Prominex Resource Corp.: Base Metal and Gold Exploration in Newfoundland and Labrador, Canada
Overview
Prominex Resource Corp. (TSXV:PXR) is a mineral exploration company engaged in acquiring, exploring and developing mineral properties within Canada. The Company’s properties are located on the island of Newfoundland in the province of Newfoundland and Labrador, Canada. Prominex is evaluating two projects within a base metal rich area of central Newfoundland, home to formerly producing world-class base metal deposits at Buchans and the currently producing Duck Pond zinc-copper mine owned and operated by Teck Corporation.
Prominex currently has 62,320,890 shares outstanding and trade on the TSX Venture Exchange under the call letters PXR. Prominex’s business is managed by the directors and officers and augmented by independent financial, geological and mining professionals retained to advise the Company on its exploration programs and business.
Investment Highlights
- NI 43-101 technical report on Tulks Hill’s published drill results
- Owns 51 percent undivided interest in the Tulks Hill project / (project operator)
- Earning a 100 per cent interest at Bond Lake project
- Solid infrastructure with easy access to resources and power
- Ongoing exploration program at Lake Bond
Key Mineral Properties
Tulks Hill
The Tulks Hill Property comprises 20 mining claims (500 hectares) that lie within a volcano-sedimentary sequence called the Tulks Volcanic Belt. The Tulks Belt is approximately 70 km long and 5 km wide and extends from Red Indian Lake to Victoria Lake in central Newfoundland.
The Tulks Volcanic Belt is similar to other volcanic belts in eastern Canada, which host significant volcanogenic massive sulphide accumulations including the former producing Buchans Mine, which, between 1928 and 1984 produced 16.2 million tonnes of ore at an average grade of 14.5% zinc, 7.6% lead, 1.3% copper, 1.37 grams per tonne gold and 126 grams per tonne silver, from in-situ and transported volcanogenic massive sulphide deposits. These ores were amongst the richest ores in the world. Asarco Ltd. operated the mine for the Asarco Ltd./Abitibi-Price Ltd. Joint Venture prior to the closure of operations in 1984.
History
Initially discovered in 1961 by Asarco Ltd., the Tulks Hill prospect was subjected to extensive exploration by the Asarco/Abitibi-Price Ltd. Joint Venture between 1961 and 1981. This exploration included 190 diamond drill holes that resulted in outlining four massive sulfide lenses termed T1, T2, T3, and T4. Asarco operated the world famous Buchans Mine from 1928 until its closure in 1984.
In 1980, an internal company report prepared by Buchans Mine geological staff reported a total inferred resource in the 4 lenses of 730,000 tonnes grading 5.5% zinc, 2.1% lead, 1.1 % copper, 45 g/t silver and 0.4 g/t gold. The tonnages were calculated by Abitibi-Price Ltd. geological personnel based on diamond drilling at 30-meter centers and a total of 212 meters of underground development on the T3 lens. In addition, the Asarco Ltd./Abitibi-Price Ltd. Joint Venture carried out bulk sampling, metallurgical testing and completed a feasibility study.
Tulks Hill Deposit
Location and Access
The property is located approximately 40 kilometers southwest of the former mining town of Buchans, 25 kilometers west of the Duck Pond deposit. The property is accessible from both the towns of Buchans and Millertown by well-maintained pulpwood haulage roads.
Outstanding Infrastructure
Tulks Hill is six kms from the 18MW Star Lake hydroelectric generating unit owned privately by Abitibi Inc. The Millertown hydroelectric generating dam and the mine infrastructure associated with the formerly producing base metal mines at Buchans are located approximately 40 km to the northeast of the property.
18MW Star Lake Hydro viewed from Tulks Hill
Tulks Hill Generalized Compilation
Prominex History
In late 2005, Prominex optioned the Tulks Hill property and commenced a re-evaluation of the deposit identified Asarco/Abitibi-Price Ltd. In November 2007, Prominex earned an undivided 51% interest by completing the terms of the option agreement. In July 2008 the Company received a National Instrument (NI) 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) compliant technical report on the Tulks Hill property authored by Mr. Hrayr Agnerian, M.Sc. (Applied), P. Geo. of Scott Wilson RPA.
Picture of T3 lens from Road
Picture from Top of T3 Lens looking back at Road
The following summary is from the NI 43-101 Technical Report on the Tulks Hill Property.
“The T3 Lens of the Tulks Hill deposit contains some 431,000 tonnes of Indicated mineral resources at an average grade of 0.89% Cu, 3.97% Zn, 1.61% Pb, 35.09 g/t Ag and 1.17 g/t Au. The 1.1% CuEq cut-off grade is based on a minimum 2 m horizontal thickness of mineralization.
The drilling by Prominex at Tulks Hill has confirmed the earlier results by Asarco Inc.” “There is good potential for the discovery of additional Cu-Zn-Pb-Ag-Au mineralization northeast, southwest, and southeast of the T3 Lens and at other targets within Mineral License 10212M. These targets have geological and geophysical characteristics that are similar to the T3 Lens.”
T3 Lens – Mineral Resources Above the Adit
| Grade | |||||||
|---|---|---|---|---|---|---|---|
| Zone | Category | Tonnes | % Cu | %Zn | %Pb | g/t Ag | g/t Au |
| 2 | indicated | 290,000 | 0.91 | 5.03 | 2.00 | 38.81 | 1.24 |
| 3 | indicated | 30,000 | 0.52 | 2.67 | 1.53 | 61.52 | 0.59 |
| Total | indicated | 320,000 | 0.87 | 4.81 | 1.96 | 40.94 | 1.18 |
Mineral Resources below the Adit and Elsewhere
| Grade | |||||||
|---|---|---|---|---|---|---|---|
| Zone | Category | Tonnes | % Cu | %Zn | %Pb | g/t Ag | g/t Au |
| 1 | indicated | 4,000 | 0.79 | 1.09 | 0.41 | 26.19 | 0.31 |
| 2 | indicated | 44,000 | 0.76 | 1.77 | 0.56 | 19.53 | 2.76 |
| 3 | indicated | 5,000 | 0.52 | 2.46 | 1.39 | 57.95 | 0.66 |
| 4 | indicated | 58,000 | 1.12 | 1.42 | 0.6 | 15.09 | 0.06 |
| Total | indicated | 111,000 | 0.94 | 1.55 | 0.6 | 18.24 | 1.15 |
Mineralization from T3 Lens
Lake Bond
The Agreement
The Company is earning a 100% interest in the Lake Bond property. In order to acquire the Option, the Company must expend $50,000 on exploration and development prior to September 30th, 2012. The property is subject to a net smelter return royalty of 2%, of which the Company can purchase 1% for $1,000,000.
Property Location
The 871.06 hectare Lake Bond Property is located in central Newfoundland and lies within the Buchans-Robert’s Arm Belt and is situated at the southern end of the Robert’s Arm Group. In excess of 50 volcanogenic sulphide mineral occurrences have been documented throughout the Buchans-Robert’s Arm Belt as well as three past producers including the renowned Buchans Mine, located approximately 60 kilometers southwest of Lake Bond property. The past producing Gullbridge copper mine which is currently being re-evaluated by Champion Resources is located six kms northeast of the property.
Access and Infrastructure
The property is easily accessed by Trans Canada Highway (TCH) approximately 11 kms northwest of the town of Badger and 30 kms from the town of Grand Falls Windsor. The old Canadian National Railroad Line (now the Newfoundland T Railway forms the southern boundary of the property. Access to the property is via the T Railway from Badger and within the property are a number of woods roads, old skidder and tractor trails.
History and Resources
The Lake Bond Property has been explored during several periods since 1953 through to 1997. This activity has defined three areas of concentrated mineralization; the Main Zone; Zone 2 and Zone 3. In 1989, MacRee Resources Incorporated announced an adjustment of resource figures for the property. They estimated indicated and possible reserves for the main zone totalling 507,998 tons at 4.15% Zn and 0.62% Cu. A lower grade estimate of 2.6 million ton grading 2.09% Zn and 0.3% Cu was also reported.
The resource estimate quoted herein is based on data and reports that were prepared by previous operators. The Company is not treating the mineral resource estimates as NI 43-101 defined resources verified by a qualified person. The Company cautions the reader that it has not completed the work necessary to verify the classification of the mineral resource estimates and that the historical estimates should not be relied upon.
Summary
Both projects are located in mineral rich belts, with solid infrastructure and outstanding access to power. Prominex has demonstrated timely execution of development targets and transparent corporate procedures. The Company has conducted exploration at its Lake Bond property in central Newfoundland, however, going forward the size, scope, and objective(s) of the exploration activity is dependent upon access to additional funds and subject to the objective of limiting shareholder dilution among other factors.
The market prices of zinc declined dramatically from a high of $2.10/lb in January 2007 to a low of $0.47 in Feb. 2009 and now trades at $0.83US$. This decline in commodity prices was in step with world economic downturn and the reduction of demand for commodities and zinc products.Prominex believes that a significant driver of price in the future will be the demand from the developing economies of India and China.
Management
Gordon Barron – President, CEO, and Director
Mr. Barron has 20 years of experience in the evaluation and financing of mineral exploration projects in Canada with a focus on Newfoundland. He has provided consulting services to Prominex since October 2004, recommended the acquisition of projects in Newfoundland, and on December 21, 2009 he became the president and CEO of the Company.
In 1985, Mr. Barron founded Varna Resources Inc. (“Varna”). In June 1985, Varna made a move into Newfoundland and by October 15, 2007 Varna had acquired interest in 3278 claims in 17 project areas in a search for base and precious metal deposits. Varna held significant interests on the Baie Verte Peninsula, Mings Bright, Glover Island, Jackson’s Arm, and on the south coast of Newfoundland.
Dr. David Stirling - Director – Chair of the Compensation Committee and Audit Committee Member
Dr. Stirling has over 25 years experience in post-secondary university education, development, research, and teaching in the fields of Medicine and Education. Dr. Stirling has served as chairman of Undergraduate Programs in the School of Kinesiology, Simon Fraser University; assistant academic Dean and Director of Research and Development, Trinity Western University; Director of Development, Kodaikanal International Baccalaureate School, Tamil Nadu, India and Vice President of University Development, Universario Nazarena, Costa Rica.
Gordon MacNiel – Director, Chair, Compensation Committee and Member of Audit, Interim CFO and Corporate Secretary
Mr. MacNiel has 26 years experience in the financial, investment and taxation arena and is the founder and president of Taurus Accounting Services Inc. of Vancouver, BC (2002).
Having graduated from St George’s School in Vancouver in 1977, he attended Queen’s University in Kingston Ontario, finishing his B.A. at UBC in 1984. He completed the Canadian Securities Course with honours later in 1984 and joined Investors Group as a financial planner from 1985-1988
Mr. MacNiel moved on to a position with Canada Revenue Agency (CRA) for two years in income tax and then two more years involved with the organization of the registration, compliance, collection and remittance processes of the GST for its implementation in 1991. He went into the private sector starting his own tax consulting business in late 1991 and his firm represents clients in personal and corporate tax accounting, planning, preparation and filing.
Liliana Hartwig – Director and Audit Committee Member
Ms. Hartwig has 25 years’ experience in communications and publishing of technical documentation particularly within the mining industry, and is the founder and Managing Director of LFH-FIELDSCOM Communications Ltd. in North Vancouver, BC (2010).
