Exploration

Strategy

NAP is committed to increasing the value of its Lac des Iles (LDI) Mine and Mill complex through exploration success. The Company maintains a three-tiered exploration strategy that encompasses:

  1. Mineral Reserves replacement on the LDI Mine Property through extension and conversion drilling adjacent to the principal Mineral Reserves and mining areas
  2. Mineral Resource additions (both underground and at surface) on other parts of the LDI Mine Property through exploration drilling, supported by geophysical and geochemical surveys
  3. Delineation of new Mineral Resources on other LDI suite intrusions in the immediate vicinity of the mill

The Company has systematically acquired mineral rights over all known LDI-suite intrusions. In addition, it holds a 50% interest in the past-producing Shebandowan nickel property and recently added to its portfolio the Sunday Lake project – an exciting, recent PGE-Cu-Ni sulfide discovery in the Thunder Bay area. These strategic land holdings, combined with its core asset at LDI, provide the Company with a premier exploration asset base encompassing immediate to long-term discovery opportunities.


Location of NAP’s exploration properties (green solids) in the Thunder Bay region, northwestern Ontario.

Lac des iles mine property

ADDING VALUE AT LOW COST

Exploration is central to the LDI operation. Based on their structurally-controlled sub-vertical orientation, unusually large thickness and atypical, selective enrichment in palladium relative to platinum, the LDI PGE deposits are truly one-of-a-kind. Sustained investment in near-mine exploration continues to deliver timely resource additions that derive from continually improving geological models. Over the past five years, average exploration costs, from initial delineation to conversion of inferred resources to indicated resources, are less than $2/tonne of resource added and <$15/oz of contained palladium added in these resources.

The majority of the known mineral resources at LDI are believed to have formed along a major, north-south trending regional feeder fault system (Shelby Lake structure). Intersections between this regional feeder structure and local cross-cutting faults provided sub-vertical conduits or dilatant zones that focused the upward and lateral flow of sulfide-bearing noritic magmas into the South LDI (SLDI) complex. Sulfides, and palladium, were concentrated within and directly adjacent to the primary magma pathways and diminished in abundance as magma flow outward. These noritic magmas have strong geochemical similarities to the parental magmas that fed the Critical Zone of the Bushveld Complex – host to the Merensky and UG2 reefs and the Platreef deposit. At LDI, the two principal ore zones are the Roby Zone (upper mining area) and the Offset Zone (lower mining area). Despite over two decades of systematic exploration drilling, the bottom of this mineralized magma conduit has not been found with the deepest intersections of Offset-style palladium mineralization being 1,800m below surface. In the central parts of both the Roby and Offset zones, palladium grades can exceed >4 g/t over true widths of >50m with the highest grades typically occurring on the east side of the conduit, locally exceeding 10 g/t Pd over several metres.

Starting in 2014, the Roby and Offset zone resources were subdivided into a thinner, higher-grade hangingwall zone resources and thicker, lower grade footwall zone resources. The hangingwall zone is an intensely altered norite interpreted to represent a primary accumulation of mafic minerals (orthopyroxene) and sulfides within the main vertical feeder conduit that was subsequently modified by volatiles released within this structure during the terminal stages of magmatism. The footwall zone is interpreted as a more distal facies of the same mineralizing event, being hosted by a breccia complex having decreasing amounts of fragments and sulfides moving west from the hangingwall zone. The northern and southern extremities of both the Roby and Offset zones are curvilinear, northeast-southwest striking mineralized trends featuring a gradual decrease in average palladium and by-product metal grades with increasing distance from the central parts of these zones. The Offset Zone remains open to the south and at depth. The Roby Zone is largely drilled off although it retains the potential to extend further to the south and west from its currently defined limits. Both zones are now believed to be part of a single, mineralized conduit despite equivocal evidence for a post-magmatic structural break (Offset fault) between the two zones.

In addition to the significant resources contained in the Roby and Offset zones, a number of satellite zones have recently been discovered. Examples include the B2 and Mystery zones (see diagram, below). Although smaller in tonnage, these satellite bodies typically contain a higher-grade core with similar palladium grades and thickness to the higher-grade parts of the Roby and Offset zones, i.e., >20m of >4 g/t Pd. Most of these satellite bodies are hosted by sub-vertical, cylindrical-shaped magmatic breccia bodies containing 1-3% disseminated Fe-Cu-Ni sulfide mineralization. The breccia typically contains barren to sporadically mineralized fragments of norite and gabbronorite hosted by a matrix of varitextured, leucocratic norite that contains most of the palladium mineralization. The LDI breccia complex extends for ~2 km in depth, 1.5 km in the north-south direction along the primary feeder conduit, and 3 km in the east-west direction along both the northern and southern intrusive contact with the older basement gneiss units.

Recent exploration highlights for LDI include:

  • Critical and timely conversion of inferred resources in the Offset Zone, supporting the new life of mine plan and the new SLS mining method
  • Confirmation of the potential for significant resource additions in the Offset South target with the potential to expand the SLS mining area and extend the life of the underground mine
  • The intersection of Offset Zone-style palladium mineralization on the south side of the recently defined Camp Lake fault, representing an exciting new exploration opportunity along the same north-south striking feeder structure that hosts the Roby and Offset zone deposits
  • The addition of new mineral resources from five satellite deposits including the Sheriff South Zone (2013), Sheriff Pit Zone (2014), B2 Zone (2015), Roby SW Wall Zone (2016) and Mystery Zone (2017)

Looking forward, the Company expects to see continued success from its near-mine exploration investment, supported by improved 3D geological and structural models, applying innovative geophysical and geochemical exploration methods, and optimizing the value of its historical knowledge base. As an established PGE producer with a clearly defined strategy for growth, NAP is well positioned to convert exploration success into production and cash flow on an accelerated timeline.

DEPOSIT MODEL

Despite over 50 years of exploration on the Property, each year brings new insights into the geology of the LDI deposits that, in turn, open up new opportunities for making value-creative discoveries. The understanding of the key elements in the development of high-grade palladium mineralization at LDI has improved dramatically in recent years. Central to the revised deposit model is the importance of several major structures in localizing the mineralization and the temporal and spatial relationships between four distinctive periods of magmatism that produced the SLDI complex. Critically, two of these episodes are directly linked to the formation of the known deposits and one of these is responsible for most of the historical and current mineral resources on the Property.

The current deposit model features four major stages of magmatism that are summarized below:

Stage 1: Early inflationary stage and emplacement of barren, iron-rich gabbronorite units in the central and eastern part of the SLDI complex
Stage 2: Norite intrusion in the southern and northwestern part of the complex with local development of lower grade magmatic sulfide mineralization
Stage 3: Dynamic injection of a pervasively mineralized breccia complex, generating the Offset-Roby deposit and
Stage 4 – Late injection of barren diorite in the southern part of the complex and contemporaneous late magmatic hydrous alteration within the major feeder structures

The thickest higher-grade mineralization in the Roby and Offset zones (central domains) is focused at the intersection of the main north-south feeder structure and two or more cross-cutting faults. During Stage 3, turbulent injection of volatile-rich, sulfide- and palladium-enriched noritic magma produced a mega-breccia complex with maximum magma flow and sulfide accumulation occurring proximal to the main magma conduit. As the brecciation progressed, energy (and sulfide) dissipated outward and laterally, away from the conduit. A reflection of this decrease in energy is the distinct metal and mineralogical zonation recognized within and adjacent to the Offset and Roby zone deposits. The northern and southern parts of both zones show a systematic decrease in both the average thickness of higher grade palladium mineralization and the total sulfide and base metal content moving away from the central sections.

UNDERGROUND EXPLORATION TARGETS

Current exploration programs are focused on adding resources directly adjacent to the underground reserves. Specific targets are shown on the longitudinal section, below.

Longitudinal projection of the Offset Zone deposit, looking west, and showing the current priority underground exploration targets on the Property, including: (1) Offset South; (2) Camp Lake; (3) B2 Zone extension (3) Mystery Zone; (5) Deep footwall to Offset Zone.

SURFACE EXPLORATION TARGETS

Current surface exploration efforts are focused on discovering new mineralized structures and satellite bodies in the southern and eastern parts of the SLDI complex. Specific targets (red stars) and recent exploration drill hole collars are shown on the image, below.

Plan view image of the Lac des Iles Mine Property showing the current, top-priority surface exploration target areas in the eastern part of the property (red stars) and recent drill hole collar locations (green circles) for the ongoing surface exploration program in the southern part of the property.

Greenfields Exploration

NAP’s northwestern Ontario PGE greenfields properties comprise over 43,000 hectares of land covering several discrete mafic to ultramafic intrusive bodies, all believed to be related to the same magmatic event that formed the LDI deposits some 2.68 billion years ago. All of the greenfields properties are registered or under option to Lac des Iles Mines Ltd. (LDIM) and occur within 50 km of the LDI mill. Discovery of new PGE resources stemming from a sustained investment into PGE greenfields exploration remains a strategic priority for the Company. NAP’s unique status as the only primary PGE producer in Canada provides a major competitive advantage in terms of maintaining exploration activity on its 100%-owned PGE greenfields projects over multi-year timeframes. Many of the greenfields properties are already known to host near-surface occurrences of palladium mineralization having strong similarities to the main mineralized zones at LDI. NAP’s advanced understanding of the controls on PGE mineralization at LDI can now be translated into value-creative discoveries of palladium-rich magmatic sulfide deposits on its attractive greenfields property portfolio.

Location of the Company’s greenfields exploration properties with respect to the Lac des Iles Mine Property and significant palladium occurrences. The background image is a grey-scale shaded relief total magnetic intensity map based principally on government airborne magnetic survey data.

The company remains committed to sustained investment into greenfields exploration, predicated on the first application of the updated LDI exploration deposit model to the other, known LDI-type intrusions. Future exploration success will require the utilization of both tried and proven exploration methods and innovative new search techniques. With valid exploration permits, existing PGE mining infrastructure, a modern and large capacity PGE and Cu-Ni sulfide processing facility, and an unrivalled knowledge of the regional geology and mineral potential, NAP is ideally positioned to make transformative PGE-rich magmatic sulfide deposits in this part of northwestern Ontario.

In October 2017, the Company resumed greenfields exploration drilling at its Legris Lake property. This program is focused on testing newly recognized electromagnetic anomalies (conductors) that flank two elongate remanent magnetic anomalies (see map, below). The conductors are modeled to be related to massive sulfide mineralization of unknown affinity. One of the remanent magnetic anomalies has been modeled as a composite, sub-vertical mafic intrusive body of unknown age. Given the geological setting and proximity to LDI, the remanent magnetic features are of specific interest as potential LDI-type intrusions that have not previously been recognized, possibly due to the presence of a thin cover sequence of flat-lying diabase associated with the 1.1-billion-year old Mid-continent rift event.

Northwestern part of the Legris Lake property (Stonefish target area) showing location of recently modeled conductors, remanent magnetic anomalies and drill hole collars from the winter 2017/18 exploration program.

SUNDAY LAKE PROPERTY

In June 2017 LDIM signed an Option Agreement with partners Impala Platinum Holdings Ltd. And Transition Metals Corp. that provides LDIM with the exclusive right to acquire a 75% interest in the property by making certain cash payments and exploration expenditures over a five-year period. On June 20, 2017, the Company, signed a Definitive Option Agreement (the “Option Agreement”) with Impala Platinum Holdings Limited (“Implats”) and Transition Metals Corp (“Transition”) through its wholly-owned subsidiary of HTX Minerals Corp, with respect to the Sunday Lake PGE-Cu-Ni exploration project. The Sunday Lake property comprises approximately 2,600 hectares of mineral claims and patents and is located 25 km due north of the city of Thunder Bay and approximately 95 km by road from the Company’s Lac des Iles mill. Exploration drilling completed in the period 2013-2015 under a joint venture agreement between Implats and Transition completed 20 diamond drill holes totaling 12,017 metres on the Sunday Lake property. This drilling delineated a semi-continuous zone of PGE-rich magmatic sulfide mineralization covering an area of ~800 metres long and 300 metres wide and reaching ~40 metres in vertical thickness. The Sunday Lake PGE-Cu-Ni deposit remains open to surface and along strike. In Q4 2017, the Company initiated a program of geophysical surveys and diamond drilling focusing on:

  • Determining the lateral and vertical limits of the Main Zone
  • Testing for local areas of thicker and/or higher-grade mineralization in the Main Zone
  • Exploring for a mineralized feeder structure along the base of the intrusion
  • Identifying near-surface mineralization along the interpreted northern extension of the Main Zone

Outline of the Sunday Lake intrusion on a total magnetic field colour gradient image showing drill holes for the current exploration program and the interpreted outline of the Main Zone sulfide deposit and its possible near-surface extension to the north (Sunday Lake North target).

OTHER PROPERTIES

SHEBANDOWAN JOINT VENTURE

LDIM retains a 50% interest in the Shebandowan nickel-copper-PGE property with its partner, Vale Canada Ltd. The Shebandowan Mine was in semi-continuous production between 1972 and 1998 and shipped nickel concentrate to Inco Ltd. smelters in Thompson & Sudbury. The property is located 90 km west of Thunder Bay and includes the past producing Shebandowan nickel mine and the Shebandowan West nickel deposit.

EMERALD LAKE PROPERTY

LDIM holds a 100% interest in the Emerald Lake copper-PGE exploration property, located ~50 km east of Sudbury, Ontario. The Emerald Lake Property was staked in late 2014 and consists of 3 mineral claims comprising 496 hectares. These mineral claims are located near the historical Rathbun Lake PGE-Cu-Ni occurrence, consisting of local, semi-massive Cu- and PGE-rich sulfide mineralization within one of many Paleoproterozoic Nipissing mafic intrusions occurring in the region. The Nipissing intrusions are known to host magmatic Cu-Ni-PGE mineralization including one intrusion, located to the west of Sudbury that hosts the currently inactive Shakespeare Cu-Ni-PGE Mine.