A deal worth its weight in platinum: the chances are "very good" that a new, un-incorporated joint venture between Inco and Lonmin plc of England will lead to the Sudbury Basin's first-ever platinum group metal (PGM) mine.
Lonmin and Inco Ltd. have established a 50-50, un-incorporated joint venture to explore for, and subsequently develop and process, low-sulphide, PGM-rich deposits found on Inco property.
"This is a genuine attempt to open up a new platinum mine in the Sudbury area," says Tom Evans, consulting geologist for Lonmin plc out of London, England.
The chances of it happening are "very good," Evans says, considering Lonmin is investing more than $4 million this year and $32 million over the next three years in exploration and development. If they find a sizable deposit it is likely Lonmin would build a PGM facility on Inco property. From there, "we basically share it 50-50."
Inco has made in-kind contributions by providing the rights and resources to explore on the McKim, Dension, Levack North, Wisner, Trillabelle and Capre properties.
"They do not have to spend any money until we spend our $32 million," Evans says.
Lonmin, the third-largest primary producer of platinum in the world, is earning the right to be a full partner.
Both companies are reviewing the mineral history and adding current geophysical and geochemical testings to the mix.
At the McCreedy-Coleman Mine, exploration for high-grade precious metals is continuing on the 170 footwall, according to a report from Mike Cosec, district geologist for the Ministry of Northern Development and Mines. He says it indicates probable reserves averaging one-per-cent nickel, 7.4 per cent copper and 14.5 grams-per tonne of platinum, palladium and gold. Proven and probable reserves at the 153 ore body reveal an average 1.2 per cent of nickel, 12.2 grams-per-tonne of platinum, palladium and gold.
Drillers on the southern end of the Copper Cliff South Mine identified a major new nickel, copper and platinum group element (PGE) deposit 500 metres south of the 865 ore body.
"We have found some promising targets, I think I can say that," Evans says. "We are drilling them up and as we get the results we put them into a database to try to build up a sizable deposit we could mine."
Platinum mineralization is quite rare and not obvious to the amateur eye. The old nickel deposits were found from outcrops, but when one is looking for PGMs that are only a few parts per million, one has to use advanced studies to further identify the mineral composition.
The Sudbury mineralization indicates more vein-like showings, rather than the layered, reef-style associated with the Limpopo Platinum property formerly known as the Bushveld in South Africa, where Lonmin owns a large stake.
"They are more tabular deposits than those found in the Bushveld property," Evans says.
Falconbridge and Inco produce platinum and palladium as byproducts of nickel mining. Traditionally, geologists would try to find the platinum layer, then follow it.
If one looks at the nickel deposits around the basin, there appear to be sites where the minerals are depleted. Geologists are now realizing copper and PGMs migrated deeper into the existing rock as a result of the meteorite impact that created the Sudbury Basin. These areas have not been actively explored.
"They moved off somewhere, so it's a matter of finding where they moved to," says Wallbridge Mining Company Ltd. president Alar Soever. Wallbridge has joint ventures with both Inco and Lonmin.
"There is lots of evidence that suggest (the platinum deposits) exist," Soever says.
Inco, FNX, and Wallbridge are finding more out about these deposits with continued exploration.
Even Falconbridge Ltd's Nickel Rim has a platinum-rich area.
Nick Sheard, Inco's vice-president of exploration, says Sudbury is considered one of the premier regions in the world for PGMs. There is a significant amount of mineralization in the Nickel City that has yet to be explored, he says.
Escalating platinum prices on the international markets is fueling the resurgence in exploration. Platinum was trading between US $940 and $960 per ounce at Northern Ontario Business press deadline, and was over $1,000 for no fewer than six days in December (platinum.matthey.com). The metal is used in catalytic converters (the devices in cars and trucks that help clean the air as they run), and demand from that sector is expected to increase for the New Year particularly in Europe, North America and Asia, according to investor sources. In North America, new demands from the heavy diesel sector should provide platinum another price boost over the next year. A higher production of light vehicles coming from China, India and South East Asia as a result of tightening emission limits will further add to the metal's value.
"Supply is tight, and as demand increases the price follows," Soever says.
By KELLY LOUISEIZE
Northern Ontario Business
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|Title Annotation:||SPECIAL REPORT: GREATER SUDBURY|
|Publication:||Northern Ontario Business|
|Date:||Jan 1, 2006|
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