pipestone lake project


Our 50% joint-venture partner in the Pipestone Deposit, Cross Lake Mineral Explorations Inc., is a wholly-owned private corporation of the Cross Lake First Nation. Gossan remains engaged in continuing discussions regarding the development and/or sale of its mineral rights at the 3584-hectare Pipestone Property in an effort to move this project forward.

In October of 2009 and 2010, the Company retained Hayles Geoscience Surveys Ltd. to conduct a survey of all of the 144 historic drill hole site locations and the grid which was originally cut at the Pipestone Lake Property in 1994. The purpose of the survey was to provide the joint venture with an accurate map on which to base a future NI 43-101 resource calculation. The crew, which included members of the Cross Lake First Nation, was able to record the locations of 105 drill holes. A total of 37 holes were inaccessible as they were drilled from ice over the lake or were flooded over by currently higher water levels. The program has resulted in a complete digital data base geo-referencing the grid, the drill hole locations, and the ground magnetic survey onto a topographical base.

A field program to re-cut and clear some sections of the baseline and gridlines was conducted in the summer of 2011. During the program the Resource Rangers re-cut approximately 17 km of the grid, including sections of the 10.2 km baseline.

Gossan continues to encourage engagement and further consultation with its partner, the Cross Lake First Nation, in regard to the development of the Pipestone Vanadium Project. It is a timely moment in the commodity cycle of vanadium with new electrical storage applications potentially requiring a number of new vanadium mines. In February 2011, Gossan management met in Cross Lake with the Chief and Band Council of the Cross Lake First Nation and presented an all-day orientation session about exploration & mining in general and how it relates to the Pipestone Lake Deposit specifically. Several meetings were conducted over the summer and fall of 2011 with representatives of the Cross Lake First Nation and the Manitoba government to investigate a means to resolving some of the historical issues which have been a barrier to the development of the Pipestone Project.

During the fall of 2011, Gossan intensified its engagement activities with the Cross Lake First Nation and the local community. Gossan held information meetings at Cross Lake in October and November of 2011. Further discussions were held in Winnipeg later in November with representatives of the Cross Lake Band Council and the Chiefs of the Pimicikamak Okimawin Four Councils in regard to advancing the development of the Pipestone Vanadium Project.

In December of 2015, at the request of the Cross Lake First Nation and the Pimicikamak Okimawin, Gossan met with their representatives and legal counsel to discuss the future of the Pipestone Property.

In July of 2016, after a short hiatus, discussions pertaining to the future of the Pipestone Property have resumed with the Pimicikamak Okimawin. Gossan has been advised that Pimicikamak Okimawin is in the final stages of performing their due diligence and will soon be in a position to extend an offer to Gossan for the Pipestone mineral rights. There is no indication that any offer will be immediately forthcoming.

The Pipestone Lake Property is located in north central Manitoba, approximately 150km south of Thompson and 550km north of Winnipeg. It is situated within Northern Flood Agreement Selection Site 1.9, an area that is otherwise withdrawn from staking as a potential and possible future site for a reserve. At the Pipestone Lake's Areas 1 and 2, drilling to date has outlined an a non-compliant NI-43-101 historic indicated resource of 156.8 million tonnes grading 5.56% TiO2, 28.11% Fe2O3 and 0.22% vanadium pentoxide and an inferred resource of 150 million tonnes at a similar grade. The mineral resources at Pipestone Lake were estimated by Reedman & Associates in a report prepared for the Company in 1998 but should not be relied upon as the report was not compliant with NI 43-101 and has not been verified by a Qualified Person under the Instrument. More drilling could significantly increase the resource.

A preliminary mine plan has been prepared for the Pipestone deposit by Reedman and Associates which classifies various tonnage is according to titanium dioxide cut-off grades, provides proposed open pits, and estimates stripping ratios; however more detailed drilling is required to support a 30,000 tons per day operation. Additional metallurgical and other studies are required in order to assess the economic feasibility of the deposit. The operation of an open-pit mine of this magnitude would be expected to require 400-500 workers on a long-term basis.

Currently, vanadium is mostly used – about 85% - in the steel industry as a strengthener. Various nations are mandating stronger steel rebar in construction and building codes, likely increasing vanadium demand. Vanadium may also play an important new role in electrical storage technology which could substantially increase demand for this metal. In lithium-based auto batteries, the use of a vanadium phosphate cathode material can materially increase energy storage and lead to a 20%+ increase in an electric car’s travelling range. Another potential large-scale use of vanadium is in grid–scale electrical storage of renewable energy – wind, solar and hydro – using re-dox flow batteries. Vanadium re-dox batteries could substantially lower power utilities’ capital costs as they allow for electricity to be generated and transmitted in off-peak hours and then stored locally to satisfy the following day’s peak power demand. New electrical transmission grids are increasingly difficult to get approved and expensive to build.

Paints, paper and plastics are the main uses of titanium dioxide. Potential future green uses of titanium dioxide include pliable solar panels.

Gossan is continuing to encourage engagement with the Cross Lake Band Council and the Chiefs of the Pimicikamak Okimawin Four Councils in discussions regarding the development and/or sale of its mineral rights at the Pipestone Property.