Wescan Goldfields Inc. was the first public company after Goldsource Mines Inc. to be involved in the recent staking rush following the discovery of significant coal in drill core near Hudson Bay, Saskatchewan. During the later part of April 2008, Wescan applied for an extensive package of coal dispositions covering over 250,000 hectares adjacent to and partially surrounding the coal discovery made by Goldsource Mines. Wescan received a "Letter of Comfort" from Saskatchewan Energy and Resources on May 27th, 2008 stating that the majority of all coal permit applications made on behalf of the company are 'first in line' and will be given priority sequence.
Wescan Goldfields Inc. has been able to acquire a significant, well-positioned block of land within the area of the coal discovery by Goldsource Mines near Hudson Bay, Saskatchewan. On July 30, 2008 Wescan did receive an initial package of 83 coal permit certificates from the Saskatchewan Ministry of Energy and Resources. These permits are adjacent to the claim block hosting the major coal discovery previously announced by Goldsource. The permits allow Wescan to aggressively explore the area for coal and cover a period of three years with two possible six-month extensions and convertible to a 15-year lease.
A balance of 268 priority sequenced ("first in line") coal applications listed in Letters of Comfort from Saskatchewan Energy and Resources were received on February 17, 2009 which now allows Wescan to move forward with exploration program.
Exploration permitting with Saskatchewan Environment was completed and the initial program proposal submitted to that department. This primary drilling will focus on Wescan's southeasterly permits, located adjacent to Goldsource and proximal to their recent drilling activity.
Wescan completed a 2,000 line-kilometre GEOTEM Electromagnetic Magnetic airborne geophysical survey over its highly prospective Hudson Bay, Saskatchewan coal permits in 2009. The survey was flown over the Company's extensive northern block located north and east of the Pasquia Hills as well as over the Company's southern blocks, located south of the Goldsource Mines Inc. and Westcore Energy Ltd.'s coal permits.
Wescan's northern block and southern blocks are contained within the northwest and southeast extensions of the "Durango Coal Trend", a zone of similar geology containing geophysical signatures indicative of settings conducive to coal deposition with coal intersections that range up to 100 metres in vertical thickness.
Drilling commenced on the Company's Hudson Bay, Saskatchewan coal exploration project in August 2009. Drilling locations were targeted using Fugro Airborne Surveys ("Fugro") specialized geophysical processing and interpretation on GEOTEM Electromagnetic Magnetic data. This data enabled Wescan to identify all potential coal bearing sub-basins on all of the Company's coal permits. Wescan initially explored a large block of coal permits, approximately 86 kilometres wide lying north of the Pasquia Hills in an area where potential depth to coal may be shallow. Within this northern block, Fugro has identified a number of priority geophysical anomalies that may be related to laterally extensive coal deposits. These geophysical anomalies are interpreted to be very large, some in excess of 15 kilometres in diameter. Wescan also explored for coal on two of its southern coal permit blocks, which lie south of the massive coal discovery by Goldsource Mines Inc. These southern blocks have also been identified by Fugro to potentially host numerous coal bearing sub-basins.
A comprehensive Phase I drilling program on Wescan's Hudson Bay coal properties was completed in December of 2009. The goal of the phase I reconnaissance program was to better understand the geology to assist with identifying where the coal basins are located.
Results from the 2009 Phase I Drill Program intersected in 21 out of 40 drill holes, with a maximum coal zone thickness of 12.90 metres. These initial coal discoveries will direct the drilling locations in the upcoming 2011 Phase 2 Drill Program, aimed at targeting thicker intersections of coal. Coal zones ranged from continuous coal seams to coal zones with interbedded sand and carbonaceous material, with coal ranging from bright to dull. Eight holes contained coal zones greater than 5 metres thick. Several drill holes also contained more than one intersection of coal, suggesting the presence of multiple coal horizons (see Table 1in our January 18, 2010 News Release).
Drilling results from the Phase 1 program indicates that the prospective area for coal is much greater than previously anticipated in the Hudson Bay area. Coal was intersected more than 50 kilometres to the west of and 10 kilometres to the south of previously reported coal intersections in the region, including intersections of coal northwest of the Pasquia Hills. These discoveries establish a new high priority focus for Wescan on four main areas of interest: The Red Deer Property, Bonus Property, Rice Property and Man River Property, proximal to Goldsource Mines Inc.'s Border Property hosting a NI43-101 compliant Indicated and Inferred coal resource estimate of 153.1 million tonnes.
Phase 1 drilling results have provided an excellent geological understanding of the regional sedimentary depositional environment. With this information, Wescan has developed a new geoscientific data framework aimed to identify where sub-basins containing thicker intersections of coal may occur. This data framework will utilize all new stratigraphic data obtained from drill core and down-hole geophysics layered together with recently acquired airborne geophysics in order to assist and prioritize future drill targets on Wescan's four main areas of interest, which still remain 90 percent unexplored.
Selection of the most prospective areas will be critical and will allow Wescan time to re-evaluate and delineate any coal deposits that may be possible to identify using current technologies. Westcore Energy Ltd. recently had tremendous success determining drill targets by using gravitational flying where they intersected an 85 coal section in their first hole. Wescan based on this success will evaluate further the merit of gravity flying to determine drill targets for Phase II this summer. Wescan will be exploring 4 highly prospective coal project areas over 190,992 hectares of permits adjacent to major coal discoveries by Goldsource Mines and Westcore Energy - The Red Deer Property, Bonus Property, Rice Property and Man River Property. Management is currently proposing to conduct further drilling and/or flying of priority areas with the assistance of data review with recommendations.
During 2011, a review was conducted of all regional geophysical and geological data relating to the Company’s coal exploration properties. Wescan management; together with consultants North Rim Exploration have been assessing which of our coal permits we should drop and which permits we should keep prior to the lapse of the original 3 year rental. These original permits had no cost attached to them other than the permit application cost of $1 per hectare in 2008. In 2009, Wescan had expenditures of approximately $3,000,000 in a Phase I drill program where we drilled 40 holes at Hudson Bay with no significant results. Now by regulation, each disposition can be extended for 2 additional consecutive 6 month periods for a cost of $1 per hectare. Following the completion of these extensions these dispositions could then be carried forward into what the government has called an annual “lease” at a cost of $5.50 per hectare. Based on this review, and also factoring in the additional expenses that would be necessary to convert the coal permits to more expensive leases (as would have been required in the near term), the Company determined that its financial resources would be better served pursuing its gold properties. As a result, the Company has allowed the majority of its coal permits to lapse, with the remainder to lapse in early 2012.
