties, and a drilling campaign.

The company hopes to undertake a winter exploration programme at the Janice Lake project this year, but is still looking for a JV partner to help fund the costs.

Meanwhile, the company is also busy with exploration activities on the Ridout Fault in the Southern Abitibi. The fault is little explored, situated south of the prolific producing Cadillac-Larder Break, where Kirkland Lake, AuRico Gold and Osisko own mines.

Transition owns a host of properties underlain by a west-trending sequence of mafic to intermediate metavolcanic rocks. Preliminary work at Haultain and Haultain West had identified outcrops of syenite with similar geochemistry to that associated with gold mineralisation of the Cadillac-Larder Break.

The company has had a number of successes in the region, comprising eight projects, two JV partnerships and the Haultain gold discovery.

Transition is also confident of its Aer-Kidd PGM project. McLean said there exists significant potential to discover a nickel/copper/PGM deposit larger than five-million tons.

The MCR is a 2 000-km-long geological rift in the centre of North America that formed when the continent's core, the North American craton, began to split apart about 1.1-billion years ago. Mafic to ultramafic intrusive rocks, with high associated PGM occurrences within the MCR, and several deposits, had been discovered in the MCR, including Lundin Mining’s Eagle deposit and Panoramic Resources' Thunder Bay North deposit.

The strategic alliance with Implats had focused its exploration efforts over the past five years on a 135 200 km2 area of interest north of Lake Superior. Within this area, the alliance had been exploring the Empire and Dorion Lake projects this summer and had recently acquired the Sunday Lake property from Rio Tinto Exploration Canada (RTEC).

The 17 km2 Sunday Lake property is situated 25 km north of Thunder Bay and covers three-quarters of a large, circular magnetic anomaly that measures 3.5 km in diameter and has been interpreted to be ‘early-rift’ related and prospective for PGMs.

Drilling by RTEC in 2011/12 intersected elevated PGM mineralisation along the basal contact of both the mafic and ultramafic horizons and confirmed the intrusion extends to a depth of 1 150 m. To date, only two of four holes, totalling 1 409 m, have tested the intrusion; however, one of the holes intersected 3.65 m grading 1.02 g/t PGMs, beginning at 142 m.

Line cutting and 42 km of detailed geological mapping, ground gravity, total-field magnetics, and surface PulseEM geophysical surveys were currently under way with plans to complete 2 750 m of drilling during the second half of the year, to test specific features and anomalies identified in the surveys.

Earlier this summer, the company completed exploration work on the 27 km2 Empire Lake property, located 100 km north-west of Thunder Bay. Underlying the property is an Archean-aged mafic intrusion that contains disseminated sulphides associated with massive magnetite and illmenite layers.

The 2013 exploration programme consisted of property mapping and sampling as well as hand-stripping and channel sampling. Assay results are pending.

At the 127 km2 Dorion Lake property, which is 45 km north-east of Thunder Bay, the company completed a 44 km horizontal loop electromagnetic survey and geological mapping. Transition is currently reviewing the results and would test any significant targets with drilling.