Slow burn [Ring of Fire] – by Eavan Moore (CIM Magazine – November 2012)

http://www.cim.org/en.aspx

Tight markets, limited infrastructure and challenging ­relationships test the resolve of those exploring the Ring of Fire

From a geological perspective, the Ring of Fire region contains a little something for everyone. Since De Beers’ 2002 discovery of a copper and zinc-rich volcanogenic massive sulphide deposit at Eagle One, explorers have uncovered chromite, nickel, gold, vanadium, iron and platinum group elements in and around the iconic crescent-shaped cluster of claims. But the extensive cash and patience required to operate in Ontario’s far north have turned junior exploration into a waiting game, as a few high-profile projects promise to open up inaccessible land to further development.

The region’s two heavyweights, Cliffs Natural Resources and Noront Resources, are each advancing a major project to the development stage. That does not lend itself to funder-friendly hype for explorers. “Where we are now in the cycle, there’s not as much flaming news coming out,” says Garry Clark, executive director of the Ontario Prospectors Association. And in a generally dry investment climate, he adds, even strong drill results do not seem to move markets.

Operating costs

Exploring in the Ring of Fire – 300 kilometres from the nearest road or rail – takes serious money. Michael Murphy, spokesperson for exploration junior White Pine Resources, sketches out the figures: “Diamond drilling costs are approximately $750 per metre for a small drilling program. A comparable cost in the historical mining camps of Ontario and Quebec would be in the $150 per metre range.” Last year, one company spent $1 million drilling 1,000 metres, according to James Trusler, president and CEO of Platinex.

The time and money required to establish working relationships with First Nations adds another layer of complexity. John Harvey, a member of the team that discovered Eagle One and now chief operating officer at Bold Ventures, considers this the biggest obstacle facing explorers seeking their licence to operate in the James Bay Lowlands. “It took us 18 months to get an agreement with Attawapiskat,” he says. “Most companies don’t want to get into that. They can’t guarantee they’re going to be able to stay in that long.”

As a result, the number of claim holders has dwindled. At one point in 2011, 35 companies held 30,000 claim units in the Ring of Fire. As of August 2012, 21 companies held only 16,435 claims.

Of those 21 companies, some continue to actively explore. In 2012, Cliffs and KWG Resources drilled further on their Big Daddy chromite deposit, updating the Measured Resource to 29.5 million tonnes grading 29 per cent chromium and the Indicated Resource to 7.9 million tonnes grading 26.7 per cent chromium. Northern Shield Resources and Discovery Harbour Resources Corp.

Intersected strong copper-zinc mineralization at their Wabassi property, including grades of up to 44.74 per cent zinc. MacDonald Mines Exploration Inc. wrapped up a summer drilling campaign on its Butler property with further definition of a potential world-class volcanogenic massive sulphide mineralization. In all, exploration spending is projected to increase from more than $50 million in 2011 to more than $80 million in 2012.

Forthe rest of this article, please go to the CIM Magazine: http://www.cim.org/en/Publications-and-Technical-Resources/Publications/CIM-Magazine/November-2012/feature/Slow-burn.aspx

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