Friday 2nd December 2016

Resource Clips


Posts tagged ‘labrador’

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

October 28th, 2016

by Greg Klein | October 28, 2016

An intriguing chance find has King’s Bay Gold TSXV:KBG hoping the Trans-Labrador Highway will be a road to discovery. That’s the story behind the company’s October 27 announcement of a definitive agreement to acquire the Lynx Lake copper-cobalt property in south-central Labrador.

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

Powerlines and the Trans-Labrador Highway
run adjacent to the Lynx Lake copper-cobalt property.

As Newfoundland was building the highway in 2008, a provincial contractor with prospecting experience noticed evidence of disseminated and massive sulphides, King’s Bay geologist/director Nick Rodway explains. Some geological sleuthing eventually drew the contractor to the property’s east side, where a quarry had been blasted for aggregate.

Grab samples assayed the following year showed non-43-101 results up to 1.39% copper, 0.94% cobalt, 0.21% nickel and 6.5 g/t silver. Regional low-res magnetic surveys undertaken by the province and preliminary work in 2014 with a hand-held EM-16 device suggest strong conductors underlying the area.

Grab samples taken on the property’s west side in 2015 brought non-43-101 results up to 1.03% copper, 0.566% cobalt, 0.1% nickel, 5 g/t silver, 0.36% chromium, 0.39% molybdenum and 0.23% vanadium.

With a team returning to Lynx Lake next week, King’s Bay intends to conduct a sampling program to bring 43-101 results, along with further EM-16 surveys. Should all go to plan, airborne geophysics could follow this winter.

Open to year-round work, highway-accessible and with adjacent powerlines, the 20-square-kilometre property sits about 100 kilometres southeast of the town of Happy Valley-Goose Bay.

Subject to approvals, the acquisition costs King’s Bay $100,000 over three years and 900,000 shares over two years. On October 27 the company also announced a private placement of up to $1 million.

The news comes amid growing concerns over future cobalt supply. Nearly 60% of global production comes from the Democratic Republic of Congo, a country rife with political instability and conflict mining.

At the same time increased demand comes from “the energy storage revolution,” reports Benchmark Mineral Intelligence. Its data shows “2015 total global supply at 100,000 tpa, of this the battery market consumed 48,000 tpa.

“With a lithium-ion battery production surge well underway—and Benchmark recently revising its megafactories tracker to now 14 that are under construction ranging from three- to 35-GWh capacity—lithium-ion battery demand for cobalt is set to exceed 100,000 tpa by 2020.”

Exploring opportunity

June 17th, 2016

A capacity crowd attends the first annual Vancouver Commodity Forum

by Greg Klein
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A capacity crowd attends the first annual Vancouver Commodity Forum

 

“There’s excitement in the air,” said Cambridge House International founder Joe Martin. That’s the mood he senses as junior explorers emerge from the downturn. And certainly optimism was evident on June 14 as more than 450 people converged on the Vancouver Commodity Forum for an afternoon of expert talks amid a showcase of two dozen companies. Keynote speakers included Martin, Chris Berry of the Disruptive Discoveries Journal, Jon Hykawy of Stormcrow Capital, John Kaiser of Kaiser Research Online and Stephan Bogner of Rockstone Research.

A capacity crowd attends the first annual Vancouver Commodity Forum

Lithium, not surprisingly, stood out as a commodity of interest. While cautioning against over-enthusiasm for the exploration rush, Berry and Hykawy each affirmed the need for juniors to find new sources of the metal. Cobalt and scandium featured prominently too, as did other commodities including what Kaiser called “the weird metals”—lesser known stuff that’s vital to our lives but threatened with security of supply.

Kaiser also noted he was addressing a crowd larger than his last PDAC audience, another indication that “we’ve turned the corner.”

Attendees also met and mingled with company reps. Potential investors learned about a wide gamut of projects aspiring to meet a growing demand for necessities, conveniences and luxuries.

Presented by Zimtu Capital TSXV:ZC, the forum’s success will make it an annual event, said company president Dave Hodge. Berry emceed the conference, holding the unenviable task of “making sure Dave stays well-behaved.”

Read interviews with keynote speakers:

Meet the companies

Most companies were core holdings of Zimtu, a prospect generator that connects explorers with properties and also shares management, technical and financing expertise. Zimtu offers investors participation in a range of commodities and companies, including some at the pre-IPO stage.

After sampling high-grade lithium on its Hidden Lake project in the Northwest Territories earlier this month, 92 Resources TSXV:NTY plans to return in mid-July for a program of mapping, exposing spodumene-bearing pegmatite dykes, and channel sampling. The company closed the final tranche of a private placement totalling $318,836 in April. Hidden Lake’s located near Highway 4, about 40 kilometres from Yellowknife and within the Yellowknife Pegmatite Belt.

With one of the Athabasca Basin’s largest and most prospective exploration portfolios, ALX Uranium TSXV:AL has a number of projects competing for flagship status. Among them is Hook-Carter, which covers extensions of three known conductive trends, one of them hosting the sensational discoveries of Fission Uranium TSX:FCU and NexGen Energy TSXV:NXE. ALX’s strategic partnership with Holystone Energy allows that company to invest up to $750,000 in ALX and retain the right to maintain its ownership level for three years. ALX closed a private placement first tranche of $255,000 last month, amid this year’s busy news flow from a number of the company’s active projects.

A capacity crowd attends the first annual Vancouver Commodity Forum

Arctic Star Exploration TSXV:ADD boasts one of northern Canada’s largest 100%-held diamond exploration portfolios. Among the properties are the drill-ready Stein project in Nunavut and others in the Lac de Gras region that’s the world’s third-largest diamond producer by value. North Arrow Minerals TSXV:NAR holds an option to earn up to 55% of Arctic Star’s Redemption property.

Aurvista Gold TSXV:AVA considers its Douay property one of Quebec’s largest and last undeveloped gold projects. The Abitibi property has resources totalling 238,400 ounces of gold indicated and 2.75 million ounces inferred. Now, with $1.1 million raised last month, the company hopes to increase those numbers through a summer program including 4,000 metres of drilling. Douay’s 2014 PEA used a 5% discount rate to forecast a post-tax NPV of $16.6 million and a post-tax IRR of 40%.

Looking for lithium in Nevada, Belmont Resources TSXV:BEA now has a geophysics crew en route to its Kibby Basin property, which the company believes could potentially host lithium-bearing brines in a similar geological setting to the Clayton Valley, about 65 kilometres south. Results from the gravity survey will help identify targets for direct push drilling and sampling.

A mineral perhaps overlooked in the effort to supply green technologies, zeolite has several environmental applications. Canadian Zeolite TSXV:CNZ holds two projects in southern British Columbia, Sun Group and Bromley Creek, the latter an active quarrying operation.

With a high-grade, near-surface rare earths deposit hosted in minerals that have proven processing, Commerce Resources TSXV:CCE takes its Ashram project in Quebec towards pre-feasibility. The relatively straightforward mineralogy contributes to steady progress in metallurgical studies. Commerce also holds southeastern B.C.’s Blue River tantalum-niobium deposit, which reached PEA in 2011 and a resource update in 2013.

Permitted for construction following a 2014 PEA, Copper North Mining’s (TSXV:COL) Carmacks copper-gold-silver project now undergoes revised PEA studies. The agenda calls for improved economics by creating a new leach and development plan for the south-central Yukon property. In central B.C. the company holds the Thor exploration property, 20 kilometres south of the historic Kemess mine.

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Pay as you go

April 28th, 2016

New gold producer Equitas Resources sees revenue for incremental expansion

by Greg Klein

New gold producer Equitas Resources sees revenue for incremental expansion

Equitas Resources meets Alta Floresta during due diligence in Brazil.

 

Negotiations with minority shareholders dragged out longer than expected but on April 27 Equitas Resources TSXV:EQT officially made the transition from Labrador nickel explorer to Brazil gold producer. On closing its acquisition of Alta Floresta Gold, Equitas now takes over a modest gold operation with the intention of increasing production—and cash flow—incrementally. Should all go to plan, that would bring a step-by-step payback for each new stage of the operation, as well as funding for further exploration.

That certainly contrasts with the traditional exploration model, with which investors can be quick to show impatience. Equitas experienced that first hand after just one season of drilling its Garland project, despite its compelling nickel-cobalt-copper story south of Voisey’s Bay.

New gold producer Equitas Resources sees revenue for incremental expansion

In operation since June, the Cajueiro project holds potential
for greater recovery, as well as expansion of near-surface oxides.

Looking for alternative financing, then-president/now-chairperson Kyler Hardy learned about Alta Floresta’s Cajueiro project through a friend in the company. Hardy not only liked its potential. He also recognized a good fit between the two companies’ teams.

Alta Floresta brings to Equitas its 100% interest in six gold properties with four production licences, part of a portfolio covering more than 184,410 hectares in Brazil’s central states of Mato Grosso and Para. The flagship Cajueiro project’s Baldo zone has been in operation since June, producing around a kilogram of gold a month. That amounts to recovery of only about 30% to 35%, achieved by running alluvium and saprolite through a sluice box.

Equitas hopes to see considerable improvement within months by installing a gravity plant, then about 85% recovery with carbon-in-leach processing that could begin early next year. Full open pit production would be a longer-term goal.

We expect the payback for each stage in less than a year, much less for the gravity plant. We’re derisking it that way, by building in stages.—Chris Harris, president/CEO
of Equitas Resources

The plan is to “develop the project in stages and each stage has to pay for itself,” explains new president/CEO Chris Harris. “We expect the payback for each stage in less than a year, much less for the gravity plant. We’re derisking it that way, by building in stages. That could also provide cash flow for a sustaining exploration program which we hope would then beget further development.”

Of course these are perilous times for Brazil, now undergoing serious recession, a wide-ranging corruption scandal and impeachment proceedings against President Dilma Rousseff. Compounding the problems are their effect on the Brazilian real, which contrasts with currently high gold prices. “But what that’s doing to our project is creating huge cost compression,” Harris says. “That benefits both capex and opex.” The company has already selected a nearly new gravity plant in the region for purchase. Its price has sunk to less than half of what he projected last year.

Exploration will focus on near-surface oxides, where Equitas sees the greatest potential for resource expansion and low-cost extraction.

Except for one property slightly north, the entire portfolio sits on the Juruena gold belt, which has historic estimates of seven to 10 million ounces of artisanal output. Straddling the border between Para and Mato Grosso states, the 39,053-hectare Cajueiro property’s near-term agenda could include bulk sampling and trenching, as well as diamond and rotary air blast drilling. Exploration will focus on near-surface oxides, where Equitas sees the greatest potential for resource expansion and low-cost extraction.

A just-filed 43-101 technical report recalculates data from a 2013 resource estimate to allow for different gold price and opex numbers. The new study bases a cutoff of 0.25 grams per tonne on a near-surface deposit that can be processed by cyanidation or gravity processing. The report provides separate numbers for four zones of sulphides and oxides.

Total sulphide zones:

  • indicated: 8.64 million tonnes averaging 0.771 g/t for 214,100 gold ounces

  • inferred: 9.53 million tonnes averaging 0.664 g/t for 203,500 ounces

Total oxide zones:

  • inferred: 1.37 million tonnes averaging 1.775 g/t for 78,400 ounces

All four zones show near-surface oxide expansion potential, Equitas states. Five other anomalies offer additional encouragement.

The project has road access to the city of Alta Floresta, 95 kilometres north. A hydro dam now under development should bring electricity within two years, if not sooner.

The arrangement combines talent from both companies. Harris casts a close eye on the accounts, having 30 years’ experience in energy, commodity trading and mining finance with companies like Ernst & Young, CIBC, Enron UK and BHP Billiton NYSE:BHP.

Hardy, through 16 years as a resource sector entrepreneur and executive, demonstrates a facility for operating remote, logistically complex exploration projects. Director Alan Carter, who also sits on the board of Eric Friedland’s Peregrine Diamonds TSX:PGD, brings 30 years’ exploration experience with the likes of Rio Tinto NYSE:RIO, BHP, and ECI Exploration and Mining, among others.

Equitas Resources closes acquisition of Brazilian gold operation

Cajueiro’s alluvial lure suggests
expansion potential to Equitas.

Co-director David Hodge also serves as president of Zimtu Capital TSXV:ZC, a project generator that supports several juniors with acquisitions and advisory services. VP of exploration Everett Makela began his career with Inco, eventually retiring as Vale’s (NYSE:VALE) principal geologist for North America. His international experience includes Brazil.

Mike Bennett, a local resident and director of Equitas subsidiary Alta Floresta Mineração, has spent 23 of his 30 exploration years in South America where he took part in three gold discoveries, Puquio North in Bolivia, as well as Coringa and Cajueiro in Brazil.

Also residing locally, Portuguese/English-fluent Richard Crew acts as operations consultant for Alta Floresta Mineração. His 30 years of experience includes positions as operations manager and COO for numerous companies worldwide. Another nearby resident, project manager and exploration geologist Elvis Alves knows the community as well as the minerology.

The deal has Equitas issuing 103.65 million shares to former Alta Floresta shareholders and 5.28 million options, exercisable at $0.15 for three years, to former Alta Floresta option holders. A 1.75% NSR applies to licences acquired two years ago from a former minority shareholder of Alta Floresta.‎

Earlier this month Equitas closed the final tranche of a private placement that totalled $1.5 million from 30 million units. Insiders bought 10.4 million units.

“We’ll be talking about implementing the gravity plant very shortly,” Harris says. “We’ll also be talking about starting our drilling plan, the drill results and possibly a revised 43-101. We’ll have a steady news flow.”

Equitas Resources signs definitive agreement on Brazil gold operation

March 7th, 2016

by Greg Klein | March 7, 2016

Equitas Resources signs definitive agreement on Brazil gold operation

Due diligence done, Equitas Resources TSXV:EQT moves forward on its acquisition of a Brazilian gold producer with a definitive agreement announced March 7. Pending regulatory approval, Equitas will take over Alta Floresta Gold Ltd, which holds a 60% stake in six gold properties, one of them a small mine.

An alluvial operation at the Cajueiro project’s Baldo zone currently produces about 100 ounces of gold a month. Equitas hopes to improve recovery by installing a small gravity plant. Further plans would call for a carbon-in-leach plant, then expanded production through open pit mining.

Cajueiro has a 2013 resource estimate for four zones:

Crente zone, 0.5 grams per tonne cutoff

  • indicated: 4.53 million tonnes averaging 1.2 g/t for 168,000 gold-equivalent ounces
  • inferred: 3.02 million tonnes averaging 1 g/t for 100,300 ounces

Crente zone, 0.3 g/t cutoff

  • indicated: 7.4 million tonnes averaging 0.9 g/t for 203,000 ounces
  • inferred: 5.26 million tonnes averaging 0.8 g/t for 127,400 ounces

Baldo zone, 0.3 g/t cutoff

  • inferred: 1.41 million tonnes averaging 1.3 g/t for 61,100 ounces

Matrincha zone, 0.3 g/t cutoff

  • inferred: 1.56 million tonnes averaging 1.1 g/t for 52,900 ounces

Marines zone, 0.3 g/t cutoff

  • inferred: 1.17 million tonnes averaging 0.7 g/t for 27,200 ounces

Last week Equitas offered a private placement of up to $1 million. The company also holds the 23,386-hectare Garland project in Labrador, 30 kilometres from Voisey’s Bay, where initial drilling has found highly anomalous nickel-copper-cobalt mineralization.

Read more about the Alta Floresta Gold acquisition.

Nickel One completes acquisition, begins trading, raises $890,000

March 1st, 2016

by Greg Klein | March 1, 2016

Having made its trading debut on February 29, Nickel One Resources TSXV:NNN prepares to explore its Tyko project in Ontario’s Thunder Bay mining district. Formerly Redline Resources, Nickel One comes about following the acquisition of Tyko Resources.

According to one chart provided by the company, some drill highlights from a 2006-to-2007 campaign on the 11,168-hectare property have shown:

Hole TK-06-001

  • 1.09% nickel, 0.76% copper and 0.42 grams per tonne palladium over 4.15 metres, starting at 17.4 metres in downhole depth

Hole TK-06-003

  • 1.06% nickel , 0.51% copper and 0.12 g/t palladium over 1.08 metres, starting at 63.92 metres

Hole TK-06-005

  • 1.05% nickel, 0.5% copper and 0.12 g/t palladium over 6.2 metres, starting at 25 metres
Nickel One completes acquisition, begins trading, raises $890,000

Now trading and recently financed, Nickel One
has work planned for its Tyko property in Ontario.

True widths weren’t provided.

Anomalous nickel, copper and platinum group elements appear within a possible conduit that was interpreted from magnetic survey data, according to a 43-101 technical report. “The property shows many similarities with mafic to ultramafic feeder systems such as Voisey’s Bay in northern Labrador and Jinchaun in China,” the report stated. “These deposits are characterized by magmatic sulphides collecting within the feeder of a large intrusive body due to variations in geometry that caused changes in flow dynamics such that immiscible sulphides were able to settle out and collect in structural traps.”

Hoping to find a comparable system at Tyko, the company has outlined a $396,000 program that would include mapping, prospecting and drilling. The company closed an $890,000 financing that included $500,000 in flow-through units.

Nickel One also settled $197,212 in debt by issuing 1.97 million shares.

How Long Blues

February 23rd, 2016

The Fraser Institute looks at exploration permit wait times across Canada

by Greg Klein

The Fraser Institute looks at exploration permit wait times across Canada

Mineral explorers in Canada generally wait longer than before for permits, the Fraser Institute reports.
Chart: The Fraser Institute

A country’s mineral output doesn’t necessarily correspond to its geological endowment, a new study reminds us. Other factors also play a role, among them exploration permitting. In many parts of Canada, that early but crucial step towards finding a new mine faces growing wait times, questionable transparency and increasing uncertainty. Those are some of the findings of a Fraser Institute study released February 23. The first-time survey, focusing on this one issue and limited to Canadian jurisdictions, arrives a week before the institute’s annual global survey of miners and explorers.

“This is a topic for which we’ve received feedback both in previous years’ surveys and in conversations we’ve had with explorers, and it’s something they consistently note to us as a growing problem,” says Taylor Jackson, an institute policy analyst and report co-author along with Kenneth Green.

It’s a growing problem in more ways than one. But there’s considerable variation between some jurisdictions, with Saskatchewan shining brightly while Ontario, the Northwest Territories and Nunavut look relatively gloomy. And although it’s slowing, Canadian permitting’s still faster than the global average.

Survey answers came from 122 people reporting on 10 jurisdictions. (Alberta, Nova Scotia and Prince Edward Island drew too few responses to be included.) Five jurisdictions had the majority saying that permitting times had lengthened over the last decade. Those who reported shorter wait times were the minority. But a slim majority of Newfoundland and Labrador respondents (56%) said wait times had stayed the same.

Saskatchewan, which ranked #2 in last year’s global survey, drew the smallest proportion of complaints (27%) about lengthening wait times.

Of Canada’s three biggest exploration targets, Ontario provoked more wait time pessimism than British Columbia or Quebec. Fourteen percent of Ontario explorers forecast waits of 11 to 14 months, compared to B.C.’s 2% and Quebec’s 3%. Another 7% of Ontario explorers anticipated waiting over two years for a permit, compared to another 2% in B.C. and 3% in Quebec.

The Fraser Institute looks at exploration permit wait times across Canada

A 1983 study found that mineral production in Western countries correlated poorly with geological riches. More recently, about 60% of Fraser Institute respondents say
they base their investment decisions on geology. The rest
cite policy-related factors. Image: The Fraser Institute

Transparency arises as another critical issue. “When explorers do not understand what the rules are or how they are applied, the result can be a deterrent to investment,” the report states.

Manitoba and Saskatchewan drew the highest proportions of respondents (50% and 47% respectively) saying the jurisdiction’s transparency actually encourages exploration. Moreover, the results were mostly positive when combining those who said a jurisdiction’s transparency encourages exploration with those who at least said that transparency concerns didn’t create a deterrent. Only the NWT flunked that one with a dismal 31%, while neighbouring Nunavut got 50%.

Saskatchewan came out on top with 94%, followed by New Brunswick (83%), Newfoundland and Labrador (78%) and Quebec (71%).

Although respondents remained confidential, they weren’t given the chance to express open-ended comments, as the institute’s global survey allows. Jackson says that could change if the survey’s repeated in future years.

The next time we might open it up to Australia and U.S. and get some feedback on how Australian and American states are performing, with the idea of determining who’s got the best practices and make some policy recommendations for Canada.—Taylor Jackson, Fraser Institute policy analyst and report co-author

Nor does the study report specific problems or make recommendations. This initial effort focused on “identifying which jurisdictions are performing well and which are not,” he explains. “The next time we might open it up to Australia and U.S. and get some feedback on how Australian and American states are performing, with the idea of determining who’s got the best practices and make some policy recommendations for Canada.”

Confidentiality’s the key to companies’ candour. So a similar survey about mine permitting would be problematic, Jackson points out. With mine proposals far fewer than exploration projects, governments might suss out who said what.

“But this is an issue that we would like to look at,” he says. “I don’t know if we’d do it in a survey form but it’s certainly an issue for setting up a mine as well.”

Two weeks ago Taseko Mines TSX:TKO launched a lawsuit alleging serious breaches of transparency in the federal process that rejected the company’s proposed New Prosperity mine. Pacific Booker Minerals TSXV:BKM has filed Freedom of Information requests with the B.C. government regarding its rejection of the proposed Morrison mine. The company had previously taken the province to court over the matter.

The institute’s study follows a January report from the Northern Policy Institute examining why “a major mining boom” with nine potential operations in northwestern Ontario failed to materialize.

Do studies like these influence the people who matter?

“I do know that decision-makers are listening to what’s said in the survey,” Jackson responds. “I can say that about the broader mining survey. We have some general examples where politicians have come and talked to us and we’ve seen policy reform later. They take the survey and it helps them identify which areas they’re performing poorly in, so I think they are listening. I don’t know if the message gets across all the time but I would say they are listening.”

Here are Canada’s rankings from last year’s international survey, with their global position in parentheses:

  • Saskatchewan (2)
  • Manitoba (4)
  • Quebec (6)
  • Newfoundland and Labrador (8)
  • Yukon (9)
  • Northwest Territories (15)
  • New Brunswick (21)
  • Alberta (22)
  • Ontario (23)
  • British Columbia (28)
  • Nunavut (29)
  • Nova Scotia (42)

PEI wasn’t included. The institute’s 2015 global survey comes out March 1.

Download Permit Times for Mining Exploration: How Long Are They?

Equitas Resources president Kyler Hardy plans to add Brazilian gold production to his company’s quest for a Voisey’s Bay-type nickel discovery

February 3rd, 2016

…Read more

Diversifying opportunity

January 15th, 2016

Equitas Resources looks to Brazil gold production as well as Labrador nickel exploration

by Greg Klein

“How do we add value in such a difficult resource market?” A problem vexing many ambitious explorers, for Equitas Resources TSXV:EQT “it kept coming back to cash flow, cash flow, cash flow,” says president Kyler Hardy. But another question followed: “How do we get that and not abandon our vision” of a Voisey’s Bay-type nickel discovery in Labrador?

The answer may lie in a small-scale gold producer with considerable expansion potential. Under a binding letter agreement announced January 15, Equitas would acquire Alta Floresta Gold, a privately traded British Columbia company with interests in six Brazilian gold properties, one already undergoing modest production. The parties see opportunity to ramp up output to complement an aggressive drill program 30 kilometres south of Voisey’s.

Equitas Resources looks to Brazil gold production as well as Labrador nickel exploration

The takeover target has an approximately 60% stake in Alta Floresta Gold Mineracao Ltd, which holds the six properties, five with production licences, covering over 184,410 hectares in western Brazil’s Mato Grosso state and Para state to the north. Straddling the border of both states is the 44,768-hectare flagship Cajueiro project.

Its Baldo zone now churns out about 100 gold ounces a month, Hardy says. Modest to be sure, but “you look at some of the legends of the business, they built massive companies off of small cash flows. Placer Dome was founded off a very similar project in Papua New Guinea.”

While not necessarily envisioning similar grandeur, the parties have a three-part plan for Cajueiro, where a 2013 resource estimate defined four zones as follows:

Crente zone, 0.5 grams per tonne cutoff

  • indicated: 4.53 million tonnes averaging 1.2 g/t for 168,000 gold-equivalent ounces

  • inferred: 3.02 million tonnes averaging 1 g/t for 100,300 ounces

Crente zone, 0.3 g/t cutoff

  • indicated: 7.4 million tonnes averaging 0.9 g/t for 203,000 ounces

  • inferred: 5.26 million tonnes averaging 0.8 g/t for 127,400 ounces

Baldo zone, 0.3 g/t cutoff

  • inferred: 1.41 million tonnes averaging 1.3 g/t for 61,100 ounces

Matrincha zone, 0.3 g/t cutoff

  • inferred: 1.56 million tonnes averaging 1.1 g/t for 52,900 ounces

Marines zone, 0.3 g/t cutoff

  • inferred: 1.17 million tonnes averaging 0.7 g/t for 27,200 ounces

All four zones have potential near-surface oxide expansion, Equitas stated, while five additional anomalies offer additional encouragement.

A three-phase plan for Cajueiro would begin with installing a small gravity plant to process Baldo’s saprolite mineralization. In production only since June, the alluvial operation currently languishes at about 35% recovery. Phase II would call for a carbon-in-leach plant between the Baldo and Crente zones, less than one kilometre apart. Initial metallurgical tests suggest gravity separation and cyanide leaching could push recovery above 85%. Phase III would use operating cash flow to ramp up Cajueiro into open pit production.

Hardy foresees a fast-paced timeline, with the CIL plant in place within six months and commissioning complete over another two months. The gear has already been sourced with “everything we need within 50 kilometres of us,” he says. The weak Brazilian real helps lighten costs.

Also on the agenda are 12 to 20 shallow drill holes for an updated resource. The 43-101 will also provide figures for production and costs. A PEA would follow within months.

Infrastructure’s good, Hardy points out, with road connections to nearby towns where staff live, rendering a camp unnecessary. The Juruena belt has a longstanding mining history and good community relations, he adds.

The deal would bring together a strong management team from both companies. Key Equitas figures would stay on—Hardy as chairperson, Zimtu Capital TSXC:ZC president Dave Hodge as director and Voisey’s veteran Everett Makela as VP of Exploration. Joining them would be president/CEO/director Chris Harris, with 29 years’ experience in mining finance, energy and commodities. New director Alan Carter’s 30-year career includes service with Rio Tinto NYE:RIO, BHP Billiton NYE:BHP and Peregrine Diamonds TSX:PGD. Technical adviser Michael Bennett’s CV shows 24 years’ experience in South America, where he’s credited with three gold discoveries.

While the new plan puts the Garland nickel project on hold pending revenue from Brazil, Equitas still has aggressive drilling in store for Labrador.

The share swap would leave Alta Floresta Gold as a wholly owned subsidiary of Equitas, with the latter being held approximately 50% by Alta’s former shareholders. Among other requirements, Equitas must raise $2.5 million. That could come at least partly through a private placement but possibly through a debenture or equipment financing as well, Hardy says. Prior to closing, Alta Floresta Gold “will use commercially reasonable efforts” to increase its stake in Alta Floresta Gold Mineracao from 60% to 100%.

The parties hope to sign a definitive agreement by January 31 and close by February 19 or soon afterwards.

“I’m excited,” enthuses Hardy. “It’s a cash-flow opportunity for the company and we’re gonna rock this.”

Visual Capitalist: The Voisey’s Bay story part 3

December 16th, 2015

Presented by Equitas Resources TSXV:EQT | posted with permission of Visual Capitalist | December 16, 2015

The story of Voisey’s Bay: Today’s mine (Part 3 of 3)

 

Preface

The massive Voisey’s Bay nickel deposit was auctioned off to the highest bidder in early 1996 for $4.3 billion. We show the events leading up to the nickel discovery in Part 1: The discovery.
We highlight the bidding war for the rights to the deposit in Part 2: The auction.

Voisey’s Bay today

The discovery at Voisey’s Bay was ultimately significant for three reasons:

The ore was rich in content. In fact, the famed Ovoid zone had an average grade of 2.8% nickel.

Much of the ore was near surface. This would help minimize extraction costs.

The deposit was close to tidewater. This reduced the costs associated with transporting ore to ships.

The deposit

The Voisey’s Bay deposit is world class in terms of its grade and size. With 141 million tonnes of ore, the deposit has significant grades of nickel, copper and cobalt:

  • 1.63% nickel

  • 0.85% copper

  • 0.09% cobalt

The resource is located in three main zones: Ovoid, Eastern Deeps and Reid Brook. The Ovoid represents less than 23% of the total tonnage but more than 42% of the metal in the deposit.

Mining and transporting the ore

The open pit mine at Voisey’s Bay, now owned by Vale NYE:VALE, has been in operation since 2005. Recently, underground mining was approved at the site as well.

  • The ore from Voisey’s Bay is transported via the Umiak I—the world’s most powerful icebreaking cargo ship

  • The Umiak I makes 12 trips a year

  • The icebreaker rides over ice that can be 10 metres thick in places

  • It has a 30,000-horsepower engine, which is large enough to drive an oil tanker 10 times its size

  • The Umiak I can carry 30,000 tonnes of nickel-copper concentrate at once (worth $100 million per load)

The future

The Newfoundland and Labrador government estimated that the Voisey’s Bay project will add approximately $20.7 billion to the province’s gross domestic product during the mine’s estimated 30-year lifespan. Will more of these mines be found in Labrador in the future?

A well-known exploration proverb states that “the best place to find a new mine is next to an old mine.” That’s why, in a research report by the Newfoundland and Labrador government on Voisey’s Bay, it is noted that “this area remains highly favourable for future exploration.”

And as Robert Friedland has said himself: “Creative people shouldn’t be punished for failure, because in the exploration process we are in the business of drilling dry holes. You can’t keep drilling where you’ve looked.”

Posted with permission of Visual Capitalist.

Read about Equitas Resources.

Phase I encourages Equitas Resources’ winter drill campaign southeast of Voisey’s Bay

December 16th, 2015

by Greg Klein | December 16, 2015

Bolstered by geophysics and its first round of drilling, Equitas Resources TSXV:EQT looks forward to continuing its search for Voisey’s Bay-type mineralization. Results announced December 16 show three areas of focus on Garland, a 23,386-hectare property 30 kilometres from Labrador’s historic nickel-cobalt-copper discovery. With the rig still on site and money in the bank, Equitas plans to resume drilling as soon as winter conditions allow.

Phase I encourages Equitas Resources’ winter campaign southeast of Voisey’s Bay

With positive autumn results and funding in place,
Equitas Resources plans winter drilling at Garland.

The company took on the newly assembled property earlier this year, based partly on the fact that the great nickel deposits of Sudbury, Norilsk, Thompson and Raglan occur in clusters. But Equitas also saw specific merits in these claims, which hadn’t previously undergone modern exploration. Now assays and geophysics instil further confidence in the project, says president Kyler Hardy.

“We think this is the start of something larger,” he says. “We’ve touched on something very exciting that can lead us to the bigger picture.”

Among highlights of the five-hole, 1,678-metre fall program was GP15-005, where two intercepts showed:

  • 0.08% nickel, 0.1% copper, 70 ppm cobalt and 1.33% sulphur over 4.6 metres, starting at 19.9 metres in downhole depth

  • 0.11% nickel, 0.14% copper, 93 ppm cobalt and 1.77% sulphur over 1.5 metres, starting at 54.5 metres

The intervals occurred within 69 metres of disseminated sulphides in a hole that revealed “an environment favourable for massive sulphide deposition,” said VP of exploration and Voisey’s veteran Everett Makela. Historic surface sampling found up to 0.15% nickel and 0.1% copper. Equitas has the area slated for a Crone pulse electromagnetic (PEM) survey when work resumes.

A downhole PEM probe of GP15-004 found “a complex anomalous response that may indicate a significant good quality conductor near the hole, in the modelled depth range for buried Voisey’s Bay-type deposits,” the company reported. Possible problems with the data call for an additional PEM survey prior to drilling.

On the property’s northern area, consulting geophysicist Alan King interprets a major east-west lineament as “representing the southern margin of the graben structure hosting the Voisey’s Bay mine.” The Garland structure coincides with VTEM anomalies and a nickel-copper-cobalt lake sediment anomaly “comparable to the anomalies adjacent to the Voisey’s Bay mineralization,” the company stated.

Overall, the autumn results give Equitas “three solid exploration focus areas for the next program, anticipated to commence as soon as safe lake ice and optimal late winter conditions are present,” Makela said. “We are fully funded for the next phase and have the economic and logistical advantages of a camp and drill rig already at site.”

Read more about Equitas Resources.

See a three-part infographic about Voisey’s Bay.