Canada Fluorspar (CVE:CFI)(OTC:CNDFF) reported Wednesday the seventh set of results from the company's phase three diamond drilling program on its Grebes Nest property in Newfoundland, saying the results give "reasonable" confidence that the structure hosting the mineralization will be found on surface, and along strike.
The Grebes Nest vein is part of the company's St. Lawrence fluorspar project in Newfoundland, and lies about 4 km from the former Tarefare mine and less than 6 km from the former Blue Beach North mine. Probable Reserves of the Blue Beach North and Tarefare veins total approximately 5.4 million tonnes at an average grade of 39.8% fluorspar, according to the Canadian company's statement.
The latest results hail from two surface trenches and one drill hole on the western end of the Grebes Nest grid area. Highlights include one trench, which exposed a vein with an average assay of 84.39% fluorspar over 5.52 metres. This trench, which was opened for a distance of 42 metres and exposed a 2.5 metre width of bedrock, is located along the same plane as some previously reported drill holes.
"The exposure and high-grade of the Grebes Nest Vein on surface, as evidenced in the two trenches reported and an open cut that was mined 20 years ago and located just 250-350 metres to the west, gives us reasonable confidence that the structure hosting the mineralization will be identified on surface along strike," said president and CEO Lindsay Gorrill, in a statement released Wednesday.
According to the St. Johns-based company, ground geophysical survey results indicate that the mineralized structure has the potential to extend for more than 4,000 metres along strike.
The company has 41 known mineralized veins on its fluorspar assets in St. Lawrence, two of which - Blue Beach and Tarefare - have been drilled and vended into a partnership with French chemical giant Arkema, while drill rigs started working at its own Director Vein in January, later moving on to Grebes Nest. The Canadian company is looking to unlock the potential value of the Director and Grebes Nest veins this year through drilling.
Canada Fluorspar said that the preliminary interpretation of the drill results at Grebes Nest indicates that the western part of the target area maintains a relatively uniform width along strike, and within a vertical depth of 175 to 200 metres below surface.
So far, the specialty mineral resource company has completed six phase 1 drill holes together with 26 additional drill holes in phase 2 and 35 drill holes in phase 3 as part of the 2013 exploration program. Assay results for remaining completed drill holes in phase 2 and phase 3 are still pending, the company said.
Jennings Capital analyst Ken Chernin retained his speculative buy recommendation on the Canadian junior and 12-month target price of C$0.60 per share, pointing out that the phase 3 drill program has identified a strike length of 1.3 km to date on Grebes Nest, of the potential for more than 4,000.
Historic mining operations on the St. Lawrence property produced more than 4.2 million tonnes of fluorspar during a 44 year continuous production from 1942 to 1977. Production resumed in 1986 and continued until 1991, when St. Lawrence Fluorspar reopened the nearby Blue Beach North Mine and processed 440,000 tonnes of ore from small open pits, one of which was located in a surface pillar at the Director Mine near the main shaft.
Fluorspar is used to reduce the amount of energy needed to produce aluminum, and is also used for photovoltaic solar panels, but the biggest application is fluoro chemicals - which are used in products ranging from air conditioners and refrigerants to lithium batteries and the material Gore-Tex.
Consumption of the mineral is expected to reach 7 million tonnes by 2015, but there is currently no domestic supply in Canada or the U.S. as these two countries rely on Mexico, the second biggest producer after China.
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