Update from Somerset Island, Nunavut – Seal Zinc

July 26, 2012

I am going to write two updates over the next three weeks. The first one will focus on the Seal Zinc Project, and the second will focus on the Storm Copper Project and regional issues.

We currently have a seven-person crew working on summer fieldwork. The Arctic Watch camp is about 50 kilometers from the Seal Zinc Project and includes a 3,500-foot airstrip with weekly flights from Yellowknife. It is unlikely we could run a drilling program from camp, but we could do some regional work and baseline environmental work from here.

First hand observation of the core and deposits have made the takeaways on the Seal Zinc Project very clear.

The ore body sits on the ocean shore with plenty of space on the peninsula for both stockpiles and overburden rock dumps. A direct ship zinc quarry should be very feasible.

We still have to work on a collection of issues over the next two years as we work towards a PEA.

Resource: We’re going to resample the historical drill holes this winter; the ore zone is clearly separate from the waste rock. The deposit appears to have two ore zones of 3-12 meters each, with a clear set of 3-5 meters of interburden between the two. We have most of the holes located, and we have the core to resample. We will try to get a resource statement from the historical work.

What is nice is the host rock is clearly different from the interburden in both color and competency. Thus, we probably have the ability to mine the zinc much like coal, stripping away layers of ore and waste.

We will have to complete a small drill program before we can produce a feasibility study, but it will be measured in the thousands of meters and not the tens of thousands of meters. Assuming the core is clear, we have a decent chance of releasing a resource statement this year.

Stockpile & Port Locations: There is a bench area that can support a stockpile and an equipment yard. Water depth will have to be tested, but we have 1-3 kilometers of shoreline from which we can select a suitable dock location.

Waste Rock: Waste rock can be stored on the backside of the ore body, as it holds plenty of area to build up the waste stockpiles. Most of the waste rock will be carbonate rock, so we aren’t concerned about acid rock drainage.

Mine Plan: The goal will be to run the zinc deposit as a quarry; we do not see any reason to build a mill or process on site. There will be no tailings pond or wet processing. The only processing we may do onsite is ore mixing and some screening. It is unlikely we will need to crush the ore, as it comes out of the ground as a granular silicate.

Shipping: This winter we need complete full egg charts and determine how long of a shipping season we have. Next summer we will have to sound the harbor and see what size ship we can bring in. The single biggest cost issue will be how close to the shore we can put the ship loader. The water appears to be deep near the shore, but it could be deep enough 20 or 200 meters from shore.

We plan to conduct additional work in the summer of 2013, specifically targeting the following:

Baseline environmental testing of the area: We will need to show just how much of a natural superfund site Seal Zinc is. We also need to determine what animals live in the area. We will only be impacting one drainage basin and a small lake that does not support any fish since it freezes through.

Engineering work: We need to determine how to lay out a mine, the location for waste rock storage, port location, water depth, and port design. We also need to decide on whether to use conveyor belts or trucks, and complete baseline surveying for engineering.

Bulk sample: We will target a 3-10 tonne bulk sample for detailed metallurgical work.

Seal is a clear and easy to target zinc project. It is not huge in size, and significant thought will have to be put into how to control costs. But if the historical grades are anything to go by, we have a deposit of $160-200 per tonne of rock that is located 500-1,000 meters from a dock site. The overburden can be stockpiled within 1-2 kilometers from the ore body, and it is easy carbonate rock to work with.