SRFDF & SRU.V - GEOFIN
Geological & Financial 1419 – 133A Street
Consulting Services Surrey BC V4A 6A2
Tel/Fax 604-541-9161
AUGUST 2001
INVESTMENT COMMENT - UPDATE
NEXT STOP 50 MILLION TONNES!
Starfield Resources (SRU - CDNX, SRFDF - OTC BB) has now delineated over 46 million tonnes of mineral resources as this year’s development drilling and exploration program progresses. Success in adding significant tonnage as in all it’s previous programs continues unabated!
STARFIELD RESOURCES (SRU - CDNX SRFDF - OTC BB)
Recap
In the fall of 1999, not even two years ago, GeoFin Inc. initiated its coverage of Starfield Resources Inc. as an extremely promising exploration venture company. Based on the review of the property’s potential at that time – its association with an 18 kilometre long magnetic feature and promising geology, GeoFin estimated a possible 50 million tonnes of resources may be discovered. The estimated value would be in excess of $6 billion Cdn.
Starfield’s exploration program has been effective! From actual specific gravity calculations by Bondar Clegg, the company consultant, Dr. N.C. Carter has recalculated the resource estimate, including the initial results of the recently commenced summer exploration and development program and estimates the resource at 46.1 million tonnes grading 0.88% copper, 0.58% nickel and 1.41 grams per tonne palladium and platinum. A value of $5.9 billion Canadian even with the summer doldrums low prices for metals (copper $0.68 per pound; nickel $2.68 per pound; cobalt $9 per pound; palladium $455 per ounce and platinum $503 per ounce) is a pretty close match to our 1999 estimated value.
Initial results from this years drilling are impressive in confirming the continuity of the overall mineralization and especially important, in expanding the size potential of the higher grade material with some pretty impressive widths. In the former category intersections of combined 2% copper nickel and over 3 grams per ton platinum-palladium are becoming so common they do not seem to stir the market and in the latter case intersection widths of over 30 metres are being reported more often and it has been a while since an under 5 metre width has been reported.
With respects to these high grade, continuously mineable areas, drilling has indicated a higher grade resource estimate of 20.9 million tonnes with almost 2% combined copper and nickel grades and almost 2 grams per tonne palladium/platinum. . The resource has continued to grow and it is intriguing to note that the higher grade sections of the deposit, are approaching the 25 million tonnes of 2.5% nickel and copper that initiated the positive production decision and subsequent development of the Thompson Manitoba Mine.
The highest grade core of 6.1 million tonnes has a value of $190 Canadian per tonne, even given the current low base and precious metal prices!
Starfield continues to enhance the viability of the project by :
increasing the size of the mineral resource, thus lowering capital costs per tonne.
Increasing the high grade resources value, thus reducing the payback period of capital costs.
increasing the widths of mineralization thus enable lower underground bulk mining methods to be employed and lowering operating costs of the operations.
What is also particularly revealing is that from preliminary metallurgy studies by Lakefield Laboratories, the ore mineralogy is similar to that at Lynn Lake and Thompson, Manitoba, with the platinum and palladium being identified as unique sulphide compounds. These conditions suggest that recoveries of the economic metallic minerals should be a fairly routine exercise. Testing of the actual recoveries of the economic mineral is commencing at Lakefield Laboratories.
Field work this year is also geared to exploring some of the other potential zones along the geophysical and geological trend of the host amphibolite including the "M – zone" discovered last year (7 m grading 1.72% Cu Ni and 2.07 g/tonne platinum palladium). With respects to this exploration and the implications, it should be noted that the 40 kilometre long Thompson belt after the initial discovery and development of the main deposit had at least five additional zones developed and mined over the past 41 years of production. That operation continues to be mined below the 1500 metre level.
With the resource estimate set at 46.1 million tonnes and with the current drill hole spacing adding between 600,000 to 1,200,000 tonnes of resource per hole (although further infill development drilling will be required, the excellent correlation of geology geophysics and sulphide bearing drill intersection discovered to date enhances the confidence of the resource estimate), the 50 million tonne resource postulated by GeoFin in 1999 may have already been attained and in all likelihood substantially surpassed, this field season!
The value of the 50 million tonne resource based on current available data will be approximately 5% higher than our 1999 estimate. With respects to gold deposit types Table I outlines the various multi million ounce gold deposit equivalents for the Starfield’s Ferguson Lake Projects Total Resource; High Grade Resource and High Grade Core Resource.
Starfield’s Ferguson Lake Property
Gold Deposit Equivalent Value (US$268 per ounce)
Resource Category
Resource Tonnage
Value/ton
Total Contained Ounces
Grade
Total
46.1 million tonnes
$127 Cdn
14.3 million
0.31 ounces per tonne
High Grade
20.9 million tonnes
$166 Cdn
8.4 million
0.40 ounces per tonne
High Grade Core
6.1 million tonnes
$190 Cdn
2.8 million
0.46 ounces per tonne
Pleasant surprises are always the best and Ferguson Lake has continued to deliver the best!
Ferguson Lake remains the premier potential source of sulphide derived nickel and platinum group metals for the early part of this century, and Starfield Resources as the developing company has a bright and prosperous future.
"The market will reward the patient investor" |
