An article from the VMS board that might be of interest on this board.

February 2008

VMS exploration: New life for old camps

Virginia Heffernan

With a tendency to be small, zinc-rich and sometimes difficult to process, Volcanogenic Massive Sulphide (VMS) deposits fell out of favour in the low metal price environment that characterized the late 1990s and early 2000s.

But with increasing demand for base metals - including zinc, an early laggard in the metals revival - explorers are returning to some of the old Canadian mining camps known for their VMS production to see if they can find ore deposits missed by their predecessors.

This time, they come armed with powerful exploration tools that can see deep into the subsurface, can detect subtle geochemical signatures and/or are capable of integrating multiple historical datasets with more recent information to generate new targets.

From Matagami, Quebec to Flin Flon, Manitoba, they are succeeding. This year alone, several new VMS deposits have been found in mining camps that were thought to have had their day. And in most cases, explorers are crediting improved technology with their success.

VMS deposits are significant sources of copper, zinc and, sometimes, precious metals (e.g. Eskay Creek in British Columbia). The model for VMS deposits, which form on the ocean floor and are one of the few deposit types to have active, modern analogues, is constantly evolving as are the exploration methods to find them.

Take Lalor Lake, a discovery in the Flin Flon - Snow Lake greenstone belt of northwestern Manitoba. The new discovery is showing potential to be a relatively large VMS deposit that could reach production as early as 2010 if ongoing drilling continues to intersect ore-grade mineralization.

Winnipeg-based HudBay Minerals had identified the Chisel Lake Basin where Lalor Lake occurs as prospective, but it was an experimental deep penetrating TDEM (time domain electromagnetic) survey incorporating proprietary "innovative techniques" that identified a large bull's eye anomaly, according to project geophysicist Alan Vowles.

Using 3-D computer modeling software, HudBay geophysicists defined the conductor as a flat-lying, tabular body within favourable stratigraphy at a depth of 800 m. They plotted it using Geosoft software, and this year, won approval from management to test it with drilling. The company hit 45 m of high-grade zinc and copper in the first hole and sees the potential to develop an 18-20 million tonne deposit grading about 8% zinc and 0.8% copper.

"We believe we have in hand one of the most significant zinc discoveries in Canada in recent years and, of course, we are now fast-tracking that opportunity," Peter Jones, president and CEO of HudBay told mining analysts in a conference call.

Though relatively deep, Lalor Lake has the advantage of occurring within an established mining belt. The deposit lies within 15 km of the company's Snow Lake concentrator and just 3 km from a haulage road and power line, so the cost of developing the project would be considerably less than if it were a greenfields discovery.

Inspired by HudBay's success, other companies in the area are using a combination of geophysics and geochemistry to find similar pockets of mineralization within the Flin Flon- Snow Lake belt, which contains 20 known VMS deposits with an average size of five million tonnes. The belt is covered by Paleozoic limestone sediments, making airborne and ground geophysical tools that can see through the cover particularly useful.

Igneous geochemistry of the mafic and felsic rocks associated with VMS deposits has also been refined to better delineate prospective ground for VMS mineralization. The two rock types can be used in tandem to identify key ingredients required to form VMS deposits - rifting and high-temperature magnetism - according to S.J. Piercey of Laurentian University in a paper presented at Exploration '07, a once-a-decade event that covers recent advances in exploration technology.

It was geochemistry that lead VMS Ventures Inc., the second largest landholder in the Flin Flon-Snow Lake belt, to the Reed Lake project southwest of Snow Lake, though geophysics that confirmed its potential.

Past drilling campaigns had identified altered rhyolites with geochemical signatures typical of the alteration halo around VMS deposits in the belt, prompting the junior to acquire Reed Lake. A subsequent airborne VTEM (Versatile Time-Domain Electromagnetic) survey identified an 800-metre-long southwest-trending anomaly and follow-up drilling hit the jackpot - 10.5 m grading 11.2% copper at a depth of 270 m.

VTEM is a leading airborne geophysical survey system capable of providing high definition, deep penetrating magnetic and electro-magnetic measurements of the underlying rock. The system, produced by Geotech Ltd., is particularly good at detecting copper-zinc massive sulphide deposits.

"We've primarily relied on geophysics to guide our drilling," concurs Lynda Bloom, president of Halo Resources, which is also using VTEM technology to identify mineralization within favourable stratigraphy at the contact between felsic and mafic volcanics in the Sherridon camp in northwest Manitoba, about 70 km northeast of HudBay's mining and metallurgical complex in Flin Flon and just north of Reed Lake.

The Sherridon property , which contains the past-producing Sherritt Gordon mine, has only recently been considered a VMS target. New thinking is that the felsic gneisses on the property may be equivalent to the suite of rocks that hosts the VMS mineralization in the Flin Flon and Snow Lake camps.

Last year, Halo identified 122 new targets with an airborne survey and, in combination with alteration mapping, prioritized new areas of VMS mineralization for drilling.

An ongoing 30,000 m drill program has intersected moderate widths of copper-zinc mineralization including 1.2% copper and 6.3% zinc over 6.5 m and 1.6% copper and 4.9% zinc over 5.1 m.

Because VMS deposits often occur as a series of lenses, down-hole magnetic and EM surveys to detect conductive sulphide bodies near the borehole are also becoming an increasingly powerful tool for VMS exploration as modeling software improves, says Marc Boivin of MB Geosolutions in a paper presented at Exploration '07.

Partners Alexis Minerals Corporation and Xstrata Zinc Canada, for instance, used a combination of magnetic and EM borehole surveys to detect buried VMS occurrences on the Ansil West property in the Rouyn-Noranda camp of northern Quebec. He team used the magnetic data from a borehole orientation probe to optimise EM interpretation and drilling locations.

Xstrata inherited West Anvil and other properties from its predecessor Noranda, which revived exploration in the Noranda camp five years ago with the objective of finding more ore in the vicinity of its Horne smelter by using new exploration technologies.

The prolific camp is one of the most studied VMS camps in the world and literally hundreds of companies have scoured its ground over the years since the Horne deposit was discovered in 1923, leaving behind not only truckloads of data but the impression that there was nothing left to find.

Xstrata's toolbox included MegaTEM and VTEM, both airborne EM systems, as well as Titan24 for deep penetration from the surface and advanced borehole survey systems. An integral part of the program was the use of 3-D earth modelling technology, particularly 3-D GIS systems, to integrate and interpret the vast amounts of multidisciplinary historical data with new data.

By developing a series of quantitative queries from conceptual geological models (e.g. proximity queries to select cells within 150 m of typical VMS associations, including hydrothermal alteration and exhalites), the partners were able to use a process of elimination to highlight prospective areas.

The resulting West Anvil discovery hole assayed 3.6 % copper over a core length of 53 m, representing the first major base metal discovery in the 17 km2 central area of the camp in 25 years, according to a paper given to Exploration '07 by the Xstrata team.

Xstrata, along with partner Donner Metals Ltd., is also using a combination of 3D data integration, advanced technologies, new concepts and diamond drilling to find ore in the Matagami camp about 300 km north of Noranda. Matagami contains 18 known VMS deposits.

The use of advanced technology to find hidden orebodies in the camp has been ongoing since 1999, when a new EM system survey led to the discovery of the Perseverance deposits containing a resource of 5.1 million tonnes grading 15.8% zinc, 1.24% copper, 29 gpt silver and 0.38 gpt gold.

The main productive horizon in the Matagami camp is a "Key Tuffite" at the top of the felsic volcanics, but earlier this year, Donner made a significant discovery in mafic volcanics about 220 m statigraphically above the Key Tuffite zone. This initial discovery, and subsequent others, demonstrates the potential for stacked mineralization in the Matagami camp.

The drilling success also validates the multidisciplinary approach the partners have used on the project. In recognition, the Québec Mineral Exploration Association (l'Association de l'Exploration Minière du Québec) awarded the 2007 Prospector of the Year Award to the Xstrata/Donner exploration team.

What lies ahead for VMS exploration in Canada after the significant successes of the past couple of years?

Laurentian's Piercey says future geochemical research will focus on distinguishing productive from non-productive volcanoes within rifts. This will require a combination of field methods, new analytical techniques and thermodynamic modeling to better understand the way tectonic, igneous and hydrothermal processes interact.

In the geophysics field, Boivin says further improvements in depth penetration of geophysical tools will be the key to discovering more deep orebodies that can contribute to the next generation of base metal production in Canada.

And finally, 3-D mapping and modeling software and GIS systems continue to evolve. Exploration software companies, like Geosoft, are giving companies more powerful tools to visualize, integrate and interpret both historical and new data. The end result is new techniques and better tools for accessing and working with their data - whether geophysics, geochemistry, drilling or 3D models.

Bring on the old mining camps.