Mining news update from Curt Freeman: Reports from summer work begin to trickle in

As expected, news has begun to trickle in from projects being worked on across the state. Some of the news is good, some not so good and some makes one scratch the head and wonder what it all means. Two new corporations entered the Alaska exploration industry in August, a trend started late last year as metal prices began their climb to current levels. August also saw the start of several new programs on a wide range of projects spread from the Seward Peninsula to southern Southeastern Alaska.

The tally of the good, the bad and the ugly for 2005 will continue into September and beyond as companies try to push exploration later into the year than was the norm a few years back.

Western Alaska

NovaGold Resources and partner Placer Dome have posted initial drilling results from the Donlin Creek project. The 2005 program included a 27,000 meter (88,000 foot) drill program with 84 infill, geotechnical and condemnation core holes and 25 condemnation-geotechnical reverse circulation holes along with detailed engineering and design studies and preparation of baseline and environmental assessment data for submission of permitting documents.

Highlights of the drilling program included hole DC05-1013 which intersected five mineralized intervals totaling 160.6 meters grading 6.24 grams gold per tonne, DC05-1061 which intersected 12 mineralized intervals totaling 226.9 meters grading 4.50 grams gold per tonne and DC05-1062 which intersected six mineralized intervals totaling 134.3 meters grading 5.33 grams gold per tonne.

Highlighting the open-ended nature of the mineralization at the ACMA portion of the deposit were holes DC05-1061 which bottomed in 54.1 meters grading 5.12 grams gold per tonne and hole DC05-1062 which bottomed in 77.3 meters grading 5.24 grams gold per tonne.

In addition, the exploration crew is secretly smiling while the engineering staff frowns because new mineralization has been encountered in areas of rotary condemnation drilling in an area known as the Far East zone four kilometers east of the Acma deposit.

DR05-996 encountered 4.6 meters grading 18.07 grams gold per tonne and DR05-998 cut two mineralized intervals totaling 21.3 meters grading 3.71 grams gold per tonne.

On the engineering front, the companies reported completion of geotechnical and condemnation drilling, installation of wind monitoring instruments, additional metallurgical test work and successful exploration for a local source of calcium carbonate just to the east of the proposed open pit.

Alaska newcomer Metallica Resources Inc. said it has acquired an option from Full Metal Minerals to earn a 65 percent interest in the latter's Aleutian Islands and Alaska Peninsula projects. Under terms of the agreement, Metallica will have the option to earn a 65 percent interest in the properties by expending US$4.5 million in exploration and making cash payments totaling $250,000 over five years.

Metallica will have the option to increase its interest from 65 percent to 70 percent in properties it selects for development by completing a pre-feasibility study, and the option to earn an additional 10 percent interest by completing a final feasibility study on such properties.

The 2005 program already in progress consists of reconnaissance-level geologic mapping, geochemical and geophysical surveys, and mechanical trenching to identify areas for follow-up exploration and drilling in 2006. Work is currently focused on the Pyramid, Zachary Bay, Kawisgag, San Diego Bay, Bee Creek, Weasel Mountain and Mallard Duck Bay porphyry prospects, as well as on a large epithermal vein system that includes the Apollo-Sitka and Shumagin deposits on Unga Island and the Centennial gold deposit on Popof Island near the town of Sand Point. Welcome to Alaska Metallica Resources!

Alaska newcomer Fury Explorations Ltd. has acquired an option to earn a 45 percent interest in Full Metal Minerals' Ganes Creek project near Ophir. Under terms of the agreement, Fury will have the option to earn a 45 percent interest in the property by incurring exploration expenditures totaling US$3.5 million over four years and making cash and share payments to Full Metal, totaling US$200,000 and 800,000 shares.

Fury can vest their interest in the property by completing a bankable feasibility study, and upon a production decision, making a one-time issuance to Full Metal equal to 50,000 shares of Fury for every 1 percent that Full Metal's share of the property drops below 30 percent, up to a maximum of 500,000 shares.

The target is the bedrock source for several of Alaska's most productive placer gold producing streams. The presence of cobble-size quartz with sulfide boxwork and coarse gold suggests that the placer gold is primary, originating from nearby bedrock sources. Welcome to Alaska Fury Explorations!

Linux Gold Corp. has begun an exploration program at its Granite Mountain project on the Seward Peninsula. The 2005 program will consist of reconnaissance surface mapping and sampling of the Quartz Creek plutonic complex, the Peace River stock and the Dime Creek placer gold-platinum prospect. A limited ground-magnetic orientation survey will target selected rock contacts, alteration zones and mineralized units to analyze response and ascertain its applicability for future use. The initial objective is to develop a detailed geological and geochemical database that will help plan drilling in 2006.

Eastern Interior

Partners Teryl Resources and Linux Gold have begun an auger drilling program on the All Gold Creek geophysical anomaly on the Fish Creek property in the Fairbanks district. Several auger drill holes are planned to test an aerial geophysical anomaly with a coincident gravity low. Results are pending.

Select Resources Corp. has initiated the first phase of its 2005 exploration program on the Shorty Creek copper-gold property near Livengood. The program will consist of an extensive soil sampling survey over two intrusive-related targets identified through integration of previous surface work on the property with satellite imagery, airborne geophysics, regional geochemistry and geologic interpretation. Some 650 soil samples are expected to be collected over the two primary targets. In addition, reconnaissance sampling and geological mapping are planned as part of a preliminary evaluation of other prospective areas on the property.

Alaska Range

Nevada Star Resource Corp. has begun exploration on its MAN Alaska gold project in the central Alaska Range. The program includes geologic mapping and geochemical sampling designed to advance one or more gold and copper-gold prospects to the drill stage for 2006. Significant occurrences include the Specimen prospect hosted in albite-carbonate altered Triassic picrite volcanics with rock values up to 6.89 grams gold per tonne, 15.8 grams silver per tonne and 15.8 percent copper. At the Gezzi prospect geochemical values range up to 3.09 grams gold per tonne, 25.7 grams silver per tonne and 6.60 percent copper. The host rocks are Triassic porphyritic felsic gabbro and mafic gabbro.

At Gezzi South assays grade up to 2.49 grams gold per tonne, 3.40 grams silver per tonne and 0.50 percent copper in Triassic mafic gabbro and Late Paleozoic calc-silicate altered limestone. At the Broxson Ridge prospect rock values range up to 5.81 grams gold per tonne, 86.7 grams silver per tonne and 2.7 percent copper in Late Paleozoic pyritiferous and calcareous sedimentary rocks and gabbro. At White Marker rock values range up to 3.69 grams gold per tonne, 2.4 grams silver per tonne and 0.30 percent copper. The host rocks are Triassic melagabbro near the south margin of the mafic-ultramafic Rainy intrusive complex.

Northern Alaska

Silverado Gold Mines Ltd. plans to begin an open-cut test placer mining project at the Nolan gold property in the southern Brooks Range. The company said it expects to stockpile about 78,000 bank cubic yards of gravel during the winter, with operations winding down by March of 2006. Sluicing of the stockpiled gravel will begin during June of 2006, and be completed by the end of July 2006. Economics indicate that the effort will recover at least 2,000 ounces of placer gold.

Southeastern Alaska

Kennecott (70.3 percent) and Hecla (29.7 percent) announced second quarter 2005 production from the Greens Creek mine on Admiralty Island. The cash cost per ounce of silver at Greens Creek for the quarter was 87 cents, a 20 cent per ounce increase compared to the second quarter of 2004.

The average grade of ore mined during the quarter was 17.74 ounces of silver per ton, up nearly 1.5 ounces per tonne over the same period in 2004. During the second quarter the mine produced 2,556,989 ounces of silver, 20,013 ounces of gold, 6,148 tons of lead and 18,086 tons of zinc. Total production costs for the quarter were $3.54 per ounce of silver produced, unchanged over the previous year figures. On the exploration front, an underground exploration drift successfully crossed the Gallagher Fault zone during the second quarter and exploration and definition platforms for exploring this new zone are expected to be ready for drilling in the thirrd quarter.

Quaterra Resources announced that drilling had begun at its Duke Island copper-nickel-platinum group element project near Ketchikan. At least six 500-1,000 foot deep holes will be drilled on the Marquis, Potato Patch and Raven targets identified by recently completed gravity, magnetic and electromagnetic surveys. Geological and geophysical data suggest these prospects lie within a mineralized system that extends for over 14.5 kilometers along strike and up to 3.8 kilometers across strike with the ultimate dimensions of the mineralized system remaining open to expansion.

Freegold Ventures and joint venture partner Pacific North West Capital said 10,000 feet of diamond core drilling had been completed at the Union Bay platinum group element project near Ketchikan. The program tested a number of magnetic targets but did not identify significant platinum mineralization. Funding partner Lonmin Plc. has elected to terminate its interest in the project.