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northern P ROSPEC T OR e annual mining & exploration review 2013- 2014 An official publication of the Manitoba-Saskatchewan Prospectors and Developers Association Publications mail agreement #40934510 Kate Rice: Canada’s first female prospector gets inducted into the Canadian Mining Hall of Fame.

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The official publication of the Manitoba-Saskatchewan Prospectors and Developers Association.

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  • northernProsPectorThe annual mining & exploration review

    2013- 2014

    An official publication of the Manitoba-Saskatchewan Prospectors and Developers Association

    Pub

    licat

    ions

    mai

    l agr

    eem

    ent #

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    Kate Rice: Canadas first female prospector gets inducted into the Canadian Mining Hall of Fame.

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  • 2013-2014 Northern Prospector 7

    table ofContentsPresidents Message 8

    Manitoba Exploration and Development Highlights 16

    Saskatchewan 2013 Exploration and Development Highlights 26

    Saskatchewan Mining Association Potash and Beyond 40Manitoba Rocks! Log on to Rock 44Tribute To Jim Hawes A Life of Movement Remembering Jim Hawes 46Profile: Kate Rice Swings On Her Own Gate 48PDAC 2013 Where the Worlds Mineral Industry Meets 56Mining Over Regulation Playing by the Rules 60Moving With The Times Potash mining has become a high-tech busines 64Possible Production Saskatchewan pushing ahead in oil sands development 68Moving Forward La Ronge Gold Belt region continues to expand 70Twinkle Of Hope Shore Gold continuing aggressive efforts to advance Fort a la Corne Diamond Project 72Looking Ahead Snow Lake region 74Port of Churchill Updated and Upgraded Reinvestment in the Port 76Copper Reef Focusing On Gold And Base Metals 78

    Continuing to Strengthen and Grow Potash Corporation of Saskatchewan Inc. 82High-Grade Teamwork Manitobas new copper mine 84Looking to Partner The Garner Lake projec 86Basin Benefits Skyharbour Resources 88Mining Essentials Creating mutually beneficial training partnerships 90Corporate Social Responsibility Are miners fulfilling their obligations? 92Low Flow Mitigating risk 94Customer Driven Innovation Tracks & Wheels Equipment Brokers Inc. 96Hitting The Off-Road Setting the standard for off-road exploration drilling 102The Right Deal Winacott Equipment Group 106Building and Rebuilding BPT Components & Parts Inc. 110

    Top Five Britespan Building Systems 113From Mars To Earth Modern day instruments 115Know Your Boundaries Learning the law of trespass 118EPCM or E-P-CM? Strategies for optimizing project execution 120New Method Technological advances key to discovery 124TNR Industrial Doors Inc. Brings the Canadian touch to the international market 126Building Strong Value Legacy Building Solutions 127Going The Distance Pronto Airways 130Think Differently MineSense 132Service Stop Scotts General Store 134Working Harder Vermeer 135Tools Of The Trade Atlas Copco 136Customer-Driven Innovation Brookville Equipment Corporation 138Putting Down Roots Di-Corp 141What An Honour Fortis 142Best In The West Westburne Electric Supply 143The Amazing Eye Needs Protection Saskatchewan Association of Optometrists 144Enhancing Mine Safety With Load Cells Massload 146Unearthing The North On Wings Calm Air 148Up-Lifting PKS Lifts 150Coreboxes, Core Racks, and Customer Service Tigerdale Enterprises Ltd 152All In The Family Argo 154Location, Location, Location JENNMAR Canada 156Whipped Into Shape Safety Whips 158Getting Started NRB 159Perfect Tool RAMROD Equipment 162Change Is In The Air Venture Capital Markets Association 164

    The Annual Mining & Exploration Review

    Northern Prospector is published by DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba, Canada R3L 0G5 www.delcommunications.com

    President & CEO DAVID LANGSTAFF

    Publisher JASON STEFANIK

    Managing Editor CARLY PETERS [email protected]

    Advertising Sales Manager DAYNA OULION

    Advertising Account Manager ROSS JAMES [email protected]

    Production services provided by: S.G. BENNETT MARKETING SERVICES www.sgbennett.com

    Art Director / Design KATHY CABLE

    Advertising Art CAITLYN HAIER DANA JENSEN Copyright 2013. Northern Prospector.

    All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

    The Manitoba-Saskatchewan Prospectors and Devel opers Association, as a body of members, is not responsible for statements made or the opinions offered in the publication. While every effort has been made to ensure the accuracy of the information contained, and the reliability of the source, neither the publisher nor the association in any way guarantees nor warrants the information, and are not responsible for errors, omissions or forward-looking statements made by advertisers.

    Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher or the association, or the irrespective directors, officers or employees. Articles and advertisements in this publication are not solicitations to buy, hold or sell specific securities; they are for information purposes only. Investors should be aware that risk is associated with any security, strategy or investment, and are advised to seek the counsel of a competent investment advisor before making any investment, or utilizing any information contained in this publication.

    Subscription, advertising and circulation can be obtained from the publisher.

    Publications mail agreement #40934510 Return undeliverable Canadian addresses to: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, MB R3L 0G5 Email: [email protected]

    PRINTED IN CANADA 10/2013

    DELCommunications Inc.

  • 2013-2014 Northern Prospector8

    PRESIDENTS MESSAGE

    Well, what a year this has been. Last year I reported a falloff in exploration by Junior companies across the country as risk capital became harder to raise, only to see further deterioration in exploration in the Junior sector but with a few notable exceptions. This downward trend does not appear to be reversing any time soon and could be with us for another 12 to 18 months or perhaps even longer. The small reversal we saw at the end of June 2013 was not sustained and we dipped further; it was not the bottom.

    Globally, Funds for Junior Exploration are almost Nonexistent: the Big Whammy

    Many Junior exploration companies are no longer active and are merely treading water. Most of those that are active have a much reduced exploration program. The capital crisis has worsened as the cash held by Juniors is further reduced and not replaced. Investment capital has gone into the best advanced exploration projects, producers, banks, and high value stocks but no grass roots exploration. The baby boomers are tired of having sleepless nights over exploration companies and watch-ing their investments and retirement capital go to pennies and then rolled back further, often 10 to 1 or 20 to 1, just so the company can raise money to survive. The 30 to 50 year olds are now into tech stocks or into the safer stocks. Risk capital has all but disappeared. The flow-through funds, intended to stimulate Juniors dependent on risk capital by sheltering inves-tor income from taxes, have all but dried up.

    Available risk capital is being placed into the top 20 per cent of Junior exploration companies, leaving the rest to carry out meager private placements, or get delisted, or go bankrupt. Ge-ologist and technical staff are being laid off and many will not return. Many major drilling companies are struggling at a re-duced rate trying to hold on to key employees. Smaller drilling companies are drilling below costs just to keep their creditors at bay with many of the owners actually doing the drilling to reduce overhead.

    Junior companies are sharing office space with a common secretary or have their officers working out of their homes. Company files are packed away in officers basements as, for some, offices become an unaffordable overhead. Junior com-

    panies have laid off staff so that if an officer is not there, the phone is not answered or you reach an answering service. It has not been this bad in 40 years. Everything from analytical labs, geophysics contractors, drill companies, rental agencies, air transport, logistic services, etc. have all seen drastic reduc-tions to their bottom line.

    The Elephant in the RoomThe elephant in the room is that there were just too many

    Juniors anyway and a culling was necessary. Well, even if this was true in part, the monumental collapse of the Junior sector has gone way beyond a healthy weeding out of those weakened by poor management or bad projects. Many good companies with good management are trading at 1 to 3 cents which makes raising survival or exploration funds extremely dilutive to the original shareholders and there appears no easy alternative.

    It is predicted that 400 to 500 exploration companies will hit the wall and disappear off the TSX Venture Exchange by the first half of 2014. From data gathered by Gamah International, the number of Junior company financings has fallen by 25 per cent since 2012 and the value of the financings carried out has fallen by 60 per cent. As of June 30th some 340 companies have less than $50,000 in their treasuries which is not sustainable and over 50 per cent of the TSX-V exploration companies were trading below five cents.

    Come March, when the unpaid auditors of many Juniors re-quire that last years audit to be paid for in advance of under-taking a new audit; the result will be delistings. This will have a devastating effect on the amount of exploration carried out in Canada and it may not fully recover. It will further weaken and destroy investor confidence in exploration risk capital because not only have investors seen their Junior exploration portfolios reduced to pennies per share but some shares will be wallpaper if the company goes defunct or is delisted. Should this happen, and it seems likely that it will, many are predicting that this appetite for risk capital will never recover to the levels we have enjoyed in the past 20 years. Many in the retired and aging baby boomer population of investors are left with a bad taste in their mouth from where their money went and will not want to re-turn to this type of risk.

    JUNIOR ExPLORATION INCRITICAL CONDITION:Buzzards CirclingThe Perfect Storm

    COPPER REEF HAS OUTLINED at least 15 new base metal targets from the new high powered VTEM Airborne System on its large landholdings in the Flin Flon Snow Lake Belt. The electromagnetic airborne system outlines at a number of new targets as well enhances some older targets which previously did not seem attractive. Some of these targets are associated with known Copper-Zinc Mineralization. Copper Reef will prioritize these targets and drill the best of these this coming winter. Shown on this page separately are selected anomalies from the east half of Alberts Big Island survey.

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    FLIN FLON REGIONAL PROPERTY MAP

    By Stephen Masson

  • COPPER REEF HAS OUTLINED at least 15 new base metal targets from the new high powered VTEM Airborne System on its large landholdings in the Flin Flon Snow Lake Belt. The electromagnetic airborne system outlines at a number of new targets as well enhances some older targets which previously did not seem attractive. Some of these targets are associated with known Copper-Zinc Mineralization. Copper Reef will prioritize these targets and drill the best of these this coming winter. Shown on this page separately are selected anomalies from the east half of Alberts Big Island survey.

    320000 340000 360000 380000 400000 420000

    60

    4000

    0 60

    7000

    0

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    4000

    0 60

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    Aimee Lake Anomaly VTEM Anomalies / Alberts Lake

    P.O. Box 306, 6 Mitchell Road Flin Flon, Manitoba R8N 1N1 Fax: 204.687.4762 [email protected]

    COPPER REEF DEVELOPS NEW BASE METAL TARGETS FROM AIRBORNE SURVEYS

    Call us today at:

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    FLIN FLON REGIONAL PROPERTY MAP

  • 2013-2014 Northern Prospector10

    PRESIDENTS MESSAGEThe high risk/high reward nexus that captures the motivating

    essence of Junior exploration will be broken. Companies put out good results and the market does not care, the stock flounders; there appears only risk with little chance of reward. Pundits, such as Kevin OLeary from Dragons Den or OLeary Lang exchange who has exposure to a large TV audience, preach that investors should stick to companies that pay dividends and actually produce something. From these Canadian media plat-forms such harangues create little appetite for investment in exploration companies who by their nature are high risk and have no production income.

    The flight to low risk and safety in an unstable world market, which includes the worlds largest economy, leaves little capital for Juniors to make new discoveries or even prove up known ones unless they are exceptionally large and high grade. Once again, rational reduction of risk leads to delusional elimination of opportunity.

    Major brokerage firms are now owned by the banks and the mid-tier and boutique brokers are being squeezed out. The ma-jor brokerage firms controlled by banks do not care for Junior exploration and actively promote investments away from ex-ploration. This is a paradigm shift devastated access to funds for Junior exploration, especially grassroots exploration. This ratio-nal has become a self-fulfilling truism as Junior stocks collapse.

    The Double Whammy Increasing Overhead Costs and Over-regulation

    For many years now, Junior exploration companies have been struggling with the increased cost of overhead and over-regu-lation. Office rent, accountants, legal, exchange and securities fees have all increased, as has the cost of simply carrying out best practices related to environmental surveys, NI 43-101 reporting, the duty to consult related to informing and en-gaging in dialog with Aboriginal communities on the impacts and benefits of exploration, and a host of smaller incremental costs. These have increased the overall overhead of running a Junior exploration company. A new accounting standard IFRS (international financial Standards) has resulted in increased ac-counting and auditing costs. This was introduced last year at a time when few Juniors could afford it and, adding to the woe, as affordability is even worse.

    The TSX raised fees rather than reduce them. These increas-es are now having such a drastic effect when capital is so hard to raise and flow-through funds can only be spent on explora-tion - not for head office costs, accounting, auditors, legal and property acquisition. Flow-through funds, even with their great tax incentives, are difficult enough to raise in this market but the non flow-through funds to pay for overhead costs are virtu-ally impossible to raise.

    In the case where a Junior has managed to acquire a former

    producer or outlined a new deposit in the past few years, the company has found capital is just not available to finance start-up which now includes drastic cost increases in materials and labour. We are now seeing companies who are close to being producers being considered by the market to be too risky be-cause of a lack of start-up capital. so they trade at under 10 cents per share. Carlisle Goldfields is a good example here in Manitoba with five million ounces of gold outlined.

    So where are the Majors that can help or earn into and take over these projects? Many are cash strapped themselves with cost over-runs as the trend continues in building larger mines with huge start-up costs. Others, as a mid-tier producer execu-tive recently put it and I paraphrase most Juniors are running on fumes and are ripe for the picking. So, rather than help Ju-niors that could ultimately feed their mills and smelters by cre-ating vibrant exploration in their respective camps, many Ma-jors are simply waiting to pick clean the bones of Juniors when they run out of cash. Certainly all that investment, by share-holders in Juniors that financed the exploration stage, deposit definition and environmental hurdles, will not realize decent returns but instead just result in the opposite. Those low hang-ing fruits will go cheap to those with cash to take advantage. This you can say is just business but perhaps a business that will irrevocably destroy investor confidence for Junior exploration. It takes a lot of dollars spent on exploration to find and outline deposits and the Majors certainly havent done it all in the past. Short term, the bones will be picked clean; long term, fewer deposits will be found which will hurt everyone in our resource dependent economy.

    The Triple Whammy- Access to Land (Over Parking and Under Permitting)Park Creation

    The creation of huge amounts of park land in this country, which is not necessarily a bad thing if done correctly, has per-manently alienated, especially in Northern Ontario and Mani-toba, millions of hectares of land from exploration. Much of this is done at the expense of northern communities that de-pend on mining or whose only hope for economic development is exploration and mining. In the far north there is no logging or farming, and tourism is not a viable alternative for large com-munities or decent paying jobs. A large part of the funding for these parks comes from lobby groups in the U.S. who dont need to earn their living here or delight in support from organi-zations like The Pew Charitable Trusts.

    There is a good likelihood that whole mining camps are now lost forever from discovery and this park land grab process continues unimpeded. We are losing this battle and drastically need to counter this insanity with rational multi-use of land. In the north, life-giving economic development depends on find-

  • 2013-2014 Northern Prospector 11

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  • 2013-2014 Northern Prospector12

    PRESIDENTS MESSAGEing and exploiting mining deposits where they are found; they cannot be moved.

    Permitting and the Duty to ConsultPerhaps the largest impediment to access to land has been

    with obtaining permits for exploration and or development due to the politics around the duty to consult. Some provinces such as Saskatchewan have found a balance based on consulta-tion tied to timelines. Others like Manitoba have seen many companies leave the province simply because they cant work the land even though they raised funds to explore their proj-ects. Even Majors are choosing to not explore outside the estab-lished camps for this reason. Delays in permitting can result a substantial penalty paid by companies who raise flow-through funds because of the tax break they guarantee to investors. Generally they only have a short time to spend these funds.

    Almost all exploration companies support northern commu-nities benefiting from resources developed in their area. This includes job training and development of skill sets that in future are transferable to jobs throughout the nation. We also believe that all communities and in particular Aboriginal communities should see a portion of the revenue that the province gets from mineral resources extracted in the region. Part of the problem is due to communication; part is due to education. Juniors and Majors like to toot their horn of the potential wealth as they compete for investor dollars to raise capital to move the project forward. One can understand why First Nations communities want a share of this wealth so touted and so they should. How-ever the reality is mines are expensive. Environmental stan-dards more rigorous, materials significantly more expensive, infrastructure lacking outside main camps , underlying NSRs and reclamation costs, etc. eventually affect the bottom line as to whether the project will be viable. This is part of the educa-tion problem and it requires an understanding of what makes economic sense. Simply put, investors will not put up the cash if there is no return.

    Some communities have been very proactive, understand-ing that if exploration is stymied there will be no exploration discoveries and there will be no economic benefits. Other com-munities have failed to see that the early stage exploration is only that, dollars being spent to find something. Statistically, few exploration projects, which are low impact, will discover a viable deposit. It takes over a 1000 drill programs to discover a significant deposit and, of those, many will not be viable due to grade, size and other factors. Our Association strongly endors-es that northern communities share in the benefits of explora-tion and discoveries at every stage and believes that impasses around these issues must be resolved for all to share the eco-nomic returns. When companies leave a province for political reasons they often seek to spend their dollars elsewhere where timelines have certainty. Once companies leave and dispose of

    their properties they rarely return. This triple whammy in Manitoba has been crushing.

    Good NewsManitoba and Saskatchewan have enormous mineral wealth

    and much more to be discovered. In Manitoba we saw the de-velopment of two new Mines by Hudbay; Lalor and Reed Lake (in JV with VMS) which are now in production. The Uranium discovery in Saskatchewan by Fission and Alpha Minerals has been one of the darlings in the stock market with their large near surface high-grade deposit. This may well be Saskatch-ewans next uranium mine. This has been one of the few good stories for Juniors in central Canada resulting in a great stock price (as high as $7) for investors and it appears to still be grow-ing in size. The key here is that it is near surface, exceedingly rich and of a significant size. Whereas a stock like Foran Min-ing, with the large zinc-copper-silver-gold deposit at Hanson Lake, Saskatchewan, and a fair amount of cash, has traded un-der 20 cents and suffers the same woes as other Juniors.

    The greatest news out there is that flow-through shares re-main a real tax benefit for investors coupled with the tax cred-its the provinces throw in, and create one of the few great tax shelters that is not capped. It is like going to Vegas and being able to deduct your expenses. Without this super flow through financial instrument to raise exploration capital most Juniors would cease to exist. The other good news is that exploration-ists tend to be a tenacious optimistic bunch known for their perseverance through adversity who would rather go down swinging than quit.

    What are we Doing to Save Our Industry - Can it be Saved as we Know It?

    Is there light at the end of the tunnel? Well, yes there is: the long term as Barricks Chairman, said looks good. China and India continue to grow and need metals as it is estimated that China alone will consume over half the worlds base metals by 2017. The U.S. is striving to become self-sufficient in oil which may ultimately make many things less costly. However, the tun-nel may be a lot longer than we think as the world economy remains shaky with ever-increasing debts in first world econo-mies. Investor confidence is low and remains risk adverse. Al-though there is little that various mining associations and pros-pectors associations can do here in Canada about the world economy, there has been a very serious effort to address some of the issues, spear-headed by the PDAC and the Mining Asso-ciation of Canada as well as various provincial prospector and mining associations. The Mining Associations have been very helpful but the real advocate for the Junior and prospector has been the prospector associations; the most prominent of these, by far, the PDAC.

    The PDAC has had a number of committees working on the

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  • 2013-2014 Northern Prospector14

    PRESIDENTS MESSAGEproblems including the Capital Crisis committee chaired by MaryAnn Mihychuk, former Mines Minister of Manitoba. The committee did a great job gathering statistics and ultimately presenting a document offering some solutions to elevate, at least in part, the lack of capital for exploration. What they found was this: During the first half of 2013, the price of shares on the TSXV

    continued to plummet with the average share price falling to $0.13 from $0.21 at the end of 2012.

    By mid-year 2013 more than half (54 per cent) of all TSXV

    companies were trading at or below $0.05 per share. More than three quarters of companies (76 per cent) were trading at or below $0.10 per share. This percentage has steadily in-creased from a low of 19 per cent in 2010, to 40 per cent in 2011 and 60 per cent in 2012.

    As of mid-2013, only five per cent of companies had a share

    price exceeding $0.50 per share. This percentage has steadily decreased from a high of 26 per cent in 2010, to 14 per cent in 2011 and eight per cent in 2012.

    Of the 1239 issuers in common from year-end 2012 to mid-

    year 2013, 82 per cent ended with lower share prices including 16 of the 52 companies that carried out share consolidations during this time.The PDAC Securities Committee is also investigating this

    issue. So far the TSX-V have only raised their fees. Although the Ontario Securities Commission did respond to a strong labby effort by the PDAC last year by eliminating a number of proposed fee increases. THE CSE on the other hand is offer-ing reduced fees and may become the Junior exchange of the future. Certainly Dundee investment in CSE is positive, think-ing perhaps they may be the future for exploration companies. Exploration Companies are partly to blame having bought into the NI 43-101 reports and best practices, as security regulators scrambled to deal with the fall out of Bre-X and weed out scam-mers. Although these were good in part, investors were given a false illusion that exploration could be made safe or safer and invested even some of their savings or RRSP money. Big Mis-take. Exploration is fraught with risk at every stage. It was actu-ally better with the good old VSX where, when people invested, there was some understanding that it was like going to Vegas: the odds were not in your favour.

    The PDAC together with the Mining Association of Canada is also advocating for targeted Mineral Exploration Tax Credit focused on Canadas remote regions, as well as an infrastruc-ture fund to support exploration in northern areas without in-frastructure. In addition, PDAC is proposing that the federeral government- and all jurisdictions, in fact-set up venture capital funds focused on grassroots exploration, modeled on Quebecs SIDEX fund.

    PDAC has been meeting with representatives from all juris-

    dictions to ask for their support: a considerable effort has gone into these proposals for provincial and federal finance depart-ments to consider as the PDAC outlined the degree of peril our exploration community was facing. Both Ross Gallinger, the PDAC Executive Director, and Glenn Nolan, the President, have made presentations on finding solutions to various groups including the TSX.

    Our Group, the Manitoba Saskatchewan Prospectors and Developers Association sent a brief to John Fox, the Manitoba Assistant Deputy Mines Minister, outlining certain problems related to the capital crisis and exploration permitting which are having a drastic effect on Junior Exploration Companies and Prospectors. It offered some constructive solutions for them to consider. So far there has been no response and the word out there is no extra grant money, which I suppose Treasury re-jected, but relief from assessment cost the province nothing and grants end up being net neutral to the province! We are more than just disappointed but are in disbelief that no support of any kind is being offered. Please note, that just before publishing the Minister phoned us and wanted to find out what he may be able to do. I appreciate this last minute overture by the Minister but the truth will be in the delivery. Also just of late, on permitting, a new round table has been set up between industry, govern-ment, and Aboriginal communities to tackle this issue. Hope-fully solutions can be found for all, but I suspect this will take some time and hopefully a few explorers can survive the wait, but it looks grim.

    The following is what we recommended: A) A temporary doubling of the assessment credits for work

    completed on claims or leases for the next two years. It is important that Juniors and prospectors do not lose their properties because of the present lack of available capital. Once Juniors lose their projects they rarely return to those jurisdictions because of shareholder resistance to this kind of destruction of their investment capital. This would be a huge benefit to our Junior Exploration sector at basically no cost to the province. Saskatchewan has done this in the past with great success. It is important to be able to present to potential investors a land package offering potential beyond any feasibility study.

    B) A one year exemption from the annual assessment work re-quirements on claims or leases. Work requirements would continue to accrue but would not have to be completed or paid in lieu of for a year. Again it is important that Juniors and prospectors do not lose their properties. This would pro-vide immediate relief from the current crisis.

    C) Modify the MEAP program with a temporary increase so that Junior Companies receive 50 per cent of the money ex-pended on a qualified project.

    In order to address the capital crises for Junior companies

  • 2013-2014 Northern Prospector 15

    PRESIDENTS MESSAGENewfoundland has expanded their grant system to 66 per cent. The Junior Exploration companies need these grants for hard money (as opposed to flow through funds) to pay for auditors, overhead, rent, legal and exchange and security fees, etc.

    D) A temporary suspension of grants to the large producers (most of which are enjoying the benefit of high metal prices and therefore profits). This would ensure that the Junior sector may have more funds available from the moneys available under the program without additional cost to the province. I have spoken to Hudbay and they are onside with foregoing MEAP grants for their exploration. Basically we temporarily need a bigger pie to help Juniors without the producers taking slices of it with their larger budgets.

    E) We would also like to see the Prospector Grants temporar-ily increased to make it possible for prospectors and project generators to remain in the business during a time when few are able to option their properties. This will also help laid off geologists, victims of this down turn, to stay in the province. We need to keep these people around so they are available to explore here in the future. This would be a small budget item.

    F) A temporary increase in the super-flow-through tax credit by the province to qualified exploration by the Junior sector. This would give Manitoba investors an incentive to provide flow-through funds for exploration in their own back yard, in a world that is currently very risk adverse to providing funds for Junior exploration. This would be a huge incentive for Junior exploration companies to move back into Mani-toba and would certainly put the province back in the stand-ings of a favoured jurisdiction to explore. We certainly have a high potential for new discoveries but we need to keep our mineral exploration companies here and alive. The Mining Association of Manitoba sent a similar letter to

    the Mines Minister and as a group has been enormously helpful to explorationists, as is the Saskatchewan Mining Association who have served and steered their province well.

    Overall are We Winning in our EffortsOn the capital crisis there is only so much we can do without

    government help or help from the Security Commissions or the Exchanges. The Federal Government and their provincial coun-terparts dont believe it is as bad as it is because they havent seen the carnage in the streets yet. Similarly the exchanges with the exception of the CNSX hold a similar view. The regulators however have allowed Juniors to finance at less than five cents if they can demonstrate they are in peril of not meeting their listing requirements, but that is causing enormous dilution as is the roll backs smugly suggested if the Junior wants to stay listed. Some Provinces such as Newfoundland have listened and have upped their grant money to 66 per cent of exploration expendi-

    tures to provide much needed hard money for overhead. This is a type of gesture that is needed across the country.

    On the double whammy, all I am hearing is more regula-tion, more fees , more accounting and auditing costs, with no relief in sight. They appear to not care!

    On the triple whammy, of access to land we are losing this battle at an ever growing rate. Park creation continues unabat-ed to sterilize potential mining camps and we are not being supported in this effort to the extent we could be by our as-sociations. On the duty to consult and obtaining exploration permits some jurisdictions have worked out a solution, such as Saskatchewan that still enjoys a booming mining economy compared to much of the country. Others such as Manitoba and Ontario have failed their explorationists miserably out-side the main mining camps. This too is not given the gravity it should, either by governments or our associations. Even if Junior Exploration Companies by some miracle or strong ini-tiative managed to raise capital, they find themselves unable to spend the flow-through because they are unable to obtain permits. This issue if not addressed, will further devastate our exploration industry and perhaps will be more damaging, than the capital crisis in the long run, to the long term health of ex-ploration and development of resources for all Canadians in-cluding northern communities.

    So What can Small Exploration Companies Do?For Juniors, the time is at hand for tough choices about: what

    properties it is prudent to retain, what staff, how you spend your exploration funds and how to cut overhead. Even so, le-gal, auditors, accountants, claim renewal fees, Security and Ex-change fees, must be paid and with hard-to-raise hard money.

    Hold on, dont quit, find a way to raise the money, be inno-vative because there is both big and medium money out there that NEEDS tax shelter. We all need to knock on more doors because, even if we all cut to the absolute minimum and work for less or nothing, in the end the coffers still need refilling. Fill them. When the worse is finally over and the carnage of defunct exploration companies and destroyed shareholder eq-uity cannot be denied, only then will governments possibly pay attention. The damage to our industry may be only partially re-pairable. I suppose we can all hope that investors, like voters, have short memories but I wouldnt count on it with the older groups.

    I appreciate the help from Edgar Wright (Secretary to our Association), Barbara Hendrickson (PDAC Securities Com-mittee Chair), Nadim Kara (PDAC), Ed Hubert (VP Manitoba Mining Association), Robert Granger (QC) for their contribu-tions and I alone however, accept responsibility for the content as I feel it reflects the views of our association from the feed-back I received from members. 8

  • 16 2013-2014 Northern Prospector

    MANITOBA EXPLORATION& DEVELOPMENT HIGHLIGHTS

    Challenging equity markets, low commodity prices, and limited venture capital availability, have contributed to a marked decline in ex-ploration expenditures. The instability of global economies continues to have a negative impact on mineral invest-ments. Junior exploration operations, in particular, have faced business crises. Companies have been forced to revise operational plans. Exploration and de-posit appraisal expenditures decreased

    in 2012 to $93.9 million (M) a 33-per-cent decline from 2011. A reappraisal of exploration programs is expected to im-pact negatively on exploration spending for 2013, currently estimated at $73.2M.

    Capital investment delivers measure of growth to industry

    In Manitoba, despite troubling mar-ket trends, the mineral production sec-tor has experienced a measure of growth

    and success. Capital investments in ex-panded mines and new mine construc-tion have helped offset negative impacts on base and precious-metal explora-tion expenditures. Once these projects have been completed, Manitobas min-eral production is expected to rise sig-nificantly. The industrys resilience and commitment to move forward by main-taining a healthy level of exploration activities continue to underscore the im-portance of the provinces considerable

    Manitoba 2013 Exploration AndDevelopment Highlights Current as of October 1, 2013

    Base and precious metals by Chris Beaumont-Smith, Minerals Policy and Business Development; Specialty/industrial minerals by Jim Bamburak, Manitoba Geological Survey, Manitoba Innovation, Energy and Mines.

  • 2013-2014 Northern Prospector 17

    MANITOBA EXPLORATION& DEVELOPMENT HIGHLIGHTS

    mineral potential. Exploration remains a key driver for sustainability in the sector.

    Base MetalsDespite the impact of challenging

    economic conditions on low base metal prices, HudBay Minerals continues to deliver a historic level of capital invest-ment in Manitoba, specifically with the construction of two new mines, the Lal-or mine and the Reed mine, situated in the Snow Lake region.

    The polymetallic Lalor mine project is proceeding on budget and on schedule, as it approaches the important mile-stone of main-shaft commissioning. The progress of the Lalor project will allow HudBay to increase production from the current 1,500 tonnes per day (tpd) to 2,700 tpd in the second quarter of 2014, contingent upon the environmen-tal licensing process being completed on schedule.

    In order to accommodate an increase in production, while preserving capi-tal reserves, HudBay plans to delay the construction of a new 4,500 tpd concen-trator on the Lalor site, and to focus on refitting the existing Snow Lake concen-trator at a cost of $9M. Deferring the construction of the new Lalor concen-trator, the company expects to conserve $325M in capital.

    HudBay has invested approximately $365M in the Lalor project. The compa-ny has committed an additional $63M, and has plans to continue concentrator engineering and optimization. Hudbay will release a reassessment of the tim-ing of concentrator construction follow-ing the completion of an updated Lalor mine plan in late 2013.

    The Indicated base-metal Lalor re-source stands at 13.3M tonnes, grading 8.87 per cent zinc, with an Inferred re-source of 4.8M tonnes, grading 9.25 per cent zinc. The Gold Zone Inferred re-source is 5.4M tonnes, grading 4.7 grams per tonne (gpt) gold. Conceptual esti-mates indicate the potential for an ad-ditional 5.1 to 6.1M tonnes, grading be-tween 4.3 and 5.1 gpt for the Gold Zone.

    The estimates also indicate an additional 1.8 to 2.2M tonnes grading 5.8 to 7.0 gpt gold and 3.2 per cent to 4.0 per cent cop-per for the Copper-Gold Zone. HudBay anticipates additional gold resources will be delineated with further explora-tion conducted from underground. The Copper-Gold Zone holds the greatest potential to add significant resources to the project.

    HudBays 70-per-cent-owned Reed mine project, located 80 kilometres (km) south of Snow Lake, is also on budget and scheduled to reach commercial pro-duction in the fourth quarter of 2013. The $71M copper-gold mine will pro-duce 1,300 tpd at full production, with the ore trucked to Flin Flon for process-ing. Achieving full production is contin-gent upon the environmental licensing

  • 2013-2014 Northern Prospector18

    process ending on schedule. The Reed Lake deposit contains a National Instru-ment (NI) 43-101compliant Indicated resource estimate of 2.5M tonnes, grad-ing 4.55 per cent copper.

    Cost-cutting measures planned by HudBay include operational efficiencies and deferred sustaining capital invest-ments at its Flin Flon and Snow Lake production facilities. Hudbay is also planning a modest decrease in explo-ration spending in the Flin Flon-Snow Lake greenstone belt. In recognition of the mine-life estimate for HudBays 777 mine, the company plans to shift its ex-ploration focus to the Flin Flon region in support of the companys metallurgical complex in the area.

    HudBay also partnered with Halo Resources Ltd. on the Lost Lake joint-venture project in the Sherridon area. The company continues to explore the deposit, and has started pre-feasibility engineering work. Terms of the joint-venture agreement have been modified to reflect the current economic condi-tions, and will provide more flexibility on the projects timelines.

    Vales business strategy in response to weak and uncertain nickel prices was to review and challenge all aspects of its Thompson operations, engaging Vale

    employees, contractors and suppliers to work together to achieve meaningful and significant operational savings of $100M. This decisive effort allowed Vale management to continue development activities at the Birchtree mine, and should ensure ongoing production. In keeping with cost-saving plans, Vale also deferred a capital commitment to the Thompson 1D deposit, which remains critical to the long-term sustainability of operations. Vale hopes to recommit to 1D in the near future.

    Low nickel values had an impact on CaNickel Mining Ltd. (formerly Crow-flight Minerals). It forced a temporary suspension of production on the Bucko Lake mine, which was placed on care and maintenance in June 2012, but Ca-Nickel managed to increase the Proven and Probable reserves at Bucko by 145 per cent, to 3.71M tonnes. The company continues to explore its large portfolio of properties in the Thompson Nickel Belt area, and has experienced considerable exploration success at the nearby M11A and Bowden Lake deposits.

    Intransigent and difficult equity mar-kets led to challenges for Victory Nickel in the Thompson Nickel Belt area. Fol-lowing the receipt in 2011 of an En-vironmental Act Licence, authorizing

    the construction and operation of the Minago project north of Grand Rapids, Victory was unable to secure financing for the initial development of a proposed $600M nickel and frac sand mine. As a result, the company has been revising development plans, and continues to focus on potential frac sand production at Minago. The company is also looking into opportunities for new market devel-opment for frac sand. In addition, Victo-ry recently completed a feasibility study to develop and advance the Mel project, a small, high-grade nickel deposit, situ-ated north of Thompson.

    In southeastern Manitoba, Mustang Minerals Corp. is moving forward with exploration and development on its Makwa deposit near Lac du Bonnet, and is conducting exploration at the nearby Mayville property. Mustang is re-evalu-ating the feasibility of developing both deposits by commissioning a scoping study with processing infrastructure planned at the Mayville site. The Makwa deposit comprises a NI 43-101-compli-ant resource of 9.855M tonnes in the Probable category. The deposit contains 0.541 per cent nickel, 0.113 per cent cop-per, and 0.433 gpt platinum group met-als (PGM). Mustang recently released a revised resource estimate for the May-ville deposit, increasing the resource to 24.3M Indicated tonnes grading 0.45 per cent copper and 0.19 per cent nickel (0.69 per cent copper equivalent).

    Prophecy Resources Corp. and Cora-zon Mining Ltd. have nickel exploration projects underway. The companies are exploring past-producing nickel mines originally operated by Sherritt Gordon Mines in Lynn Lake. Using advanced exploration techniques and technology, both companies have discovered new mineralization and have expanded re-maining resources at the past-producing Lynn Lake and El mines.

    Exploration for volcanogenic-associ-ated massive sulphide (VMS) deposits continues despite poor copper and zinc prices. VMS Ventures, a 30 per cent joint venture partner with HudBay Min-

    MANITOBA EXPLORATION& DEVELOPMENT HIGHLIGHTS

    Aerial view of the surface infrastructure at Hudbays Lalor project in Snow Lake, Manitoba, July 2012.

  • 2013-2014 Northern Prospector 19

    MANITOBA EXPLORATION& DEVELOPMENT HIGHLIGHTS

    erals at the Reed mine, is aggressively exploring its numerous grassroots proj-ects in the Snow Lake region. As well, HudBays success at Lalor has encour-aged Callinex Mines to explore ongoing projects in the Chisel Basin, adjacent to HudBays holdings.

    Beyond the Flin FlonSnow Lake greenstone belt, the most advanced VMS exploration project in Manitoba is Rockcliff Resources Inc.s Tower prop-erty, located north of Grand Rapids. The joint-venture project with partner, Pure Nickel, has outlined two zones of copper-gold mineralization (T1 and T2) within rocks of the Thompson Nickel Belt. An initial NI 43-101 compliant-re-source estimate for the T1 zone contains 1.1M Indicated tonnes grading 3.73 per cent copper, 1.05 per cent zinc, 0.55 gpt gold, and 1.3M Indicated tonnes grading 2.0 per cent copper, 1.02 per cent zinc, and 0.27 gpt gold.

    A deep-penetrating electromagnetic (DPEM) geophysical survey outlined a large down-plunge continuation of the

    T1 zone and identified two other untest-ed anomalies (T2 and T3). The first fol-lowup test drill hole of the T2 anomaly returned 2.77 per cent copper over 4.0 metres. The relationship between the two mineralized zones is not yet well un-

    derstood. However, the T1 zone is char-acterized by mineral textures consistent with remobilization and a lack of associ-ated hostrock alteration, whereas the T2 zone is hosted within a well-developed alteration envelope.

    Aerial view of Monument Bay, 2013.PHOTO: G. KUNTz, MEGA PRECIOUS METALS INC.

  • 2013-2014 Northern Prospector20

    A subsequent DPEM geophysical survey of the T1 deposit identified ad-ditional targets near the deposit, which are awaiting future drill testing.

    Rockcliff was successful testing geo-physical anomalies at the past-produc-ing Dickstone mine, west of Snow Lake. Initial diamond-drill testing for poten-tial deep mineralization returned 2.7 per cent copper over 2.5 metres. The fol-lowup downhole geophysics suggest the mineralization is associated with a large,

    untested anomaly below the existing mine workings.

    Precious MetalsPrecious metals exploration and de-

    velopment activities experienced some level of slow-down recently due to a softening of gold prices, as well as con-tinuing equity market challenges. As a result, Manitoba producer San Gold has continued gold exploration at reduced levels. However, the company has also

    improved operational performance due to exploration success at its Rice Lake and Hinge mines in Bissett. The devel-opment of high-grade, near-surface de-posits, has allowed San Gold to embark on a multi-year production expansion, targeting sustainable annual production of more than 100,000 ounces of gold.

    San Gold produced a record 85,000 ounces of gold in 2012, and the company remains on target to produce 100,000 ounces in 2013. The company has also continued to improve operational per-formance through a lowering of cash-production costs to $850 per ounce gold, and by increasing quarterly mill throughput. San Gold has consistently maintained an aggressive exploration program, completing over 220,000 me-tres of diamond drilling during the 2012 fiscal year. Mine site and region explo-ration will continue in 2013 at slightly reduced levels due to eroding operating margins, resulting from declining gold prices.

    The Rice Lake belt remains Manito-bas pre-eminent gold exploration camp, where efforts are dominated by junior explorers. Although financing remains problematic, a number of exploration companies are active in the region, in-cluding Bison Gold Resources Inc., (on its past-producing Central Manitoba property southeast of Bissett), as well as Wildcat Exploration Ltd, Strikepoint Gold and Harvest Gold.

    The success of San Gold demonstrates the potential of past-producing gold mines to continue to yield impressive exploration results. To this end, a num-ber of past-producing gold mines have become the focus of renewed explora-tion efforts. Two projects in the Trans Hudson Orogen are advancing towards feasibility studies and potential redevel-opment.

    QMX Gold (formerly Alexis Miner-als Corp.) recently sold the former New Britannia mine to Liberty Mines Inc. The $20M purchase paves the way to re-open the mine, and Liberty has the financial capacity to assemble the re-quired $50M in pre-production financ-

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    ing. Liberty is committed to re-starting pre-production activities as soon as possible. If successful, the Liberty Snow Lake mine will produce between 80,000 and 90,000 ounces of gold per year. A 2010 feasibility study outlined a five-year mine life. Exploration efforts by QMX have added significantly to the resource base, and a revised life-of-mine estimate is pending.

    The New Britannia mine produced 858,000 ounces of gold between 1995 and 2005, and 760,000 ounces of gold between 1949 and 1958, as the Nor Acme mine. The current reserve esti-mate stands at 336,700 ounces of gold grading 4.43 gpt and total inferred re-sources are estimated at 451,000 ounces of gold, grading 4.04 gpt. Surface and underground infrastructure have been maintained since the closure of the New Britannia mine in 2002, making the po-tential re-starting of mine production possible.

    The theme of re-opening past-pro-ducing gold mines is further demon-

    strated in Lynn Lake, with the advanced exploration activities of Carlisle Gold-fields Ltd. Carlisle has assembled a port-folio of past-producing gold properties, previously operated by Blackhawk Min-ing. The company has also successfully explored the MacLellan, Burnt Timber and Farley Lake mine sites, as well as adjoining properties, to assemble a re-source base of more than 4.8M ounces. The flagship MacLellan mine property contains measured and indicated re-sources of 2.7M ounces, and an inferred resource of 2.1M ounces. The bulk of the project is amenable to open-pit mining.

    Carlisle has commissioned a Prelimi-nary Economic Assessment (PEA) in advance of feasibility studies. The PEA will assess the economics of the con-struction of a central processing facility drawing feed from the MacLellan depos-it, followed by satellite deposits under Carlisles control in the region. Carlisle holds a significant land position in the Lynn Lake greenstone belt, with rights to exploration drilling at the MacLellan

    Mine, (which operated between 1986 and 1987); the BT mine, (which operated between 1994 and 1996); the Farley Lake mine, (which operated between 1997 and 2000); and the Lasthope deposit. A number of other deposits along strike from past-producers are expected to re-turn sufficient resources to proceed to a feasibility study.

    Other past-producing gold mines in the Trans-Hudson Orogen that have been evaluated include Satori Resources Tartan mine, (east of Flin Flon), Au-riga Gold Corp.s Maverick gold proj-ect, (south of Sherridon), and Callinex Mines Gossan Hill project (near Cran-berry Portage), which hosts the past-producing Gurney mine.

    Interest in gold exploration in the Ar-chean age northeast Superior province, east of Thompson, is fuelled by the suc-cess of Mega Precious Metals Inc. at the Monument Bay project, situated north of Red Sucker Lake.

    The Monument Bay project includes the Twin Lakes gold deposit within a

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    large regional exploration property. The Twin Lakes deposit is the focus of a research project at the University of Manitoba, which will aim to identify an association between gold and tungsten throughout the deposit. The close as-sociation led Mega to include tungsten in the resource estimate, significantly increasing the value proposition of the project. The revised resource estimate contains a pit- constrained, Measured and Indicated resource of 2.8M ounces of gold at 1.4 gpt, with an additional 300,000 ounces of Inferred resources grading 1.2 gpt. The inclusion of tung-sten in the resource estimate will require additional data. Mega believes that the soon-to-be estimated tungsten resource is recoverable, due to the close associa-tion of scheelite and gold in the mineral paragenesis.

    Mega continues with an aggressive in-fill and exploration drill program at Twin Lakes. A significant component of the exploration program is the sampling and analysis of drill core generated by previ-ous project operators. Mega plans to as-sess more than 40,000 metres of core in advance of a revised resource estimate that will include tungsten. To facilitate this process the company has estab-lished an on-site sample preparation and analytical facility. Mega also reports that the gold-tungsten association persisting across the Monument Bay property pro-vides optimism for additional regional exploration success.

    The success of the Monument Bay project points to the favourable geology of the Archean northern Superior Prov-ince southeast of Thompson. The area has attracted a number of junior gold explor-ers, including Puma Exploration, Gossan Resources Limited, Alto Ventures Ltd., Callinex Mines, Canada Bay Resources, and Quantum Minerals Corp.

    This under-explored, accretionary terrane represents the western strike-extension of proven gold-producing geology in Ontario, and is viewed by explorers as having the potential to host a number of gold deposits that forms a regional camp.

    Specialty/Industrial MineralsIn October 2012, Westcore Energy

    Ltd. announced the release of a National Instrument (NI) 43-101 coal resource evaluation for the Panther Coal Proper-ty, located in the Cretaceous Swan River Formation near The Pas, Manitoba. The property is jointly held by Westcore (60 per cent) and 49 North Resources Inc. (40 per cent). At the Quasar deposit, 14.2M tonnes of Measured, 4.3M tonnes of Indicated, and 9.1M tonnes of In-ferred, sub-bituminous coal were delin-

    eated in 18 exploration holes. To March 31, 2013, a total $1.9M had

    been expended on the Panther Coal Property. In November 2012, Westcore reported a NI 43-101 coal resource evaluation for the Black Diamond Coal Property (located immediately west of the Panther Coal Property). The Black Diamond Property, jointly held by West-core (75 per cent) and Goldsource Mines Inc. (25 per cent), comprises the Discov-ery, Cyclops, Ambit, Athena and Ca-lypso deposits. Total resources at these

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    deposits are: 40.6M tonnes of Measured, 9.4M tonnes of Indicated, and 10.6M tonnes of Inferred, sub-bituminous coal, as delineated by 44 exploration holes. To March 31, 2013, a total $3.0M had been expended on the Black Diamond Coal Property.

    Saturn Minerals Inc.s wholly-owned Overflowing project lies immediately to the east of Westcores Panther Property. Saturn has made three coal discoveries along its eight-km-long, north-south, Overflowing geophysical trend. These discoveries are similar in size and shape to the deposits outlined by Westcore. They are also characterized by signifi-cantly low sulphur values, relatively low ash content, and moderate-to-high calo-rific values. Westcore and Saturn did not conduct drilling programs during the winter of 2012 or the spring of 2013.

    In March 2013, Gossan Resources Limited announced it couldnt reach an agreement with Dr. Douglas J. Zuliani to use his process in the production of mag-nesium metal. Raw material for Gossans proposed plant was to be obtained from a high-purity Silurian Fisher Branch Formation dolomite outcropping on 80 hectares, north of Inwood, Manitoba. At the proposed quarry site, a NI 43-101compliant measured resource of 28 819 000 tonnes of dolomite was outlined by the company. The deposit, averaging

    21.15 per cent magnesium oxide (MgO) and 30.91 per cent calcium oxide (CaO), to a depth of 12 to 15 m, had been de-termined from a 2006 drill program, and from 25 previously drilled, provincial government holes.

    Claim Post Resources Inc. acquired 100 per cent interest in nine, contiguous, silica sand quarry leases (428 hectares) (ha), located southeast of Seymourville, Manitoba, from Char-Crete Limited.

    The combined property will form the nucleus of Claim Posts Seymourville Frac Sand Project. The company first in-tends to confirm the results of previous drilling by the Manitoba government and Gossan. The results had outlined two zones of silica sand, from five to 15 metres (m) thick and >400 m and >600 m long, in 41 of 60 drill holes. Ameri-can Petroleum Institute (API) test work on the sand showed its suitability for the production of good quality white frac sand in the 8,000-to-10,000 pounds per square inch (psi) compressive strength range. Next, Claim Post plans to com-plete a NI 43-101 report and scoping study Preliminary Economic Assess-ment (PEA); and then carry out discus-sions with Hollow Water First Nation, and the villages of Manigotogan and Seymourville.

    Victory Silica Ltd. (a subsidiary of Victory Nickel Inc.) has drilled a NI 43-

    101compliant, Indicated resource of 15M tonnes of Ordovician Winnipeg Formation silica sand (containing 84 per cent of marketable frac sand), located in the vicinity of the Minago River, south of Thompson, Manitoba. The deposit could produce up to 1.14M tonnes per year of premium frac sand. This would be a 20/40 sand product with a spheric-ity of 0.72; roundness of 0.78; acid solu-bility of 0.92 per cent; silt test (turbidity) of 24 Formazine Turbidity Units (ftu); and crush resistance of 11.5 per cent. It should be noted that the silica sand de-posit is situated above Victory Nickels Minago Nose nickel deposit, and must be removed before the nickel can be open-pit mined.

    In September 2011, Victory Nickel received an Environmental Act Licence for the Minago mine, and the develop-ment (including a frac sand component) was approved by its board of directors. In July 2013, Victory Silica acquired the Seven Persons frac sand processing fa-cility, located southwest of Medicine Hat, Alberta. This the first phase of a multi-year process, which will culminate in the Phase 3 construction of a 1.1M tonnes-per-year frac sand plant in Win-nipeg. The Winnipeg plant will process and distribute imported and domestic sand, including the sand mined as a co-product of the Minago nickel project. 8

    MANITOBA EXPLORATION& DEVELOPMENT HIGHLIGHTS

  • 2013-2014 Northern Prospector26

    General OverviewIn 2012, Saskatchewan remained the

    worlds leading potash-producing juris-diction and the second-largest producer of uranium. The province also produced coal, gold, salt, sodium sulphate, silica sand, and clays products. Deposits of other commodities such as diamonds, base metals, and rare earth elements are currently being evaluated.

    Buoyed once again by strong potash sales volumes, provincial mineral sales were $7.4 billion (B) in 2012, down mar-ginally from the $8.1 B in 2011, but up from $6.9 B in 2010 and $4.6 B in 2009.

    Expenditures for mineral exploration and evaluation projects in Saskatchewan in 2012 totalled $324 million (M), ex-ceeding the $293 M spent in 2011 and the $321 M in 2010. Preliminary estimates for 2013 showed companies plan to spend about $297 M, mostly on uranium and potash projects (Table 1). Natural Resources Canada estimates that in 2013 Saskatchewan will account for about 12.3 per cent of the spending in Canada on exploration and deposit appraisal, rank-ing fourth behind Ontario, Quebec, and British Columbia.

    As of August 31, 2013, active min-eral dispositions, issued pursuant to The

    Mineral Disposition Regulations, 1986, totalled about 7.49 M hectares (ha). In addition, there were 167 active potash dispositions, issued pursuant to The Subsurface Mineral Regulations, 1960, comprising permits and leases, totalling about 4.35 M ha. The recent uranium discoveries at Patterson Lake South and the discovery of kimberlite north of De-schambault Lake have contributed to the increase in mineral dispositions.

    Uranium1 Saskatchewan produced 15.4 per cent

    (23.3 M lb of U3O8) of the worlds prima-ry uranium in 2012. Uranium was pro-duced from two operations: McArthur

    River/Key Lake and Eagle Point/Rabbit Lake. The McArthur River mine, oper-ated by Saskatoon-based Cameco Cor-poration (Cameco), was once again the worlds largest uranium producer, yield-ing 19.5 M lb U3O8, or 13 per cent of the worlds supply. Production is anticipated to be 18.9 M lb U3O8 in 2013. The Eagle Point mine at Rabbit Lake, another Cam-eco operation, yielded a further 3.8 M lb U3O8. It is forecast to produce 4.2 M lb U3O8 in 2013. Construction at the Cigar Lake uranium mine is nearly complete. Although the operator Cameco had ex-pected to produce about 0.3 M lb U3O8 in the fourth quarter of 2013, delays com-pleting the underground ore storage in-frastructure have resulted in a minor pro-duction delay with mining now expected to commence in the first quarter of 2014. The AREVA Resources Canada Incorpo-rated (AREVA) operated McClean Lake mill will handle the processing of Cigar Lake ore. Necessary upgrades of the mill in advance of production will delay ore packaging until the end of the second quarter of 2014.

    Nearly $116 M was spent on uranium exploration in 2012, mainly in or near the Athabasca Basin. It is estimated that a

    SASKATCHEWAN EXPLORATION& DEVELOPMENT HIGHLIGHTS

    Saskatchewan 2013 ExplorationsAnd Development HighlightsBy Saskatchewan Geological Survey Saskatchewan Ministry of the Economy Information current as of September 10, 2013

    2009 ($ M) 2010 ($ M) 2011 ($ M) 2012 ($ M) 2013 ($ M) (preliminary estimates)

    Uranium 108.6 103.2 101.2 115.8 122.2Gold 3.0 9.5 10.5 13.1 7.5Base Metals1 3.0 6.5 13.3 13.0 9.9Diamonds 10.9 17.3 7.9 5.2 4.1Industrial Minerals2 151.1 184.0 160.3 176.5 153.5Total 276.6 320.5 293.2 323.6 297.21 Includes: platinum group metals.2 Includes: potash, coal, rare earth elements, and clays.

    Table 1 Saskatchewan mineral exploration expendituresas compiled by the Saskatchewan Geological Survey

    from the annual survey of exploration spending intentions.

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  • 2013-2014 Northern Prospector28

    further $122 M will be spent in 2013. Al-though expenditures remain robust, there are fewer companies actively exploring in the region due to difficulties raising mon-ey and consolidation across the industry. One company that has taken advantage of the climate in order to consolidate its holdings is Denison Mines Corp. (Deni-son). Denison has absorbed two junior companies, JNR Resources Inc. (JNR) and Fission Energy via all-stock trans-actions. Denison and JNR were already partners on several uranium exploration projects, however, the takeover allowed Denison to gain control of the Way Lake project that contains a small uranium/rare earth element deposit with a pub-lished NI 43-101compliant Resource es-timate (Inferred Resource grades 0.03 per cent U3O8 and contains 6.96 M lb U3O8). Denisons takeover of Fission Energy al-lowed it to gain control of the J-zone (60 per cent interest), which is the western extension of Rio Tintos Roughrider de-posit in the northeast Athabasca Basin. Prior to the takeover, Fission Energy pub-

    lished an updated NI 43-101compliant Resource for the J-zone that included an Indicated Resource grading 1.52 per cent U3O8 (10.3 M lb U3O8 contained) and an Inferred Resource grading 0.90 per cent U3O8 (2.75 M lb U3O8 contained). Deni-son has since upgraded the estimate to the Indicated Resource category, which grades 2 per cent U3O8 and contains 12.81 M lb U3O8. Denison also gained control of a number of other properties in the Fission Energy transaction, including several properties that were explored by Pitchstone Exploration in advance of its takeover by Fission Energy Corp. These properties contain a number of uranium occurrences discovered in Pitchstone Ex-plorations drilling that will require follow up. One project excluded from the Deni-sonFission Energy transaction was Pat-terson Lake South, which was retained by spin-off company Fission Uranium Corp. (Fission).

    Denisons main exploration focus, however, has been at the Phoenix depos-its, about 35 kilometres southwest of the

    McArthur River mine. Drilling concen-trated at the A and B deposits, which are about 400 metres below surface, and led to the publication of an updated Resource estimate. The bulk of the mineralization lies in the A deposit, which includes an Indicated Resource grading 15.8 per cent U3O8 and containing 46.5 M lb U3O8 with a further 7.2 M lb U3O8 in an Inferred Re-source that grades 51.7 per cent U3O8. The smaller B deposit includes Indicated and Inferred Resources containing 5.9 M lb U3O8 at a grade 14.1 per cent U3O8 and 0.4 M lb U3O8 at a grade of 3.5 per cent U3O8, respectively. The A deposit stands to be expanded, as Denison continues to report mineralized intersections from step-out drilling.

    Fission and equal partner Alpha Min-erals Inc. (Alpha; formerly ESO Uranium) have had a great deal of drilling success at the Patterson Lake South property, locat-ed about 65 kilometres south-southeast of the Shea Creek deposits (see below). Four zones of mineralization have been discovered along a conductive trend over

    SASKATCHEWAN EXPLORATION& DEVELOPMENT HIGHLIGHTS

  • 2013-2014 Northern Prospector 29

    a strike length of 1.02 kilometres in the metamorphic rocks that form the base-ment to the nearby Athabasca Basin. In-tersections such as 54 metres (not a true width) grading 9.08 per cent U3O8, start-ing only 61 metres from surface, demon-strate the potential of the project, which is located only a few kilometres from provincial highway 955. To that end, Fis-sion made an all-stock takeover bid that was accepted by Alphas board. Pending shareholder approval, Fission will have full control of the Patterson Lake South property. The exploration success at Pat-terson Lake South initiated a staking rush with new dispositions radiating for tens of kilometres in all directions from the discovery. Most exploration projects in the newly claimed land are at grassroots stages, but a group of junior companies combined their efforts to form the West-ern Athabasca Syndicate, which has un-dertaken VTEM surveys with the inten-tion of identifying conductive trends that might be associated with mineralization.

    AREVA and UEX Corporation (UEX)

    continue to expand four deposits, Anne (southeast end), Kianna, 58B, and Colette (northwest end), along the three kilome-tre, northwest Shea Creek trend in the western Athabasca Basin. An updated NI 43-101compliant Resource estimate for the deposits released in April of 2013 in-dicates that the combined Indicated Re-source for the four deposits grades 1.484 per cent U3O8 and contains 67.66 M lb U3O8 with the bulk of the Resource in the Kianna (34.8 M lb U3O8) and Anne (24.76 M lb U3O8) deposits. The deposits also contain a combined Inferred Resource that includes 28.2 M lb U3O8 with over half of the contained uranium in the Ki-anna deposit. Although the deposits are relatively deep (below 700 m) compared to those in the east Athabasca Basin, the total contained U3O8 is more than 30 M lb, more than the total production from the nearby Cluff Lake uranium mine (now decommissioned).

    Grassroots uranium exploration con-tinues in various parts of the Athabasca Basin. Forum Uranium Corp. (Forum)

    and Mega Uranium Ltd. (Mega) have renewed exploration near the historic Maurice Bay deposit northwest of Lake Athabasca in the far northwest of the province through an option agreement with Cameco and AREVA that could earn Forum and Mega 60 per cent inter-est in the property. The operator, Forum, has concentrated on new drill targets and has discovered several new zones of min-eralization near the Maurice Bay deposit. In the eastern Athabasca Basin, Cameco, AREVA, and International Enexco Lim-ited (Enexco) initiated a major drill pro-gram near Mann and Hughes lakes along the structural trend between the Phoenix deposits and the McArthur River mine. The joint venture partners report altera-tion and elevated uranium concentra-tions in the Athabasca Group near and above the unconformity (about 580 to 600 metres below surface). The altera-tion and elevated concentrations are of-ten indicative of a uranium mineralizing system. In order to meet its funding re-quirements for the project, Enexco issued

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    a stock placement to which Denison was a major subscriber. The move has allowed Denison to gain some control of the drill project through an agreement with En-exco. Cameco and partner AREVA have planned another major drill program at the Read Lake project, west of McArthur River in 2013.

    GoldProduction continued at two gold op-

    erations in Saskatchewan in 2012. Claude Resources Inc.s (Claude) Seabee mining operation, situated approximately 125 kilometres northeast of La Ronge, pro-duced 49,570 troy oz (oz) of gold in 2012 from 275 235 tonnes (t) of ore with an av-erage grade of 5.86 grams per tonne (g/t) Au. This production came from both the Seabee mine, including the recently dis-covered L62 zone, and the nearby Santoy 8 mine. An additional 20,520 oz Au was produced in the first-half of 2013 from 139 364 t of ore grading an average of 5.11 g/t Au.

    As part of its La Ronge gold project, Golden Band Resources Inc. (Golden Band) produced gold from two mines over the past year, the Roy Lloyd and Ko-mis mines. For its fiscal year 2013 (ended April 30, 2013), Golden Band processed 110 326 t of ore with an average grade of 6.55 g/t at its central Jolu mill, yield-ing 23,263 oz Au. Golden Band initiated shrink-stoping mining methods at the Roy Lloyd underground mine and halted mining altogether at its Komis mine in order to make the operation more cost effective. Milling was suspended for just over five months during this process, re-

    commencing in August of 2013.Both Claude and Golden Band also

    continued to actively explore at and near their operations over the past year. Claude completed drilling at the Santoy mine complex, including the recently dis-covered Santoy Gap deposit. This drilling allowed for a new Mineral Resource Es-timate at Santoy Gap, with an Indicated Resource of 994 000 t grading 8.8 g/t (281,000 oz) and an Inferred Resource of 1 875 000 t grading 5.92 g/t (357,000 oz). Subsequent drilling increased the down-plunge extent of known mineralization by 400 metres at Santoy 8 and 650 me-tres at Santoy Gap. Claude also continued exploration at its Amisk Gold project on northern Amisk Lake, and is working towards a Preliminary Economic Assess-ment of this project.

    Results from new surface and under-ground drilling at the Roy Lloyd mine (Bingo deposit) allowed Golden Band to update the Mineral Resource Estimate for the unmined portion of the deposit, including an Indicated Resource of 155 383 t grading 12.6 g/t Au (62,947 oz) and an Inferred Resource of 91 888 t grading 10.78 g/t Au (31,843 oz). Golden Band is now focussing on moving other de-posits towards production over the next two years, including the Golden Heart and Decade deposits and renewed pro-duction from Komis. Additionally, along with joint venture partner Masuparia Gold Corp. (Masuparia), Golden Band is nearing completion of a bulk sample from the Greywacke North deposit. The stockpiled ore from the sample will be processed and, along with the other

    deposits, Golden Band is anticipating adding production from the Greywacke deposit within the next two years. The MasupariaGolden Band partnership is also undertaking resampling of historical drill core at the North Lake deposit, lo-cated ~25 kilometres south-southwest of the Roy Lloyd mine.

    There were several other active explo-ration projects in Saskatchewan in 2012-13. La Ronge Gold Corp. (La Ronge Gold) continued with drilling of its Preview SW deposit, located ~10 kilometres north of Lac La Ronge. Following completion of a drill program in late 2012, La Ronge Gold released a new Mineral Resource for the deposit, including an Indicated Resource of 1 958 400 t grading 2.12 g/t (138,100 oz) and an Inferred Resource of 3 714 600 t grading 2.09 g/t Au (257,300 oz). Additional drilling was subsequently completed in early 2013 which identified gold mineralization outside the defined Resource, and metallurgical testing was completed on two samples from the de-posit to provide a preliminary assessment of the gold recovery potential of gold-bearing materials.

    Wescan Goldfields Inc. (Wescan) com-pleted an airborne geophysical (VTEM and magnetic) survey in the vicinity of its Jojay deposit, located ~125 kilometres north-northeast of La Ronge, to aid in identification of other possible mineral-ized zones in the area. Wescan also com-pleted an airborne geophysical (magnetic and EM) survey over its Munro Lake property, located ~4.5 kilometres north of Claudes Santoy 8 mine, and completed four drill holes, one of which yielded an intersection of 67.1 g/t over one metre.

    Galaxy Graphite Corp. initiated ex-ploration in the vicinity of historical gold showings in the Brownell Lake area, lo-cated ~100 kilometres east of La Ronge. The exploration program consisted of two phases, including an initial phase of detailed mapping, soil/outcrop sampling, and ground geophysics (VLF and magne-tometer), and a subsequent program of channel sampling over zones identified as prospective during the first phase. Assay results from the channel sampling includ-

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    ed values of 25.1 g/t Au over 1.03 metres and 4.1 g/t Au over 5.1 metres in different areas of one of the historical showings.

    The most significant gold project out-side of the greater La Ronge area is Brigus Gold Corp.s Goldfields project (Box and Athona deposits), located in the Beaver-lodge Domain on the north shore of Lake Athabasca. A production decision on the project is pending.

    Base MetalsAlthough there is currently no base

    metal production in Saskatchewan, es-timates for exploration expenditures for 2013 are $9.9 M, which is on par with the $12.97 M spent for exploration in 2012. Foran Mining Corporations (Foran) Mc-Ilvenna Bay deposit in the western Flin Flon Domain continues to be the most advanced base metals exploration proj-ect in northern Saskatchewan. Transi-tion Metals Corp. (Transition Metals) have commenced preliminary explora-tion work on its Janice Lake project in the Wollaston Domain. Manicouagan Miner-

    als Inc. has not reported any further work for its Brabant Lake deposit in the west-ern Kisseynew Domain. Unity Energy Corp. (Unity), a Vancouver-based junior resource company, has acquired two base metal properties in the province and has publicized plans for exploration work.

    In October 2012, Foran announced a $5 M exploration and development bud-get focussed on its 100 per cent-owned copper-zinc-silver (Cu-Zn-Ag) McIlvenna Bay deposit, located 80 kilometres west of Flin Flon. Primary objectives of this work were to complete 2000 metres of infill drilling at McIlvenna Bay, 5000 metres of additional drilling on regional targets, and to calculate a new mineral resource for the deposit. In March 2013, Foran an-nounced a new and increased mineral resource estimate for the McIlvenna Bay deposit including an Indicated Resource of 13.9 M t (15 per cent increase) grading 1.28 per cent Cu, 2.67 per cent Zn, 0.49 g/t Au, and 17 g/t Ag, and an Inferred Re-source of 11.3 M t (18 per cent increase) of 1.32 per cent Cu, 2.97 per cent Zn, 0.43

    g/t Au, and 17 g/t Ag. The regional drill-ing, carried out in February and March of 2013, discovered a new zone of high-grade copper mineralization at the Bal-sam deposit, which is located 7 kilome-tres southeast of McIlvenna Bay. One of the better intersections returned assays of 4.08 per cent Cu, 0.43 g/t Au, and 27.0 g/t Ag over 3.66 m, at a vertical depth of 205 metres (drill hole BA-13-77).

    Transition Metals announced plans to spend $2 M on exploration in 2013 on its 100 per cent-owned Janice Lake property, which is located 55 kilometres southeast of Key Lake. Grab samples collected by the company confirmed previous reports of sediment-hosted mineralization and returned values ranging from 0.34 to 9.35 per cent Cu and 0.7 to 61.7 g/t Ag. The new exploration work will mainly consist of data compilation, mapping, ground geophysics, soil geochemistry, and rec-lamation and sampling of historical drill core.

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