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North American Palladium (NAP) wants to extend its stay in northwestern Ontario.
The Toronto-headquartered palladium miner signed an option agreement with Impala Platinum Holdings and Sudbury’s Transition Metals on a recently discovered platinum group element (PGE)-copper-nickel deposit near Thunder Bay that could boost the company’s mineral reserves.
The agreement provides NAP with the right to acquire a 75 per cent ownership stake in the Sunday Lake Project, 25 kilometres north of Thunder Bay.
The 2,600-hectare property is 95 kilometres by truck from the Lac des Iles mill.
With that mind, NAP is revising its exploration strategy which involves $10 million of exploration spending over the next three years at Sunday Lake, at Lac des Iles, and on its greenfield properties.
Under the agreement, NAP can obtain 75 per cent stake in Sunday Lake by making total cash payments of $3.5 million and completing a minimum of $4.5 million in expenditures over a five-year, earn-in period.
Transition will retain its existing 25 per cent interest. The two companies have down-the-road plans to enter into an exploration joint venture.
“The Sunday Lake property rounds out our portfolio of early-stage to advanced exploration opportunities within our strategic exploration area of interest extending over a radius of 50 kilometres from our Lac des Iles mill," said NAP president-CEO Jim Gallagher in a June 20 company statement.
The company has a long-range exploration strategy to steadily bring its mineral resources into production on a timely basis. Gallagher said their new life-of-mine plan and reserves allow them to do that.
The Sunday Lake project hosts a magmatic sulfide deposit with combined PGE grades in the 2 to 5 gram per tonne range over thicknesses of several metres up to a maximum of 40 metres.
Between 2013 and 2015, Implats and Transition had teamed up to drill 20 holes and 12,000 metres at Sunday Lake. They outlined a semi-continuous zone of PGE mineralization about 800 metres long, 300 metres wide with a vertical thickness of 40 metres.
The deposit remains opens along surface and at strike. NAP will be conducting geophysical and geochemical surveys this summer before bringing in the drills later this year for a 7,000-metre program to test the deposit’s lateral and vertical limits, thickness and areas of high-grade mineralization.
David Peck, NAP’s vice-president of exploration, said he’s ready to dig in.
“Our immediate priority is to advance the project to the resource delineation stage. In addition, after a multi-year effort, we now hold mineral rights over all of the known Lac des Iles suite of intrusions and are well-positioned to translate our new insights into the ore-forming processes at Lac des Iles into future discoveries of PGE-rich magmatic sulfide deposits on a condensed timeframe.”
