Seeking another Sullivan

1 of 2A large exploration pit at the Iron Range Property in Creston, B.C. — Photo courtesy Eagle Plains Resources

2 of 2Drilling at the Iron Range Property near Creston, B.C. — Photo courtesy Eagle Plains Resources

The historic Sullivan Mine in Kimberley, B.C., one of the largest lead and zinc producers in the world, and was a major contributing factor in putting the East Kootenay of British Columbia on the global map. In its lifetime, the mine produced ore containing more than 17 million tons of zinc and lead and more than 285 million ounces of silver, which were together worth more than $50 billion by today's figures. After 92 years of active production, the Sullivan Mine was closed in 2001. Today, the region boasts numerous mining properties and various projects that are attracting the eyes of major international companies. It's the SEDEX deposits, like the Sullivan Mine, that are currently being actively sought out and explored.

Eagle Plains Resources is a major player in the East Kootenay. This junior exploration company has been aggressively acquiring and developing early-stage mineral exploration projects since 1992. Of the more than 35 projects on the go in British Columbia, Saskatchewan, Yukon and the Northwest Territories combined, 15 are located right in the heart of the East Kootenay. To develop these projects, Eagle Plains has assembled an expert in-house technical team of geologists, technicians and geographic information system specialists. Seasonally, it also contracts geologists specializing in specific types of mineralization to assist with its field programs.

Mike Labach, investor relations for Eagle Plains, said with 10 of their 15 active projects in the East Kootenay, what they are really searching for is another Sullivan.

"We are targeting SEDEX-style mineralization which is what the Sullivan deposit was," said Labach.

SEDEX (Sedimentary Exhalitive) deposits are one of Eagle Plains' specialties, as they can be very large and rich in base metals.

These deposits have been known to occur in southeastern British Columbia in the Aldridge Basin, an ancient sea, and in the Selwyn Basin of the Northwest Territories where the company holds extensive land positions. Eagle Plains is currently targeting this type of deposit at the Iron Range Property, the Findlay Property and at eight other properties in the East Kootenay.

According to Labach, the Iron Range property, which is located near Creston, B.C., has shown a lot of the same characteristics as Sullivan.

"We made a significant discovery of base metals in 2010 at the Iron Range property, which sparked a lot of interest in our other projects located in the East Kootenay that target this type of mineralization," said Labach. "Another phase of drilling was completed at the Iron Range this spring. Geologists will interpret the results from this, previous drill programs and other efforts including soil sampling and geophysics. The interpretation of all this information will result in how we should proceed."

Providence Resources Corp. originally optioned the Iron Range project from Eagle Plains Resources in May 2010. By March 2012, Providence had exercised its option and earned a 60 per cent undivided right, title and interest in the project. Providence earned its interest by making aggregate cash payments of $500,000, issuing a total of 1,000,000 common shares and completing exploration expenditures of $3,000,000. A joint-venture partnership between Providence Resources Corp. and Eagle Plains Resources has been formed for the exploration and development of the Iron Range project.

Labach said this is Eagle Plains' model of conducting business, inviting other companies to option their properties, which can lead to joint ventures being formed once the option terms have been fulfilled.

"Our business model is be risk-averse. Rather than invest our own money into exploring these properties, we prefer to spread out that risk and share it with a partner," Labach said. " A typical option agreement consists of three parts; commitment to explore between $3-5 million over a specified amount of time, contribute approximately a half million dollars in cash payments and one million in shares. These terms vary from project to project."

Labach adds that because of the significant discovery at the Iron Range in 2010, another seven option deals came about for Eagle Plains on its East Kootenay projects that target Sullivan-style SEDEX deposits.

According to Eagle Plains, the Findlay Property is centered 40 kilometres northwest of Kimberley, B.C., and contains a stratigraphic interval demonstrated to host significant base-metal mineralization. It is the nearest northern exposure of prospective lower/middle Aldridge Formation SEDEX stratigraphy which hosts the world class Sullivan deposit 40 kilometres to the south. Structurally, this area may be an extension of the North Star-Sullivan corridor.

Labach said the Findlay Property is optioned to Mineral Metals Group (MMG), based out of Australia, which is the third largest zinc producer in the world and operates a portfolio of world-class base metal mining operations, development projects and exploration projects.

On August 7, 2012, MMG notified Eagle Plains that drilling has commenced at the Findlay Property. MMG holds the exclusive right to earn up to a 75 per cent interest in the 33,500-hectare property. 2012 exploration work will consist of a 1,800-metre, four-hole program to be funded and operated by MMG. Work is expected to take two to three weeks to complete.

The Findlay property and the Iron Range property are just two of the many projects that Eagle Plains is currently experiencing success with in the East Kootenay. Time will only tell as to whether either property will fill the shoes of the great Sullivan Mine.

"The East Kootenay is Eagle Plains' backyard and it's a rather prolific mining district," said Labach. "There's synergy with that fact and our location. The Sullivan Mine was an incredible deposit that really helped form the East Kootenay as it is today and we are working to find a similar deposit."