Sunday 22nd April 2018

Resource Clips


Posts tagged ‘saskatchewan’

Belmont Resources readies drill targets, selective extraction for Nevada lithium

April 6th, 2018

by Greg Klein | April 6, 2018

Supported by a successful financing and encouraging geophysical and drill results, Belmont Resources TSXV:BEA prepares to advance its Kibby Basin lithium project on two fronts. The company now plans to sink up to five holes on the 2,760-hectare Nevada property while continuing lithium extraction discussions with other companies that have requested samples.

Belmont Resources readies drill targets, selective extraction for Nevada lithium

A Quantec Geoscience crew member sets induction
coil for this year’s Spartan Magnetotelluric survey.

The drill campaign would be Kibby Basin’s second, following two holes from last year. Core samples graded between 70 ppm and 200 ppm Li2O. Thirteen of 25 samples surpassed 100 ppm, “indicating that the sediments could be a potential source of lithium for the underlying aquifers,” the company stated.

Since then a magnetotelluric survey covered some 36 square kilometres, adding geophysical detail to a 2016 gravity survey and showing a conductive zone that starts about 500 metres in depth.

Backing the campaign will be fresh financing. The second tranche of private placements totalling $198,000 closed this month.

In New Brunswick last November, Belmont acquired the Mid-Corner/Johnson Croft property, where historic, non-43-101 sampling showed prospectivity for zinc, copper and cobalt. Along with International Montoro Resources TSXV:IMT, Belmont shares a 50/50 interest in two Saskatchewan uranium properties, Crackingstone and Orbit Lake.

Read Isabel Belger’s interview with Belmont Resources CFO/director Gary Musil.

Pistol Bay Mining begins drilling its expanded zinc-copper-polymetallic Ontario VMS project

March 22nd, 2018

by Greg Klein | March 22, 2018

With about 3,500 metres planned, Pistol Bay Mining TSXV:PST has drilling now underway at northwestern Ontario’s VMS-rich Confederation Lake greenstone belt. Three holes of about 500 metres each will supply material from the project’s Arrow zone for preliminary metallurgical tests. From there the rig shifts roughly eight kilometres west to the Fredart zone, aka the Copperlode A zone.

Pistol Bay Mining resumes drilling at its expanded zinc-polymetallic Ontario VMS project

Last year the company released a 43-101 resource for Arrow that used a base case 3% zinc-equivalent cutoff for an inferred category showing:

  • 2.1 million tonnes averaging 5.78% zinc, 0.72% copper,19.5 g/t silver and 0.6 g/t gold, for a zinc-equivalent grade of 8.42%

Contained amounts come to:

  • 274 million pounds zinc, 34.3 million pounds copper, 1.33 million ounces silver and 41,000 ounces gold

Obviously overdue for renewed attention is Fredart. The zone has conflicting historic, non-43-101 estimates of 386,000 tonnes averaging 1.56% copper and 33.6 g/t silver, or 219,500 tonnes averaging 1.95% copper and 41.8 g/t silver.

A January option agreement expands Pistol Bay’s Confederation Lake package by 3,700 hectares, for a total of about 20,700 hectares. The new turf comprises part of last year’s VTEM-Plus survey, the area’s first state-of-the-art regional geophysics. Some of the available, non-43-101 past intercepts from the acquisition’s Wasp Lake trend include 2.96% zinc and 0.04% copper over 2.79 metres, as well as 1.12% zinc and 0.04% copper over 7.19 metres. The same trend showed a strong conductive response on the VTEM-Plus results, Pistol Bay reported.

Another positive geophysical response came from the acquisition’s Fly Lake zone, where historic, non-43-101 assays reached as high as 1.36% zinc and 0.17% copper over 11.5 metres, along with 1.51% zinc and 0.08% copper over 8.9 metres. The zone appears to remain open along strike and at depth, the company stated. Nine other geophysical anomalies, meanwhile, appear to lack previous drilling.

The January option follows 5,860 hectares of staking last September that covers multiple conductors and IP anomalies identified in the airborne survey, as well as parallel conductors or extensions of known conductors.

Last month the company announced an amended agreement with a Rio Tinto NYSE:RIO subsidiary which will increase its hold on the C4, C5 and C6 uranium properties in Saskatchewan from 75% to 100%. The deal will bring Pistol Bay $1 million.

In January the company also announced progress with its PB Blockchain subsidiary as it builds “a suite of blockchain products to address needs that are particular to the data management and security of mining/oil and gas companies.”

Read more about Pistol Bay Mining here and here.

Canadian exploration spending projected to rise 6%; Manitoba contradicts its Fraser Institute ranking

March 14th, 2018

by Greg Klein | March 14, 2018

It’s hardly a boom time scenario but mineral exploration within Canada should see a healthy 6% spending increase this year, according to recent federal government figures. Info supplied by companies shows an estimated total of $2.238 billion planned for exploration and deposit appraisal this year, compared with $2.111 billion in 2017. The second annual increase in a row, it’s far less dramatic than last year’s 29.6% leap.

Canadian exploration spending projected to rise 6% Manitoba contradicts its Fraser Institute ranking

The Natural Resources Canada survey compares preliminary numbers for metals and non-metals from last year with projected budgets for 2018.

Together Quebec and Ontario account for more than half the spending, with la belle province getting 27.3% of last year’s total and 29.3% of this year’s, while Ontario got 24.9% and 26.5%.

Some runners-up were British Columbia (12.2% of Canada’s total in 2017 and 13% in 2018), Saskatchewan (9% and 7.4%) and Yukon (7.8% and 7.7%).

Proportionately Manitoba enjoyed the greatest increase, a 42% jump from $38.5 million to $54.7 million, in a performance at odds with the province’s most recent Fraser Institute ranking. Less spectacularly but still impressive, the figures show Quebec climbing 13.9% from $576.5 million to $656.7 million. British Columbia gets a 12.9% increase from $257.7 million to $290.9 million, and Ontario 12.7% from $526.2 million to $593 million.

Some disappointments include Saskatchewan, falling 13% from $189.9 million to $165.1 million. Nunavut plunged 34.6% from $169.3 million to $110.7 million.

Nunavut has to address its land access issues. In the NWT, work on the proposed Mineral Resources Act and other legislation must be to improve the investment climate. Settling long-outstanding land claims and reducing the over 30% of lands off limits to development would also help, as would proactive marketing by indigenous governments.—Gary Vivian, president, NWT and
Nunavut Chamber of Mines

Addressing the territory’s performance along with its neighbour’s 10% drop, Northwest Territories and Nunavut Chamber of Mines president Gary Vivian said, “Nunavut has to address its land access issues. In the NWT, work on the proposed Mineral Resources Act and other legislation must be to improve the investment climate. Settling long-outstanding land claims and reducing the over 30% of lands off limits to development would also help, as would proactive marketing by indigenous governments.”

Combining figures for mine complex development with exploration and deposit appraisal, this year’s projected country-wide total rises 8.9% to $14.9 billion, the highest number in the four years of data released in this survey.

Commodities getting the most money are precious metals, although at a nearly 1.5% decrease to $1.35 billion this year from $1.37 billion last year. A more drastic drop was uranium, down 23.4% to $103.7 million. Base metals saw a 38.4% surge to $406.9 million. Coal’s projected for a 31.1% boost to $70.8 million.

Exploration and deposit appraisal expenses considered for the survey include field work, engineering, economics, feasibility studies, the environment, land access and associated general expenses. Natural Resources Canada did not consider work for extensions of known reserves.

Recent studies from PricewaterhouseCoopers showed a marked improvement in junior mining company finances and a relatively stable, if cautious, ambience for more senior Canadian companies.

Covering a different period with different methodology than Natural Resources Canada, a study by EY, the B.C. government and the Association for Mineral Exploration calculated a 20% increase in B.C. exploration spending from 2016 to 2017.

See the Natural Resources Canada survey here.

Deep-sensing geophysics precedes Belmont Resources’ Nevada lithium drilling

March 2nd, 2018

by Greg Klein | March 2, 2018

Recently received geophysical results will help Belmont Resources TSXV:BEA select drill targets for its Kibby Basin lithium property in Nevada. Described as a “full tensor magnetotelluric technology that acquires resistivity data in the 10 kHz to 0.001 Hz frequency band,” the survey covered about 36 square kilometres to depths of three kilometres over a playa basin and some adjoining turf.

Deep-sensing geophysics precedes Belmont Resources’ Nevada lithium drilling

Located 65 kilometres from Clayton Valley, Belmont Resources’
Kibby Basin project advances towards Phase II drilling.

While a 2016 gravity survey suggested the presence of a basin about 4,000 metres deep, the new results “clearly map a more conductive zone beginning at approximately 500 metres’ depth,” Belmont stated. Targets for a 2018 drill program on the 2,760-hectare property are being considered where potential brine contacts are closest to the playa surface, the company added.

Core samples from last year’s two-hole, 624-metre campaign assayed between 70 ppm and 200 ppm Li2O, with 13 of 25 samples exceeding 100 ppm.

A November acquisition added the Mid Corner-Johnson Croft zinc-cobalt prospect in New Brunswick to Belmont’s portfolio. Belmont also holds a 50% interest in two Saskatchewan uranium properties.

This week the company offered an amended private placement of up to $100,000, following an oversubscribed financing that closed on $312,000 in December.

Read Isabel Belger’s interview with Belmont Resources CFO/director Gary Musil.

Deep-penetrating geophysics to probe Belmont Resources’ Nevada lithium project

January 17th, 2018

by Greg Klein | January 17, 2018

Now being mobilized, an electromagnetic survey will help target brine aquifers on Belmont Resources’ (TSXV:BEA) Kibby Basin property. The company describes Quantec Geoscience’s Spartan AMT/MT method as “a full tensor magnetotelluric technology that acquires resistivity data in the 10 kHz to 0.001 Hz frequency band. The result is a measurement that is applicable from near-surface to potential depths of three kilometres or more.” Belmont credits Quantec with over 5,000 geophysical programs in over 50 countries.

Deep-penetrating geophysics to probe Belmont Resources’ Nevada lithium project

Two holes sunk on Kibby Basin last year brought
core samples between 70 ppm and 200 ppm lithium.

The Kibby Basin survey should take nine days, with another two weeks for an initial report.

The program follows a satellite data review and two-hole 2017 drill campaign on the 2,760-hectare Nevada property 65 kilometres north of Clayton Valley. Thirteen of 25 core samples surpassed 100 ppm lithium, “indicating that the sediments could be a potential source of lithium for the underlying aquifers,” the company stated.

A gravity survey the previous year suggested the property hosts a closed basin which the company later estimated to cover four square kilometres, extending to at least 1.5 kilometres in depth.

Last week Belmont announced its lawyers would request the annulment of a decision by the International Centre For Settlement Of Investment Disputes reported in August. The tribunal stated it had no jurisdiction in a dispute involving Belmont, EuroGas Inc and the Slovak Republic regarding Rozmin SRO’s ownership of the Gemerska Poloma talc deposit. Belmont seeks to be restored as a claimant in the arbitration proceedings.

The company also holds the Mid Corner-Johnson Croft property in New Brunswick, a prospect with some historic, non-43-101 zinc-copper-cobalt sampling results that has yet to undergo modern geophysics.

In northern Saskatchewan, Belmont and International Montoro Resources TSXV:IMT share a 50/50 stake in the Crackingstone and Orbit Lake uranium properties.

Belmont closed an oversubscribed private placement of $312,200 in December.

Read Isabel Belger’s interview with Belmont Resources CFO/director Gary Musil.

Satellite imagery helps Belmont Resources home in on Nevada lithium targets

December 14th, 2017

by Greg Klein | December 14, 2017

Thanks to NASA and the U.S. Geological Survey, archived satellite data sharpens the focus on Belmont Resources’ (TSXV:BEA) Kibby Basin lithium project in Nevada. The company now has geophysics and other work planned for a busy new year.

Satellite imagery helps Belmont Resources home in on Nevada lithium targets

The satellite info shows hydrothermal indicator minerals over about one square kilometre of the 2,760-hectare property, CEO/president Vojtech Agyagos stated. “This area hosted the highest lithium surface samples as well and is the site of our proposed third drill hole. Our 2017 drill program discovered both water (fresh) and up to 200 ppm lithium in the core in the eastern side of the property about two kilometres from these thermal alterations.”

Drill results released last June showed clay-rich core samples grading between 70 ppm and 200 ppm lithium, “with 13 of 25 core samples assaying over 100 ppm lithium, indicating that the sediments could be a potential source of lithium for the underlying aquifers,” Belmont announced at the time.

Agyagos added that the satellite-revealed geothermal alteration “sits above the deepest gravity-indicated area from Belmont’s 2016 Wright geophysical ground gravity survey.”

Results from that survey suggest a basin model about 4,000 metres deep with similarities to Clayton Valley, host to Albemarle Corp’s (NYSE:ALB) Silver Peak lithium mine.

Belmont’s next plans call for a number of surveys including magnetotelluric, vertical electrical sounding, geothermal probe, electromagnetic resistivity and possibly seismic to help identify lithium brine drill targets. The company expects to finish EM work in early January.

Along with International Montoro Resources TSXV:IMT, Belmont holds a 50/50 stake in two northern Saskatchewan uranium properties, Crackingstone and Orbit Lake, for which the companies seek JV partners.

In New Brunswick last month, Belmont acquired the Mid Corner-Johnson Croft zinc-copper property, which shows promising historic sampling results but has yet to undergo modern geophysics.

Last week the company closed an oversubscribed private placement of $312,200.

Read Isabel Belger’s interview with Belmont Resources CFO/director Gary Musil.

Double discovery

November 18th, 2017

The USGS reports new American uranium potential and a new uranium “species”

by Greg Klein

The USGS reports new American uranium potential and a new uranium “species”

The Southern High Plains of Texas, New Mexico and Oklahoma
might someday boost U.S. domestic uranium supply.
(Photo: Public domain)

 

The dream of discovery must motivate many a geologist. Through skill, effort and luck they hope to eventually find something precious, useful or otherwise valuable—something well known yet found in a previously unknown location. But a group of geo-boffins from the U.S. Geological Survey not only identified a type of uranium deposit previously unknown to their country, they discovered a new mineral.

It’s finchite, “a new uranium mineral species,” as a press release described it last week. The discovery actually dates to 2015, says Brad Van Gosen, the USGS scientist who did the discovering.

While surveying a Texas cotton ranch Van Gosen collected samples of what he and his colleagues thought was carnotite, “a pretty common yellow, near-surface uranium mineral.” Back in the lab, he put it under a scanning electron microscope, which kept showing strontium with the uranium and vanadium, he recalls. To a geologist, it was unusual—very unusual. A eureka moment was looming.

The USGS reports new American uranium potential and a new uranium “species”

First to recognize the new mineral finchite, USGS scientist
Brad Van Gosen examines rock layers in Texas.
(Photo: Susan Hall/USGS, public domain)

“We looked it up and there’d been no strontium-uranium mineral ever reported before. So [team leader Susan Hall] worked with a crystallography/mineralogy lab that specializes in micro-analysis up at Notre Dame and they concluded, ‘By gosh you’re right.’” Further study continued before sending the evidence to the International Mineralogical Association. “They’re the high council and they blessed it as a new mineral.” Finchite’s moniker honours the late Warren Finch, a USGS uranium expert.

Another major finding was that the uranium was hosted in calcrete rock formations, a style of deposit known elsewhere but reported for the first time in the U.S.

Some previously secret info led to the twin epiphanies. Hall, as leader of a project that’s reassessing national uranium resources, gained privy to some unpublished 1970s and ’80s data from the former Kerr-McGee company. Included were estimates for two deposits, Sulphur Springs Draw and Buffalo Draw, with marginal grades of 0.04% and 0.05% U3O8 respectively. Together they held an estimated 2.6 million pounds U3O8.

(Of course data from historic sources and the U.S. government agency falls outside the framework of NI 43-101 regulations.)

The newly transpired, near-surface deposits led Hall and her group to the Southern High Plains spanning parts of Texas, New Mexico and Oklahoma. It was there that they recognized calcrete, its first known manifestation in the U.S.

The USGS reports new American uranium potential and a new uranium “species”

Surface showings of yellow finchite might have previously
been mistaken for sulphur, says Van Gosen.
(Photo: Susan Hall/USGS, public domain)

The stuff’s associated with uranium in other countries. Among major calcrete-style deposits listed by the World Nuclear Association are Yeelirrie in Western Australia, along with Trekkopje and Langer Heinrich in Namibia. Yeelirrie is a potential open pit held by a Cameco Corp TSX:CCO subsidiary and averaging 0.16% U3O8. Trekkopje, a potential open pit majority-held by AREVA Resources, averages 0.01%. Langer Heinrich, an open pit mine operated on behalf of Paladin Energy, the majority owner now under administrative control, averages 0.052%.

According to the USGS, grades for potential Southern High Plains deposits range from 0.012% to 0.067%, with a median 0.034% U3O8. Gross tonnage estimates range from 200,000 to 52 million tonnes, with a median 8.4 million tonnes. Together, the region’s calcrete-style potential comes to 39.9 million pounds U3O8.

But that’s a regional assessment, not a resource estimate, reflecting how USGS methodology contrasts with that of exploration companies. The agency uses a three-part approach, explains Mark Mihalasky, who co-ordinated the assessment. The procedure first delineates areas that would allow the occurrence of a particular kind of deposit. Using additional geoscientific evidence, the agency estimates how many deposits might be awaiting discovery. How much those potential deposits hold can be estimated through comparisons with similar known deposits around the world.

Mineral assessment and mineral exploration are two different things…. It’s not a ‘drill here’ assessment.—Mark Mihalasky

“Mineral assessment and mineral exploration are two different things,” Mihalasky emphasizes. “The purpose of our assessment is to help land planners, decision-makers and people in the region get an idea of what could be there, based upon probability. It’s not a ‘drill here’ assessment.

“This whole region is a relatively newly recognized area of potential and while we’re not saying this is a new uranium province we are saying there’s something here that hasn’t been found before in the United States and this might be worth looking into in greater detail if you’re an exploration company.”

Already one company from Australia has been asking “lots of questions,” says Van Gosen. Although most uranium mining in the American west uses in-situ recovery, the shallow depth and soft host rock of the Southern High Plains could present open pit opportunities “assuming uranium prices and other factors are favourable.”

Any positive price assumption will have to wait, however. One week earlier Cameco announced the impending suspension of its high-grade McArthur River mine and Key Lake mill in Saskatchewan’s Athabasca Basin. The company said that long-term contracts had shielded it from uranium’s post-Fukushima plunge of over 70%, but those contracts are now expiring. Cameco had previously suspended its Rabbit Lake mine and reduced production at its American operations.

But while production faces cutbacks, controversy over American dependence on foreign uranium flared up again last month with renewed questions about the sale of Uranium One to Russia’s state-owned Rosatom. The formerly TSX-listed Uranium One holds American resources that could potentially produce up to 1,400 tonnes of uranium annually, according to the WNA. But last year the company’s sole U.S. operation, the Willow Creek ISR mine, produced just 23 tonnes of the country’s total output of 1,126 tonnes.

As the world’s largest consumer of uranium for energy, the U.S. relies on nukes for about 19% of the country’s electricity, according to USGS numbers. Only 11% of last year’s uranium purchases came from domestic sources.

Update: The full USGS report is now available here.

USGS reports new domestic uranium potential and new uranium “species”

November 14th, 2017

This story has been expanded and moved here.

Paved with mineralization

October 27th, 2017

Norman B. Keevil’s memoir retraces Teck’s—and his own—rocky road to success

by Greg Klein

Norman B. Keevil’s memoir retraces Teck’s—and his own—rocky road to success

Profitable right from the beginning, Teck’s Elkview mine “would become
the key chip in the consolidation of the Canadian steelmaking coal industry.”
(Photo: Teck Resources)

 

“We were all young and relatively inexperienced in such matters in those days.”

He was referring to copper futures, a peril then unfamiliar to him. But the remark’s a bit rich for someone who was, at the time he’s writing about, 43 years old and president/CEO of a company that opened four mines in the previous six years. Still, the comment helps relate how Norman B. Keevil enjoyed the opportune experience of maturing professionally along with a company that grew into Canada’s largest diversified miner. Now chairperson of Teck Resources, he’s penned a memoir/corporate history/fly-on-the-wall account that’s a valuable contribution to Canadian business history, not to mention the country’s rich mining lore.

Norman B. Keevil’s memoir retraces Teck’s—and his own—road to success

Norman B. Keevil
(Photo: Teck Resources)

Never Rest on Your Ores: Building a Mining Company, One Stone at a Time follows the progress of a group of people determined to avoid getting mined out or taken out. In addition to geoscientific, engineering and financial expertise, luck accompanies them (much of the time, anyway), as does acumen (again, much of the time anyway).

Teck gains its first foothold as a predecessor company headed by Keevil’s father, Norman Bell Keevil, drills Temagami, a project that came up barren for Anaconda. The new guys hit 28% copper over 17.7 metres. Further drilling leads to the three-sentence feasibility study:

Dr. Keevil: What shall we do about Temagami?

Joe Frantz: Let’s put it into production.

Bill Bergey: Sounds good to me.

They schedule production for two and a half months later.

A few other stories relate a crucial 10 seconds in the Teck-Hughes acquisition, the accidental foray into Saskatchewan oil, the Toronto establishment snubbing Afton because of its VSE listing, an underhanded ultimatum from the British Columbia government, getting out of the oyster business and winning an unheard-of 130% financing for Hemlo.

Readers learn how Murray Pezim out-hustled Robert Friedland. But when it came to Voisey’s, Friedland would play Inco and Falconbridge “as though he were using a Stradivarius.” Keevil describes one guy welching on a deal with the (apparently for him) unarguable excuse that it was only a “gentleman’s agreement.”

Norman B. Keevil’s memoir retraces Teck’s—and his own—rocky road to success

Through it all, Teck gets projects by discovery or acquisition and puts them into production. Crucial to this success was the Teck team, with several people getting honourable mention. The author’s closest accomplice was the late Robert Hallbauer, the former Craigmont pit supervisor whose team “would go on to build more new mines in a shorter time than anyone else had in Canadian history.” Deal-making virtuoso David Thompson also gets frequent mention, with one performance attributed to his “arsenal of patience, knowledge of the opponents, more knowledge of the business than some of them had, and a tad of divide and conquer…”

Partnerships span the spectrum between blessing and curse. International Telephone and Telegraph backs Teck’s first foray into Chile but frustrates its ability to do traditional mining deals. The Elk Valley Coal Partnership puts Teck, a company that reinvests revenue into growth, at odds with the dividend-hungry Ontario Teachers’ Pension Plan. Working with a Cominco subsidiary, Keevil finds the small-cap explorer compromised by the “ephemeral response of the junior stock market.” And smelters rip off miners. But that doesn’t mean a smelter can’t become a valued partner.

Keevil argues the case for an almost cartel-like level of co-operation among miners. Co-ordinated decisions could avoid surplus production, he maintains. Teck’s consolidation of Canada’s major coal mines helped the industry stand up to Japanese steelmakers, who had united to take advantage of disorganized Canadian suppliers. “Anti-trust laws may be antediluvian,” he states.

Keevil admits some regrets, like missing Golden Giant and a Kazakhstan gold project now valued at $2 billion. The 2008 crash forced Teck to give up Cobre Panama, now “expected to be a US$6 billion copper mine.” Teck settled a coal partnership impasse by buying out the Ontario Teachers’ share for $12 billion. Two months later the 2008 crisis struck. Over two years Teck plunged from $3.6 billion in net cash to $12 billion in net debt.

But he wonders if his own biggest mistake was paying far too much for the remaining 50% of Cominco when an outright purchase might not have been necessary. Keevil attributes the initial 50%, on the other hand, to a miracle of deal-making.

For the most part Keevil ends his account in 2005, when he relinquishes the top job to Don Lindsay. By that time the company had 11 operating mines and a smelting/refining facility at Trail. A short chapter on the following 10 years, among the most volatile since the early ’70s, credits Teck with “a classic recovery story which deserves a full chapter in the next edition of Never Rest on Your Ores.” Such a sequel might come in another 10 years, he suggests.

Let’s hope he writes it, although it’ll be a different kind of book. As chairperson he won’t be as closely involved in the person-to-person, deal-to-deal, mine-to-mine developments that comprise the greatest strength of this book—that and the fact that the author grew with the company as it became Canada’s largest diversified miner.

Meanwhile, maybe Lindsay’s been keeping a diary.

The author’s proceeds go to two organizations that promote mining awareness, MineralsEd and Mining Matters.

Confederation Lake in focus

October 2nd, 2017

Regional geophysics bring expansion and JV potential to Pistol Bay’s quest for Ontario VMS zinc-copper

by Isabel Belger

Isabel Belger

Isabel Belger

Isabel: I would like to introduce the president and CEO of Pistol Bay Mining [TSXV:PST] Charles Desjardins. I am very glad you could find the time. Charles, tell us something about your background and how you got started in the mineral exploration industry.

Charles: I started in Vancouver as a stockbroker in the 1980s. Then you could say I got lured into the venture capital space, at that time the Vancouver stock exchange. The first thing that I worked on was actually a technology deal. Since then I have worked in a lot of different sectors: tech, biotech, oil and gas, diamonds, mining, etc.

This was a natural transition—I started more as a promoter and then I just became more hands-on because I wanted to get things done the way that I wanted to do them.

Isabel: How did you get involved with Pistol Bay?

Charles: Pistol Bay was actually in the Dave Hodge camp before as Solitaire Minerals and it came from somebody that kind of gave up. I wanted to take it over and one of the first things I acquired were the C3, C4, C5 and C6 uranium properties in Saskatchewan, which we are selling now to Rio Tinto [NYSE:RIO].

I got an e-mail from them last night. Basically I asked them if they were planning to pay the $1.5 million this year and they said probably. If they don’t pay it this year, then they’ll have to pay $2 million next year. It’s most likely that they will pay in 2017.

Isabel: Your principal properties are located in the Confederation Lake VMS greenstone belt in Ontario. Can you give me a little overview of what you have there and what makes your projects valuable?

Charles: Confederation Lake has been explored to some extent since the 1950s with only one producing mine, the South Bay mine. There are about nine historic occurrences there that we control.

Regional geophysics bring expansion and JV potential to Pistol Bay’s quest for Ontario VMS copper-zinc

The technology of exploration and mining has changed a lot just since 2000. I was recently in Toronto and I met the geophysicist who used to handle the area for Noranda. A lot of this ground was Noranda. Up until 2000 they couldn’t see anything beyond 200 metres in depth. Originally my plan two years ago was to tie up zinc and copper properties focusing on zinc. At that time zinc was at 62 cents per pound, now it is more like $1.40. Let’s call it prescience—I was able to tie up most of the belt, which is over 50 kilometres long and about 28 kilometres wide. The whole goal was to explore the belt using modern exploration methods, mostly with a deep-penetrating airborne study. Pistol Bay has just completed that.

I would also like to mention that there are about 800 historic drill holes in this belt and we have data on 600 of them. And we have access to a big geochemical study that was done, probably worth about $500,000 or even $600,000, that was never really followed up on or plotted in to any degree. That is very valuable because it went through all alteration zones and all the occurrences. Recently we did the airborne survey, as I have mentioned. I doubled the size of the survey area, ending up being about 2,100 line-kilometres. What that does, and what it has shown us, is that there are two trends in this belt. The first trend has stronger copper and zinc numbers and the lower trend is more zinc-dominated. The conductors we found are actually deeper in places. They have not been followed up before…. Keeping that in mind we have also staked another 14,500 acres [about 5,860 hectares] of conductors and IP anomalies. So there is a lot to follow up on.

Isabel: What is the plan for the rest of 2017 and where do you see more excitement?

We are talking right now to four companies about joint-venturing this. We don’t really have the capital to pay for our own drill program unless Rio Tinto writes us that cheque. I don’t want to dilute at this moment. I’d rather wait for the cheque if I have to or enter in joint ventures.—Charles Desjardins

Charles: We are talking right now to four companies about joint-venturing this. We don’t really have the capital to pay for our own drill program unless Rio Tinto writes us that cheque. I don’t want to dilute at this moment. I’d rather wait for the cheque if I have to or enter in joint ventures. I can say that we are permitting right now for drilling, but it might be a joint venture partner drilling. In the worst-case scenario we would drill in the first quarter of next year.

But I am pretty sure that Rio Tinto will write the cheque.

Isabel: You have a 5% NPI royalty on the Rio Tinto project, is that correct?

Charles: Yes, we have a 5% net profit interest after they paid the $1.5 million. I am rather confident that at some point they will come and try to buy that. If it is something that they think they are going to take to production—of course it is not even close to that—they would never leave us with 5% NPI.

Isabel: You said that you won’t be able to do a drill program yourself right now. How much money do you have in the bank right now?

Charles: A couple of hundred thousand.

Isabel: How much of Pistol Bay is held by the management?

Charles: Management, friends and family own about 35%.

Isabel: That is quite a bit. Interesting. Let’s talk a bit about zinc and copper. Recently a lot of articles were published on copper. It was Robert Friedland who recently noted that about 150 kilograms of copper is required for each electric vehicle manufactured, whereas people talk mostly about lithium and cobalt and EVs, but not so much about the increasing demand for copper. But I think many people are aware of rising copper prices and what copper is used for, being an interesting commodity in this “rechargeable” era. But maybe not everyone is as well-informed about zinc and what it is used for. Can you say a bit about the usage of zinc and also the zinc market?

Charles: One of the reasons that I got into zinc was that I was looking at all the commodities at a time when the resource market was quite depressed. I was looking for something that looked promising for a commodity shock. The zinc market is working in a production deficit. The prices have more than doubled, I wouldn’t call that a commodity shock, but it has gone well. And the fact that we hadn’t had that jump is probably the length of the bull zinc market.

About its usage, more than half of all zinc that is mined is used for galvanizing other metals, such as steel and iron. And significant amounts of zinc are also used to form alloys with other metals.

Isabel: What do you like most about your job?

Charles: I always like this kind of work. It is risky and can be stressful at times, but it doesn’t mean sitting behind a desk. I was up at the property in Ontario earlier this summer seeing first hand what everything looks like. How much infrastructure there is, which I was certainly quite surprised about, roads and even power lines as well. I love the variety that the job offers.

Isabel: What is your favourite commodity beside the ones in your company?

Charles: Probably gold though we do have some gold in our Confederation Lake. To me, in a world right now with the geopolitics that we are facing it is kind of a must-have. You have to have some gold.

Isabel: Thank you so much for the insights.

Charles: Thanks for having me, Isabel.

Isabel Belger

Charles Desjardins, president/CEO
of Pistol Bay Mining

Bio

Mr. Desjardins brings more than 25 years of experience in public company finance and management. He is president and CEO of Tandem Capital Group Inc, which was active in the investor relations field during the mid 1980s. Mr. Desjardins was also past president of numerous public mineral exploration and technology companies which traded on the TSXV.

Fun facts

My hobbies: Running marathons, biking, fishing
My favourite airport: JFK
My favourite tradeshow: Mines and Money Hong Kong, PDAC
My favourite commodities: Copper, zinc and gold
With this person I would like to have dinner: Elon Musk
If I could have a superpower, it would be: Extraordinary vision

Read more about Pistol Bay Mining here and here.