Cover Story Volume 11 | Number 3 | Fall 2008 Vancouver, British Columbia www.ReportOnMining.com Planning for Profits - Report on Mining edition is published 4 times a year by Fusion Publishing Inc. All rights reserved. Any reproduction or duplication without prior written consent of Fusion Publishing Inc. is strictly prohibited. Published by Fusion Publishing Inc.
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4
On the Move 6
Production – Layout Artist Cindy Hughes Contributing Editors Grant Campbell Doug Dulmage Sales Manager Doug Dulmage 1.888.925.0313 x3001 Sales Representatives Garry Ferris Marie Richards Richard Ward Randy Chaster Publication Mail Agreement #41124091
Hard Creek Nickel Corporation
Athabasca Commodities: Uranium 10
Belmont Resources Inc.
12
International Montoro Resources Inc.
14
Red Rock Energy Inc.
Commodities: Uranium 16
Geosoft Inc.—Berkeley Resources Ltd.
Mexico Commodities: Silver
Associate Publisher & Editor Connie Ekelund Editorial Assistant – Copy Editor & Proofreader Leslie Goodson
When Opportunity Knocks by Doug Dulmage
20
Scorpio Mining Corporation
22
Silver Shield Resources Corp.
Commodities: Silver & Gold 24
Silver Eagle Mines Inc.
Commodities: Gold 26
PC Gold Inc.
28
Colossus Minerals Inc.
Commodities: Molybdenum 30
Pacific Comox Resources Ltd.
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6
When Opportunity Knocks By Doug Dulmage
A
very wise elderly woman, a veteran of the junior mining business, was ruminating not long ago about the state of the markets. She has heard it all during her long career in the business, seen all the cycles, all the ups and downs, the Black Fridays, the Bre-X scandal, the recessions, the huge one-day drops and similar market rallies, wars around the world, incredible government decisions and more. This is a woman who founded a junior mining company more than 20 years ago, at an age when most of us would be settling into retirement, and wishes to remain anonymous. But she is still involved as a major shareholder and spends a solid 40 to 50 hours a week in the office taking care of business in spite of her advancing years. So what did she think about the state of the TSX Venture exchange over the last year, a year when the bears have definitely taken over action in the juniors? She smiled brightly, thought for a moment and said: “I think, as I always have, that these seemingly bad times create wonderful opportunities for mining companies, and for investors both institutional and retail. “After all, we’re not going to zero. We’re not going out of business. Investors are not going broke. Demand is not disappearing. Money is still available. And yes, things are more difficult and money is more expensive and the work is harder than it has been over the past three or four years. But overall, good opportunities are out there. You just have to find them.” This woman’s attitudes come from a different era, when people formed opinions and laid their life and business plans on information they knew—not on force-fed media opinions blasting negativity and scare tactics 24/7 into your living room by so-called expert talking heads who should know better. This woman’s attitude is based on experience and awareness and having watched every downturn recover to rise higher. And this woman knows that this will happen again. She knows all about the United States sub-prime mortgage debacle, fuelled by greed from the investment houses and the banks, morphing into a world-wide problems of billion dollar write-downs. 4 Planning for Profits / Report on Mining | Fall 2008
She knows about the asset-backed commercial paper scandal on the Canadian side and its influence on the markets. She knows about the fears investors feel in the financial institutions and that there is likely more bad news to come. But she also knows that in spite of all the talk, few people are willing to say the United States or Canada has fallen into recession, and she also knows that in the middle of the summer market doldrums, bottoms were being reached, balance sheets were being tidied up, leaner business measures were being taken, and investors with huge amounts of money parked on the sidelines were paying close attention to these moves with an eye to returning to the market for what is basically an annual fall to mid-winter rally. Yes, this woman understands that the TSX is down 10 per cent or more from its all-time highs, and that the Venture exchange is down some 40 per cent across the board, and some juniors are down as much as 85 per cent. She understands because she’s seen it all before, because she knows the fall rally is as dependable as the summer doldrums, and understands that people, that companies, that the human spirit shall always overcome. That’s the real track record. It’s just not the same one that the talking heads would have you believe. This woman’s own company stock has plummeted with many others over this year of investor discontent, financial shenanigans and the ongoing spate of bad news spun into fear-mongering by media. But if you listen to the underlying reasoning behind the wise woman’s thinking, you’ll realize that there’s no real reason for investors to be spooked. “As always,” she says, “markets go up and markets go down and either direction creates new opportunities. I believe that better opportunities are created in a down market because it’s easier to get ahead of the curve.” I would like to have spent more time listening to this wise woman, but she didn’t have time. She was working on several interesting opportunities that couldn’t wait. Opportunities to move her company forward. Opportunities to add to her portfolio. When opportunity knocks, seize the moment. I know the wise woman will do so, and I believe all of us should do so too. www.reportonmining.com
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Fall 2008 | Planning for Profits / Report on Mining 5
Nickel On the Move
interview
HARD CREEK NICKEL CORPORATION
E
xploration and development in the mining business is famous for its ups and downs. But every so often there is a property with the goods in the ground; so it is with Hard Creek Nickel’s Turnagain Project in north-central British Columbia. In the hectic four and a half years since Mark Jarvis took over the top job at Hard Creek, the company has moved from an undrilled, well-positioned possible open-pit mining site to one of the largest undeveloped nickel plays world-wide, according to current 43-101compliant resource calculations updated in June 2008. With more than two billion pounds of nickel in the measured plus indicated categories and an additional two billion pounds in the inferred category, Hard Creek’s potential has jumped from literally nowhere to almost as much contained nickel as the famous Voisey’s Bay project in Newfoundland and Labrador. The project also contains considerable credits for cobalt and platinum.
6 Planning for Profits / Report on Mining | Fall 2008
A preliminary assessment completed in December 2007 laid out the case for an economically feasible operating mine with a life of 29 years, payback in 6.4 years and a net present value of CDN $422 million at an 8% discount. All of these parameters and results are base case assumptions with nickel prices at US $7.50/lb, cobalt at US $ll.50/lb, and copper at US $1.40/lb. The project’s capital cost is calculated at CDN $1.38 billion. (For complete preliminary assessment numbers, please visit www.hardcreek.com.) So, where does this leave Mark Jarvis? It leaves him feeling good about the whole project, and he has his plate full bringing it along from an exciting possibility to a full-fledged producer. “We’re going to continue drilling to get a better handle on the complete resource,” he says. “Meantime, we’re just now beginning a search for a deep-pockets partner to help with the financing of some of the infrastructure.”
www.reportonmining.com
To understand the dilemma faced by Mr. Jarvis and his team, one needs only look at the market over the last year. In spite of what is expected to be a continuing bull market in metals, fuelled by ongoing growth in emerging markets (China, India, Russia and Brazil), the junior mining market has been clobbered by investors fleeing in the face of an ugly financial crisis caused by the mortgage market meltdown in the US, the asset-backed commercial paper scandal, and the ensuing extremely tight credit market. “It doesn’t thrill me that our stock price, which moved from about 40 cents to $3.25 as we began developing the resource, has settled back to pretty much where it started,” Mr. Jarvis says, “but markets do have their ups and downs. The overall outlook for demand in emerging markets is still there and stocks have been hit so hard that many are severely undervalued. The market could post a strong rally in the last quarter.” Overall, the Turnagain project’s strength lies in its basics. Its sheer size makes it attractive not only to investors, but also to major mining players who are increasingly willing to buy metal in the ground rather than explore and develop. The deposit is not only well-positioned with regard to geography and geology, it is also more easily mineable than others. It is an Alaskan ultramafic intrusive shot through with sulphur so that the contained metals are available in sulphide form, which is easy to extract from the host rock with standard flotation technology. “Large sulphide nickel deposits are rare,” Mr. Jarvis says. “Most large nickel deposits are laterites, which require high nickel prices to be economic. www.reportonmining.com
Fall 2008 | Planning for Profits / Report on Mining 7
Nickel On the Move
interview
Think of laterites as the tar sands of the nickel business. Because incremental supply is going to be from these high-cost deposits, nickel prices should remain relatively high.” Turnagain lies about 70 kilometres east of Dease Lake, BC, tucked between two mountain ranges in a relatively dry zone compared to other mining projects in the area. It is easily accessible by road and air. Members of Hard Creek’s team are working ceaselessly negotiating comprehensive agreements with governments on several issues, as well as with First Nations and special interest groups. Mr. Jarvis says Hard Creek and a number of other BC mining companies are working and negotiating with the provincial government on a comprehensive plan to expand the power grid in the region that will be in the best interests of all the stakeholders. The deep-pocketed partner, or partners, Jarvis is seeking could be asked to provide financing for the building of such a grid. Meanwhile, work proceeds apace on a major drilling program leading to pre-feasibility and expanded exploration, and on the metallurgy program, preliminary mine development design, environmental permitting, First Nations consultation, and infrastructure development. Work also continues to reduce the development risk of the Horsetrail nickel-cobalt deposit, and to further explore both the new platinum-palladium component of the Turnagain ultramafic. Mr. Jarvis has assembled a great deal of expertise on the company’s advisory board and project management team.
8 Planning for Profits / Report on Mining | Fall 2008
Joining the advisory board is Mike Young, a 45-year veteran of the mining business with international experience and extensive knowledge of smelters and refineries worldwide. His focus has been on metallurgy and the marketing of nickel concentrates. He will provide input into planning and modeling going forward. Also on board is the well-known and respected Tookie Angus, former head of the Global Mining Group at Fasken Martineau and more recently Managing Director of Mergers and Acquisitions at Endeavor Financial. Mr. Angus will advise the company on achieving maximum shareholder value from Hard Creek’s resource. Mr. Jarvis, who has considerable experience in the financing and operations of public companies in both mining and oil and gas, heads up the management group and will oversee the financial side of moving the project forward to production. As a former manager of corporate finance at Ultra Petroleum and a long-term industry broker, he has a vast network of contacts on the finance side. Hard Creek appears to have all the components necessary for the implementation of a great producer. The goods (and they are abundant) are in the ground. Things are moving forward quickly in all the necessary areas, and each area is in the hands of qualified and experienced people. It is the type of play that, in time, is expected to draw the interest of majors. But, Mr. Jarvis says, the time to sell is not now: “There’s much, much more to be done on all fronts, including expansion of the resource base. But I am encouraged. I wouldn’t risk my time, my energy and my money if it didn’t have the potential for a huge payoff.” n
Hard Creek Nickel #1060 1090 West Georgia St. Vancouver, BC Canada V6E 3V7 Phone: 604.681.2323 www.hardcreek.com TSX-V: HNC www.reportonmining.com
Uranium Athabasca
B
elmont Resources Inc. is an aggressive exploration and development company involved in the acquisition, exploration and development of uranium properties in Canada. The company is moving forward by completing NI 43-101 technical reports, exploration programs and initiating drilling on targeted areas. Belmont currently has one drill program underway at the Crackingstone Uranium project and the results are due this summer. This project lies in a region that contains some of the world’s largest uranium zones and is supplied with mining infrastructure and personnel. Since early 2006, Belmont has acquired five uranium projects in the following uranium districts: •Uranium City, Saskatchewan (two projects). •Wollaston-Reindeer Lake area, southeast Athabasca Basin, Saskatchewan (one project). •Central Mineral Belt of Labrador (two projects). Belmont continues to identify additional uranium projects in strategic uranium districts, and views joint venture opportunities as methods for heightened exploration on currently held projects.
10 Planning for Profits / Report on Mining | Fall 2008
Crackingstone and Orbit Properties Uranium City, Saskatchewan The Crackingstone and Orbit Properties are considered Belmont’s flagship projects, as they are the most advanced projects under exploration From 1953-1982, 16 deposits were brought into production in the Uranium City camp, which has had historical production over 70.5 million pounds U3O8. Some past producers’ average grades are: • Ace and Fay Mine: 0.28% U3O8 (30 million pounds) • Verna-Bolger Mine: 0.19% U3O8 (15.3 million pounds) • Rix-Smitty Mine: 0.20% U3O8 (1.13 million pounds) • Gunnar Mine: 0.18% U3O8 (19.25 million pounds) •Cinch Lake Mine: 0.26% U3O8 (739,000 pounds) Gunnar Mines was an open pit operation; 15 other past producers were underground operations. A number of programs have taken place since acquisition. In April 2006, Belmont and International Montoro (50/50) acquired the 750-hectare Crackingstone property, which is 8 km southwest of Uranium City on the northwestern margin of the Athabasca Basin. In the fall of 2006, the company staked an additional 11,109 hectares–the Orbit property–to further cover the main Crackingstone fault and some northeast trending extensions.
www.reportonmining.com
The Orbit claims adjoin CanAlaska Uranium’s large claim block to the south. Cameco Corp., the world’s largest uranium producer, holds a block of claims west of the property. In September 2007, the Belmont/Montoro joint venture completed an extensive sampling and ground geophysical program on the Crackingstone and Orbit properties. Two hundred and ninety-nine channel and grab samples from 18 of 32 showings all contained uranium values. Two of the showings had spectrometer readings over 65,350 cps (beyond instrument limits). Some of the highest assays ranged from 0.12% to 1.24% U3O8. Thirty-four of the 290 samples assayed over 0.059% U3O8, 21 samples assayed over 0.12% U3O8, and 5 samples assayed over 0.59% U3O8 (see sampling & claim map). In October 2007, the joint venture completed a helicopter airborne magnetic and radiometric survey on an area of 12,091 ha, consisting of 1391-line km of 100-m flight line spacing. The survey identified numerous NE-SW radiometric anomalies, one with a strike length of over 15 km, and four major uranium anomaly trends having linear strike distances of 1 to 4.5 km long. Also, a radon gas survey conducted around the intersection point of the Crackingstone and Boom Lake Faults collected 93 samples covering 4.65 km of grid lines at 50-m sample intervals. The survey identified 10 areas of anomalous uranium mineralization in overburden areas (see airborne survey map). In April 2008, the joint venture commenced drilling on an 1800 metre-long conductor coincident with the NE Boom Lake Fault. Twenty drill holes in Phase 1 completed, 3075 m, with hole depths ranging from 100m to 300m. Assay results pending. Wollaston/ Reindeer Lake Southeast Athabasca Basin, Saskatchewan In January 2007, the company staked 63,184 ha east of the Athabasca Basin that is known as Compulsion Bay/Reindeer Lake area. The claims cover approximately 60 km of the Wollaston-Peter Lake Domain contact, and the Needle Falls Shear Zone located on this contact.The area was staked based on strong radiometric anomalies identified in airborne surveys in a joint survey carried out by Saskatchewan Industry and Resources/Natural Resources Canada. Previous exploration was successful in identifying uranium mineralization. The uranium mineralization found on the property is similar to the deposits found to the west contained within the same Wollaston Domain. The Wollaston Domain hosts other explorers including Hathor Exploration Limited and JNR Resources Inc. www.reportonmining.com
Stormy Lake and Partridge River claims Central Mineral Belt, Labrador Belmont and Montoro acquired the 26.5 sq km Stormy Lake and the 7.5 sq km Partridge River claims. The four mineral leases totaling 139 claims cover two highly prospective geological terrains. A 2006 helicopter airborne radiometric and magnetic survey over the properties located several high priority radiometric anomalies on both blocks that were targeted with ground follow-up exploration during 2007. n Directors & Officers Vojtech Agyagos Gary Musil Jake Bottay Kenneth B. Liebscher Roger Agyagos Tim Froude, P.Geo
President/Director CFO/Director Director Director Director Advisor to Board
Stock Information Shares Outstanding Fully Diluted 52 Week High/Low Long Term Debt
23,853,253 34,158,253 $0.20 / $0.085 Nil
Belmont Resources Inc. #600 - 625 Howe St. Vancouver, BC Canada V6C 2T6 Phone: 604.683.6648 Information Phone: 416.517.2270 Email: dean@boardmarker.net www.belmontresources.com TSX.V: BEA FRANKFURT: L3L Fall 2008 | Planning for Profits / Report on Mining 11
Uranium Athabasca
• Situated in Elliott Lake, Ontario–once known as the Uranium Capital of the World • Developing in the world’s powerhouse region for Uranium –Saskatchewan • Quality management with successful track record
I
nternational Montoro Resources is charging forward in the cleaner energy world of tomorrow. Montoro is currently advancing uranium projects in Saskatchewan (Crackingstone/Orbit-Uranium City) and Ontario (Elliot Lake). While many uranium companies are spending their investment dollars in one province or region, Montoro and its joint venture partners are currently advancing two projects in two separate regions, managing the risk for their investors to maximize potential in becoming a “True North“ cleaner and greener uranium mining company.
Overview of Projects
Elliot Lake Property / Serpent River Property Northern Ontario Montoro is earning 100% interest in 1,840 hectares in the Sault Ste. Marie Mining Division, Elliot Lake, Ontario. The Elliot Lake mining camp has produced more than 270 million pounds of U3O8 from stratigraphically-bound deposits that demonstrate remarkable consistency over extensive areas. The Serpent River Property is located about 13 kilometres east of the town of Elliot Lake, which was the centre of Rio Algom’s uranium production of the area during the 1950s to the 1970s. It covers approximately 4,000 m of the contact. An NI 43-101-compliant technical report was completed, authored by Scott Wilson Roscoe Postle Associates, dated March 20, 2007. Phase One of diamond drilling (16 holes) was completed in November 2007. Enhanced levels of radioactivity were encountered in three different environments. Pyritic quartz pebble conglomerate (QPC) beds were intersected over core length ranging from 0.46 m to 7.65 m. This is the same type of mineralization that was mined in the past at Elliot Lake. 12 Planning for Profits / Report on Mining | Fall 2008
The best assays from QPC were from hole P-07-04 that returned an intercept grading 0.036% U308 over a core length of 1.26 m including 0.08% U308 over 0.20 m; hole P-07-03 of 1.53 m -0.037% U308; hole P-07-05 of 0.53 m -0.092%; and hole P-07-07 of 1.40 m -0.04% U308. Aplite dikes and sills were often intersected near the unconformity. Some were mineralized with disseminated pyrite and they exhibited enhanced levels of radioactivity. Hole P-10 cut an aplite breccia dike that returned an intercept grading 0.04% U308 over 2.48 m, including an intersection of 0.17% U308 over 0.28 m. Some of the holes intersected a highly-altered and mineralized unsorted, heterolithic breccia at or near the unconformity between the Huronian sediments and the older Achaean basement. These rocks contained 1% to 75% disseminated pyrite, pyrrhotite and chalcopyrite and exhibited the highest levels of radioactivity of any rock units intersected to date. The most significant intersection occurred in hole P-07-02 where this unit was intersected over a core length of 15.96 m and 11.5 m. Holes PO07-01, P-07-06 and P-07-09 also cut similar altered and mineralized rocks exhibiting enhanced levels of radioactivity over core lengths of 8.75 m, 8.08 m and 19.81 m respectively. The intersection from these holes occurs near an east-west trending fault zone over a strike length of about 700 m, and the zone is open in both directions.
www.reportonmining.com
In January 2008, Montoro announced assays from the breccia unit as follows: hole P-07-01 (1.17 m -0.061% U308); Hole P-07-02 (6.04 m -0.034% U308 incl. 1.04 m -0.089%); and numerous others. An airborne VTEM electromagnetic survey was flown, with preliminary plots of this data revealing the existence of at least eight conductors in area underlain by Huronian sediments and suggesting that the conductors may be caused by features in the greenstone basement rocks. As a result of the Phase One drilling program and the airborne survey, Consulting Geologist Mr. D. Hawke, M.Sc. P.Geo., recommended an additional 30 holes (approx. 6,000 m) for a C$1 million drilling program that is mid-way to completion. Crackingstone and Orbit properties Uranium City, Saskatchewan From 1953-1982, 16 deposits were brought into production in the Uranium City mining district. In April 2006, Montoro and sister company Belmont Resources acquired the 750 ha Crackingstone River Property, 8 km southwest of Uranium City on the northwestern margin of the Athabasca Basin. In the fall of 2006, an additional 11,109 ha (named the Orbit Property) was staked to further cover the main Crackingstone fault and some northeast trending extensions. The Orbit claims adjoin a large claim block to the south owned by CanAlaska Uranium. Cameco Corp., the world’s largest uranium producer, holds a block of claims to the west of the Property. In September 2007, the Montoro/Belmont Joint Venture completed an extensive sampling and ground geophysical program on the Crackingstone and Orbit properties. Two hundred and ninety-nine channel and grab samples taken all contained uranium values. Two of the showings had spectrometer readings over 65,350 cps (beyond instrument limits). Some of the highest assays ranged from 0.12% to 1.24% U308. Thirty-four of the 290 samples assayed over 0.059% U308, 21 samples over 0.12% U308, and 5 samples over 0.59% U308 (see claim map top right). In October 2007, the joint venture completed a helicopter airborne magnetic and radiometric survey consisting of 1391 line km of 100-metre flight line spacing. The survey identified numerous NE-SW radiometric anomalies, one with a strike length of over 15 km, and four major uranium anomaly trends having linear strike distances of 1 to 4.5 km long. www.reportonmining.com
The radon gas survey conducted around the intersection point of the Crackingstone and Boom Lake Faults covered 4.65 km of grid lines at 50-metre sample intervals. The survey identified 10 areas of anomalous uranium mineralization in overburden areas. In April 2008 the company commenced drilling on an 1800-metre long conductor coincident with the NE Boom Lake Fault. Twenty drill holes completed, Phase 1 (3,075 metres), with hole depths ranging from 100m to 300m, assays results pending.
Management
Gary Musil, President/CFO/Director, has more than 30 years of management and financial consulting experience and has served as an officer and director at numerous public companies since 1988. Roger Agyagos, Secretary/Director since January 1998. Bruce Bried, Director, P.Eng. Brent Griffin, Director, BSc. Geo. n
International Montoro Resources Inc. #600 625 Howe St. Vancouver BC Canada V6C 2T6 Phone: 604.683.6648 IR Phone: 416.868.1079 x 229 Email: michael@chfir.com www.montororesources.com TSXV: IMT FF: O4T Fall 2008 | Planning for Profits / Report on Mining 13
Uranium
Standard logo device Red Rock Energy Inc.
Athabasca
TM
Red Rock Energy
R
ed Rock Energy Inc. is a uranium exploration and development company headquartered in Calgary, Alberta, with a field office in Uranium City, Saskatchewan. Red Rock is currently exploring for uranium in Northern Saskatchewan. Its claims are strategically located near Uranium City where previous mining has occurred. The largest producer in the area was Eldorado Mines, the predecessor to uranium giant Cameco. Starting in the early 1950s, the Uranium City district produced approximately 77 million pounds of uranium until1982 when production ceased due to low uranium prices. Red Rock’s management has a unique understanding of the history, geology and infrastructure of the Uranium City region: company President and CEO Sandy L. Loutitt was born there. With experienced Red Rock drill crews, new technology, core infrastructure already in place, plus past productive mining at the site, Uranium City hold much promise for new discovery.
Three campaigns conducted by Red Rock in 2007 focused on a previously under-tested area, including a TM locale known as the red fault radioactive zone. In phase one of the 2008 drill campaign, a discovery hole (08RB2-03) was drilled indicating a new uraniferous mineralized zone located about 600 m northeast of the former producing Lake Cinch Mine main shaft near Uranium City. This zone–dubbed the Fusion zone–is a new discovery not included in Red Rock’s estimates of historic uranium resources, nor has the zone been intersected by any known previous surface drilling. Chemical assays indicate two intersections of note; the primary intersection is on a key structural feature of the former TMLake Cinch Mine, described as the Main Ore Fault. Hole 08RB2 03 was drilled northerly with the intent to intersect both the Main Ore Fault and any easterly trending uraniferous splays off the Main Ore Fault. Both structure directions formed ore in the prior Lake Cinch mine.
Red Rock Energy
Red Rock Energy
For colour reproduction Pantone ® 1807 (red) and black Notice to designers and printers: graphic and logo type are not to be modified (electronically or otherwise) from what is shown here Fonts: Gill Sans Extra Bold and Gill Sans Bold 14 Planning for Profits / Report on Mining | Fall 2008
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Sample grades are highest near the Main Ore Fault: .079 % U308 across 14.5 m, including higher grade intercepts of .123% U308 across 7 m core length and .177% U308 across a 2.5 m core length. This intersection of the Fusion zone is approximately 225 m below surface. In addition, a separate intersection closer to surface representing a possible easterly trending cross fracture gave a grade of .067% across 4.0 m of core length. Two additional early holes have split core and Red Rock is awaiting results from chemical assaying. Partial results received to date are only from hole 08RB2-03. Red Rock intends to continue drilling on the Fusion zone to test it along the strike and dip of the Main Ore Fault, as the zone is currently open both laterally and up and down the dip of the fault. Historic operations in the Lake Cinch Mine typically mined ore widths of 0.61 to 1.8 m, utilizing a cut-off grade of .07% U308 , or approximately 1.4 pounds U308 per ton of rock. Red Rock’s main objectives are to: • Actively pursue other development opportunities building on the company’s technical and operating expertise. • Expand existing historical 1.8 million U308 resource through diamond drill exploration. • Drive towards sufficient tonnage to justify new production. Red Rock’s 2008 exploration program is drill testing known and inferred radioactive regions and structures. This drill testing is follow-up work from several years of geophysics. The site mapping and prospecting are based on a detailed compilation of historic information from former mine operators. www.reportonmining.com
The campaign started February 4, 2008, and continues 24 hours a day/7 days a week; it ends on December 15, 2008. Red Rock’s properties contain drill-ready targets to support a continuous drill program for the foreseeable future. Through the success of the completed drill campaign and resourceful management, Red Rock believes that Uranium City has the potential to be a thriving uranium district once again. n
Red Rock Energy Inc. #200 638 11th Ave SW Calgary, AB Canada T2R 0E2 Phone: 403.685.1047 FAX: 403.685.1047 ir@redrockenergy.ca www.redrockenergy.ca TSX-V: RRK Fall 2008 | Planning for Profits / Report on Mining 15
Uranium
Berkeley advances
its uranium exploration projects in Spain
with aggressive drilling campaign Exploration Manager Jim Royall explains how Berkeley Resources honed its expertise in pinpointing modern uranium targets in Spain
When When Berkeley Berkeley Resources Resources decided decided to to pursue pursue uranium uranium exploration exploration in in Spain Spain in in 2005, 2005, the the Australian Australian company company faced faced an an interesting interesting dilemma: dilemma: access access to to aa rich rich database database of of historical historical information information about about its its portfolio portfolio of of properties properties without without the the means means or or know-how know-how to to fully fully interpret interpret it. it. Berkeley Berkeley was was still still in in the the early early days days of of acquiring acquiring that that expertise expertise when whenititmade madeits itsfirst firstdiscovery, discovery,Santidad, Santidad,in inan anarea areauntouched untouched by by previous previous exploration. exploration. Using Using ground ground data data itit had had collected collected as as part part of of an an environmental environmental study, study, and and newly newly acquired acquired Geosoft Geosoft exploration exploration software software to to plot plot the the radiometric radiometric data, data, the the company company zeroed zeroed in in on on an an anomalous anomalous area. area. The The subsequent subsequent drilling drilling campaign campaign intersected intersected flat-lying flat-lying uranium uranium mineralization mineralization in in 14 14 drill drill holes holes over over aa strike strike length length of of 500m 500m and and aa width width of of approximately approximately 150m. 150m. To To date, date, Santidad Santidad has has been been drilled drilled with with close close to to 200 200 drill drill holes. holes. The The deposit deposit has has aa strike strike length length of of over over 1kmand 1kmand the the current current resource resource of of the the deposit deposit isis close close to to 44 million million pounds pounds of of contained contained U3O8. U3O8. Since Since that that first first discovery, discovery, Berkeley Berkeley has has continued continued to to steadily steadily climb climbthe thelearning learningcurve curveof ofacquiring acquiringknowledge knowledgeof ofthe theregion’s region’s uranium uranium geology geology and and mineralization. mineralization. And And itit has has invested invested in in the the technology technology and and expertise expertise required required to to harvest harvest the the opportunity opportunity buried buried within within its its substantial substantial historical historical database. database. Berkeley’s Berkeley’s geologists geologists are now able to select drill targets targets on on their their projects projects with with confidence. confidence. And And they they can can efficiently efficiently explore explore in in any any type type of of environment. environment. Whether Whether it’s it’s augmenting augmenting and and extracting extracting insight insight from from 50 50 year year old old data data in in an an office, office, or or developing developing opportunities opportunities in in the the field, field, as as with with Santidad. Santidad. “We “We started started from from nothing, nothing,”” says says Jim Jim Royall, Royall, Berkeley’s Berkeley’s exploration exploration manager manager for for the the Spanish Spanish projects. projects.“Now “Now we we believe believe 16 Planning for Profits / Report on Mining | Fall 2008
Berkeley Berkeley exploration exploration manager manager Jim Jim Royall Royall on on top top of of the the Arapiles Arapiles hills hills
we we can can go go into into any any project project in in Spain, Spain, drill drill it, it, and and come come up up with with aa valid valid interpretation interpretation for for what what we we get get out out of of the the hole. hole. That That isis what what sets sets us us ahead ahead of of any any competitor competitor that that might might appear appear in in Iberia. Iberia.”” As As aa result, result, the the company company isis now now firing firing on on all all cylinders cylinders at at aa time time when when worldwide worldwide uranium uranium demand demand far far exceeds exceeds supply supply from from mine mine production. production. An An aggressive aggressive drill drill campaign campaign using using two two reverse reverse circulation circulation rigs rigs and and at at least least one one diamond diamond rig rig isis underway, underway, new new discoveries discoveries are are being being made, made, and and aa recent recent scoping scoping study study has has confirmed confirmed the the potential potential for for an an economically economically viable viable mining mining operation operation at at Salamanca Salamanca I,I, the the company’s company’s flagship flagship project project in in the the historic historic uranium uranium mining mining district district of of west-central west-central Spain. Spain. And And because because Berkeley’s Berkeley’s 450,000 450,000 hectares hectares of of landholdings landholdings represent represent the the entire entire exploration exploration spectrum, spectrum, from from grassroots grassroots prospects prospects to to those those approaching approaching the the feasibility feasibility stage, stage, the the company company can can move move several several projects projects along along the the pipeline pipeline at at once. once. The The large large historical historical database database has has required required Berkeley Berkeley to to finely finely tune tune its its processing processing and and interpretation interpretation techniques. techniques. The The mountain mountain of of data data had had built built up up over over decades decades of of uranium uranium prospecting prospecting in in the the Iberian Iberian Peninsula Peninsula -- some some of of itit half half aa century century old old –– and and Berkeley Berkeley has has applied applied considerable considerableexpertise expertiseand andtechnology technologyto totransform transform itit into into aa useful useful guide guide for for modern modern exploration. exploration. The The available available data data isis so so extensive extensive because because Berkley’s Berkley’s projects, projects, which which cover cover the the main main uranium uranium mining mining and and exploration exploration areas areas in in Spain, Spain, have have all all been been investigated investigated by by reputable reputable explorers explorers in in the the past, past, including including Areva Areva NC NC and and ENUSA, ENUSA, the the Spanish Spanish national national uranium uranium company. company. But But most most of of that that exploration exploration was was completed completed at at least least 20 20 years years ago ago and very little of of the the information information was was in in digital digital format. format. www.reportonmining.com www.reportonmining.com www.reportonmining.com
“There were massive amounts of data available,” says Mr. Royall, “We didn’t really understand what the data was telling us, so we’ve had to develop techniques to quickly process and validate existing data and then expand on it.” This has meant growing its investment in Geosoft software, to equip its geologists with a common toolset for efficiently visualizing their drill project data. Uranium exploration requires a lot of drilling to find and outline deposits and Geosoft’s exploration geology software, Target, was able to process years of drill logs and turn them into 3-D sections that gave Berkeley a visual rendering of the geology and structure of the deposits they were investigating. “One of the key issues with the Iberian deposits is their variability,” explains Mr. Royall. “They have a big footprint, and the ability to view data in the third dimension has been critical in some areas.” Having the technology to handle the massive amount of data has freed the team up to focus on building its geological models. And Berkeley is working with some of the best Universities in Spain and international consultants to develop new genetic models for the Iberian deposits.
Berkeley technical director Dr Jim Ross oversees logging.
“We don’t have to jump across a spectrum of packages, because we’re able to do all of our exploration work within Geosoft” says Mr. Royall, “and we’ve found there’s good compatibility with the other programs we use for our resource modeling and GIS work.” Since the company launched its exploration program in Spain, the team has grown from a handful of consultants to 25 full-time employees and 13 national and international consultants. With that rate of growth, extensive training in technology becomes a challenge. The ease with which its young team of geologists have been able to adopt its exploration software has meant the company could rapidly develop its human resources without slowing down its fast paced exploration. “We give the Geosoft package to all of our geologists,” says Mr. Royall, “and with minimal training they can produce their own cross-sections, maps and plans for their own specific needs.”
It’s also helping on a day to day basis. A lot of data is collected in the course of developing a uranium project, and Target is helping to make sense of not only historical data, but the constant stream of new data coming in from airborne radiometric and magnetic surveys, ground scintillometer work, and finally, boreholes. For each hole it drills, Berkeley collects lithological, structural, and geotechnical information as well as down-the-hole scintillometer readings that can determine if the subsurface is radioactive or not.
The company drilled its first hole in December 2006 and by December 2007 it had completed over 15,000m of combined RC and diamond drilling. Only mid-way through 2008 it has already drilled as much. “Our drilling program produces a massive volume of data that requires processing,” says Mr. Royall “and Geosoft provides the tools to do this efficiently and quickly. It’s enabled our exploration teams to spend less time processing data and more of their time interpreting it to build our understanding.”
Being able to fully develop its projects within one environment has been key to keeping this painstaking process efficient.
Berkeley Resources Ltd. Head office: Level 9, BGC Centre 28 The Esplanade Perth WA 6000 Tel: +61 8 9322 6322 Fax: +61 8 9322 6558 Email info@berkeleyresources.com.au www.berkeleyresources.com.au
Three dimensional voxel of the Santidad Ore body created in Geosoft Target. www.reportonmining.com www.reportonmining.com
For more information on Geosoft software & solutions referenced in this article, go to www.geosoft.com/start-exploring or email your inquiry to explore@geosoft.com. Berkeley in Spain Fall 2008 |Advances Planning Its forUranium Profits /Projects Report on Mining 17
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Uranium 20 Planning for Profits / Report on Mining | Fall 2008
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Fall 2008 | Planning for Profits / Report on Mining 21
Silver Mexico
Breathing New Life into Old Mines
W
hich sounds like a better bet to you: a grassroots exploration play starting from scratch or a historical mine site that can be explored using modern techniques and benefit from existing infrastructure? Silver Shield Resources prefers the latter, to save money and time as it aims to advance projects into producing mines. Silver Shield is a mineral exploration and development company with a clear mandate to acquire and develop quality silver projects in politically stable environments and turn them into producing properties. By identifying more advanced-stage properties with old mine workings (e.g. adits, shafts) that can be renovated, Silver Shield will leverage the mines’ assets, which preferably will include historical databases for reference, and apply technology and expertise to aggressively define high priority drill targets in order to advance new exploration on the property. The company currently has properties in Mexico, the world’s second largest silver producing nation, and Northern Ontario. Silver Shield’s Mexican flagship property is its wholly-owned La Cumbre project in Guerrero State, approximately 100 km east of Goldcorp’s Los Filos mine. Initial work at La Cumbre revealed positive potential for silver, gold and copper. The company has completed a Phase I diamond drill program: 17 holes were drilled for a total depth of 2,500 m. Results include intersections of 308.28 g/t silver over 3.8 m, and 2,159.15 g/t silver, with 28.44 g/t of gold over 0.55 m. The positive results here spurred Silver Shield to greatly expand its landholdings at La Cumbre, where it also constructed a base camp (office, kitchen, and sleeping quarters for company and contractor personnel) that demonstrates the company’s commitment to the area. 22 Planning for Profits / Report on Mining | Fall 2008
Typical of other Mexican deposits in style and setting, La Cumbre is a fault-hosted epithermal vein system within a sequence of flat-lying mafic volcanic flows and breccias, along with interbedded conglomeratic sediments. The high grade zone with veining in mineable widths is open in all directions: to the east and west, and at depth. Drill results thus far have confirmed management’s original theory that the mineralization is the top part of an epithermal system. These styles of mineralization typically extend to a 600-metre depth in Mexico, and can have extended lengths and multiple veining systems. Management is particularly excited about the prospects of its latest property, the La Florida, which is located east of La Cumbre and has a land mass totaling 3,000 ha. La Florida is a highly prospective silvercopper play that has not had any modern exploration or drilling. Silver Shield rediscovered two historic mines with adits and shafts on the property. Malachite staining was very evident on the walls of the adit, and highly-oxidized mineralization in ore piles found nearby consists of pyrite, galena, sphalerite, and chalcopyrite within a silicified quartz veining system. Silver Shield plans to review all historical data and analyze part workings before completing line cutting, mapping and sampling in anticipation of a fall diamond drill program. Company management has the necessary skills to lead a successful mining exploration company. President Tim Towers is an accountant and former president of Conquest Yellowknife Resources. His mining experience in Northern Ontario, combined with an accountant’s conservative financial mind, serves Silver Shield well. www.reportonmining.com
Stephen Mlot, vice president of mining engineering and a company director, is a career mining engineer with experience at a number of public exploration companies, including Terra Mining (Silverbear Mine), Noramco Mining, Carlisle Goldfields, Patricia Mining Corp, Claim Lake Resources, and Clarion Mining. Mr. Mlot is also NI 43-101-qualified. Ray Lashbrook, vice president of exploration and a company director, is a career geologist with 39 years experience in mineral exploration– four years in Mexico and 35 years in northern Ontario. Mr. Lashbrook, who has established a friendly presence in Mexico and built beneficial relationships with many prospectors and landowners there, brought La Cumbre to Silver Shield’s attention in 2006, and through his endeavours, the company acquired La Florida after Silver Shield field staff brought it to his attention. Geologist Peter Hawley, founder and executive chairman and CEO of Scorpio Mining, is a company director. Mr. Hawley has worked in grassroots mining exploration projects, seeing them from development through to production, and in silver deposits development in Mexico, such as Scorpio’s Nuestra Senora Project, which began production this year. Mr. Hawley has also worked for Placer Dome, Teck Corp and Barrick Gold Corp. Mr. Mlot’s expertise lies in guiding a practical exploration plan geared to facilitating future production, while Mr. Hawley provides a wider perspective and Mr. Towers keeps a close watch on the coffers. Together, Silver Shield’s management brings a committed and focused approach to the development of silver resources production and, in particular, breathing new life into old mines and expanding the historic sites at La Cumbre and La Florida. n
Silver Shield Resources Corp. c/o CHF Investor Relations #600 90 Adelaide St. W. Toronto, ON Canada M5H 3V9 Phone: 416.868.1079 ext. 239 lindsay@chfir.com www.silvershieldresources.com TSXV: SSR
www.reportonmining.com
Fall 2008 | Planning for Profits / Report on Mining 23
Silver + Gold Mexico
SILVER EAGLE MINES Silver Eagle Mines Continues to Move Forward
T
SX-listed Silver Eagle Mines is in a fortunate position for a junior miner. With a mine ramping up to production, the company is able to generate cash resources through its milling operations to support additional exploration of identified targets on the 41,000 hectares of land it owns in Mexico’s precious metals belt. A string of positive news releases over the past three months has added to the confidence that the company’s employees, including President and CEO Terry Byberg, have in its continued growth. In June 2008, Silver Eagle announced the results of a pre-feasibility study, including increased resources and reserves, at its Miguel Auza property in Zacatecas, Mexico. The updated estimate, resulting from an intensive diamond-drilling campaign, added 2.1 million oz Ag Eq1 to the Indicated Resource to total 23.2 million oz Ag Eq, and added 2.5 million oz Ag Eq to the Inferred Resource to total 11.6 million oz Ag Eq. Included in the Indicated Resources is a probable reserve of two million tonnes containing 20.3 million oz of Ag Eq. “Resources are the heart of this operation,” Mr. Byberg says, “and we have to continue to find new deposits to grow going forward.” The results of the pre-feasibility study are very encouraging. Even with the mill’s production rate projected to increase from 150 to 600 tonnes per day by Q4 2008, and to 850 t/d by the end of 2009, the mine is expected to last 7½ years and the veins remain open ended both on strike and to depth. “The importance of the milling operation,” Mr. Byberg says, “is that it generates the money we need to fund additional exploration operations.” 24 Planning for Profits / Report on Mining | Fall 2008
Shortly after the release of the pre-feasibility results, Silver Eagle released results from diamond drill holes 2008-189 and 2008-194 in the North Zone. These holes intersected veins 0.4 and 0.5 m in width, assaying 2,463 g/t Ag and 3,291 g/t Ag respectively. “The advantage of higher grades,” Mr. Byberg explains, “is increased efficiency. By processing the same tonnage of rock, a higher grade yields more silver, which leads to greater revenues and profits per tonne; ounces pay the bills.” A strong corporate culture and the intentional decision to focus on quality production before expansion are two of the biggest contributors to Silver Eagle’s success. Silver Eagle takes corporate culture very seriously and has actively built its management team around three core tenets: depth, experience and character. Adolfo Vera joined the company in January 2008 as Executive Vice President and CFO, and brings experience at previous senior management positions, including Managing Director of BNP Paribas (Peru and Andean region) and CFO and CIO of Volcan Compañía Minera S.A.A., a major publicly-traded mining company in Peru. Mr. Vera shares the conviction held by company management and the board of directors that the path to success is through production: “We’re a productionoriented company from top to bottom,” he says. “Everyone here believes we should be generating cash by producing real silver output from our reserves. For shareholders, this means we can fund exploration efforts without going back to the market for additional funds, which would dilute ownership.” www.reportonmining.com
What’s next for Silver Eagle? Mr. Byberg looks to the company’s recently rewritten vision statement for the answer: To be the most efficient and respected international mid-tier mining company, as valued by our employees, our shareholders and the local communities in which we operate. “It’s ambitious,” he says, “but we wanted something that we could always be striving for from one year to the next.” To see the vision in action, Mr. Byberg describes a plan to grow through further development of the current veins and by identifying new targets elsewhere on the company-owned property. Since infrastructure and exploration equipment are already in place, nearby targets can be developed much more efficiently than further targets. Many company decisions are guided by efficiency. For example, the company decided to purchase its own drills, rather than continue to lease them from third parties, to reduce drilling costs while increasing drill availability. Although nearby targets are more efficient in the immediate future, Silver Eagle does not consider itself confined to growth within the Miguel Auza mine. Mr. Byberg expects that in the near future exploration will take them into other identified targets, such as Loma Las Minas, Mesa El Cobre and Cerro San Bartolo. Other opportunities, such as mergers and acquisitions, have also been tabled as possible future moves by the company. Which companies would make attractive M&A targets? Mr. Byberg doesn’t hesitate: “Near-term producers are the ideal target. We can use our production knowledge to turn these resources into cash to benefit the company and its shareholders.” www.reportonmining.com
Success through production is echoed consistently throughout Silver Eagle’s mineshafts and inside of its corporate boardrooms. Seeing where this strategy has brought this junior miner–growing resources, anticipated increases in production, high grade exploration results–it’s easy to understand why the investment community is watching the company as it continues to move forward with success. n
Silver Eagle Mines 10th Floor, 360 Bay St. Toronto, ON Canada M5H 2V6 Phone: 416.361.1101 info@silvereaglemines.com www.silvereaglemines.com TSX: SEG
Quality Assurance
The pre-feasibility study was prepared by Silver Eagle Mines and audited and approved by Wayne Valliant, P.Geo., Kevin Scott, P.Eng. and James Pearson, P.Eng. of Scott Wilson Roscoe Postle Associates Inc. 1. Indicated resources are inclusive of Mineral Reserves a) CIM definitions were followed for mineral resources. b) Indicated mineral resources were estimated using a minimum net smelter return of US$ 40, based on metal prices, plant recoveries and smelter terms as per notes e and f. c) Inferred mineral resources were estimated using a minimum net smelter return of US$ 25, based on metal prices, plant recoveries and smelter terms as per notes e and f. d) A minimum mining width of 1.0 m was used. e) Equivalent Ag grades and contained ounces were estimated based on the following metal prices: US$ 600/oz gold, US$ 11/oz silver, US$ 0.65/lb lead and US$ 1.00/lb zinc. f) Equivalent Ag grades and contained ounces were estimated based on gold, silver, lead and zinc plant recoveries as per the most recent metallurgical test work, and on 2007 smelter terms. g) Mineral resources that are not mineral reserves do not have demonstrated economic viability
Fall 2008 | Planning for Profits / Report on Mining 25
Gold
www.pcgold.ca An outstanding exploration play with high discovery and expansion potential
N
ewly-listed PC Gold Inc. was established in October 2007 to consolidate leasehold ownership interests in, and to explore and develop the past-producing high grade Pickle Crow underground gold mine in mining-friendly northwestern Ontario, Canada. The company now owns 100% of the Pickle Crow mining lease, together with surface infrastructure including a modern mill, stockpiles, equipment and tailings. PC Gold officers and directors have extensive experience in the natural resource sector. PC Gold provides an excellent opportunity for investors who subscribe to the adage that the best place to find a new mine is on the site of an old one. The Pickle Crow Mine was well known in its heyday as a long-life and high-grade consistently profitable operation, producing in total 1.45 million Troy ounces of gold at an average recovered grade of 16.14 g/t (0.47 oz/T) between 1935 and 1966. When it closed in 1966, gold was trading at just $35 per ounce, productive high grade veins remained open to depth, and zones of iron formation-hosted gold mineralization sat largely untouched within the workings. PC Gold President & CEO Kevin Keough believes the property has exciting exploration potential: “We have begun a major multi-year exploration program that is expected to encompass some 45,000 metres of diamond drilling per year of combined shallow, intermediate and deep exploration with three rigs.�
26 Planning for Profits / Report on Mining | Fall 2008
An important focus of the company’s exploration drilling program will be to define and possibly expand the mineralized envelopes encompassing the known zones of iron formation-hosted gold, as the historical drilling record indicates they can carry strong values over significant intervals. Historical drill intercepts of 3.4 g/t over 12.19 m and 4.1 g/t over 9.60 m were common, but intervals of up to 10.6 g/t over 34.29 m and 16.1 g/t over 10.66 m were also intersected (widths cited are not true widths; true widths are unknown).
www.reportonmining.com
Drilling will also test veins known to remain Toronto Stock Exchange : PKL www.pcgold.ca in place, including the near-surface No. 13 vein where historical drill intersections included values ranging from 7.35 g/t over 1.30 m to 38.55 g/t over 2.30 m and 149.98 g/t over 1.05 m (true Focused gold junior positioned as exploration with high discovery and expansion potential widths unknown). Extensions to these known iron Single excellent asset: past producing high grade Pickle Crow gold mine in politically stable Ontario formation-hosted gold zones and gold-bearing Pickle Crow Mine was a long life (31 years), high grade, consistent money maker veins, as well as new discoveries, will also be Produced 1.45 million ounces Au @ avg. 16.14virgin g/t (0.47 oz/T) - from veins only sought in the ground beneath the old mine Closed (1966) with gold at just $35/oz, mineralization in place, productive high where the system lies open to depth. n grade veins open, and zones of largely untouched iron formation hosted gold within the workings, also open
Plan: to define and expand known gold zones within the old workings and seek extensions to those zones, and new discoveries, in virgin ground beneath the old mine, where the system lies open Objective: 45,000 metres drilling per year of shallow, intermediate and deep exploration with 3 rigs
# 304, Tower A,
PC Gold Vision: defineInc. sufficient mineralization from surface to 2km+ depth, within ~500m radius of No. 1 shaft, to possibly allow for modern high capacity extraction and processing similar to that employed 555 Legget Dr. at Goldcorp’s 4,000 tpd / ~225,000 oz. per year Musselwhite Mine in similar geology further north
Kanata, ON, Canada K2K 2X3 Phone: 613.271.2105
www.pcgold.ca
kevin.keough@pcgold.ca
www.pcgold.ca TSX : PKL
www.reportonmining.com
Fall 2008 | Planning for Profits / Report on Mining 27
Gold
Seeks high-grade in Brazil
C
olossus Minerals Inc. is an emerging exploration and development company, headquartered in Toronto, Canada, dedicated to high-grade gold and platinum group metal projects in Brazil. With three projects, each offering promising potential, Colossus aims to become a leader in the Brazilian mining sector. Colossus CEO Ari Sussman says that “the solid relationships we have established over the years with garimpeiro groups [artisanal miners], local technical professionals and companies in Brazil have helped us gain a formidable advantage over our competitors.”
Current Projects Flagship Project–Serra Pelada Discovered in 1979, Serra Pelada was the site of the largest ever precious metals rush in Latin America. During the 1980s, nearly 70,000 garimpeiros produced an estimated two million ounces of high-grade gold, plus platinum and palladium, from a 400 m x 300 m x 110 m open pit. Garimpeiro production declined due to pit wall collapse and flooding that caused the cessation of bedrock mining close to 20 years ago. 28 Planning for Profits / Report on Mining | Fall 2008
Historical drill results by Vale include 43 m @ 3465 grams per ton (g/t) gold 189 g/t platinum and 1088 g/t palladium. Serra Pelada is situated in the mineral-prolific Carajas Province near the towns of Curionopolis and Parauapebas in northern Brazil. Access and infrastructure are excellent. In July 2007 Colossus and Coomigasp formed a partnership to develop the remaining bedrock mineralization at Serra Pelada. Under the terms of this joint venture, Colossus will manage and operate the project, earning up to 75% interest by funding exploration and paying Coomigasp a premium for the gold reserve established by the joint venture. To date, Colossus has completed an approximate 5000-metre Phase I drilling program, and is due to commence a Phase II 5000-metre drilling program in October 2008. Phase I Drill results include: • Hole 1: 88.00 m at 5.80 g/t gold, 6.11 g/t platinum and 6.83 g/t palladium • Hole 2: 46.72 m @ 24.11 g/t gold, 9.04 g/t platinum and 11.57 g/t palladium, and 14.65 m @ 22.51 g/t gold, 4.56 g/t platinum and 5.01 g/t palladium. Other drill results can be found at www.colossusminerals.com. www.reportonmining.com
Colossus President Vic Wall explains that Colossus’ drilling at Serra Pelada continues to realize the potential of this extraordinary noble metal deposit. “The assay results of our drill holes,” he says, “demonstrate the continuity of high value goldplatinum-palladium mineralization through large vertical intervals, and more than 100 m of strike length of our main target zone well south of the historic Serra Pelada open pit. The apparent persistence of high grade PGE subzones is particularly encouraging.” Natividade Natividade is a high-grade vein gold project located in Tocantins State, Brazil. The project area comprises two contiguous exploration licenses aggregating 10,000 hectares. Access and infrastructure are both excellent. Project operator Colossus is earning a 70% interest in the Natividade project. This agreement involves Colossus making staged option payments of US$1.5 million and exploration expenditures of US$2 million over three years. Colossus recently completed a scout drilling program, with results that include the following intersections within 30 metres of surface: • Hole 17: 2 @ 34.91 g/t gold • Hole 24: 19 m @ 7.72 g/t gold, including 8 m @ 16.05 g/t gold; hole terminated in mineralization. • Hole 39: 9 m @ 1.04 g/t gold; hole terminated in mineralization. Sumidouro The Sumidouro gold project, a medium-stage exploration play, is located in an area of excellent infrastructure in the prolific Quadrilatero Ferrifero, Minas Gerais state, historically and currently Brazil’s major gold producing region. Comprising 10 contiguous exploration licenses aggregating 6420 hectares, Sumidouro is centred on the historic gold mining village of Padre Viegas, near Marianna and Ouro Preto. www.reportonmining.com
Colossus is currently prioritizing drill targets, and a drilling program is scheduled to commence in 2009. The company can earn a 70% interest in the property by spending $1.25 million in exploration and development over a three-year period and completing a bankable feasibility study. With a team that has world-class geoscientific expertise and stellar business acumen to lead a growing list of high-grade projects, Colossus Minerals Inc. is poised to become a strong contender among today’s juniors. And with drilling programs set to commence on its Serra Pelada and Natividade projects, Colossus Minerals’ investors have much to be excited about. n
Colossus Minerals Inc. # 2500, 130 King St. W. Toronto ON Canada M5X 1A9 Phone: 416.643.7638 info@colossusminerals.com www.colossusminerals.com TSX: CSI Fall 2008 | Planning for Profits / Report on Mining 29
Molybdenum
PACIFIC COMOX RESOURCES LTD.
P
acific Comox is focused on the exploration of the Ryan Lake copper-molybdenum claims at Matachewan, Ontario, 60 kilometres west of Kirkland Lake, and its Mabel gold-silver property 40 km south of the Arizona-Sonora border in Mexico. At Ryan Lake, Comox’s drilling has outlined the South, North & CLT mineralized zones to the west of the mill buildings and Highway 566.
30 Planning for Profits / Report on Mining | Fall 2008
The 5.9 million tonne resource estimate (NI 43101 compliant) for the South Zone indicated resource grading 0.34% Cu, 0.039% Mo, 0.09g/tonne Au, and 5.0g/tonne Ag, was recently reported. The resource estimate for the North and CLT Zones on a NI 43-101 basis is underway. The 30 holes in the North Zone and six holes in the CLT Zone are all mineralized. In the North Zone, 22 of the 30 holes reported intervals grading an average of 0.12% Mo over an average core length of 36 m starting at an average of 8 m in the core. The mineralization in the three deposits is open in all directions and to depth. Surface showings between the three zones suggest the potential for additional mineralized zones on this trend. Comox has options on a large block of claims that extends about 3 km west, north and east of the Ryan Lake claims where most of the drilling has been completed. The resource estimate was completed on the South Zone. A number of copper-molybdenum showings on the optioned claims will be tested in the current exploration programs. More than 500 relatively short and closely-spaced RC holes have been completed on the Mabel property in Mexico. A resource estimate is underway and metallurgical tests are also being conducted to test the recoveries of the gold and silver with cyanide under normal process conditions. In addition to the results for the Carmelitas area (see below), several other areas that have yielded results warrant further drilling. Results in the property’s Ridge & Micho Zones indicate the possibility of a substantial tonnage of gold, silver and copper mineralization.
www.reportonmining.com
Work to date in the Carmelitas and Gate areas of Comox’s Mabel property indicates the potential for two million tonnes of or at near surface drill intersected mineralization grading in the order of 1.5 g/tonne gold and 64 g/tonne silver. In the Gate North Area, 11 holes returned mineralization averaging 1.6 g/tonne gold, and 78 g/ tonne silver over average intersections of 5 m, starting 6 m from surface. In the Gate South Area, 8 widely spaced mineralized holes averaged 0.5 g/tonne gold and 35 g/tonne silver over average intersections of 3 m, starting 0.5 m from surface. The Micho Zone encompasses an area about 900m east-west and 900 m north-south. Results of 10 RC holes and 9 chip samples 3 m long have yielded encouraging results indicating numerous mineralized outcrops with a significant copper content. The 9 widely-spaced chip samples reported 4.6 g/ tonne gold, 192 g/tonne silver, and 0.43% copper. Hole 62 intersected from 0 to 6 m, 1.5 g/tonne gold, and 51 g/tonne silver, followed by 6 to 29 m of 1.1% copper and 10 g/tonne silver. www.reportonmining.com
In addition to Mabel, Comox owns the Famosa goldsilver property in northern Sonora, which is located between two former producers; preliminary work indicates that further work is warranted. The existing infrastructure of road access, mill buildings, and equipment will be a key advantage in the project’s development. Comox’s near-term target is to assess the economic potential of production utilizing the existing mill facilities and other infrastructure. Initial production of 500 tonnes per day, increasing to 2,000 tonnes per day, is envisioned and will be reviewed in a pre-feasibility study. n
Pacific Comox Resources Ltd. #2300, Box 13 One Dundas St. W. Toronto, ON Canada M5G 1Z3 Phone: 416.977.4653 info@pacificcomox.com www.pacificcomox.com TSX.V: PCM Fall 2008 | Planning for Profits / Report on Mining 31
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