Eric,
Analyze this.
Unsatisifed with the results of the 1986 drilling, Richardson gathered samples
from the cores and from surface and sent them for analyses at various labs
he had "investigated" in the U.S. The results showed "good" values in gold,
silver and platinum group metals. Oddly enough, considering the reliance
H.M.S. had placed on the old reports from Allan and Bradley, most of the
samples did not come from the Precambrian basement rock where Bradley
said he had found his "half pound" of gold.
HMS Properties also sent three samples of core it had obtained from the
Scurry-Rainbow well and had them re-assayed by one of the labs. All three
samples returned what H.M.S. described as "excellent values" of gold,
palladium, platinum, rhodium and silver. All the labs mentioned in the report
are best known for their work on "desert-dirt" projects in the U.S., where the
gold appears and disappears, depending on who does the assaying.
H.M.S. Group acquired the metallic mineral leases in the summer of 1991.
In the late 1980s, a report by Myrrholm Financial of Edmonton began
circulating, citing the potential of the Alberta properties. It stated that a
"dossier is available and a dore bullion bar can be extracted for further
analysis, subject to interested parties meeting certain qualifying conditions."
It said the minerals were disseminated throughout the host material "in salt
form."
The report included an unauthored geological section that was bullish beyond
all expectations. "The values of the minerals extracted from the cores and
surface samples suggest a very rich orebody. Presently, H.M.S. is upgrading
their extraction processes in order to improve the quantity and quality of the
recovered products."
The report cited grades of 345 grams silver, 4 grams gold and 4 grams
combined platinum-group metals per tonne, and implied that these were
average grades from sampling the whole project.
Ken Richardson then set out to spread the word, which he did by calling up
newspaper reporters. The gold "discovery" got plenty of press, though
Richardson candidly admitted that modern assay methods showed no gold
content in his samples. He told reporters this was because the tests were
"designed for hard rocks that normally host gold in Canada."
Working from a basement lab, Richardson then claimed to have found a
secret way to extract gold and platinum from the limestone "in breathtaking
quantities." The reports were met with raised eyebrows or worse in mining
circles, at least in the beginning.
Some juniors acquired ground, including Focal Resources (FCJ-V), which
took an option to earn 25% in the H.M.S. property. Focal's own early
sampling was encouraging, with multi-ounce grades in gold and platinum
group elements. But these results came from made-to-measure assaying
shops in the southwestern U.S., and when the Alberta Stock Exchange
moved to demand that Focal disclose results from conventional fire-assay
analysis of the same samples, the numbers were substantially lower.
The unverifiable grades meant the Fort MacKay gold rush had plenty of
skeptics in the beginning. A major mining company sent out a consultant who
reported back that the samples were being "pre-treated" before assaying with
chemicals the assayer refused to identify. While conventional labs got
nothing, the innovative assayer was able to produce a prill of alloyed gold and
silver after roasting the sample, leaching it with cyanide solution, and
recovering gold from the cyanide solution on a resin.
The procedure included adding chemicals at the roasting stage and
immediately after leaching -- chemicals the assayer refused to identify. He
also told the consultant that the gold might be in the leached residue, in the
resin, or in the cyanide solution, so he needed to assay residue, resin, and a
precipitate left behind when the cyanide solution was evaporated.
A Focal vice-president at the time, Richard Fischer, The Northern Miner that
Focal was "investigating labs . . . [to] find one that knows the eight steps of
doing a fire assay right -- most labs are not aware of all the steps" (T.N.M.,
May 3/93).
Focal's work was taken more seriously when others joined the search for
prairie gold, including Tintina Mines (TTS-T), its joint-venture partner NSR
Resources (NSR-T), and Lac Minerals, which did a short-lived deal with the
two juniors that died in July 1994. The stocks soared, with Tintina running to
$7.12, NSR to $4.10 and Focal to $3.85.
The interest reached its height when results were published from research
work done by Geological Survey of Canada scientists Hugh Abercrombie
and Rui Feng. Abercrombie and Feng delivered a series of papers in 1994 in
which they detailed how they had found gold by examining samples from
Focal and the Tintina-NSR joint-venture properties, using a scanning electron
microscope.
Describing the discovery of these grains as "a great opportunity for gold and
other precious-metal exploration in the Western Canadian Sedimentary
Basin," Abercrombie and Feng suggested the mineralization formed when
oxidized formation water leached metals from basement rocks and the
lowermost sediments in the basin, then moved upward in the sequence,
re-depositing the metals once it encountered reducing conditions.
The idea was scientifically plausible, even attractive: it was a precious-metal
twist on widely accepted models for the deposition of zinc and lead in
carbonate-hosted deposits and of copper and cobalt in sedimentary rocks.
The theoretical geochemistry was not controversial, and it found confirmation
in studies of the base metal deposits.
But the idea lacked one leg: no credible chemical technique had found
significant concentrations of gold in deposits of this sort, at least not in
repeated analyses.
Still, Abercrombie was confident enough to tell Michael Byfield of the Sun
newspapers that he was guessing the mineralization was "a world-class
resource," and Richardson of H.M.S. was ready to "declare Fort McMurray
to be the new South Africa."
To determine just how much precious metal was in the mineralization,
Abercrombie and Feng started small: one grain at a time, analyzed by
energy-dispersive X-ray spectrometry. This system, commonly part of any
electron microscope or microprobe setup, gives a qualitative determination of
the elements making up an individual grain -- that is, it reports the presence
or absence of an element, but not its concentration. The two authors' 1994
papers speculated on whether the elements might be held in chlorides,
oxides, native metals or other species but never actually suggested what
concentration those elements might reach.
Having verified that the samples had tiny mineral grains, and that some of the
tiny grains contained gold, Abercrombie and Feng turned their attention to
measuring concentrations using laser-ablation mass spectrometry, a
technique that vapourizes a small surface area of the sample, passes the
vapour to a plasma generator, and measures the quantity of each element in
the sample in a mass spectrometer. The two reported in a 1997 G.S.C. paper
that samples that underwent laser ablation MS analysis had between 0.04 and
3.71 grams gold per tonne -- not emphasizing that the material with this grade
was a square surface about 0.5 mm on a side, and might be
unrepresentative of the whole rock.
In the same study, Abercrombie and Feng tried to back up the laser ablation
work with chemistry, using inductively coupled plasma mass spectrometry on
2-gram samples that had been digested using strong nitric acid and highly
reactive hydrofluoric acid. They got numbers that were about a tenth of what
they had seen from laser ablation, down near typical abundance levels.
They suggested the problem was with ICP-MS, rather than with their
qualitative probe work or with laser ablation, arguing that the strong acid
attack had somehow not destroyed organic material coating the gold grains,
or that the ultra-small gold grains possibly "escape[d] recovery." They did not
mention the possibility that the laser ablation work might not be valid, or that
the probe analyses implied little or nothing about the grades.
Birch Mountain entered the picture in 1995 when, as an ASE junior-capital
pool listing, it acquired privately-owned Birch Mountain Minerals. Birch
Mountain held a large land package in the Fort MacKay area surrounding the
Tintina-NSR ground, and its new publicly listed parent did little but office work
until early 1997, when the GSC's Abercrombie signed on as exploration
manager.
After concluding agreements with Syncrude Canada, Shell Canada
(SHC-T) and the BHP Diamonds division of Broken Hill Proprietary
(BHP-N), Birch Mountain had access to drill cores from oil operators on
much of its property package. The most expansive arrangement was with
Syncrude, which held the oil rights on a large part of the property where
Birch Mountain held the metallic-mineral rights. A "co-development
agreement," providing for co-operative drilling and planning, shared
infrastructure and access, was signed in May 1997.
Birch Mountain has historically had little trouble raising money. Private
placements, often at well above market value, have kept the company cashed
up for the Alberta project. In October 1997, for example, while the junior
market was lying bloodied by the Bre-X scandal, Birch closed a private
placement at $6 per share for proceeds of $9.8 million.
In April 1997, Birch Mountain reported that a sample from a Syncrude drill
hole on the Fort MacKay property contained around 0.2 gram gold and
between 2.2 and 4.9 grams platinum per tonne. The sample came from the
Waterways formation, a sequence of shales and limestones near the middle
of the Devonian-age sediments in the area.
Birch Mountain also got Syncrude's leave to sample cores from about 450
drill holes in the area. In June 1999, despite the company's intervening
announcements that its examination of Syncrude cores confirmed the view
that the sediments carried significant precious-metal grades, management
finally announced that four holes, all drilled within 100 metres of old
Syncrude holes, had found no gold.
The company said it could not explain the "contradictory results" but turned
around immediately to insist that the earlier SEM and probe investigations
"prove[d] conclusively that that platinum, palladium, gold and silver are
present in anomalous quantities in these rocks . . . the inconsistencies . . .
reflect inadequate analytical methodologies, not the absence of precious
metals."
Birch Mountain's response to the assaying "problem" was to take four bulk
samples from the Moberly limestone member of the Waterways formation.
Birch Mountain, in its disclosure release, described the samples as "visibly
altered"; Abercrombie told The Northern Miner that the limestone showed
siderite, sulphides, barite and iron and manganese oxides, and that
major-element geochemistry confirmed that they were altered. Disseminated
pyrite is common in the Waterways sediments, often in fractures where it is
mixed with bitumen.
The bulk samples were meant to establish whether there was any gold, and to
provide large amounts of testing material for different analytical techniques.
Birch Mountain opened up four trenches, sampling about 50 kg of Moberly
limestone from each, then sent those bulk samples to Loring Laboratories in
Calgary, Alta., to be crushed and ground, then to ITS Bondar-Clegg in
Vancouver for analysis. Fire assays on all four bulk samples showed
insignificant gold -- 0.002 to 0.003 grams per tonne. One sample, BJ98-008,
was also analyzed using neutron-activation analysis, which turned up less
than 0.002 gram gold. (Another lab in Kelowna, B.C. analyzed the same
sample using an aqua-regia digestion and atomic-absorption analysis,
returning 0.08 gram gold and 11 grams platinum per tonne, but that lab found
no detectable gold or platinum in any of the other samples.) Most reference
works on geochemistry suggest that concentrations below 0.005 gram per
tonne are typical of unmineralized shale or limestone.
The fire-assay portions were also analyzed for palladium and platinum, which
were either not detected or present at concentrations near the limit of
detection. The neutron-activation analysis Birch Mountain requested did not
analyze for platinum or palladium, but it did test for iridium, which was below
the detection limit.
Similarly, silver values were either low or below the limit of detection in the
bulk samples when analyzed by emission spectrometry following strong acid
digestion, and by neutron activation.
In 1999, despite the uniformly negative results, the company embarked on a
program of laboratory work
"to develop analytical methods to resolve inconsistencies between SEM/EMP
imaging and precious metals analysis, and to address the problem of
repeatability."
Birch Mountain's reasoning rested entirely on the microscopic and probe
examinations that had found gold grains and on three previous analytical hits.
Two composite samples from the Lac Minerals work in 1994 had returned
gold values of 4.1 grams per tonne (analyzed by high-energy X-ray
fluorescence) and 0.36 gram per tonne (analyzed by fire assay with an ICP
finish). A third surface sample had been sent to the Saskatchewan Research
Council for cyanide leaching and activated-carbon recovery; a fire assay of
the carbon pulp returned 1.69 grams gold per tonne.
"We have multiple lines of evidence that lead us to conclude that there are
not just chemically interesting levels of precious metals," said Abercrombie.
"We also concluded, based on this, and repeatedly said this, that standard
fire assay is not capable of getting these [levels], and we stand by that
statement and the data's there in public."
Using its own lab to prepare the samples, then sending the prepared material
out to Loring for fire assay or to the University of Calgary for
atomic-absorption spectrometry, the company reported that its testing had
shown "important values of gold and palladium" in BJ98-008, which had
previously shown very low gold contents: 0.003 gram per tonne by fire assay
and less than 0.002 gram by neutron activation.
(Variable results at very low concentrations are common, and does not imply
that the fire assay and neutron activation analyses did not agree that the
sample contained insignificant gold.)
Birch Mountain's in-house sample preparation included reducing, caustic
and acid digestion of the samples, with or without agitation. The most
successful technique for gold was a modified aqua-regia digestion with the
leach liquor analyzed by conventional AA, which returned results showing a
grade of 4 to 6 grams gold per tonne in the bulk sample.
Other techniques involving analysis of a collector or precipitate didn't find
significant gold but did kick for up to 1.9 grams palladium per tonne.
How Birch Mountain's samples are able to produce so much gold even when
neutron activation (a technique known to be impervious to chemical and
grain-size effects) finds none, is the principal mystery of the project -- one
that Birch Mountain management is currently happy to maintain.
Abercrombie told the Miner that the results of the company's work on the bulk
samples has led to a reliable analytical procedure, one Birch Mountain
intends to patent. Of the technique that yielded the 6-gram assay, he said, "it
is not strictly aqua regia; there is more to it . . . [which] would be part of the
subject of what we are patenting."
Company President Douglas Rowe told the Miner that Birch Mountain's
patent lawyers did not want the company's assay techniques discussed. "It's
really just in the short term. We should have it filed within . . . two or three
weeks, and then we can be much more explicit."
The latest developments in the area appear to indicate that Birch Mountain
has become the principal operator in the immediate Fort MacKay area.
Tintina Mines and NSR Resources have sold their Fort MacKay project to
Birch for 600,000 shares -- and on the day the deal was announced, that
represented more than $1.7 million: two-thirds to go to Tintina and one-third
to NSR.
Birch Mountain recently closed a $2.7-million private placement (2.3 million
units priced at $1.15) to finance further work on the Fort MacKay project.
Each unit is a share plus one half a warrant, and each warrant gives the
holder the right to buy one share at $1.50. About half the common shares in
the placement were flow-through shares.
The verification testing by Strathcona Mineral Services, announced by Birch
Mountain last November, is "ongoing," says Abercrombie. Strathcona has
done its own trench sampling but is awaiting instruction on how the samples
are to be assayed. "When we nominate the process and put it forward to
them, those experiments will go ahead," says Abercrombie. "At this point, we
have not nominated a process for them to verify."
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