Tuesday 25th October 2016

Resource Clips

Posts tagged ‘newfoundland’

GTA sells Ivanhoe property to focus on Northshore gold

April 29th, 2016

by Greg Klein | April 29, 2016

An option on the Ivanhoe gold project passes from GTA Resources and Mining TSXV:GTA to Probe Metals TSXV:PRB, allowing GTA to concentrate on its Northshore flagship. Announced April 29, the deal costs Probe $234,000 and 350,000 shares, out of which GTA gets $134,000, 200,000 shares and a 1% NSR. GTA will issue 200,000 shares to the northern Ontario property’s original vendors. The acquisition increases Probe’s West Porcupine project by about 130 square kilometres, to total over 180 square kilometres.

GTA sells Ivanhoe property to focus on Northshore gold

That leaves GTA with a stronger focus on its Northshore gold property in the Hemlo greenstone belt, where the company has additional drilling planned. GTA holds a 51% interest in Northshore and acts as operator in a JV with Balmoral Resources TSX:BAR. GTA has been examining the potential for low-cost mining on a near-surface, high-grade area of the project’s Afric zone.

The Ivanhoe sale “allows GTA to recover much of its expenditures over the last two years while maintaining an upside by receiving shares of Probe, and by retaining an NSR on any future production,” commented president/CEO Wayne Reid. “The company can now concentrate its immediate efforts on evaluating the economics of the open pit potential of the Afric zone. We believe capital requirements would be minimal if contract mining, hauling and milling can be utilized.”

GTA also holds the Auden graphite project in central Ontario and the Burnt Pond copper-zinc project in Newfoundland.

Read more about GTA Resources and Mining.

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)



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.

Infographic: The world’s most famous diamonds

November 5th, 2015
Infographic: The world’s most famous diamonds


by Jeff Desjardins | posted with permission of Visual Capitalist | November 5, 2015

Original graphic by Gear Jewellers.

You may have heard of the Cullinan Diamond or the Hope Diamond, but do you know the stories behind these legendary finds? This infographic looks at the history and characteristics of six of the most famous diamonds.

A diamond primer

Every diamond is unique and as a result the value of a particular diamond is partially determined by the eye of the beholder. The diamond industry generally uses a set of criteria called the four Cs to help determine the potential value of a diamond: clarity, cut, carats and colour.

Most diamonds have major deficiencies in one or more of the above categories. For example, while a diamond may be clear and large in size, it may have a less desirable colour and shape. In a previous infographic, we explained the importance of these characteristics in more depth and we’ve also previously posted on the significance of rare coloured diamonds.

The most famous diamonds in the world are exceptionally rare: they tend to excel in all four of the above categories. They are a desired colour and shape, have great clarity and are giant in size.

The most famous diamonds

The stories behind six of the most famous diamonds in brief:

The Cullinan Diamond: Perhaps the most well-known, the Cullinan Diamond was discovered in 1905 in South Africa. Weighing in at 3,106.75 carats, the Cullinan is the largest rough gem-quality diamond ever discovered. The diamond was ultimately cut into nine smaller stones including the 530.2-carat Star of Africa, which is valued at over $400 million alone.

The Hope Diamond: The Hope Diamond is a grayish-blue diamond that was discovered in India at an unknown date. It has a long history, in which it changed hands numerous times between countries and eventually ended up at the Smithsonian Institute in Washington, D.C.

The Centenary Diamond: The Centenary Diamond is considered to be one of the most flawless diamonds, both internally and externally. Discovered in South Africa, it was unveiled in its final form by De Beers in 1991. The current owner is unknown.

The Regent Diamond: This pale blue diamond was discovered by a slave in India in 1698. After eventually making it to the crowns of Louis XV and Louis XVI in France, it is now on display at the Louvre in Paris and weighs 140.64 carats.

The Koh-i-Noor Diamond: Meaning “Mountain of Light” in the Persian language, this diamond was discovered at a mine in India. It is of the finest white colour and made its way from a Hindu temple eventually to the UK crown in 1850.

The Orlov Diamond: Discovered in India at an unknown date, this jewel retains its traditional Indian rose-style cut. The Orlov, which weighs in at 189.62 carats and is white with a faint bluish-green colour, now rests in the Kremlin in Russia.

The world’s most famous diamonds all have intriguing stories behind their discoveries. However, a diamond prospector doesn’t need to find a diamond to strike it rich. Check out the infographic story of Diamond Fields, a diamond company that ended up finding and auctioning off one of the world’s richest nickel deposits for billions.

Original graphic by Gear Jewellers.

Posted with permission of Visual Capitalist.

Back on the autobahn

November 2nd, 2015

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

by Greg Klein

Next Page 1 | 2

Overseas investors once again get to meet Canadian juniors in person, as prospect generator Zimtu Capital TSXV:ZC and 11 of its holdings visit four European cities from November 5 to 11. Now in the event’s fifth year, company reps will hold conferences in Munich, Geneva, Zurich and Frankfurt to largely institutional audiences, demonstrating the wide-ranging interest in exploration opportunities.

“Essentially it’s a commitment by Zimtu and all the participating companies to keep the European investor informed about what the companies are doing, to meet the management and form a relationship with the guys who are going to be making the decisions, effectively spending their money,” says Zimtu president Dave Hodge.

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

The Zimtu bus arrives as crowds enter
Munich’s Edelmetallmesse in 2014.

“Many of the investors who are still interested in the sector had made great money in the past and experienced tremendous upside in some stocks. Certainly the Canadian junior market is very unique globally and provides that opportunity for the European investor to speculate on discovery.”

Describing himself as a “grizzled veteran of the Zimtu bus,” Chris Berry acts as MC, moderator and keynote speaker. The president of House Mountain Partners and co-editor of the Disruptive Discoveries Journal says, “I like to go back and get a sense of what institutional investors in those cities are thinking about, not just about commodity markets but central bank policies and the macro economy.”

His talk will briefly review the perspectives he offered last year then “challenge the audience” with four questions to consider in 2016. “It’s really more of a discussion than a lecture and I hope there’s a lot of pushback and debate. That gets people thinking and hopefully planning for better times next year.”

While the downturn’s all too obvious, several Zimtu holdings have made impressive strides over the last year. Some of the more remarkable stories include the creation of ALX Uranium TSXV:AL after Lakeland Resources and Alpha Exploration won overwhelming shareholder approval to combine their companies. The result is a distinguished team overseeing one of the Athabasca Basin’s largest and most prospective portfolios.

Competing for flagship status are a number of drill-ready projects including Kelic Lake, where a rig’s currently at work. Gibbon’s Creek has a ground gravity survey underway to follow up on last winter’s 2,550-metre program on a property hosting some of the Basin’s highest radon levels. The company’s Carter Lake and Hook Lake properties feature around 15 kilometres of untested corridors on strike with the Patterson Lake South, Arrow and Spitfire discoveries. Other drill-ready projects include Newnham Lake and Lazy Edward Bay, a 60% stake in the Carpenter Lake joint venture and an 80% share of the Gorilla JV.

Well financed for additional campaigns, the ALX team has been poring over property data to further establish priorities.

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

Commerce Resources addresses last year’s Munich conference.

Focusing on a rare earths project with relatively simple mineralogy, Commerce Resources TSXV:CCE continues to make progress with drilling, metallurgy and community engagement as its Ashram deposit in northern Quebec moves towards pre-feasibility. Last month the company increased rare earth elements recovery from 71% to 76% at a high grade of 42% total rare earth oxides, while also simplifying the plant’s flowsheet. The most impressive concentrates so far have graded 48.9% TREO at 63% recovery and 45.7% TREO at 71% recovery.

Following high-grade, near surface assays from the winter/spring drill program, Commerce has a summer/fall campaign targeting around 32 holes for 3,000 metres. A new infrastructure model indicates cost-cutting potential. The company’s commitment to social responsibility won an award from l’Association de l’exploration minière du Québec.

In British Columbia, Commerce’s Blue River tantalum-niobium project achieved its preliminary economic assessment in 2011.

Recognizing that the great nickel deposits of Sudbury, Norilsk, Thompson and Raglan occur in clusters, Equitas Resources TSXV:EQT acquired the recently assembled Garland project in Labrador, 30 kilometres from Voisey’s Bay. Then, for the first time, Equitas subjected Garland to modern geophysics. Now a drill program under the supervision of Voisey’s veteran Everett Makela has 12 VTEM anomalies targeted.

With over $3.8 million raised since September, the company continues drilling while awaiting initial assays.

Inspired by China’s allure for the beauty and practical qualities of B.C. jade, Electra Stone TSXV:ELT intends to create a vertically integrated nephrite jade mining, trading and marketing platform. The company began by acquiring properties as well as expertise, and has so far confirmed jade at two of six projects before winter conditions ended exploration.

Eager to make contact with potential buyers, Electra bought and shipped an 18-tonne cargo of jade to Shanghai in September and is now preparing a second shipment. The company also produces chalky geyserite, or aluminum silica, from a Vancouver Island quarry. The product’s U.S. customer collaborated with Electra on a drill program last summer to study the project’s expansion potential.

Next Page 1 | 2

Voisey’s Bay infographic Part 2—The auction

October 29th, 2015

Presented by Equitas Resources TSXV:EQT | Posted with permission of Visual Capitalist | October 29, 2015

The Story of Voisey’s Bay: The Auction (Part 2 of 3)


The hit at diamond drill hole #2 of 33 metres of massive sulphides turned Voisey’s Bay from caribou pasture to one of the most exciting stories in the mining world. For a full recap of the events leading to this point, check out Part 1 of the Voisey’s Bay story.

In Part 2 we look at the ensuing bidding war that occurred once it was clear that Voisey’s Bay had all of the action. Again, we have turned to Jacquie McNish’s fabulous book The Big Score, which documents the history of the discovery, biographical elements of Robert Friedland’s life, and the ensuing bidding war between Inco and Falconbridge that led to one of the most spectacular takeovers in mining history. If you like these infographics, then look into buying Jacquie’s book. It’s gripping and full of information.

Finally, it’s worth noting that Part 3 of this series will be released within a week or two.

Setting the stage

The discovery of massive sulphides with hole #2 brought increased attention to the former diamond play. However, the stock price didn’t really explode until the assays came in: 2.23% nickel, 1.47% copper and 0.123% cobalt. Diamond Fields traded in December 1994 at $13.50 per share, up from $4.65 just a month prior.

The company doubled down on drilling, but up until January 1995 they hit nothing after hole #2. The price dribbled down to $11.

However it was in February 1995 that the results for holes #7 and #8 were released and they were some of the most significant holes for the entire project. The holes were in the Ovoid, which would soon be a famed and ultra-rich section of the Voisey’s Bay discovery.

Hole #7 was 104 metres long and had 3.9% nickel, 2.8% copper and 0.14% cobalt. Hole #8 was 111 metres long and had 3.7% nickel, 2.78% copper and 0.13% cobalt. This propelled the stock price to $20 in February 1995.

Continued exploration of the Ovoid revealed a bowl-shaped orebody lying just below surface. This deposit had surface dimensions of some 800 metres by 350 metres and extended to depths of about 125 metres. More nickel from Ovoid came in every month and the stock price continued to rise.

At this point, Diamond Fields could no longer fly under the radar. Major mining couldn’t stand to watch as one of the world’s greatest base metal deposits blossomed outside of their influence.

The suitors

Three major mining companies vied to get in on the action. Here’s some history on each of them.


At this time, the Canadian diversified mining company Teck had nine mines in operation and a reputation as a swift deal maker.

In 1947, Teck’s founder Norman Keevil Sr. was one of the first explorers to use magnetic survey technology that was initially employed by the U.S. military to find submarines. With this technology, he found one of the richest copper deposits in Canada.

He once impressed a plane load of investors by flying them over a 150-foot copper vein that was exposed to the air. It shone like a newly minted penny as they passed over, stunning even the most skeptical investors. (He had previously parachuted a crew in to polish the ore in the bush.)


The International Nickel Company was founded in 1902 and for most of the 20th century it remained the dominant player in nickel exploration, production and marketing.

The company virtually invented the nickel market: In 1890, global output of nickel was 3,000 tonnes. Nickel was mainly used for military purposes but sales dried up at the end of WWI. The company discovered nickel alloys that were marketed for use in automobiles, pipes, industry, coins and even kitchen sinks.

By 1951, the world consumed 130,000 tonnes of nickel a year with 90% of it supplied by Inco. By 1995, Inco was still the market leader in nickel, producing 26% of the world’s nickel with $2.3 billion in sales each year.


In 1901, American inventor Thomas Edison found a nickel-copper ore body in the area northeast of Sudbury. However, it wasn’t until 1928 that Thayer Lindsley, the founder of Falconbridge, bought these claims and began to turn them into its first mine.

At the time, Inco had the only technology in North America to refine nickel, so Falconbridge sent its production to Norway where the company purchased an operating refinery.

Falconbridge was smaller than Inco but seen as more aggressive and nimble. The company produced 11% of the world’s nickel in 1995.

The bidding begins

While Inco, Falconbridge and up to a dozen other global miners spent resources on calculating the value of Voisey’s Bay, Teck was the first to approach with a different strategy.

In less than a day, and without seeing any core, Teck was able to do a simple deal less than four pages long: $108 million for 10% of the company, or the equivalent of $36 per share. Teck also surrendered its voting rights to Friedland to prevent future hostile takeovers.

That got the market talking. Days later, Diamond Fields would trade at over $40 per share with a market capitalization of more than $1 billion.

In May 1995, after much posturing between Inco and Diamond Fields executives, another deal was struck. This time, Inco bought a 25% stake of Voisey’s Bay for US$386.7 million in preferred shares and cash, as well as 8% of Diamond Fields from company co-founder Jean-Raymond Boulle and early investor Robertson Stephens.

By the time the deal closed in June 1995, Diamond Fields’ stock price doubled again to $80.

In August, after months of drilling misses outside the Ovoid, there were signs of light: one metre of massive sulphides in hole #166.

In November, drill hole #202 retrieved 40 metres of massive sulphides, the largest section of sulphides found outside the Ovoid. It was now clear that there was a series of deposits at Voisey’s Bay. The hole assayed 3.36% nickel and became a part of what is known as the Eastern Deeps.

The showdown

In December, Inco and Falconbridge both began to aggressively pursue Diamond Fields.

First, Inco presented a deal in principle for $3.5 billion, or $31 per share. Then Falconbridge intercepted with an official offer for $4 billion, or $36 per share. This was a risky move for the smaller company, but it limited its downside by adding $100 million in fees to the agreement in case the deal wasn’t finalized.

Next, the two competitors (Inco and Falconbridge) teamed together through a mutual connection to present an offer in tandem.

It was instantly shot down by Friedland.

Finally on March 26, 1996, Inco announced a takeover bid of its own for $4.5 billion of Diamond Fields—the equivalent of $43.50 per share or $174 pre-split. Inco’s stock price dropped but the company held on, making the total value of the deal closer to $4.3 billion. On April 3, the deal was officially signed by all parties.

Watch for Part 3, Voisey’s Bay today, coming in early November.

See Part 1: The discovery.

Posted with permission of Visual Capitalist.

Infographic: The story of Voisey’s Bay—The discovery (Part 1 of 3)

October 28th, 2015

Presented by Equitas Resources TSXV:EQT | Posted with permission of Visual Capitalist | October 28, 2015

The story of Voisey’s Bay: The discovery (Part 1 of 3)


The legendary story of one of Canada’s most significant base metal discoveries happened just before the dawn of the internet era. While some investors recall the sequence of events and the value that was created by Diamond Fields Resources, there are many investors today, both new and old, who are not familiar with the story of Voisey’s Bay.

For this infographic we have turned to Jacquie McNish’s fabulous book The Big Score, which documents the history of the discovery, biographical elements of Robert Friedland’s life, and the ensuing bidding war between Inco and Falconbridge that led to one of the most spectacular takeovers in mining history. If you like these infographics, then look into buying Jacquie’s book. It’s gripping and full of information.

Part 2 on the ensuing bidding war for Voisey’s Bay will be released on October 29. Part 3 will be released in the following week or two.

The origins

By its very definition, a discovery is the breakthrough action of finding something of value that no one knew existed. Discoveries come in all shapes and sizes—but it turns out many of the very best discoveries happen in the most unsuspected conditions.

Labrador is bigger than Great Britain and has over 8,000 kilometres of coastline, yet a population of just 26,700. Caribou outnumber people by a ratio of 13:1.

In 1985, geologists of the Newfoundland Department of Mines and Energy conducted a survey of one of the most remote parts of Labrador. Voisey’s Bay is 35 kilometres from Nain, a town of 1,000 people.

The team, in a helicopter-supported survey, tested samples in the area, but were not encouraged by the low metal content of the weathered rocks exposed at surface. They left and didn’t look back.

In early 1993, Michael McMurrough of a fledgling company called Diamond Fields Resources was looking for untapped diamond properties to add to the company’s property portfolio. He had heard that a place called Labrador had ancient Archean rock formations—one of the earth’s oldest rock groups—which can hold diamonds in kimberlite pipes. While Labrador’s wealth in iron ore is well documented, no diamonds have ever been discovered in the region.

Diamond Fields geologist Rod Baker was sent to Newfoundland in April 1993 but found that the best diamond prospects had just been staked by two Newfoundlanders. Al Chislett and Chris Verbiski, and their prospecting outfit named Archean Resources, eventually convinced Diamond Fields to pay $372,000 in annual instalments over four years to acquire their claims. Diamond Fields also agreed to pay $500,000 to start an exploration program.

The two prospectors sampled throughout the summer of 1993 without much luck, but they did chip some samples of chalcopyrite, a copper-bearing mineral, from an outcrop. The samples came back with 2% copper, and they pushed for Diamond Fields to put more money into the exploration program.

Diamond Fields

At this time, Diamond Fields was a fledgling company. Running under Robert Friedland’s umbrella of Ivanhoe Capital, the company had its share of issues. Legal problems were mounting and the company had finally just raised cash in a desperate move: the company impressed investors with its idea of “vacuuming” diamonds off the seafloor near Namibia.

It was company geologist Richard Garnett who convinced the board of Diamond Fields to pursue the Labrador findings, which he had been tracking. The company eventually allocated $220,000 to Labrador—or 40% of what Chislett and Verbiski recommended for follow-up spending.

The discovery

In August 1994, the prospectors received more detailed assays from the samples they collected—assays that confirmed a multi-element deposit with cobaltite, copper, magnetite and exceptionally high amounts of nickel. In fall, the team tried to beat winter by executing the next phase of exploration.

They hit on drill hole number two. The core was yellow—not from gold, but from high-grade massive sulphides. The hole was 33 metres long and signified that Diamond Fields was finally onto something.

At this point, Robert Friedland reigned in control of the company with one mission: to auction off the discovery for the highest price.

Part 2: The auction to be released October 29.

Posted with permission of Visual Capitalist.

Pistol Bay expands Garland presence with option from Zimtu Capital

October 21st, 2015

by Greg Klein | October 21, 2015

Recent land acquisitions place another company in the vicinity of Equitas Resources’ (TSXV:EQT) Garland nickel-copper project in Labrador. Announced October 21, Pistol Bay Mining TSXV:PST signed a 100% option with Zimtu Capital Corp TSXV:ZC on 40 claims totalling 1,000 hectares. The new turf increases Pistol Bay’s Garland Peninsula Group, acquired late last month, to 1,150 hectares.

The new claims feature mafic intrusive rocks including gabbro, norite and anorthosite, the same general suite of intrusives that host the Voisey’s Bay nickel-copper-cobalt deposit about 35 kilometres northwest, the companies stated. Cominco conducted limited historic work in 1995 and 1996, when the claims formed part of its Merrifield project. Geophysics revealed weak conductors apparently unexplained by surface observations. Prospecting on Merrifield found disseminated sulphide mineralization containing up to 0.154% copper and 0.22% nickel.

Five kilometres northwest, Equitas has drilling underway at its Garland project following the property’s first-ever exposure to modern geophysics. Pistol Bay has its property slated for a magnetic/electromagnetic survey with ground follow-up.

The deal gives Zimtu $2,500 on signing, another $2,500 and 500,000 shares within five days of TSXV approval, $10,000 and 750,000 shares within a year, and a 2% NSR.

Zimtu staked the claims, part of the prospect generator’s model of evaluating and acquiring properties to offer other companies for sale or joint venture.