Why Should We Care About VMS Deposits
VMS deposits might seem complex, but they are an integral part of Canada’s 100-year mining history. According to the CEO of Sun Peak (TSX-V: PEAK), these deposits have provided a significant portion of the country’s copper, zinc, lead, silver, and gold production, with major mines like Kidd Creek and Flin Flon standing as testaments to their economic importance.
“These deposits form on the sea floor in rift environments, similar to black smokers spewing out massive sulfide material in the Red Sea today.” VMS deposits are poly-metallic, containing several economically viable metals, including copper and zinc, making them a diverse and attractive exploration target.
VMS deposits occur worldwide, but Canada remains a key area of focus, with the company exploring across multiple regions, including East Africa, where the CEO mentioned they are targeting Proterozoic-aged VMS deposits around 600 to 700 million years old.
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The Economic Potential of VMS Deposits
When asked about what an economically attractive VMS deposit looks like, the CEO responded with a clear benchmark:
“We aim for 20 million tons averaging over 1% copper. That’s our threshold for a new discovery.” He also mentioned that these deposits often occur in clusters, meaning where there’s one, there’s likely more, akin to “zits on your face,” as humorously suggested during the conversation.
Despite their smaller average size compared to porphyry copper deposits, VMS deposits often boast much higher grades, which can offset the tonnage. For example, deposits such as Nevsun’s Bisha mine in Eritrea showed copper grades over 4% in certain zones, proving the immense economic potential.
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Exploration Challenges and Techniques
Exploration for VMS deposits requires different strategies compared to copper porphyries. VMS systems are smaller but more concentrated, meaning precision is key in discovering them. The CEO pointed out that they rely heavily on geophysical techniques such as electromagnetics to identify conductive material underground, and gravity surveys to detect anomalies with high specific gravity.
“Massive sulfides have a specific gravity of 4 to 4.5, compared to the surrounding rocks, which are around 2.7. This difference creates a gravity anomaly, which we use to pinpoint potential deposits.”
The company’s approach to exploration builds on decades of experience, having successfully used these techniques to discover the world-class Bisha mine in Eritrea, which transitioned from exploration to production in a remarkably fast eight years.
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Risks in VMS Exploration
Every exploration project comes with risks, and VMS deposits are no exception. One of the major risks involves metallurgy—the process of extracting the metals from the ore.
“Metallurgy can be tricky with poly-metallic deposits, as you’re balancing different metals with different economic drivers,” the CEO explained. Copper typically leads the economic value in VMS deposits, but zinc, gold, and silver all contribute to the overall project economics.
Another risk is the fluctuation in metal prices. VMS deposits are sensitive to market conditions because their value is derived from multiple metals. However, the CEO pointed out that even smaller VMS deposits—such as those with five million tons—can be economic if the grades are high enough, particularly if satellite deposits can be found nearby to feed into the mine.
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Case Study: The Bisha Discovery
The Bisha discovery in Eritrea was a landmark project for the CEO’s team. Initially starting as an exploration project in 2003, Bisha turned into a world-class mine with significant copper, zinc, gold, and silver production. The deposit had three distinct zones: an oxide gold zone at the surface, a supergene copper zone, and a deeper primary VMS zone rich in zinc and copper.
“It took us just eight years to go from our first drill hole to production, which is lightning fast in this industry,” said the CEO. Bisha became highly profitable, with the company generating over half a billion dollars in revenue within the first year of production, showcasing the potential upside of a successful VMS discovery.
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The Future: Targeting World-Class Deposits
The CEO’s company is now applying the lessons learned from Bisha to their current projects. With a target size of 50 to 100 million tons for world-class deposits, they are focusing their efforts on discovering significant VMS clusters. The company is prioritizing areas with multiple exploration targets and strong geophysical anomalies.
One standout area is the Anga North target, which has shown highly promising geophysical data. It remains the top focus for future drilling campaigns. The CEO emphasized their disciplined approach: “We have a checklist of things we want to see: conductors, gravity anomalies, and copper-zinc signatures in soil sampling. We’ve stacked enough evidence here to be confident.”
Exploration is expected to ramp up as the company continues to raise funds and drill deeper into these promising targets. For now, the focus remains on the exploration phase, with an eye toward future discoveries that could mirror the success of Bisha.
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Conclusion
Volcanogenic Massive Sulfide (VMS) deposits present a unique opportunity in the mining world, offering high-grade, poly-metallic ores that can support economically viable mining operations. The CEO’s company is leveraging decades of experience and a proven exploration methodology to target significant discoveries in underexplored regions. With a clear roadmap and strong exploration fundamentals, the company remains focused on discovering the next world-class VMS deposit.
However, as always in exploration, risks remain high, and success is never guaranteed, especially in complex regions like East Africa. Time will tell if the company can replicate its past successes and unlock the potential of these hidden treasures.
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This is a very brief summary of what was a lengthy interview. Don’t rely on this summary. Watch the full interview which is linked above.
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