by Greg Klein

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More high-grade, near-surface results from Fission/Alpha’s Patterson Lake South

The best assay yet from Patterson Lake South’s R00E zone hit the news on May 16. That’s when the Fission Uranium TSXV:FCU and Alpha Minerals TSXV:AMW joint venture reported nine more holes from last winter’s 46-hole program. Some highlights include:

• 4.8% U₃O₈ over 22 metres, starting at 67.5 metres in downhole depth
• (including 20.73% over 4 metres)
• 3.56% over 18 metres, starting at 75.5 metres
• (including 11.95% over 4.5 metres)
• 1.93% over 18.5 metres, starting at 64.5 metres
• (including 8.04% over 2.5 metres)
• 0.87% over 10.5 metres, starting at 62 metres
• (including 2.01% over 3.5 metres)
• 0.23% over 21 metres, starting at 64 metres.

True widths weren’t available. Further assays are pending.

The shallowest of the project’s three discovery zones, R00E shows continuous mineralization for 120 metres of strike and remains open in all directions. The 50-50 partners consider it a priority for next season’s drilling on the property that caused so much activity in and around the Athabasca Basin’s southwestern rim.

Noka, Lucky Strike earn-ins finance Skyharbour exploration in PLS region

Two option agreements have Skyharbour Resources TSXV:SYH financed to explore one of the PLS region’s largest land packages. The company granted Lucky Strike Resources TSXV:LKY and Noka Resources TSXV:NX each a 25% earn-in on seven properties totalling 161,755 hectares. In deals announced May 14 and 16 respectively, each company pays Skyharbour $100,000 and funds $500,000 of exploration a year over two years. Noka issues Skyharbour 640,000 shares, while Lucky Strike issues the optionor two million shares. Skyharbour remains project operator and retains a 2% NSR on approximately 46,000 hectares the company staked directly while a vendor holds a 2% NSR on the rest of the package.

Events have moved quickly since March, when the company announced its entry into the region. “Now that we’ve brought in these two partners we’ve recuperated the $200,000 all-in costs in the initial outlay, we have a 10% equity position in both companies and their work commitment is half a million each for a total of $1 million a year for two years,” says Jordan Trimble, Skyharbour’s manager of corporate development and communications. The seven properties involved in the agreements include Wheeler, on the Basin’s eastern flank.

But exploration will focus on the PLS area, starting with a joint airborne survey that will fly properties held by Skyharbour and at least three other companies. “Given that we have such a large land package, the most effective way to do the geophysics is to put together a team to share expenses,” Trimble says.

He expects the survey to take two or three weeks, followed by a few weeks of interpretation and a summer of fieldwork. “You can work there until October and then winter is the best time to drill.”

He sees other advantages too. “We’ll be using the same methodology that Alpha and Fission employed. They spent the last four or five years refining the exploration methodology in this area. It’s unique because it’s outside the Basin. If you read their technical report, they have a very refined process and specific geophysical targets that they look for in conjunction with radon anomalies and boulder fields, etc. Given that we don’t have to re-invent the wheel, we’re hoping to have drill targets by the end of the year.”

He adds, “We had our foot to the pedal to do these deals with Noka and Lucky Strike so we can get to work without having to go back to the market.”

Alpha’s PLS discovery team looks north

While Fission toils as PLS project operator, the Alpha team that made the discovery has turned its attention farther north. Along with JV partner Acme Resources TSXV:ARI, Alpha’s studying reports from previous operators on their Skull Lake claim adjacent to the former Cluff Lake mine, which gave up 60 million pounds of uranium by 2005.

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by Greg Klein

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Just the stuff to develop bigger and healthier crops, potash complements a world growing in population and appetite. Two contrasting companies pursuing the commodity are Western Potash TSX:WPX, the most advanced junior in the space, and Pacific Potash TSXV:PP, with a very big but early-stage property optioned from Western. Those differences aside, both companies have seen a general upturn in share price over the last month.

Pacific Potash TSXV:PP chart
for the month ending May 16, 2013.

Pacific’s V.P. of corporate communications Mike Blady largely attributes his company’s stock performance to a $2.25-million financing announced in April. The money will fund exploration on the Amazonas project in the Brazilian potash basin of the same name, a region that’s being compared in size and geology to Saskatchewan’s prolific potash region.

With 796,000 hectares, Pacific holds a substantial chunk of property. Even so, it’s been trimmed from its original size of over 1.5 million hectares. Last September the company dropped claims to the south that involved indigenous communities, protected forests or inaccessible terrain. Much of the remaining land had already been cleared. A 43-101 technical report followed in November.

Parts of the property might be remote but “there are several cities within our claim blocks, with 40,000 to 100,000 inhabitants,” Blady explains. “There are roads in and around the cities but the majority of the property is accessible by boat through tributaries of the Amazon River,” which he calls “the super-highway for commerce in most of Amazon state.”

The location offers an even greater advantage—an already huge domestic potash market with a faster rate of increase than anywhere else on the planet.

Pacific Potash hopes to begin drilling its
Amazonas property in September or October.

“Brazil has a very large agricultural sector but almost zero domestic production,” Blady points out. The country currently imports over 90% of its supply from places as distant as Canada, Russia and the Middle East, he says. Shipping costs add about $175 to $225 per tonne to the price, compared to an estimated $40 to $60 for shipping if a local mine were developed. Consequently “the government’s very supportive of these projects. Brazil’s trying to increase domestic production to 60% of demand by 2020. They’re very interested in seeing this basin get developed, which is great for a company like us.”

He adds, “In Brazil, agro-business is the fastest-growing industry and one of the government’s largest cash generators. It’s expected that Brazil will have the largest sustained growth in potash consumption over the next 50 to 100 years as it still has 20% of the world’s remaining arable land. Brazil is the number one growth market for fertilizer and potash. It’s growing even faster than China for potash consumption.”

That potential attracted Asian capital to Pacific’s recent $2.25-million financing. A first tranche of $1.25 million closed last month while another $1 million from Sino-Canada Natural Resources Fund is being held in trust until May 31. That’s the day shareholders decide whether to approve a change of control in which the fund would hold about 18.1% of Pacific’s outstanding shares and nominate a co-chairman and director.

Sino-Canada plans to invest more than $500 million over two years in Canadian natural resource companies.

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by Greg Klein

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Updated results:

• BC Liberals 50 seats, 44.4% of the vote
• NDP 33 seats, 39.5%
• Greens 1 seat, 8%
• Independent 1 seat, 3.3%

If British Columbia’s mining and exploration sector needed a massive jolt of reassuring news, they got it May 14. The pollsters were wrong, the pundits were wrong and the winners might be as surprised as the losers are disappointed. Although the popular vote was close, the BC Liberal party won an historic fourth term, handily defeating the New Democratic Party.

Christy Clark’s campaign emphasized the economy with appearances
at work sites throughout the province. (Photo: BC Liberals)

Or did the NDP defeat themselves? Adrian Dix, the party’s choice for new leader 13 months ago, was widely considered an NDP hardliner. He played a prominent role in B.C.’s last NDP government, which is blamed for the “dismal decade” of 1991 to 2001, when the province’s economy tanked despite robust performance in other parts of the country. For possibly the first time in its history, B.C. saw a significant exodus of job-seekers. In addition to low metal prices and Bre-X, exploration and mining were hammered by NDP policies. As the BC Liberals like to say, when the NDP governed “two mines closed for every one that opened.”

More recently, Dix tried to soften his image. But he remained vague about his intentions even though—or because—he leads arguably the most extreme left-wing party in mainstream North American politics. In several conversations with ResourceClips prior to the election, exploration and mining company executives spoke with dread of another NDP government.

Now, it turns out, they needn’t have worried. But apart from removing a widely perceived threat, what exactly does a BC Liberal victory mean to the sector?

That’s not easy to say. Mining didn’t play a prominent role in the election, despite the efforts of four industry organizations behind the Vote Mining campaign.

Moreover, under Christy Clark’s leadership the once business-friendly party has shown policy confusion and a lack of conviction. Her government never explained its rejection last October of Pacific Booker Minerals’ TSXV:BKM proposed Morrison copper-gold-molybdenum mine, which received a favourable environmental assessment report. The company launched a lawsuit in April after spending about $30 million on the project, including over $10 million on the decade-long environmental process.

When news broke that HD Mining plans to staff its proposed Murray River coal mine exclusively with Chinese underground workers, the BC Liberals couldn’t say enough good words about the scheme. The government knew that Chinese interests had similar plans for other B.C. coal projects since at least 2007.

Even under Clark’s more capable predecessor, policy wonk Gordon Campbell, the BC Liberals could sow uncertainty. A sudden ban on uranium and thorium exploration in 2009 led to a $30-million out-of-court settlement for Boss Power TSXV:BPU.

By the BC Liberals’ first 10 years in office, BC Hydro built up at least $2.2 billion in deferred debt that’s expected to reach $5 billion by 2017. The burden calls into question the public utility’s ability to build infrastructure and provide inexpensive electricity to homes, businesses and industry.

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by Greg Klein

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Fission/Alpha conduct radon survey at Patterson Lake South

What? Two weeks without assays from Patterson Lake South? No scintillometer readings either? Taking a break from reporting drill results, Fission Uranium TSXV:FCU and Alpha Minerals TSXV:AMW instead revealed a survey showing “the strongest radon-in-water anomaly to date,” the companies stated on May 6. That result was 13.3 pCi/L, found about 170 metres northeast along strike of the project’s R780E zone.

By the way, pCi/L stands for “picocuries per litre.” But you knew that, didn’t you? Regardless, all those picolitres per whatever suggest good news for a project that based its initial drill targets on these measurements of radon gas, which is released by radioactivity. Those targets found two of three discovery zones featuring the high-grade, near-surface assays that sparked the acquisition rush around the southwestern rim of Saskatchewan’s Athabasca Basin.

Overall the survey found six radon anomalies, in addition to the original five, “all associated with known conductors and offsetting structures.” One anomaly was found as far as 1,500 metres along strike of R780E. The 50-50 joint venture partners now plan summer drilling from barges on the lake and further radon surveys next winter.

Forum, NexGen release NW Athabasca assays

A JV within a JV, Forum Uranium TSXV:FDC and NexGen Energy TSXV:NXE reported assays on May 9 for their Northwest Athabasca project. Highlights from Zone A show:

• 0.14% U₃O₈ over 3 metres, starting at 80.5 metres
• 1.34% over 3 metres, starting at 88.5 metres
• (including 1.86% over 1.5 metres)
• (which includes 2.48% over 0.5 metres).

True widths weren’t available.

A result from the Barney zone showed:

• 2.32% U₃O₈ over 0.5 metres, starting at 169 metres.

Still pending are assays for a 30-metre interval of uranium mineralization at the project’s Otis West zone, the partners stated. Zone A lies on the north side of the Maurice Bay deposit, which has an historic, non-43-101 resource of 1.5 million pounds uranium averaging 0.6% U₃O₈.

Forum and NexGen may earn 30% each of the project, which would leave Cameco Corp TSX:CCO a 27.5% interest in its JV with AREVA Resources, which holds the remaining 12.5%. Forum acts as project operator. NexGen made its Venture debut on April 23.

Yellowjacket offers $600,000 private placement, plans airborne survey

Having announced a $600,000 offering on April 30, Yellowjacket Resources TSXV:YJK followed up on May 10 with plans to begin flying its claims in the Patterson Lake South vicinity later this month. “The airborne survey will cover approximately 2,910 line-kilometres using VTEM-plus, EM and magnetometer arrays, with an additional 1,700 line-kilometres of radiometric sensor coverage,” the company stated. Results are expected in late July.

The private placement would issue up to 5 million units at $0.12, with each unit consisting of one share and one-half share warrant. Each whole warrant will be exercisable for a share at $0.20 for 18 months. If the shares trade at or above a volume-weighted average of $0.30 for more than 10 consecutive trading days, any unexercised warrants will expire 30 days after the company issues written notice.

Yellowjacket will use the proceeds for its Saskatchewan uranium projects and general working capital. With over 158,000 hectares, the company says it’s the largest claim holder in the Patterson Lake area.

Zadar acquisition approved

Zadar Ventures’ TSXV:ZAD 100% option on the Bull Run project cleared TSXV approval, the company reported on May 10. First announced April 17, the 9,185-hectare acquisition consists of three blocks in the southwestern Basin. In return Zadar pays $265,000 and issues 550,000 shares over six years, as well as spending $50,000 by July 2015 and $100,000 by July 2016.

Last month the company picked up the 2,729-hectare Upper Poulton Lake property adjoining the Richmond Lake project, part of the former Fission Energy portfolio acquired by Denison Mines TSX:DML in April. The same month Zadar announced completion of its 60% earn-in on the 17,300-hectare Whiskey Gap uranium project in southwestern Alberta.

Athabasca Uranium expands

Athabasca Uranium’s TSXV:UAX eastside Basin portfolio grew by 10,157 hectares with the Fisher River option announced May 7. Three kilometres north of the company’s Keefe Lake project, it’s contiguous with the southern part of UAX’s McCarthy Lake project and some Denison claims.

The property’s Fisher River zone features “conductive targets near or at the unconformity and associated with faulting” which the company stated “are typically the mainstay of uranium exploration” in the Basin.

Additionally the zone “appears to be crosscut by a series of northwest lineaments, which is significant as secondary faulting greatly improves a target’s quality—deposits such as Shea Creek and McArthur River are unequivocally associated with cross-faulting. Unconformity depths at Fisher are shallow, estimated to be between 125 to 170 metres,” the company added.

The vendor gets $10,000 and 3 million shares up front and another $500,000 by the fourth anniversary, along with a 1% NSR. Athabasca Uranium may buy back half the NSR for $1 million.

The company also announced it’s reviewing a recently completed model of its Keefe Lake project by the University of Saskatchewan geophysical team prior to determining the Phase 3 drill program. Athabasca Uranium holds over 70,000 hectares in the eastern Basin.

Uravan to fly Stewardson Lake, review Halliday Lake

Uravan Minerals TSXV:UVN reported on May 7 news from its Stewardson Lake and Halliday Lake projects, both under option to Cameco. Stewardson, in the south-central Basin, will get a heli-borne EM survey over 779 line-kilometres with 500-metre spacing in June. A ground EM survey will follow, along with geochemical sampling on the 21,349-hectare property. The company is now interpreting ground geophysics undertaken last March on the 2,169-hectare Halliday project in the eastern Basin.

While Uravan acts as project operator, Cameco has an option to earn up to 70% of the two projects by funding a total of $22 million.

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by Greg Klein

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We’re about three and a half hours north of Vancouver, bouncing up a rough mountain road in a four-wheel-drive. The objective? To check out what Ryan Sharp calls “a grassroots exploration company with a producing mine. Or the other way around—a mining company with blue sky exploration potential.” He wants people to see for themselves Huldra Silver’s TSXV:HDA Treasure Mountain and Thule projects because, he says, “We’re not a paper company.” In particular, the nearly 3,000-hectare Treasure Mountain silver-lead-zinc operation hasn’t been divulged on paper nearly to the same extent as most working mines.

Huldra Silver CEO
Ryan Sharp

“Other mines have gone into production without a feasibility study,” he points out. “Others have done it without a PEA. But very few have gone into production without a resource estimate.”

Well, there was a resource back in 2009. But Sharp maintains it was based on limited data. After investigating the company and its assets, he became convinced of far greater potential. That was in March 2010, when he was invited to join the company as president/CEO/director. Two months later he visited Treasure Mountain for the first time, driving up the logging road without a map. “I got all the way to the mine property without seeing another vehicle, and got out. I started walking through the snow, came across grizzly tracks and ran back to the vehicle. I found my way back to the Coquihalla Highway even though I’d never been up here before, and went home that night.”

But he returned, spending months at a time living in a trailer furnished with an air mattress. “I hiked the hills, I studied the rocks. I was the first person in 40 years to question the geology.” And to complement the geology was some infrastructure—a four-level underground mine built by Huldra in the late 1980s but never put into operation.

He sunk “pretty much 100% of my savings in it” and enticed investors to the site, including Coeur d’Alene TSX:CDM, which currently holds about 10% of Huldra. Financing continued with, most recently, $10 million in convertible debentures that closed last February.

Uphole drilling has brought better core recovery
from Huldra’s underground stations.

To get the mine up and running Sharp hired manager Al Beaton, whose worldwide experience includes a past stint with Huldra during Treasure Mountain’s 1980s development stage. Experienced workers signed up, attracted in part by one of the best locations and climates Canadian miners could hope for. Sharp attributes considerable cost savings to using his own staff, instead of contract mining.

Sharp’s background, on the other hand, might be atypical. But he says, “I have the background for what mining CEOs are going to become.” In addition to seven years as a broker, he headed an environmental construction/remediation firm. “It’s similar to mining in that it’s labour-intensive and equipment-intensive, with lots of permitting and red tape.” His geology is self-taught. Nevertheless the University of British Columbia took him on as an advisor and marker on an honours thesis about Treasure Mountain geology. “I’ve seen more rocks up there than anybody other than Magnus,” he says, referring to Magnus Bratlien, a Huldra director and veteran prospector.

For all that, Sharp insists he’s “the world’s lowest-paid mining CEO.”

Treasure Mountain mining began in November 2011, with commercial production achieved last March. Now Huldra typically sends three trucks hauling 42 tonnes of ore twice a day each to its mill outside Merritt, an hour and 20 minutes away. April totals show 233 tonnes of lead-silver concentrate and 199 tonnes of zinc-silver concentrate went to the smelter, a 42% and 18% increase respectively over the previous month.

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by Greg Klein

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Geology has a way of stimulating even the most discouraged investors, as shown by the way North ROK excited an otherwise dismal market. The very first hole from the Colorado Resources TSXV:CXO project sent company stock soaring from an April 24 close of $0.16 to a May 6 high of $1.25. Along with the excitement comes revived interest in the northern part of British Columbia’s Golden Triangle, in the region around the discovery hole and Imperial Metals’ TSX:III development-stage Red Chris project, 15 kilometres east.

For anyone coming out of cryogenic slumber, here’s the first North ROK hole announced April 25:

• 0.51% copper and 0.67 grams per tonne gold over 333 metres, starting at 2 metres in downhole depth
• (including 0.63% copper and 0.85 g/t gold over 242 metres, starting at 2 metres)
• (which includes 0.76% copper and 1 g/t gold over 180.47 metres, starting at 63.53 metres)
• (and including 0.2% copper and 0.19 g/t gold over 91 metres, starting at 244 metres).

True widths haven’t been determined.

Still to come are assays for a second hole 350 metres west. Geophysical data, however, suggests drilling “may have been stopped short of adequately testing the IP chargeability anomaly.” Colorado now plans to deepen the second hole and sink a series of 100-metre-spaced step-outs from the 333-metre intercept.

Spectacular assays have put Colorado Resources on top of the world.

Could North ROK be a one-hole wonder? Maybe, but other companies aren’t wasting time getting in on the action. The region “may become the next significant mining district in British Columbia,” according to TAD Mineral Exploration TSXV:TJ. On May 6 the company reported staking a 876-hectare copper-gold prospect near the village of Iskut, north of North ROK. TAD could be a tad opportunistic, having announced on April 11 it staked 4,000 hectares in the region of Patterson Lake South, the Fission Uranium TSXV:FCU/Alpha Minerals TSXV:AMW uranium discovery that sparked the southwestern Athabasca Basin acquisition rush.

Also on May 6, Teuton Resources TSXV:TUO reported it optioned its Yellow Chris South claims to Redhill Resources TSXV:RHR. Located “a few kilometres northeast” of Colorado’s discovery hole, Yellow Chris South shares a similar geophysical setting, Teuton stated. The company added that its optionee “plans an aggressive program of property-wide soil sampling, geological mapping and IP surveying” beginning immediately. Subject to regulatory approval, the option allows Redhill to earn an initial 50% by paying Teuton $300,000 and 1.4 million shares, as well as spending $4.5 million over four years.

Teuton still has several blocks in the Red Chris and Yellow Chris area totalling 10,256 hectares. “We’re currently negotiating with a number of other companies,” IR officer Gary Assaly tells ResourceClips. “We have several properties that are optioned in the Stewart region [roughly 190 kilometres south] and there will be a lot of work done by other companies on our properties,” he says. But there’s been sudden interest in the North ROK area. “The phone started ringing a week ago, on the weekend.”

Teuton president Dino Cremonese adds, “We feel that our claims have a lot of potential, especially those which have discrete mag highs, some associated with flanking mag lows, the latter suggesting an area where alteration has been so intense that the magnetite has been replaced. So far, because our attention has been on our many claims further south, we have done only very minor soil geochem. This, however, has also been positive, with a few areas reporting values to 271 parts per million copper.”

A company that diversifies its opportunism, Pistol Bay Mining TSXV:PST was advancing an Ontario graphite property while a big-name joint venture partner drilled one of its Athabasca Basin uranium projects. Then the Colorado Resources discovery drew Pistol Bay back to its Summit Lake B property contiguous to North ROK.

“When this hit we went back and looked at the results from our 2010 program,” Pistol Bay president/director Charles Desjardins tells ResourceClips. “When you look at the showing in North ROK and compare it to our Kitty showing, we have some good numbers.”

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by Greg Klein

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Great Northern Gold Exploration’s TSXV:GGE Wekusko property hasn’t always delivered the grade. But four holes reported April 29 have ended a 2,133-metre Phase I program on a high-grade note, extending the McCafferty zone at depth and offering encouragement to the project in northern Manitoba’s Flin Flon greenstone belt. The results show:

• 14.6 grams per tonne gold over 1.5 metres, starting at 49 metres in vertical depth
• 1.52 g/t over 1.25 metres, starting at 92 metres
• 9.19 g/t over 1.15 metres, starting at 56 metres
• 5.98 g/t over 1.2 metres, starting at 90.5 metres.

True widths were estimated around 80%. The company labelled the second result a poor sample recovery due to broken and ground-up core.

Another five exploration holes, however, failed to find expansion potential. Of 11 previous holes reported March 13 from the same one-kilometre by three-kilometre grid, 10 didn’t show significant gold but one hole produced intervals of:

Great Northern Gold’s winter drill campaign extended
its McCafferty zone at depth with high-grade assays.

• 131.1 g/t gold over 0.3 metres, starting at 85.5 metres
• 3.73 g/t over 0.5 metres, starting at 85 metres.

True widths weren’t available.

A non-43-101 in-house estimate by a previous operator suggested McCafferty holds 16,761 tonnes averaging 13.89 g/t for 7,483 gold ounces. An historic, non-43-101 estimate for Wekusko’s Gold Dust zone suggested 58,356 tonnes averaging 14.06 g/t for 26,361 gold ounces. Another non-43-101 estimate for the project’s past-producing Ferro mine suggested 73,760 tonnes averaging 15.31 g/t for 36,111 gold ounces.

While the estimate “is modest in size,” concedes Great Northern’s May 2012 technical report, “the grade is relatively high and, in aggregate, the tonnage and contained ounces exceed [what] was mined successfully from the adjacent Rex-Laguna past-producer. It should also be noted that the erratic distribution of gold in these zones as indicated in drill intercepts makes ore resource estimation difficult.”

Summer exploration will venture beyond the McCafferty grid to include soil sampling, mapping and prospecting on other parts of the property.

The company holds an option to earn 100% of the 8,880-hectare Wekusko as well as a separate 100% option on the nearby 60-hectare Ferro mine. The package lies 23 kilometres southeast of Snow Lake, home to HudBay Minerals’ TSX:HBM Lalor mine and QMX Gold’s TSX:QMX Snow Lake mine, a past-producer that QMX plans to re-open.

Great Northern opened April 29 at $0.06, half a cent over its previous close, then ended the day at $0.065. The stock’s 52-week high and low were $0.18 and $0.05. With 20.22 million shares outstanding, the company’s market cap came to $1.31 million.

In other April 29 gold news, an option adjacent to its 100%-held Juby property allowed Temex Resources TSXV:TME to substantially increase its resource estimate.

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by Greg Klein

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Denison gets Fission Energy, spinco Fission Uranium gets Patterson Lake South

It’s a done deal, both companies announced April 26. Denison Mines TSX:DML closed its acquisition of Fission Energy TSXV:FIS. The latter company stops trading at the close of April 29 but a new outfit, Fission Uranium Corp TSXV:FCU, is expected to begin trading on May 1. (Update: Fission Uranium Corp TSXV:FCU began trading on April 30, 2013.) Fission Uranium will retain the Fission Energy team and their most celebrated asset, a 50% interest in Patterson Lake South.

For each Fission Energy share, holders get 0.355 of a Denison share, a full Fission Uranium share and, for good measure, one ten-thousandth of a penny. The new company also gets about $17 million from Denison, a handy sum to continue its share of PLS drilling while shopping for other properties.

The acquisition went much as planned except for a late decision to change the new company’s stock ticker to FCU. It was originally registered as FUC.

Read more about the Denison/Fission acquisition here.

Patterson Lake South rolls out the results

Patterson Lake South, meanwhile, continues to shock and awe the market with near-surface results showing off-scale scintillometer readings and high-grade assays about every week—at least.

Just a couple of examples: An April 22 announcement reported assays of 6.57% U₃O₈ over 53 metres, including 29.26% over 10.5 metres. The intercept started at a downhole depth of 95 metres. Only two days later came assays of 6.26% over 49.5 metres, including 35% over 6 metres, starting at 66 metres in downhole depth.

A 50/50 joint venture between Fission Energy and Alpha Minerals TSXV:AMW, the PLS discovery sparked the current staking rush around the Athabasca Basin’s southwestern rim. Alpha filed an NI 43-101 technical report for the property on April 14.

Read more about the Patterson Lake South discovery here and here.

Read more about the Athabasca Basin staking rush here.

Alpha private placement closes at $12.28 million

While Fission Uranium starts off with about $17 million from Denison, its JV partner-to-be, Alpha Minerals, has just picked up $12.28 million. On April 25 the company announced completion of 1.2 million flow-through shares at $4.40 each and 1.75 million units at $4. Each unit consists of one non-flow-through share and half of a warrant. Each whole warrant will be exercisable at $5 for 24 months.

The private placement was originally offered up to $7.28 million, but was increased by $5 million on April 9.

NexGen now on the TSXV

Its reverse takeover with Clermont Capital complete, NexGen Energy Ltd TSXV:NXE made its Venture debut on April 23. NexGen interprets its flagship Radio property to be on the same structural trend as Rio Tinto’s Roughrider deposit and Denison’s Waterbury Lake J-zone. NexGen holds an option to acquire an initial 70%, then the remaining 30% subject to a 2% NSR.

Another NexGen standout is Rook 1, immediately northeast of Patterson Lake South.

Under a JV within a JV, NexGen and Forum Uranium TSXV:FDC have an option to earn 30% each of the Northwest Athabasca project, currently held 87.5% by Cameco Corp TSX:CCO and 12.5% by AREVA Resources. On April 10 project operator Forum announced completion of a 3,500-metre program that hit uranium mineralization in eight of 17 holes.

Last November NexGen picked up 10 Canadian uranium properties from Mega Uranium TSXV:MGA. On April 22 Mega acquired an approximately 25.2% interest in NexGen, which currently has about $6 million on hand.

Read more about NexGen here and here.

As for Waterbury and the J-zone …

In the eastside Basin neighbourhood of Radio and Roughrider, Waterbury Lake is now held 60% by Denison, a result of its Fission Energy acquisition. A consortium headed by the Korean power utility Kepco holds the remaining 40%.

Last winter Fission Energy sunk 68 holes totalling over 21,000 metres to define and expand the project’s J-zone. Scintillometer results announced April 5 showed mineralization in 35 holes. Assays are pending for this final stage of a three-year, $30-million campaign.

Forum to fly Clearwater

In addition to its NexGen collaboration, Forum plans an airborne magnetic and electromagnetic survey over its 100%-held, 9,910-hectare Clearwater property immediately southwest of Patterson Lake South. Funding comes from a $500,000 private placement that closed April 23.

Denison drills turn Wheeler River

On the Basin’s east side, winter drilling at Denison’s 60% Wheeler River project completed 14,577 metres in 27 holes. On April 24 the company announced it had extended the new 489 zone along strike by 65 metres. The zone lies 2.1 kilometres from the project’s Phoenix deposits, which Denison calls “the most significant new uranium discovery in the Athabasca Basin in many years.”

Denison acts as project operator for partners Cameco, which holds a 30% interest, and JCU (Japan-Canada Uranium) Exploration, which holds 10%.

Lakeland stakes more land

Now a “pure play uranium exploration company focused on the Athabasca Basin,” Lakeland Resources TSXV:LK announced on April 25 it had staked three more properties. The Small Lake, Hawkrock Rapids and Circle Lake properties total 54,745 hectares in the northern and northeastern Basin.

The news followed an April 2 announcement that Lakeland staked two other northern Basin properties, the 9,645-hectare Otherside and 35,429-hectare Riou Lake. All five properties, totalling nearly 100,000 hectares, were chosen on the basis of previous work by former operators. Lakeland intends to study historic data prior to planning a work program.

The company has also signed a non-binding letter of intent for eight other Basin properties totalling about 190,000 hectares.

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by Greg Klein

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Will fortune treat this company so favourably a second time? David Grondin thinks it might. As president/CEO of TomaGold Corp TSXV:LOT, he’s already seen spectacular success at Quebec’s Monster Lake, a repetitive source of high-grade gold assays bankrolled by joint venture partner Quinto Real Capital TSXV:QIT. Now he’s planning a simultaneous drill campaign on TomaGold’s adjacent, 100%-held Winchester property.

Lying on the same trend, the two properties have similarities, Grondin says. Like the 3,336-hectare Monster, the 1,070-hectare Winchester had originally been drilled at shallow depths. It wasn’t until Monster was drilled deeper that the big discovery was found. But Winchester’s mineralized corridor, “instead of being five to 15 metres wide like Monster, is 60 to 100 metres wide.” Historic results show base metals potential too, he points out. “So we think Winchester can be a big driver for the company too. We’ll start drilling the same time as Monster, so it’ll be highly cost-effective. It should create a lot of new interest in the company, so we’re excited about that.”

As if TomaGold really needs new interest. Monster Lake first grabbed the market’s attention back in April 2012, with an assay of 237.6 grams per tonne gold over 5.7 metres. But relative calm set in while the company tested other targets at shallow depths. Then, in November, TomaGold met Quinto, a well-heeled company looking for a qualifying transaction. The two companies consummated their JV with a winter campaign focusing on the 325 zone, site of the April 2012 discovery, and going beyond 125 metres’ depth for the first time in Monster Lake’s drilling history. Another outburst of market enthusiasm greeted assays from three holes announced on February 20:

• 33.6 g/t gold over 5.85 metres, at a vertical depth of 217 metres
• 11.5 g/t over 5.3 metres, at a depth of 187 metres
• 42 g/t over 7.2 metres, at a depth of 278 metres.

Highlights from three more holes released March 8 showed:

• 42 g/t gold over 7.2 metres, at a vertical depth of 278 metres
• 33.6 g/t over 5.85 metres, at a depth of 217 metres
• 32.6 g/t over 6 metres, at a depth of 170 metres.

An April 22 batch included:

• 37.1 g/t gold over 4.8 metres, at a vertical depth of 235 metres
• 8.65 g/t over 11.3 metres, at a depth of 325 metres
• 7.3 g/t over 2.55 metres, at a depth of 330 metres.

True widths were estimated at 70% to 85%. Topcuts weren’t applied.

The February 20 assays shot TomaGold from $0.115 to $0.205. By March 8 the stock hit $0.41. Even more dramatic was Quinto. Previously flat at $0.04, its shares soared to $0.25 on February 20 and, on February 28, $0.98.

Grondin now plans another 4,000 metres beginning mid-May. But despite a short pause, the company’s capable of year-round drilling thanks to a “really brilliant” crew, he says. He also plans a surface bulk sample, pending permitting. As the maiden resource approaches Grondin expects to calculate a topcut to compensate for the high-grade nugget effect.

Meanwhile the next 4,000 metres will target the zone at depth and its extensions along strike, he says. “Then we’ll probably do some infill to classify some of the resource as indicated. If it’s still open at depth, we might then do another 2,000 or 3,000 metres. One way or another, the resource is going to be done by year-end.”

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by Greg Klein

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Maybe as much as anyone, QMX Gold TSX:QMX president/CEO Francois Perron knows the challenges of the industry today. His company’s Lac Herbin gold mine in Val-d’Or has yet to meet expectations. A “broken market” has stalled plans to re-open the Snow Lake past-producer in Manitoba. The yellow metal’s sudden price plunge has only added anguish to angst. Still he soldiers on, with a confidence born of long-term perspective.

“People are freaked out by short-term factors,” he insists. “I think the longer term is amazingly bullish for gold. I’m still in the gold business and I’m glad to be there.”

After a disappointing 2011, QMX Gold’s Lac Herbin
operation reached its 2012 production target.

He bases much of his optimism on Snow Lake, a northern Manitoba operation that gave up 1.44 million gold ounces up to 2005. With surface infrastructure including a mill, the mine still has gold to offer, according to 2010 figures that show a proven reserve of 900 gold ounces and a probable reserve of 451,000 ounces.

Those reserves are included in the measured and indicated categories of a resource estimate that shows 1,000 ounces measured, 727,000 ounces indicated and 336,700 ounces inferred. Snow Lake exploration continued throughout 2011, totalling over 42,000 metres of drilling.

A 2010 feasibility study used a 7% discount rate to project a pre-tax net present value of $100.8 million and an impressive 80% internal rate of return. Initial capital costs came to $39.7 million for a reactivated underground mine that would produce 415,600 gold ounces over a five-year lifespan. Payback was set at 1.7 years.

Now, nearly three years later, QMX estimates the initial capex closer to $45 million. “Some of the numbers have moved around but some of that is pure inflation,” says Perron. “We have been optimizing the feasibility study. The initial study had cash costs of $640 an ounce. With a larger camp and a different format for financing equipment, we expect $825 an ounce.”

Snow Lake remains on care and maintenance, with a closure plan in place and dormant but renewable permits. It could be pouring gold in 12 to 14 months and ramp up to commercial production within 21 months. All that’s holding it up is a currently very elusive commodity—money.

“The initial approach was to finance through the public markets,” explains Perron. “By now we all agree that the public markets are broken. We have the advantage of having a project that’s been through the bankable feasibility process. On that basis I’m looking at private equity partners or some kind of strategic alternative like that.”

In May 2012 Credit Suisse agreed to lend the company, then known as Alexis Minerals, $45 million over 4.5 years for Snow Lake development. Contingent on the loan is a requirement that the company raise additional equity. The actual figure, says Perron, “depends on the amount of hedging that we put into it. I’d say they’re probably looking for $10 million to $15 million to backstop the project.”

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by Greg Klein

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Is this any time to join the TSX Venture? According to Prima Fluorspar Corp TSXV:PF president/CEO Robert Bick, his company’s April 19 trading debut comes at exactly the right time. He maintains Prima has a necessary commodity for a niche market, a big, high-grade, near-surface historic resource, a strong team with past success and the likelihood of future interest from some very big players.

For all that, fluorspar’s hardly well-known. Yet it’s all around us. The lower-priced metallurgical grade finds its way into iron, steel, aluminum and cement. As for the pricier acid grade, modern refrigeration wouldn’t exist without it. Most new medicines rely on its derivatives. An EU-designated critical mineral, fluorspar plays a crucial role in producing a wide range of products we’d rather not live without. As emerging countries improve their living standards, those societies will find fluorspar products increasingly important.

Purple fluorspar right at surface offers encouraging signs
for Prima’s Liard project in B.C.

That probably explains China’s export restrictions. It’s both the fluorspar world’s largest producer and largest consumer, in the latter role mostly as a manufacturer of goods for export. Last year the country produced 61% of global supply, according to the U.S. Geological Survey, a slight decrease from the previous year. Mexico produced another 17.5% in 2012, with third-place Mongolia offering a mere 6%, demonstrating the enormous imbalance in world production.

Prices, meanwhile, have climbed 225% between 2005 and 2012.

Despite China’s overwhelming share of production, the country’s expected to become a net importer within five years. As Simon Moores of the authoritative journal Industrial Minerals has explained, country risk was a major factor in fluorspar’s designation as a critical mineral.

Located in a friendly jurisdiction, Prima’s Liard fluorspar project looks all the more appealing. The northern British Columbia property holds 22,500 hectares along the Alaska Highway in a region that is, by B.C. standards, not particularly rugged. And there’s certainly fluorspar in them there hills.

Some 3.2 million tonnes grading 32% calcium fluoride (CaF₂, also known as fluorite), according to an historic, non-43-101 resource. That’s a big, high-grade—albeit non-compliant—asset that the Prima team plan to prove up and expand. “With fluorspar projects, it’s very difficult to get such high-grade deposits,” says geologist Neil McCallum of Dahrouge Geological Consulting. “And most of the high-grade deposits out there are vein-type deposits where you might only have widths of one or two metres. So we’ve got pretty wide mineralization. What we tested was exposed on surface.”

The 61 historic holes found 20 showings, seven of them major, along a 30-kilometre strike potential. Prima’s preliminary work last fall tested two showings to find channel samples of 23.76% CaF₂ over 19.55 metres and 23.49% over 74.55 metres. By spring or early summer McCallum plans to be back with a field crew doing geophysics and setting up a base camp prior to this year’s drill campaign of up to 100 holes and 10,000 metres.

“We’ll mostly do confirmation holes until we get the geophysical results. Then we’ll focus on building resources. What we’re aiming for is something that could be mined cheaply. Having something at surface that’s open-pittable will be important,” McCallum explains.

“With rare earths and a lot of the specialty metals, a project sinks or floats on the right metallurgy,” he adds. “But with most fluorspar deposits, it’s a fairly simple process.” Historic metallurgical tests brought results over 97% CaF₂, the threshold for the more expensive, more highly demanded acid grade fluorspar, known as acidspar. More recent improvements in metallurgical science suggest even better results to come, McCallum points out.

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by Greg Klein

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Just last Thursday, some headlines still forecast bullish news for gold. That changed suddenly on Friday and, by Monday, even more dramatically yet. Here’s a roundup of explanations, blame and even some optimism expressed on April 15.

“Fundamental explanations” don’t cut it

The Globe and Mail dutifully blamed the usual suspects before quoting Julian Jessop of Capital Economics. He pointed to “aggressive selling by speculative traders, rather than any change in the long-term or fundamental drivers.”

The G&M stated, “The ‘fundamental explanations’ for the plunge that are being tossed around simply don’t hold up, [Jessop] said, citing the fact that it’s not yet known whether Cyprus will in fact sell [its gold] and that the latest economic readings in the United States don’t signal a pullback by the Federal Reserve on its stimulus measures.”

“The hallmarks of a concerted short sale”

Ross Norman of the Sharps Pixley bullion brokerage noted that Friday began with “a monumental 3.4 million ounces (100 tonnes) of gold selling of the June futures contract … in what proved to be only an opening shot. The selling took gold to the technically very important level of $1,540,” which was last year’s low and “in many traders’ minds it stood as a formidable support level—the line in the sand.”

The initial sell-off was, he wrote, “rumoured to have been routed through Merrill Lynch’s floor team.” Two hours later came “a further 10 million ounces of selling (300 tonnes) over the following 30 minutes of trading. This was clearly not a case of disappointed longs leaving the market—it had the hallmarks of a concerted short sale….” The ploy pressured others to join the dumping frenzy.

Norman also stated, “The value of the 400 tonnes of gold sold is approximately $20 billion but, because it is margined, this short bet would require them to stump up just $1 billion.”

“Now so much depends on the algorithm”

Kitco News asked three veterans of the 1980 plunge for comparisons. Their responses show much has changed since then, at least in tactics.

Once dumping starts, electronic trading creates its own momentum, explained Peter Thomas, VP of INTL FCStone Precious Metals North America. “There’s no one to stop it as it goes into a freefall,” he told Kitco. “The computer lights up all red and the selling goes on until the computer changes colour. Now so much depends on the algorithm.”

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by Greg Klein

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Projects go under, under new Ontario law

“We’re not working in Ontario any longer and, yes, that’s because of these regulations.” Friday’s Toronto Star quoted Wally Rayner, VP of exploration for Mineral Mountain Resources TSXV:MMV, on the provincial Mining Act amendments that took full effect April 1.

Gone is the free entry system. In its place are requirements that companies and individual prospectors file plans with the government for even the earliest-stage work. That’s followed by a minimum 30-day period for public comments. Prospectors and explorers are now specifically required to consult and accommodate aboriginals. “Many find the regulations too onerous for an industry already in dire financial straits,” the Star reported.

Last month, even before the new regs took hold, Solid Gold Resources TSXV:SLD was denied an exploration permit in what the company said “appears to be a politically motivated abuse of power and indicates the unfair political interference that permeates the new exploration regime.” Now trading for a penny, the company has had uneasy relations with a Timmins-region native band.

Last February International Millennium Mining TSXV:IMI backed out of an option on its Hope Lake property, saying “the constraints of Ontario’s modernized Mining Act provided incentive for ending the agreement.”

Mineral Mountain’s Rayner also told the Star that delays jeopardize spending deadlines mandated by flow-through shares. “If the exploration is held up because of consultations or permits, then this whole financing system falls apart,” he said.

The reporter added, “The Ontario Bar Association echoed that concern in a submission to the ministry last year.”

The new act presents problems for natives too. Shawn Batise, executive director of the Wabun Tribal Council, told the Star his group has been overwhelmed with requests for consultation. “Today we got 12 requests, eight yesterday, six the day before, 20 last week…”

As for Quebec …

Over 10,000 people signed a petition expressing concern about possible changes to the province’s royalties structure, the Quebec Mining Association announced on Tuesday. Following a round of talks with industry reps, the Parti Quebecois government now ponders a 5% tax on the gross value of annual mine production and a 30% royalty on yet-to-be-defined “super profits.”

“Quebec has already the highest royalties and corporate tax rates among all the main mineral-producing provinces in Canada,” the QMA stated.

QMA president/CEO Josée Méthot added, “The damage caused to the Quebec economy could be far greater than the benefits derived from an increase in royalties.”

But in Saskatchewan …

One provincial government has actually cut royalties. Saskatchewan’s new system re-evaluates uranium mining costs in a manner that will slash taxes by about $15 million a year, the Saskatoon StarPhoenix reported on Tuesday. Premier Brad Wall discussed the revamped royalties at the offices of Cameco Corp TSX:CCO, where he joined federal politicians to announce a uranium trade deal with India. Canada had banned uranium exports to the country in 1974, after it used a Canadian-made reactor to create plutonium for a nuclear bomb.

Following a recent and similar deal with China, the India agreement “will mean literally billions of dollars worth of sales of Saskatchewan uranium into these two markets,” the StarPhoenix quoted Wall.

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by Greg Klein

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A revised development plan has reduced initial capital expenditures for Sandspring Resources’ TSXV:SSP Toroparu gold-copper project in Guyana. A pre-feasibility study released late April 9 laid out the economics for a 16-year open pit operation.

Using a 5% discount rate, the base case forecasts a pre-tax net present value of US$992 million and a 27.2% internal rate of return. After taxes the numbers show a $691-million NPV and a 23.1% IRR.

Sandspring incorporated last year’s discovery of a
satellite gold deposit into Toroparu’s pre-feasibility study.

The study cut the initial capex to $464 million from the $482 million estimated by the January 2012 preliminary economic assessment update. Contributing to the more optimistic figures is an estimated $37 million that would come from cyanide leach processing of saprolite gold ore prior to commercial production. By year three, cash flow should fund the $50-million expansion to a 22,500-tonne-per-day operation. Payback would come in 2.6 years. Average annual production over 16 years would be 228,000 gold ounces at a cash cost of $700 an ounce, with copper credits factored in. About 78% of production would go into doré bars, with the rest in concentrate.

The project’s reserves include a satellite pit 1.2 kilometres from Toroparu that was discovered in May 2012. Combining three types of ore—saprolite gold, fresh gold and fresh gold-copper—the reserves show:

• a proven category of 29.78 million tonnes averaging 1.1 grams per tonne gold and 0.13% copper for 1.05 million gold ounces and 64 million copper pounds
• a probable category of 97.33 million tonnes averaging 0.98 g/t gold and 0.1% copper for 3.06 million gold ounces and 147 million copper pounds.

Within the pit shell but outside the reserves are resources that use a 0.3 g/t gold cutoff to show:

• measured and indicated categories totalling 90.24 million tonnes averaging 0.83 g/t gold and 0.06% copper for 2.42 million gold ounces and 112 million copper pounds
• an inferred category of 124.34 million tonnes averaging 0.74 g/t gold and 0.04% copper for 2.97 million gold ounces and 111 million copper pounds.

In a statement accompanying the announcement, Sandspring CEO Rich Munson said, “We are encouraged by recent approaches from third parties expressing interest in developing Toroparu jointly with Sandspring. Despite the expressions of interest, we recognize that funding a project of this scale is challenging in the current environment. We have therefore engaged Cutfield Freeman & Co, a leading independent advisory firm in the mining sector, to conduct a process to determine the options available for financing.”

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by Greg Klein

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Should Newman Todd begin with a small starter pit or go directly underground? That’s the question Confederation Minerals TSXV:CFM will address with its just-commissioned preliminary economic assessment, to be released later this year. On April 8 the company announced another batch of assays from its winter drill campaign in northwestern Ontario’s Red Lake Greenstone Belt. Some highlights include:

• 1.92 grams per tonne gold over 36 metres, starting at 103 metres
• (including 7.56 g/t over 1 metre)
• 1.3 g/t over 38 metres, starting at 75 metres
• (including 9.1 g/t over 1 metre)
• 2.62 g/t over 19 metres, starting at 202 metres
• (including 10.9 g/t over 1 metre)
• 63.1 g/t over 0.5 metres, starting at 297 metres
• 1.21 g/t over 22 metres, starting at 297 metres
• (including 8.66 g/t over 1 metre)
• 1.82 g/t over 16 metres, starting at 53 metres
• (including 2.54 g/t over 9 metres).

Mineralization closer to surface distinguishes
Newman Todd from other Red Lake projects.

The down-hole depths provided don’t reflect vertical depths. Intercept true widths weren’t available. No topcut was applied to assays.

Confederation describes the Newman Todd structural/alteration system as approximately 200 metres in width, with significant intercepts to depths of 850 metres from surface. Most of the April 8 assays came from drilling “within a relatively restricted area” about 200 metres along the zone’s strike length and at least 50 metres on sections perpendicular to strike, the company added. The maiden resource and PEA will focus on the project’s Hinge zone.

“One of the things with Red Lake and this type of geology is that it tends towards more vertically oriented systems,” Confederation president/director Brian Bapty tells ResourceClips. “But we have a very, very long strike length of 1.8 kilometres with good grades near surface. So if you look at other people drilling at Red Lake, they tend to be drilling quite deep. We can find near-surface ounces, which are cheaper to drill, but they don’t speak to the size of the opportunity.”

With size, however, comes challenges. “One of the problems of having a strike length of 1.8 kilometres by at least a kilometre deep is that it would take us years and cost millions to drill the entire thing out. So we want to focus our business plan on the most economic ounces, on what’s the best way forward—a starter pit or direct to underground. Answering those questions early is important to us.”

More assays are pending and drilling continues. Winter allows work on a frozen lake and marsh, Bapty points out. “After break-up we can move back onto solid ground.”

Confederation funds and operates the project under option with Redstar Gold TSXV:RGC. With its initial $5-million work requirement already complete, Confederation can achieve a 50% interest by paying Redstar $75,000 and 150,000 Confed shares. The PEA, along with another 500,000 shares, would boost Confederation’s portion to 70%.

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by Greg Klein

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Tibetan tragedy draws attention to the world’s deadliest mines

By Wednesday 66 bodies had been recovered from the Good Friday landslide that buried a tent camp for miners in Tibet. Seventeen more people were missing and presumed dead. Weather was to blame, according to a Tibetan government official cited by the New York Times. But the Economist quoted a Chinese government official who called it a “natural geological disaster.”

China has reportedly barred foreign media from the site, ordered its own media to limit their coverage to that of the state-run Xinhua news agency and censored social media. Apart from the carnage, the landslide poses a disaster for Chinese-Tibetan relations, as well as the image of Chinese mining and resource imperialism. The camp housed workers for the Gyama copper-polymetallic mine (a.k.a. the Jiama mine), which belongs to a wholly-owned subsidiary of China Gold International Resources TSX:CGG. The Vancouver-headquartered company’s “controlling shareholder is the China National Gold Group Corp, a state-owned enterprise and China’s largest gold producer,” reported the National Post.

Only two of the 83 dead are Tibetans. The rest came from distant parts of China. “Managers at big state-owned firms are usually Han Chinese, who in turn tend to regard their own ethnic kin as easier to control and communicate with than Tibetans,” stated the Economist. The magazine quoted a 2012 China Daily story saying that 35% of the mine’s workers were non-Han, which the state-run paper called “the highest percentage among mining companies in China.”

As Bloomberg reported, “China’s history of mining incidents includes the world’s worst safety record at its coal mines, which saw 1,973 people killed in accidents in 2011 and 2,433 the year before that, according to the State Administration of Work Safety.”

Several hours after the Tibetan landslide, a coal mine blast in northeastern China left at least 28 dead and 13 injured. A second explosion on Monday killed at least seven rescuers, said CCTV.com. “The mine is a state-owned colliery,” Xinhua added.

On March 14 NBC reported that a coal mine accident in southern China killed at least 21 people.

A Tuesday news release from China Gold International Resources stated its Tibetan mine, about 10 kilometres from “the geological disaster site,” was not damaged. Production continues.

Will private equity lead investors back to mining?

“The only people who want to lend to this industry right now—and a lot of executives call them the mafia of the mining industry—are the royalty trusts, and they really extract a lot.” In an Equedia interview posted on Wednesday, Kenneth Hoffman of Bloomberg Industries Global Metals and Mining Research said private equity could be the miners’ salvation. And the miners are clamouring for it.

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by Greg Klein

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At first glance the numbers seem modest enough—just under 12,000 gold ounces and $3.3 million net income for fiscal 2012. But that in itself might put Anaconda Mining TSX:ANX in an enviable position among micro-cap juniors. With an expanded land package and two active exploration areas, the company hopes to increase production in the Baie Verte peninsula of northern Newfoundland.

So it was more gold lust than fabled romance that drew Anaconda to the Romeo and Juliet prospect, about 1.5 kilometres northwest of the company’s Pine Cove open pit mine and mill. Last year the company decided that impressive, near-surface historic results called for an initial 1,000-tonne bulk sample. On April 4 Anaconda released high-grade assays from five sub-samples averaging 12,598 grams grading 5.71 grams per tonne gold. The individual numbers show:

Anaconda Mining expects about 14,000 gold ounces this year from Pine Cove but hopes to expand production in its newly enlarged land package.

• 6.32 g/t gold from an 11,842-gram sample
• 5.14 g/t from 12,774 grams
• 5.15 g/t from 12,299 grams
• 4.91 g/t from 13,061 grams
• 7.05 g/t from 13,018 grams.

The results follow closely on drill results released March 25 from a new Western Extension area within Pine Cove’s current pit limit. Highlights include:

• 1.81 g/t gold over 26.87 metres
• (including 2.15 g/t over 20 metres)
• (and including 1.44 g/t over 2.87 metres)
• 1.28 g/t over 12.7 metres
• (including 2.05 g/t over 6.1 metres)
• 1.82 g/t over 4 metres
• (including 4.47 g/t over 1 metre)
• 7.31 g/t over 1.03 metres
• 2.21 g/t over 4 metres
• 3.1 g/t over 0.99 metres.

True widths weren’t available. The top-most intercept started at a vertical depth of 7.83 metres, while the deepest ended at 178.59 metres from surface. The zone remains open to the northwest, which will be the focus of Phase II drilling.

“These holes were drilled within the current pit limit but the mineralization was found below the pit shell,” Anaconda president/CEO Dustin Angelo tells ResourceClips. “We have to remove that waste because you have to fan back to maintain a stable pit wall. Where we’re drilling was an area that was deemed waste, but when you drill far enough down there are areas that are gold-bearing. So we were removing waste in this area already and now we’ve found gold under it.”

As for Romeo and Juliet, “We’re going to do some more definition drilling from the surface,” Angelo says. “But I think we’ll have to do some underground exploration to better define it and help with the mine plan.”

With a mill less than two klicks away, the star-crossed lovers might have a promising future. But “we have to do metallurgical tests to see how we would process that material,” Angelo explains. “Various parts of our circuit have different levels of capacity right now. There’s a potential that there’s plenty of mill capacity but if we have to put it through our ball mill and flotation circuit as well, there’s probably less. But what we could do is blend the feed stock so instead of doing a thousand tonnes a day right now from the pit, we could do 900 from the pit and 100 of this, and blend the head grade.”

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by Greg Klein

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While graphite frontrunners like Flinders Resources TSXV:FDR, Northern Graphite TSXV:NGC and Focus Graphite TSXV:FMS work through the pre-development or even pre-production stage, other companies vie for runner-up status. Among news announced April 3, Standard Graphite TSXV:SGH released assays from the final two holes of its 2012 drill campaign. These near-surface results come from the Oat Zone, east of the company’s Mousseau East Deposit in southwestern Quebec, showing 5.69% graphitic carbon over 6.8 metres and 5.73% over 20.1 metres.

True widths weren’t available. The top-most intercept started at a depth of 22 metres down hole while the deepest stopped at 64.6 metres.

Additional assays and metallurgical results are pending
for Rock Tech Lithium’s Lochaber graphite project.

These assays conclude Standard’s 2012 campaign, which verified part of Mousseau East’s historic drilling as well as extending mineralization east and west. (Click here for some previous assays.) The company plans fieldwork and additional drilling this year to better define and expand the mineralization.

The same day Energizer Resources TSX:EGZ reported an analysis that it says further supports the February preliminary economic assessment for its Molo graphite deposit in Madagascar. In a statement accompanying the announcement, Energizer president/COO Craig Scherba said, “If the graphite price falls off by 25% and there is a 20% opex cost over-run, the project still has very positive IRR and NPV values.”

Going back a week, on March 27 Big North Graphite TSXV:NRT announced grab and channel sample assays for its Grand Lac du Nord property in eastern Quebec. The results “confirmed a multiple graphite-bearing structure covering an area approximately four kilometres by two kilometres, with results of up to 5.31% graphite,” the company stated. Its name notwithstanding, Big North also has a southern presence. That’s in Sonora state Mexico, where the company has three projects that include a 50% share in Nuevo San Pedro and 100% of Caraples and La Fortuna, all small-scale past-producing amorphous graphite mines. Last January Big North commissioned an NI 43-101 technical report for Nuevo San Pedro, which the company’s preparing to re-open.

On March 26 Canada Strategic Metals TSXV:CJC announced flake size distribution for grab samples from three parts of its 25-square-kilometre La Loutre property in southern Quebec. The company plans 15 to 20 holes of near-surface Phase I drilling this spring. One day earlier, Graphite One Resources TSXV:GPH announced it commissioned a PEA for its Graphite Creek property, 65 kilometres north of Nome, Alaska. Along with an updated resource, the study is slated for Q1 2014 release.

On March 21 Canada Carbon TSXV:CCB announced more surface sample assays that “confirmed the presence of a high-quality lump/vein graphite deposit” on the former Miller open pit mine about 80 kilometres west of Montreal. The company plans a busy spring with geophysics, channel sampling and drilling.

Speaking of drilling, on March 18 Rock Tech Lithium TSXV:RCK reported more assays from its Lochaber project, also in southwestern Quebec. One hole “intersected 84.56 metres of graphitic carbon at various depths with grades ranging from 1.11% to 4.42% Cg,” while another found 117.99 metres “at various depths with grades ranging from 1.3% to 3.63%.” Still to come are assays for 12 more holes, re-submitted assays from Phase I drilling and test results for flake size distribution and purity.

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by Greg Klein

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Qualified person de-qualified

A geologist who faked assays and wrote false news releases has been slammed by the Ontario Securities Commission. On March 28 the OSC announced sanctions against Bernard Boily, a one-time VP of exploration for Bear Lake Gold TSXV:BLG who worked on the company’s Larder Lake gold project in the Cadillac Break of northeastern Ontario.

Some examples of his fanciful figures follow, with real results in brackets:

• 8.5 grams per tonne gold over 1.2 metres true width (2.6 g/t over 1.2 metres)
• 10.6 g/t over 6.5 metres (3.6 g/t over 6.5 metres)
• 9.9 g/t over 6.5 metres (1.3 g/t over 2.1 metres)
• 23.4 g/t over 0.6 metres (3.1 g/t over 0.6 metres)
• 10.5 g/t over 2.1 metres (1.7 g/t over 2.1 metres).

His scam came to light in July 2009 after Bear Lake hired an independent firm, InnovExplo Inc, to compile a resource estimate. Bear Lake then hired other independents to investigate. Investors, meanwhile, launched a class action suit. That was settled in April 2010 under confidential terms.

The OSC banned Boily from trading securities for 15 years, fined him $750,000 with $50,000 costs, and barred him from QP-ing for life.

In a statement announcing the penalties, OSC director of enforcement Tom Atkinson said Boily’s behaviour ran “contrary to the important gatekeeper role played by qualified persons in the securities disclosure regime.”

But Larder Lake’s not barren. Drilling continues by Bear Lake’s JV partner Gold Fields Abitibi Exploration, a subsidiary of the multi-billion-market-cap Gold Fields Ltd.

In January a Vancouver ex-QP, John Gregory Paterson, got a six-year prison term for faking assays while CEO of Southwestern Resources.

Speaking of fraud

Bre-X, the outrage that brought about QPs and NI 43-101 in the first place, is coming to an anti-climactic end. That’s according to an Ontario judge quoted in the March 21 Globe and Mail as he granted a bankruptcy trustee’s request to drop its legal action against Bre-X, its former officers and other companies involved. The G&M stated that an Alberta court is likely to approve a similar request and an Ontario class action suit will likely be dropped.

But some people made money and it wasn’t just company insiders. Clint Docken, the lawyer representing the Alberta class action suit, told the paper that trustees Deloitte & Touche got $3.9 million in fees and paid its lawyers $8 million, leaving $79,000 in Bre-X coffers. “A lawyer representing the trustee was not available for comment,” the G&M stated.

No charges were ever laid and “little also came of a move by the trustee to freeze the assets of [John] Felderhof, his ex-wife Ingrid and former Bre-X chief executive officer David Walsh, who died in 1998.” Nor is there any trace of the $75 million the Felderhofs got by selling Bre-X shares, the story added.

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by Greg Klein

Updated March 27, 2013

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Now responsible for roughly 15% of global electricity generation, nuclear energy continues to expand. After the earthquakes and tsunami that caused Japan’s Fukushima Daiichi accident, uranium prices fell from a 2011 high of $72.63 a pound to a low of $41.25 in November 2012. More recently the price has nudged up to a March 25, 2013, level of $42.25. But countries like China, Korea and India plan to add significantly more nuclear generation, while even Japan is re-starting some of its reactors.

Cameco Corp TSX:CCO’s fourth quarter report released February 8 reiterated the company’s view that “the near-term environment for the industry was challenging but that the long-term outlook remained very positive.”

According to environmentalists like Greenpeace co-founder Patrick Moore, nuclear energy is the world’s most viable source of electricity.

This year’s anticipated end of the Russia/U.S. highly enriched uranium (HEU) program (also known as megatons to megawatts) would remove up to 24 million pounds of annual supply from former Soviet warheads converted to fuel. But Cameco’s forecast also considered the retirement of older reactors in other countries and India’s 2020 nuclear target, which has been scaled down from 20 to 14.6 gigawatts.

As a result, Cameco stated, “While the market continues to evolve, our current estimates project nuclear generating capacity to reach about 510 gigawatts by 2022 from today’s 392 gigawatts, which represents average annual growth of 3%. Of this expected growth, approximately 64 new reactors with 64 gigawatts of generating capacity are under construction today.”

As for prices, there’s “no formal exchange for uranium as there is for other commodities,” explains the Ux Consulting Co. “Uranium price indicators are developed by a small number of private business organizations [like Ux] that independently monitor uranium market activities, including offers, bids and transactions.”

In a November 2012 interview with the Daily Crux, Sprott Global Resource Investments chairman Rick Rule said uranium prices are “irrationally depressed.” The Fukushima accident, he said, took 20 million pounds of annual uranium demand off the market while Japan placed a 15-million-pound surplus on the market. He also noted HEU’s anticipated end in 2013.

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