Manitoba's Mineral Industry

Exploration and Development Highlights 2004

Base Metals
Platinum-Group Metals
Specialty/Industrial Minerals

Preliminary estimates for exploration and deposit appraisal expenditures in Manitoba for 2004 are $32.6 million, nearly 20% higher than the $27.2 million spent in 2003. A higher, stable price for gold has resulted in dramatic spending increases in the province for the yellow metal since 2002. With many metals reaching multiyear price highs, Manitoba is attracting many new companies to explore its diversified mineral endowment.

The total area of mining claims and mineral exploration licences as of November 1, 2004 was 3 298 445 ha compared to 2 383 906 in 2003. The total area of mineral dispositions and leases in good standing as of November 1, 2004 was 3 492 971 ha compared to 2 578 114 ha at the end of 2003. Surface exploration diamond drilling in 2003 was 74 717 m, down from 78 346 m in 2002.

Base Metals

Hudson Bay Mining & Smelting (HBMS) completed the final phase of the 777 Project, the development of the 777 mine. The $400 million project, which commenced in 2000, consisted of 6 components. This included expansion and upgrading projects at the Flin Flon metallurgical plant and development of two new underground mines. The 777 mine reached full production of 1 million tonnes per year in January 2004. The deposit contains mineable reserves of 14.5 million tonnes grading 4.56% zinc and 2.5% copper, and significant precious metal credits. Hudson Bay Exploration conducted geophysics and drilling of SPECTREM airborne targets in the Flin Flon–Snow Lake belt and beneath the Paleozoic in the Hargrave Lake–Moose Lake area. Drilling was also carried out in the vicinity of current and past producing mines.

The biggest news of the year came in December when Johannesburg-based mining giant Anglo American sold its Canadian subsidiary Hudson Bay Mining and Smelting (HBMS) to Toronto-based junior OntZinc Corp., which subsequently changed its name to HudBay Minerals. The $325-million deal included HBMS' five operating mines, two concentrators, the Flin Flon copper smelter and zinc refinery, and HBMS's large land position in Manitoba and Saskatchewan.

Nuinsco Resources and partner Inco conducted winter drilling on the Mel deposit northwest of Thompson. An updated mineral resource calculation prepared by Inco estimates the deposit to contain a measured and inferred resource of 2.75 million tonnes of 0.77% nickel. Mineralization at the Mel deposit lies between 46 and 183 metres, and could be partially mined by open pit and trucked 40 km to the Thompson smelter complex.

Canadian Royalties entered an option agreement to acquire a 50% interest in Inco’s TNB South Property. The property covers key stratigraphy along the Thompson Nickel Belt (TNB) from Thompson south to the Wabowden area. With Inco acting as operator, Canadian Royalties is required to spend $1.0 million per year for 5 years, after which the partners will form a joint venture. AMT and UTEM geophysics were conducted and drilling of some initial drill targets was completed during the winter.

Anglo American Exploration (Canada) has acquired a substantial land position in the Thompson area in the last few years. The company conducted geophysics and drilling on their permits at Rock Lake and Paint Lake.

Crowflight Minerals entered an option agreement with Falconbridge on a 190 km² property package in the Wabowden area south of Thompson. The deal includes the Bucko deposit which contains 1.2 million tonnes of 2.71% nickel as indicated resources. Crowflight has initiated an extensive work program including surface and underground drilling to upgrade the resource base to the reserve category and bring the project to production.

Falconbridge and partner Donner Minerals completed another round of geophysics and drilling at their Stephens Lake property near Gillam. The area is extensively covered by overburden and is suspected to contain an extension of the TNB. The partners reported that no ultramafic rocks were intersected in any of the holes.

BHP Billiton Diamonds has an option agreement with Cream Minerals, Sultan Minerals and ValGold Resource to explore potential nickel targets on their Stephens Lake project 100 km east of Gillam. The property consists of 3 exploration licences and a group of claims. BHP flew airborne magnetic and VTEM surveys over the large property last winter. At least 6 high-priority targets have been selected for drilling in early 2005.

In the Leaf Rapids area, Rare Earth Metals conducted geophysics and drilling at their South Bay nickel property. In the fall of 2003, Rare Earth announced they had discovered nickel-bearing sulphides in blast rubble from a new road cut. Nickel grades were reported to average 2.42%. The 2004 drill program intersected the ultramafic host rock, but no nickel sulphides were encountered.

Mustang Minerals acquired the past producing Maskwa property in southeastern Manitoba in June. The property contains the Maskwa deposit which in 1999 was estimated to contain a measured resource of 2.66 million tonnes of 1.27% nickel and 0.21% copper, plus cobalt and platinum group metal values. Mustang conducted a fall infill drill program to document historical resources and to assist in an updated NI 43-101 compliant resource calculation. Drilling was to resume in early 2005 to significantly increase potential tonnage at Maskwa.

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Bema Gold conducted another extensive program of winter and summer drilling at the Monument Bay project in northeastern Manitoba. Using a cut-off of 8 grams per tonne, the inferred resource is now estimated at 1 069 258 tonnes averaging 15.36 g/t representing 528,041 ounces of gold. The estimate is based on drilling to date, excluding this past summer’s drill program which tested recently discovered zones to the west of the main Twin Lake gold zones. Drilling will continue in 2005 to outline and enlarge the gold resource on the Twin Lakes and Seeber River zones. Wolfden Resources is Bema’s joint venture partner in the Monument Bay project.

Canadian Gold Hunter and partner Rare Earth Metals also completed winter and summer drilling at their Assean Lake property northeast of Thompson. Drilling intersected high-grade gold mineralization at the Hunt zone including a 2.35 m interval of 27.91 g/t gold. Winter drilling also tested reconnaissance targets on the large property which straddles a major structural break—the Assean Lake shear zone. Gold mineralization has been discovered in 6 zones on the property to date.

Near Lynn Lake, Trans-America Industries completed a 19-hole drill program on their Arbour Lake property. No significant gold values were reported.

At Snow Lake, mining and milling operations were suspended at the New Britannia mine in September 2004 and an in-mine exploration program was initiated to determine the grade and extent of the ore body at depth. Joint venture partners Kinross Gold and High River Gold, owners of New Britannia, reported in January 2005 that the exploration program failed to find the required resource to continue mining. The mine will be placed in care and maintenance while consideration is given to conducting additional exploration in the area. New Britannia started commercial production in 1995 and had exceeded its original 8-year mine life.

Just west of Snow Lake, Foran Mining was busy with underground ramp development and extraction of a bulk sample. Results from the underground sample were slightly lower in grade compared to the surface bulk sample which returned grades of between 9.5 and 14 g/t gold. The company was conducting mine planning and engineering studies for site development. A building was purchased to house the new mill which has been ordered. Additional drilling is planned to upgrade reserves.

In central Manitoba, NDT Ventures conducted ground geophysics on their exploration licence in the Oxford Lake area. Previous drilling in the area is reported to have intersected gold-bearing iron formation which returned 4.1 m of 5.40 g/t gold.

Puma Exploration also picked up exploration licences in central Manitoba. Surface sampling at their Butterfly Lake property returned up to 99 g/t gold. A 2005 drill program is planned.

Placer Dome conducted work on an exploration lease optioned from W.S. Ferreira Ltd. in the southeast Island Lake area. The property hosts a number of high-grade gold showings and has a geological environment reported to be similar to the Red Lake camp. Also at Island Lake, Falcon Ventures completed a program of shallow drill holes on their Sagawitchewan Bay property. Drilling tested two gold occurrences which returned only anomalous gold values.

In southeastern Manitoba, San Gold Resources and Gold City Industries formed a partnership to create Rice Lake Joint Venture Inc. (RLJV) and purchase 100% of Harmony Gold Canada. By doing so, the two juniors became 50/50 owners of Harmony’s Bissett gold mine operation. Harmony had placed the operation on care and maintenance in 2001 due to the sagging price of gold. The operation consists of an 1100 tonne-per-day mill and a mine that received significant upgrading in the mid and late 1990s. An audit conducted in 2002 concluded that the Bissett mine currently has a proven and probable mineable reserve of 818 000 tonnes of 9.2 g/t gold. The partners intend to rehabilitate the mine and put it back into production. The partnership also gives RLJV control of San Gold’s properties located to the east and along strike of the Bissett mine. The mine horizon has been traced for up to 15 km on the properties now controlled by RLJV. San Gold has conducted substantial drilling on the eastern extension of the mine horizon over the last few years. To date, 3 near-surface deposits of gold mineralization have been located which could provide additional feed for the Bissett mill. The most advanced is the San Gold #1 deposit where the partners are preparing to go underground to extract a bulk sample.

Wildcat Exploration conducted spring geophysical surveys at their Poundmaker, Siderock and Jeep gold properties in the Bissett area. Summer mapping and sampling programs were carried out at Poundmaker and Siderock. Drilling was to commence in November starting with the Poundmaker property and shifting to the other properties in early 2005. Drilling will test newly discovered zones of gold mineralization as well as the potential of the past-producing Jeep and Poundmaker deposits.

Placer Dome conducted a winter drill program to test the down-dip extension of known gold mineralization near the past-producing Ogama-Rockland mine near Long Lake. The property is under option from Mid North Resources.

Marum Resources continued to acquire more property in the Rice Lake Belt. The company now holds 9 properties throughout the belt. A 10-hole reconnaissance drill program was conducted in the winter on the Strike Point property adjacent to the Bissett mine. Summer and fall mapping and sampling programs were conducted on the Beresford Lake, Strike Point and Gem properties.

Gossan Resources conducted a spring drill program at their Angelina gold property east of Bissett where mainly low grade gold values were encountered. A summer mapping program was reported to have located 3 new zones of interest. Sampling from one of the zones returned 43.7 g/t in a 1 m chip sample.

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Platinum Group Metals

Gossan Resources substantially increased the size of their property holdings along the Bird River Sill in the Lac du Bonnet area. New research conducted by the Manitoba Geological Survey suggests that high-grade nickel-PGM mineralization may have been remobilized some distance from their source within the sill. Gossan conducted summer work including geophysical and geochemical surveys as well as geological mapping.

Wildcat Exploration acquired Arc Metals’ PGE property located near Reed Lake in the Flin Flon–Snow Lake Belt. The Reed Lake property contains platinum-palladium mineralization hosted by a 6 km long, by 4 km wide, mafic-ultramafic layered intrusion.


The search for diamonds in Manitoba heated up again in 2004 as the area of significant interest shifted to the Hudson Bay Lowland and Seal River area, west of Churchill. In December, De Beers Canada secured a 20,000-sq.-km land package at Seal River. The acquisition surrounds diamond and base metals targets outlined by BHP Billiton Diamonds.

Nustar Resources entered an option agreement with BHP to drill a large kimberlite target identified in a MEGATEM airborne survey carried out by BHP in the Seal River area.

In the HBL near the Ontario border, Foran Mining, Diamonds North Resources, Falcon Ventures and Indicator Explorations have acquired significant holdings. Foran Mining conducted airborne and ground geophysics and completed a short drill program in the summer. Drilling did not intersect kimberlite but it did encounter a 100 m topographic depression in bedrock filled with unusual sediments. The sediments are suspected to be of Cretaceous to Jurassic age, which would make them of equivalent age to the kimberlites found in the HBL in Ontario.

Majors BHP Billiton Diamonds and Ashton Mining of Canada acquired permits in the HBL west of York Factory in the Nelson River area. Geodex Minerals and Arctic Star Diamonds teamed up to explore 10 exploration licences optioned from a numbered Manitoba company. The 10 licences are located southeast of the BHP and Ashton properties.

Specialty/Industrial Minerals

Rare Earth Metals continues to investigate their Eden Lake carbonatite complex, 35 km northwest of Leaf Rapids. The complex shows rare earth element (REE) enrichments over an extensive area. High-grade veins, carbonatite dikes, fenitic selvages of the carbonatite dikes, and altered syenite and other host rocks have been identified. The highest REE concentrations are in the dikes (up to 1.6 % total REE, 9764 ppm Sr and 745 ppm Y) and in hydrothermal REE-rich veins (up to 13.8 % total REE, 5307 ppm Y and 5465 ppm Th + U).

Sunterra Horticulture (Canada) is in its third year of sphagnum peat production from a bog located 10 km south of the Lake Winnipeg Narrows, on the west shore. Berger Group continued to develop a sphagnum peat bog 20 km south of Hadashville in southeastern Manitoba.

In December 2003, Gossan Resources received positive test results in a characterization study of a 75-kg bulk sample of high-purity Inwood dolomite from Manitoba’s Interlake. The test was carried out by Mintek, a leading South African-based, mineral and metallurgical firm. Mintek is building a magnesium pilot plant facility, which will use a continuous advanced thermal magnesium extraction process, based on atmospheric silicothermic reduction of calcined dolomite.

During the summer of 2004, Gossan Resources carried out a series of reverse circulation test holes on its high-purity silica sand property near Seymourville, on the east shore of the south basin of Lake Winnipeg. The purpose of the holes was to develop a resource estimation and to determine the purity and grain size characteristics of the sand for various potential applications.

Sodium chlorate for the pulp and paper industry continued to be produced by ERCO Worldwide (a division of Superior Plus Inc.) at their Hargrave plant (10 km east of Virden) and by Nexen at their Brandon plant. Raw material for the ERCO plant is obtained by salt dissolution of the Devonian Prairie Evaporite. Nexen, the world’s largest producer of sodium chlorate, presently purchases salt for its Brandon plant from Saskatchewan potash producers. However, in 2004, Nexen obtained 5 quarry leases to solution mine salt, also in the Hargrave area. Nexen’s plant production, one of the largest in North America, will be expanded by 65 000 tonnes per year, which will increase annual capacity to over 260 000 tonnes.

Tantalum Mining Corporation continued exploration for tantalum- and cesium-bearing pegmatites in the Bernic Lake area in southeastern Manitoba.

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