Looking for Voisey's Bay, part II
Fjordland Exploration seeks to replicate storied discovery
|Geophysical crew delineating drill targets.|
By Jason Smith
The Voisey’s Bay nickel-copper-cobalt deposit in Newfoundland and Labrador was discovered by a company that was initially looking for diamonds.
Then, in a helicopter ride over the area, a piece of rusty upcropping rock caught geologists’ eye. After some sampling, they put down some drill holes and came up with some truly extraordinary nickel grades.
What happened from there is the stuff of mining industry legend, as the discovering company Diamondfields parlayed a string of outstanding drill results into deals with major players, Teck and Inco. Eventually, the upstart company would sell Voisey’s Bay to Inco for C$4.3 billion.
The deal made company co-founder Robert Friedland and his compatriots enormously wealthy, and the mine went on to be one of the largest nickel mines in the world. According to current operator Vale and the U.S. Geological Survey, Voisey’s Bay produced 28 per cent of Canada’s nickel in 2013, along with 18 per cent of its cobalt and 6 per cent of its copper.
Just a few weeks ago, Vale announced that it is moving ahead with underground mining at Voisey’s Bay. The work will extend the mine’s life by 15 years. The first ore from the underground operation should come online in 2021.
And while Vale pursues expansion at Voisey’s Bay, Fjordland Exploration Inc. (TSX.V: FEX) is looking for the next Voisey’s Bay at its South Voisey’s Bay project, located some 80 kilometres to the south.
Looking for a Voisey’s Bay Analog
The South Voisey’s Bay project encompasses the Pants Lake intrusion, an area of rock that has the same geological age and a similar geochemical signature to Voisey’s Bay.
The 29,400-hectare area has been plied by several past operators, including Teck, Falconbridge, Donner Mineral, and Northern Abitibi. That work has generated what Fjordland’s President and CEO Richard Atkinson estimates at over $25 million of historical data.
Atkinson commented, “It’s an old exploration axiom that the best place to look for a new mine is in the shadow of the headframe of an existing mine, and few headframes cast a longer shadow than the large open pit operation at Voisey’s Bay.”
Fjordland had entered into an agreement with Commander Resources to take a 100 per cent interest in South Voisey’s Bay once the option exercised Commander will retain a 2% NSR. Then, in September 2017, High Power Exploration (“HPX”), a company founded and co-chaired by Friedland, took a 30 per cent interest in Fjordland by investing $1.4 million.
HPX went on to sign an option to spend up to $7.4 million on exploration and $290,000 in property payments in exchange for a 65 per cent interest in South Voisey’s Bay. Fjordland will retain a 35 per cent carried interest in the project after earn-in.
Fjordland Makes Two Key Hires
A critical factor encouraging HPX to invest in Fjordland was the latter company’s ability to snap up former Voisey’s Bay employees, geologist Dawn Evans-Lamswood and geophysicist Brian Bengert after Vale restructured their personnel base.
Ms. Evans-Lamswood had worked on Voisey’s Bay since its discovery by Diamondfields, and she left as Manager of Brownfields Exploration for the mine. She wrote her master’s thesis at Memorial University on Voisey’s Bay.
Along with Bengert, she was responsible for the discovery of several new deposits on the Voisey’s Bay project, including the Reid Brook deposit, home to several million tonnes of high-grade nickel and mineable grade copper and cobalt. In conjunction with the high qualified geoscientists by HPX, they are helping Fjordland analyze the historical data at South Voisey’s Bay and to identify drill targets. Atkinson effuses, “The rocks talk to these geniuses.”
Nickel’s Battery Metal Role
A key macro trend driving interest in Fjordland’s work at South Voisey’s Bay is the rise of electric vehicles. As carmakers seek battery technology that provides the highest energy density at the lowest cost and least weight, nickel is becoming a key part of the equation.
While lithium has been receiving much of the focus from this trend, a nickel-manganese-cobalt cathode is receiving attention as well. With the price of cobalt rising, a key sticking point in battery metal technology, the trend is toward using more nickel instead. That trend could provide strong support for nickel prices going forward.
Indeed, Vale is financing a portion of its $1.7 billion mine expansion at Voisey’s Bay by selling a portion of their cobalt by-product for $690 million. All these trends make the drilling program Fjordland has slated for South Voisey’s Bay of particular interest to investors looking for the next big story in the region.
Thanks to the cash influx from HPX, Fjordland and Commander will soon embark on a $1.2 million summer drilling program at South Voisey’s Bay. The work will test six-to-eight targets highlighted by Evans-Lamswood and Bengert, and will follow up on good results from a small program conducted in 2017.
The partners will also engage in ongoing target generation via exploration, regional mapping, and sampling. With funding available for the foreseeable future and a world-class exploration team, Fjordland Exploration (TSXV: FEX) looks ideally situated to find Newfoundland and Labrador’s next big nickel-copper-cobalt deposit.