PGM demand sparks surge in exploration.

Major mining companies spending millions on exploration programs around Sudbury area

For the past year, Mike Cosec's Ramsey Lake Road office has been a bustling place.

The district geologist for the Ontario Geological Survey has been greeting a steady stream of clients from mining exploration companies seeking advice on the best places to hunt for platinum group metals (PGM).

"I just point them in the right direction and give them my two cents worth of advice," says Cosec, in explaining why exploration activities in the Sudbury district have been at their highest levels in more than a decade.

Skyrocketing prices for PGMs has made Sudbury hot property once again for dozens of junior mining companies and the millions of exploration dollars that have been flowing into the region over the last three years.

Cosec says the price of PGMs, also known as platinum group elements (PGE), has been on a steady incline for about a decade, but in the last couple of years has spiked because supply from South Africa - the main PGM supplier - is thought to be running out. Mix in some added instability in Russia, the world's second largest supplier, and the copper and nickel-rich ore bodies around Sudbury are looking better all the time.

In January the price for platinum hovered at $630 (US) an ounce while palladium averaged around $1,024 (US) an ounce.

Those concerns about world supply have driven up the price so that it's now more economical to do exploration. Though PGMs are among the rarest and most expensive metals to find, advances in geophysical technologies combined with anxieties about supply have made exploration and testing more worthwhile to pursue.

PG metals consist of platinum, palladium, rhodium, iridium, osmium and ruthenium, six metals usually found together in nature, along with nickel and copper, platinum and palladium being in the largest quantities.

They're prized in the auto industry where they are used in smog-controlling catalytic converters, in the Asian jewelry market, and in electronics to coat hard drives.

The most highly prized properties in the Sudbury mining district, believed to have the greatest geological potential, are east and west of the city in the River Valley area, north of Warren and East Bull Lake, north of Massey, where the majority of exploration activity is centred.

"The number of claim units being worked for platinum exploration (outside of Sudbury) is probably around the 7,000-unit mark," says Cosec. One unit being 40 acres (16 hectares).

How much there is out there is anybody's guess, but the signs are encouraging.

"We don't have a handle yet on the geology and how the deposits are sitting and if they're continuous, minable and economical," Cosec says.

Wallbridge Mining, Crowflight Minerals Inc., Aurora Platinum Corp., Champion Bear Resources Ltd., Mustang Minerals Ltd. and Pacific North West Capital Corp. are some of the major players in the Sudbury mining district spending millions on aggressive exploration programs in 2001.

Last year Mustang Minerals Ltd. entered into a $6.2-million joint venture with Impala Platinum Holdings Ltd. of South Africa for an exploration program in the River Valley area, while Falconbridge chipped in with $6 million for exploration at the East Bull Lake property.

Ken Lapierre, Mustang's vice-president of exploration, believes the PGM exploration rush has some staying power based on the area's geology and the wealth of mining infrastructure available in Sudbury.

"A lot of people in Sudbury don't realize that this is the third largest PGM producer in the world," he says, "There are properties here that have extremely high merit for PGM potential. Just take a look at the supply and demand of these commodities and you have to believe this isn't just a short term blip."

In conjunction with their partners Falconbridge and Impala Platinum Holdings of South Africa, Mustang is implementing a $2.5-million program in 2001 working their properties in River Valley and East Bull Lake, about 12,000 hectares.

Four years ago Lapierre was with Mustang in Nevada exploring for gold and copper when base metal prices began to dip. PGMs, they decided, were the only commodity that wasn't losing value and they moved their operations to Sudbury. After two-and-a-half years of exploration, the results are encouraging.

"There are some really good signals to indicate that the deposits are there to find something," Lapierre says. "That's why the major mining companies decided to take a chance. The potential is tremendous."