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Little Deer Property (Copper)
Springdale Area, Newfoundland
Page Index:
Project Overview
Objective
Background
Brief History
Property Geology
Mineral Resources
Little Deer Copper Deposit
Whalesback Copper Mine
Preliminary Economic
Assessment
Metallurgical Test Work
Project Infrastructure
2013 Program
QA/QC
Project Overview
| Ownership |
Thundermin and 50% joint venture partner Cornerstone Resources Inc. own a 100% interest in the Little Deer and Whalesback copper deposits. Thundermin has the right to increase its interest in these deposits to 75% by completing a feasibility study and by arranging 100% of mine financing. |
| Operator |
Thundermin |
| Past Production |
Minor production by BRINEX 1970-72 from adjoining, past-producing, Whalesback mine; minor production by Green Bay Mining 1973-74 via ramp. |
| Deposit Type |
Cyprus type VMS deposit in ophiolitic mafic volcanic rocks |
| NI 43-101 Resource |
Little Deer: Indicated 1,911,000 t @ 2.37% Cu (99.8 M lbs Cu), Inferred 3,748,000 t @ 2.13% Cu (176.0 M lbs Cu).
Whalesback: Indicated 797,000 t @ 1.67% Cu (29.3 M lbs Cu), Inferred 443,000 t @ 1.57% Cu (15.3 M lbs Cu).
|
| Process |
Normal flotation process produces a clean, high grade copper concentrate grading over 28% copper with over 97% copper recovery in locked cycle tests. |
| Mine Type |
Shaft/ramp -
underground |
| Location |
10 km north of Springdale, Newfoundland |
| Status |
P&E Mining Consultants Inc. completed a positive preliminary economic assessment on Little Deer on November 1, 2011 which demonstrates the potential technical and economic viability of developing a new copper mine at current metal prices. The additional mineral resources outlined at Whalesback are expected to enhance the overall economics of a mining operation at Little Deer. A major diamond drilling program is planned for 2013 for Little Deer to commence upgrading the Inferred Resources to Indicated Resources so that a pre-feasibility study can be undertaken. |
Objective
Thundermin Resources Inc. (“Thundermin”) and Cornerstone Resources Inc.
(“Cornerstone”) are exploring the Little Deer property to determine if
there are sufficient quantities of economic grade copper mineralization
on the property to support a viable mining operation. Exploration work
completed to date on the Little Deer and Whalesback copper deposits has
been successful in outlining a National Instrument 43-101 (“NI 43-101”)
compliant indicated and inferred mineral resource of approximately seven
million tonnes containing over 2.0% copper. A preliminary economic
assessment (“PEA”) carried out on Little Deer in 2011 indicated that
there is potential to develop Little Deer on an attractive economic
basis at current copper prices. The mineral resources recently outlined
at Whalesback, when combined with the resources previously outlined at
Little Deer, are expected to enhance the overall economics of
establishing a new mining operation at Little Deer. Whalesback remains
open along strike to the east and west as well as down dip/plunge.
Borehole Pulse EM surveys recently completed on Whalesback suggest that
there is potential to expand resources with additional drilling. Little
Deer is also open to depth and along strike and additional resource
delineation will be carried out as well as in-fill drilling prior to
carrying out a pre-feasibility study on the Little Deer/Whalesback
copper resources.
Hugh Harbinson & John Heslop with high grade
copper core
Background
The Little Deer copper property, which is located approximately 10 km
north of Springdale in north-central Newfoundland, consists of 276
mineral claims (65.3 km²) in four separate mineral licences. Three of
the licences (44 mineral claims) in the eastern part of the property
(the Little Deer, Duck Pond and East Licences) were subject to an option
agreement with Weyburn Investments Limited (“Weyburn”) whereunder
Thundermin and Cornerstone have exercised their option to earn a 100%
interest in the three licences. The remainder of the Little Deer
property (Licence 12196M - 232 claims), which covers the past-producing
Whalesback mine, the Timber Pond zinc prospect, the Mine Brook gold
prospect and a 165 m wide sliver of property between the Duck Pond and
Little Deer Licences, which covers part of the Little Deer copper
deposit, is owned 50%/50% by Thundermin and Cornerstone.
The Little Deer Licence is subject to a 2.0% net smelter returns (“NSR”)
royalty, 50% of which can be repurchased for $1,000,000. The Duck Pond
Licence is subject to a 3.0% NSR royalty, with no buy-back provision The
East Licence is subject to a 1.5% NSR royalty, 50%% of which can be
repurchased for $1,000,000. Licence 12196M is subject to a 2.0% NSR, 25%
of which can be repurchased for $1,000,000.
Thundermin, under its joint venture agreement with Cornerstone, has the
right to increase its interest in the Little Deer property to 75% by
completing a feasibility study and by arranging 100% of the necessary
bank financing required to place the property into commercial
production.
Brief History
Copper mineralization was first discovered at Little Deer in 1952 by
Falconbridge Nickel Mines Limited. The property was mined by British
Newfoundland Exploration Company (“BRINEX”) from 1970 to 1972, with
access via a 1,144 m drift on the 244 m level from the Whalesback mine
to the north, and by Green Bay Mining Company from 1973 to 1974, with
access via a 329 m decline. At the cessation of mining operations in
1974, historical reserves of 210,200 t grading 1.53% Cu were reported
above the 245 m elevation (not NI 43-101) compliant).
Geological mapping, surface and borehole geophysical surveys and 6,815 m
of diamond drilling in 12 holes were undertaken by Mutapa Gold Corp.
(“Mutapa”) from 1998 to 2000. Mutapa intersected significant copper
mineralization below and to the west of areas previously mined (3.8% Cu
over a core length of 10.3 m in their westernmost hole). Mutapa returned
the property to the owners in 2000 due to low copper prices and the
desire to redirect their focus in the high-tech business.
Thundermin and Cornerstone acquired the Little Deer property from
Weyburn in June 2007 and to September 30, 2012 have spent approximately
$8,000,000 on the property. Exploration work includes approximately
48,800 m of diamond drilling in 82 holes, borehole Pulse EM surveys,
assaying of core samples, lithogeochemical analysis on whole rock
samples, a Differential GPS survey of all recent and historical drill
holes to determine accurate collar locations and elevations, 227 line
kms of VTEM airborne electromagnetic and magnetic surveys, NI 43-101
compliant mineral resource estimates for the Little Deer and Whalesback
copper deposits, scoping level metallurgical test work on copper
mineralization from Little Deer and the completion of a positive PEA for
Little Deer.
Property Geology
The Little Deer volcanogenic massive sulphide (“VMS”) copper deposit
occurs within the Lush’s Bight Group which is a Cambro-Ordovician
sequence of ophiolitic mafic volcanic rocks consisting mainly of
intermediate to mafic pillow lavas with minor associated tuffs and
agglomerates which have been intruded by gabbroic stocks and dykes. The
main sulphide mineralization consists of disseminated, stringer and
semi-massive to massive, pyrrhotite (pyrite), chalcopyrite and locally
very minor sphalerite. The main copper-bearing zones strike
east-northeast at 075˚and dip approximately 75˚- 80˚ to the south. There
are eight similar VMS copper deposits in the Lush’s Bight Group with
reported resources of which the Whalesback and the Gullbridge are the
largest known to date at approximately 4.5 million tonnes (“Mt”) each.
These deposits belong to what is commonly referred to as the “Cyprus
type” of VMS copper deposit in that there are 17 such deposits with
similar characteristics in Cyprus.
Mineral Resources
On June 22, 2011, an updated NI 43-101 compliant mineral resource
estimate was announced for Little Deer. P&E Mining Consultants Inc. of
Brampton, Ontario (“P&E”), estimated that Little Deer contains Indicated
Resources of 1,911,000 t at an average grade of 2.37% Cu and additional
Inferred Resources of 3,748,000 t at an average grade of 2.13% Cu (see
Table 1).
On July 26, 2012, a NI 43-101 compliant mineral resource estimate was
announced for Whalesback. P&E estimated that Whalesback contains
Indicated Resources of 797,000 t at an average grade of 1.67% Cu and
Inferred Resources of 443,000 t at an average grade of 1.57% Cu (see
Table 1).
Table 1: Summary of Whalesback and Little Deer Mineral Resources
at 1.0% Copper Cut-Off (P&E, July 9, 2012 (Whalesback) and June 20, 2011
(Little Deer))
| Resource Classification/Zone |
Tonnes |
Cu% |
Cu lbs (M) |
| Indicated Mineral Resources |
|
|
|
| Whalesback |
797,000 |
1.67 |
29.3 |
| Inferred Mineral Resources |
|
|
|
| Whalesback |
443,000 |
1.57 |
15.3 |
| Indicated Mineral Resources |
|
|
|
| Little Deer Zone |
1,911,000 |
2.37 |
99.8 |
| Inferred Mineral Resources |
|
|
|
| Little Deer Zone |
1,240,000 |
1.93 |
52.8 |
| Little Deer Footwall Zone |
1,711,000 |
2.04 |
77.0 |
| Little Deer Footwall Zone Splay |
797,000 |
2.64 |
46.2 |
| Total Indicated Resources |
2,708,000 |
2.16 |
129.1 |
| Total Inferred Resources |
4,191,000 |
2.07 |
191.3 |
Notes:
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Mineral resources which are not mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources may
be materially affected by environmental, permitting, legal, title,
taxation, socio-political, marketing, or other relevant issues.
-
The quantity and grade of reported Inferred resources in this estimation
are uncertain in nature and there has been insufficient exploration to
define these Inferred resources as an Indicated or Measured mineral
resource and it is uncertain if further exploration will result in
upgrading them to an Indicated or Measured mineral resource category.
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The mineral resources in this press release were estimated using the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM
Standards on Mineral Resources and Reserves, Definitions and Guidelines
prepared by the CIM Standing Committee on Reserve Definitions and
adopted by CIM Council.
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Ordinary Kriging was used for Cu grade interpolation.
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Grade capping of 5% and 15% Cu, respectively, utilized on composites for
Whalesback and Little Deer.
-
A variable bulk density based on numerous field measurements was used
for tonnage calculations.
-
Domain models were generated from successive polylines spaced every five
metres (Whalesback) and 10 metres (Little Deer) and oriented
perpendicular to the trend of the mineralization. The outlines of the
polylines were determined by selecting copper grades equal to or greater
than 1.0% Cu with demonstrated continuity along strike and down dip.
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Whalesback: A copper price of US$3.82/lb (June 30, 2012 two year
trailing average) and an exchange rate of US$0.99=C$1.00 was utilized to
derive the 1% Cu cut-off grade. Mining costs were C$45/t, process costs
were C$16/t and G&A was C$6/t. Concentrate freight and smelter treatment
charges were C$10/t mined. Concentrate mass pull was 7%, process
recovery was 97%, smelter payable was 96% and Cu refining was
US$0.07/lb.
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Little Deer: A copper price of US$3.42/lb (May 31, 2011 24 two year
trailing average) and an exchange rate of US$0.95=C$1.00 was utilized to
derive the 1% Cu cut-off grade. Mining costs were C$40/t, process costs
were C$15/t and G&A was C$5/t. Concentrate freight and smelter treatment
charges were C$10/t mined. Concentrate mass pull was 7%, process
recovery was 97%, smelter payable was 96% and Cu refining was
US$0.07/lb.
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All Thundermin and Cornerstone assays were analyzed at Eastern
Analytical Limited of Springdale Nfld. A QAQC program of field and lab
duplicates, certified standards and blanks was put in place.
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The mineral resource estimate for Whalesback is based on diamond drill
hole records from 316 surface and underground drill holes totalling
37,163 m of drilling. Fourteen of these holes were drilled recently by
Thundermin and Cornerstone (see news releases dated October 20, 2011 and
February 23 and May 10, 2012) and the remainder were drilled by British
Newfoundland Exploration Company between 1961 and 1970.
The Little Deer and Whalesback mineral resource estimates were
prepared under the supervision of Mr. Eugene J. Puritch, P. Eng.,
President of P&E. Mr. Puritch is an independent Qualified Person
(“Q.P.”) in accordance with NI 43-101.
Mr. Andrew Hussey, P.Geo., Project Geologist and Lands Manager,
Cornerstone Resources Inc., is the Q.P. that supervised the drilling
programs on the Little Deer property for the purposes of NI 43-101.
Little Deer Copper Deposit
Vertical Longitudinal Section
Little Deer Copper Deposit
(Looking NNW)
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Little Deer - Whalesback
Copper Deposits
3D View Looking West
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Orthographic View of
Little Deer and Whalesback
Copper Deposits (Looking 330°)
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Whalesback Copper Mine
On October 20, 2011, Thundermin and Cornerstone announced encouraging new “blue
sky” potential for the adjoining, past-producing, 100%-owned Whalesback Copper
Mine (Figure 1). A digital compilation of data from 107 holes drilled in the
mineralized zone below and to the west of the areas previously mined suggest
that there is excellent potential for establishing additional copper resources
on the Whalesback property (see Figure 2 and Table 2).
 |
 |
Whalesback Copper Mine
2011-2012 Drilling/Borehole
Pulse EM Program |
Table 2: Significant Historical Intersections: Whalesback Copper Mine
| Hole No. |
From (m) |
To (m) |
Width (m)* |
Cu (%) |
| 9-43 |
-- |
-- |
6.10 |
4.50 |
| 9-43 |
-- |
-- |
3.35 |
4.01 |
| 8-28 |
119.79 |
125.27 |
5.48 |
3.23 |
| 9-90 |
39.93 |
44.2 |
4.27 |
2.96 |
| 9-88 |
36.58 |
44.96 |
8.38 |
2.88 |
| 9-47 |
160.02 |
166.12 |
6.10 |
2.90 |
| 9-85 |
41.15 |
45.70 |
4.57 |
2.55 |
| 9-52 |
73.15 |
80.01 |
5.33 |
2.51 |
| 9-78 |
51.82 |
60.96 |
9.14 |
2.44 |
| WB-61-45 |
201.47 |
207.26 |
5.79 |
2.23 |
| WB-65-99 |
65.53 |
68.58 |
3.05 |
2.25 |
| 9-38 |
21.03 |
24.38 |
3.35 |
2.29 |
| 9-92 |
27.43 |
35.97 |
8.54 |
2.20 |
| 9-79 |
68.58 |
81.69 |
13.11 |
2.13 |
| 11-3 |
67.36 |
75.90 |
8.54 |
1.99 |
Notes:
*Widths approach true thickness
--- Data taken from historical longitudinal section and no drill log available
Preliminary Economic Assessment
On November 1, 2011, Thundermin and Cornerstone announced a positive Preliminary
Economic Assessment (“PEA”) for Little Deer.
PEA Highlights
Base Case Scenario: (copper price of US$3.75/lb and an exchange rate of US$0.95
= C$1.00; all dollar amounts are expressed in Canadian dollars unless otherwise
stated)
- Mineral Resources: Indicated
Resources of 1,911,000 t grading 2.37% Cu (99.8 million lbs of copper) and
Inferred Resources of 3,748,000 t grading 2.13% Cu (175.9 million lbs of copper)
and 20% mining dilution at zero grade with 90% extraction rate incorporated into
the mine plan
- Mining: 1,800 t/day
underground mine with ramp and shaft access using long hole stoping method
- Mine Life: 9.5 years
- Conventional milling and
flotation process with 97% copper recovery to a clean 28% copper concentrate
- Initial Capital Cost: $110
million
- Average Site Operating Cost:
$47.32 per tonne of ore mined and milled ($1.16 per lb. of copper)
- Total Revenue: $829 million
- Pre-tax Net Cash Flow: $237
million: After-tax Net Cash Flow $166 million
- Pre-tax Net Present Value at
6% Discount Rate: $130.4 million. After-tax Net Present Value at 6% Discount
Rate: $86.7 million
- Payback of Pre-production
Capital: 3.5 years
- Internal Rate of Return
Pre-tax: 26.0%
- Internal Rate of Return
After-tax: 21.5%
Financial Evaluations
Financial evaluations for Little Deer were calculated by P&E using a discounted
cash flow analysis. On a 100% equity financing basis, the Base Case analysis
shows that the pre-tax Internal Rate of Return (“IRR”) is 26.0% and the Net
Present Value (“NPV”), at a 6.0% discount rate, is $130.4 million. The pre-tax
undiscounted cash flow for the project is $237 million and the payback of
capital from the commencement of commercial production is approximately 3.5
years. The Base Case analysis shows that the after-tax IRR is 21.5% and the NPV,
at a 6% discount rate, is $86.7 million. The after-tax uncounted cash flow for
the project is $166 million. The Base Case scenario assumes initial capital
costs of $110 million to advance the project to commercial production. The
average operating costs for life-of-mine is estimated to be $47.32 per tonne of
ore mined and milled. A projected 10-year average copper price of US$3.75 and
exchange rate of US$0.95=C$1.00 was used in the Base Case financial analysis.
The Base Case also includes the payment of certain underlying NSR royalties to
third parties. The sensitivity of the project to copper prices is shown in Table
1.
Table 3: Sensitivity of the Little Deer Copper Deposit to Copper Price
| Copper Price (US$/lb) |
3.25 |
3.50 |
3.75 (Base Case) |
4.00 |
4.25 |
| Pre-tax IRR (%) |
13.8 |
20.1 |
26.0 |
31.8 |
37.5 |
| After-tax IRR (%) |
11.1 |
16.3 |
21.5 |
26.6 |
31.7 |
| Pre-tax NPV ($million @ 6%) |
47.6 |
89.0 |
130.4 |
171.8 |
213.1 |
| After-tax NPV ($million @ 6%) |
27.4 |
57.1 |
86.7 |
116.3 |
146.0 |
Production Plan
The PEA was undertaken using a production rate of 1,800 t/day (657,000
t/year), resulting in a 9.5 year mine life for the project. Underground
access will be gained via a ramp, driven at 15%, and an 875 m production
shaft. It is envisioned that production from approximately the upper 400
m of Little Deer will be via ramp and production from the lower part of
Little Deer will be via the production shaft. Copper mineralization from
Little Deer will be extracted using a long-hole mining method using
mechanized trackless mining equipment (see Figure 3).
Copper mineralization from Little Deer will be processed in a new,
state-of-the-art, environmentally friendly mill employing differential flotation
to produce a high quality copper concentrate.
Approximately 46% of the tailings from the mill will be placed underground in
cemented hydraulic backfill. The remainder of the tailings are expected to be
submerged in the former Whalesback tailings impoundment facility which is
located approximately 1.2 km north of Little Deer.
Approximately 389,000 t of copper concentrate will be produced during the life
of the mine which equates to approximately 26 million lbs of copper on an annual
basis. The concentrates are expected to be trucked to one of two deep water port
sites within 25 km of the property for storage and loading onto oceangoing
vessels for shipment to a custom smelter.
Capital and Operating Costs
The total initial capital cost to advance the project to commercial production
is $110 million. This capital includes all new hoist, head frame, equipment,
mill infrastructure, ramp, upper portion of the shaft and power line and
transformers. It is anticipated that the mine/mill infrastructure will require
approximately 16-18 months to complete from the date that all necessary permits
are received and financing for the project has been completed.
The average life-of-mine operating cost per tonne of ore mined and milled is
estimated at $47.32 which equates to approximately $1.16 per lb. of copper.
In the PEA, P&E has identified a number of opportunities to potentially further
enhance the economics of the project. These include the discovery of additional
resources with further drilling at depth and along strike at Little Deer, the
discovery of additional resources at the adjoining Whalesback Mine, improvement
in metallurgical recoveries and concentrate grade, increase in mine production
rates, further reductions in capital costs through the employment of refurbished
equipment, project design optimization and the potential use of existing
underground infrastructure, including vent raises, ramp access and pre-developed
ore which exist on the Little Deer property.
Metallurgical Test Work
On October 19, 2010, excellent metallurgical results from scoping level test work on core samples from
Little Deer were announced. This work, which was undertaken at SGS Lakefield Research Limited (“Lakefield”) of Lakefield, Ontario, indicates that a
clean, high grade copper concentrate grading over 28% copper with over 97% recovery and free of any deleterious elements can be produced from
Little Deer. The use of a simple rougher-cleaner flowsheet, a common xanthate collector, pH control with lime and a relatively course primary grind for copper liberation from mineralization of medium hardness suggest that the operating costs should fall into the low range for any metallurgical plant constructed to treat the Little Deer mineralization (see
Highlights).
Lakefield undertook a scoping level metallurgical test program on a representative sample of copper mineralization from
Little Deer grading 2.43% copper, 0.034% cobalt, 0.03 g/t Au, 19.1% iron and 5.99% sulphur accompanied by basic environmental characterization of the flotation tailings produced from the metallurgical test program.
Highlights
- Production of a saleable, high grade copper concentrate grading over 28% copper with over 97% copper recovery in locked cycle tests
- Copper concentrates free of any deleterious elements
- Copper recovered employing a simple rougher-cleaner flowsheet using a common xanthate collector
- Copper mineralization of medium hardness with Bond ball mill work index of 14.6 kilowatt hours per tonne (“kWh/t”)
- Fresh and aged tailings decant solutions well within Canadian Metal Mining Effluent Regulations (“MMER”) limits and non-lethal designations for MMER aquatic toxicology tests
Project Infrastructure
 Little
Deer and Whalesback are located on a brownfield site and are well
situated to take advantage of Newfoundland’s developed infrastructure. The
deposit lie approximately 16 km from the Tran-Canada Highway and are easily
accessed by a 10 km network of paved and gravel roads north of Springdale, where
there is an available skilled mining workforce. The site is approximately 8 km
from a major power substation and there is a plentiful supply of fresh water in
the area. The former tailings impoundment facility for the Whalesback Mine,
which may be able to be upgraded and used to store additional tailings,
is located only 1.2 km north of Little Deer. There is also good access
to several deep water ports for any future shipment of copper
concentrates.
The recovery of a substantial quantity of archived data, referenced earlier in
this report, has also given Thundermin and Cornerstone a better understanding of
the underground infrastructure that exists on the property. This infrastructure
dates from 1966 to 1972 and 1972 to 1974 when a portion of the upper part of
Little Deer was developed and mined by BRINEX and Green Bay Mining Company (“Green Bay”), respectively. BRINEX accessed
Little Deer from the adjoining Whalesback Mine and Green
Bay accessed Little Deer via a ramp. Three ventilation
raises and substantial lateral development in unmined copper mineralization are
known to exist on the property. This existing infrastructure may potentially
afford substantial cost savings for access underground for future definition
drilling and mining.
2013 Program
As a result of the positive PEA and the discovery of additional
resources at Whalesback, Thundermin and Cornerstone intend to
proceed with further evaluation of the Little Deer Project. This work
will include a substantial infill
diamond drill program at Little Deer to commence upgrading existing resources from
the Inferred to the Indicated Resource category prior to commencing a
pre-feasibility study on the project.
The
Little Deer and adjacent Whalesback deposits provide an excellent
opportunity to re-establish the Springdale area of north-central
Newfoundland as a significant copper producer. The general area has
proven to be very prospective for volcanogenic massive sulphide deposits
of the Cyprus type and the LDJV anticipates increased exploration
activity on its large landholdings that may lead to additional
discoveries.
QA/QC
The PEA was prepared under the supervision of Mr. Eugene J. Puritch, P.
Eng., President of P&E. Mr. Puritch is an independent Q.P. in accordance
with NI 43-101 and has reviewed and approved the contents of this
information. A NI 43-101 compliant PEA Technical Report was filed on SEDAR by Thundermin and
Cornerstone on December 15, 2011.
Mr. Andrew Hussey, P.Geo., Project Geologist and Lands Manager,
Cornerstone Resources Inc. and Q.P. has also reviewed and approved the
contents of this information.
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