Saskatchewan Exploration and Development Highlights 2013 · 2014. 2. 5. · Saskatchewan...

Saskatchewan Exploration and

Development Highlights

2013

Compiled byStaff of the Saskatchewan Geological Survey

Saskatchewan Ministry of the Economy

Saskatchewan Exploration and 1 Saskatchewan Geological Survey Development Highlights 2013 Saskatchewan Ministry of the Economy

Saskatchewan Exploration and Development Highlights 2013 Compiled by Staff of the Saskatchewan Ministry of the Economy

1. GENERAL OVERVIEW Expenditures for mineral exploration and evaluation projects in Saskatchewan in 2012 totalled $324 million (M), exceeding the $293 M spent in 2011 and the $321 M in 2010. Preliminary estimates for 2013 showed companies planning to spend about $297 M. The bulk of spending will be on potash and uranium projects, but also significant expenditures on gold, base metal, diamond, coal, platinum group metal (PGM), and rare earth element (REE) projects (Figure 1). This year’s expenditure estimate is down from 2012, reflecting the difficulty many junior companies continue to have in raising exploration capital. Despite the decrease, exploration spending in Saskatchewan continues to be well above historic levels. In the past decade over $2.7 billion (B) has been spent on exploration and evaluation programs, a dramatic increase when compared to the total $674.5 M spent in the 20 years previous. The continued interest in Saskatchewan’s mining industry is due to the province’s diverse geology, which hosts a variety of metallic and non-metallic mineral deposits.

As of September 2013, the amount of land under disposition for mineral exploration, pursuant to The Mineral Disposition Regulations, 1986, totalled 7.5 M hectares (ha), 25% higher than the same period last year. The increase is attributed mainly to staking around the recent discoveries of uranium at Patterson Lake South and kimberlite north of Deschambault Lake, and was facilitated by the province’s new online Mineral Administration Registry (MARS). In addition to mineral dispositions, there were also 4.4 M ha of land under disposition for potash exploration and

Figure 1 – Mineral exploration expenditures in Saskatchewan. Data in the histogram compare actual historical expenditures to estimates (e) for 2013, 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: Diamonds from the PK150 kimberlite discovery (+0.85 sieve screen fraction). Image provided by North ArrowMinerals Inc.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013eUranium 31.2 74.6 123.7 199.2 204.4 108.6 103.2 101.2 115.8 122.2Diamonds 22.4 55.4 98.8 76.6 73.2 10.9 17.3 7.9 5.2 4.1Gold 5.7 15.3 13.8 15.3 8.9 3.0 9.5 10.5 13.1 7.5

Base Metals/PGM 1,3 0.9 2.9 3.9 11.6 6.8 3.0 6.5 13.3 13.0 9.9

Industrial Minerals 2 0.5 1.8 3.5 22.6 180.7 151.2 184.0 160.3 176.5 153.5

Total 60.8 150.0 243.7 325.3 473.9 276.6 320.5 293.2 323.6 297.21 Platinum group metals2 Including REE, potash, and clays.3 Base metals and PGMs combined to maintain confidentiality standards.

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

Uranium Diamonds Gold Base Metals/PGM Industrial Minerals

$M

2009

2010

2011

2012

2013e


development, pursuant to The Subsurface Mineral Regulations, 1960. The total amount of land under disposition in Saskatchewan, including mineral, potash, coal, alkali, and quarry dispositions was 12.1 M ha, or about 18.6% of the province.

In 2012, Saskatchewan remained the world’s leading potash-producing jurisdiction and the second-largest producer of uranium. Gold, coal, salt, sodium sulphate, silica sand, and bentonite were also mined and there is good potential for production of a variety of other commodities including diamonds, base metals, and REEs.

Provincial mineral sales in 2012 were $7.4 B, down marginally from $8.1 B in 2011, but up from $6.9 B in 2010 and $4.6 B in 2009. In its 2012-13 Survey of Mining Companies, the Fraser Institute ranked Saskatchewan fifth out of 96 mining jurisdictions around the world for mineral potential assuming current regulations and land use restrictions. Saskatchewan also ranked fourth best for the quality and ease of access to its geologic databases. In the report, the province was lauded for its progressive mining-friendly government and its balanced approach to protected lands.

Saskatchewan produced 23.3 M lb U3O8 in 2012, good for a 15.4% share of the world’s primary uranium production. The bulk of that production came from the McArthur River/Key Lake operation, which produced 19.5 M lb U3O8, or 13% of the world’s primary production. The balance was produced from the Eagle Point mine at Rabbit Lake. The province is expected to produce at least 23.1 M lb U3O8 in 2013. Although construction is nearly complete at both the Cigar Lake mine and the McClean Lake mill, no 2014 production forecast for the operation has been released. Ore packaging is anticipated at the end of the second quarter of 2014 which should add to the province’s total production. Almost $116 M was spent on uranium exploration in 2012 with a further $122.2 M in expenditures anticipated in 2013. In spite of these consistent expenditures, fewer junior companies are currently active in the province after a period of consolidation.

In 2012, Saskatchewan had two active gold producing operations. Claude Resources Inc. (Claude)’s Seabee mining operation, which consists of the Seabee and Santoy 8 mines, produced 49,570 oz of gold in 2012, up from the 44,756 oz of gold produced in 2011. An additional 20,520 oz Au was produced in the first-half of 2013. Golden Band Resources Inc.’s (Golden Band) La Ronge gold project included 23,263 oz of gold production from the company’s Roy Lloyd and Komis mines in the company’s fiscal year 2013 (ended April 30, 2013). Both Claude and Golden Band continued to explore their properties in efforts to expand existing resources. Estimated expenditures for gold exploration programs in 2013 are about $7.5 B, down from actual expenditures of $13.1 M in 2011 and $10.5 M in 2011. The decline in spending is likely a reflection in the nearly 25% drop in the value of the commodity from a year ago.

Base metal exploration expenditures are expected to be nearly $10 M in 2013, down from actual expenditures of $13 M in 2012, but similar to the $13.3 M spent in 2011. The majority of advanced exploration and deposit appraisal work has been in the Flin Flon Domain where Foran Mining Corp. (Foran) continues to evaluate and explore its McIlvenna Bay deposit. Other companies such as Transition Metals and Unity Energy Corp. initiated grassroots base metal exploration projects in different parts of the province.

The most advanced diamond play in Saskatchewan continues to be the Star–Orion South Kimberlite project where Shore Gold Inc. (Shore) is the operator, and through its wholly owned subsidiary, Kensington Resources Inc., is the majority owner (67% ownership; Newmont Mining Corporation of Canada Ltd., 33%) in the project. Shore is continuing to work with provincial and federal regulators as it makes progress on its Environmental Impact Assessment for the project. A new discovery of kimberlite by North Arrow Minerals Inc. (North Arrow), sparked some recent interest and staking activity around an area north of Deschambault Lake. The discovery marks the first known occurrence of diamond-bearing kimberlite in Saskatchewan on the exposed portion of the Precambrian Shield.

In 2012, Saskatchewan potash miners produced about 14.4 M t 1 of KCl and had cumulative sales values totalling $6.0 B. Potash Corporation of Saskatchewan, The Mosaic Company, and Agrium Inc. all reported higher sales volumes in the first half of 2013, but a decrease in the average price per tonne of potash sold. In late July, the world’s largest single supplier of potash, Uralkali, announced it was ending its participation in the Belarusian Potash Company selling consortium. The announcement had an immediate impact on potash markets as speculators felt the move would result in lower product prices and a supply surplus. Undeterred by this turn of events, existing producers are still planning to invest up to $13.9 B on upgrades and expansions to current mining facilities. It is anticipated that these improvements will increase Saskatchewan’s potash production capacity by over 90% by the year 2023. K+S Potash Canada GP (K+S Canada) is also continuing with construction of the province’s first new potash mine in over 40 years at the Legacy solution mine site, located about 60 km northwest of Regina.

1 The 14.4 M t KCl is an estimate of the cumulative production based on the 2012 calendar year. A complete breakdown of production by mine is provided in Table 4, and is based on the companies’ fiscal year reports.


Potash exploration and development continued at a strong pace over the past year, with explorers advancing projects that ranged from greenfields to advanced development. BHP Billiton Ltd. (BHP) recently announced it will invest an additional $2.6 B in the Jansen project, bringing total investments into the proposed mine up to $3.8 B. Several other potash projects such as: Western Potash Corp.’s (Western) Milestone project, Karnalyte Resources Inc.’s (Karnalyte) Wynyard project, Encanto Potash Corp.’s (Encanto) Muskowekwan project, M&J Potash Corp’s (M&J Potash) Hanley project, North Atlantic Potash Inc.’s (North Atlantic) Foam Lake project, and Rio Tinto PLC (Rio Tinto)/North Atlantic joint venture grassroots projects are at various stages of evaluation and development.

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, 2013; http://www.infomaps.gov.sk.ca/website/ SIR_Geological_Atlas) and the Saskatchewan Mineral Deposits Index (www.er.gov.sk.ca/SMDI).

All information contained in the document 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 the Economy. 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–compliant standards required by Canadian securities regulators for publicly reporting companies. Although the contained information has been carefully compiled, the Saskatchewan Ministry of the Economy 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 does the Saskatchewan Ministry of the Economy 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 September 10, 2013. Information released after this date may, or may not, be present in the document. Only active exploration and development projects are included. Due to the current rapid pace of exploration, it is inevitable that significant new activities have occurred since printing.

Tables 2 and 3 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 sectors are critical components of the Saskatchewan economy, accounting for 21.8% of the provincial Gross Domestic Product (GDP) ($55.5 B) in 2012 (Figure 2). The share of the provincial GDP is virtually unchanged from the 2011 level of 22.3% of the provincial GDP ($54.3 B). This result is due to the continued strength in demand for commodities, especially the developing economies.

Saskatchewan is Canada’s second-largest producer of crude oil, behind Alberta, with a total output of 27.5 M cubic metres (m3) at a value of $12.6 B. Due to continued price strength, the value of sales in oil remained strong in 2012. Meanwhile natural gas production has dropped off significantly as the price continues to deteriorate and profits become elusive.

In 2012, 3,108 oil wells were drilled in Saskatchewan compared with only 10 gas wells. This shows steady strength in oil drilling activity while gas activity continues to decline. The persistently high oil prices in 2012 contributed to a record 2,036 horizontal oil wells

Figure 2 – 2012 percentage of GDP by sector ($55.5 B, CANSIM Table 379-0030, Statistics Canada, 2013).

Agriculture, Forestry,

Fishing, and Hunting5.8%

Mining and Petroleum21.8%

Manufacturing6 7%

Finance, Insurance, and Real Estate

Business Services5.9%

Government Services 5.7%

Education and Healthcare11.0%

Other Services Industries 4.1%

6.7%

Construction 8.0%

Transportation, Warehousing,and Utility

7.2%

Wholesale and Retail Trade

10.5%

Real Estate13.4%


drilled that year. This upward trend in horizontal oil well drilling looks to continue well into the future.

Saskatchewan mineral production in 2012 included metallic mineral production of uranium and gold, and industrial mineral production of potash, silica sand, salt and sodium sulphate, bentonite, clay, and coal. The value of non-renewable resource sales in 2012 including oil and natural gas totalled just over $20 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, respectively. In 2012, Saskatchewan produced 100% of Canada’s uranium from two operations, and accounted for approximately 15.4% of world output. The province also produced approximately 95% of Canada’s potash from 10 facilities, accounting for nearly one-third of world production. Market fundamentals indicate strong future demand for both commodities.

The minerals sector increased prosperity in Saskatchewan by creating high-paying jobs (over 30,000 directly and indirectly employed) and contributing over $500 M in royalties in 2012 while the energy sector added an additional $1.28 B in royalties to the provincial coffers. Table 1 further details the impact that the mineral sector has in

Table 1 - Statistical summary of major Saskatchewan resource industries – minerals. Values in millions of dollars unless otherwise noted.

Figure 3 – Value of non-renewable resources ($M, Saskatchewan Ministry of the Economy).

Industrial Minerals $5,972Oil and Gas

$$12,600

Other Minerals $1,479$1,479

POTASH 2008 2009 2010 2011 2012Production (thousand tonnes K2O) 10,147 4,251 9,141 10,378 8,826 Value of Sales 7,386 3,067 5,366 6,714 5,972

Royalty/Tax 1 1,364 -184 263 438 365 Direct Employment 3,838 3,916 4,443 4,455 5,112 Capital Spending 1,025 1,760 2,127 2,537 2,684 URANIUM 2008 2009 2010 2011 2012Production (thousand tonnes U3O8) 11 12 Value of Sales 956 1,260

Royalty/Tax 1 90 105 Direct Employment 2,532 2,523 Capital Spending 310 360 SALT 2008 2009 2010 2011 2012Production (thousand tonnes) 1,311 1,255 1,067 1,283 1,280 Value of Sales 29.5 27.8 28.6 30.3 30.5

Royalty/Tax 1 1.3 1.3 1.0 1.3 1.3 Direct Employment 142 150 133 132 129

Other 2 2008 2009 2010 2011 2012

Production (million tonnes) 10 10.8 10.8 9.8 9.6Value of Sales 217 237.893 1247 1371.2 1448

Royalty/Tax 1 30 25.3 132.6 147.8 146.9

Direct Employment 3 1074 n/a 3850 4284 4359Capital Spending n/a n/a n/a n/a n/aNotes:

See Note 2

1 Royalty/Tax are reported for fiscal year, remaining entries are calendar year.2 Confidentiality requirements pursuant to The Crown Minerals Act do not permit commodity-specific information to be released where there are fewer than three producing companies. This information is aggregated and presented in the "Other" category which includes bentonite, quarriable materials, coal, sodium sulphate, uranium, and precious and base metals.3 Approximately 300 additional Saskatchewan residents are employed at the Hudbay operations in Flin Flon, Manitoba.Non-Ministry Data Sources: Employment information was derived from information from the Ministry of Labour Relations and Workplace Safety (annual average).Some capital spending figures were derived from Natural Resources Canada's Expenditure Survey.


Saskatchewan and illustrates the importance and the continued contributions to the Saskatchewan economy for natural resources will make for many generations.

4. URANIUM OVERVIEW OF PRODUCTION AND EXPLORATION

Saskatchewan produced 15.4% of the world’s primary uranium in 2012, a total of 23.3 M lb of U3O8, from two operations: McArthur River/Key Lake and Eagle Point/Rabbit Lake. The McArthur River mine, operated by Cameco, was once again the world’s largest uranium producer providing 13% of the world’s primary supply. The balance of Saskatchewan’s contribution was yielded from the Eagle Point mine at Rabbit Lake, another Cameco operation. Construction at the Cigar Lake uranium mine is nearly complete. Although production was expected to commence in 2012, operator Cameco has announced that ore packaging will not commence until 2014. Ore from Cigar Lake will be milled and packaged at AREVA Resources Canada Inc.’s (AREVA) McClean Lake mill when production commences.

A total of $115.8 M was spent exploring for uranium in 2012, primarily in the Athabasca Basin. Spending is expected to be $122.2 M in 2013. Large-scale exploration programs were undertaken by major companies such as Cameco, AREVA, and Rio Tinto. Smaller companies such as Denison Mines Corp. (Denison), Fission Uranium Corp., Alpha Minerals Inc. (Alpha), UEX Corporation (UEX), and Forum Uranium Corp. (Forum) are actively exploring in the basin.

OPERATIONS 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 19.5 M lb U3O8 in 2012. Production is anticipated to be 18.9 M lb U3O8 in 2013. With Reserves of almost 380 M lb U3O8 (Table 2) the McArthur River deposit remains the largest high-grade uranium deposit in the world.

Cameco continues to move its production into the zone 4 area of the deposit, which necessitated the installation of a new freeze wall. The goal is to increase production at the mine to 22 M lb U3O8 per annum by 2018, leaving an additional milling capacity of 3 M lb U3O8. These expansions await regulatory approval. In addition, increasing the tailings capacity at the Deilmann tailings management facility remains a priority. Cameco anticipates submitting a draft Environmental Impact Statement for the project to regulators in 2013. Exploration continues on the site with areas north and south of the current mining area being tested.

Eagle Point Mine, Rabbit Lake Mill

Cameco Corporation, operator (100%).

The Eagle Point/Rabbit Lake operation produced 3.8 M lb U3O8 in 2012 and is forecast to produce a 4.2 M lb U3O8 in 2013. The reserve replacement exploration plan is being extended at the mine via an underground drilling program. The relatively small Reserve (Table 2) at the mine continues to be replenished annually through this program. In addition, surface drilling is being undertaken at areas east and northeast of the mine.

The Rabbit Lake operation has sufficient tailings capacity to handle production until the end of 2017. Cameco expects to expand capacity by the end of 2017 to extend the life of the operation. A new environmental assessment and regulatory approval will be necessary to complete the project.

McClean Lake Mill/Cigar Lake Mine

McClean Lake mill: AREVA Resources Canada Inc., operator (70%); Denison Mines Corp. (22.5%); and OURD (Canada) Co. Ltd. (7.5%). Cigar Lake mine: Cameco Corporation, operator (50.025%); AREVA Resources Canada Inc. (37.100%); Idemitsu Uranium Exploration Canada (7.875%); and TEPCO Resources Inc. (5.0%).

Both the McClean Lake mill and Cigar Lake mine were the sites of construction activity in 2013 as preparations were made for ore processing once the Cigar Lake mine begins production. The Cigar Lake mine was set to produce about 0.3 M lb U3O8 in the fourth quarter of 2013; however, delays completing the underground ore storage infrastructure have resulted in a minor production delay with mining now expected to commence in the first quarter


Table 2 – Published NI 43-101–compliant Reserves and Resources for uranium deposits in Saskatchewan.

Owner(s)* Property/Deposit

Reserves (M lb U3O8)

Grade (%U3O8)

Production (M lb U3O8) **

RESERVES*** 2012 2013 (e) Cameco Corporation Rabbit Lake; Eagle Point Mine 22.8 0.7 3.8 4.2

Cameco Corporation – AREVA Resources Canada Inc.

Key Lake 0.7 0.52 – –


McArthur River 378.9 16.36 19.5 18.9

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

Cigar Lake 216.7 18.3 – –

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

McClean Lake (Sue D, Caribou, McClean underground, Sue B, MED)

12.6† 2.2† –


Midwest 42.5† 1.7† – –

RESOURCES***

Measured and Indicated

(M lb U3O8) Grade %U3O8 Inferred

Grade (%U3O8)

Cameco Corporation Rabbit Lake; Eagle Point Mine 6.4 0.60 10.3 1.24

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

Cigar Lake 2.2 2.27 98.9 12.01


McArthur River 12.1 5.65 56.5 7.78

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

Dawn Lake 12.9 1.69 – –

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

Tamarack 17.9 4.42 1.0 1.02

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

Millennium 68.2 4.16 22.3 5.29


Midwest A 5.8 0.57 4.3 21.2

AREVA Resources Canada Inc. – UEX Corporation

Shea Creek (Anne, Kianna, Colette, 58B)

67.66 1.48 28.19 1.01

Rio Tinto PLC Roughrider (West, East) 17.2 1.98 40.7 11.5

Denison Mines Corp. – Korea Waterbury Uranium Limited Partnership

J-zone 12.81 2.00 - -

UEX Corporation Hidden Bay (Horseshoe, Raven)

35.04 0.16 2.72 0.11

UEX Corporation Hidden Bay (West Bear) 1.579 0.91 - -

Denison Mines Corp. – Cameco Corporation – JCU Exploration (Canada) Co., Ltd.

Phoenix A and B 52.3 15.6 7.6 29.80

Denison Mines Corp. Fraser Lakes Zone B 6.96 0.03

Notes: * Operator first. ** 2012 and 2013 production figures and estimates are from company releases; e, estimated. *** Total Reserves (Proven and Probable) are reported. Measured and Indicated Resources have been combined and are reported

separately from Inferred Resources. Both Reserves and Resources are reported in the U3O8 content of a larger ore body. Reserve and Resource data are from company releases unless otherwise specified.

† 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.


of 2014. Necessary upgrades of the McClean Lake mill in advance of production will delay ore packaging until the end of the second quarter of 2014. Once construction and permitting are complete the McClean Lake mill will be licensed to produce 24 M lb U3O8 annually, up to 75% of which will be derived from the Cigar Lake mine. No forecast for 2014 production had been provided at the time this document was compiled. The Cigar Lake/McClean Lake operation is forecast to slowly reach its full licensed production target of 18 M lb U3O8 in 2017.

Midwest Property

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

AREVA’s Midwest project remains on care and maintenance. Originally slated for production in 2013, the project was suspended due to uncertain economic conditions. Although the environmental permitting is now complete, a new Feasibility Study must now be completed before a production decision can be made. Should the outcome be positive, AREVA plans to drain the Mink Arm of McMahon Lake and construct a large open pit to access the ore body. Ore from the mine would be milled at McClean Lake utilizing some of the mills remaining production capacity.

Millennium Deposit

Cameco Corporation, operator (69.9%); and JCU Exploration (Canada) Co., Ltd. (30.1%).

After Cigar Lake, Millennium is Cameco’s most advanced development project. Although a Feasibility Study has been completed, no production decision is expected in 2013. Cameco plans to submit a final Environmental Impact Statement in 2013. Additional exploration is planned to test some targets near the deposit. A development decision will be made depending on market conditions. Although milling of the deposit was originally planned at the Key Lake mill, Cameco asserts that the connecting highway planned between the McArthur River and Cigar Lake mines opens other milling options.

EXPLORATION OVERVIEW

Although expenditures remain robust, there are fewer companies exploring for uranium in Saskatchewan due to difficulties raising money and consolidation. Denison has been aggressively obtaining assets and has absorbed two junior companies, JNR Resources Inc. (JNR) and Fission Energy Corp. (Fission Energy) via all-stock transactions. Denison and JNR were already partners on several uranium exploration projects; however, the takeover allowed Denison to gain control of the Way Lake project that contains the small Fraser Lakes B uranium/rare earth element deposit, which has a published NI 43-101–compliant Resource estimate (Table 2). Denison’s takeover of Fission Energy allowed it to gain control of the J-zone (60% interest), which is the western extension of Rio Tinto’s Roughrider deposit in the northeast Athabasca Basin. Although a Resource estimate for the J-zone was available in advance of the takeover, Denison has since upgraded the Resource, which grades 2% U3O8 and contains 12.81 M U3O8, all in the Indicated category. Denison also gained control of a number of other properties in the Fission Energy transaction, including several properties that were explored by Pitchstone Exploration Ltd. before that company was taken over by Fission Energy. These properties contain a number of uranium occurrences that will require follow up. One project excluded from the Denison–Fission Energy transaction was Patterson Lake South, which was retained by spin-off company Fission Uranium Corp. (Fission).

Denison’s main exploration focus has been at the Phoenix deposits, a joint venture with Cameco and JCU Exploration (Canada) Co., Ltd. (JCU) about 35 km southwest of the McArthur River mine. Drilling concentrated at the A and B deposits, which are about 400 m below surface, led to the publication of an updated Resource estimate (Table 2) in which the bulk of the mineralization lies in the A deposit. The combined Indicated Resources from the Phoenix A and B deposits, which are separated by about 200 m, are similar in size to the published Indicated Resource from Cameco’s Millennium deposit (Table 2). The A deposit stands to be expanded as Denison continues to report mineralized intersections from step-out drilling. Additional drilling has been focussed at the 489 zone, a few kilometres northeast of the Phoenix A deposit, where weak mineralization has been discovered.

Fission and equal partner Alpha have had a great deal of drilling success at the Patterson Lake South property, located about 65 km south-southeast of the Shea Creek deposits (see below). Six zones of mineralization have been discovered along a conductive trend over a strike length of 1.02 km in the metamorphic rocks that form the basement to the nearby Athabasca Basin. The drill targets are typically associated with radon gas anomalies. Intersections such as 54 m grading 9.08% U3O8 (not a true width) starting only 61 m from surface demonstrate the project’s potential. Late in the summer of 2013, Fission made an all-stock takeover bid that was accepted by Alpha’s board. Pending shareholder approval, Fission will control the Patterson Lake South property. The exploration success at Patterson Lake South initiated a staking rush with new dispositions radiating for tens of kilometres in all directions from the property. Most exploration projects in the newly claimed land are in their infancy, but a group of junior companies combined their efforts to form the Western Athabasca syndicate, which has undertaken VTEM


surveys with the intention of identifying conductive trends and radon surveys looking for gas seeps that might be associated with mineralization.

AREVA and UEX continue to expand four deposits, Anne (southeast end), Kianna, 58B and Colette (northwest end), along the 3 km long, northwest-striking Shea Creek trend in the western Athabasca Basin. An updated NI 43-101–compliant Resource estimate (Table 2) for the deposits released in April of 2013 indicates that the bulk of the mineralization rests in the Kianna and Anne deposits. Although the deposits are relatively deep (below 700 m) compared to those in the east Athabasca Basin, the total contained U3O8 is more than 30 M lb U3O8 greater than the total production from the nearby Cluff Lake uranium mine (now decommissioned).

Grassroots uranium exploration continues in various parts of the Athabasca Basin. Forum and Mega Uranium Ltd. (Mega) have renewed exploration near the historic Maurice Bay deposit northwest of Lake Athabasca in the far northwest of the province through an option agreement with Cameco and AREVA that could earn Forum and Mega 60% interest in the property. The operator, Forum, has concentrated on new drill targets and has discovered several new zones of mineralization near the Maurice Bay deposit. In the eastern Athabasca Basin, Cameco, AREVA, and International Enexco Ltd. initiated a major drill program near Mann and Hughes lakes along the structural trend between the Phoenix deposits and the McArthur River mine. The joint venture partners report alteration and elevated uranium concentrations in the Athabasca Group near and above the unconformity (about 580 to 600 m below surface) that are indicative of a uranium mineralizing system.

5. GOLD OVERVIEW

Gold exploration expenditures in Saskatchewan totalled $13.1 M in 2012, up from $10.5 M in 2011 and the highest annual total since 2007. Forecasted expenditures are estimated to drop in 2013 to about $7.5 M, due largely to recent declines in gold price. Over the past year, the price of gold ranged from a high of US$1792 per Troy ounce (oz) in October 2012 to a low of $1192/oz in June 2013.

In 2012-13, gold mining and exploration in the province was focussed in Paleoproterozoic rocks of the La Ronge, Glennie, and Flin Flon domains of the Reindeer Zone, Trans-Hudson Orogen. The two mining operations currently producing gold are Claude’s Seabee operation, entering its 23rd year of production, and Golden Band’s La Ronge Gold project, currently in its third year of production. Both Claude and Golden Band have continued exploration over the past year in the vicinity of the current operations, and several other junior companies were actively undertaking exploration in the region. The only advanced gold exploration project outside of the Reindeer Zone is Brigus Gold Corp.’s (Brigus) Goldfields project, located in rocks of the Beaverlodge Domain on the north shore of Lake Athabasca.

PRODUCTION

Seabee Gold Operation

Over the past year at the Seabee operation, Claude (100%) produced gold from the Seabee mine, including the L62 zone, and the Santoy 8 mine, with all ore being processing at the Seabee mill. Total production in 2012 totalled 49,570 oz (275 235 tonnes (t) grading 5.86 grams per tonne gold (g/t)), with an additional 20,520 oz (139 364 t at 5.11 g/t) produced over the first half of 2013. This brings total historical production from Seabee to just over 1,000,000 oz (Table 3). To facilitate future mining at the operation, Claude completed an extension of the shaft at Seabee from 600 m to 980 m in 2012. Claude anticipates bringing the Santoy Gap deposit, situated approximately 600 m from the Santoy 8 mine, into production in 2014.

La Ronge Gold Project

For its fiscal year 2013 (ended April 30, 2013), Golden Band (100%) produced 23,263 oz of gold at its La Ronge gold project from 110,326 t of ore with an average grade of 6.55 g/t. The majority of the ore was produced from the Roy Lloyd underground mine, with a subordinate amount coming from open pit operations at the Komis mine. All ore was processed at the Jolu central milling facility. Although mining operations at Roy Lloyd continued uninterrupted throughout the year, mining at Komis was halted and milling at Jolu was suspended for just over five months in order to make the overall project more cost effective.

EXPLORATION

Much of the gold exploration in the province over the past year was focussed near existing mining operations. Claude completed drilling at the Santoy mine complex, including the Santoy Gap deposit. This drilling resulted in discovery of extensions to both the Santoy 8 and Santoy Gap deposits, extending the mineralization down 400 m and 650 m, respectively, the plunge of the existing resources for the deposits (Table 3). At Santoy Gap, the drilling also uncovered another sub-parallel, mineralized lens 150 m to the east of the known deposit. Outside of the Seabee area,


Table 3 – Production totals for current gold mining operations and published Reserves/Resources for selected gold deposits in Saskatchewan.

Ownership (%)Years

Operated Mine/DepositOre Milled

(t)

Au Grade (g/t)

Au Grade (Troy

oz/ton)

Total Au Production (Troy oz)

Claude Resources Inc. 1991 to present

Seabee gold

operation 14 794 373 7.36 0.215 1,047,760

Golden Band Resources Ltd. 2011 to present

La Ronge gold

project 2252 852 8.55 0.250 68,140

Ownership (%)

Effective Date

(dd/mm/yr) Mine/DepositTonnes of

OreCut Off

(g/t)

Au Grade (g/t)

Au Grade (Troy oz/

ton)In Situ Au (Troy oz)

RESERVES (Proven + Probable)

Claude Resources Inc. 28/04/12 Seabee Mine 1 062 900 4.57 6.58 0.192 224,900

Claude Resources Inc. 28/04/12 Santoy 8 997 100 3.00 4.08 0.119 130,600

Brigus Gold Corp. 6/10/11 Box 16 502 247 0.72 1.51 0.044 800,000

Brigus Gold Corp. 6/10/11 Athona 5 830 798 0.72 1.17 0.034 220,000

Claude Resources Inc. 31/03/11 Amisk Gold3 30 150 000 0.40 0.950 0.028 921,000

Claude Resources Inc. 28/04/12 Seabee 127 400 4.57 4.650 0.136 19,000


Claude Resources Inc. 12/11/12 Santoy Gap 994 000 3.00 8.80 0.257 281,000

Claude Resources Inc. 28/04/12 Porky Main 160 000 3.00 7.50 0.219 38,581

Claude Resources Inc. 28/04/12 Porky West 110 974 3.00 3.10 0.091 11,045

Golden Band Resources Ltd. 19/03/13 Roy Lloyd 155 383 5.00 12.60 0.368 62,947

Golden Band Resources Ltd. 30/04/12 Golden Heart 492 800 4.00 6.60 0.193 104,800

Golden Band Resources Ltd. 30/04/12 Komis 191 740 4.00 7.85 0.229 48,398

Golden Band Resources Ltd. 30/04/12 Memorial 288 400 1.00 2.83 0.083 26,220

Golden Band Resources Ltd. 30/04/12 Tower East 5 019 080 1.00 1.86 0.054 299,835Masuparia Gold Corp. (51) / Golden Band Resources Ltd. (49) 30/04/12

Greywacke Lake (North zone) 184 000 5.00 8.40 0.245 49,700

Wescan Goldfields Inc. 04/02/10 Jojay 420 000 2.00 3.70 0.108 50,000

La Ronge Gold Corp. 30/11/12 Preview SW 1 958 400 0.50 2.12 0.061 138,100

Claude Resources Inc. 31/03/11 Amisk Gold 3 28 653 000 0.40 0.700 0.020 645,000

Claude Resources Inc. 28/04/12 Seabee 813 900 4.57 6.830 0.199 178,800


Claude Resources Inc. 28/04/12 Porky Main 70 000 3.00 10.43 0.305 23,500

Claude Resources Inc. 28/04/12 Porky West 138 300 3.00 6.03 0.176 26,800

Claude Resources Inc. 12/11/12 Santoy Gap 1 875 000 3.00 5.920 0.038 357,000

Golden Band Resources Ltd. 19/03/13 Roy Lloyd 91 888 5.00 10.78 0.315 31,843

Golden Band Resources Ltd. 30/04/12 Golden Heart 10 500 4.00 4.95 0.145 1,672

Golden Band Resources Ltd. 30/04/12 Komis 10 746 4.00 7.91 0.231 2,731

Golden Band Resources Ltd. 30/04/12 Memorial 90 900 1.00 2.49 0.073 7,272

Golden Band Resources Ltd. 30/04/12 Tower East 902 020 1.00 1.52 0.044 43,965Masuparia Gold Corp. (51) / Golden Band Resources Ltd. (49) 30/04/12

Greywacke Lake (North zone) 58 000 5.00 7.29 0.213 13,600

Wescan Goldfields Inc. 04/02/10 Jojay 630 000 2.00 4.30 0.126 87,000

La Ronge Gold Corp. 30/11/12 Preview SW 3 714 600 0.50 2.09 0.060 257,300

2 values are approximate; includes production from the Roy Lloyd, EP, and Komis mines.3 Mineral Resource includes Ag as 'Au equivalent'.

1 values are approximate; includes production from the Santoy 8 mine and the Santoy 7 and Porky West bulk samples.

PRODUCTION (current operations)

RESOURCES (Measured + Indicated)

RESOURCES (Inferred)

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.


Claude’s other significant exploration project is the Amisk Gold project, located on northern Amisk Lake in rocks of the Flin Flon Domain. Claude is advancing with a Preliminary Economic Assessment of the project.

At the La Ronge gold project, Golden Band has continued underground and surface drill programs at the Roy Lloyd mine (Bingo deposit), resulting in an updated Mineral Resource estimate for the deposit (Table 3). Golden Band is currently focussing efforts on moving additional projects towards production over the next two years, including the Golden Heart and Decade deposits and renewed production from Komis. Along with joint venture partner Masuparia Gold Corp. (Masuparia), Golden Band is also nearing completion of a bulk sample from the Greywacke North deposit, which is being done to confirm the metallurgical performance of the mineralized zone through the Jolu mill. The stockpiled bulk sample will be processed through the mill and, along with the other three aforementioned deposits, Golden Band is anticipating adding production from the Greywacke deposit within the next two years. The Masuparia–Golden Band partnership is also proceeding with resampling of historical drill core at the North Lake deposit, located ~25 km south-southwest of the Roy Lloyd mine.

Elsewhere in the Reindeer Zone, La Ronge Gold Corp. (La Ronge Gold) continued with drilling of its Preview SW deposit, located ~10 km north of Lac La Ronge. Following completion of a drill program in late 2012, La Ronge Gold released a new Mineral Resource for the deposit, including an Indicated Resource of 138,100 oz and an Inferred Resource of 257,300 oz Au (Table 3). An additional drill program was subsequently completed in early 2013 in order to test for extensions of gold mineralization outside the defined Resource and to explore for additional near surface gold mineralization. Several of the 19 holes drilled in this campaign intersected mineralization. La Ronge Gold also completed metallurgical testing on two samples from the deposit to provide a preliminary assessment of the gold recovery potential of gold-bearing materials from the deposit.

Wescan Goldfields Inc. (Wescan) completed an airborne geophysical (VTEM and magnetic) survey in the vicinity of its Jojay deposit (Table 3), located ~125 km north-northeast of La Ronge, to aid in identification of other possible mineralized zones in the area. Wescan also completed an airborne geophysical (magnetic and EM) survey over its Munro Lake property, located ~4.5 km northwest of the Claude’s Santoy 8 mine, and drilled four holes, one of which yielded an intersection of 67.1 g/t over 1 m.

Galaxy Graphite Corp. initiated exploration in the vicinity of historical gold showings in the Brownell Lake area, located ~100 km east of La Ronge. The exploration program consisted of two phases, including an initial phase of detailed mapping, soil/outcrop sampling and ground geophysics (VLF and magnetometer), and a subsequent program of channel sampling (128.5 m) over prospective zones identified in phase 1. Assay results from the channel sampling included values of 25.1 g/t Au over 1.03 m and 4.1 g/t Au over 5.1 m in different areas of one of the historical showings.

Brigus’ Goldfields project, located on the north shore of Lake Athabasca, is the most significant gold project outside of the greater La Ronge area. In 2011, Brigus released a Pre-Feasibility Study for the project, including Mineral Reserve estimates for both the Box and Athona deposits (Table 3). A production decision on the project is pending.

6. BASE METALS Although there is currently no base metal production in Saskatchewan, estimates for exploration expenditures for 2013 are $9.9 M, which is down from the $13.0 M spent for exploration in 2012. Foran’s McIlvenna Bay deposit in the western Flin Flon Domain continues to be the most advanced base metals exploration project in northern Saskatchewan. Transition Metals Corp. (Transition Metals) have commenced preliminary exploration work on its Janice Lake project in the Wollaston Domain. Unity Energy Corp. (Unity), a Vancouver-based junior resource company, has acquired two base metal properties in the province and has publicized plans for exploration work.

In October 2012, Foran announced a $5 M exploration and development budget focussed on its 100%-owned copper-zinc-silver (Cu-Zn-Ag) McIlvenna Bay deposit, located 80 km west of Flin Flon. Primary objectives of this work were to complete 2000 m of infill drilling at McIlvenna Bay, 5000 m of additional drilling on regional targets, and to calculate a new Mineral Resource for the deposit. In March 2013, Foran announced a new and increased Mineral Resource estimate for the McIlvenna Bay deposit including an Indicated Resource of 13.9 M t (15% increase) grading 1.28% Cu, 2.67% Zn, 0.49 g/t Au, and 17 g/t Ag, and an Inferred Resource of 11.3 M t (18% increase) of 1.32% Cu, 2.97% Zn, 0.43 g/t Au, and 17 g/t Ag. The regional drilling, carried out in February and March of 2013, discovered a new zone of high-grade copper mineralization at the Balsam deposit, which is located 7 km southeast of McIlvenna Bay. One of the better intersections returned assays of 4.08% Cu, 0.43 g/t Au, and 27.0 g/t Ag over 3.66 m, at a vertical depth of 205 m (drill hole BA-13-77).

Transition Metals announced plans to spend $2 M on exploration in 2013 on its 100%-owned Janice Lake property, which is located 55 km southeast of Key Lake. Grab samples collected by the company confirmed previous reports of sediment-hosted mineralization and returned values ranging from 0.34 to 9.35% Cu and 0.7 to 61.7 g/t Ag. The


new exploration work will mainly consist of data compilation, mapping, ground geophysics, soil geochemistry, and reclamation and sampling of historical drill core.

Unity’s Borys Lake Zn-Pb property is located in the Crew Lake assemblage, at the transition between the southern La Ronge Domain and neighbouring Rottenstone Domain, containing sediment-hosted sulphide mineralization that has been overprinted by a high-strain zone. Their Dinty Lake Ni property is located in the Beaverlodge Domain, within a small sill-like noritic intrusion containing up to 0.94% Ni and 0.04% Cu.

7. RARE EARTH ELEMENTS JNR released a NI 43-101–compliant Inferred Mineral Resource for the Fraser Lakes Zone B on the Way Lake project, which included uranium and rare earth oxides. At a cut-off grade of 0.01% U3O8, the Resource estimate is 10 354 926 t grading 0.03% U3O8 (6,960,681 lb), 0.003% La2O3 (681,325 lb), 0.006% Ce2O3 (895,077 lb), 0.001% Yb2O3 (304,762 lb), and 0.007% Y2O3 (1,619,017 lb). The mineralization is associated with circa 1800 Ma granitic pegmatite dykes.

8. DIAMONDS Shore is the operator, and through its wholly owned subsidiary Kensington Resources Inc., the majority owner (67% ownership; Newmont Mining Corporation of Canada Ltd., 33%) of Saskatchewan’s most advanced diamond prospect, the Star–Orion South kimberlite project. A Feasibility Study for the project concluded that 34.4 M carats, at an average value of US$242 per carat, could be extracted from the Probable Reserves of 279 M t of kimberlite, which has a weighted average grade of 12.3 carats per hundred tonnes. Shore continues to work with provincial and federal regulators through the Environmental Impact Assessment process and the company is actively seeking partners or potential investors to help fund the estimated $2.5 B capital cost of the project.

This past summer, North Arrow undertook a 2002 m diamond-drilling campaign north of Deschambault Lake to earn a majority interest in the Stornoway Diamond Corp. (Stornoway) Pikoo project located approximately 120 km east of La Ronge. North Arrow encountered kimberlite in nine of 10 holes drilled with reported intersections ranging from centimetre-scale dykes up to 28.9 m. The kimberlite is described as a dark grey hypabyssal facies with abundant olivine, common ilmenite, and orange to purple garnet with less common chrome diopside and low (>5%) country rock dilution and common mantle nodules ranging up to 10 cm in diameter. Micro-diamond analysis results are expected sometime in October 2013. North Arrow is new to Saskatchewan, but its board of directors include seasoned diamond explorers such as: D. Grenville Thomas (founder of Aber Resources, one of the discoverers of the Diavik Diamond Mine), Ken Armstrong (Rio Tinto, Aber Resources, Strongbow Exploration Inc.), and Christopher Jennings (SouthernEra Diamonds Inc., Aber Resources).

These intersections represent the first discovery of kimberlites in Saskatchewan on the exposed portion of the Precambrian Shield. Although these new discoveries are not geographically proximal to the Fort à la Corne kimberlite field, both areas are underlain by the Archean Sask Craton. Exploration work on the Pikoo project started with regional till sampling in 2006. Well-defined indicator mineral trains containing G9 and G10 garnets were complimented with airborne geophysical surveys to pinpoint the targets. Since the initial discoveries, there has been an increase in staking activity blanketing an area of about 40 km all around the Pikoo claims.

9. INDUSTRIAL MINERALS POTASH

In 2012, Saskatchewan potash miners produced 14.4 M t KCl, down from 17.0 M t KCl in 2011 and 14.9 M t KCl in 2010. Saskatchewan’s three potash-producing companies, Potash Corporation of Saskatchewan, The Mosaic Company, and Agrium Inc. combined for $6.0 B in potash sales in 2012 compared to $6.85 B in 2011. All three producers reported higher sales volumes in the first half of 2013, but a decrease in the average price per tonne of potash sold. In late July, the world’s largest single supplier of potash, Uralkali, announced it was ending its participation in the Belarusian Potash Company selling consortium. The announcement had an immediate impact on potash markets as shares of all major producers fell on speculation that the move would result in lower product prices and a supply surplus.

It is estimated that between 2004 and 2023, the province’s three producers will invest about $13.9 B to upgrade and expand existing mining facilities to increase provincial production capacity by over 90%. Saskatchewan continues to be the world’s largest producer of potash, typically accounting for about one-third of global production and 40% of global trade. In addition to current producers, numerous companies are continuing to advance greenfield potash projects that range from grassroots exploration to development stages. Over the past five years, potash projects have accounted for more than half of the total annual exploration and development expenditures in Saskatchewan and 2013 is anticipated to be the same.


K+S Potash Canada (K+S) is continuing with construction of Saskatchewan’s first new greenfield potash mine in nearly forty years. In April, the board of K+S reached a decision to increase the capital expenditures budget for the Legacy solution mine to $4.1 B, up from the initially estimated cost of $3.25 B outlined in the Feasibility Study of November 2011. Despite the cost increase, K+S maintains that the Legacy project still meets the company’s requirement to earn a 15% premium on the cost of capital before taxes. K+S, already one of the world’s largest fertilizer producers, intends to use the new facility to reach new markets in Asia, South America, and North America. Commissioning of the mine is anticipated in the summer of 2016 and the company expects to have a productive capacity of 2 M t KCl available by 2017, en route to reaching the full anticipated annual capacity of 2.86 M t KCl. In July, K+S announced it had signed a long-term volume-based contract with Canadian Pacific Railways (CPR) for the transportation of potash from the Legacy site to a yet-to-be-determined western Canadian port of export. The deal will also give K+S access to CPR’s extensive North American rail network for product distribution to Canadian and American markets.

In August, BHP announced it will invest an additional US$2.6 B in the Jansen potash project, located approximately 140 km east of Saskatoon. The new investment will be spread out over the next four years and should allow BHP to complete the excavation and lining of the production and service shafts as well as install basic infrastructure and utilities to the mine. BHP continues to work on engineering design studies required for the Jansen Feasibility Study, but the company has not given a timeline for a board approval on a production decision. Contrary to the previously announced estimate of 2015 for initial production, BHP CEO Andrew Mackenzie recently stated that the company prefers to retain flexibility as to when to enter the market and implied initial production from the facility could be closer to 2020. This recent investment brings total commitments by BHP on the project up to $3.8 B, still well short of the estimated $12 B in capital costs required to reach an 8 M t KCl per year (tpa) capacity. The company also revealed that it may consider taking on one or more minority-stake joint venture partners, as it has with many of its other mining operations around the world.

BHP is also continuing exploration and evaluation activities on its Boulder, Young, Melville, and other project areas. The company recently completed an extensive drilling program at Melville as well as 3-D seismic surveys on two properties.

In April, junior potash company Western Potash Corp. (Western) received approval of its Environmental Impact Assessment from the Saskatchewan Ministry of the Environment for the Milestone solution mine project located approximately 30 km southeast of Regina. In June, China BlueChemical Ltd. (CBCHC) and Benewood Holdings Corp. Ltd. (a subsidiary of Guoxin International Investment Corp. Ltd.) agreed to a strategic investment of nearly $32 M for a 19.9% ownership position in Western. Should the project proceed to a mine, the agreement assures CBCHC an off-take entitlement for the purchase of the lesser of 30% or 1 M t KCl of annual potash production for a 20-year term. CBCHC is a majority owned subsidiary of China National Offshore Oil Corp., China’s largest off-shore oil and gas producer. Western estimates that the proposed 2.8 M tpa KCl mine would cost about $3.3 B in total and could be ready to start production as early as 2016.

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

Company Mine

2007 Production (M t KCl)





2012 Production (M t KCl)*

Agrium Vanscoy 1.73 1.76 0.90 1.78 1.74 1.40

Mosaic Esterhazy (K-1/K-2) 3.90 4.10 3.00 2.30 3.90 4.00

Belle Plaine 2.20 2.10 1.80 1.50 2.20 2.30

Colonsay 1.30 1.40 1.00 0.80 1.10 1.10

PotashCorp Lanigan 1.91 2.14 0.70 2.37 3.04 1.65

Rocanville 2.65 2.83 0.95 2.18 2.34 1.57

Allan 1.74 1.09 0.69 1.10 1.02 1.17

Cory 0.77 0.42 0.42 0.55 0.78 1.29

Patience Lake 0.26 0.28 0.10 0.37 0.39 0.29 Production Totals 16.46 16.12 9.56 12.95 16.51 14.77

* 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.


Karnalyte is continuing to work on its Wynyard project, where the company is attempting to be the first in Saskatchewan to produce potash from the potassium-bearing mineral carnallite (KMgCl3·6H2O), rather than sylvite (KCl). Karnalyte is proposing an initial stage 625 000 tpa KCl mine at a projected cost of $593 M. The operation is designed to be expandable up to 2.125 M tpa KCl within five to six years at a cost of approximately $2 B. In January, Karnalyte and Gujarat State Fertilizers & Chemicals Ltd. (GSFC) announced a strategic investment agreement through which GSFC contributed $45 M to acquire a 19.98% stake in Karnalyte in exchange for a committed off-take agreement of 350 000 tpa KCl, increasing to 600 000 tpa KCl, as productive capabilities of the proposed project increase. GSFC is a publicly traded India-based agri-business focussed on the production and sale of fertilizer.

First Potash Ventures, a partnership between Encanto and Muskowekwan Resources Ltd. is proposing to build and operate a solution mine on the Muskowekwan First Nation located approximately 100 km northeast of Regina. In March, it was announced that the project had been accepted under the First Nations Commercial and Industrial Development Act, which enables the Federal Government to enact regulations similar to the provincial regime governing the potash industry. Environmental impact studies are well underway and Proven and Probable Reserves combined with Measured and Indicated Resources for the project area suggest it could support a 2.8 M tpa KCl solution mine for at least 70 years.

Brazilian mining major Vale held open house events in July to inform the public of ongoing environmental studies and to provide a general update on the Kronau project. Vale deferred the Kronau project in 2012, citing challenging economic times, but the company stated it remains committed to the fertilizer business, and is examining funding options for the project including joint ventures or an outright sale.

In January, North Atlantic Potash Inc. (NAP), the Canadian subsidiary of Russia’s fertilizer producer JSC Acron, completed an 11-hole drill program and acquired seismic data for its Foam Lake project area, where the company is investigating the feasibility of an underground mine in the Esterhazy Member. NAP also has a joint venture with Rio Tinto, which covers nine potash exploration permits spanning an area from Last Mountain Lake southeast to Broadview. Rio Tinto is the operator on the joint venture project, and has drilled numerous holes across the permits as the companies evaluate the solution mining potential of the potash deposits in the area.

Several other privately owned or foreign-owned companies such as M & J Potash, Yancoal Canada Resources Co. Ltd., Canada Potash Corp., and Canada Royal Potash Inc. are at various stages of exploring and evaluating potash projects.

SILICA SAND

In January 2012, Preferred Sands Unlimited (Preferred Sands) purchased Winn Bay Sand Limited (Winn Bay) which has a quartz frac sand mine in the Ordovician Winnipeg Formation at Hanson Lake. The 110 employees were retained. Frac sand is used by the petroleum industry for enhanced oil and gas recovery. Preferred Sands is the largest frac sand producer in Canada and one of the three largest in the U.S.A. Winn Bay now has a large land package and had been preparing a new location northwest of their present operation, and closer to the highway for future development. Preferred Sands also plans to increase the plant capacity at the operation this year.

OTHER INDUSTRIAL MINERALS

There has been no significant exploration reported for the other industrial mineral deposit types in the province in this past year; however, there is significant production. There are six producing salt operations, four as by-product from potash production and two as primary producers. The Canadian Salt Co. Ltd. produces by-product salt at Belle Plaine. Compass Minerals International, Inc. (Compass) produces by-product salt at Esterhazy and primary salt at their subsidiary Sifto Canada Inc. mine at Unity. ERCO Worldwide produces primary salt at their Saskatoon operation. NSC Minerals produces by-product salt at Rocanville and Vanscoy.

Saskatchewan Minerals Inc.’s long-standing operation at Chaplin remains the only primary sodium sulphate producer in the province. Big Quill Resources Inc., a subsidiary of Compass, produces value-added potassium sulphate at their plant near Wynyard.

Canadian Clay Products, Inc. excavates and processes bentonite at their operation near Wilcox. Following some production in 2012, Whitemud Resources Inc. currently has their value-added metakaolin plant at Gollier Creek on care and maintenance. Colored Shale Products Inc. mines clinker on a campaign basis from their quarries near Willow Bunch for use as landscaping material. Premier Tech Horticulture produces horticultural peat from bogs in the Carrot River region and processes it at their plant near the town. Wapa Bay Resources produces leonardite on a campaign basis from a small quarry near Wapawekka Lake. Leonardite is used as an organic soil additive and fertilizer.


10. REFERENCES Saskatchewan Geological Survey (2003): Geology, Mineral and Petroleum Resources of Saskatchewan; Sask.

Industry Resources, Misc. Rep. 2003-7, 173p.

Slimmon, W.L. (2013): Geological Atlas of Saskatchewan; Sask. Ministry of Energy and Resources, Saskatchewan Geological Survey, Misc. Rep. 2013-7, CD-ROM, version 16.

LALOCHE

BUFFALONARROWS

PATUANAK

PINEHOUSELAKE

LARONGE

21

MontrealLake

AmiskLake

CumberlandLake

1817

16156 5 4

Scott Lake

Tazin Lake

Lake AthabascaFond du Lac

BlackLake

Fond du Lac RiverHatchet Lake

WollastonLake

PasfieldLake

WaterburyLake

Reindeer

Lake

Cree

Cre

eR

iver

Turnor Lake

DoreLake

Lac La

Ronge

DeschambaultLake

AmiskLake

MontrealLake Cumberland

Lake

Saskatchewan River

Beaver River

Battle River

North

Sask

atche

wan R

iver

Sout

h Sa

skat

chew

an R

iver Quill Lakes

LastMountainLake

Lake Diefenbaker

Old Wives Lake

Qu'Appelle River

Frenchman River

Souris

River

C H U R C H I L L

R I V E R

Lake

4

21

21

21

13

13

2

7 5

5

16

9

1

1

10

11

55

106

102

914

106

135

905

16

955

155

918

155165

165

165

55

2

2

3

3

11

6

4

1

9

3

2

39

13

62

4

SWIFT CURRENT MOOSE

JAWREGINA

YORKTON

SASKATOON

PRINCE ALBERT

MELFORTNORTHBATTLEFORD

WEYBURN

ESTEVAN

LLOYDMINSTER

FLIN FLON

STONYRAPIDS

60°110°

49°110°

102°

1

DODGE

TANTATO

BEAVERLODGE

NOLAN

ZEMLAK

TALTSON

MUDJATIK

ENNADAI

CARSWELL STRUCTURE

ATHABASCA BASIN

PETER LA

KE

WOLL

ASTON

MUDJATIK

TALT

SON

ROTTENSTO

NE

LA R

ONGE KISSEYNEW

FLIN

FLONGLE

NNIE

WATHAMAN

BATHOLIT

H

TRAIN

MINERAL RESOURCE MAP OF SASKATCHEWAN Exploration and Development

Highlights 2013

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 faults

1 RoadsCitiesTowns

0 25 50

0 25 50 Miles

75 Kilometres25

25

SCALE

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URANIUMOperating Mines/Mills1. McClean Lake mine (North and South deposits; Sue A, B, C, and E deposits; AREVA Resources Canada Inc., 70%; Denison Mines Corp., 22.5%; OURD [Canada] Co. Ltd., 7.5%)2. Eagle Point mine (Cameco Corp.); ore processed at Rabbit Lake mill 3. McArthur River mine (P2N Zone deposit; Cameco Corp., 69.805%; AREVA Resources Canada Inc., 30.195%); ore processed at Key Lake mill4. Key Lake mill

Locations Referenced in Text5. Cigar Lake mine6. Fraser Lakes Zone B7. J-zone and Roughrider deposit8. Patterson Lake South9. Phoenix deposits10. Shea Creek (Anne, Kianna, Colette, and 58B) GOLDOperating Mines1. Seabee operation (includes L62 zone; Claude Resources Inc.) 2. Santoy 8 mine (Claude Resources Inc.)3. Roy Lloyd mine - Bingo deposit (Golden Band Resources Inc.)4. Komis mine (Golden Band Resources Inc.)

Locations Referenced in Text2. Santoy Gap5. Jolu/Decade6. Amisk Gold7. Golden Heart8. Greywacke/Greywacke North9. North Lake10. Preview SW11. Jojay 12. Munro Lake13. Brownell Lake showings14. Goldfields (Box and Athona)

COPPER-ZINC1. McIlvenna Bay2. Brabant Lake3. Janice Lake4. Borys Lake COPPER-NICKEL1. Dinty Lake

RARE EARTH OCCURRENCE1. Hoidas Lake2. Douglas River3. Fraser Lakes Zone B

KIMBERLITE OCCURRENCE1. Fort à la Corne kimberlite cluster2. Star-Orion South project3. Pikoo project

3

POTASH AND SALTOperating Mines1. Vanscoy potash mine (Agrium Inc.)2. Cory Division potash mine (Potash Corp.) 3. Patience Lake Division potash solution mine (Potash Corp.)4. Allan Division potash mine (Potash Corp.)5. Colonsay potash mine (The Mosaic Company)6. Lanigan Division potash mine (Potash Corp.)7. Esterhazy K-1 and K-2 potash mines (The Mosaic Company)8. Rocanville Division potash mine (Potash Corp.)9. Belle Plaine potash solution mine (The Mosaic Company) 10. Unity solution salt mine and plant (Sifto Canada Inc.)11. Saskatoon chloride based chemical plant (ERCO Worldwide)

Locations Referenced in Text12. Jansen project13. Kronau project14. Legacy project15. Milestone project16. Muskowekwan project

SODIUM SULPHATE AND POTASSIUM SULPHATEOperating Plants1. Chaplin Lake sodium sulphate plant (Saskatchewan Minerals Inc.)2. Big Quill Lake potassium sulphate plant (Big Quill Resources Inc.)

CLAY RESOURCESOperating Quarries1. Saskatoon clay quarry and plant (Cindercrete Products Ltd.)2. Ravenscrag clay quarry (I-XL Industries Ltd.)3. Wilcox bentonite quarry (Canadian Clay Products Inc.)

Location Referenced in Text4. Gollier Creek metakaolin plant (Whitemud Resources Inc.)

COAL Operating Mines1. Poplar River mine (Prairie Mines)2. Boundary Dam (Shand, Costello, and Utility) mine (Prairie Mines)3. Bienfait mine (Prairie Mines)

SILICA SANDOperating Mine1. Hanson Lake silica sand quarry (Preferred Sands Unlimited)

KEY TO NUMBERED MINES AND DEPOSITS

17. Melville project18. Wynyard project19. Boulder project20. Young project21. Foam Lake project

11. Cluff Lake mine (closed)12. Maurice Bay deposit13. Mann and Hughes lakes

%

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102

11

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6

9

46

3

11

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MAPLE CREEK

ASSINIBOIA

MELVILLE

HUDSON BAY

HUMBOLDT

SANDYBAYPINEHOUSE

LAKE

PATUANAKBUFFALONARROWS

LALOCHE

SOUTHEND

LARONGE

URANIUMCITY

KINDERSLEY

Saskatchewan Exploration and Development Highlights 2013 · 2014. 2. 5. · Saskatchewan...

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