The city of Thunder Bay is located on the northern shore of Lake Superior and is the main supply hub for the mining centres of northern Ontario including Red Lake, Pickle Lake and the Musselwhite gold mine. It has extensive port facilities and an airport providing daily flights to major provincial cities, as well as a rail line that provides access to both eastern and western North American markets.
Access to the Lamaune Iron property from Thunder Bay is via a sealed highway for 235 kilometres to the town of Armstrong and then via a well-maintained forest products unsealed road for 100 kilometres that runs to the property.
A Canadian National Railway line runs parallel to the Lamaune Iron property 13 kilometres to the south providing direct transport access to both the ore processing centre of Sudbury and the port facilities at Thunder Bay. In addition, the Lamaune Iron property has abundant water resources nearby and is just 10 kilometres from the planned hydro-electric power station on the Little Jackfish River.
Exploration work including geophysical surveys, trenching and drilling, has identified the presence of a large Algoma-type magnetite iron deposit in the Lamaune Lake area.
A total of 40 diamond drill holes, totaling 7,933 metres have been completed on the deposit between 2005 and 2010. This, in conjunction with other exploration work including a helicopter-borne high resolution ‘Impulse’ geophysical survey over 12 kilometres of potential strike, indicated that the deposit could be of economic significance.
Accordingly, independent studies were initiated to provide an estimate of the potential size and quality of the Lamaune Iron project.
The Lamaune magnetite iron project contains an ‘Exploration Potential’ of 300 to 500 million tonnes of mineralization grading from 25% Fe to 35% Fe (2011 NI 43-101 Technical Report).
The size of the Lamaune iron exploration target was determined by advanced geophysical modelling of high resolution, high quality geophysical data acquired in 2009, measurements of core sample magnetism, field work and assay results.
The potential quantity and grade expressed above is conceptual in nature and further drilling is required in order to define a mineral resource.
A test work programme has been carried out to determine the physical and chemical characteristics of the magnetite ore samples supplied from the central zone of the ore body. Ten composite samples, selected from drill holes spaced along the central 3.5 kilometre zone, were submitted for ‘Davis Tube Recovery’ (DTR) tests. The test determines the recovery and grade of the magnetic product that can be obtained through grinding and magnetic separation only.
The average grade of the submitted composite samples was 32.19%. The average grade of the DTR tests results was 65.5% Fe with a weight to concentrate averaging 25.2%.
Preliminary flotation tests have indicated success at reducing silica in the concentrate to acceptable levels and improving iron recoveries. The magnetic separation/flotation circuit is common in the iron mines of Minnesota and Northern Michigan. The flotation tests show that a 68% Fe, 4.5% SiO2, 0.3% S grade concentrate, at a 72% product weight recovery and 83% Fe yield could be achieved.
An estimated feed tonnage of 11.6 Mtpa would be required to produce 2.5 Mtpa of iron pellets. Further flotation test work will be required to optimise this circuit but the initial test work yielded positive results and it is expected that a combined sulphur and silica flotation circuit will produce the final product grade at acceptable yields.
The iron formation outcrops at surface along the central 3.5 kilometre zone provides for a low stripping ratio of ore to waste with associated low mining costs.
In October 2010, a high-level marketing and transportation study for Lamaune Iron concluded that a potential market exists for iron pellets or iron nuggets in North America and that transportation of product to these markets, especially in southern Ontario, would be by direct rail.
Markets for the Lamaune Iron pellets are the 23 integrated steel mills in North America with a combined capacity of 69 million tons of annual steel production. These steel mills are predominantly located around the Great Lakes and managed by six corporations.
The encouraging results from exploration work, marketing and transportation study and independent studies completed to date show the Lamaune Iron deposit has the potential to be economically viable.
In late 2008, a gold discovery was made in the vicinity of the Lamaune Iron deposit. A drill campaign, consisting of 75 drill holes for a total of 11,644 metres, was completed on Lamaune Gold in 2009/2010. Drilling intersected narrow vein high grade gold and wide zones of lower grade mineralisation.
The southern broad zone of gold mineralisation, frequently outcropping at surface, has so far been intersected over 500 metres of strike extent and has been drilled to a depth of 200 metres. The zone remains open at depth and to the east along strike.
The Lamaune Gold prospect consists of a Conceptual Exploration target of 1,350,000 to 1,650,000 tonnes containing between 40,000 and 50,000 ounces of gold at 0.3g/t cut-off.
The size of this conceptual exploration target was determined by a three dimensional model and a conceptual mineral inventory for the Lamaune Gold prospect. The conceptual mineral resource inventory indicates that the Lamaune Gold prospect is a viable exploration target. Its proximity to the Lamaune Iron deposit has the distinct advantage that almost every drill hole intersects both deposits with resultant economic savings. Should they be advanced to development stage these savings will continue with the mining of both deposits simultaneously.
Preliminary metallurgical testing of representative samples from the Lamaune Gold prospect has been completed that indicates gold recovery from pulp material (-0.075mm) is 94.4%. Petrographic analysis shows the gold to be “free gold” in the matrix of garnetiferous amphibolite.
Metallurgical testing to date indicates the amenability of the low grade gold mineralisation to heap leaching and the high grade to gravity separation. Both are simple and low capital cost extraction methods and could be advanced to production in a relatively short time period.