• On July 7 ,2010, Prophecy has received the first results of a property-wide surface induced polarization ("IP") survey conducted during the late-spring of 2010. To date, results have been modeled for the area coinciding with the Disco deposit that was discovered during 2008. Results indicate a strong chargeability anomaly centred 200 meters below the existing Disco deposit, for a total strike length of approximately 150 meters. This anomaly appears to increase in intensity with depth, beyond 610 meters from surface

Overview

Lynn Lake Location Map
Click to enlarge

The Lynn Lake sulphide nickel deposit is located in northern Manitoba. The Lynn Lake mine was operated by Sherritt-Gordon from 1953 to 1976. During its 23 years of operation, the mine produced over 20 million tonnes of Ni-Cu ore at a grade of 1.02% Ni and 0.54% Cu, making it the 3rd largest nickel producer in North America. Eleven discrete ore bodies were brought into production. Our project covers the majority of these claims that were operated by Sherritt-Gordon.

In addition to a near-term production path using a disruptive Bioleach technology, the recent 2008, near-surface Disco Zone discovery located 1.5km away from the outlined deposit offers an exciting exploration potential. The Disco Zone is 80m x 20m x 270m with drill highlights including 1.5% nickel, 0.7% copper and 0.04% cobalt @ 18m, 0.7% nickel, 0.5% copper and 0.02% cobalt @ 47.1m. Click here for more drill results and to learn more about the Disco Zone discovery.

On January 12, 2010 Prophecy has acquired the Lynn gabbros claims, which include five gabbro plugs, from VMS Ventures. Prophecy now has six of the seven known gabbro plugs in the Lynn lake area and is now the dominant player in terms of land size and resource base in the Lynn Lake nickel camp. Click here to read the news release.

Lynn Lake is a project with proven reserves, electrical power and rail available. The project can be operated year-round with a low Cap-Ex cost of $148 million. The overall cost margin is well defined at $7/lb nickel (inclusive of Cap-Ex). Ore can go through an on-site bio-leach SX/EW option to produce 99.9% pure, marketable nickel, or it can be shipped to a smelter in concentrate form (9% Ni) after milling. The location is in a safe jurisdiction. Lynn Lake is a relatively low-risk project scheduled for production within 2-3 years.

Location and Access

Aerial View of Lynn Lake
Click to enlarge

The property was a historic mining area and the site is readily accessible from the town of Lynn Lake. Lynn Lake is approximately 320 kilometres from Thompson, Manitoba along Provincial Highway 391. There is an airport at Lynn Lake which is serviced by Calm Air and Perimeter Air. Perimeter Air maintains a regular flight schedule into Lynn Lake from Winnipeg with stops in regional communities. A railway line is located at Lynn Lake, which extends south to Flin Flon, Manitoba and from there to the rest of Canada.

Lynn Lake Property Map
Click to enlarge

Physiography Map of the Lynn Lake Property
Click to enlarge

A Map Of The Gabbros Identified At Lynn Lake
Click to enlarge

History

The Lynn Lake orebody was discovered in 1941 by Austin McVeigh, who noticed oxidation of mafic rocks while prospecting for gold in northern Manitoba. Initial samples had yielded results of 1.5% nickel and 1% copper. McVeigh further established the presence of three anomalies in the area over the following years. Encouraged by these results, Sherritt Gordon commenced a drilling program over what was to become known as the Lynn Lake Gabbros in 1945. A third hole of this program intersected 84 feet (25.6m) of ore grade nickel mineralization, and marked the beginning of the Lynn Lake nickel deposit.

With a new discovery in hand, Sherritt Gordon had decided to literally move it's entire operations from Sherridon, located over 250 km south of the discovery, to its newer project. It accomplished this by freighting over 18,000 tons of material, including 50 houses, that would soon comprise the core of the town of Lynn Lake, thus establishing its sobriquet as "the town that moved."

The sinking of the 'A' shaft began in 1947 and production from the 'A' mine started in 1953. In addition to the A mine, Sherritt developed and operated the Farley mine and the EL mine, before halting production in 1976.

The Lynn Lake nickel mine was operated by Sherritt-Gordon from 1953 to 1976. During its 23 years of operation, the mine produced over 20 million tonnes of nickel-copper ore at a grade of 1.02% Ni and 0.54% Cu. This ranked the Lynn Lake mine the third largest nickel producer in North America after only the Sudbury and Thompson mining camps. When the mine was closed in 1976, it was during a period of stagnant growth in the nickel market. The mine was not closed because the ore was mined out. An estimate of the unmined mineralization includes 5.76 million tons of 0.80% nickel, and 0.32% copper, including a higher grade portion of 2.32 million tons grading of 0.92% nickel, and 0.34% copper. This is within the 'N' and 'O' orebodies occurring between depths of 2,000 and 4,000 feet. The company is uniquely positioned to employ new exploration technologies in an underexplored nickel mine setting.

The Lynn Lake nickel mine focused its production efforts on three main operations known as the 'A' mine, the 'Farley' mine, and the 'EL' mine. These deposits occur within two adjacent mafic-ultramafic intrusive plugs situated in the Lynn Lake greenstone belt. The ore occurs in structurally controlled pipes of ultramafic and mafic cumulate rocks.

The 'A' mine was mined from 1953 to 1969, while the high-grade EL deposit came into production in 1954, and was mined until 1963. The Farley mine operated from 1961 until 1976, when nickel operations ceased in Lynn Lake.

Throughout their tenure, Sherritt Gordon delineated 11 discrete orebodies in the mine environment, not all of which were extracted.