A substantial new copper exploration project in Labrador, Canada
Early in 2023 Chesterfield optioned its 100% owned Adeline property in Labrador, Canada to Sterling Metals (SAG.V https://sterlingmetals.ca/) in exchange for cash and share payments. Thus Chesterfield retains an interest in the potential upside from the work that Sterling will carry out on the Adeline project through its shares in Sterling. Sterling is also the owner of the 13,500 hectare Sail Pond Project in neighbouring Newfoundland, which was also sourced from Altius, and was first discovered in 2016 with no drilling prior and consists of high grade, silver, copper, lead and zinc associated with quartz-carbonate veining, brecciated dolostone, and 100% sulfo-salt veining. Sterling is well funded and very committed to these two potentially large regional plays in its portfolio.
The province of Newfoundland and Labrador was recently voted the eighth best location in the world for mining investment by the Fraser Institute. At a time when copper explorers are being driven to increasingly risky corners of the globe, we have acquired a project that is in one of the most mining-friendly and best organised jurisdictions in the world. The project is well located, within easy helicopter reach of the services hub of Goose Bay. There are several substantial mines in Labrador, and the province is served with good infrastructure. The Trans-Labrador highway is around 70 miles away from the project site, a hydro access road is 38 miles away. The 5,428 MW Churchill Falls power station is 112 miles away. Adeline is on a relatively southern latitude (equivalent to the North of England) with average Celsius temperature ranging from -15 in January to 20 in July. Licences are renewable after five years, with further renewals up to 30 years.
The project covers nearly 300 KM2, which is around three times the size of our project in Cyprus. A considerable amount of exploration work has been carried out on the basin over the last 60 years by various groups, including fieldwork such as mapping and sampling and high-quality aerial surveys and ground geophysics. Around 250 copper showings have been identified in the basin, at the surface or close to the surface (ie within 50m). Annual spending obligations commence at C$237,800, rising to C$475,600. The company has already met its first-year obligations.
The exploration opportunity for the project is that despite the rich inventory of data, very little drilling has been done on the project, because there is no road access. Some drilling was conducted around ten years ago, but it was rather speculative. Our approach is to re-analyse the large volume of data using modern technology and improved understanding of this type of geology.
The data re-evaluation programme has been completed and has been used to direct a helicopter-supported field programme of additional mapping, sampling and study of geological structures. To save time during the warm summer season, we commenced the field programme immediately on completion of the transaction. This programme is now complete and its results, together with a desk top study of a considerable amount of high-quality geophysics data, is now being analysed in order to create a ranked drill target lists and detailed drill campaign design. Project planning, and permitting is now underway for a diamond drill programme.
The vendor of the project was Altius Minerals, a project generator and royalty company based in Newfoundland. Altius is highly regarded in Canada. It has now not only become a strategic shareholder to Chesterfield, but also an operational partner. Its team has assisted with much of the data preparation and also in rapidly organising the field programme. In addition, Altius has also helped bring together a first-class team of specialists and local experts for the project. The principal objective of the field work was to design a diamond drill programme for the winter (when it is easier to access drill locations on the frozen lakes). By managing to move very quickly on the data programme and field programme this summer, we have saved a year of the project roll-out and so potentially provide a much quicker pay-back for our shareholders.
The Adeline copper project is unusual since it covers an entire sedimentary basin, some 44km long. There are only a couple fo dozen such basins globally and several of these are known for yielding large copper discoveries, in locations such as Zambia, Michigan and Siberia. The sediment-hosted deposit class is highly attractive to explorers because it can yield orebodies that compete with porphyry coppers on tonnage but are much higher grade, such as the Polish Lubin deposit with 2.6Bt @ 2% Cu, the Congolese Kamoa-Kakula deposit with 2.6Bt @ 2.6% Cu. Should we make a discovery, or even a partial discovery, our strategy is to attract the attention of one of the major mining groups, probably via an earn-in deal, and thus create value for the company in a relatively short time-frame.