Mining news summary: Alaska mining industry running at over capacity

The annual running of the bulls in Pamplona can't hold a candle to the statewide frenzy that is going on right now across the length and breadth of Alaska. Measure it any way you like - meters drilled, helicopter hours used, geologists or engineers on the payroll, gallons of fuel burned or gallons of peanut butter consumed - it all comes out the same. The Alaska mineral industry is running at or over capacity and there is no sign that that will change any time soon.

The last month saw the start of multiple drilling programs in the Brooks Range, Seward Peninsula, Southwest, Southcentral and Interior Alaska; permit applications for Interior Alaska's newest heap leach gold project; and a major leap forward at Alaska's largest copper-gold deposit. Perhaps most satisfying and telling of all is the fact that thousands of e-mails and phone messages have gone unanswered because their intended recipients are in the nearly electron-free world of the Alaska bush!

Western Alaska

Northern Dynasty Minerals Ltd. announced that Kennecott Canada Exploration Inc. has acquired a 9.9 percent stock interest in Northern Dynasty. While the acquisition does not give Kennecott any rights to Northern Dynasty's Pebble copper-gold-molybdenum deposit, it does give Kennecott the right of first refusal to participate in up to 50 percent of future share placements by Northern Dynasty until Kennecott reaches 19.9 percent of Northern Dynasty's outstanding shares.

Kennecott also has the right to supply up to three technical advisors to complement Northern Dynasty's project management team. The agreement has been hailed as a very positive development in the industry due to Kennecott's worldwide expertise with deposits such as Pebble.

Tonogold Resources and JV partner Calista Corp. announced initial assay results from its Nyac project. Of the 833 grid soil samples reported to date for the Cox Mountain, Saddle Mountain and Nugget Ridge prospects, 57 soil grid samples ranged from 0.10 parts-per-million gold to 2.9 parts-per-million gold. Of the 52 rock chip samples taken during grid sampling, 11 ranged from 0.10 parts-per-million gold to 132 parts-per-million gold. The best results in 2006 have been from Saddle Mountain. Core sample results are pending from the first four drill holes on the Bonanza Ridge.

Quaterra Resources said core drilling has begun on its Big Bar copper-lead-zinc project on the Seward Peninsula. The 1,500-foot drilling program is targeting a 4,000-foot long soil anomaly that contains up to 1,920 parts-per-million copper in felsic schist that corresponds to gravity and induced polarization geophysical anomalies. Gossans collected as float from the anomalous area contain up to 0.06 grams of gold per tonne, 49.8 grams of silver per tonne, 4,260 parts-per-million copper and 3,900 parts-per-million zinc. The previously un-drilled prospect was identified by Anaconda in the early 1980s during a stream sediment and soil geochemical reconnaissance survey.

Linux Gold announced approval of a 3,000-foot core drilling program at its Granite Mountain project on the Seward Peninsula. The drilling, with depths averaging 500 feet, is to commence during late July as part of the company's $1.4 million 2006 exploration program.

Liberty Star Gold said it plans further geophysical and geochemical sampling at the Big Chunk copper-gold and Bonanza Hills gold projects for late August. At Big Chunk, field efforts will focus on the White Sox, Point Grey, Baltusrol, Bay Hill, and Silver Leaf copper prospects. In addition a large gold and indicator-element geochemical anomaly in the west portion of the Big Chunk Caldera, covering parts of the Augusta, Black Diamond and Bel Aire blocks, is recommended for additional geochemical sampling and more geophysics prior to additional drilling. At Bonanza Hills, additional rock, soil and stream sediment sampling is planned prior to possible drilling later in the year.

Eastern Interior

The biggest news of this month was from Kinross Gold.

The company said it has submitted initial draft permits to conduct a valley leach system as part of its overall operations at the Fort Knox mine near Fairbanks. The valley fill heap leach will be in the upper end of the Walter Creek drainage immediately upstream from the existing tailings impoundment. The heap leach system will cover approximately 310 acres and will have a total capacity for 160 million tons of rock. The pad is to be constructed in five stages using run-of-mine rock from the Fort Knox Pit and at least 29 million tons of ore from the Barnes Creek and Fish Creek stockpiles.

The ore is characterized by relatively high permeability that will promote efficient flow in the heap, rapid solution recovery and rapid rinsing at mine closure.

In-heap storage of process solution and storm water will be accomplished behind an embankment in the downstream toe of the heap.

The valley fill heap leach pad will be constructed with a 12-inch prepared subbase overlain by a high density geomembrane liner.

Above the geomembrane liner, there will be an overliner consisting of three feet of crushed rock containing a network of piping to promote rapid drainage.

The overliner will provide liner protection during ore loading, promote leachate collection, and maintain a low pressure on the geomembrane liner.

The facility will utilize an in-heap storage pond for collection of pregnant solution. This storage area will possess sufficient capacity for pregnant solution as well as a 24-hour storm drain down plus the runoff from the 100-year/24-hour storm event.

Beneath the in-heap storage pond, a leachate collection and recovery system will be constructed between an overlying primary geomembrane liner and an underlying secondary geomembrane liner underlain by a 12-inch-thick layered prepared subbase.

Barren solution will be applied on the heap leach using drip emitters, or possibly sprinklers, during the warm months. Pregnant solution containing gold in solution will flow to the in-heap storage reservoir, which will have an operating capacity of about 68 million gallons. Pregnant solution will be pumped into the existing Fort Knox mill for recovery and refining.

The heap leach pad will be located immediately upstream of the existing zero discharge tailing impoundment which has been designed and will be maintained to contain the 100-year/24-hour storm event and the average 30-day spring breakup plus provide three feet of freeboard. The mill and heap leach process will recycle water from the tailings impoundment for reuse in the beneficiation process. Public comments on the proposed facility are due by July 31 and details relating to the project can be acquired at http://www.dnr.state.ak.us/mlw/mining/largemine/fortknox.

Teryl Resources Corp. and JV operator Kinross Gold announced their intent to conduct drilling on the Gil project. The new gold target being explored was located by integrating geological and geochemical information with the recent geophysical data. A total of three drill holes initially is planned to test the most favorable geophysical targets.

Freegold Ventures Ltd. announced the discovery of new areas of veining and shearing to the south and along strike of the Cleary Hill mine on their Golden Summit project. Trenching commenced at the old Beistline shaft, located 1,300 feet southeast of the Cleary Hill mine.

Chip channel samples by prior operators along the Beistline shaft walls graded 0.61 ounces of gold per ton over the 109 feet of the shaft, with the top 46 feet grading 1.25 ounces of gold per ton. Trenching followed a shear zone that hosts the gold mineralization at the Beistline shaft and continued in a northwesterly direction for more than 1,000 feet towards the Cleary Hill Mine.

The shear zone width expanded from 12 feet near the Beistline shaft to more than 25 feet halfway between the Beistline shaft and the Cleary Hill Mine. The 25-foot width of the shear exposed by a cross trench matches extremely well with results from the company's prior drill hole CHM96-01 which intercepted 0.16 ounces of gold per ton over 25 feet at a depth of 25 feet. An additional 900 feet of trenching was conducted approximately 1,000 feet south of the Cleary Hill Mine, where a new shear zone was discovered parallel to and 50 feet south of the Wackwitz vein which contained coarse stringers of gold to 12.0 ounces per ton.

Veins in the Beistline and Wackwitz zones have converging strikes and trenching in their apparent intersection revealed a 200-foot wide zone containing extensive alteration and quartz veining. Assays are pending.

Rimfire Minerals Corp. said field work has begun on its large property position in the Goodpaster district. The 2006 field program will include reconnaissance silt geochemical surveys to explore a 110,000 acre claim package staked last winter. Additional work consisting of mapping and prospecting will be undertaken to examine high priority targets generated in previous programs.

Alaska Range

Full Metal Minerals announced additional high grade result from its Lucky Shot gold project near Anchorage.

To date, 28 core holes have been completed over a 200 foot strike length in the Coleman Block of the Lucky Shot Shear Zone. Significant intervals include 4.53 meters true width averaging 51.5 grams of gold per tonne in hole C06-17, 1.20 meters true width averaging 134.5 grams of gold per tonne in hole C06-19, 2.51 meters true width averaging 60.3 grams of gold per tonne in hole C06-21, 1.90 meters true width averaging 21.3 grams of gold per tonne in hole C06-20, 3.48 meters true width averaging 32.8 grams of gold per tonne in hole C06-23 and 1.68 meters true width averaging 34.1 grams of gold per tonne in hole C06-27.

Mineralization is typified by quartz veins within a strongly sericite-carbonate altered shear zone, with disseminated visible gold, tellurides and minor sulfides occurring within multiple phases of quartz veining and cataclasites. Continuity of the gold-bearing structure is excellent, with local minor offsets due to post-mineralization faulting.

Northern Alaska

Little Squaw Gold Mining said work has begun at its Little Squaw gold project in the southern Brooks Range.

Field activities to date have included collection of 235 soil samples and 15 rock samples while seven drill sites have been prepared on the Little Squaw quartz vein and four on the Rock Glacier quartz vein. Drilling was scheduled for a mid-July start-up.

Silverado Gold Mines said alluvial gold recovery operations have begun at its Nolan gold project in the southern Brooks Range.

Last winter and spring saw the completion of 1,200 feet of underground development on the Swede Channel and extraction of approximately 40 percent of the resources outlined in the underground workings.

Underground work will begin after freezeup and will include the removal of the remaining gold bearing gravels which were blocked out this year. Underground work will also be conducted on gold bearing gravels which were discovered in prior years drilling.