Alaska sees significant mining developments in March, says Freeman

Although the traditional Alaska field season has not really arrived yet, three significant developments occurred in March: Teck Cominco and Sumitomo Metal Mining received final permits for the Pogo gold project from the U.S. Environmental Protection Agency allowing construction to move ahead at flank speed, Anglo American acquired its first U.S. mineral property in years by signing a joint venture option on Nevada Star's MAN nickel-copper-platinum group element project and NovaGold and Kennecott signed a joint venture on one of Alaska's golden oldies, the Arctic copper, gold, silver, zinc and lead deposit in the prolific Ambler massive sulfide belt.

These milestones are important in that the Pogo project moved from nothing to mine construction in less than 10 years, the MAN project represents the culmination of several new exploration techniques which successfully located nickel, copper and platinum group elements, all of which have future demand curves that bode well for the project, and the Ambler district went to sleep when Czar Jimmy Carter pushed ANILCA through Congress in 1980 and threw future Brooks Range development into doubt.

The most significant commonality among these properties is the fact that the districts in which they are located possess significant potential for additional discoveries, a thought that warms the heart of exploration geologists like me!

Western Alaska

Northern Dynasty Minerals announced that it had begun engineering and environmental/permitting studies at its Pebble copper-gold project near Iliamna. These studies include access and power alternatives, optimum milling rates (currently estimated at 90,000 to 200,000 tonnes per day), environmental baseline data, and other items that will be required for completion of an environmental impact statement. In this regard, the Tundra Telegraph reported that fieldwork related to diamond drilling at Pebble began in March, well before the snows of winter left the project.

Liberty Star Gold Corp. reported that airborne magnetics surveys were 80 percent complete at its BC copper-gold property near Iliamna. This effort is designed to help delineate additional porphyry copper-gold targets in the recently identified Big Chunk volcanic caldera which hosts the nearby Pebble deposit. The survey is designed to include approximately 18,099 line-kilometers at 275-meter line spacings and is expected to be completed in May with field exploration commencing in mid-May.

NovaGold Resources announced that its joint venture partner, Placer Dome, plans to spend $6 million in 2004 on environmental and engineering studies for development of the Donlin Creek project. On-going studies have identified feasible alternatives for project access and power supply. Drilling activities related to engineering studies have already begun on the project.

NovaGold Resources also said that it is continuing engineering and exploration work to evaluate the potential to restart placer mining at its Nome gold project in the Nome district. The property contains a measured and indicated resource estimated at 1.2 million ounces of gold and an inferred resource estimated at 1.1 million ounces of gold. More than 4 million ounces of gold have been extracted from the property since its discovery around 1900. Mining on the project was terminated in 1998 due to low gold prices. The company has budgeted $500,000 for delineation drilling and engineering work in 2004.

Eastern Interior

Freegold Ventures Ltd. and joint venture partner Meridian Gold announced that diamond core drilling had begun at its Golden Summit project in the Fairbanks district. Initial drilling will be targeting the strike extension of previously intersected high-grade mineralization at the historic Cleary Hill mine. Drill efforts will be probing below levels previously mined on the property.

Tri-Valley Corp. announced plans to spin off its 42 square mile Richardson gold project into a new public company designed specifically to develop its gold properties. The company plans to raise up to $25 million through future public offerings.

The biggest news of the year (at least so far!) came on March 15 when the EPA approved the discharge permit for Teck Cominco and Sumitomo Metal Mining's Pogo gold project in the Goodpaster district. This marked the final permit needed for the project and was followed soon thereafter by the sound of personnel and equipment beginning the 25-33 month task of building a mine, access road and power facilities for the 5.6 million ounce deposit. Congratulations Teck Cominco and Sumitomo Metal Mining on a job well done!

Alaska Range

Nevada Star Resources came in with much anticipated news by announcing that mining giant Anglo American Exploration (Canada) has exercised its option to enter into a joint venture on Nevada Star's MAN nickel-copper-platinum group element project in the Delta district.

Under the terms of the proposed option/joint venture agreement, Anglo American can earn a 51 percent interest in a portion of the property by spending a total of $12 million over a five-year earn-in period.

Anglo American has the right to increase its interest by an additional 19 percent by completing a feasibility study and an additional 5 percent by arranging production financing for both partners.

Nevada Star also announced results from more than 500 soil samples collected over the Fish Lake and Dunite Hill intrusive complexes.

Proprietary sampling techniques utilized in this sampling confirmed the presence of elevated nickel-copper-platinum-palladium-cobalt-iron in soils, with up to 542 parts per million nickel and 80 parts per million copper in soils at the Tres Equis nickel prospect in the Fish Lake complex.

The survey also revealed a 1.5-kilometer long anomalous soil zone on the Fish Lake complex where values up to 881 parts per million nickel and 589 parts per million cobalt were detected.

At Dunite Hill, elevated nickel-copper-platinum-palladium soil concentrations of up to 1,455 parts per million nickel and 131 parts per million copper confirm the location of previous Mobile Metal Ion Ni soil anomalies near the north side of the complex, west of Fourteenmile Lake.

Nevada Star also announced that it is seeking joint venture participation in its Canwell, Rainy, Broxson, Eureka and Summit Hill prospects, also located in the same area as the Fish Lake and Dunite Hill complexes optioned to Anglo American.

Northern Alaska

In a breath from the past, NovaGold Resources said that it had acquired an option from Kennecott Exploration Co. and Kennecott Arctic Co. to explore and develop the Ambler project in the southern Brooks Range.

For those of you still wet behind the ears, the Ambler project contains several know volcanogenic massive sulfide occurrences discovered in the 1970s but not significantly explored in more than a decade.

The most advanced target on the property is the Arctic deposit which has an inferred resource of 36.3 million tonnes with precious metals grading 0.7 grams of gold per tonne and 54.9 grams of silver per tonne (1.64 grams per tonne gold equivalent) and base metals grading 4 percent copper, 5.5 percent zinc and 0.8 percent lead (7 percent copper equivalent).

The contained precious metals in this resource total 817,000 ounces of gold and 62.1 million ounces of silver (1.9 million ounces gold equivalent) and the base metals total 3.2 billion pounds of copper, 4.2 billion pounds of zinc and 640 million pounds of lead (5.6 billion pounds copper equivalent using US$350 per ounce of gold and US$6 per ounce silver, and US90 cents per pound copper, US45 cents per pound zinc and US35 cents per pound lead).

This estimate was based on 70 wide-spaced drill holes and ranks the deposit as one of the largest volcanogenic massive sulfides in the world.

The favorable mineralized horizon at the Arctic deposit has been mapped over a strike length exceeding 50 miles east and west of the deposit.

Under the terms of the agreement, NovaGold can earn a 51 percent interest in the project by matching Kennecott's expenditures on the property totaling US$20 million before 2016.

During the first five years of the agreement NovaGold must spend a minimum of US$5 million on exploration and development work and obtain memorandums of understanding with land owners in the region necessary to provide access for mine development.

During the second phase of the agreement NovaGold must spend the balance of the earn-in funds (to total $US20 million) and complete a pre-feasibility study resulting in a positive rate of return using a 10 percent discount rate.

NovaGold is manager of the project through to the completion of a final positive feasibility study at which time Kennecott has a one-time option to acquire an extra 2 percent interest in the project, and take over management of construction and operation of the mine by making a payment to NovaGold equivalent to 4 percent of the project's net present value using a 12.5 percent discount rate.

NovaGold has budgeted a minimum $1 million for exploration and development work on the Ambler project for 2004 including an initial 6,000-foot core drilling program.

Other

Rio Fortuna Exploration and Bravo Venture Group jointly announced that Joe Kizis has become president of both companies. Joe is a well-known Great Basin expert and will be bringing his extensive experience to Rio Fortuna's Divide gold project near Nome and Bravo's Woewodski Island massive sulfide project near Petersburg. Welcome to Alaska Joe!

Author Bio

Curt is President of Avalon Development Corporation, a mineral exploration consulting firm based in Fairbanks, Alaska. He is a U.S. Certified Professional Geologist with the American Institute of Professional Geologists (CPG #6901) and is a licensed geologist in the State of Alaska (Lic. # AA 159).

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• Phone: 907-457-5159
• Contact Curt Freeman