Thunder Bay junior miner Mega Precious Metals Inc. has set its sights on going underground in 2012 at its recently acquired Monument Bay project in northern Manitoba.
Acquired as a result of a merger with Rolling Rock Resources in December 2010, the property has a 43-101 inferred resource of more than six million tonnes grading 5.98 g/t for just over 1.2 million ounces.
“In the top 500 metres, we should be able to come up with at least two million ounces,” said Mega Precious president and CEO Jim Rogers. “That’s 20 years at 100,000 ounces a year, but the reality is that this thing is deep. It’s open at depth like all Archean deposits, so eight to 10 million ounces at two kilometres is a reasonable expectation in terms of potential.”
Previous owners of the property – Wolfden, Bema and Kinross –spent a total of $28 million doing 114 kilometres of drilling over several decades. Mega Precious has a drill program now under way in the hope of bumping up the resource to 1.5 million ounces and will spend 2011 making sure all of the permitting for the property is in order.
Rogers is convinced that the existing 43-101 resource underestimates the property’s potential.
“I’ve been doing resources and reserves all my life. The numbers are just circles around the drillholes. You can infer a lot outside the data by looking at the continuity, so I believe we can probably take this to 1,200 tonnes a day at 8 g/t or maybe even more tonnes at a lower grade.”
Meanwhile, at the company’s Headway project in Red Lake, deep drilling continues on two holes in the hope of finding an extension to Goldcorp’s high-grade zone. As of the middle of January, one hole was down to 2,603 metres and the second hole was just short of the 2,000-metre level.
“The drilling has gone a lot slower than we expected because of technical issues, but from a geological standpoint, we’ve proven the model to a T,” said Rogers. “It’s just a question now of getting the drillholes a little deeper and getting into the mineralized horizon.
“Our target is basically 2,500 to 3,000 metres. Goldcorp just hit 3,500 grams over 1.5 metres at 2,400 metres on their high-grade zone, so we believe they will develop and mine to three kilometres.”
Mega Precious has spent approximately $1.5 million on the two holes to date. It plans to take its first hole down another 400 metres and has another 1,000 metres left to drill in the second hole.
The plan is to leverage the proximity of Goldcorp’s underground infrastructure to develop a mine, said Rogers, who served as chief mine geologist at the Dickenson Mine in Red Lake and then regional exploration manager for Goldcorp’s Red Lake operation.
Mega Precious also owns the North Madsen project, a consolidation of properties adjacent to the historical Red Lake mines that produced 680,000 ounces of gold in the 1930s and 40s. The strategy there is to rely on contract mining and custom milling.
The company’s Blue Caribou copper project in Nunavut’s Kitikmeot Region has a resource of just under three million tonnes at approximately 3.1 per cent copper and is potentially worth billions, but in the absence of transportation infrastructure, “we can’t really put a value on it,” said Rogers.
The property is 160 kilometres south of a proposed deep-water port in Bathurst Inlet and is essentially a play on infrastructure and the price of copper.
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