pipestone lake project
Our 50% joint-venture partner in the Pipestone Deposit, Cross Lake Mineral Explorations Inc., is a wholly-owned private corporation of the Cross Lake First Nation. Gossan remains engaged in continuing discussions regarding the development or sale of its mineral rights at the 3584-hectare Pipestone Property, in an on-going effort to move this Project forward.
In October of 2009, the Company retained Hayles Geoscience Surveys Ltd. to conduct a survey of all of the 144 historic drill hole site locations and the grid which was originally cut at the Pipestone Lake Property in 1994. The purpose of the survey was to provide the joint venture with an accurate map on which to base a future NI 43-101 resource calculation. The project was completed in the Fall of 2010. Hayles Geoscience used survey quality GPS instrumentation to record the location of 105 holes. A total of 37 holes were inaccessible as they were drilled from ice over the lake or were flooded over by currently higher water levels. Hayles Geoscience reported that the baseline remains in reasonable condition but that some sections of baseline and the cross gridlines require re-cutting. The survey has resulted in a complete digital data base geo-referencing the grid, the drill hole locations, and the ground magnetic survey onto a topographical base.
A field program to re-cut and clear some sections of the baseline and gridlines was conducted in August of 2011 utilizing the Manitoba Resource Rangers and members of the Cross Lake First Nation.
Gossan continues to engage in further consultation with its partner, the Cross Lake First Nation, in regard to the development of the Pipestone Vanadium Project. This is a very timely moment in the commodity cycle of vanadium with new electrical storage applications potentially requiring a number of new vanadium mines. In February 2011, Gossan management met in Cross Lake with the Chief and Band Council of the Cross Lake First Nation and presented an all day orientation session about exploration & mining in general and how it relates to the Pipestone Lake Deposit specifically. Further discussions have taken place to investigate a means to resolving some of the historical issues which have been a barrier to the development of the project.
Gossan has intensified its engagement activities with the Cross Lake First Nation and the local community. Gossan held information meetings at Cross Lake in October and November of 2011. Further discussions were held in Winnipeg later in November with representatives of the Cross Lake Band Council and the Chiefs of the Pimicikamak Four Councils in regard to advancing the development of the Pipestone Vanadium Project. In March of 2012, Gossan participated in Career Day in Cross Lake and conducted further engagement.
The Pipestone Lake property is located in north central Manitoba, approximately 500 km north of Winnipeg and 150 km south of Thompson. At Pipestone Lake’s Areas 1 and 2, drilling to date has outlined a non-compliant NI 43-101 indicated resource of 156.8 million tonnes grading 5.56% TiO2, 28.11% Fe2O3 and 0.22% vanadium pentoxide and an inferred resource of 150 million tonnes of similar graded material (Reedman & Associates 1998). Currently, the Company is considering the commission of a NI 43-101 resouce estimate for the Deposit.
A preliminary mine plan has been prepared for the Pipestone by J. H. Reedman and Associates which classifies various tonnages according to titanium dioxide cut-off grades, provides proposed open pits, and estimates stripping ratios; however more detailed drilling is required to support a 30,000 tons per day operation. Additional metallurgical and other studies are required in order to assess the economic feasibility of the deposit. The operation of an open-pit mine of this magnitude would be expected to require 400-500 workers on a long-term basis.
Vanadium is mostly used in the steel industry as a strengthener. Various nations are mandating stronger rebar in construction, likely increasing vanadium demand. Vanadium may play an important new role in electrical storage technology which could substantially increase demand for this metal and outstrip supply. In lithium-based auto batteries, the use of a vanadium phosphate cathode material can materially increase energy storage and lead to a 20%+ increase in an electric car’s travelling range. Another potential large-scale use of vanadium is in grid–scale electrical storage using re-dox batteries. Vanadium re-dox batteries could substantially lower utilities’ capital costs as they allow for electrical power to be generated and transmitted in off-peak hours and then stored for local use the following day during peak power requirements.
Paints, paper and plastics are the main uses of titanium dioxide.