Prohibitive costs, brutal weather and limited success have forced many juniors to abandon exploration around the rich Voisey’s Bay nickel deposit in Labrador , but a handful of die-hards are taking another stab at finding mineralization on the fringes of Inco’s growing orebody.
The relative ease of claim-staking in Labrador, where prospectors can acquire ground by outlining an area on a map rather than running claim lines and hammering in corner posts, allowed hundreds of companies to take positions around Voisey’s Bay following the initial nickel discovery by Diamond Fields Resources in 1994.
That number has dwindled to less than two dozen, while the resource at Voisey’s Bay has grown to an estimated 150 million tonnes. By the end of this year, the number of claims in good standing within Labrador is expected to drop to 125,000 from a high of 280,000 in 1995, says Ken Andrews, Director of the Mineral Lands Division of Newfoundland and Labrador’s Mines Management Branch.
“Map-staking made it possible for companies to pick up land in Vosiey’s Bay and pretend to go mining,” says Douglas Hickey of International CanAlaska Resources, a company which still holds claims in the area. “Most of them never did, but hundreds of them saw their stock double in price over a few days.”
Those who stuck it out in the inhospitable terrain, where high winds are known to hurl drill rigs off cliffs and winter temperatures freeze exposed skin in minutes, will be joined this summer by seniors Falconbridge and Teck. The consolidation means exploration spending in Labrador, expected to fall to $59 million from last year’s $76 million, will be more focused, says Andrews.
The perseverance of some juniors, and the recent entry of senior players around Voisey’s Bay, is attributed to the nature of sulphide nickel deposits, which tend to occur in clusters or belts. All three of the main mineralized zones discovered to date - Ovoid, Eastern Deeps and Western Extension - lie within Inco’s 2,059-sq.-km property. But the belief that additional discoveries will be made has left Inco, which expects to build a mine at Vosiey’s Bay by 1999, surrounded on all sides.
To the south, Donner Resources plans to drill a number of geophysical targets that lie in close proximity to copper-nickel-cobalt mineralization. The junior expects to spend $5 million, funded in part by a recent private placement with operator Teck, to complete 10,000 metres of drilling on the South Voisey Bay Area.
To the east, partners International CanAlaska and Columbia Yukon Resources have enlisted the technical expertise of Falconbridge to direct a $3.3 million program to test for extensions of the Eastern Deeps mineralization. Falconbridge will cover a third of the cost of the program in return for an option to earn a 51% interest in the juniors’ property.
And to the north, NDT Ventures is planning to spend most of the $2 million it has budgeted for Labrador this season to investigate troctolite units, the host rock of the Vosiey’s Bay deposit, in the Staghorn Lake area.
A recent exploration update by Inco suggests these regional efforts are more than wild speculation. “Based on geological mapping and recent drilling, the troctolite rock which hosts the mineral resource found in the Voisey’s Bay area may be significantly more extensive than originally estimated,” Inco said in its first quarter report.
The nickel producer will confine its own drilling to the immediate area around the Voisey’s Bay resource, says Rick Gill, executive vice-president of Voisey’s Bay Nickel Company, an Inco subsidiary. But the company has also launched a regional geophysical survey to determine the extent of the troctolite host rock.
And to the chagrin of native groups in the area, who have yet to sign impact and benefits agreements with Inco, Voisey’s Bay Nickel has applied for infrastructure permits to build an airstrip for small fixed-wing aircraft and an 11-km road from the drilling camp to the main camp at Anaktalak Bay. The impact and benefits negotiations with the Labrador Inuit Association (LIA) and the Innu Nation, meant to cover cultural, environmental, educational, and employment issues, have been held up by unresolved issues over financial compensation.
Meanwhile, land claim talks between the two native groups and the Newfoundland government, stalled since the mid-April, are expected to resume on May 12.
Once the land claims are settled, the impact and benefits agreement finalized and environmental permitting in place, Inco can begin building what is expected to be the lowest-cost nickel mine in the world. In the year 2001, Vosiey’s Bay is forecast to provide about 35% of the 750 million pounds of nickel produced at Inco’s Canadian and Indonesian mines. Native groups also stand to benefit, if only in an economic sense, from the mineral riches beneath their land.
“To put the Voisey’s Bay find in perspective, the net benefit over the long term to Newfoundland and Labrador … is greater than from Hibernia, Terra Nova and other potential oil discoveries,” said Premier Brian Tobin after the deposit was discovered.