Non-Ferrous and PGMs on the Duluth Complex in Minnesota

Implications: The growth of the Asian Market has set the course of metals pricing to new all time highs.  The market conditions have resulted in the exploration of new targets that include the so-called Duluth Complex in Northeast Minnesota just below the Canadian Border.  Exploration by companies such Polymet, Franconia Minerals, Teckcominco, and Duluth Metals has uncovered potentially very significant copper, nickel, cobalt, and precious metals resources that could become the next Sudbury for the non-ferrous industry.  The discussion by the Chairman of Duluth Metals gives some good background on the potential for Northeast Minnesota and the prospects of continued high metals prices for non-ferrous and precious metals such as gold and the platinum group of metals.  Scientifically, the metals are in the mining district.  It will be important to follow the developments in this US state because it could develop into a world-class non-ferrous mining district.


Analysis: The Duluth complex has been studied for over 20 years by exploration geologists from the University of Minnesota Duluth and these activities have been analyzed in detail by the researchers involved and by the current exploration companies.  One University researcher alone has logged over 1.4 million feet of drill core from the multitude of drill holes that have been drilled over the last two and a half decades.  This information has been analyzed in some detail and grade maps in 3-D have been produced by the University researchers that have driven various exploration companies to fully investigate this area's mineral potential.

The most advanced project is that of Polymet Mining Corporation (AMEX:PLM) who have a 4,000 acre tract of land that they have just completed a bankable feasibility study.  They have also secured the physical assets of the former LTV Mining property and this will allow them to greatly reduce the start-up capital for the planned mining operation.  This project will be an open pit mining operation and its grades of copper and nickel are lower grade (e.g., Cu~0.26%), but the resource is vast and will allow a long term mining program.  the mineral values in this case are fund at depths that are near the surface

The Duluth Metals case is slightly different.  Instead of an open pit mining plan, the metals are deeper and will have to be recovered by underground mining techniques.  The grades however are much higher than that for Polymet with copper at over 0.85%.  The footprint of the mining operation will also be less since it will be an underground mine.  Duluth Metals is taking a systematic approach to its project and expects a bankable feasibility study to be completed in 2008.  They continue to delineate their deposit with further exploration drilling.  Like Polymet, extensive other metal values beyond copper and nickel such as platinum group metals are expected to be recovered if the mining operation is implemented.

The other companies Franconia Minerals and Teckcominco are continuing their detailed exploration programs.  All parties are awaiting the completion of the environmental impact statement being undertaken by the State of Minnesota for the Polymet Mining Project.  If the EIS is completed satisfactorily, this area of Minnesota will likely become a very significant world-class source of non-ferrous and precious metals for years to come.