Saskatchewan Exploration and Development Highlights 2010 · 2019. 1. 3. · Saskatchewan...

Saskatchewan Exploration and

Development Highlights 2010

19 48

Compiled by Staff of theSaskatchewan Ministry of

Energy and Resources

(PDAC Edition)

Updates on Saskatchewan Exploration and Development Activity as of February 9, 2011

• In the past six months, the spot price for uranium has increased from $45/lb U3O8 to $73/lb U3O8. Strong long-term industry fundamentals have rejuvenated uranium exploration in the province and it is estimated that there are at least 25 drills currently active on winter exploration programs in the Athabasca Basin, with others yet to get underway.

• At the Wheeler River project, Denison Mines released the first NI 43-101–compliant Resource

Estimate for the Phoenix trend A and B zones. Most of the Resource lies in zone A, which contains 35.64 million (M) lb U3O8 grading 17.99% in the Indicated category. Zone B contains a further 3.81 M lb U3O8 grading 7.27% in the Inferred category.

• Hathor Exploration Limited has released a new resource model for the Roughrider deposit.

Roughrider now contains an Indicated Resource of 17 M lb to 18 M lb U3O8 in 394 200 tonnes (t) of ore that grade at about 2% U3O8. An Inferred Resource of 10.6 M lb U3O8 is contained in 43 600 t of ore that grade at 11.03% U3O8.

• Rio Tinto Exploration Canada Inc., a subsidiary of Rio Tinto Ltd., the world’s third-largest uranium producer, has entered the Athabasca Basin by partnering with the Purepoint Uranium Group Inc on its Red Willow project.

• On January 12, 2011, Golden Band Resources produced the first doré gold bar (15.9 kg or

~500 troy oz Au) at the Jolu mill, from high-grade ore extracted from the Bingo deposit, now known as the Roy Lloyd mine.

• Claude Resources Inc. announced that gold production at the Seabee mining operation was

13 200 oz in the fourth quarter of 2010, bringing the 2010 production total to approximately 47 300 oz Au. To date, the Seabee mine has produced over 930 000 oz Au.

• Shortly after completion of a Feasibility study, and receiving approval on its Environmental

Impact Assessment, for the Legacy project, Potash One Inc. announced that it had agreed to a friendly take-over by German company K+S (formerly known as Kali und Salz AG), for ~$424 M. K+S, Europe’s largest potash producer, stated that it hopes to build a 2.7 M t per year mine at a cost of ~$2.5 billion (B).

• BHP Billiton announced that it had submitted an Environmental Impact Statement (EIS) for its

Jansen Project and that the ground-freezing process, required to begin shaft excavation, has begun.

• Western Potash Corp. announced it had completed a Preliminary Economic Assessment at its

Milestone project, southeast of Regina. The assessment concluded that the identified resources could support a 2.5 M t per year solution mine for over 40 years, with an initial estimated capital cost of $2.51 B.

• Brazilian miner Vale announced that it was in the Pre-feasibility Stage on its ‘Regina’ solution potash mining project, and that a decision by its board on whether or not to proceed to mining is expected in 2012.

• Canpotex announced it has signed three-year distribution agreements with Chinese state-owned Sinofert Holdings Ltd. (Sinofert) and India’s Tata Chemicals Ltd (Tata). Under the agreements, Canpotex will supply minimums of 3.15 M t to Sinofert, and 1.5 M t to Tata. Canpotex also established a five-year agreement with Korean-based Unid Co. Ltd. to supply a minimum of 400 000 t annually. Prices for all of the contracts are to be negotiated on set intervals.

• In base metals, Foran Mining Corporation (Foran) and Copper Reef Mining Corporation (Copper Reef) have signed a joint venture agreement on the McIlvenna Bay deposit, in which Foran is acquiring 100% ownership of the deposit by purchasing the remaining 25% of the interest held by Copper Reef.

• Shore Gold Inc. (Shore) announced that it had submitted an EIS for its Joint Star-Orion Diamond

Project to the Ministry of Environment. Shore anticipates having a completed final Feasibility Study by end of the second quarter of 2011.

• Sifto Canada Corp.’s parent company Compass Minerals (Compass) completed a $56 M all-cash purchase of Saskatchewan sodium sulphate producer Big Quill Resources Inc. Compass has plans to expand production at Big Quill and increase sales of high-value specialty potassium sulphate fertilizer products.

Saskatchewan Exploration and Development 1 Saskatchewan Ministry of Energy and Resources Highlights 2010

Saskatchewan Exploration and Development Highlights 2010

Compiled by Staff of the Saskatchewan Ministry of Energy and Resources

1. GENERAL OVERVIEW In 2010, expenditures on mineral exploration projects in Saskatchewan are expected to be approximately $355 million (M). This represents a significant increase from the $277 M spent in 2009 and would be the second-highest annual exploration expenditure total in provincial history behind 2008’s record of $474 M (Figure 1). Exploration activity levels in the province have been on a continual upward trend in recent years with an estimated $1.88 billion (B) in expenditures since 2004, compared to the collective $674.5 M spent in the 20 years prior to 2004. The continued interest in Saskatchewan’s mining industry is due to the province’s diverse geology, which has the potential to host a variety of metallic and non-metallic mineral deposits.

As of September 30, 2010, the amount of land under disposition for mineral exploration, pursuant to The Mineral Disposition Regulations, 1986, totalled 4.9 M hectares (ha). There were also 4.3 M ha of land under disposition for potash exploration and development, pursuant to The Subsurface Mineral Regulations, 1960, with an additional 4.1 M ha disposed under The Coal Disposition Regulations, 1988.

In 2009, Saskatchewan remained a leader in potash and uranium production, accounting for about one-third and one-fifth of global production, respectively. Coal, gold, salt, sodium sulphate, silica sand, bentonite, and kaolin were also

Figure 1 - Mineral exploration expenditures in Saskatchewan. Data in the histogram compare actual historical expenditures to estimates (e) for 2010, which are compiled from the annual survey of exploration expenditures by the Saskatchewan Geological Survey. Tabulated data are from the same survey. All values are in millions of Canadian dollars ($M).

Front Cover: First load of Bingo high-grade ore goes to Jolu Mill for processing later this year. Photo courtesy of Golden Band Resources Inc.

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010eUranium 14.0 15.4 13.3 31.2 74.6 123.7 199.2 204.4 108.6 96.5Diamonds 4.8 6.1 12.0 22.4 55.4 98.8 76.6 73.2 10.9 15.0Gold 1.0 2.5 2.9 5.7 15.3 13.8 15.3 8.9 3.0 10.7Base Metals 1.4 1.9 2.2 0.9 2.9 3.9 11.5 6.8 1.6 3.6

1 PGM 0.1 0.6 0.5 0.0 0.0 0.0 0.0 0.0 1.4 0.82 Industrial Minerals 0.8 1.3 0.5 0.5 1.8 3.4 22.7 180.7 151.2 229.0

Total 22.1 27.8 31.4 60.7 150.0 243.6 325.3 474.0 276.6 355.61 Platinum group metals.2 Including REE, potash, and clays.

0

50

100

150

200

250

Uranium Diamonds Gold Base Metals PGM Other

$M

2006

2007

2008

2009

2010e


mined in the province in 2009. An unprecedented drop in potash sales volumes in 2009 resulted in a fall in total value of provincial mineral sales to $5 B, down from record the $9.5 B sold in 2008. A strong rebound in potash sales volumes in the first-half of the year provides a clear indication that 2010 provincial mineral sales values will once again be among the highest in Canada.

A total of 26.5 M lb U3O8 was produced in 2009 from three operations: McArthur River/Key Lake, which contributed the majority; Rabbit Lake; and McClean Lake. In 2010, production has been forecasted to fall to about 24 M lb U3O8, largely due to the suspension of activities at the McClean Lake operation at the end of June 2010. Saskatchewan’s production is expected to be <24 M lb U3O8 for the next few years until the Cigar Lake mine is operational. In 2010, the lion’s share of uranium exploration expenditures, estimated to be $96.49 M, was undertaken in the Athabasca Basin, the world’s premier exploration district for high-grade, unconformity-related uranium deposits. Cameco Corporation (Cameco) is involved in a number of exploration projects at various stages of advancement, including on the McArthur River and Rabbit Lake mining leases, at the Millennium deposit, currently at the Feasibility stage, and at the Virgin River project, where the economic viability of the deep Centennial deposit is being investigated. AREVA Resources Canada Inc. (AREVA) and UEX Corporation (UEX) have focussed significant exploration on the Shea Creek property, on which three deposits are included in a National Instrument (NI) 43-101–compliant Resource estimate, released in May. Hathor Exploration Limited (Hathor) and Fission Energy Corp. (Fission) are both working at expanding a mineralized trend that spans their property boundary and includes the Roughrider deposit and J-Zone. In addition, Denison Mines Corp. (Denison) continues to expand the uranium mineralization encountered on the Phoenix trend at the Wheeler River property.

Gold exploration expenditures in 2010 are estimated to be $10.66 M, up substantially from actual 2009 expenditures of $2.97 M. Claude Resources Inc.’s (Claude) Seabee operation remains the sole producing gold mine in the province, with total production of 46,800 oz. in 2009 and 34,054 oz. over the first three quarters of 2010. Claude anticipates mining the nearby Santoy 8 satellite deposit, possibly by the first quarter of 2011. Golden Band Resources Inc. (Golden Band) continued to advance its La Ronge gold project over the past year, including underground exploration at the Bingo deposit. Golden Band reports to be on track for its target of gold production from Bingo in the fourth quarter of 2010. Wescan Goldfields Inc. (Westcan) announced a new NI 43-101–compliant Mineral Resource Estimate for its Jojay property, located ~125 km northeast of La Ronge, and Brigus Gold Corp. (Brigus) acquired the advanced-stage Goldfields project, located near Uranium City, as a result of the merger between Linear Gold Corp. (Linear) and Apollo Gold Corp. (Apollo) in 2010.

Base metals exploration expenditure are expected to be $3.6 M in 2010, which is just below the ten-year average and up from $1.6 M spent in 2009. Most activity was focused on exploration for volcanogenic massive sulphide mineralization in the Flin Flon and western Glennie domains, while some was directed at intrusion-related copper- nickel mineralization in the Dodge Domain. Nearly all of the exploration dollars committed to the search for magmatic copper-nickel-platinum group metals (Cu-Ni-PGM) deposits were directed at the Peter Lake Domain.

Since the announcement in July of 2009 that China would be drastically decreasing rare earth element (REE) exports; prices for the commodities have increased greatly. REE interest and exploration in the province has also increased from last year. There are now six companies currently involved in five projects in Saskatchewan. The Zemlak, Beaverlodge and Wollaston domains, and the Athabasca Basin are all areas of REE exploration activities.

Diamond exploration in Saskatchewan has been almost exclusively restricted to the Fort à la Corne area, where Shore Gold Exploration Inc. (Shore) is in the advanced stages of evaluating the Star and Orion kimberlite deposits. Shore is the operator on both projects, and is partnered with Newmont Mining Corporation of Canada Ltd. (Newmont) (37% interest) on the Fort à la Corne Joint Venture (FALCJV), which has holdings that include the Orion kimberlite and a portion of the west side of the Star kimberlite. In February, Shore released a Preliminary Feasibility Study (PFS) on the combined Star-Orion project, which examines the merits of combining the two projects into one mine plan. The study surmised that about 35 M carats could be extracted over a 20-year mine life. Shore is now working on a full Feasibility Study for the two projects together.

In 2009, Saskatchewan’s loan coal producer Sherritt International Corporation (Sherritt) produced 10.3 M t of coal from the Boundary Dam (6.3 M t), Poplar River (3.3 M t) and Bienfait (0.7 M t) mines. The majority of coal exploration in 2009 and early 2010 was focused in the Hudson Bay area, in and around the area where Goldsource Mines Inc. (Goldsource) discovered anomalously thick intersections of relatively shallow Mannville-aged coal. Goldsource has now drilled over 140 holes and discovered 17 coal deposits, some with cumulative coal thicknesses up to 126.5 m. Other coal explorers such as: Westcore Energy Ltd. (Westcore), Wescan Goldfields Inc. (Wescan), as well as Saturn Minerals Inc. (Saturn) and Swift Resources Inc. (Swift) have also reported interesting coal in the Hudson Bay area. In addition, some companies are beginning to investigate the feasibility of utilizing the province’s extensive lignite reserves for the production of synthetic gasses and possibly liquid fuels.

After a near-record fiscal year for potash in 2008, with production of 16.12 million tonnes (M t) of potassium chloride (KCl), and value of sales of $7.3 B, 2009 saw a significant decrease, with production of 9.56 M t KCl, and


a sales value of $3.7 B. Initial sales for the first half of 2010 indicate a strong rebound in global demand. All of the province’s ten mining facilities have recently undertaken, or have plans to undertake, expansions to their production capacity. Between 2004 and 2020, the three potash producing companies (Potash Corporation of Saskatchewan (PotashCorp), The Mosaic Company (Mosaic), and Agrium Inc. (Agrium)) are expected to invest about $11.9 B in expanding the province’s production capacity by 90%. In 2009, more exploration expenditures were aimed toward potash than any other mineral in the province and forecasts for 2010 exploration spending indicate the trend should continue. In the past few years there have been over 30 000 line-km of seismic surveys and more than 140 test wells over potash dispositions. Many companies such as BHP Billiton Inc. (BHP), Potash One Inc. (Potash One), Western Potash Ltd. (Western Potash) and Vale S.A. (Vale) have made substantial investments towards advanced projects for which they have outlined significant potash resources.

2. INTRODUCTION This report is a review of current activity only. Geology, and Mineral and Petroleum Resources of Saskatchewan (Saskatchewan Geological Survey, 2003) provides a comprehensive summary of the economic geology of the province, including historical reserve and production data. For up-to-date information on all Saskatchewan mineral occurrences, refer to the Saskatchewan Geological Atlas (Slimmon, 2010; http://www.er.gov.sk.ca/geological_atlas) and the Saskatchewan Mineral Deposits Index (www.er.gov.sk.ca/SMDI).

All contained information is from publicly available sources. Exploration expenditure forecasts are compiled from an annual survey conducted by geologists of the Saskatchewan Geological Survey, Saskatchewan Ministry of Energy and Resources. Actual annual expenditures for previous years are from the same survey. Grade, tonnage, reserve, and resource data reported herein are from a variety of public sources including: published reports, public records, corporate websites, securities filings, and Saskatchewan Mining Association facts sheets. These data may not necessarily conform to the current CIM and NI 43-101 standards required by Canadian securities regulators for publicly reporting companies. Although the contained information has been carefully compiled, the Saskatchewan Ministry of Energy and Resources and the Government of Saskatchewan do not accept liability for any errors, omissions or inaccuracies that may be included in, or derived from, this report. Nor do the Saskatchewan Ministry of Energy and Resources and the Government of Saskatchewan recommend or endorse any of the projects described in this document.

This document is an attempt to capture relevant information current as of October 15, 2010. Only active exploration and development projects are included. Due to the current rapid pace of exploration for uranium, potash, coal, diamonds, and gold, it is inevitable that significant new activities have occurred since printing.

Tables 1 and 2 contain data on the current mineable reserves and geologic resources for the active uranium and gold properties in the province, respectively. The last page is a colour map, showing the locations of properties discussed herein. The map also outlines the general mineral and hydrocarbon potential of the province and shows the lithotectonic elements of the Precambrian Shield in northern Saskatchewan.

3. THE ENERGY AND MINERALS SECTOR

The energy and mineral extraction sector are a critical component of the Saskatchewan economy accounting for 12.4% of the provincial Gross Domestic Product (GDP) ($36.9 B) in 2009 (Figure 2). This is down slightly from the 2008 level when this sector contributed 14.0% of the provincial GDP ($39.5 B). This decrease is largely due to weakening demand for commodities as many economies experienced recessionary pressures during this period.

Saskatchewan is Canada’s second-largest producer of crude oil, behind Alberta, with a total output of 24.6 M cubic metres (m3) at a value of $9.0 B, a decrease of 32.5% that reflects a major decline in prices. Natural gas production was 7.6 B m3 in 2009 at a value of $744.3 M, a decrease of 55% from 2008 due to a decrease in both amount sold and price.

In 2009, 1,610 oil wells were drilled in Saskatchewan compared with only 233 gas wells. This is a reduction

Figure 2 - 2009 percentage of GDP by sector ($36.9 B, CANSIM Table 379-0025, Statistics Canada, 29 April 2010).

Agriculture, Forestry, Fishing & Hunting, 12.1%

Mining and Petroleum, 12.4%

Manufacturing, 7.7%

Construction, 6.7%

Transp, Warehousing &

Utility, 8.6%Wholesale and Retail

Trade, 12.1%

Finance, Insurance & Real Estate , 16.5%

Business Services, 6.1%

Government Services, 5.5%

Education & Healthcare, 12.1%

Other Services

Industries, 5.6%

http://www.er.gov.sk.ca/geological_atlas�


in drilling activity of 43% and 80.9%, respectively from 2008. Drilling activity is expected to increase in 2010 with the first half of the year comparing favourably to the first half of 2008. Sixty per cent of the wells drilled in the first seven months of 2010 were horizontal wells, which now account for almost half of Saskatchewan’s total oil production.

Saskatchewan mineral production in 2009 included metallic mineral production of uranium and gold, and industrial mineral production of potash, silica sand, salt and sodium sulphate, kaolin, bentonite, clay, and coal. The value of non-renewable resource sales in 2009 totalled just over $14 B (Figure 3).

The mines of the Athabasca Basin, in northern Saskatchewan, and the Prairie Evaporite Formation, in central Saskatchewan, continue to be among the world’s most important suppliers of uranium and potash. In 2009, Saskatchewan produced 100% of Canada’s uranium from three operations, and accounted for approximately 20% of world output. The province also produced approximately 95% of Canada’s potash from ten facilities, accounting for about 26% of world production. Market fundamentals indicate strong future demand for both commodities. The Saskatchewan potash industry has responded to this by investing $1.8 B in expansions in 2009 and, with more investments planned, the industry should nearly double production over the next ten years. Furthermore, nuclear power continues its resurgence with many countries planning to increase nuclear power generation capacity.

The energy and minerals sectors increased prosperity in Saskatchewan by creating high-paying jobs (23,500 directly employed) and contributing $1.2 B in royalties in 2009. These sectors will continue to make significant contributions to the Saskatchewan economy for many generations.

4. URANIUM In 2009, Saskatchewan produced 26.5 M lb U3O8, constituting about 20% of world and 100% of Canadian production. Uranium was produced from three mines: McArthur River, McClean Lake, and Eagle Point. The McArthur River mine was the world’s largest uranium producer in 2009, yielding 19.1 M lb U3O8. Production is anticipated to be 18.7 M lb U3O8 in 2010. The Eagle Point mine at Rabbit Lake produced 3.8 M lb U3O8 in 2009 and is expected to produce a further 3.6 M lb U3O8 in 2010. The McClean Lake operation produced 3.6 M lb U3O8 in 2009; however, the mine was placed on care and maintenance as of June 30, 2010 after producing about 1.7 M lb U3O8. The McClean Lake mill awaits ore from the Cigar Lake mine and smaller deposits such as Midwest. Although, no production start-up date has been divulged for the Midwest deposit, remediation of the Cigar Lake mine continues and, barring any unforeseen difficulties, production will begin by the middle of 2013. A four-year, ramp-up period will follow before the mine produces at its annual licensed capacity of 18 M lb U3O8.

The World Nuclear Association estimates that about US$5.75 B were spent on uranium exploration globally between 2003 and 2009, the third world-wide uranium exploration cycle. According to Saskatchewan Ministry of Energy and Resources statistics, about 11.5% of that total was spent in Saskatchewan. Despite a relatively modest share of the world’s exploration expenditures, several new occurrences, some of them significant, have been discovered across the basin. Many of these new prospects and some historically known deposits are entering the advanced exploration to evaluation stage. Uranium exploration spending in 2010, primarily focussed in the prolific Athabasca Basin, is estimated to be $96.49 M, a decrease from realized expenditures of $108.58 M in 2009.

MINES AND MAJOR DEPOSITS McArthur River Mine/Key Lake Mill McArthur River mine: Cameco Corporation, operator (69.805%) and AREVA Resources Canada Inc. (30.195%); Key Lake mill: Cameco Corporation, operator (83%) and AREVA Resources Canada Inc. (17%).

The McArthur River/Key Lake operation yielded 19.1 M lb U3O8 in 2009 making it the world’s leading uranium producer (World Nuclear Association, 2010, URL <http://www.world-nuclear.org/info/inf49.html>). The Key Lake

Figure 3 - Value of non-renewable resources ($M, Saskatchewan Ministry of Energy and Resources).

Crude Oil and Natural Gas

9,601

Potash 3,067

Uranium1,260.4

Other265.7

http://www.world-nuclear.org/info/inf49.html�


mill is subject to a special case scenario where production can be increased to as much as 20.4 M lb U3O8 annually to recover previous production shortfalls as long as the average annual production over the life of the license does not eclipse 18.7 M lb U3O8. The additional 0.4 M lb U3O8 produced in 2009 makes up for part of the 2008 shortfall when only 16.6 M lb U3O8 was produced. Production is slated to be 18.7 M lb U3O8 over the next several years. Total Reserves (Table 1) at the McArthur River mine as of the end of 2009 were 335.2 M lb U3O8 grading 19.53%.

After completing a new freeze wall around zone 2, panel 5, two new raisebore chambers were completed and production commenced in late 2009. About two-thirds of the mine’s 2010 production is expected from this area. In addition, Cameco began freezing lower zone 4 in January of 2010 and anticipates production from this area late in the year. Exploration continues at the site. Underground exploration continues to allow Cameco to convert Measured Resources into in Proven Reserves. In addition, surface drilling has resulted in the discovery of two new zones, A and B, since 2004. Underground development of the 530 m level to the north of the mine will allow for underground drilling and better delineation of zones A and B. As of early 2010, there were Measured and Indicated Resources of about 30.3 M lb U3O8 at 6.78% and Inferred Resources of 159.4 M lb U3O8 grading 11.97% at the McArthur River mine.

Eagle Point Mine, Rabbit Lake Mill Cameco Corporation, operator (100%)

The Eagle Point mine produced 3.8 M lb U3O8 in 2009, slightly more than was anticipated. Production for 2010 is expected to be about 3.6 M lb U3O8. At the end of 2009, total Reserves were 21.3 M lb U3O8 grading 0.88% with further Resources of 10.4 M lb U3O8 at 0.59% in the Indicated category and 0.9 M lb U3O8 grading 0.36% in the Inferred category (Table 1). New reserves have been consistently added over the last few years and are now expected to keep the mine in production until 2015, an extension of two years. In addition, the underground reserve replacement exploration program at Rabbit Lake has been extended into this year.

The Rabbit Lake mill is expected to process some of the uranium solution from the Cigar Lake mine after initial processing at the McClean Lake mine. This will increase production significantly (current license is for 16 M lb U3O8) and requires mill and tailings management facility upgrades. In addition, $5 M will be spent in 2010 on reclamation of facilities on the property that are no longer in use.

McClean Lake Mine/Mill AREVA Resources Canada Inc., operator (70%); Denison Mines Corp. (22.5%); and OURD (Canada) Co. Ltd. (7.5%).

The McClean Lake mine produced 3.6 M lb U3O8 in 2009, some 0.22 M lb more than was forecasted. In late 2009, AREVA announced that the JEB mill would be put on care and maintenance by mid-2010. Ore has not been mined on the property since 2008 and the development of new resources has been delayed due to economic uncertainty. The Caribou deposit is now fully permitted for open-pit mining but AREVA has decided not to proceed with construction at this time. Furthermore, the environmental permitting process at Midwest is not complete (see below). The main source of feed for the JEB mill in the future will be the Cigar Lake mine; however, the well-documented development difficulties at Cigar Lake have delayed production start up (see below). Production

Figure 4 - Heavy equipment at the opening of the Eagle Point mine at Rabbit Lake. Photo courtesy of Cameco Corporation.


Table 1 - Reserves and Resources for uranium deposits in Saskatchewan at the end of 2009.

Owner(s)* Property/Deposit Reserves (M lbs

U3O8) Grade

(%U3O8) Production (M lbs

U3O8) ***

RESERVES** 2009 2010 (e) Cameco Corporation Rabbit Lake; Eagle Point

Mine 21.3 0.88 3.8 3.6

Cameco Corporation – AREVA Resources Canada Inc.

Key Lake 0.7 0.56


McArthur River P2N 335.2 19.53 19.1† 18.7†

Cameco Corporation – AREVA Resources Canada Inc. – Idemitsu Uranium Exploration Canada – TEPCO Resources Inc.

Cigar Lake 209.3 17.04 – –

AREVA Resources Canada Inc. – Denison Mines Corp. – OURD (Canada) Co. Ltd.

McClean Lake 2.7‡ 0.62‡ 3.6 1.7

UEX Corporation Hidden Bay (West Bear) 1.49 0.94 – –

RESOURCES** Measured and

Indicated Grade (%U3O8) Inferred

Grade (%U3O8)

Cameco Corporation Rabbit Lake; Eagle Point Mine

10.4 0.59 0.9 0.36

Cameco Corporation – AREVA Resources Canada Inc. – Idemitsu Uranium Exploration Canada – TEPCO Resources Inc.

Cigar Lake 1.2 2.27 133.5 12.61


McArthur River P2N 30.3 6.78 159.4 11.97

Cameco Corporation – AREVA Resources Canada Inc. – JCU Exploration (Canada) Co., Ltd.

Dawn Lake 12.9 1.69 – –


Tamarack 17.9 4.42 1.0 1.02


Millennium 46.8 4.53 9.7 2.06


McClean Lake 15.3‡ 2.24‡ – –


Midwest 42.9 5.50 0.4 0.80


Midwest A 5.8 0.57 4.3 21.23

AREVA Resources Canada Inc. – UEX Corporation

Shea Creek (Anne, Kianna, Colette)

63.57 1.54 24.5 1.04

Hathor Exploration Limited – Terra Ventures, Inc.

Roughrider 6.58 2.57 5.47 3.00

UEX Corporation Hidden Bay (Horseshoe, Raven)

40.0 0.12 3.47 0.08

Notes: * Operator first. ** Total Reserves (Proven and Probable) are reported. Reserve and Resource data are from company releases unless otherwise

specified. *** 2009 and 2010 production figures and estimates are from company releases and Saskatchewan Mining Association uranium

fact sheets. † Combined production from Key Lake and McArthur River ore. ‡ Saskatchewan Mining Association uranium fact sheets. Reserve and Resource figures are NI 43-101 compliant, but not

separated into categories (Proven, Probable; Measured, Indicated, Inferred) by this source. e estimated.


from the McClean Lake operation in 2010 was about 1.7 M lb U3O8.

No date has been given for restart of the McClean Lake operation; however, AREVA has proposed hauling some slurry from the McArthur River mine to the site in order to test the milling system in advance of receiving high-grade, Cigar Lake ore. The McClean Lake mill will be used for initial processing of Cigar Lake ore before sending some uranium solution to the Rabbit Lake mill. Ultimately, McClean Lake will produce about 45% of the yellowcake from the Cigar Lake mine leaving significant capacity for mining of other deposits under the current annual licensing agreement for production of 12 M lb U3O8.

Cigar Lake Deposit Cameco Corporation, operator (50.025%); AREVA Resources Canada Inc. (37.100%); Idemitsu Uranium Exploration Canada (7.875%); and TEPCO Resources Inc. (5.000%).

Construction of the Cigar Lake mine has been beset by delays. Operator Cameco now anticipates a production start up by the middle of 2013. A ramp-up period of four years is planned before the mine produces at its full capacity of 18 M lb U3O8 in 2017. Before this can occur, work must be completed to secure and restore the underground part of the mine. Cameco has introduced a new underground water management system that can handle double the maximum predicted inflow rate at the mine and have sealed off some levels of the mine where inflow risk is highest. To that end, both the jet-boring system and the ore-freeze system will be driven from the 480 m level. Cameco is also investigating surface freezing technology that could shorten the production ramp-up period. By the time the mine opens, total capital expenditures are likely to exceed $2 B.

Cigar Lake is the world’s second-largest, high-grade uranium deposit with total Reserves of 209.3 M lb U3O8 at an average grade of 17.04%, Measured and Indicated Resources of 1.2 M lb U3O8 grading 2.27%, and an Inferred Resource of 133.5 M lb U3O8 at an average grade of 12.61% (Table 1). The primary ore slurry from Cigar Lake will be transported to AREVA’s JEB mill at McClean Lake for processing. The Rabbit Lake facility, operated by Cameco, will receive ~55% of the pregnant solution from McClean Lake for further processing and production of yellowcake.

Midwest Property AREVA Resources Canada Inc., operator (69.16%); Denison Mines Corp. (25.17%); and OURD (Canada) Co. Ltd. (5.67%).

A deposit study commissioned by Denison indicates that the Midwest deposit, discovered in 1978, has Measured and Indicated Resources of 42.9 M lb U3O8 at a grade of 5.5%. The same study also delineated an Indicated Resource of 33.9 M lb Ni at an average grade of 4.35%. AREVA is currently responding to comments after the government review of their environmental impact statement for an open-pit mine at the site. During this process the site will remain on care and maintenance.

EXPLORATION OVERVIEW Cameco and AREVA are the most active explorers in the Athabasca Basin. Each company controls large land packages and has good prospects to define new resources. In the last few years, however, junior companies have discovered many new uranium occurrences, most of which are in the well-explored eastern part of the Athabasca Basin. In addition, junior company Red Rock Energy has been attempting to revive the Beaverlodge mining camp near Uranium City.

Cameco is active in both brownfield (detailed above) and greenfield exploration. One of the company’s more advanced-stage projects is at the Millennium joint venture (Cameco 42%, operator; JCU Exploration (Canada) Co., Ltd. 30% (JCU); AREVA 28%), currently the focus of a Feasibility Study scheduled to be completed in 2010 after which a production decision will be made. The Dawn Lake joint venture property (Cameco 57.5%, operator; AREVA 23%; JCU 19.5%) contains a number of well-explored occurrences. Much of the exploration in the last five years has been focussed at the Tamarack deposit where, after some 20 000 m of drilling, Cameco now reports a total Resource nearing 20 M lb U3O8 (Table 1). On the Virgin River property, (Cameco 49%, operator; AREVA 49%; Coronation Mines Ltd. 2%) three new pilot holes, VR-041, 042, and 043, were drilled during the 2010 winter-drilling program with VR-042 intersecting weak mineralization over ~19 m. This intersection is interpreted to represent a second mineralized zone parallel to the Centennial deposit. The Centennial deposit has now been identified over a strike length of 650 m but Cameco is evaluating the economic viability of the deposit as it occurs at a depth of ~800 m.

At the Shea Creek project (AREVA 51%, operator; UEX 49%) AREVA continues to expand the Anne, Kianna, Colette, and 58B deposits. The deposits are strung out over a length of about 2.5 km along the northwest-trending Saskatoon Lake conductor. The contiguous Anne and Kianna deposits, at the southeast end of the mineralized trend, are now nearly amalgamated. The south end of the Colette deposit lies ~850 m northwest of the Kianna deposit with


the 58B deposit roughly halfway between the two. The individual deposits are complicated and generally contain significant basement and unconformity mineralization that is sometimes separated by over 100 m vertically. Perched mineralization tens of metres above the unconformity is common. In early 2010, UEX announced that a new NI 43-101–compliant Resource Estimate for the Anne, Kianna and Colette deposits represents the largest undeveloped uranium resource in the Athabasca Basin. Together they contain 63.57 M lb U3O8 grading 1.54% in the Indicated category and an additional Inferred Resource of 24.53 M lb U3O8 grading 1.04% (0.30% cut-off grade; Table 1). Furthermore, the deposits are locally auriferous. A breakdown of the Resource estimate by deposit is available on UEX’s website. Environmental scoping and geotechnical work is being completed in advance of the development of at least one exploration shaft that will allow for better delineation of the deposits, which occur at depths of 700 m below surface and greater. Company news releases indicate that the first shaft is planned between the Anne and Kianna deposits.

UEX is the 100% owner of the Hidden Bay project, which also contains three uranium deposits. Although the West Bear, Raven and Horseshoe deposits are significantly lower grade than those on the Shea Creek property they occur at much shallower depths and are proximal to milling infrastructure in the northeast Athabasca Basin. The West Bear deposit is the shallowest undeveloped uranium deposit in the Athabasca Basin. It is modest in size, with a Probable Mineral Reserve of 1.49 M lb grading 0.94%, but attractive because it occurs only 13 to 31 m below surface. A recent PFS for the deposit indicates a best-case scenario uranium price of $77.53/lb U3O8 would make the deposit economically viable. The Raven and Horseshoe deposits are located about 4 km southwest of the Rabbit Lake Mill and together contain a combined Resource (Indicated and Inferred) of 37.7 M lb U3O8 with grades between 0.1 and 0.2%. Exploration continues on the Hidden Bay property both to expand the previously mentioned deposits and at other prospects. One of these, the Telephone Lake area, has an intercept of 4.52% U3O8 over 0.5 m at depths of ~190 m. New results included an intercept of 1.527% U3O8 over 1.5 m suggesting that the Telephone Lake fault will continue to receive exploration attention.

Hathor (90%, operator) and partner Terra Ventures, Inc. continued to intersect high-grade uranium at the Roughrider deposit in 2010. The companies released a NI 43-101 Resource estimate for the deposit late in 2009 with 6.58 M lb U3O8 at 2.57% and 5.47 M lb U3O8 at 3.00% in the Indicated and Inferred categories, respectively. In late 2009, Hathor announced the discovery of a new zone 200 m to the east, now termed the Roughrider East zone. Initial drilling revealed intersections similar to those in the Roughrider deposit, such as 28 m grading 12.71% U3O8; however, Hathor has since announced an 81.5 m intersection grading 1.59% U3O8. This intersection is one of the widest, high-grade intersections ever reported from the Athabasca Basin. The Roughrider East zone is now continuous over 160 m and Hathor continues with infill drilling and expansion of both Roughrider and Roughrider East with the intent of determining whether they are connected. Anomalous radioactivity has now been encountered in 47 drill holes at Roughrider East and more drilling success could initiate compilation of an NI 43-101–compliant Resource model.

Fission (operator, 50%) and equal partner, the Korea Electric Power Corporation, have announced significant uranium intercepts during the past year of drilling on the Waterbury Lake property. Three mineralized zones have been identified in an east-west–trending corridor that apparently extends on to Hathor’s Midwest NorthEast property, host of the Roughrider mineralization. In fact, the J-Zone east is less than 10 m from the property boundary and only about 50 m from the Roughrider deposit. The J-Zone, from which the best mineralized intersections have been reported, is 50 m to the west of J-Zone east with the Highland zone a further 120 m from the J-Zone.

One of the newest discoveries in the basin is the Phoenix trend on the Wheeler River property (Denison 60%, operator; Cameco, 30%; JCU, 10%). The Phoenix trend now contains four mineralized zones, A to D, with zones A and B being modelled in order to produce a NI 43-101 Resource model by the fourth quarter of 2010. The most recent drilling has expanded zones A and B and the company is focussed on the 50 to 100 m gap between the two. Assay results from the property remain impressive, with intersections of 10.5 m at 7.70% U3O8 and 4.5 m at 7.96% U3O8 from zone A, and 2.5 m at 34.8% U3O8 from zone B.

The recent exploration boom in the Athabasca Basin has resulted in the discovery of many new uranium occurrences. Pitchstone Uranium Ltd. (Pitchstone), a junior company, has now announced three new uranium occurrences on its portfolio of properties. The first two occurrences, on the Candle and Gumboot properties, are both west of the Cigar Lake at depths of over 600 m. Pitchstone’s latest discovery, on the Wolverine property, is 0.25% U3O8 over 0.1 m at a much more manageable depth of 370 m. Japan Oil, Gas and Metals National Corporation has the option to earn a 50% interest in the Wolverine property.


5. GOLD After a sharp decline in total annual gold exploration expenditures to $2.97 million in 2009, such expenditures are estimated to increase to $10.66 M for 2010. This estimated 2010 expenditure remains low in recent historical terms, however, relative to the price of gold (Figure 5), which was at a record high of US$1365.50 on October 13, 2010.

The main gold exploration work in the province in 2009-2010 focused on four principal areas, including the La Ronge Domain, the Seabee mine area of the Glennie Domain, the Amisk Lake area of the Flin Flon Domain, and the Goldfields area in the Beaverlodge Domain on the north shore of Lake Athabasca. Other areas of known gold potential include the Brownell and Wapawekka lakes area of the southern Glennie Domain, the Ithingo Lake area of the central Mudjatik Domain and the Pine Channel area of the Tantato Domain, though no new exploration work has been reported from these areas over the past year.

Claude’s Seabee mine was the only commercially producing gold mine in the province as of October 2010, having produced a total of ~46,800 oz. of gold in 2009 and ~34,054 oz. of gold over the first three quarters of 2010. Golden Band’s La Ronge gold project is at an advanced stage, with underground exploration and development ongoing at the Bingo deposit and commencement of commercial gold production anticipated in the fourth quarter of 2010. These and other active projects are described below and a list of current Mineral Reserve/Resource estimates are provided in Table 2.

GOLD PRODUCTION Seabee Mine Claude, 100% owner of the Seabee mine, reported final production figures of 46,800 oz. of gold in 2009, up slightly from the 2008 total of 45,466 oz. For the first three quarters of 2010, 34,054 oz. of gold was produced from the Seabee mining operation, on track with estimated 2010 gold production totals of 46,000 to 50,000 oz. This production total for the first three quarters of 2010 represents a 5% increase over the same period in 2009 (32,528 oz.). Gold production in 2010 has been from the Seabee mine and from underground development activity at the Santoy 8 deposit.

La Ronge Gold Project (Bingo deposit) Golden Band (100% owner) announced a production decision for the Bingo deposit in September of 2010, with commercial production targeted to commence in the fourth quarter of 2010. As of October 2010, a total of 8805 t of high-grade mineralized material has been stockpiled from the deposit with an average grade of 15.02 g/t Au based on underground face chip sample assays. An additional 11 800 t of low-grade material with an average grade of 4.39 g/t Au has also been stockpiled.

Figure 5 - Historical gold price (line) shown against annual gold exploration expenditures (bars) in the province from 2002 to present.

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Table 2 - Published reserves/resources for selected gold deposits in Saskatchewan.

Ownership, operator first (at time of mining for PRODUCTION; at present for RESERVES/RESOURCES) % share Mine/Deposit tonnes

Au grade (g/t)

Au grade (oz/ton)

Total Au Production

(oz)

Claude Resources Inc. 100 Seabee Minining Operation1

4 000 000 7.70 0.23 915,527

Golden Rule Resources Ltd. 100 Komis 128 634 6.90 0.20 28,595Consolidated Mining and Smelting Company of Canada Ltd. 100 Box Mine 1 418 320 1.55 0.05 64,066

tonnescut off (g/t)

Au grade (g/t)

Au grade (oz/ton)

in situ Au (oz)

Claude Resources Inc. 100 Seabee Mine2 772 309 5.10 6.77 0.20 168,163Claude Resources Inc. 100 Santoy 82 177 328 4.20 7.02 0.20 40,015Brigus Gold Corp. 100 Athona 10 483 000 0.25 1.02 0.03 344,500Brigus Gold Corp. 100 Box 14 908 000 0.25 1.43 0.04 685,900

Claude Resources Inc. 100 Porky Main2 160 000 4.20 7.50 0.22 38,581Claude Resources Inc. 100 Porky West2 112 908 4.20 3.06 0.09 11,104Claude Resources Inc. 100 Santoy 82 545 625 4.20 8.98 0.26 157,529Golden Band Resources Ltd. 100 Bingo 174 668 5.00 13.14 0.38 73,777Golden Band Resources Ltd. 100 Komis 191 740 4.00 7.85 0.23 48,398Golden Band Resources Ltd. 100 Memorial 288 400 1.00 2.83 0.08 26,220Golden Band Resources Ltd. 100 Tower East 5 019 080 1.00 1.86 0.05 299,835Golden Band Resources Ltd. 100 EP (Eric Partridge) 102 000 1.00 3.81 0.11 12,494Masuparia Gold Corp. / Golden Band Resources Ltd.

5149

Greywacke Lake (North zone) 184 000 5.00 8.40 0.25 49,700

Wescan Goldfields Inc. 100 Jojay 420 000 2.00 3.70 0.11 50,000

Claude Resources Inc. 100 Seabee2 651 168 5.10 8.01 0.23 167,763Claude Resources Inc. 100 Porky Main2 70 000 4.20 10.43 0.30 23,473Claude Resources Inc. 100 Porky West2 138 314 4.20 6.03 0.18 26,792Claude Resources Inc. 100 Santoy 82 391 500 4.20 8.10 0.24 101,955Brigus Gold Corp. 100 Box 3 710 000 0.25 0.93 0.03 111,000Brigus Gold Corp. 100 Athona 2 198 000 0.25 0.83 0.02 59,000Golden Band Resources Ltd. 100 Bingo 155 074 5.00 13.89 0.41 67,756Golden Band Resources Ltd. 100 Birch Crossing 536 300 2.00 5.11 0.15 88,100Golden Band Resources Ltd. 100 Corner Lake 184 400 5.00 8.07 0.24 47,900Golden Band Resources Ltd. 100 Golden Heart 671 650 4.00 9.10 0.27 196,549Golden Band Resources Ltd. 100 Komis 10 746 4.00 2.98 0.09 2,731Golden Band Resources Ltd. 100 Memorial 90 900 1.00 2.49 0.07 7,272Golden Band Resources Ltd. 100 Tower East 902 020 1.00 1.52 0.04 43,965Masuparia Gold Corp. (51%) / Golden Band Resources Ltd.

5149

Greywacke Lake (North zone) 58 000 5.00 7.29 0.21 13,600

Wescan Goldfields Inc. 100 Jojay 630 000 2.00 3.70 0.11 87,000

2 as of December 31, 2009 (Annual Information Form).

1 currently in production; values are approximate and include production from Porky West and Santoy 7 bulk samples and from Santoy 8 development.

Notes: Data in this table are intended to reflect NI 43-101-compliant standards but do not all necessarily conform to the current legal definition of reserves and resources by CIM. Data are from a variety of public sources including published reports, public records, corporate websites, and Saskatchewan Mining Association Facts Sheets. Data for different deposits are not necessarily comparable.

PRODUCTION (Previous + Historical)

RESERVES (Proven + Probable)

RESOURCES - Measured + Indicated

RESOURCES - Inferred


GOLD EXPLORATION A) LA RONGE DOMAIN La Ronge Gold Belt Gold mineralization in the La Ronge Domain constitutes primarily structurally controlled, quartz-carbonate vein-hosted deposits within Paleoproterozoic volcanic and plutonic rocks. Golden Band has been focused on acquisition of mineral dispositions in the domain since the mid-1990s and now holds a land portfolio that encompasses 750 km2 and includes 12 known gold deposits, four of which are past-producing mines. It has also acquired the licensed, 400 t/day Jolu mill, which processed ore sporadically in the 1980s and 1990s and is centrally located within Golden Band’s existing land package.

In 2009-2010, Golden Band continued to define NI 43-101–compliant resources/reserves for its properties and advance the project towards the production stage. To date, the company reports a total Measured and Indicated Resource of 5 866 048 t grading 2.57 g/t of gold has been defined from nine deposits (including the Greywacke deposit, 51% owned by Masuparia Gold Corporation), with an additional Inferred Resource of 2 579 510 t grading 5.58 g/t gold. The project received the required provincial environmental assessment approval and permitting in 2009 and recently received approval from the Department of Fisheries and Oceans Canada for use of the Jolu mill’s Mallard tailings management facility. Underground exploration development work at the Bingo deposit, the first targeted for production, is ongoing, with ramp access currently reaching a depth of 120 m vertically below surface. Construction and mill refurbishment at the Jolu mill site are currently underway and surface construction is ongoing at the Bingo mine site. Golden Band’s board of directors approved the production decision for the Bingo gold deposit in September, and the company reports to be on track for its target of gold production from the deposit in the fourth quarter of 2010. Golden Band’s long-term production plan for the La Ronge gold project includes anticipated gold production from both the past-producing Komis deposit (Table 2) and the EP deposit by the fourth quarter of 2010, and from the Golden Heart deposit by 2013.

Elsewhere in the La Ronge Domain, Wescan announced a new NI 43-101–compliant Mineral Resource Estimate for its Jojay property, located ~125 km northeast of La Ronge. Indicated and Inferred Mineral Resources for the ‘Red’ zone (or ‘Main’ zone) and six minor zones at Jojay are reported in Table 2.

Killdeer Minerals Inc. (Killdeer) acquired, though optioning and staking, a land package in the southern La Ronge Domain covering an area of ~9370 ha that includes the known Davidson, Charlie’s Chance, and Vidgy gold showings. Killdeer completed grab sampling, trenching and chip sampling, and an airborne geophysical (VTEM) survey on the property in 2009-2010.

New Moon Minerals Corporation recently acquired several mineral dispositions in the province, including areas covering known gold showings near Berven Lake in the southern La Ronge Domain. In early 2010, till sampling and bedrock channel sampling was undertaken at several showings in the Berven Lake property; complete results are forthcoming.

B) GLENNIE DOMAIN Seabee Mine Area Gold mineralization in the Seabee area is invariably structurally controlled, typically present in quartz vein-hosted shear zones that cut Paleoproterozoic volcanic and plutonic rocks. Claude proposed a significant exploration program for its Seabee operation in 2010, with ~50 000 m of surface and underground diamond drilling planned at the Seabee mine and surrounding satellite deposits. Underground exploration at the Seabee mine, which focused on ore zones 2b, 2c, 161, and 162 in 2010, continued to identify high grade gold mineralization at depth. Some of the significant (uncut) intersections included: 46.06 g/t gold over 4.30 m (drill hole U10-631, zone 2b), 15.90 g/t gold over 6.30 m (drill hole U10-629, zone 2c), and 39.27 g/t gold over 2.10 m (drill hole U10-632, zone 2b). Claude also reported drilling results from its Santoy 8 satellite deposit, located 14 km east of Seabee, including an (uncut) intersection grading 15.06 g/t gold over 3.58 m (drill hole SUG-10-005, zone 8a). Ore development work at Santoy 8 commenced in June of 2010 after Claude received the required provincial approval and an operating permit. Claude reports to be nearing a final commercial production decision for Santoy 8 and anticipate possible commencement of gold production by the first quarter of 2011. Ore produced from Santoy 8 would provide feedstock to the Seabee central milling facility.

C) FLIN FLON DOMAIN Amisk Lake Project Along with joint venture partner St. Eugene Mining Corp. Ltd. (St. Eugene), Claude continued with exploration work on its ~14 000 ha Amisk gold project in 2010. This work is currently focusing on the Laurel Lake Au-Ag deposit, located on Missi Island on northern Amisk Lake, which is associated with a sericite-rich alteration zone in a


locally gossanous rhyolite dome complex (Figure 6) and has characteristics akin to epithermal-style gold mineralization. The 2010 exploration work, designed to expand the deposit and evaluate its bulk mining potential, was initiated with a first phase, 11-hole (2300 m) winter drill program that tested mineralization to a depth of ~300 m. Mineralization was intersected in all holes, highlighted by an intersection of 1.29 g/t gold and 8.0 g/t silver over 161.86 m in drill hole AL-10-281. A summer exploration program consisting of resampling ~17 000 m of historic drill core was scheduled to begin in June of 2010; no results have been reported from this work to date. St. Eugene recently announced plans for an additional 4000 m diamond-drill program on the project, expected to be completed by the end of 2010, to complete infill drilling and to test for extensions of mineralization.

D) BEAVERLODGE DOMAIN Goldfields Project Brigus acquired the advanced-stage Goldfields project, which features the past-producing Box mine and the nearby Athona deposit, as a result of the merger between Linear (previous owner) and Apollo in 2010. An updated Feasibility Study was completed for the Box deposit in 2009 and an updated PFS was completed for the Athona deposit that same year. Mineral Reserve and Resource estimates for the deposits are listed in Table 2. In 2010, Brigus undertook a 3000 m drill program to test regional targets and to test the down-dip potential of the host Box mine granite beneath the location proposed for the open-pit mine. This drilling confirmed the presence of down-dip gold mineralization, including intersections of 2.28 g/t Au over 29.1 m (drill hole B10-303) and 2.52 g/t Au over 47.1 m (drill hole B10-304). Brigus also undertook a high resolution, deep-penetrating induced polarization and resistivity survey covering 13 km2 to identify new gold mineralized systems near the Box and Athona deposits. Brigus reports to be progressing with the final mine engineering design and construction permitting applications for the Box mine.

6. BASE AND PLATINUM GROUP METALS Most of the exploration for volcanogenic massive sulphide deposits in Saskatchewan was focused in the Flin Flon and western Glennie domains in 2009-2010, while the search for magmatic copper-nickel-platinum group metals (Cu-Ni-PGM) deposits was directed at the Peter Lake and Dodge domains. The most significant work to report relates to Canadian Platinum Corp.’s exploration efforts in the Peter Lake Domain, where expenditures of $2.3 M has resulted in drill intersections of 81.5 m of 0.6 g/t PGM+Au, 0.48% Cu and 0.27% Ni, including a 6.2 m intersection of 5.376 g/t PGM+Au. By comparison, ore mined from open pit and underground operations in Canada’s only producing palladium mine at Lac des Iles near Thunder Bay, Ontario, has an average grade of 3.18 g/t Pd, 0.26 g/t Pt, 0.22 g/t Au, 0.07% Cu, and 0.09% Ni.

There was no base metal production in Saskatchewan in 2009-2010. Current base metal reserves and resources and historic production are summarized in a separate publication (Saskatchewan Geological Survey, 2003).

EXPLORATION Flin Flon Domain In 2008, Exploration Syndicate, Inc. (Exploration Syndicate) had announced the discovery of two significant Cu-Zn zones beneath Phanerozoic cover on their MacKenzie Lake property. Early in 2010, a NI 43-101 technical report was released in which results of two additional drill holes into the M2 (Suggi Lake) anomaly, located 73 km southwest of Flin Flon, were announced. The M2 zone, delineated originally by three drill holes in 2008, is

Figure 6 - Close-up of gossanous, quartz porphyritic rhyolite boulder near the Laurel Lake Au-Ag deposit, northern Amisk Lake.


interpreted to consist of structurally modified volcanogenic massive sulphide mineralization. The two 2010 vertical holes were spotted between 50 and 100 m east of the three 2008 discovery holes, which were drilled in an easterly direction at an angle of -60°. The 2010 holes both intersected massive sulphide mineralization in altered felsic volcanic-dominated host rocks, including 16.4 m grading 4.41% Cu and 4.8% Zn (hole ML-10-01), and 9.8 m grading 6.14% Cu and 5.84% Zn (hole ML-10-02) with associated silver. The report also recommends a $3.5 M future exploration program to test other geophysical conductors in the Suggi-MacKenzie lakes area, by way of approximately seven diamond-drill holes totalling some 5000 m.

HudBay Minerals Inc. (HudBay) drilled two deep holes near Creighton in 2010 and is currently completing a third. The holes targeted what was interpreted as thrust-repeated, mine-hosting stratigraphy with coincident 2-D and 3-D seismic reflectors. The targets were identified during the Targeted Geoscience Initiative III program, a joint federal-provincial-industry geoscience initiative, through detailed surface mapping, re-logging of strategically selected drill holes, and 2-D and 3-D seismic interpretations of the immediate Flin Flon–Creighton area. HudBay will continue to assess the newly defined targets and plans to follow up with additional drilling.

Copper Reef Mining Corporation (Copper Reef) announced in August of 2010 that it drilled two holes in the footwall of the past-producing Western Nuclear mine on Hanson Lake, which, between 1967 and 1969, produced some 147 000 t containing 9.9% Zn, 5.8% Pb, 0.5% Cu, and 137 g/t Ag from one of the rare lead-rich volcanogenic massive sulphide deposits in the Flin Flon Domain. Both holes intersected mineralization hosted by altered, garnet- bearing rhyodacites, with the best intersections being a 3.26 m interval of 2.01% Cu and 19.2 g/t Ag in hole HCR- 10-1, and a 7.5 m interval of 1.00% Cu and 10.0 g/t Ag in hole HCR-10-7. Copper Reef is planning to drill ten additional holes on its Hanson Lake property in late 2010.

Western Glennie Domain MacDonald Mines Exploration Ltd. (MacDonald) announced in the fall of 2009 that it completed an extensive preliminary exploration program on the Nielsen-Chisholm property located northwest of La Ronge, in the Nemeiben-Bob lakes area. The program was designed to evaluate numerous electromagnetic conductive anomalies indicated by a helicopter-borne VTEM geophysical survey completed in 2008. Eight potential drill targets identified on the property were followed up by initial geological mapping, prospecting, grab sampling, Beep Mat TM and VLF-EM geophysical surveys, and targeted organic soil geochemical sampling. The MacDonald property is located to the north of the Elizabeth Lake Cu-(Au-Ag) deposit, historically interpreted as a pelitic-mafic volcanic-associated massive sulphide deposit, and the mafic-ultramafic intrusion-hosted Dunlop Ni-Cu deposit, both located in the immediate Nemeiben Lake area.

Dodge Domain In June 2010, Strongbow Exploration Inc. (Strongbow) released a NI 43-101 technical report detailing a summary of exploration work on its Snowbird Nickel Project, which extends for over 200 km from the Nickel King deposit in the Northwest Territories across the border into Saskatchewan. On the Opescal Lake property, which straddles the border, exploration work identified previously unrecognized mafic and ultramafic intrusions utilizing airborne geophysical surveys, limited bedrock mapping and geochemical surveys. Ni-Cu sulphide occurrences were identified in five areas and grab samples collected over a coincident 770 m-long conductor returned assay results ranging from 0.2% to 1.17% Ni. Interestingly, one grab sample collected on the Opsecal Lake property suggests a potential PGE component to the exploration play (4.2 g/t Au, 0.8 g/t Pd, and 0.8 g/t Pt).

The Dumas Lake property, located some 30 km north of Stony Rapids, is underlain by mafic-ultramafic intrusions, which coincide with multiple geophysical anomalies. Drill testing in 2008 of the centre of a 550-m long coincident magnetic and electromagnetic anomaly returned a 0.8 m interval grading 1.89% Ni, 0.96% Cu, and 0.11% Co within a highly strained mafic intrusion.

Peter Lake Domain A newly formed company, Canadian Platinum Corp. (Canadian Platinum), has acquired a large ground position in the Peter Lake Domain, where it is exploring for an economically viable PGM resource. Canadian Platinum acquired 41 claims totalling approximately 499,363 acres (202 085 ha) with a further eight claims totalling 80,916 acres (32 745 ha) pending. The Peter Lake Domain contains one of the largest accumulations of Neoarchean to Paleoproterozoic mafic plutons in North America, representing four separate intrusive events into the Archean tonalitic to granitic basement of the Hearne Craton. The domain is known to host magmatic Cu-Ni-PGM mineralization. Since the beginning of exploration in May of 2009, Canadian Platinum has spent $2.3 M on soil geochemistry, geological mapping, prospecting, and airborne geophysics (ZTEM/Magnetitcs), as well as an aeromagnetic tri-axial gradient and VLF-EM survey over the northern part of the disposition area, a ground magnetic and Horizontal Loop EM (HLEM) survey of the Swan Lake Cu-Ni-PGE showing, and two phases of drilling (~4000 m) focused on the Rutherford and Swan lakes areas. The drill results on the Swan Lake mineral showings indicate significant widths of elevated PGM, copper and nickel concentrations traced over a strike length of 175 m and drilled to a depth of 180 m. Drill intersections of up to 81.5 m (true width 75.5 m) grading 0.632 g/t


Au+Pt+Pd, 0.48% Cu and 0.27% Ni have been encountered, with narrow zones of higher grade mineralization, including a section of 6.2 m of 5.376 g/t Au+Pt+Pd, 1.07% Cu, and 0.46% Ni.

Another significant finding was the discovery of PGM-Cu-Ni mineralization while prospecting in the Rutherford Lake area (28 km southwest of Swan Lake), where a mafic breccia with a sulphide-rich matrix was identified. Assay results of the highest grade grab sample were 940 ppb PGM, 3615 ppm Cu, and 1345 ppm Ni. Additional drilling is planned for late 2010, including 4000 m in the Swan Lake area and 2000 m on other prospects.

7. RARE EARTHS There has been a two- to nearly ten-times increase in light rare earth oxide (LREO) prices since July 2009, when China announced it would drastically decrease in REE exports. Six companies are currently involved in five projects in Saskatchewan in the Zemlak, Beaverlodge and Wollaston domains, and in the Athabasca Basin. There is currently no REE production in Saskatchewan. At the forefront of exploration is Great Western Minerals Group (GWMG) with two major projects at Hoidas Lake and Douglas River.

The Hoidas Lake property, located about 60 km northeast of Uranium City in the Ena Domain, consists of 10 188 ha spread over a 12 km-long belt and contains three mineralized areas exposed at the surface: the JAK Zone, Hoidas South, and Nisikkatch South. The property lies less than 10 km west of the regional-scale Black Bay fault, where a number of mylonite zones are exposed within migmatitic, granitic, and granodioritic gneisses. GWMG’s Hoidas Lake project is the most advanced in the province. A new Barr Engineering Company–commissioned NI 43-101–compliant resource estimate, released by GWMG on November 20, 2009, contains a total resource of 2 560 835 t at 2.431 % total rare earth oxide (TREO) (1.5 % cut off) in the JAK Zone, comprising 963 808 t in the Measured category and 1 597 027 t in the Indicated category. Mineralization consists of allanite-apatite–rich veins of alkaline affinity and is light rare earth element (LREE)– enriched with, in the Measured resource category, 46.5% CeO2, 20.9% Nd2O3, 20.2% La2O3, 6% Pr6O11, 2.7% Sm2O3, 1.3% Gd2O3, 1.1% Y2O3, and 0.5% Eu2O3. This represents a significant increase in the previous resource estimate of 1 150 000 t at 2.362% TREO for the JAK Zone.

The Douglas River property, located in the Athabasca Basin, consists of two claims located ~15 and 25 km south of the Carswell structure, respectively. Marline Oil Corporation discovered heavy rare earth element (HREE) mineralization on these claims in the early 1980s, where sandstone-hosted xenotime mineralization that yielded total rare earth element (TREE) grades up to 6.3% was reported by Saskatchewan Mining Development Corporation from Area 10 in the Beatty River area. In a news release dated October 9, 2009, GWMG verified historic values on the property and reported assay values from chip samples reaching 8.75% TREO. The distribution of the rare earths in the chip samples is largely dominated by the HREE (>99%) due to the presence of xenotime.

The Archie Lake REE deposit is located 50 km east of Uranium City in the Beaverlodge Domain. The economic potential of the deposit is being evaluated by Quantum Rare Earth Developments Corp. (Quantum). REE mineralization is hosted by psammopelitic gneiss and essentially consists of monazite. The deposit is believed to represent a paleoplacer (Harper, 1986). Old assessment work reported that the mineralized horizon was traced for 610 m lengthwise and is ~4.6 m wide. Grades up to 29% TREE are reported from recent work by Quantum. The REE distribution of nine samples ranging from 1.5 to 29.2% TREE is: 48.1% Ce, 25.3% La, 18.9% Nd, 1.5% Sm and <1 % of the heavier REE. In July 2010, Quantum announced that, following positive 2009 exploration results, the 2010 field program will consist of three phases of exploration with a total budget of $1.1 M.

Eagle Plains Resources Ltd. (Eagle Plains) has identified a number of occurrences where analysed samples returned concentrations varying between 0.3 and 55.9% TREO on their Karin Lake, Eagle Lake, and Baska-Eldorado properties. A 100% interest in the Baska-Eldorado property (less 1% Net Smelter Royalty (NSR)) was sold to 99 Capital last November, while Eagle Plains retained the option to buy-back a 50% interest. In January 2010, Eagle Plains announced the assay results of three samples collected from a set of historical trenches on the Eldorado grid. TREO concentrations of 55.9% (sample AGKJR001), 30.6% and 18.9% (0.7 m chip sample AGKJR003), were reported, respectively, for these samples. The distribution of the REE in sample AGKJR001 was reported as follows: Ce2O3 28.1%, Nd2O3 9.57%, Eu2O3 0.086%, and Tb2O3 0.051%.

In July, Eagle Plains announced that it had agreed to grant Slater Mining Corporation (Slater) the option to earn a 60% interest (subject to regulatory approval) in its 15 800 ha Karin Lake property. The announcement further stated that to earn a 60% interest in the property, Slater will have to complete $3 M in exploration expenditures, make $500,000 in cash payments and issue one million common shares to Eagle Plains over four years. Five U-Th-REE occurrences are shown in a document accessible on Eagle Plains’ website at URL <http://www.eagleplains.com/ projects/sask/karinlake/documents/KarinLakeREE_Project_Summary_2010.pdf> that contain TREO concentrations varying between 0.32% (Craig Bay) and 2.1% (Yellow Lake). The property is underlain by rocks of the Proterozoic Wollaston Domain that comprise ortho- and paragneisses, as well as Archean gneissic domes (basement) and minor younger intrusive rocks including abundant pegmatite bodies. The project area is being explored for its uranium and REE potential based upon both historical occurrences and on new targets.

http://www.eagleplains.com/projects/sask/karinlake/documents/KarinLakeREE_Project_Summary_2010.pdf�

http://www.eagleplains.com/projects/sask/karinlake/documents/KarinLakeREE_Project_Summary_2010.pdf�


8. DIAMONDS In 2010, exploration expenditures for diamonds in Saskatchewan are expected to be about $15 M, the majority of which will be spent by Shore as the company continues to evaluate its independently owned Star Diamond Project and the Orion South Diamond Project, which is a part of the FALCJV, in which Shore is the operator with a 63% interest and Newmont has a 37% interest. Both projects are located in the Fort à la Corne forest, 60 km east of Prince Albert. The Fort à la Corne area is home to over 70 known kimberlite intrusions, some of which are volumetrically amongst the largest in the world. The Star and Orion South kimberlites are composed of eruptive kimberlite phases and mixed kimberlitic sedimentary rocks. The eruptive, or volcanoclastic, phases are of greater economic interest, particularly those most proximal to the volcanic vents.

In late 2009, Shore completed a PFS on the Star Diamond Project (Star). The study incorporated core drilling, geologic modeling, large-diameter drilling, underground bulk sampling, diamond valuations, as well as engineering and environmental studies. The PFS evaluated Star by each of its five major eruptive kimberlite phases: Cantuar (CPK), Pense (PPK), Early Joli Fou (EJF), Mid Joli Fou (MJF), and Late Joli Fou (LJF). These phases are named after the stratigraphic geological formations in which they are hosted.

Star is dominated by well defined pyroclastic flows such as CPK and PPK, which radiate away from the center of the crater. LJF is also a pyroclastic flow, while MJF is a crater facies vent filling pyroclastic kimberlite and EJF is a combination of the two. The Star EJF phase has the largest amount of estimate tonnes and estimated carats (Orava et al., 2010).

The PFS determined that Star contained 171 M t of Probable Mineral Reserves at a weighted average grade of 12 carats per hundred tonnes (cpht), and would contain over 20 M carats at a weighted average price of $265 per carat (US$225).

Similar to Star, the Orion South Kimberlite (Orion) has distinct eruptive kimberlite phases, also named after their host geological formations: CPK, PPK, EJF, LJF, and Viking pyroclastic kimberlite. Despite the similar naming conventions for Star and Orion, these two kimberlites and their various phases are unique volcanic bodies each with distinct physical and chemical properties and diamond distributions. Several volcanic feeder conduits have been identified within Orion, feeding the various kimberlite phases. Similar to Star, the Orion EJF is the dominant phase for volume and grade. The other time equivalent phases, such as CPK and PPK show significant variability between the two deposits. These phases often display cross-cutting relationships near the conduits, but are for the most part stacked vertically across the deposit (Orava et al., 2010).

Using an evaluation methodology similar to that employed in the Star PFS, Shore produced a NI 43-101 Mineral Resource estimate for Orion in late 2009. The Mineral Resource estimate for the explored portion of Orion included Indicated Resources of 84 M t at a grade of 13.83 cpht and Inferred Resources of 98 M t at a grade of 12.83 cpht. Shore stated that the relatively lower proportion of Indicated Resources for overall tonnes reported from Orion, was due to the significantly smaller underground bulk sample (23 468 t from Orion versus 75 436 t from Star), and a smaller large diameter drilling program (62 holes on Orion versus 96 holes on Star).

In February 2010, Shore released a combined Star-Orion PFS, which examined the viability of incorporating both kimberlites into a single mine plan. The combined PFS outlined Probable Mineral Reserves of 279 M t at a weighted average grade of 12.5 cpht, with a weighted average price of $226 per carat (US$192) over the life of the mine (Table 3).

The study projected that approximately 35 M carats could be extracted over the estimated 20-year mine life, and that pre-production capital costs would be approximately $1.6 B. The proposed pit design would produce an estimated 14.2 M t of ore per year, which would be processed at an onsite plant at a rate of 40 000 t per day, or 14.6 M t per year. Stripping of the estimated 760 M banked m3 (~47.4 M banked m3 per year) of overburden and waste rock, would be assisted by a 20 000 t per hour capacity in-pit crush and convey system. It is estimated the total project footprint would be 3000 to 4000 ha, or 2.3 to 3.0% of the Fort à la Corne forest. The sensitivity analysis conducted showed the project would be most sensitive to fluctuations in the Cdn$/US$ exchange rate, fluctuations in diamond prices, recovered grade, capital costs and operating costs, respectively (Orava et al., 2010).

On June 2, 2010, the provincial government introduced a new royalty system for future diamond production in Saskatchewan. Minister Boyd stated that the royalty regime “strikes a balance between providing a positive climate for growth and a fair return to the province.” The province’s main diamond exploration company Shore, echoed these sentiments and commended the government on the consultative approach it used to develop the royalty parameters.

Also in June, Shore released an updated diamond valuation estimate for the Star-Orion project. The revaluation showed the stones increased in value between 11% and 19% above the previous price estimate done in March of 2008. Modeled prices now range between US$116 and US$344 per carat for the various phases of the kimberlites. A


Table 3 - Mineral Reserve estimate kimberlite unit detail for Star-Orion project, effective January 31, 2010.

diamond infrared spectroscopy study conducted by Shore concluded that 26% of all diamonds exceeding 2.7 carats from the Star underground bulk sample were Type IIa diamonds. The company stated that Type IIa diamonds are rare and account for “probably less than 2 percent of all natural rough diamonds in the world”. Type IIa diamonds are free of nitrogen or boron impurities and represent many of the world’s high-value, top colour, large special diamonds, including the ten largest rough diamonds recovered worldwide.

Shore has moved the joint Star-Orion project to a Feasibility Study, and hopes to have a production decision in the first quarter of 2011. Shore is currently busy signing MOUs with several surrounding First Nation and MétisNation communities. The agreements will help gather information on aboriginal traditional land use and traditional knowledge in the Fort à la Corne area, and assess any potential impacts proposed mining activities mayhave on traditional uses or cultural sites of importance.

In October 2009, Embee Diamond Technologies Inc. (Embee), in partnership with the Muskoday First Nation, opened a new diamond cutting and polishing atelier in Prince Albert. Embee President Mike Botha, who previously headed a diamond training facility at Aurora College in Yellowknife, believes the success of the facility will not be dependent on the development of a mine in the Fort à la Corne area.

9. COAL COAL PRODUCTION Present coal mining activity in Saskatchewan is restricted to the Tertiary-aged lignites of the Ravenscrag Formation, and is concentrated near the city of Estevan and the town of Bienfait in southeastern Saskatchewan. Sherritt International Corp. (Sherritt), through its wholly owned subsidiary Prairie Mines and Royalty Ltd. (PMRL), operates three surface mines: Boundary Dam, Poplar River and Bienfait, which in 2009 produced 6.3 M t, 3.3 M t, and 0.7 M t, respectively. In 2009 Sherritt, and joint venture partner Norit Canada Inc., began construction of an activated carbon plant at Bienfait. The plant will produce high-value activated-carbon products, which assist in the removal of mercury from flue gas emissions, and will be sold mainly to North American electricity producers.

COAL EXPLORATION Hudson Bay Area In 2009 and 2010, Goldsource continued to utilize its proprietary geophysical interpretation methods to discover and delineate deposits on its Border coal property in the Hudson Bay area. The company has now drilled over 140 holes on the property and has discovered 17 coal deposits, some with cumulative coal intersections up to 126.5 m in true thickness (Figure 7).

These Lower Cretaceous–age coal deposits occur within the Cantuar Formation of the Mannville Group, infilling structural lows that were created on Devonian carbonates at the Sub-Mesozoic unconformity. Goldsource utilizes a proprietary method for interpreting its airborne geophysical data, which the company has termed the Coal

Deposit Kimberlite Unit Ore (M t) Carats (M) Ore Grade (cpht)

Star Cantuar 14.826 1.124 7.58

Early Joli Fou - Inner 86.536 12.476 14.42

Early Joli Fou - Outer 40.691 3.971 9.76

Pense 7.298 1.740 23.84

Mid Joli Fou 21.132 1.717 8.13

Late Joli Fou 0.352 0.018 5.11

Star Total 170.835 21.046 12.32

Orion South Early Joli Fou - Inner 62.303 9.609 15.42

Early Joli Fou - Outer 16.691 1.519 9.1

Pense 29.641 2.677 9.03

Orion South Total 108.635 13.805 12.71

TOTAL 279.470 34.851 12.47


Identification Matrix. This matrix has been applied to airborne electromagnetic survey data to pinpoint and delineate the structural lows on the Sub-Mesozoic unconformity. The company has identified four major coal seams which it has named, in descending order, Durango Seams D to A. Currently, the seam of greatest interest to Goldsource is Durango C, averaging approximately 20 m in thickness (Morris et al., 2009).

In April 2010, Goldsource released results of a NI 43-101 technical report for the Border coal property, which outlined Indicated Resources of 63.5 M t and Inferred Resources of 89.5 M t. The coal has been ranked according to ASTM Standards as sub-bituminous A to sub-bituminous C. Average as-received weighted results, from proximate analysis, indicated the coal has: 27.33% moisture content, 18.61% ash content, 2.16% sulphur content, and 15 409 kJ/kg average calorific value.

The company has suggested the deposits could be primarily used to support an on-site 500 MW coal-fired generator. The company is also examining the prospect of an on-site coal-to-liquids plant, as a secondary end use for the coal deposits. Goldsource has begun collecting environmental baseline data for its planned Preliminary Economic Assessment (PEA).

Goldsource also used its proprietary matrix to assist fellow coal explorer Westcore in identifying and prioritizing its geophysical targets. In exchange for the assistance, Goldsource can earn an interest in coal discoveries made by Westcore.

Westcore conducted a 26 drill hole exploration program in the Hudson Bay area and reported coal intersections in excess of eight metres in one hole. The company also reported intersecting coal intervals up to 55.12 m thick on its Black Diamond property located adjacent to the Hudson Bay area discoveries, just east of the Saskatchewan-Manitoba border. Preliminary analyses indicate Westcore’s Hudson Bay area coals ranked as lignite A, whereas the Black Diamond coal had a slightly higher sub-bituminous C ranking.

Coal exploration partners Saturn and Swift conducted a winter drilling program on their Saskatoba project area, which includes the Erwood and Armit claim blocks located near the town of Hudson Bay. The company identified 41 potential drill targets from a 3208 line-km airborne electromagnetic survey conducted over the permit areas earlier in the year. On the Erwood block, located approximately 12 km east-northeast of Hudson Bay, the companies discovered only modest coal intersections, less than 2 m thick. Located approximately 40 km east of Hudson Bay, the Armit block of claims aligns with the same general north-northwest trend as many of the Goldsource discoveries. In the Armit area, Saturn and Swift intersected up to 10.35 m of coal at a depth of 112 m. Initial analysis of the coal

Figure 7 - Goldsource drill-hole locations and relative carbonaceous intercepts. Note: carbonaceous intervals are based on a combination of visual inspections, geophysical well logs and later by assay results and mining feasibility studies.

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seams indicate the as-received calorific value ranked the coal as a mixture of lignite A and lignite B.

Also in the Hudson Bay area, Wescan reported intersecting coal in 21 out of 40 drill holes, with maximum coal zone thicknesses of 12.9 m. The company was targeting geophysical anomalies it identified with a 2000 line-km GEOTEM electromagnetic airborne survey. Wescan reported intersecting continuous coal seams and coal zones composed of interbedded sand and carbonaceous material. Eight holes contained coal zones greater than 5 m, with many holes having multiple coal horizons. The company also completed eight holes at its Pinehouse Lake project area. Four of these holes contained coal zones greater than 5 m in thickness, with the largest up to 14.8 m.

Southern Saskatchewan NuCoal Energy Corp. (NuCoal) has shifted the focus of its South 50 project, which encompasses large areas in the Estevan, Willowbunch, and Shaunavon regions. NuCoal had originally intended to utilize the southern Saskatchewan tertiary lignite deposits for a coal-to-liquids project. NuCoal is now interested in building a coal-powered poly-generation plant, and has entered into a MOU with Chinese company Coal-Based InvestmentHoldings Co. Ltd (CBI). As part of the MOU, CBI will provide their proprietary poly-generation technology andtechnical support for the project including: plant and process design, engineering, procurement, manufacturing, and commissioning. NuCoal stated that the plant could be capable of producing various products including: electricity, methanol, fertilizers, chemicals, heat and steam, and other by-products. The proposed poly-generationplant has an estimated $620 M capital cost, and would employ around 250 people. NuCoal has also signed a MOU with Spartan Resources Inc. to jointly evaluate the potential for commercial concentrations of germaniumand uranium mineralization in the southern Saskatchewan lignites.

10. INDUSTRIAL MINERALS Expenditures for industrial minerals will comprise 64% of the $355.6 M anticipated to be spent in the province in 2010. The majority of these expenditures will be on potash exploration and evaluation projects, with lesser expenditures on coal, REE, silica sand, kaolin, and clay projects.

POTASH PRODUCTION The Saskatchewan potash industry comprises eight conventional underground mines and two solution mines which are owned and operated by three companies: PotashCorp, Mosaic, and Agrium (Figure 8). After reaching near-record levels for production in 2008 (Table 4), and surpassing the record for potash sales ($7.3 B), the three potash-producing companies reported significantly decreased product sales in 2009 and were forced to scale back production accordingly to a collective 9.56 M t KCl (Table 4). The first half of 2010 saw a strong rebound in potash demand and initial indications are that sales volumes will be considerably higher for the year.

The long-term prospects for fertilizer remain very positive. In their 2010 Annual Outlook report, the International Fertilizer Association estimates that over the next few years potash demand will continue to grow by about 4.3% annually. To meet future supply needs, Saskatchewan’s three potash-producing companies are undertaking a series of upgrades and expansions to the province’s existing mines. It is estimated that between 2004 and 2020, $11.9 B will be spent to increase the province’s cumulative capacity by approximately 16 M t KCl, representing an 80% increase in total productive capability above 2004 levels.

In August 2010, BHP launched a $39 B bid for PotashCorp. The board of PotashCorp rejected the bid calling it “hostile” and “grossly inadequate” and vowed to launch a shareholder rights plan (commonly referred to as a “poison pill”) to deter any potential take-over. The bid is currently pending regulatory and shareholder approvals. BHP also announced that it is committed to continuing its Jansen project and to making Saskatchewan the home of its potash operations, regardless of the outcome of its bid for PotashCorp.

POTASH EXPLORATION Potash exploration and development in the province continued at a brisk pace in 2009, and is expected to maintain momentum in 2010. There are currently more than 15 individual potash projects underway and they range from the early exploration to feasibility stages. Over the past three years, more than 30 000 line-km of seismic surveys have been conducted over potash dispositions and over 140 new test wells have been drilled. Figure 8 shows the location of the current potash mines and some of the potash exploration/development projects currently underway.

In January 2010, BHP purchased Athabasca Potash Inc. (API) and acquired control of all API’s potash assets, including the Burr Potash Project, which had a NI 43-101–compliant Indicated Resource estimate of 241.2 M t with a grade of 23.3% K2O, and an Inferred Resource of 183.1 M t with a grade of 23.2% K2O. BHP stated that it would independently evaluate the Burr Project and assess it in terms of its other potash projects in the province. With the acquisition of API’s holdings, BHP now controls over 1.4 M ha of potash dispositions in the province. The company also announced it has completed exploration on its Boulder and Young projects and is commencing preliminary


Table 4 - Saskatchewan potash producing mines annual fiscal year production.

Figure 8 - Location of potash mines (circles) and potash exploration/development projects (squares).

Company Mine

2005 Production (M t KCl)





Agrium Vanscoy 1.72 1.21 1.73 1.76 0.90 Mosaic Esterhazy (K-1/K-2)* 4.00 3.40 3.90 4.10 3.00 Belle Plaine 2.40 2.20 2.20 2.10 1.80 Colonsay 1.50 1.20 1.30 1.40 1.00 PotashCorp Lanigan 2.02 1.47 1.91 2.14 0.70 Rocanville 2.57 1.90 2.65 2.83 0.95 Allan 1.43 0.99 1.74 1.09 0.69 Cory 0.83 0.77 0.77 0.42 0.42 Patience Lake 0.25 0.19 0.26 0.28 0.10

Production Totals 16.72 13.33 16.46 16.12 9.56 * PotashCorp’s mineral rights at Esterhazy are mined by Mosaic Potash Esterhazy Canada Limited Partnership under a mining and processing agreement. For calendar year 2009, PotashCorp elected to off-take 1.125 M t KCl from Esterhazy. Production values are from each company’s annual information forms which are reported by fiscal year and do not correspond to calendar year values discussed earlier in the report.

Mosaic Potash Belle Plaine

Mosaic Potash Colonsay

Mosaic Potash Esterhazy Canada

PotashCorp - Lanigan Division

PotashCorp - Rocanville Division

Partnership Ltd. K-1 and K-2 MinesPotashCorp - Allan Division

Agrium Vanscoy Mine

PotashCorp - Cory Division

PotashCorp - Patience Lake Division

Agrium Triton Partnership Project - Agrium Inc.

Jansen Project - BHP Billiton Ltd.

Young Project - BHP Billiton Ltd.

Boulder Project - BHP Billiton Ltd.

Burr Project - BHP Billiton Ltd.(Formerly Athabasca Potash Inc.)

Muskowekwan Project - Encanto Potash Corp.

Ochapowace Project - Encanto Potash Corp.

Wynyard Project - Karnalyte Resources Inc.

Hanley Project - M & J Potash Corp.

Legacy Project - Potash One Inc.

Bredenbury Project - Potash Corporation of Saskatchewan Inc.

Regina Project - Vale S.A.

Milestone Project - Western Potash Corp.

Potash Exploration Boundary

Spar Project - Encanto Potash Corp.

O

Melville Project - BHP Billiton Ltd.

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exploration at its Melville Project. BHP drilled seven wells on the Boulder project and 15 wells on the Young project, and has conducted over 15 000 line-km of seismic on the two project areas combined. The company currently has plans for 2-D and 3-D seismic surveys in the Melville area.

In June 2010, BHP released a Mineral Resource estimate of 3370 M t grading 25.4% K2O at its Jansen project. The majority of the estimate, which was prepared for the Lower Patience Lake Member, was in the Indicated Resource category, 3250 M t at 25.4% K2O and Inferred Resources of 120 M t at 26.7% K2O. The Jansen project, located ~140 km east of Saskatoon, is the most advanced of BHP’s potash projects and was scheduled to proceed to the Feasibility Study stage in the second half of 2010. The company has identified locations for surface facilities and is set to commence ground freezing in preparation for shaft sinking. Barring any delays, BHP estimates construction to start in 2011 and that saleable potash could be produced by 2015. The proposed mine would have an initial capacity expanding to an eventual capacity of 8 M t KCl per year. In August, BHP announced it had reached a preliminary agreement with the Port of Vancouver USA, in Washington State, regarding the possible location of a potash export facility. BHP has chosen rail proposals from Canadian Pacific Railway and Burlington Northern Santa Fe Railway, as its preferred options for transporting the potash.

In March 2010, Agrium announced that it had deferred development of its Triton Project in the Yorkton area, based on high capital costs and reduction in global potash prices. The company also cited the significant capital the company has allocated to its brownfield expansion the Vanscoy mine as a reason for the decision.

Potash One Inc. completed a PFS on its Legacy project, a solution mining endeavour adjacent to Belle Plaine. The study concluded that the 222 M t K2O of Indicated Mineral Resources and the 852 M t K2O of Inferred Resources could support a 2.5 M t KCl per year mine, for 40 years. The company estimated the capital cost of the mine would be US$1.877 B. Potash One submitted an Environmental Impact Statement (EIS) to the Saskatchewan Ministry of Environment and the company is currently working on a Feasibility Study for the project.

Western Potash Corp. announced results of a PEA on its Milestone solution mining project, located approximately 30 km southeast of Regina. The study concluded that the resources present (41 M t Measured, 133 M t Indicated, and 560 M t Inferred), could support a 2.5 M t per year KCl mine for over 40 years. Capital cost of the project was estimated at $2.51 B. The assessment recommended that the project proceed with a PFS.

Brazilian miner Vale is conducting a PFS on its Regina solution mining project, which it acquired from Rio Tinto plc (Rio Tinto) in 2009. Between Rio Tinto and Vale, there have now been over 20 holes drilled on the property. Vale estimates a mine in the area could have potential production of 2.8 M t per year with start-up date expected by 2015.

Karnalyte Resources Inc. (Karnalyte) is working to develop a potash-magnesium solution mining operation in the Wynyard region. The proposed operation would be the first in Canada to attempt to recover potash from an area where the principal potash mineral is carnallite (KMgCl3·6(H2O)), rather than sylvite (KCl). The company intends to utilize the magnesium as a value-added product. Karnalyte has conducted a 3-D seismic survey, drilling, and has commissioned a cavern design study and a NI-43-101 technical report for the property. The report estimated an Indicated Resource of 56.2 M t KCl and 50.2 M t MgCl2 with an additional 186.3 M t KCl and 130.9 M t MgCl2 of Inferred Resources.

During Chinese President Hu Jintao’s visit to Canada in June; M&J Potash Corp. (M&J), a subsidiary of Zhongchuan International Mining Holding Ltd., signed a MOU on cooperation in potash mining with Hatch Ltd. M&J has completed seismic surveys and has drilled seven holes on its project just east of Hanley.

Encanto Potash Corp. (Encanto) has conducted preliminary seismic surveys and drilling on the Ochapowace and Muskowekwan First Nations. The company conducted a follow-up 3-D seismic survey on the Muskowekwan First Nation, and has selected four sites for further delineation drilling. Encanto also announced that it had purchased potash assets from Raytec Metals Inc, which included the Spar project area north of Saskatoon.

KAOLIN In July 2010, Whitemud Resources Inc. signed an agreement with BASF Construction Chemicals (BASF) for the marketing and distribution of their metakaolin product WhitemudMK to the ready-mix concrete, precast concrete, concrete block, concrete brick, concrete pipe, and mining industries in the United States. The marketing of Whitemud’s metakaolin product will be directed by the Admixture Systems business of BASF, a leading provider of innovative admixtures for concrete used throughout North America.


SILICA SAND In April 2009, Winn Bay Silica was approved under the Environmental Assessment Act to expand the silica sand mining operations near Hanson Lake an additional 272 acres (110 ha) adjacent to their existing quarry site. Winn Bay Silica produces fracturing sand that is used by the petroleum industry for enhanced oil and gas recovery.

SODIUM SULPHATE In August 2009, Saskatchewan Minerals celebrated the production of the ten-millionth ton of sodium sulphate shipped from its Chaplin mine since their start in 1948. Sodium sulphate has a wide variety of chemical applications including the production of detergent and paper.

POTASSIUM SULPHATE Big Quill Resources is building a dedicated facility for food-grade production of potassium sulphate on site. The new building will allow for the manufacturing of products that meet stringent food-grade standards, separate from the other production.

11. REFERENCES Harper, C.T. (1986): Geology of the Nevins-Forsyth lakes area; Sask. Energy Mines, Open File Rep. 86-4, 57p.

Morris, R.J., Engler, R.F., and Fier, N.E. (2009): Technical report for the Border Coal Property resource estimation; Goldsource Mines Inc., effective date 24 December 2009 posted on SEDAR, URL<http://www.sedar.com/ homepage_en.htm>.

Orava, D., Ewert, W., Purtich, E., Brown, F., Hayden, A., Burga, E., Sharpe, C., Trehin, H., Leroux, D., Clifton, W., and Jakubec, J. (2010): Technical Report and Updated Preliminary Feasibility Study on the Star-Orion South Diamond Project; Shore Gold Inc., effective date 31 January 2010 posted on SEDAR, URL<http:// www.sedar.com/homepage_en.htm>.

Saskatchewan Geological Survey (2003): Geology, Mineral and Petroleum Resources of Saskatchewan; Sask. Industry Resources, Misc,. Rep. 2003-7, 173p.

http://www.sedar.com/homepage_en.htm�




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16

955

155

918

155165

165

55

2

2

3

3

11

6

4

1

9

3

2

39

13

6

4

2

SWIFT CURRENT MOOSE

JAWREGINA

YORKTON

SASKATOON

PRINCE ALBERT

MELFORTNORTHBATTLEFORD

WEYBURN

ESTEVAN

LLOYDMINSTER

FLIN FLON

STONYRAPIDS

60°110°

49°110°

102°

1

2

TRAIN

TANTATO

DODGEZEMLAK

TALTSONBEAVERLODGE

MUDJATIK

CARSWELL STRUCTURE

ATHABASCA BASIN

PETER LA

KE

WOLL

ASTON

MUDJATIKVIR

GIN R

IVER

TALT

SON

ROTTENSTO

NE

LA R

ONGE

KISSEYNEW KISSEYNEW

FLIN

FLONGLE

NNIE

WATHAMAN

BATHOLIT

H

NOLAN

MINERAL RESOURCE MAP OF SASKATCHEWAN Exploration and Development

Highlights 2010 - PDAC

LEGEND

Base metal potentialUranium potential

Gold potentialDiamond potentialMajor peat resource potentialCarbon dioxide (CO ) resource potential 2

Oil fieldsGas fieldsOil sands potentialCoal fieldsPotash and salt resource areasCarnallitic regions (magnesium)

SYMBOLSEdge of Precambrian ShieldPrecambrian domain boundaries and namesMajor bounding shear zonesMajor faults

1 RoadsCitiesTowns

0 25 50

0 25 50 Miles

75 Kilometres25

25

SCALE

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URANIUMOperating Mines1. McClean Lake Mine (North and South deposits; Sue A, B, C, and E deposits)2. Eagle Point Mine; ore processed at Rabbit Lake Mill 3. McArthur River Mine (P2N Zone deposit); ore processed at Key Lake Mill

Locations Referenced in Text1. Caribou deposit (at McClean Lake Mine)4. Shea Creek (Anne/Kianna/Colette/58B)5. Cigar Lake Mine6. Midwest deposit7. Horseshoe & Raven deposits8. West Bear deposit9. Millennium deposit10. Roughrider, Roughrider East, J-Zone, Highland zone

GOLDOperating Mines1. Seabee Mine2. Roy Lloyd Mine

Locations Referenced in Text3. Goldfields (Box & Athona)4. Waddy Lake (Komis, EP, Golden Heart, Corner Lake)5. Birch Crossing, Tower East, Memorial6. Jojay

COPPER-ZINCLocations Referenced in Text1. M2 (Suggi Lake)2. McIlvenna Bay

COPPER-NICKEL-PGMLocations Referenced in Text1. Snowbird2. Swan Lake3. Rutherford Lake

COPPERLocations Referenced in Text 1. Nielsen-Chisholm2. Footwall of Western Nuclear Mine

RARE EARTH OCCURRENCE1. Hoidas Lake2. Douglas River3. Beatty River4. Archie Lake 5. Karin Lake, Eagle Lake, Baska-Eldorado

KIMBERLITE OCCURRENCE1. Candle Lake2. Fort à la Corne kimberlite cluster3. Star Kimberlite

POTASH AND SALTOperating Mines1. Vanscoy potash mine2. Cory Division potash mine 3. Patience Lake Division potash solution mine4. Allan Division potash mine5. Colonsay potash mine6. Lanigan Division potash mine7. Esterhazy K-1 and K-2 potash mines8. Rocanville Division potash mine9. Belle Plaine potash solution mine and fine salt plant (processes waste salt from potash mine)10. Unity solution salt mine and plant11. Saskatoon chloride based chemical plant

Location Referenced in Text12. Jansen project13. Burr project14. Regina project15. Legacy project16. Milestone project17. Wynyard project

SODIUM SULPHATE AND POTASSIUM SULPHATEOperating Plants1. Chaplin Lake sodium sulphate plant 2. Palo sodium sulphate plant 3. Big Quill Lake potassium sulphate plant

CLAY RESOURCESOperating Quarries1. Saskatoon clay quarry and plant2. Ravenscrag clay quarry3. Truax bentonite quarry4. Gollier Creek kaolin quarry

COAL Operating Mines1. Poplar River Mine2. Boundary Dam (Shand, Costello, and Utility) Mine3. Bienfait Mine

Locations referenced in text4. Border project Hudson Bay area coal projects

SILICA SANDOperating Mine1. Hanson Lake silica sand quarry

KEY TO NUMBERED MINES AND DEPOSITS

11. Key Lake Mill12. Tamarack deposit13. Phoenix deposit14. Gumboot deposit 15. Centennial deposit16. Candle deposit17. Wolverine deposit18. Red Willow

18. Triton project19. Melville project20. Hanley project21. Muskowekwon project22. Spar project

7. Berven Lake8. Greywacke Lake9. Vidgy, Charlie’s Chance, Davidson10. Porky Main/West11. Santoy12. Amisk/Laurel lakes

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42

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913

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4 56 12

17

2118

19

13

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8915

1416

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22

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%1

1 32

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MAPLE CREEK

ASSINIBOIA

MELVILLE

HUDSON BAY

HUMBOLDT

SANDYBAYPINEHOUSE

PATUANAKBUFFALONARROWS

LALOCHE

SOUTHEND

LARONGE

URANIUMCITY

KINDERSLEY

Saskatchewan Exploration and Development Highlights 2010 · 2019. 1. 3. · Saskatchewan...

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