alberta exploration highlights and industrial minerals ...2008 alberta exploration highlights and...

2008 Alberta Exploration Highlights and Industrial Minerals Production Update

Energy Resources Conservation Board Alberta Geological Survey

Alberta Geological Survey ♦ 4999 – 98 Avenue, Edmonton, AB T6B 2X3 ♦ www.ags.gov.ab.ca Page 1

2008 Alberta Exploration Update Contributing authors: C. Crocq, D.R. Eccles, D. Edwards, B. Kafle, T. Matveeva, C. Pana, A. Rukhlov. Compiled by A. Beaton. As of December 2008, Alberta had 11.9 million hectares of active mineral permits for industrial and metallic minerals, of which 6.1 million hectares were staked in 2008. Approximately 3.0 million hectares of new staking occurred along the Alberta-Saskatchewan border in response to the accelerating global potash market. In addition, a resurgence of diamond activity in the Buffalo Head Hills field resulted in the discovery of new diamondiferous kimberlites and the emergence of new operators in the area. Uranium activity continued in northern and southern Alberta, there was renewed interest in polymetallic shale in northeast Alberta and lead-zinc in northwest Alberta. Throughout 2008, there was an ongoing assessment of the Clear Hills iron, the Burmis magnetite and in situ coal gasification potential. Coal production saw very little change in 2008 producing 37 million tons. Industrial minerals saw an increase in the price of sulphur and a decrease in salt and brine production. This exploration update is not a complete listing of all exploration and development activities in Alberta. Furthermore, we primarily gathered information regarding projects from corporate websites. Mineral Assessment Files are available for viewing at the Alberta Geological Survey (www.ags.gov.ab.ca).

Uranium Southern Alberta Uranium occurrences have been reported in the Upper Cretaceous and Tertiary formations in southern Alberta since the early 1980s. The increased demand for uranium on the global markets spurred the staking and exploration activity in southern Alberta for the last four years. Southern Alberta is an exploration ground for sandstone-hosted uranium deposits because of its similar geology to the uranium-producing clastic sedimentary basins in Wyoming and Colorado. In 2008, detailed information about the exploration activities became available through newly released mineral assessment reports. These reports are available from Alberta Geological Survey. Whiskey Gap Project: North American Gem Inc. drilled 378 metres in five reverse-circulation holes on the Whiskey Gap property located along the Canada-U.S.A border. They collected samples from two of five reverse-circulation holes and submitted them for analysis. Results are pending. Results from previous drilling and exploration programs on the project are available in assessment report MIN 20070017. Alberta Sun Project: Firestone Ventures Inc. announced that geophysical modelling of the initial dataset from the company's airborne geophysical survey in southwest Alberta, south of Ft. Macleod, was successful in identifying buried stream channels on four priority areas. The objective of the airborne geophysical survey was to identify pre-glacial paleovalleys (buried stream channels) on four priority areas covering favourable stratigraphic, hydrological and structural settings. Fugro Airborne Surveys completed an electromagnetic and magnetic survey in 2007. TerraNotes Ltd. carried out Radarsat Imaging Analysis and interpretation of preliminary data, followed by modelling of the airborne survey dataset. Conductive trends on two of the properties and indications of an oxidation-reduction–front may be indicative of a roll-front–style



uranium deposit formation. Results from the latest exploration program are now available in assessment reports MIN 20070013 and MIN 20070020 from Alberta Geological Survey. Fort McLeod Project: Fission Energy Corp. performed a reconnaissance scintillometer survey and sampling program. They took 13 samples and 105 scintillometer readings from the outcrops. Geophysical log review of microfilms from 151 oil and gas wells was completed from holes north and south of Claresholm, Alberta. Soil, water and rock sampling was conducted over portions of the property. They collected 233 soil, 2 stream sediment, 19 well water and 28 rock samples. In addition, a 1027 radon cup (AlphaTrack) survey was completed over select portions of the property. A total of 14,414 line-kilometres of airborne radiometric and magnetic surveys were flown over portions of the Fort Macleod property. The intent of the survey was to map areas of anomalous radioactivity and to delineate paleochannels. Results of this survey and other exploration activities are in assessment report MIN 20070023 available from Alberta Geological Survey. Northeastern Alberta The Proterozoic Athabasca Basin, which hosts the richest uranium deposits in the world on the Saskatchewan side of the border, is also being explored in the northeast corner of Alberta. The mineralization occurs near the unconformity between the deformed crystalline basement of the Archean and Early Proterozoic and flat-lying fluvial deposits 1.6 billion years old. In Alberta, the Maybelle River Shear Zone hosts disseminated to high-grade uraninite, with one intersection of 21% U3O8 over 5 metres. In 2008, companies reported the following activities in the Alberta portion of the Athabasca basin.

Rea Uranium Project: Red Dragon Resources Corp. has planned a ground electromagnetic survey on some of the high-priority targets, discovered by drilling in 2007. Three of eight holes intersected significant alteration and anomalous concentrations of uranium in sedimentary rocks immediately above the unconformity with the underlying basement pegmatite. The objective of the 2008 program was to map more precisely the intersection of the basement fault structures and the unconformity with the overlying sedimentary rocks.

Figure 1. Rea uranium project – drilling operations (www.reddragonresources.com).



North Shore Project: Fission Energy Corp.’s 2007-2008 exploration program began with a 696 line-km, airborne, high-resolution, magnetic and electromagnetic (VTEM) survey in the northeast part of the property, and concluded with a seven-hole spring drilling program totalling 1260 m. The exploration program successfully identified a significant hydrothermal system associated with a major northeast-trending structure. Strong alteration and radioactivity were intersected along this structure at downhole depths up to 185 m, with widths ranging from less than one metre to 8.5 metres. The basement-hosted altered zones contained highly anomalous concentrations of geochemical pathfinders and included uranium values ranging as high as 70.5 ppm uranium. Four holes (DDH: NS08-002, 003, 004 and 007) encountered geochemically anomalous intervals ranging in width from 0.5 m to 8.5 m with uranium values as high as 70.5 ppm in (NS08-004) associated copper values (to 984 ppm copper in NS08-007), and occasionally anomalous zinc (to 216 ppm zinc in NS08-003). Hole NS08-007 returned copper values of 305 ppm over 3.5 m from 38.0 to 41.5 m. Holes NS08-002, 003 and 004 intersected intervals of significant structural and hydrothermal alteration, and encountered mineralization (>10 ppm uranium) over drillhole widths of 0.5 to several metres within basement rocks. Holes 003 and 004, spaced 1.2 km apart, intersected strong, pervasive alteration and intermittent mineralization between depths of 72 to 99 m. Hole NS08-007, located 850 m northeast of NS08-004 along an inferred structure, contained significant intermittent copper anomalies between 70 and 79 m (up to 984 ppm copper), which corresponds with other anomalous geochemistry and radioactivity observed within NS08-002, 003 and 004. Alberta Project: The Alberta Project is on the west side of the Athabasca Basin, covering the western arm of Lake Athabasca. It is a 20 x 90 km block of 13 permits that stretches from the Saskatchewan border to just north of Fort Chipewyan. CanAlaska Uranium Ltd. has carried out airborne and marine geophysical surveys in previous years. Detailed follow up work was carried out over major prospective areas during winter 2008. Athabasca South Shore Project: Fission Energy Corp. reported that they completed ground electromagnetic surveys over targets identified from airborne geophysical surveys. The Athabasca South Shore property is along the southwestern shore of Lake Athabasca, stretching from Wood Buffalo National Park on the west and to the Alberta-Saskatchewan Border on the east.

Diamonds The Buffalo Head Hills kimberlite field, located about 380 km north of Edmonton, is the third largest known district of significantly diamond-bearing kimberlites in Canada, after Lac De Gras in the Northwest Territories and Fort à la Corne in Saskatchewan. New 2008 kimberlite discoveries bring the total number of known occurrences in the Buffalo Head Hills field to 41, 28 of which are diamondiferous. During 2008, two separate Grizzly Diamonds Ltd. drill programs completed 12 drillholes, totalling 2270 m in the northeastern part of the Buffalo Head Hills kimberlite field. The drilling discovered three unknown kimberlite bodies (BE-01, BE-02 and BE-03), which represented the first kimberlites discovered in Alberta since 2003. Positive, caustic-fusion diamond results from the 2008 winter drill program yielded 54 diamonds greater than 0.075 mm and 26 diamonds greater than 0.106 mm from a 56.6 kg sample from BE-02. This finding prompted a larger campaign by Grizzly Diamonds with a fall 2008 drill program that collected an additional 563 kg



of kimberlite material from BE-02. Grizzly Diamonds currently holds about 1.2 million hectares of diamond properties throughout Alberta. In 2007, Diamondex Resources Ltd. and Shore Gold Inc. purchased the Buffalo Head Hills diamond project from Stornoway Diamond Corporation (formerly Ashton Mining of Canada Inc.), who had previously defined 38 kimberlite bodies between 1997 and 2007 by spending approximately $30 million. During January to March 2008, Diamondex drill tested the K14, K252 and K6 kimberlite bodies with 41 drillholes, totalling 6818 m, to identify different kimberlite phases and micro-diamond content. The grid-based drill program represented a more thorough approach in comparison to the previous operators, and it will be interesting to view the results, particularly because of Shore Gold’s knowledge of ‘prairie-type’ kimberlites, as it is the owner/operator of the Star Diamond Project and Fort à la Corne joint venture in Saskatchewan. Preliminary modelling identified six distinctive, eruptive phases within the K14 kimberlite from which the partners developed a preliminary, three-dimensional model. Internal studies anticipated each eruptive phase will have its own characteristic diamond grade. This modelling has already indicated that an additional east-west row of drillholes is required along the southern edge of the K14 grid to delineate further the kimberlite body.

Figure 2. Core photo of BE-02 kimberlite (Grizzly Diamonds Ltd.). In addition to this Diamondex/Shore Gold drill program, an aggregate sample of 369 tonnes of kimberlite was recovered from surface trenches at K14 and K6. A total of 139 stones were recovered from three separate trench samples from K14, yielding estimated diamond grades between 7.4 and 8.8 carats per hundred tonnes (cpht). A single trench at K6 returned 85 diamonds and an estimated diamond grade of 7.0 cpht. The largest stone recovered was a 1.07-carat stone from K6. The results of the bulk sample program need to be viewed in context of new geological modelling because the trench samples represent the near-surface phase of a complex, multiphased kimberlite. Thus, the K6 and K14 trench results may not be applicable to



the entire kimberlite body. Diamondex/Shore Gold plans further grid drilling for 2009 on the K91, BH225 and K5 kimberlites, with additional holes at the K6 and K14 bodies. To the west of the Buffalo Head Hills kimberlite field, United Uranium Corp. and Star Uranium Corp. completed a six-hole drill program. Although none of the drillholes penetrated kimberlite, till and shale samples yielded high numbers of kimberlitic-indicator minerals (>100 grains of pyrope, olivine and chromite). In addition, caustic-fusion analyses of a basal till unit resulted in the recovery of one diamond within the 0.15-0.212 sieve. The companies are planning a more extensive geophysical and drilling program.

Potash With the global potash market experiencing rapid growth in the last decade due to the demand for food, fibre and feed, a new mineral play is developing in southeastern Alberta. Several companies, including APEX Geoscience Ltd., Cloudbreak Resources Ltd., Dahrouge Geological Consulting, Grizzly Diamonds Ltd., Landis Energy Corporation, Rich Resource Investments Ltd., Shear Minerals Ltd., Solitaire Minerals Corp., Utah Uranium Corp. and several numbered Alberta limited companies have staked metallic and industrial mineral permits on the Alberta-Saskatchewan border south of latitude 55 degrees. The play is developing, in part, because of the results of a mid-1960s drilling program completed by Bayfield Oil and Gas Ltd. and City Savings and Trust Co. that discovered potash-bearing beds within the uppermost portion of the Prairie Evaporite Formation at a depth of approximately 1061 m in well VCO#15. The potash minerals carnallite and possibly sylvite are of the same composition, depositional sequence and depth as the potash at Unity, Saskatchewan, Canada's first potash mine. The depth is likely sufficient for solution mining, which accounts for some of the potash produced in Saskatchewan.

Magnetite In southwestern Alberta, Micrex Development Corp. continues to develop its Burmis Magnetite project, where it is estimated that a quarry could sustain a 20 000 to 40 0000-tonne-per-year operation of finished magnetite for 10 to 12 years. The magnetite would be developed for recoverable, dense-medium separation in the coal industry. Furthermore, it is possible that titanium-bearing minerals, such as ilmenite, leucoxene and rutile, could be liberated as co-products during the processing of the magnetite raw ore. Exploration for magnetite and other metals in the Burmis area dates back to the early 1900s, with three known magnetite deposits historically named the North Burmis (Marasek), Central Burmis (Milvain) and South Burmis (Boutry) deposits. In 1961, an historical study (i.e., non-National Instrument 43-101 compliant) estimated a resource of approximately 2.1 million tons of “possible magnetite ore.” Recent 2000s work confirmed the potential for this historic resource estimate. For example, the Marasek and Milvain deposits, which have magnetic survey anomalies that have strike lengths for approximately 1 to 3.5 km, yielded average grades of 55.2 wt. % Fe2O3 and 5.2 wt. % TiO2 across 4 m, and 58.5 wt. % Fe2O3 and 6.7 wt. % TiO2 across 8.5 m, respectively, based on geochemical samples over selected portions of the anomalies.

Lead-Zinc (Pb-Zn) Ivany Mining Inc. completed a helicopter-borne electromagnetic and magnetic survey using the Fugro's HeliGEOTEM® system over the Pb-Zn target on its 1145 square kilometre Zama Lake property, consisting of 16 permits in northwestern Alberta. Of that property area, Ivany Mining Inc. has optioned 922 square kilometres from Star Uranium Corp. and staked an additional 224 square kilometres.



The Zama Lake Property is approximately 20 km north of Zama City (700 km north of Edmonton). It covers an area of anomalous concentrations of sphalerite and galena grains (>1000 grains in a 20 kg sample) in the coarse sand fraction of bulk till samples, as reported in Alberta Geological Survey Special Report 77. The HeliGEOTEM survey was flown at 200 metre flight-line intervals encompassing approximately 1667 line-kilometres in and around the Zama Lake project to detect potential targets based on favourable geological and geophysical signatures and/or known mineralization, and to facilitate follow-up geological ground-truthing, mapping and drilling intended during the second phase of exploration later in the fall season. The Pb-Zn mineralization was tentatively attributed to a sedimentary exhalative source (Sedex type) thought to be within the property area. Although the carbonate strata occur only at depth near Zama Lake, the potential for Mississippi-Valley Type lead-zinc mineralization also exists, similar to the world-class Pine Point deposit in the Northwest Territories, mined by Cominco (now TeckCominco) between 1964 and 1998. Star Uranium Corp. retains its diamond rights on approximately 850 square kilometres of Zama Lake property.

Figure 3. Ivany Mining Pb-Zn project area, northwest Alberta (http://ivanymining.com).

Polymetallic Shales In 2008, to advance exploration and development of near-surface, metal-enriched black shales, Dumont Nickel Inc. acquired a wholly owned 2536 square kilometre mineral property (SBH property), located approximately 120 kilometres north of Fort McMurray in northeast Alberta. The SBH property encompasses six 100 to 300 square kilometres of historical subproperties (Buckton, Buckton South, Asphalt, Eaglenest, McIvor West and North Lily) previously studied for



metals by Tintina Mines Ltd., NSR Resources Inc., Alberta Geological Survey and the Geological Survey of Canada. No exploration work was completed on the SBH property in 2008; however, Dumont Nickel Inc. compiled previous work in an NI-43-101 compliant technical report. Based on publicly available information on extensive exploration work over the past 15 years and regional oil-gas drilling databases, the SBH property is underlain by the near surface, flat-lying Late Cretaceous shales of the Second White Speckled and Shaftesbury formations, which are locally enriched in Mo, Ni, V, Zn, U, Cu, Co, Ag, Au, PGE and organic carbon. The former unit (20-40 m thick) is mainly black shale interbedded with bentonitic seams, contains up to 20% fine-grained sulphides (mostly FeS) and 3% to 29% organic carbon, and represents Dumont Nickel Inc.’s primary exploration target. Based on the previous regional outcrop and drillcore sampling, the Second White Speckled Formation contains up 0.13% V, 0.09% Zn, 0.04% Mo, 0.04% Ni, 0.027% U, 0.018% Cu, 3.6 g/t Ag and 3.4 g/t Au, in addition to enriched Co, Cd and traces of PGE. At several locations, the black shales have elevated sulphides and metal contents, identified as sedimentary exhalative (Sedex) in nature, with a northward increase in thickness and frequency of bentonite seams. This indicates proximity to the hydrothermal vents and the source of volcanic debris. Dumont indicates two potential black shale-hosted polymetallic zones: Buckton and Asphalt. Both the Buckton and Asphalt potential deposits are open in more than one direction for an additional few kilometres. Based on the previous, extensive surface exploration, the Buckton south property may represent a southern extension of the Buckton zone for a distance of 6 km. Previous reconnaissance exploration on the McIvor west property identified surface Ni-Au-Zn anomalies, as well as circular geophysical features consistent with similarly identified polymetallic-enrichment zones elsewhere within the SBH property. The Alberta black shales have many similarities with other black shale-hosted polymetallic deposits worldwide (e.g., Nick, British Columbia, Canada, Talvivaara, Finland, and southern China).

Figure 4. Cretaceous shale outcrop in northeast Alberta.



Titanium and Zirconium Titanium Corporation Inc. continued research and development on the concentration and separation of titanium and zirconium minerals and the removal and recovery of bitumen from oil sands tailings in the Fort McMurray area of northeast Alberta. Titanium Corporation Inc. performed heavy-mineral concentration and separation programs at its Regina facility to increase the recovery of higher-grade zircon products using various oils and surfactants. Prospective new technologies, tested with external firms, have shown improved results and testing is continuing.

Figure 5. Titanium Corporation’s oil sands tailings processing for titanium and zirconium (www.titaniumcorporation.com).

Clear Hills Iron Ironstone Resources Limited, through an exclusive agreement with TUL Resources Ltd., earned 40% to 60% interest on 14 metallic and industrial permits and leases in the Clear Hills area of northwestern Alberta. It completed a drilling program on its Rambling Creek block in February and March 2008. The company drilled 51 holes and recovered 385.5 m of ooidal ironstone-bearing core from 47 holes. As yet, they have not reported the results from this drilling program. Ironstone Resource planned follow-up drilling work in its north Whitemud prospect in fall 2008. An additional 23 400 hectares of land were staked north of Smoky River by TUL Resources Ltd. for iron exploration.

Figure 6. Ooidal ironstone in the Bad Heart Formation along Rambling River, northwest Alberta.



Placer Gold Gold is the only metal produced in Alberta solely as a by-product from gravel operations using a sluice box at the end of the gravel-washing process. According to Alberta Energy, the total Alberta production of placer gold in 2008 was about 65 kg. Natural Resources Canada reported 53 kg of total gold production in Alberta in 2007 and 60 kg in 2006. Ammolite Ammolite is the gem-quality, iridescent, fossilized shell of Placenticeras meeki and Placenticeras intercalar ammonites from the Upper Cretaceous marine shales of the Bearpaw Formation. In 1981, the World Jewellery Confederation gave ammolite official gemstone status, and it is Alberta’s provincial gemstone. Southern Alberta, mainly along the St. Mary River west of Magrath, appears to be the only region in the world where shells reaching gem quality are found. The mechanism producing gem-quality material is uncertain, but is probably a combination of rapid burial, heavy pressures and unique chemical reactions that preserve the iridescent shell structure. Ammonite shell of gem quality is rare; estimates are that less than 10% of shells found in the St. Mary River area are gem quality, and only 20% of these can be used for jewellery. Because ammolite is soft and occurs in thin, delicate sheets, development of special processing techniques was essential for commercial application. Most material is impregnated with a synthetic resin to stabilize the flakey ammolite prior to cutting, and it is usually covered with a convex cap of spinel or other durable, transparent, synthetic material. Korite International is the largest commercial producer of ammolite with about 90% of world production and sells ammolite jewellery in more than 25 countries.

Figure 7. Ammolite mining operation, southwest Alberta (www.korite.com).



Alberta Industrial Minerals Production Update All production statistics (except sulphur) are from Natural Resources Canada’s commodity review reports. The 2007 numbers are confirmed, whereas the 2008 numbers are still preliminary in some cases. Table 2 displays the commodity production quantity and value. Mineral Aggregate Alberta is the second largest producing province in Canada, behind Ontario. Between 2006 and 2007, sand and gravel production increased by 15% to 56.9 Mt and increased in dollar value by 25% to $488.0M. The 2008 preliminary production forecasts indicate sand and gravel to maintain the 2007 level of production. Mineral aggregate demand in Alberta is expected to increase due to the demands of construction and infrastructure activity.

Figure 8. Aggregate operations in northern Alberta.

Peat Peat production rates saw very little change between 2006 and 2007. Production increased by 9% to 174 kt and the value increased by 9% to $30.8 M. The 2008 preliminary production forecasts indicate a decrease in peat production from 2007. Salt Salt decreased in production in 2007 from 2006 by 75% to 281.4 kt and decreased in value by 20% to $17.0 M. In 2007, there were two plant closures, one by ERCO in November 2007 and the other by Dow Chemical in September 2007. A significant decrease in 2008 production was due to Dow Chemical closing another production plant. As a result, 2008 salt production is expected to decrease by 44% from 2007 levels. Salt production in Alberta is mainly from the extraction of salt brines to manufacture chloralkali, as well as solution mining of sodium chlorate from the extensive, very pure Upper Lotsberg salt deposit in the Fort Saskatchewan area.



Elemental Sulphur All information on Alberta’s elemental sulphur can be found in the Energy Resources Conservation Board’s Statistical Series ST98: Alberta’s Energy Reserves 2007 and Supply/Demand Outlook 2008-2017, and is current to the end of 2007. The Energy Resources Conservation Board estimates the remaining established reserves of elemental sulphur in Alberta, as of December 31, 2007, to be 154.3 million tonnes (106 t), a decrease of 3 per cent since 2006. Table 1 shows the changes in sulphur reserves during the past year.

Table 1. Reserves of Sulphur (Table 7.1 of ERCB ST98-2008).

Crude bitumen in oil sands deposits contains significant amounts of sulphur. As a result of current upgrading operations in which bitumen is converted to synthetic crude oil, approximately 90 per cent of the sulphur contained in the crude bitumen is recovered in the form of elemental sulphur. During 2007, 1.5*106 t of elemental sulphur was produced from the six active projects: Suncor, Syncrude, Albian Sands, Shell Jackpine, CNRL Horizon and Petro-Canada/UTS Energy/Tech Cominco Fort Hills. The remaining sulphur production in Alberta is from the processing of sour natural gas and refining of crude oil. In 2007, Alberta produced 4.8*106 t from sour gas and 16 thousand (103) t from oil refining. Although sulphur production from sour gas is expected to decrease by 27% from 4.8*106 t in 2007 to 3.5*106 t, sulphur recovery from bitumen upgrading is expected to increase from 1.5*106 t to 4.4*106 t by the end of 2017. Demand for sulphur within the province in 2007 was about 204 100 t, slightly higher than in 2006. It was used in production of phosphate fertilizer and kraft pulp and in other chemical operations. Approximately 96% of sulphur marketed by Alberta producers was exported primarily to the U.S. and China. China is now the world’s largest importer of sulphur, which they use primarily for making sulphuric acid to produce phosphate fertilizers. Canadian exports to China declined by 24% in 2007 compared to 2006 (see below chart).



Increased global demand for sulphur resulted in major price changes, from US$16/t in 2001 to US$50/t in 2006. In 2007, the Alberta sulphur prices increased sharply, from US$50/t at mid-year to between $US150/t to $350/t FOB Vancouver.

Canadian sulphur offshore exports (Figure 7.4 of ERCB ST98-2008).

Figure 9. Sulphur stockpiles, Athabasca oil sands area.



Silica and Quartz Quartz saw a decrease in production from 2006 to 2007 by 50% to 202 kt and an increase in value by 9% to $20.2 M. This decrease was due to a reporting error, as one producer was actually producing sand and gravel and not silica as previously reported. The 2008 preliminary production forecast of 304 kt takes into consideration this reporting error, as well as a forecasted increase in production. The silica is sold mainly for the manufacture of fibreglass, insulating materials, silica flour, silica fume and sandblasting sand for the oil and gas and construction industries. Stone Production statistics remain confidential due to competition issues and the limited number of producers. Clay Products Production of clay and clay products remained steady for 2007. Production statistics remain confidential. Plainsman Clay Limited mines clay specifically for pottery (i.e., Helmer kaolin) from sites in Manitoba, Saskatchewan, Alberta, Montana and Idaho for stoneware, and processes the mined clay at its Medicine Hat, Alberta, facility. I-XL Industries Ltd. of Medicine Hat produces brick, block and flue liners. Table 2. Production statistics, industrial minerals.

Mineral Production of Alberta

Commodity 2006 2007 2008 Preliminary Quantity $ Quantity $ Quantity $

Sand and gravel (t) 48 429 967 370 011 862 56 910 908 487 963 923 54 306 188 478 007 119Sulphur elemental (t) 6 765 764 122 811 059 6 464 071 205 165 072 6,964,331 2,078,931,524Peat (t) 158 996 28 129 908 174 747 30 824 606 129,466 25,309,830Salt (t) 1 116 375 21 416 536 281 409 17 023 996 180,387 17,927,998Silica/Quartz (t) 402 462 18 473 016 202 536 20 231 304 304,260 23,893,754Cement (t) x x x x x xClay (t) x x x x x xLime (t) x x x x x xLimestone (t) x x x x x xSandstone (t) x x x x x xShale (t) x x x x x x

x denotes confidential data Lime Production statistics remain confidential due to competition issues and the limited number of producers. Uses of domestic lime, quick and hydrated, include steel making, water and sewage treatment, water purification, gas scrubbing, metal concentration, pulp and paper mills, chemicals, road and soil stabilization, mason, and finishing lime.



Cement Cement continues to follow sand and gravel in terms of production value for Alberta. Production statistics remain confidential. Lafarge Canada Inc.’s Exshaw plant operates a dry kiln and a dry/precalciner kiln, and Lehigh Inland Cement Ltd.’s Edmonton plant operates a dry/precalciner kiln.

Underground Coal Gasification Since the summer of 2008, two test pilots have been proposed to test the feasibility of underground coal gasification (UCG) as an alternative source of energy. The proposed pilot locations are near Drayton Valley, targeting the Ardley Coal Zone, and Swan Hills, targeting the upper Mannville coals. The Ardley test site is in the planning stages, whereas the Mannville site is selected and testing is proceeding. The underground coal gasification process has been internationally demonstrated as an alternative source of energy for several decades (former Soviet Union, U.S.A., Australia, China and India), making available the coal resources that are unsuitable for conventional mining. Underground coal gasification operates with a series of injection-production well pairs, enabling in situ conversion of coal into syngas (synthesis gas) by pyrolysis, combustion and gasification. Syngas is a mixture of mainly carbon monoxide and hydrogen. It can be used as fuel for power generation, as feedstock for various chemical products (i.e., hydrogen and ammonia) and as synthetic pipeline gas, a replacement of natural gas.

Figure 10. Underground coal gasification scheme (www.fossil.energy.gov/international/Publications/cwg_april06_ucg_reliance.pdf).



Coal Update Coal production remained strong in Alberta with 37 million tonnes produced in 2008. Sub-bituminous coal is mined from the Plains region and is used primarily as a feedstock for mine-mouth power-generation plants. Thermal bituminous coal is mined in the Coal Valley area of Alberta for domestic and export markets. Metallurgical coal is mined in the Foothills for export. Table 3 provides a summary of coal production in Alberta.

Table 3. Alberta coal production statistics (source: various ERCB statistical reports).

End 2006 Total

End 2007 Total

End 2008 Total

Genesee (Epcor Generation) 5,406,002 5,557,606 5,137,572 Vesta (Luscar) 1,870,593 1,471,321 1,236,663 Paintearth 1,218,466 1,554,433 1,685,194 Highvale (Transalta Utilities) 12,570,482 12,462,181 12,680,185 Whitewood (Transalta Utilities) 1,173,659 1,349,738 1,265,691 Sheerness (Luscar) 3,675,166 3,590,185 3,959,504 Dodds 85,668 113,413 101,845 Burtonsville Island (Keephills Aggregate) 33,609 19,296 15,684 Total Subbituminous Surface Thermal Coal

26,033,645 26,118,173 26,082,338

Bituminous Thermal (surface mines) Coal Valley (Luscar) 4,444,348 5,945,525 7,162,640 Total Bituminous Surface Thermal Coal

4,444,348 5,945,525 7,162,640

Bituminous Metallurgical (surface & underground) Cardinal River (Cheviot, surface) 2,447,094 2,735,733 2,559,334 Grande Cache Corp. (surface) 785,992 856,774 354,351 Grande Cache Corp. (underground) 589,023 1,008,970 890,694

Total Bituminous Metallurgical Coal 3,822,109 4,601,477 3,804,379

TOTAL ALBERTA COAL PRODUCTION

34,300,102 36,665,175 37,049,357

Alberta Producing MinesProduction (raw tonnes of coal)

Subbituminous Thermal (surface mines)



Alberta Mineral Staking and Assessment Statistics Highlights There was a staking rush for potash along the Alberta-Saskatchewan border bringing the

total number of hectares staked for 2008 to 6.1 million. Mineral assessment expenditures increased from $9.4 M to $16.9 million in 2008. This

increase was mainly due to diamond, uranium and iron exploration in Alberta. The Alberta Department of Energy’s website (www.energy.gov.ab.ca) has information about mineral dispositions in Alberta. Additional Information about the geology and mineral resources of Alberta are on Alberta Geological Survey’s website (www.ags.gov.ab.ca). Table 4 shows the mineral claims staked and assessment work filed within Alberta during 2008 and the five preceding years. Table 4. Mineral permits and assessment activity, 2008.

ACTIVITY 2003 2004 2005 2006 2007 2008

Claims Staked (Permits1 Applied For)

Number of applications1

322 598 590 482 445 675

Millions of hectares2

2.9 M ha 4.7 M ha 5.2 M ha 3.9 M ha 3.9 M ha 6.1 M ha

Permits in Good Standing

Number of agreements

1276 866 1124 1275 1513 1638

Active hectares 10.2 M ha 6.3 M ha 8.2 M ha 9.6 M ha 11.4 M ha 11.9 M ha

Mineral Assessment Filed

Number of reports 8 27 10 34 29 32

Number of permits represented*

6 66 20 189 357 448

Hectares represented*

0.02 M ha 0.3 M ha 0.06 M ha 1.1 M ha 1.8 M ha 3.2 M ha

Expenditures filed*

$0.2 M $4.8 M $0.4 M $6.1 M $9.4 M $16.9 M

1 Includes both successful and withdrawn permit and lease applications (permits are predominant). 2 Includes hectares requested to take from permit to lease. * Includes active permits only.

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