A “New” Gold Camp in the Making?
One seldom gets to name a planet or star, a new species of plant or animal, a street or a town. In the mining world new mining camps are relatively rare phenomena too so getting to name a “new” mining camp is something of an honour. Indeed it could be like a staking rush if anyone was actually noticing that an area with great potential is developing and remains unnamed as yet. However, that begs the question as to at what point a couple of disparate prospects and projects start to crystallise into a new district.
If Signature Resources Ltd.’s (TSXV: SGU | OTCQB: SGGTF) Lingman Lake project was alone out there in the Ontario/Manitoba borderlands or if it was solely greenfield then naming the area the “Red Sucker Lake Camp” would be jumping the gun but in fact its property was mined in the 1940s, made a false start at resumed production in the 1990s, and now the sizeable Monument Bay project in the hands of Yamana is making the area almost crowded (we jest) in comparison to recent decades.
Both of these projects are located in an east-west trending granite-greenstone terrane exposed across northeastern Manitoba and northwestern Ontario.
With many of the historically productive gold zones of Ontario and Quebec being well-picked over, exhausted or totally staked, the natural course for up-and-coming explorers is to push the borders of exploration beyond the same old, same old. What looks however like striking out into the wilderness in the case of Signature is actually a return to proven territory that has come to grief in the past not through lacking geological potential but due to the swings and roundabouts of gold pricing and financing moods. So with Signature’s team having multigenerational prospecting history and Yamana moving into the zone this has started a process that we might call “mining gentrification”.
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Signature Resources consolidated its acquisition of the property, which is located in the Kenora district of Ontario in the fall of 2013. Initially it encompassed 78.5-hectares. It later added a further 12-staked claims totalling 538.3-hectares. A significant portion of the historic resource that is contained in the North Zone, approximately 50%, resides on this property. The historic resource estimate (not NI43-101 compliant), dating from 1989, speaks of 234,647 oz Au.
The property is remote with no all-weather roads leading into it. Lingman Lake being 6,000-meters long and 500-meters wide accommodates safe aircraft landings and take-offs. Thus the site can be accessed by float- or ski-equipped aircraft, either from the Town of Red Lake 325 kms south or from the First Nations community of Red Sucker Lake located in Manitoba, 55 kms northwest, or from the First Nations community of Sachigo Lake Ontario 50-km east.
The Lingman Lake property is situated in the Lingman Lake greenstone belt. The belt consists of complexly folded assemblage, of mafic metavolcanics, felsic metavolcanics and metasedimentary rocks. The assemblage is in intrusive contact with marginal granitic rocks and internally intruded by various intrusive rocks. There are mineralized high angle shear zones and faults proximal to a large pluton. The pluton appears to have a late magmatic phase resulting in the formation of feldspar porphyry stocks and dikes that are intrusive to the volcanic-sedimentary succession. Gold mineralization at Lingman Lake is associated with shear hosted veins in the volcanic-sedimentary rocks, the contact zone of intrusive rocks with the volcanic-sedimentary succession and within the intrusive phases.
A Location with History
Exploration work began on the site in the 1930s and has seen bursts of intense activity since, interspersed with long fallow periods. In 1947, reports indicated that 5,919-meters of diamond drilling were completed. East of a major north-south trending dike, 1,617-meters of drilling were performed on the North zone and 2,132-meters of drilling were conducted on the South zone. West of the dike; 1,480 metres were drilled on the North zone.
The North zone was estimated to be 152 metres long and averaged 2.44 metres in width, with a reported average grade of 46.32 g/t Au. Free gold was observed in core from this zone. The South zone was estimated to be 274 metres long and averaged 2.16 metres in width, with a reported average grade of 12.82 g/t Au. The West zone was estimated to be 244 metres long and averaged 1.92 metres in width, with a reported grade of 8.02 g/t gold. It was at this time that the shaft was sunk and a lot of above ground infrastructure was put in place (bunkhouses, assay lab etc.). Some more work was done in 1948/9 then financial difficulties resulted in the mining and exploration efforts being abandoned. There is still a stockpile with exceptional grades on site. Always useful for a starter revenue flow…
Agassiz Resources financed three diamond drill campaigns in 1987, 1988 and 1989, when approximately 28,000 metres of diamond drilling were completed on the property and it commissioned a “pre-feasibility” – scoping study, and three resource determinations. The last resource estimate, complied in 1989 is the historic estimate of 234,647 oz. (non-43-101 compliant). An attempt to revive mining in the 1990s came to grief again due to financial considerations.
As a result of Yamana Gold’s takeover of Mega Precious in early 2015, it ended up as the owner of the 338km2 Monument Bay project which is the closest development to Lingman Lake in proximity, but the two projects differ greatly in the fact that Signature’s property is a high grade standalone resource and does not use any other resource to reach its grades. It is located some 80kms NNW of Lingman Lake over the provincial border in Manitoba and is also in the territory of the same First Nations group, the Red Sucker Lake community. Yamana picked this up for around $17.5mn, but over $50mn in work has gone into the project since 2011.
Monument Bay’s mineral resource base has been expanded in recent times to 1.8 million ounces of Indicated resource and 1.8 million ounces of Inferred resource. It grades around 1.5 g/t and includes Tungsten credits.
It is key to note that Signature’s management see themselves as explorers and not developers. Thus they see a timeline of 24-36 months of intensive exploration before “turning this over” to a major (or mid-tier) developer to carry through to the production phase.
Looking at the history of this site one can only attribute its obvious attractions having been overlooked for so long (particularly during the last boom) as being due to its access issues. Ironically though the operators in the 1940s shipped in a sizeable mill over a long distance and were planning a high tension electricity connection, so 70 years ago, it was not that daunting. Frankly if this project had been 100kms closer to traditional mining areas it would have been swarming with prospectors in the go-go years from 2003-2011. With Yamana’s Monument Bay project showing the attractiveness of the area, this border region between Ontario and Manitoba promises to be the “next frontier” in Canadian gold exploration AND production.
Past operators have seen the worth of going off the beaten track to try and exploit the Lingman Lake potential. They suffered in their day from either the low gold price and/or difficult financing conditions. Clearly with grades at depth of the order of 9ozs per tonne over decent lengths the potential exists for a concerted and intense exploration campaign to significantly boost Lingman Lake up the rankings of takeover targets in the Ontario gold space and cementing the position of the “Red Sucker Lake Camp” as the new district to watch.
To access the Hallgarten and Company research report released today, click here.
Christopher Ecclestone is the EU Editor for InvestorIntel and is a Principal and mining strategist at Hallgarten & Company in London. Prior to founding Hallgarten ... <Read more about Christopher Ecclestone>