More mineral riches from the smoky waters of Minnesota – by John Chadwick (International Mining – November 2012)

International Mining is a global technical magazine written for miners by miners. John Chadwick is the publisher. 

Ore riches that built America have much more to offer. Minnesota’s Iron Ranges to the west of Lake Superior – Vermilion, Mesabi and Cuyuna from the northeast of Duluth down to the south-southwest – have been the most important ore deposits in US history, and continue to be so, providing well over 90% of the iron ore the country needs. Just a few of the great historical landmarks include the establishment, in 1901, of the world’s first multi-billion dollar corporation, US Steel.

Before that, in May 1890, Edmund Longyear (founder of one of the companies that was to become, much later, Boart Longyear) brought the diamond drill to the Iron Ranges. This exploration tool was to be a key to unlocking the riches of the region.

There was also the Minnesota Mining and Manufacturing Co (3M) founded in 1902 at the Lake Superior town of Two Harbors. However its only connection with the Iron Ranges was location. The deposit was set up to mine for grinding-wheel abrasives proved to be of little value.

William Boeing made profits from the Mesabi Range and just a few other great names with Iron Ranges associations include Henry Bessemer, Frederick Weyerhaeuser, Andrew Carnegie, John D. Rockefeller, Kelsey D. Chase, and J.P. Morgan.

More great mines will rise from the ‘smoky water’ – the Native American meaning of Minnesota. The Duluth Complex copper/nickel/PGM deposits will add another century-plus of production. Of the known US mineral resources, Minnesota accounts for 99% of the nickel, 90% of the iron, 88% of the cobalt, 51% of the platinum and 48% of the palladium, 40% of the manganese and 34% of the copper.

America’s third largest mining state may be poised to take the lead. In work pioneered by Duluth Metals, its Senior Vice President, Exploration, Dean M. Peterson and his innovative team, truly magnificent orebodies are being revealed in an area that has already played such an important role in the US mining industry.

Meanwhile, the iron ore is still going strong. The value of iron ore projects on the Mesabi Range (130 years of iron mining in the state) amount to some $4 billion. There are new open-pit mines being developed by ArcelorMittal and Essar Resources. The latter is initially aiming at 4.1 Mt/y of pellets by Q3 2013, and 7 Mt/y by January 2014. There is also the Keewatin Taconite upgrade and US Steel’s Minntac recently completed a six-year, $50-million upgrade of its concentrator facility.

The facility, containing 16 concentrator lines, has processed more than 2,000 Mt of crude ore since it was built 35 years ago. There are also the United Taconite and Northshore upgrades and the Mesabi Nugget iron nugget plant. In power there is the Excelsior Energy power plant proposal and the Minnesota Power wind generators.

There are other companies involved in the Duluth Complex, such as Teck’s Mesaba deposit and Polymet with its NorthMet deposit, but Duluth is the only one with a real exploration team on the ground, undertaking extensive work. Peterson considers that the team has advanced the understanding of the Duluth Complex well beyond the norm, and has gained insight on the magmatic system and copper-nickel-PGM deposits that rivals any company in the world.

This has resulted in a joint venture with Antofagasta to form Twin Metals Minnesota (Duluth 60%, Antofagasta 40%) and the start of a very detailed prefeasibility study for an underground copper, nickel, platinum and palladium mine, with Bechtel Mining & Metals as the lead consultant. The study is based on a vertically integrated mining complex, with a large-scale phased underground mine plan. It is evaluating different scenarios for both on- and off-site surface facility alternatives, including options in milling capacity up to some 80,000 t/d in throughput. The planned hydrometallurgical plant will likely have the minimum capability of producing copper cathode, nickel hydroxide and a PGM concentrate.

Contained metals in TMM’s June 2012 NI 43-101 Indicated resource estimate total 8,000 Mlb of copper (another 13,500 Mlb Inferred), 2,500 Mlb of nickel (4,600 Mlb Inferred) and 12.1 Moz (15.8 Moz Inferred) of TPM (total precious metals – platinum, palladium and gold). When AMEC completed that resource estimate it confirmed global Indicated 726 Mt and Inferred 1,370 Mt on three deposits (Birch Lake, Maturi and Spruce Road), which are approximately only 11% of the TMM property block. Indicated resources are an impressive 726 Mt grading 0.55% Cu, 0.17% Ni and 0.57 ppm TPM for Maturi, plus additional Inferred resources of 651 Mt at 0.53% Cu, 0.18% Ni, and 0.521 ppm TPM.

Add to this Inferred resources of 480 Mt at 0.43% Cu and 0.16% Ni for Spruce Road and 242 Mt at 0.52% Cu, 0.16% Ni and 0.83 ppm TPM for Birch Lake and you may think you are getting a little idea of the potential of the Duluth Complex, but are you really? Duluth’s ground outside of TMM, held through Duluth Exploration earn-in rights on some 16,185 ha of Duluth mineral interests is considerably more than the joint venture’s 10,120 ha.

On September 21, the day I visited the site, Duluth received four Bureau of Land Management (BLM) Prospecting Permits covering strategic targets for their Minnesota exploration program. Contractor IDEA Drilling is mobilising drill rigs on three different target areas, with the first drill rig targeting the significant gravity anomaly within the highly prospective Nickel Lake Macrodike. Vern Baker, President of Duluth explained that the drilling will “test the property for a magma conduit-hosted type target. We will commence drilling on the other two targets areas in sequence.”

The primary exploration focus on the Nor’East and East Shore Properties, on the basis of a geological model developed by Peterson, is for copper-nickel-PGM mineralisation, similar to other known deposits in the Duluth Complex, (e.g., the Maturi). The Nor’East property is situated at the junction of the Nickel Lake Macrodike and the South Kawishiwi Intrusion and is a prime target area for Duluth. Geological modelling indicates that the property has the potential to host “Voisey’s Bay”-type Ni-Cu-PGM massive sulphide mineralisation.

Duluth’s fundamental understanding of the mineralisation of the complex is a result, Peterson explains, of detailed geological mapping and comprehensive compilation of historic drill hole assay data (from extensive work done by major companies in the past; Inco for example). The extensive drilling within the region amounts to more than 305,000 m. He has been involved in fundamental research in similar magmatic systems in Antarctica. Summing up, he notes the “integration of these data into exploration models, and most importantly, questioning geologic thought and ore deposit models.

“The Duluth Metals approach to exploration attempts to understand ore deposits as final expressions of multi-scale earth systems that focus mass and transfer energy to ultimately form ore deposits. This approach to mineral exploration leads to systematic, scale-dependent targeting models and allows for the recognition of the largest-scale footprints of ore-forming systems.”

Eight exploration projects provide a pipeline of new opportunities for potential future growth outside of the TMM joint venture. Duluth Exploration has a $7 million work budget for 2012-13. It has already completed a 7,053 line km airborne VTEM-Magnetic survey as well as definition of high priority exploration targets. It has also completed a 2011 summer geochemistry and mapping program.

Both the Twin Metals and Duluth projects have access to outstanding infrastructure in the form of skilled people, power, rail, road and ports. That infrastructure is currently there for the iron ore industry and Duluth will be able to tap directly into it. Today the iron mines directly contribute $1.8 billion to the Minnesota economy every year in purchases, wages and benefits, taxes and royalties. Subsequent secondary business impact resulting from iron mining is responsible for an additional more than $1.6 billion – making the total economic impact $3.4 billion on the state and region’s economy.

Currently the mines directly employ 4,200 men and women and support an additional 13,000 employed by vendors.