Sediment hosted gold in the new world - Near production in Nova Scotia

Materials World magazine
1 Sep 2013

Michael Forrest talks to Wally Bucknell, CEO of Atlantic Gold NL, an Australian company in near production of gold in Nova Scotia, Canada.

Australian natural resources companies have a reputation for seeking new projects in locations far from home. Part of that drive is to apply the successful exploration techniques employed in Australia and seek geological corollaries to Australian mineral deposits. Wally Bucknell, CEO of Atlantic Gold NL, has achieved that goal with the development of two advanced gold properties in Nova Scotia, Canada. His company has a track record of gold exploration in Western Australia, which is one of the largest regional gold producers thanks to a variety of geological environments that host gold deposits.

Bucknell explains, ‘The geological understanding of the genesis of gold deposits has been advanced by modern geochemical research that has provided evidence of gold derivation, and how it has been transported and concentrated’. At the same time, mining and process technology has enabled economic recovery from what were once regarded as low-grade deposits. Atlantic Gold has achieved this knowledge transfer in its near-production projects in Nova Scotia, Canada, geographically and climatically a long way from Western Australia.

Gold mining has taken place intermittently in Nova Scotia for more than 140 years, with production peaks in 1865, 1900 and the 1930s. Overall, it is estimated that around 1.4moz were recovered over this period. The numerous underground mines exploited small, high-grade vein deposits, limited by the technology of the time and resulting in an equally large number of claims. However, the gold was only found in the part of Nova Scotia to the south of the Cobequid-Chedabucto fault that roughly bisects the peninsula.

This fault marks the junction between the Avalon and Meguma terranes of Cambro-Ordovician age, both a series of metamorphosed sedimentary rocks. The origin of the two terranes is entirely different and it is only continental break-up and collision that accounts for their geographic juxtaposition. The Meguma terrane is a series of metamorphosed mudstones (argillites) and sandstones (greywackes) folded and intruded by later granites. In Nova Scotia, the Meguma Group extends more than 400x100km and accounts for the distribution of gold deposits.

Historic gold discoveries were found in quartz veins, hosted on anticlines in the fine-grained argillites – the target for past mining. It was assumed that the quartz-vein gold originated from the granites post-intrusion with mineralised fluids resulting in the veining and gold. However, during the course of Atlantic Gold’s exploration, significant gold content was determined in the host argillites where quartz veining is largely absent. In some areas, the gold within the argillites can extend to more than 100m thick, with values up to 9g/t.

The importance of sedimentary-sourced gold is recognised in a number of large mines, including the giant Telfer mine in Western Australia, Carlin in Nevada, USA, and Macraes Flat in New Zealand. Although gold grades may be lower than those in epithermaI deposits, their greater extent more than compensates.

Bucknell continues, ‘Our most advanced project is Touquoy, situated at the former village of Moose River Gold Mines, where several quartz vein gold deposits were worked underground from 1877 to around 1910 and processed by six stamp mills’. Following extensive drilling and completion of a definitive feasibility study (DFS), Atlantic Gold has established JORC- and NI43-101-compliant ore reserves of 454,000 – 118,000oz in the proven category and 336,000oz in the probable category. These reserves are amenable to mining by open pit with a low 2.5:1 strip ratio as the ore is shallow with a compact distribution. The company’s DFS contemplates a mining/processing rate of 2Mt/y, with ore treatment by conventional gravity/carbon-in-leach (CIL) processing. Metallurgical tests have confirmed an overall gold recovery of 93.5% with around 70% of the gold recovered by simple gravity separation and the remainder through leaching. Also confirmed is a minimum five-year mine life, with cash operating costs of less than US$600/oz. Recently, Atlantic Gold has engaged Merit Engineers to assist in the tendering and award of a fixed sum engineering, procurement and construction contract.

The next Nova Scotian project for Bucknell is Cochrane Hill, located 80km east of Touquoy. Gold was first discovered at Cochrane Hill in 1868 and worked intermittently over a period of more than 50 years from 1877, with 1,354oz of gold recovered. The mineralisation is hosted in sheared and quartz-veined argillites within a 30-metre-wide mineralised sequence located in the steeply dipping southern limb of the overturned Cochrane Hill anticline. This sequence is elsewhere concealed by extensive drift, resulting in the intermittent recognition of geochemical gold anomalies that extend more than 5km mapped from samples obtained from shallow drilling. The resource inventory for Cochrane Hill currently stands at 549,000 contained ounces, comprising indicated resources of 4.5Mt at a grade of 1.8g/t for 251,000oz, and inferred resources of 5.6Mt at a grade of 1.6g/t for 298,000oz. This inventory is based on more than 13,000 assays from 128 diamond core holes, including 39 follow-up holes and supplementary assaying of more than 3,000m of core drilled in the 1970s and 1980s. Visible gold is common in the cores from Cochrane Hill and is predicted to be free-milling on indications from historic records and its similarity to other gold deposits in the Meguma terrane.

Meanwhile, Bucknell is continuing to explore at Touquoy, Cochrane Hill and in the wider Meguma terrane. More than 12 target areas have been selected based on the known gold-bearing argillite lithologies that host significant gold at Touquoy and Cochrane Hill. The discovery of gold in these lithologies, compared with the quartz vein-hosted deposits worked in the past, has transformed the prospectivity of the area. This type of mineralisation hosted in structurally and stratigraphically delineated argillite now appears through regional exploration to effectively define a new, extensive gold province. The ultimate goal is to identify additional Touquoystyle ore reserves that that can be mined by open pit. Atlantic Gold has commenced first pass reverse circulation drilling on seven of the regional targets with more than 400 holes for over 5,500m drilled to sample bedrock beneath an average of nine metres of transported glacial till.

One of the major challenges is the mapping of the argillite bedrock, according to Bucknell. Nova Scotia is covered in extensive glacial drift 5–10m thick, and in some places up to 30m. In collaboration with a local driller, Atlantic Gold has developed a reverse circulation drill mounted on an all-terrain logging vehicle. The argillite bedrock can be readily sampled below the significant drift cover and it this is the first time that the majority of the prospective Meguma terrane bedrock has been explored.

The company has now acquired all but one of the 63 private properties needed to build the mine and infrastructure at Touquoy. The mining lease was granted in 2011 and the critical environmental permit for the mining and processing was obtained in 2008.