Manitoba's Mineral Industry

Exploration and Development Highlights 2008

Current as of November, 2008

Base Metals
Precious Metals

The dip in metal prices experienced throughout 2008 has apparently not curtailed exploration spending substantially in Manitoba. Exploration and deposit appraisal spending intentions are estimated at $135.8 million, significantly higher than the estimated $102.6 million spent in 2007.

The increase in exploration activity boosts local economies, contributes to the province’s geoscience knowledge-base and identifies new deposits that have the potential to be Manitoba’s next mine. Exploration is the driving force behind a sustainable mining industry which depends on the discovery of new deposits to succeed.

Manitoba’s mining industry makes a significant contribution to the provincial economy. In 2007, the value of mineral production totalled $2.5 billion for metals and industrials, nearly tripling in value since 2003.

Manitoba's 8 operating mines employ 3,500 people directly—most of whom reside in the north—with an additional 14,000 employed indirectly in spin-off businesses servicing the mineral sector. In 2007, Manitoba’s metal mining industry invested $543 million in capital expenditures.

The province’s major producers, HudBay Minerals, Vale Inco, San Gold Corporation and Tanco are the backbone of Manitoba’s mining industry. Mining communities depend on a healthy industry to secure their future and Aboriginal and northern communities look to mining as a potential driver of local and regional economic development. On-going sustainability of the mining industry is critical to maintaining the high quality of services and supports for northern Manitoba communities.

It is expected that mining in the province will generate more than 1,500 new jobs within the next five years. A variety of educational and on-the-job training initiatives are currently being developed and delivered by the province’s colleges and by mining companies that will soon need new workers to replace an aging workforce approaching retirement.

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Base Metals

The Bucko Lake nickel mine is poised to reach full commercial production in early 2009. (Photo courtesy of Crowflight Minerals, Inc.)Crowflight Minerals continued surface and underground development at the Bucko Lake nickel mine near Wabowden. The company has received its Environmental Act Licence from the province allowing production to commence. While awaiting federal approval to use Bucko Lake as a tailings disposal site, Crowflight is installing an interim land-based tailings storage facility. Production was to begin ramping up in the fourth quarter and reach full production in early 2009.The base-case scenario calls for production of 1000 tonnes per day to produce 11.1 million pounds of nickel per year.

Crowflight announced that drilling at the former-producing Manibridge mine located south of Wabowden resulted in the discovery of two nickel zones located within 400 m of past production. One of the zones returned an intersection of 16.75 m of 1.38% nickel. The project is a joint venture with Pure Nickel Inc.

Vale Inco plans to invest about $120 million into new automated technology for its nickel refinery in Thompson. New leading-edge robotic technology incorporating automated cranes and electric transfer cars will replace manual labour involving the handling of heavy slabs of nickel cathodes. The project is expected to be completed by 2011.

Exploration drilling by Vale Inco near its Thompson mines has demonstrated significant potential for open-pit mining of two new deposits, the Thompson 1-C and 1-D Surface zones. Drilling projects are also returning encouraging results at depth at both the Thompson and Birchtree mines in efforts to locate new zones of nickel mineralization within and near existing infrastructure.

In-fill drilling at Lalor zinc-copper deposit to better define resource. (Photo courtesy of HudBay Minerals Inc.)HudBay Minerals continues to advance their Lalor zinc discovery (March, 2007) near Snow Lake with up to 6 diamond drills active on the property. A National Instrument (NI) 43-101–compliant resource estimate released at the end of August determined Lalor contains Indicated resources of 3.4 million tonnes of 8.82% zinc, 0.71% copper plus significant silver and gold values. Inferred resources currently stand at 13.2 million tonnes of 8.19% zinc and 0.70% copper. Drilling continues in efforts to upgrade the Inferred mineral resources. A feasibility study is expected to commence in the fourth quarter of 2008.

Independent Nickel Corp. continues to drill to upgrade the reserve base of the past-producing Lynn Lake nickel mine. A prefeasibility study released in November 2007 concluded the project has demonstrably positive economics with a cash cost of producing refined nickel at $4.90 per pound at a production rate of 3000 tonnes per day. The company has been drilling a new zone of mineralization discovered in the spring located close to a shared boundary line with Western Areas NL. In mid-August, Victory Nickel made an unsolicited takeover bid for Independent Nickel. In early September, after evaluation of an amended offer, Independent’s Board of Directors recommended shareholders accept the offer.

Western Areas NL is conducting nickel exploration on the EL mine property in Lynn Lake. Drilling at the Melville prospect (near a shared boundary with Independent Nickel) encountered a significant new nickel-copper zone which thus far appears to lie within Independent’s claim boundary. Western Areas intends to further test the zone to see if it extends onto their ground as well as investigate other anomalies in the vicinity.

rilling at the Reed Lake Discovery Zone near Snow Lake. (Photo courtesy of VMS Ventures Inc.)VMS Ventures announced in October 2007, they had discovered a significant zone of copper-zinc mineralization at their Reed Lake property. Since that time the company has drilled upwards of 60 holes with many returning wide intervals of significant copper and zinc grades. For example, assays from drillhole RD-08-51 returned 97.21 m of 2.08% copper and 0.07% zinc, including a 10.7 m intersection of 6.86% copper and 0.23% zinc. Some intersections also contain significant gold and silver credits. Drilling is ongoing.

A winter drill program by Victory Nickel at the Minago deposit north of Grand Rapids was successful in finding continuity of nickel mineralization at depth beneath the large, open-pit resource. Significant results included 47.8 m of 1.30% nickel within a 623.5 metre intercept of 0.36% nickel. A feasibility study for the open-pit portion of the project is in progress and due for completion in the fourth quarter of 2008.The Minago deposit has Measured and Indicated resources of 49.1 million tonnes of 0.516% nickel.

Pure Nickel Inc. completed a Versatile Time-domain Electromagnetic (VTEM) airborne survey and a 15-hole drill program at their William Lake property north of Grand Rapids. The drill program tested nickel-bearing zones previously identified by Falconbridge. Drilling was completed on five zones and the company says that a significant mineralized zone was discovered. The most significant hole on the new zone intersected a sulphidic iron-formation containing massive sulphide intervals which averaged 0.91% nickel over 12.15 m.

Murgor Resources conducted drilling at their Hudvam and Wim copper-zinc projects which are under option from HudBay Minerals. At the Wim deposit near Snow Lake, Murgor claims that drilling in 2008 has upgraded the resource estimate by 1.0–2.5 million tonnes. In 2007, an NI 43-101–compliant resource estimate concluded that Wim contains Inferred resources of 2.06 million tonnes of 1.92% copper and 1.65 g/t gold. At the Hudvam property near Flin Flon, a new NI 43-101 resource estimate based on recent drilling has increased the gold resource by 40% and boosted the Indicated resource to 854 076 tonnes based on a 2.0% copper equivalent cut-off grade.

Halo Resources has been actively exploring their large Sherridon and area property package northeast of Flin Flon. The project contains a combination of mature and grassroots base-metal and gold prospects including four historic copper-zinc deposits, Cold Lake, Bob Lake, Lost Lake and Jungle Lake. Halo has had NI 43-101–compliant resource estimates completed for all four of the deposits and incorporating all four, they contain total Indicated resources of 3.1 million tonnes of 1.00% copper, 0.91% zinc plus precious-metal credits. This calculation does not include results of recent drilling at Bob Lake.

Rockcliff Resources completed geophysics and drill programs on a number of their properties in the Snow Lake area. The large property portfolio contains some previously discovered deposits under option from Hudbay Minerals. Initial drilling commenced in the winter at the Kof and Sylvia zones and intersected multiple sulphide zones containing significant copper and zinc values.
An initial 27-hole drill program at the Rail property identified the source of several untested geophysical targets and extended the strike and depth of the copper-rich mineralization of the historic Rail Lake deposit. A second phase of drilling commenced at the Rail zone at the end of July.

Troymet Exploration completed an 8-hole drilling program at their McClarty Lake project southwest of Snow Lake. Drilling identified two laterally continuous zones of massive sulphides. A hole from the lower zone intersected 15.3 m of 3.46% zinc and is locally enriched in silver and gold. Geophysical surveys suggest that there may be additional sulphide lenses associated with the alteration system that hosts the mineralized zones discovered to date.

Southeast of Flin Flon, Copper Reef Mining completed an airborne VTEM survey and drilling at their Mink Narrows property. Drilling was highlighted by a 10.21 m intersection of 3.66% copper from the Copper Reef deposit. Drilling expanded the known mineralization as well as helped to confirm that the upper east portion of the deposit is actually a separate lens which remains open at depth and to the east.

Wildcat Exploration completed airborne geophysical and ground induced-polarization (IP) surveys at their Reed Lake property. The property has the potential to host volcanogenic massive-sulphide deposits in the north portion, while the south contains a layered mafic-ultramafic intrusive complex which is prospective for platinum group metals. Geological mapping and ground truthing of geophysical targets were completed in the summer.

In southeast Manitoba, Mustang Minerals Corp. has released results of a positive prefeasibility study done by independent consultants on the Maskwa nickel deposit east of Lac du Bonnet. The study incorporated a Proven and Probable open-pit reserve totaling 7.11 million tonnes grading 0.64% nickel and 0.13% copper. The initial capital cost of the open-pit project is estimated at $123 million. The company plans to undertake a full feasibility study. Mustang has a second nickel-copper open-pit resource at the M2 zone on the Mayville property, 35 km from the Maskwa deposit.

Marathon PGM Corporation conducted resource-definition drilling on their Ore Fault and Bird River properties east of Lac du Bonnet. Multiple lenses of massive sulphide have been intersected at both the Ore Fault and Page (Bird River) zones, including 15 m grading 1.71% nickel at Ore Fault and 6.55 m grading 1.65% nickel at Page. The Ore Fault North zone consists of an upper zone of nickel-copper mineralization and lower zinc-copper-silver zone.

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Precious Metals

Carlisle Goldfields commenced a second phase of drilling of 20–25 holes at the past-producing MacLellan mine in Lynn Lake in February. In May, an initial NI 43-101–compliant resource estimate was released stating MacLellan contains Measured and Indicated resources of 932 000 tonnes grading 6.81 g/t gold and 11.4 g/t silver. If sufficient resources can be defined, Carlisle plans to dewater the mine and conduct a feasibility study.

Garson Gold continues to drill to define additional resources at the New Britannia mine property in Snow Lake. Efforts are focused on the No. 3 zone west of the New Britannia mine as well as at the main mine itself. Garson is looking at the feasibility of reopening the mine using additional ore from the No. 3 zone. A recently updated NI 43-101–compliant resource estimate significantly boosted the No. 3 zone’s Indicated resource to 394 000 tonnes of 6.72 g/t gold and a further 575 000 tonnes are estimated in the Inferred category. A scoping study to determine capital costs of reopening the mine and mill is in progress.

In September, Cuprus Mining Corporation purchased the Ferro and Wekusko Gold Property options located 20 km southeast of Snow Lake from Black Pearl Minerals Consolidated. Exploration has outlined auriferous quartz vein systems on the property. The Company has made capital investments in operating equipment exceeding $2 million (Cdn) including the purchase of a 10 tonne per hour gold recovery plant from Gekko Systems Pty Ltd of Ballarat, Australia and is presently extracting a 9000 tonne bulk sample from one of the vein systems.

Tribune Uranium Corp. conducted a 13-hole drill program at their Reed Lake project southwest of Snow Lake. The purpose of the program was to verify historic drilling by HudBay Minerals which encountered significant gold values. Tribune’s drilling identified multiple sections of gold bearing mineralization with the best assay returning 5.79 m of 12.84 g/t.

Rolling Rock Resources reported in January 2008 that additional drilling since 2006 has increased the Inferred resource for the Monument Bay project to 4.9 million tonnes of 6.01 g/t gold, an increase of 35% in contained ounces. The company has embarked on a scoping study to define mining economics and evaluate the potential of putting the deposit into production. Rolling Rock also completed a drill program at their Domain gold project near Oxford House which returned encouraging results.

In southeastern Manitoba, San Gold Corp. reported discovering multiple gold-bearing zones located about 1.5 km northeast of the Rice Lake mine. Referred to as the Hinge zone, drilling to date has discovered at least four sub-parallel veins and numerous uncorrelated breccia zones within 100 to 300 m of surface. A drillhole from the most recently discovered zone, Hinge #4, returned 6.3 m of 85.1 g/t (2.49 oz/ton). Deep underground drilling below the working levels at the Rice Lake mine also resulted in the discovery of a high-grade zone and extended the downdip extension of the high-grade “96” vein. An early hole on the newly discovered zone returned 2.7 m of 31.8 g/t gold.

Wildcat Exploration conducted drill programs at their Poundmaker and Jeep properties in the Rice Lake Belt. Airborne geophysical and ground IP surveys were also conducted at Jeep to investigate potential mineralized shear zones. Summer sampling and/or geological mapping programs were conducted at the Jeep, Mable and Garner Lake properties.

Harvest Gold conducted a 9-hole drill program at their Lesavage North project located east of Bissett. The company tested mineralized zones encountered in previous drill programs as well as new geochemical and geophysical anomalies. Assay results have yet to be released.

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