Spanish River Project

Spanish River Project

Spanish River Project

The Spanish River Project consists of an unpatented mining claim S-4270643 (Claim) over an area of 1.89km2, in the south-eastern area of the province of Ontario, Canada.

Based on the geological setting, historic exploration and mining, the Spanish River Project has the potential to host a sulphide mineral deposit with copper as the dominant metal. Other subordinate metals including silver, cobalt and uranium may be associated.

A summary of the salient information is provided as follows.

Location, Access and Tenure

The Spanish River Project is located on the northern shore of Agnew Lake in the Sudbury Mining Division of Ontario, Canada near to the township of Baldwin, approximately 60kms west-south-west of the regional centre of Sudbury.

The Claim covers a portion of the Agnew Lake, with approximately 0.7km2 (~40%) over Agnew Lake and the remaining ~60% over land, and is valid through to September 2019. The expiry date of the Claim may be extended subject to approval by the Ministry of Northern Development and Mines – Ontario.

Agnew Lake was formed in the early 1920’s when INCO (International Nickel Company of Canada) dammed up the Spanish River channel in order to generate hydroelectric power, causing the river to flood and form Agnew Lake. It is named after John Lyon Agnew who was the President of INCO at the time.

Access to the Spanish River Project is via unsealed access roads that connect to sealed highways linked to Sudbury, or via boat and barge from the nearby southern shore of Lake Agnew which has road access to the regional highway.

Ontario has been recently ranked 7th among mining jurisdictions for its geological attractiveness for minerals and metals and the extent to which government policies encourage or deter exploration and investment.
Ontario is regarded as having “rich mineral reserves, competitive taxes, efficient permitting procedures and certainty around environmental regulations”.

Sudbury, the mining centre of Ontario, supports a strong mining industry highlighted by Vale’s six operating mines producing nickel, copper, cobalt, platinum, gold and silver.

The Company believes that operating within a well-established mining jurisdiction has the benefit of greatly improving its ability to implement its business model in a cost effective and timely manner. Additionally, the existence of established mining operations located within Ontario will allow the Company to source the required geological and technical expertise as and when required along with plant and equipment for planned exploration activities.

Infrastructure

The Spanish River Project is located close to the township of Baldwin which is situated at the junction of Ontario Highway 17 and Ontario Highway 6 and which has, despite having just over 500 permanent residents, a rail connection and a local airstrip.

Baldwin is approximately 66kms from Sudbury, the largest city in Northern Ontario, and has the major infrastructure expected of a major city including road, rail, air, power, gas, telecommunications, health, education and emergency.

Agnew Lake and surrounding area has been the site of varied mining activity, including nickel, cobalt, diamonds and uranium. The Shakespeare nickel-copper deposit located 20kms west of the Spanish River Project was mined as recently as 2010 and produced ore averaging 0.357% nickel, 0.407% copper, 0.025% cobalt and 1.1 gpt gold.

The Agnew Lake Uranium Mine, located approximately 20kms north-east of Baldwin, was mined for uranium initially from 1967 to 1970, when low uranium prices forced its closure. It re-opened in 1979 and continued operating through to 1983. It is reported that it produced 1.9 million pounds of uranium at the time of its closure in 1983. During the mid 1980’s, five small-scale diamond operations are reported to have been in operation.

The location of the Spanish River Project will reduce the Company’s need to expend funds on costly infrastructure to create access to the Project. In addition, its locality to the town of Baldwin will provide cost effective accommodation for field activities without the need to create portable or remote accommodation.

Physiography and Climate

Vegetation on the Spanish River Project area is described as being mostly forested with some areas of swamp; and with some dwellings scattered on the lake shore.

Southern Ontario is described as a landscape of flat plateaus and low, rounded hills, crisscrossed by rivers and lakes. The project area is typical of Southern Ontario. It is mostly flat lying with an elevation ranging from 262m ASL at the shore of Agnew Lake to a peak of approximately 320m ASL in the central part.

The climate is described as a humid continental climate, with warm and often hot summers contrasted by long, cold and snowy winters. Snow cover typically lasts six months of the year. It is situated north of the Great Lakes, making it prone to artic air masses. Total annual precipitation of 871.8 mm (34.3 in) with monthly precipitation being approximately equal year round. Extreme weather events are rare.

The Company is of the view that the climate and physiography of the region will not impede its planned exploration activities and allow for extended periods of access to the project area throughout the year.

Regional Geology

The Spanish River Project area is located in the Proterozoic Southern Province of the Canadian Shield. The eastern part of the Southern Province consists of the Paleoproterozoic Huronian Supergroup which occurs in an area extending from Lake Superior (west of Lake Agnew) to Sudbury to the east.

The Huronian Supergroup is subdivided into four stratigraphic groups. The oldest, the Elliot Lake Group, consists of volcanic rocks and clastic sedimentary rocks, and contains significant uranium deposits. The three other groups, from bottom to top (oldest to youngest) are the Hough Lake, Quirke Lake and Cobalt Groups. Each is characterised by a sedimentary cycle in which conglomerate, of probable glacial origin, is overlain by mudstone, siltstone and coarse arenite.

The Sudbury Igneous Complex, located to the north-east, hosts world class mineral deposits and has a mining history of over 100 years. These deposits have predominantly produced nickel and copper sulphides with associated platinum group elements and precious metals.

Mineral occurrences of the Huronian Supergroup are of a smaller tonnage than those hosted by the Sudbury Igneous Complex and formed through different mineralising processes. The Elliot Lake Group is known for significant uranium deposits, several of which have been mined.

Mineral occurrences of the Huronian Supergroup are of a smaller tonnage than those hosted by the Sudbury Igneous Complex and formed through different mineralising processes. The Elliot Lake Group is known for significant uranium deposits, several of which have been mined.

The mineralisation at the Spanish River Project is considered to be a Volcanogenic Massive Sulphide (VMS) style deposit, however this classification needs review relative to current geological theories when a greater amount of data is available.

VMS deposits are volcanic or volcano-sedimentary associated or hosted massive sulphide deposits that form metal-enriched fluids associated with seafloor hydrothermal convection. These deposits are major sources of Zn, Cu, Pb, Ag and Au and significant sources of Co, Sn, Se, Mn, Cd, In, Bi and Te. The deposits can range in size from thousands of tonnes to giant deposits of many millions of tonnes.

Local Geology

The Ontqario geological mapping data for the region shows that the Spanish River Project area straddles the contact between Precambrian Elliot Lake Group rocks in the south-east and Precambrian Hough Lake Group, Mississage Formation in the north-west. The regional scale mapping indicates major structures through the area with a north-east orientation and Creighton fault zones.

Historical Activities

The Spanish River Project has been explored and mined for copper with historic trenching, drilling and mining of a zone of sulphide mineralisation.

A review of historic information reflects that 64 holes for 26,993.3 feet of drilling was completed between 1929 and 1967 with the majority of the work carried out between 1956 and 1967. No assay data from the drilling is available, and even were it available, it would not be reportable as the drilling was not performed under JORC standard.

Drill hole geological logs are available for some of the historical drilling. These logs indicate mineralisation is dominated by chalcopyrite, pyrrhotite and pyrite associated with siliceous alteration and quartz veining. Sulphide texture is described as disseminated, splashes, streaky, blebby, stringers and occasionally veined. Sulphide percentages are not recorded in the available drill hole logging. The core is not available to validate the information.

Historic reports indicate that a decline was sunk in 1968 and ore was produced until September 1970. The mine workings are described by E.E Matten (1972) as a decline driven into the hillside being 9 x 13 feet at a 15% copper grade. No mine plans or production records are available to determine the extent of mining, ore quality or processing of this material.

Two 45-gallon drums were collected from existing surface stockpiles or exposures of mineralisation in historic surface workings at Spanish River Project and submitted to Falconbridge (Lakefield) laboratory for analysis in 1994. The analysis showed copper grades of 1.74% and 8.77% with associated silver of 3 gpt and 14 gpt respectively.

No analysis was conducted for gold or cobalt. No validation of the location, sample method, sample quality, representivity or analytical techniques can be made and as such these samples cannot be considered representative of the mineralisation of the Spanish River Project.

A Time-Domain Electromagnetic, Magnetometer and Very Low Frequency Electromagnetic (VLF-EM) survey was conducted in 2003 on behalf of Ursa Major Minerals Inc. and covered a much larger area than the Spanish River Project area but appears to have extended into the Claim area near the site of the historic mining. The survey summary describes the VLF-EM conductor as ‘moderate to strong’, ‘south of a broad magnetic high”, and “could be associated with a known copper deposit”.

Since the closure of the mine in 1970, exploration has been sporadic and the historic reports available indicate that no systematic exploration work programs have been undertaken for at least 40 years.

Proposed Exploration

The Spanish River Project should be considered an early-stage exploration project. Mineralisation has been identified, however, Mineral Resources have not been identified according to JORC Code 2012, and there has been no systematic exploration or targeting. Consequently, mineral exploration is planned on a staged process with the results from each activity used to ensure the following work is conducted effectively and efficiently. Program details may be modified during the stages based on the outcomes of preceding work.

It is proposed that a cost-effective exploration program will be implemented. An emphasis placed on drilling, which will focus on drilling at and near the historic mine, particularly to extend known mineralisation, and other targets identified from mapping, sampling and collation of historic records.

During the first 12 months, the Company proposes to review and collate available historical information and to conduct mapping and sampling to aid in the geological interpretation and for drill program design. Planned exploration in the 12 months includes diamond drilling on target zones.

Follow-up diamond drilling is planned in the second year as a follow-on from encouraging diamond drilling results from the first work program together with resource modelling and geostatistical analysis.

The Company will engage skilled consultants to carry out the proposed exploration program as and when needed. The Company does not anticipate any difficulty in locating or engaging consultants to carry out the proposed exploration program.

A summary of Project exploration expenditure is set out below:

It is anticipated that the work program will enable the Company to establish an initial resource and/or uncover new mineral discoveries.