2004: A year of renewed interest in mining exploration

Sylvian Lacroix and Patrick Houle
Géologie Québec

The year 2004 has been one of the best in a long time for mining exploration in Québec, for allocated investments as well as discoveries and exploration results.

More than 200 million dollars spent on exploration and deposit appraisal

Exploration and deposit appraisal expenditures in Québec reached slightly more than 200 million dollars in 2004. This represents an increase of 70 million dollars (+ 52%) when compared with 2003. In fact, these expenditures haven’t stopped to increase since the year 2000, when a total of 94 million dollars had been accounted. The amount for 2004, from a broader historical perspective, is higher than the 173 million dollars accounted in 1997 and such a level of exploration activity hasn’t been seen in Québec since the end of the 1980’s.

Sources:	MRNFP, Secteur des mines, Direction du développement minéral, Service de l’imposition et des données minières (for data related to Québec); Metals Economics Group (for worldwide data).
Note:	2004P refers to preliminary data. 2005CI means companies’ intentions for 2005.

The rising trend for the worldwide exploration budgets began in 2003 and continued on in 2004 to reach the estimated amount of US$3.8B, in comparison with US$2.4B in 2003 and US$1.9B in 2002. However, the rise in these budgets converted in Canadian dollars (+ 47%) has been lower than the one observed in Québec. Consequently, the worldwide exploration budget portion allocated to Québec’s territory has slightly risen to 4.1%, which would rank Québec 6^th among the most explored countries in the world for 2004.

The high expenditures increase on exploration and deposit appraisal observed in Québec for 2004 is explained by the increase in the expenditures on precious metals (+ $41M, + 61%), as well as on base metals (+ $19M, + 46%) and diamond (+ $9M, + 48%).

Highlights in exploration

Northwestern Québec has been the site of intense mining activity due to high prices of precious and base metals. Major advanced exploration, deposit appraisal and underground development work was achieved in order to evaluate the possibility of bringing into production Lapa and Goldex gold projects for Agnico-Eagle Mines Ltd., Casa-Berardi for Aurizon Mines Ltd., East Amphi for Richmont Mines Inc., Fenelon for International Taurus Resources Inc., Sigma-Lamaque for Century Mining Corporation, Croinor for South-Malartic Exploration Inc., and Kiena for Wesdome Gold Mines Ltd.

Campbell Resources Inc. has announced the beginning of operations at the Copper Rand copper and gold mine, in Chibougamau. Drilling at the Noranda Inc. symbolically called "Renaissance" (rebirth) property near Matagami has intersected a new lens of massive sulphide with high zinc grades. Partners Noranda Inc. and Alexis Minerals Corporation have intersected 5.61% Cu, 1.70% Zn, 0.34 g/t Au and 17.6 g/t Ag over 5.16 m on their Lac Montbray property, west of Rouyn-Noranda.

In the Baie James area, the "Éléonore" discovery of Virginia Gold Mines Inc. has aroused intense interest and lead to new claim acquisitions. A major auriferous system, with intersections such as 18.85 g/t of gold over 16 metres, was tracked for over 300 metres laterally and to depths of 225 metres. In the La Grande greenstone belt, Virginia Gold Mines Inc. and its partner Noranda Inc. have announced the discovery of volcanic massive sulphides horizons in the DOM (9.94% Zn, 2.12% Pb, 0.73% Cu and 96.38 g/t Ag over 19.5 m–drillhole CN04-17) and the DOM NORD zones (12.65% Zn, 1.54% Pb, 1.36% Cu, 125.31 g/t Ag and 0.3 g/t Au over 4.7 m–drillhole CN-04-23) of their Coulon property.

Nickel exploration has been particularly intense in the Cape Smith belt where the Raglan mine is exploited since 1998. Canadian Royalties Inc. has announced a revised indicated resources estimate of 1.84 million tons @ 1.9% Ni, 2.3% Cu and 5.2 g/t Pt+Pd at the Mesamax deposit, and a preliminary inferred resources estimate of 1.4 million tons @ 0.7% Ni, 0.9% Cu and 2.7 g/t Pt+Pd at the Mequillon deposit. Knight Resources Ltd. and Anglo American Exploration (Canada) Ltd. have announced several promising intersections, such as 24.5 metres @ 1.71% Ni, 0.8% Cu and 1.33 g/t Pt+Pd. Goldbrook Ventures Inc. has also reported the discovery of new showings, where they have obtained grades such as 1.35% Ni, 0.61% Cu and 2.88 g/t Pt+Pd over 49.35 m.

Ashton Mining of Canada Inc. and SOQUEM INC. invested about $18M north of the Monts Otish area in 2004, specifically for a 639 tons bulk sample of kimberlite material from the Renard swarm. In order to evaluate the diamond value, they are aiming at a target of 300 carats of diamonds. The first 269 treated tons have produced a total of 97 carats.

Prospects for 2005

Thanks to high metal prices and Québec’s diverse mineral potential, 2005 should be as favourable as 2004, since companies are planning to invest $209M in exploration and deposit appraisal in Québec.

Thus, northwestern Québec, the Monts Otish area and the Ungava Trough should remain the most explored regions in 2005. The investments on Québec’s territory will be helped by the exploration for gold, diamond, and nickel, together with the diverse measures taken by the gouvernement du Québec, such as the permanent continuation and upgrade of the flow-through share regime, the improvement of the tax credit for resources for junior companies, and the acquisition of geoscientific knowledge.