Cashed-up Pistol Bay Mining consolidates and updates Confederation Lake
by Greg Klein
From a Rio Tinto NYSE:RIO subsidiary comes money for an unprecedented campaign in Ontario’s Confederation Lake greenstone belt. That’s where Pistol Bay Mining TSXV:PST has region-wide exploration with modern methods about to begin on a VMS-rich area that’s previously seen piecemeal, unco-ordinated work with old school technology. President/CEO Charles Desjardins sees plenty of promise in his portfolio’s historic resources. But he also likes the blue sky possibility of a new discovery.
Funding the campaign will be $750,000 from Rio, along with this month’s private placement of $548,436. Proceeds go to the largest land package in Confederation Lake, a region of base metals deposits that Desjardins considers to be clamouring for up-to-date exploration.
Rio’s portion comes as the giant exercises more of its 100% option on the junior’s C4, C5 and C6 uranium properties in Saskatchewan’s Athabasca Basin. The deal originally called for $5 million by the end of 2019 and a 5% net profit interest to acquire the final 25%. Now Rio pays the $750,000 along with either $1.5 million by 2017 year-end, $2 million by 2018 year-end or $2.25 million by 2019 year-end, plus the 5% NPI.
“That’s less money than the original option, but I can create so much value with it now,” says Desjardins. “And I’m doing it without dilution.”
First item on the agenda—and long overdue, Desjardins believes—will be helicopter-borne VTEM Max, penetrating to depths of 500 to 700 metres. “There have been major Canadian discoveries over the last decade with this kind of geophysics,” he points out. “But very little of this belt, less than 5% of it, has been explored beyond 200 metres. There’s only one zone examined to 300 metres and that was with downhole geophysics by Noranda.”
He expects the first of three airborne campaigns to begin within four weeks. While Pistol Bay’s package comprises 9,450 hectares, “we’re going to fly this whole belt,” he adds. “I’m looking for something bigger, something that hasn’t been found.”
As for the deposits that have been found, they’re overdue for upgrading to 43-101 status. First priority is the polymetallic Arrow deposit, which has a 2007 estimate that Pistol Bay considers historic and non-43-101:
3% zinc-equivalent cutoff
- indicated: 2.07 million tonnes averaging 5.92% zinc, 0.75% copper, 21.1 g/t silver and 0.58 g/t gold
- inferred: 120,552 tonnes averaging 2.6% zinc, 0.56% copper, 18.6 g/t silver and 0.4 g/t gold
5% zinc-equivalent cutoff
- indicated: 1.76 million tonnes averaging 6.75% zinc, 0.79% copper, 22.3 g/t silver and 0.61 g/t gold
- inferred: 51,631 tonnes averaging 3.86% zinc, 0.79% copper, 23.9 g/t silver and 0.58 g/t gold
10% zinc-equivalent cutoff
- indicated: 633,000 tonnes averaging 14.3% zinc, 1.11% copper, 31.7 g/t silver and 0.85 g/t gold
Desjardins expects about a month to redo the resource, incorporating another 20 holes.
About eight kilometres west of Arrow, the Fredart zone, also known as Copperlode A, has an historic, non-43-101 estimate showing 385,000 tonnes averaging 1.56% copper and 33.6 g/t silver.
Roughly 24 kilometres farther west, the Dixie property’s historic, non-43-101 estimate comes to 136,000 tonnes averaging 14% zinc.
Estimates for other zones, all with historic, non-43-101 caveats, include:
- Dixie 3: 83,000 tonnes averaging 10% zinc and 1% copper
- Copperlode D: 33,000 tonnes averaging 7.58% zinc and 0.26% copper
- Copperlode E: 145,000 tonnes averaging 8.28% zinc and 1.02% copper
- Diamond Willow: 270,000 tonnes averaging 4% zinc
There have been major Canadian discoveries over the last decade with this kind of geophysics. But very little of this belt, less than 5% of it, has been explored beyond 200 metres.—Charles Desjardins, president/CEO of Pistol Bay Mining
Past work has left an extensive legacy of other data too. Historic records for the recently optioned Joy North property show intriguing electromagnetic and geochemical anomalies. Pistol Bay’s team has been poring over details of about 850 Confederation Lake holes sunk between 1962 and 2007. A Noranda database of rock chemical analysis, meanwhile, could offer insight into the belt’s VMS mineralizing process and help define zinc-copper targets.
Along with February’s Joy North option, Pistol Bay’s acquisitions continue with the Lucky 7 and Moth properties picked up this month. Now yellow metal shows its Confederation Lake potential with one 2016 grab sample assaying 13.84 g/t gold and 3.21% copper.
As for drilling, the already-permitted Joy North might be first, depending on the review of historic info. Eight other areas have permitting underway. The rigs will take part in Pistol Bay’s threefold near-term agenda: the Arrow resource, the VTEM Max and a drill program, all of which should fuel a steady news flow. “We’ve got lots of work coming up and, thanks to the Rio payment, money to do it with no dilution,” says Desjardins.
Apart from growing the existing deposits, he clearly believes in the potential for a new discovery. “The opportunity here is in consolidating the belt and exploring the whole thing at depth, which hasn’t been done. There’s lots of blue sky at Confederation Lake.”