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Avannaa Resources
The Advantage in Greenland
While there may only be as few as a couple of explorers really doing grassroots exploration in Greenland today, IRJ has managed to track down the one which looks particularly special. Avannaa Resources, the Denmark-based junior explorer, stands out on a number of fronts. Firstly, its exclusive focus on greenfields exploration is quite rare, but secondly, its first-class geologist team and its decade-spanning involvement in the country, make its real knowledge of Greenland tough to compete with.
“What we’ve got is considerable experience working in Greenland, doing both geological research and also working in mineral exploration — so this experience is going back over the last 28 years,” Hugh Mackay, Avannaa’s Chairman says.
“We’ve got tremendous knowledge of the geology of Greenland and the opportunities for mineral exploration.”
Avannaa is not looking to reactivate old mines or working with discoveries made in the 1950’s. The company is not looking to acquire projects which might have lost strategic focus for other companies. Avannaa is looking to exploit the wealth of knowledge within its ranks and make generally new discoveries. With all of this in mind, things appear to be coming along nicely. IRJ spoke with Mackay about how Avannaa is continuing its quest.
A multi-commodity portfolio
Having a spread of exploration types is a key concept behind the portfolio Avannaa has today which, of course, shapes the way the company is going about its grassroots exploration depending on the mineralisation type, terrain and other specifics.
“What we’re doing at the moment is three things simultaneously: we’re looking to advance the projects as quickly as we can so that we can push them down the exploration pipeline towards pre-feasibility study — major milestones in the development of an exploration project,” Mackay explains.
“We’re also trying to kill projects as quickly as we can, to trim the portfolio and get rid of projects which aren’t going to result in a significant discovery.”
The company is also looking to refresh its portfolio with new projects, thus meaning it won’t become too dependent on any one in particular.
“I know people like to pigeon-hole and say ‘the rare earth company,’ or ‘the diamond company,’ but we’re trying to avoid that where we can,” Mackay says.
“We’d like to become known as the company who’s a specialist in grassroots exploration in Greenland.”
The Karat rare earths project
The first of these projects, and one of two where Avannaa is approaching drilling, is Karat REE; a rare earths project located in West Greenland’s Karrat Fjord region. Karat was discovered in 2007 during a regional prospecting expedition.
“This is a completely new discovery, no one had realised that there was the potential to have a rare earth deposit in this part of Greenland,” Mackay says.
“We‘ve been advancing that for the past three years, to the point now where drilling is justified and we’ll be conducting a 2,000 metre drilling campaign which is starting right now.”
The company has a ship on location and is deploying the drill rig from Northern Drilling. With things moving along well, and the buzz about the demand for rare earth increasing and the ability of China to support this demand decreasing, it’s a promising position for Avannaa.
“This is a fantastic project to have, we don’t feel it appropriate to start speculating as to what the tonnage might be until we’ve done some drilling, but we do believe it’s a very large tonnage and if it comes in as we expect, in terms of contained metal this would be a top ten deposit,” Mackay says.
“There’s a lot of hubris in the market. We don’t really understand the dynamics of supply and demand, so whilst we’re delighted to have this deposit we’re also really pleased that we can diversify the risk of being over-exposed to one commodity with the other projects that we have in the portfolio.”
This is where Avannaa’s second and altogether different project enters play.
The Ataa Sund kimberlite diamond project
Once drilling is complete at Karat, Avannaa plans to move the drill rig 250 kilometres south to Qeqertaa Island; home to its Ataa diamond project which was also discovered in 2007 and is currently under development.
“It began with a 40 kilogram sample which gave us a very good diamond recovery—101 micro-diamonds and one macro-diamond,” Mackay says.
“Since then we’ve taken a 435 kilogram sample in 2008 and recovered 1,487 macro-diamonds of which over 30 were micro-diamonds and in 2009 we took a 10 tonne and a three tonne sample which we ran through DNS separation and it continues to look very good.”
This year Avannaa will do 1,000 metres of drilling and take a 50 tonne sample, however there is still a lot more to explore. Mackay says that there are literally hundreds of kimberlite dykes to explore in the Ataa area.
“Last year we shot 1,900 kilometres of aeromagnetics and we’ve just acquired a further 1,200 kilometres of aeromagnetic data. These provide a very good way of prospecting for new kimberlite dykes,” he explains.
“So one other thing is that as well as drilling up our existing discovery, we’re looking to test the remaining 100-or so dykes we have got to test. We’ve done around 40 so there’s about another 60 dykes that we have to test.”
It is clear that Avannaa’s weighty knowledge, experience and drive in Greenland has the company on what looks like the right path at Ataa.
The Disko Bay gold province
Within the Disko Bay gold province are four individual projects including Eqi and Ataa Hills. Mackay says that history states there have been plenty of expeditions through the area over time, yet while they have discovered gold, no one has ever really been able to put these indications into a geological model.
“We’ve been reviewing the existing data, the historical data, and also collecting some of our own,” he says.
“We believe that a new geological interpretation that we have developed really fundamentally changes the mineralisation concept.”
As a result, Avannaa will devote a substantial part of its program to mapping and prospecting on these gold projects over the coming year, conducting TEM and magnetic survey, detailed mapping, chip sampling, channel sampling and SGH sampling.
“We are elephant-hunting,” Mackay notes.
“We’re generally developing our own ideas and developing first-mover advantage. This year we’ve also now taken our first licenses in east and north Greenland.”
Avannaa’s advantages
Through careful application of the team’s knowledge, experience and goals using lightweight expeditions, 2010-model data collection, drilling and survey techniques and undeniably, being particularly good at grassroots exploration, Avannaa isn’t wasting any time.
“We want to advance at least one of our projects, plus a number of fast-followers, to the point where we have a pre-feasibility study and to create a liquidity event for our investors,” Mackay says.
“We’re most definitely not a ‘scientific ideas-generation’ house. We’re a business.”
There are a number of elements to Avannaa’s strategy: exploiting the teams knowledge of Greenland, exploiting its skills in grassroots exploration, thinking differently to create new projects [Mackay points out that the team “absolutely recognises that our skills are in grassroots so if it comes to developing a mine we will bring in development partners to take mines to production,”] and working quickly to produce NI43101 resource estimates leading on to pre-feasibility studies. It’s an awful lot of work and Avannaa is exactly the company to do it successfully.
avannaa.com
While there may only be as few as a couple of explorers really doing grassroots exploration in Greenland today, IRJ has managed to track down the one which looks particularly special. Avannaa Resources, the Denmark-based junior explorer, stands out on a number of fronts. Firstly, its exclusive focus on greenfields exploration is quite rare, but secondly, its first-class geologist team and its decade-spanning involvement in the country, make its real knowledge of Greenland tough to compete with.
“What we’ve got is considerable experience working in Greenland, doing both geological research and also working in mineral exploration — so this experience is going back over the last 28 years,” Hugh Mackay, Avannaa’s Chairman says.
“We’ve got tremendous knowledge of the geology of Greenland and the opportunities for mineral exploration.”
Avannaa is not looking to reactivate old mines or working with discoveries made in the 1950’s. The company is not looking to acquire projects which might have lost strategic focus for other companies. Avannaa is looking to exploit the wealth of knowledge within its ranks and make generally new discoveries. With all of this in mind, things appear to be coming along nicely. IRJ spoke with Mackay about how Avannaa is continuing its quest.
A multi-commodity portfolio
Having a spread of exploration types is a key concept behind the portfolio Avannaa has today which, of course, shapes the way the company is going about its grassroots exploration depending on the mineralisation type, terrain and other specifics.
“What we’re doing at the moment is three things simultaneously: we’re looking to advance the projects as quickly as we can so that we can push them down the exploration pipeline towards pre-feasibility study — major milestones in the development of an exploration project,” Mackay explains.
“We’re also trying to kill projects as quickly as we can, to trim the portfolio and get rid of projects which aren’t going to result in a significant discovery.”
The company is also looking to refresh its portfolio with new projects, thus meaning it won’t become too dependent on any one in particular.
“I know people like to pigeon-hole and say ‘the rare earth company,’ or ‘the diamond company,’ but we’re trying to avoid that where we can,” Mackay says.
“We’d like to become known as the company who’s a specialist in grassroots exploration in Greenland.”
The Karat rare earths project
The first of these projects, and one of two where Avannaa is approaching drilling, is Karat REE; a rare earths project located in West Greenland’s Karrat Fjord region. Karat was discovered in 2007 during a regional prospecting expedition.
“This is a completely new discovery, no one had realised that there was the potential to have a rare earth deposit in this part of Greenland,” Mackay says.
“We‘ve been advancing that for the past three years, to the point now where drilling is justified and we’ll be conducting a 2,000 metre drilling campaign which is starting right now.”
The company has a ship on location and is deploying the drill rig from Northern Drilling. With things moving along well, and the buzz about the demand for rare earth increasing and the ability of China to support this demand decreasing, it’s a promising position for Avannaa.
“This is a fantastic project to have, we don’t feel it appropriate to start speculating as to what the tonnage might be until we’ve done some drilling, but we do believe it’s a very large tonnage and if it comes in as we expect, in terms of contained metal this would be a top ten deposit,” Mackay says.
“There’s a lot of hubris in the market. We don’t really understand the dynamics of supply and demand, so whilst we’re delighted to have this deposit we’re also really pleased that we can diversify the risk of being over-exposed to one commodity with the other projects that we have in the portfolio.”
This is where Avannaa’s second and altogether different project enters play.
The Ataa Sund kimberlite diamond project
Once drilling is complete at Karat, Avannaa plans to move the drill rig 250 kilometres south to Qeqertaa Island; home to its Ataa diamond project which was also discovered in 2007 and is currently under development.
“It began with a 40 kilogram sample which gave us a very good diamond recovery—101 micro-diamonds and one macro-diamond,” Mackay says.
“Since then we’ve taken a 435 kilogram sample in 2008 and recovered 1,487 macro-diamonds of which over 30 were micro-diamonds and in 2009 we took a 10 tonne and a three tonne sample which we ran through DNS separation and it continues to look very good.”
This year Avannaa will do 1,000 metres of drilling and take a 50 tonne sample, however there is still a lot more to explore. Mackay says that there are literally hundreds of kimberlite dykes to explore in the Ataa area.
“Last year we shot 1,900 kilometres of aeromagnetics and we’ve just acquired a further 1,200 kilometres of aeromagnetic data. These provide a very good way of prospecting for new kimberlite dykes,” he explains.
“So one other thing is that as well as drilling up our existing discovery, we’re looking to test the remaining 100-or so dykes we have got to test. We’ve done around 40 so there’s about another 60 dykes that we have to test.”
It is clear that Avannaa’s weighty knowledge, experience and drive in Greenland has the company on what looks like the right path at Ataa.
The Disko Bay gold province
Within the Disko Bay gold province are four individual projects including Eqi and Ataa Hills. Mackay says that history states there have been plenty of expeditions through the area over time, yet while they have discovered gold, no one has ever really been able to put these indications into a geological model.
“We’ve been reviewing the existing data, the historical data, and also collecting some of our own,” he says.
“We believe that a new geological interpretation that we have developed really fundamentally changes the mineralisation concept.”
As a result, Avannaa will devote a substantial part of its program to mapping and prospecting on these gold projects over the coming year, conducting TEM and magnetic survey, detailed mapping, chip sampling, channel sampling and SGH sampling.
“We are elephant-hunting,” Mackay notes.
“We’re generally developing our own ideas and developing first-mover advantage. This year we’ve also now taken our first licenses in east and north Greenland.”
Avannaa’s advantages
Through careful application of the team’s knowledge, experience and goals using lightweight expeditions, 2010-model data collection, drilling and survey techniques and undeniably, being particularly good at grassroots exploration, Avannaa isn’t wasting any time.
“We want to advance at least one of our projects, plus a number of fast-followers, to the point where we have a pre-feasibility study and to create a liquidity event for our investors,” Mackay says.
“We’re most definitely not a ‘scientific ideas-generation’ house. We’re a business.”
There are a number of elements to Avannaa’s strategy: exploiting the teams knowledge of Greenland, exploiting its skills in grassroots exploration, thinking differently to create new projects [Mackay points out that the team “absolutely recognises that our skills are in grassroots so if it comes to developing a mine we will bring in development partners to take mines to production,”] and working quickly to produce NI43101 resource estimates leading on to pre-feasibility studies. It’s an awful lot of work and Avannaa is exactly the company to do it successfully.
avannaa.com
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