The survey airplane was flying very fast and very high and that’s why the onboard computers missed a potential Greenland “monster” a decade ago, says Rick Mark, CEO and chairman of VMS Ventures Inc. (VMS), a junior mining exploration based in North Vancouver.
But when VMS flew over the same area last year using advanced exploration equipment dangling beneath a slow and low-flying helicopter, “boom, all these targets suddenly lit up,” Mark said.
The findings could signal a potential giant new nickel deposit and are an indication of why remote technology has sparked a global exploration boom.
In 2011, according to the Halifax-based Metals Economic Group, global mining exploration spending hit an all-time high of $6.1 billion, up 50% from a year earlier. And much of it is due to remote sensing from the air.
VMS is using helicopter-borne VTEM (versatile time-domain electromagnetic) technology that can locate minerals deep underground based on their specific magnetic signals.
The major hit for VMS is the Reed Copper deposit, now a planned underground mine in northern Manitoba that the company is developing with veteran producer HudBay Minerals Inc. (TSX, NTSE:HBM). Reed Copper is in the same mineral belt that runs beneath Flin Flon, the third-largest copper deposit in Canada.
Tiny target
“The Reed footprint is incredibly small, only about 20 acres,” said geologist John Roozendaal, the president of VMS. “It is all vertical.” Roozendaal said data analyzed from VTEM indicates the deposit is more than 600 metres deep and holds an estimated 2.2 million tonnes of copper ore. Copper is trading at around US$3.67 a pound.
“It’s an elusive monster,” Roozendaal said. “If we hadn’t flown a tight grid, basically 100 metres apart, we never would have picked it up.”
The ore body itself is covered in about 20 metres of rock, hence the reason it was not discovered when the original Hudson Bay Mining and Smelting company hit the Flin Flon deposit in 1927.
“You could walk over this area all day long with a pickaxe and a donkey and never know it was there. It was a completely hidden deposit,” Mark said. The potential mine is located just 100 metres from a major highway.
Since the discovery in January, the Reed Copper deposit has become the focus of the joint venture with HudBay Minerals. VMS owns 30% of the Reed Copper play, and HudBay has pledged funding to production. The HudBay and VMS joint management committee have approved a budget for a 4,000-metre diamond drill program focusing on targets around the Reed Copper deposit and option properties. Drilling started this February and will continue into the summer.
Boots on the ground
And that is when the truth will be revealed, says geologist Murray Allan, a research associate with UBC’s mineral deposit research unit (MDRU). Allan is a project manager for the MDRU’s two-year Yukon Gold Project that, with some of the world’s largest mining firms, is helping to assess the mineral potential of 100,000 square kilometres in the far north, much with the assistance of airborne geophysics.
Aerial technology, such as VTEM, the similar SkyTEM and light detection and ranging (LIDAR) systems are useful, Allan said, but “it is boots on the ground” and drill results that show what minerals are actually available. Allan explained that the aerial technology can provide excellent early data, but it is how that data is interpreted that decides if drilling should proceed. “Even then it can take years to determine a mine’s viability,” he said.
Mark, however, is confident that the Reed Copper deposit will pan out big time for both VMS and its shareholders. VMS was trading at press time at $0.33 a share, down from its 2011 peak of $0.85. “We are monitoring the data very carefully, we have a mine coming on board and we are convinced we can make this [Reed Copper] happen very quickly,” he said. “What we are saying to our shareholders is hang in there, cash is coming and copper looks strong.” •
