Out of the blue invitations to lunch can lead to life-changing experiences. Such was the case one day in December, 2004.
Nelson Baker, a geologist with a distinguished exploration career and roots in Kirkland Lake, didn’t know what to expect when he sat down for lunch with a merchant banker from the Providia Investment Group. When the reason for the invitation became clear, he just about fell off his chair.
“If you had all the money you wanted to set up a company, would you know of a good gold property to acquire?” It was a proposition that geologists usually just dream about.
“Gold was a little over $400 an ounce at the time,” said Baker, “but they believed it was on an uptrend.”
Baker inherited his passion for geology from his father, Walter, a lifelong prospector with several important discoveries to his credit (see sidebar).
A graduate of both the Haileybury and South Dakota School of Mines, Nelson worked for Esso Minerals for 14 years and consulted independently for junior mining companies with properties across Canada and overseas. He moved to Vancouver in 1991, worked for Hunter Dickenson for several years and then joined Boulder Mining as vice president of exploration.
Baker’s experience across Canada gave him a good overview of promising gold properties and the one that immediately came to mind was the Rainy River project in northwestern Ontario.
He had a close look at the Rainy River project, 80 kilometres south of Kenora, in 1999 when he worked for Hunter Dickenson, but the owner of the property, Nuinsco Resources, balked at Hunter Dickenson’s terms.
“They never wanted to part with more than 50 per cent interest in the project and Hunter Dickenson’s strategy was to acquire better than 50 per cent,” said Baker.
The Rainy River deposit was discovered by the Ontario Geological Survey in 1987 as a result of a till sampling program.
“It’s a Greenstone Belt, but prospectors couldn’t explore it because it’s covered by a layer of clay. It’s completely hidden.
“When you find an unexplored Greenstone Belt in Canada, you have to take it seriously because they are such prolific producers of minerals,” he said.
Baker consulted his friend and fellow geologist Stu Averill, owner of Overburden Drilling Management, who was equally excited about the property. His next call was to Warren Holmes of Nuinsco.
“I asked him if Nuinsco would be willing to sell its interest in the Rainy River project and he said yes. He also indicated that someone else was looking at it, so we had to move quickly. We got our financial people together, got on a plane and within a week we were in Nuinsco’s office.”
The property changed hands for $2.5 million in cash staged over two years and 2.4 million shares in Rainy River Resources.
“Nuinsco felt they were dealing with a Timmins or Kirkland Lake-style gold occurrence related to faults and shear zones,” said Baker. “There was some shearing, but we recognized that it had a different configuration. It was dipping and plunging in a different direction than was previously recognized, so with that model in mind, we were able to spot our holes to intersect the mineralization.”
The Rainy River project is a VMS (volcanic massive sulphide) deposit with a dominant gold credit. “It also has copper, zinc and silver, but the moneymaker is gold,” said Baker. The model also occurs in the Bousquet camp, from Noranda to Val d’Or.
“When we purchased the property, Nuinsco estimated there were just over one million ounces from surface down to 200 metres over an 800-metre strike length of the 17 Zone. We drilled that particular portion at close intervals down to 300 metres and extended the zone to beyond 1.2 kilometres, so we’ve added another third to the strike length and we know the zone extends at least one kilometer down. That’s why we feel we have multi-million ounce potential.”
Since acquiring the property in June 2005, Rainy River Resources has drilled more than 160 holes and spent more than $8 million. Nuinsco spent $11 million exploring the property from 1993 to 2004.
Till sampling using reverse circulation drilling has played an important part in the painstaking detective work at the site. Soil samples retrieved from just above the bedrock provide the exploration team with important clues pinpointing the source of the gold that was scraped and dispersed by the relentless force of glacial movements.
“It’s a technology that not too many companies use effectively, but because of Stu Averill’s expertise, we’ve been able to use it more effectively than most companies.”
In April, the Northwestern Ontario Prospectors Association recognized Rainy River Resources’ work and the potential significance of the deposit by presenting Baker and his colleagues with the Bernie Schnieders Discovery of the Year Award for 2006.
Baker family played role in Hemlo gold discovery
Nelson Baker was smitten by geology as a boy growing up in Kirkland Lake. He was 14 years old in 1963 when he accompanied his father, Walter, to the Hemlo area.
“There was a windblow that went through the western edge of the Williams claim and while traversing north of the highway, there was a fallen tree that had been uprooted, exposing a rock that hadn’t been seen before,” recalled Nelson.
“Dad traced the horizon by prospecting and panning for 3,000 feet. He would dig holes along the trend, pan the material just overlying the rock and he would count the visible gold grains he found in his pan.
“He was so proficient at it that he could tell if it was commercial or not. When he panned the Hemlo sample, he predicted within 50 cents what the assay would be.”
Gold was depressed at the time and the best they could get was .09 ounces per tonne. Years later, deeper drilling revealed much better grades, but “that’s the game we’re in,” said Nelson.
The elder Baker kept the Hemlo discovery to himself for several years, eventually encouraging Don MacKinnon to stake the property in the ’70s when the ground came open and was allowed to expire.
“Dad was working for Esso Minerals at the time and felt it would be a conflict if he staked it himself, so he had Don go and stake it and Don compensated him handsomely.”
Walter made several other discoveries, too. In 1987, the Prospectors and Developers Association of Canada awarded him the Prospector of the Year Award for his 1962 discovery of the North American Palladium deposit north of Thunder Bay. A few years before that, he discovered the Marshall Lake copper-zinc deposit now being explored by East-West Resources.
“Dad had an illustrious career as a prospector,” said Nelson. “Just about every year he went out, he found a new mineral occurrence that was worth drilling.”
Walter passed away in 1990 at the age of 87, but his two sons, Nelson and C.J., and grandson Brad continue the legacy. C.J., who earned an undergraduate degree in Geology in Australia and has a Masters degree from Queen’s University in Kingston, Ontario, is Rainy River Resources’ regional manager, while Brad looks after investor relations.