Prosperity Goldfields Corp. (TSX: V.PPG, Stock Forum) President Adrian Fleming told Stockhouse this week that his company may be sitting on multiple gold deposits on its Kiyuk Lake project in southern Nuvavut.
If he is right, it would come as no surprise to Tom Hoefer, the executive director of the Northwest Territories and Nunavut Chamber of Mines.
“Nunavut is such a big area. There is lots of prospective ground, and yet there hasn’t been a lot of exploration or geoscience,’’ he said. Hoefer said Nunavut’s huge size encompasses several geological provinces, which means it hosts a great diversity of minerals and deposit types.
“It’s ripe for the picking,’’ he said.
Indeed, spending on exploration and deposit appraisals was expected to hit a record $586 million in Nunavut this year, marking a 13.5% increase from 2011, according to statistics compiled by Natural Resources Canada.
Some of the projects that are making headlines include:
The $4 billion Baffinland Iron Ore Mines project in northwestern Baffin Island. Held 70% by steel making giant ArcelorMittal (NYSE: MT, Stock Forum) and 30% by Iron Ore Holdings LP, it recently entered the permitting stage after securing a positive recommendation from the Nunavut impact review board. Development is expected to be facilitated by the construction of a 140-kilometre railway that will be used to ship future output to port. Iron Ore Holdings is an entity backed by Energy & Minerals Group, a $2 billion Houston-based private equity firm.
China-controlled Minerals and Metals Group has triggered an environmental review of its Izok corridor project in the Kitikmeot region, which would see both the Izok and the High Lake base metal deposits mined, linked together and connected to a dedicated port via a 350-kilometre all-weather road.
Agnico-Eagle Mines Ltd. (TSX: T.AEM, Stock Forum) (NYSE: AEM, Stock Forum) is planning to complete a feasibility study next year for its Meliadine gold project located 25 kilometres northeast of Rankin Inlet. Meliadine is comprised of five deposits. Toronto-based Agnico said construction is under way on a permanent all-season road, linking the project with Rankin Inlet.
Last month, Advanced Exploration Inc. (TSX: V.AXI, Stock Forum) filed a positive feasibility study for the C Zone of its Roche Bay iron project, located on the east coast of Melville Peninsula in Nunavut. The study targeted a start-up production rate of 5.5 million tonnes annually and start-up production of 66% iron concentrates.
North Country Gold Corp. (TSX: V.NCG, Stock Forum) said last week it had discovered emeralds in the drill core on its southern portion of its Committee Bay Greenstone Belt Property, which is located 180 kilometres northeast of Agnico-Eagle’s Meadowbank gold mine in northeastern Nunavut.
Given that North Country is exploring for gold, the discovery of emeralds came as a complete surprise, said Brian Budd, the junior’s vice-president, corporate development.
For its part, Prosperity is at a much earlier phase of exploration at Kiyuk Lake, which Fleming has described as the best new gold discovery in Nunavut.
The aim is to outline enough gold – likely 3 million ounces – to attract the attention of major mining companies such as Agnico-Eagle.
Rusty Zone
In keeping with that plan, Prosperity amalgamated with Fleming’s Smash Minerals Corp. in April 2012, a move that brought together the geological expertise of Fleming and Qunton Hennigh. It was Hennigh who brought the property to Prosperity in February 2011. He remains a director and technical advisor at Prosperity.
Any success at Kiyuk would be the first success for Fleming since his former company Underworld Resources went on to define the Golden Saddle deposit in the White Gold district of the Yukon, which was sold to Kinross Gold Corp. (TSX: T.K, Stock Forum) (NYSE: KGC,Stock Forum) in 2010, in a transaction worth $139 million.
Prosperity’s first drilling program in 2011 included 14 holes, for a total of 2,600 metres which the company said returned encouraging results from three separate targets, including the Rusty zone, which coughed up 157.6 metres at 1.7 grams per tonne gold from surface.
After following that up with a property-wide sampling program aimed at gaining a better understanding of the local geology, the company has identified additional areas of interest.
In 2013, the company is planning to spend $3.5 million to drill about 20 holes, of which 12 will target the Rusty Zone. The aim is to show continuity and support the theory that (Rusty) can get bigger.
“I think that eventually there will be a number of open pit gold mines, with one processing facility being fed by a number of pits,’’ Fleming said.
But he was quick to qualify that statement by saying it could take a least a decade and thousands of metres of drilling to prove the property is as rich in gold deposits as Fleming is suggesting.
Meanwhile, as the company's stock price would suggest, Kiyuk remains an early stage exploration project. The stock traded at 18 cents Wednesday, leaving Prosperity with a market cap of $10.6 million, based on 59.2 million shares outstanding. The 52-week range is 82 cents and 17 cents.