Alaska mining news and trends from geologist Curt Freeman

Alaska's "winter that wasn't" is nearing its end and with it the mining industry is gearing up for another summer season.

This season promises to see less intense activity in the gold exploration sector, more polymetallic and platinum group element exploration along with continued development activities at Red Dog, Greens Creek, Fort Knox and the Pogo project.

To underscore this recent shift away from gold and into other metals, the Prospectors and Developers Association of Canada recently awarded its prestigious Prospector of the Year award for 2000 to the team of geologists and engineers at Hudson Bay Mining and Smelting that discovered the 777 base metal deposit in the old mining camp at Flin Flon, Manitoba.

This award normally goes to more flashy characters and deposits such as the award for the discovery of the Voiseys Bay nickel deposit, the Lac Des Gras diamond discovery and the ill-fated Busang gold non-deposit.

Similar to the current circumstance where the so-called "old economy" has stomped the NAS-DOG exchange with its so called "new economy", the mining industry is returning to the realization that boring old polymetallic mineralization can help take the peaks and valleys out of the cyclic metals price markets and return a bit of sanity to the mine and the board room.

Western Alaska

Cominco American released new resource calculations at its Anarraaq zinc-lead-silver property north of Red Dog mine. Revised inferred resources stand at 17.2 million tonnes grading 15.8 percent zinc, 4.8 percent lead and 71 grams per tonne silver. Additional drilling is planned for the project in 2001.

NovaGold Resources announced that during 2000 it generated revenue of CDN$2,860,000 from its Alaska activities. Sales include $2.2 million in land sales, mostly in the Fairbanks District, $380,000 in gravel sales from Nome, gold production royalties of $79,000 and $181,000 from lease agreements and other items. The company is expecting increased revenues in 2001 and will be looking to expand its gravel and real estate sectors while exploring new lands in Alaska and Canada.

Bristol Bay Native Corp. reported that 40 year old core from the Kemuk Mt. iron ore body was recently donated to it by ExxonMobil.

The core, dating from a 1958-59 drilling program, originally totaled over 12,000 feet and was discovered in a warehouse in Houston.

The U.S. Geological Survey estimated reserves on the project at 2.2 billion tons grading 15 percent to 17 percent Fe and 2 percent to 3 percent Ti.

Traces of chalcopyrite were seen in several of the drill holes, but none of the core was analyzed for platinum-group metals until recently.

Results from analyses conducted in late 2000 include values up to 1.33 grams per tonne platinum.

The prospect is hosted in magnetite-bearing ultramafic rocks covered by unconsolidated sediments and may be genetically similar to the Goodnews Bay complex where over 600,000 ounces of alluvial platinum have been recovered since the late 1920's.

Bristol Bay currently is looking for a partner to assist in development of this project.

Eastern Interior

The big day finally arrived on March 31 for Kinross Gold and its True North satellite operation. The first truck lode of ore from True North made its way down the newly constructed access haulage road to the Fort Knox mill. From approval of the permit to first haulage was only a little over two months. Construction operations conducted by the company and its sub-contractors garnered the company high marks for road construction techniques and quality from the Alaska Department of Transportation and Public Facilities. Congratulations Kinross Gold!

Teryl Resources announced that it had arranged for $1 million in financing to cover its share of anticipated exploration for 2001 at its 20 percent owned Gil project in the Fairbanks District. Kinross Gold subsidiary Fairbanks Gold is the 80 percent owner and operator of the JV. Extensive drilling is planned for 2001 to increase resource beyond the currently published resource of 433,000 ounces of gold.

The Tundra Telegraph reported that Kennecott Exploration has initiated field work on its Uncle Sam project in the Richardson District. Details of the program have not been published.

Tri-Valley Corp. reported that Kennecott Exploration has signed a confidentiality agreement whereby Kennecott will review existing information on Tri-Valley's 100 square mile Richardson project in the Richardson District.

Tri-Valley also indicated that it would be conducting its own diamond core drilling on its Buckeye/Bald Knob prospect where high grade gold in quartz veins was found in the past. The company also indicated that it would conduct reverse circulation drilling on its First Chance Creek placer gold target where previous drift mining recovered as much as one-quarter ounce of gold in a single gold pan.

North Star Exploration initiated field work in early March its Road Metal prospect near Northway. The company is planning to complete work preparatory to an 8,000 foot drill program planned for May. In addition, the company is planning to complete geophysical surveys over the project this year.

Alaska Range

Usibelli Coal Mine has submitted permits to bring a new coal reserve into commercial production. The proposed Rosalie mine is located in the Healy Creek valley and has a reserve of 6.7 million tons of coal good for about 13.5 years of production (1.9 million tons per year). Copies of the permit are available through Dept. of Natural Resources.

Southeast Alaska

Kennecott (70.3 percent) and Hecla (29.7 percent) announced fourth quarter and year-end 2000 production results from the Greens Creek mine on Admiralty Island. The mine reported record production for the year, lower per ounce operating costs and increased production by 8 percent over 1999. The total cash cost per ounce of silver at Greens Creek in 2000 was $2.20. During 2000 the mill processed 687,646 tons of ore (1,884 tons per operating day) at a cost of $49.25 per ton. For the year, the mine produced 10,285,951 ounces of silver at a cash cost of $2.20 per ounce. The mine also produced 92,899 ounces of gold, 27,942 tons of lead and 81,941 tons of zinc.

Year-end total production costs were $4.87 per ounce of silver produced, up slightly from $4.37 per ounce total cost for 1999. Total reserves at the mine now stand at 11.1 million tons grading 0.133 ounces per ton gold, 15.7 ounces per ton silver, 4.4 percent lead and 11.9 percent zinc.

Other news

Rising tungsten prices have prompted North American Tungsten Corp. to investigate re-opening the long-idled CanTung mine in the western Northwest Territories. The mine, last operated in 1986, has been shut down due to depressed tungsten prices. If re-opened it would once again be the western hemisphere's largest tungsten producer. Although plans are still being considered, the mine probably would truck about 1,000 tonnes of tungsten ore per day about 300 miles through the Yukon to the port loading facility in Skagway.

Viceroy Resources announced its year-end 2000 production figures at its Brewery Creek heap leach mine in the Yukon. The operation produced 48,048 ounces of gold at an average cash cost of US$243 per ounce compared to 1999 production of 48,164 ounces of gold at an average cash cost of US$288 per ounce. The company indicated that year-around heap leaching will continue at the mine but seasonal mining will not be conducted unless there is a sustained increase in gold prices.

The Alaska mineral industry set another record for the value of exploration, development and production in 2000. Total value rose to over $1.3 billion on the strength of record production from Red Dog and Greens Creek. The value of production was $1.1 billion, development came in at $137 million and exploration followed at $31 million. Details are available at http://www.dggs.dnr.state.ak.us.