By IAN ROSS
Thunder Bay – A Thunder Bay junior miner hopes a newly minted relationship with Goldcorp will deliver the final push to bring their Nunavut copper deposit into production and open up new financing doors to pursue some international projects.
In late November, Wolfden Resources Inc. signed a letter of intent with Goldcorp allowing the gold mining giant to acquire six million shares – close to a 10 per cent stake in Wolfden – through a private placement of three million common shares and three million flow-through shares.
“It gives us a strategic partner moving forward that we can look at other opportunities with,” says Wolfden president and CEO Ewan Downie. “My hope is we can look at some (international) deals that would be bigger than we can pursue on our own.”
The offer, which was finalized in December, will raise $21.6 million, which Wolfden plans to use to advance all of their exploration and development projects.
Wolfden, which has several highly prospective gold and base metal properties in northwestern Ontario and the Far North, is forging ahead with development on an open pit copper mine at its wholly-owned High Lake deposit in Nunavut.
Situated about 550 kilometres northeast of Yellowknife, the plan is to bring the mine into production by 2009. It’ss estimated development price tag is between $200 million and $250 million.
The company has been touting its West Zone discovery at High Lake as one of North America’s largest poly-metallic (copper, zinc, silver and gold) deposit discoveries in the last decade.
“It’s the largest and highest-grade of its type since the Louvicourt (Que.) discovery 15 years ago. It (established) Aur Resources as one of the major copper companies. Since that discovery, there hasn’t been any of those types of deposits found, they’re getting harder and harder to come by.”
High Lake is reported to harbour a 15-million tonne copper-zinc-gold-silver resource and is expected to have a 12-year mining life.
A mine pre-feasibility study was nearing completion in December and the company was submitting its Environmental Impact Study for permitting approvals, a process that’s expected to take more than two years to complete.
Downie says Goldcorp will assist in arranging financing for the High Lake project and other acquisition opportunities through a sister company, Silver Wheaton Corp.
He says Goldcorp has “relationships with certain banks and would help make introductions to the right people to help finance projects to production.
“Silver Wheaton has done some things with base metal companies before on the production side that (have) been pretty innovative. They have some ingenious ideas in how to finance operations (while) limiting dilution to shareholders. We hope the relationship grows as we move forward.”
Downie says Goldcorp was well acquainted with Wolfden’s exploration work in the Red Lake Mining District where the two companies are practically neighbours. Wolfden made their Bonanza-Follansbee discovery three kilometres away from Goldcorp’s Red Lake Mine.
“That probably was why they wanted to own a piece of us, because of our discovery just down the road.”
He says being aligned with Goldcorp should gain some credibility for Wolfden’s gold portfolio projects at Red Lake and Pickle Lake, many of which are in the advanced stages of exploration.
In Nunavut, Wolfden has a combined gold resource approaching a million ounces.
Wolfden maintains another gold deposit, dubbed Ulu, about 55 km south of High Lake. It is the company’s newest and most advanced gold project with a geological resource of 565,000 ounces of gold.
Downie says Canada’s Far North remains relatively under-explored. “We’ve made three new discoveries over three years. It’s pretty tough to do that in a belt (like Red Lake) that’s more accessible.”
In 2006, Wolfden expects to earmark between $5 million and $6 million for exploration.
In northwestern Ontario, together with venture partner Sabina Resources, they are drilling on a high-grade gold zone on their Bonanza-Follansbee property.
They have received encouragement from drill results on Bonanza showing significant gold grades near surface that warrant follow-up investigation. Downie says three drills are working the property. “Next year we’ll be going full-speed again.”
Earlier this year, Wolfden released a mineral resource estimate for their highly prospective East Bay property, north of Placer Dome’s Campbell Mine, of 1.4 million tonnes grading 8.0 grams per tonne gold.
“We’re trying to work out something with Placer (Dome) so it moves forward next year.”
As 50/50 joint venture partners, both companies are currently exploring the property in the Red Lake mining district.
