Exploration and deposit appraisal activities

The 2004 year was the most active for mining exploration in Québec since the end of the 1980’s. According to preliminary data, exploration and development expenditures reached 204 million dollars, representing an increase of 70 million (52%) compared to 2003 and the fourth consecutive annual increase. The 204 million dollar amount equals 4.1% of the worldwide exploration budget, which totaled 3.8 billion dollars US in 2004 according to the Metals Economics Group. This puts Québec in 6^th place when compared to a list of the most explored countries in the world for 2004.

Intense exploration for the following commodities was the reason behind Québec’s strong upswing in expenditures:

• precious metals – an increase of 41 million (61%), reaching 110 million dollars;
• base metals – an increase of 9 million (46%), reaching 61 million dollars;
• diamonds – an increase of 9 million (48%), reaching 27 million dollars.

Sources:	MRNF, 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.

A detailed description of many of Québec’s exploration and development projects can be found in the MRNF Report on mineral exploration activities, or by accessing the 2004 link from the Hot Spots web page. A number of projects worth mentioning are summarized below.

Gold in Northwestern Québec

• Alexis Minerals Corporation and Noranda intersected auriferous veins that assayed 3.19 g/t over 15 metres while drilling their Noralex property. The property lies 10 km northwest of the Doyon and Mouska mines.
  
  
• Agnico-Eagle Mines began rehabilitation work on the mining infrastructure at its Goldex property near Val-d’Or. Approximately 10 million dollars will be invested to improve the degree of confidence in its probable reserve estimate of 21.77 million tonnes at 2.4 g/t gold.
  
  
• At its Croinor property, South Malartic Exploration recovered 1,981 ounces of gold during a bulk sampling of 20,000 tonnes that was completed in February. The company also announced that it had reached an agreement with the Camflo mill to process 65,000 tonnes of ore from July to December 2004.
  
  
• To the east of Val-d’Or, drilling by Alexis Minerals Corporation on the Hogg showing – part of the company’s Cadillac Group project – intersected a skarn-type mineralized zone yielding values of 21.2 g/t gold and 0.56% copper over 3.8 metres.
  
  
• North of the Selbaie mine, International Taurus Resources and Fairstar Explorations recovered 3,428 ounces of gold from an 8,300 tonne bulk sample at the Fenelon deposit. An estimate of measured (4,002 tonnes at 18.36 g/t) and indicated resources (52,255 tonnes at 19.71 g/t) was announced for the central zone.
  
  
• In the central part of the Urban-Barry belt, 120 km east of Lebel-sur-Quévillon, Noront Resources conducted a drilling program on its Windfall property. Several holes intersected pyritic zones containing significant gold grades, including 8.55 g/t gold over 13.4 metres.

Copper, zinc and gold in Northwestern Québec

• On October 1^st, Campbell Resources completed almost 9,000 m of definition drilling at the Copper Rand mine in Chibougamau. Extraction of the copper-gold ore began in November and commercial production should begin in January 2005.
  
  
• In the Matagami region, drilling by Noranda intersected massive and semi-massive sulfides over 6.9 metres at a depth of 465 metres. The new showing, named “Renaissance”, is located seven kilometres southeast of the company’s concentration mill.
  
  
• West of Rouyn-Noranda, partners Noranda and Alexis Minerals Corporation revealed an impressive intersection on the Lac Montbray property: 5.16 metres at 5.61% copper, 1.70% zinc, 0.34 g/t gold and 17.6 g/t silver. The zone was reached at a vertical depth of 110 m.

Gold, zinc and diamonds in the James Bay territory

• In the Near North, close to the Opinaca reservoir, Virginia Gold Mines defined a rich gold-bearing system using surface fieldwork and drilling. The zone extends over a lateral distance of approximately 300 metres and a depth of more than 225 m. The project, known as “Eléonore”, consists of two main zones: Roberto (18.85 g/t gold over 16 m) and Roberto Est (4.05 g/t gold over 17 m). This new, strongly auriferous gold environment has generated enormous interest, leading to the acquisition of a large number of claims in the area.
  
  
• In the La Grande greenstone belt, Virginia Gold Mines and its partner Noranda announced the discovery of volcanogenic massive sulfide horizons on the Coulon property:
  
  
  • the DOM zone (9.94% zinc, 2.12% lead, 0.73% copper and 96.38 g/t silver over 19.5 m);
  • and the DOM NORD zone (12.65% zinc, 1.54% lead, 1.36% copper, 125.31 g/t silver and 0.3 g/t gold over 4.7 m).
    
    
• Ashton Mining of Canada and SOQUEM invested approximately 18 million dollars north of the Otish Mountains to conduct a bulk sampling program comprising 635 tonnes of kimberlitic rocks collected from the Renard cluster. The planned target is 300 to 400 carats in order to properly evaluate the diamond value. A 415-tonne bulk sample collected in 2004 from drill core and reverse circulation drilling yielded 282 carats of diamonds, including 12 stones weighing more than one carat. The processing of a 3.87-tonne sample of float from the Lynx property also yielded an estimated diamond content of 120 carats per 100 tonnes.
  
  
• Majescor Resources confirmed the discovery of several kimberlite blocks up to 50 cm wide on its Portage property. Thirty-two diamonds larger than 0.075 mm were recovered from a 138-kg sample collected from the float material.

Nickel in the Far North

• Canadian Royalties continued exploration work at their Expo-Ungava property, 15 km south of the Raglan mine, which has been in operation since 1998. The company announced revised estimates of indicated resources at its Mesamax deposit (1.84 million tonnes at 1.9% nickel, 2.3% copper, 5.2 g/t platinum and palladium), and a preliminary estimate for inferred resources at its Mequillon deposit (1.4 million tonnes at 0.7% nickel, 0.9% copper, 2.7 g/t platinum and palladium). In addition, Canadian Royalties discovered another high grade surface showing near Mesamax that grades 2.25% nickel, 5.70% copper, and 10.01 g/t platinum and palladium over 56.6 m.
  
  
• Goldbrook Ventures also reported the discovery of high grade Ni-Cu-Pt-Pd showings on its Bélanger property in the western part of the Cape Smith Belt. A drill hole returned average grades of 1.35% nickel, 0.61% copper and 2.88 g/t platinum and palladium over an interval of 49.35 metres. Further west, Knight Resources and Anglo American Exploration (Canada) announced several interesting intersections, including 24.5 metres at 1.71% nickel, 0.8% copper and 1.33 g/t platinum and palladium.
  
  
• Further south and between the 55^th and 56^th parallels, Virginia Gold Mines and BHP-Billiton completed a drilling program of almost 1 million dollars at the Gayot project.

Other projects

• The 2004 year also witnessed renewed interest for exploration in other regions or for new substances, including:
  
  
  • uranium, notably in the Caniapiscau reservoir region;
  • copper and nickel in the Grenville Province, on the Côte-Nord (North Shore) and in Lac-Saint-Jean;
  • titanium dioxide in the Grenville Province north of Forestville on the Côte-Nord (North Shore);
  • copper associated with iron oxide-copper-gold mineralizations in the Gaspé region.

Stone and industrial minerals

• NAMCA successfully continued their development work at two architectural stone deposits. Located at Maria and Saint-Armand, the deposits consist of rosy violet limestone breccia and whitish grey calcilutite respectively.
  
  
• Junex began drilling two new brine wells at Bécancour. Once in production, these wells will allow the company to increase its daily production capacity of natural brine.
  
  
• Finally, exploration for graphite continues in some areas of the Côte-Nord region, and limestone that may be of interest for cement manufacturing has been identified in the Percé area of the Gaspé region.