Gary Delaney and the Saskatchewan Geological Survey Staff - Saskatchewan's Mineral Sector Going into 2017: Status and Outlook

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In 2016 Saskatchewan was the world’s largest potash producer, and the second largest producer of primary uranium.  There was also production of coal, gold, base metals, sodium and potassium sulphate and clay products.  In 2016 the value of mineral sales, mostly from potash and uranium, was approximately $6.4 billion (B), down from $8.2B in 2015 and from $7.3B in 2014.

Saskatchewan’s potash miners produced 17.9 million (M) tonnes potassium chloride (KCl) in 2016 with sales valued at about $4.2B.  Demand for potash, particularly over-seas, drove sales throughout 2016 and is anticipated to remain strong throughout 2017.  On the development front, K+S Potash Canada GP recently held a grand opening for the Bethune solution mine (formerly known as Legacy potash project), which is Saskatchewan’s newest potash mine in over 45 years.  A number of other potash projects, ranging from early exploration to advanced development, continued to make progress over the past year, including BHP’s Jansen project, which may see initial production by 2023.

Saskatchewan produced 36.4M pounds (lb) of triuranium oxtoxide (U3O8) in 2016, with a sales value of $1.9B.  Production for 2017, which will come from the McArthur River/Key Lake and Cigar Lake/McClean Lake operations, is forecasted to be about 36Mlb U3O8. Silver Standard Resource Inc. reported that production at the Seabee Operation, Saskatchewan’s only active gold mine, achieved a record 77,660 ounces (oz) gold (Au) in 2016, the third consecutive year the operation has sent new records for production.  In total, the Seabee mining operation has produced over 1.2Moz Au since commencement of mining in 1991.

A survey conducted by the Ministry of the Economy estimated that $177M will be spent on mineral exploration in Saskatchewan in 2017.  This compares to actual expenditures of $199M in 2016, $211M in 2015, $216M in 2014, and $236M in 2013.  An estimate by Natural Resources Canada indicates that Saskatchewan accounted for 14.9 per cent of Canadian exploration expenditures in 2016, and will likely account for around ten per cent in 2017.  The bulk of the spending is anticipated to be for uranium and potash, although there is also renewed interest in diamond and base metal exploration.  Uranium exploration spending is forecasted to remain robust in 2017, with projected expenditures of about $132M, mainly on projects in the Key Lake to McArthur River corridor in the east part of the Athabasca Basin region, and near Patterson Lake in and adjacent to the southwest part of the basin.

There is active diamond exploration in two areas in Saskatchewan.  In the Fort à la Corne forest, in central Saskatchewan, Shore Gold Inc. continues to advance the FALC-JV Star-Orion South diamond project.  About 100 kilometres west of Flin Flon, at the Pikoo project, operator North Arrow Minerals Inc. has identified ten discrete kimberlite occurrences, five of which have been tested and proven to be diamondiferous.

As of April 30, 2017, there were a total of 8.74M hectares (ha) under disposition including 5.82Mha for minerals, 2.83Mha for potash, and 0.09Mha for coal.  Over the past few years uranium discoveries in the Patterson Lake South area, north of La Loche, and diamond-bearing kimberlite discoveries, north of Deschambault Lake, have resulted in industry acquiring significant land positions in those two areas.  The increased staking activity has been facilitated by the Mineral Administration Registry Saskatchewan System (MARS), Saskatchewan’s new on-line mineral disposition acquisition system.

Saskatchewan Mining Association - Mining in Transformational Times

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Saskatchewan’s geological architecture hosts world-class mining deposits, with the result that SK has long been a world-leading mining jurisdiction.  The province has also strived to offer an environment that attracted investment by providing certainty and timeliness in it’s policies and regulatory framework. Both of these factors contributed to SK being named by the Fraser Institute in 2016  as the #1 jurisdiction in the world for attracting mineral investment, an improvement on its #2 rankings in 2015 and 2014. 

When commodity prices were cresting in 2009, Saskatchewan was Canada’s top mineral producing jurisdiction (by value of production), overtaking ON, AB and BC for a period,  However, the sustained low commodity prices for both potash and uranium over the past few years has seen SK’s position slide.

In spite of our high-ranking position, right now is a time of significant uncertainty for the SK and Canadian mining sectors, as having a bountiful geological framework is no longer a guarantee of being a world-class mining jurisdiction. Along with operators being faced with sustained low commodity prices there are increasing regulatory requirements from primarily the federal government related to climate change, environmental assessments, relations with indigenous communities, SARA, the role of social media and the question of “public trust”. These factors are combining to drive transformational change in the Saskatchewan mining industry to help ensure SK mine operations remain globally competitive in the future, offering individuals and communities a path to sustainable prosperity.


Silver Standard's Seabee Gold Operation - The Santoy Gap

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The Santoy Gap deposit was officially discovered in August, 2011 with the intersection of multiple visible-gold bearing quartz veins in drillhole JOY-11-549. This intercept returned grades of 6.73 g/t over 6.24 m (drilled width) and was quickly followed-up by additional holes such as JOY-11-556, which intersected a zone grading 19.10 g/t over 20.48 m from a downhole depth of 323 m showing the size potential and significance of the discovery.

The Gap intercept in JOY-11-549 contains the C-Vein (hangingwall) and A-Vein (footwall) although the grade in the hole comes mainly from the former showing the strong nugget effect. The B-Vein is only locally well-developed within the core of the deposit Calc-silicate alteration zones developed along vein margins and internal to the mafic volcanic host-rock are made up of diopside-albite-potassium feldspar-titanite assemblages associated with the highest grade portions of the deposit. Gold mineralization is mainly in the form of millimetre-scale visible gold flecks hosted within quartz veins and calc-silicate bands. Gold mineralization can be interstitial or adjacent to pyrite, pyrhottite and chalcopyrite but is generally found in weak association to sulphide.


NexGen Energy Ltd - Arrow: The Basin's Largest Undeveloped Deposit

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The Arrow Deposit is a basement-hosted uranium discovery made by NexGen Energy Ltd. in February 2014 at its Rook I property in the southwest Athabasca Basin, northern Saskatchewan.

On March 3, 2016 NexGen announced the results of its maiden independent Mineral Resource estimate for the Arrow Deposit. Based on holes drilled and assayed to the end of October 2015 (AR-14-01 to AR-15-62), the estimate is an Inferred Mineral Resource of 201.9 M lbs of U3O8 contained in 3.48 M tonnes of mineralization grading 2.63% U3O8. The Arrow Deposit mineralization is associated with numerous sub-vertical graphitic shears across a strike length of 645 m, width of 235 m, and vertical extent of 920 m. Drilling from early-January to mid-November 2016 has greatly expanded mineralization to a strike length of 895 m, and a width of 300 m, which remains open in all directions.

Highlights from 2016 drilling include discoveries of significant high grade mineralization within the A1 and A5 shears, and the zone 180 m southwest of the Arrow Deposit. The Patterson corridor has uranium mineralization confirmed by drilling along an approximate 14 km strike length, of which 9 km of that strike length is covered by NexGen’s Rook I property. In May 2016, Geotech flew a ZTEM survey along the Patterson corridor, which has revealed one of the most valuable geophysical datasets in the southwest Athabasca.

Regional exploration 4.7 km along trend and northeast of the Arrow Deposit has yielded another discovery, known as the Harpoon zone. This high grade discovery was unlocked with drill hole HP-16-08, which intersected 17.0 m of continuous mineralization (220.0 to 237.0 m) including 4.5 m of off-scale radioactivity (>10,000 to >61,000 cps) with dense accumulations of massive to semi-massive pitchblend.