Alaska pops its news cork: New mine being built, Donlin bumped to 32.7M ounces, lawsuits, more

By most years' standards, the last month has been a barn burner for mining news. By 2006 standards it hardly measures on the Mining Industry Care-O-Meter, a highly subjective, totally unscientific measurement of what is happening in Alaska's mineral industry.

In the last month we have seen the state's largest primary gold deposit resources increase to a mind-boggling 32 million ounces, we've seen one new mine begin commercial construction, we've seen one mine under construction receive a partial injunction against part of its mine plan and two partners enter the lawsuit stage over a $1.5 billion hostile takeover attempt.

We've also seen one project return nearly half-mile drill intervals of plus-1 percent copper-gold-molybdenum mineralization and two new joint ventures announced on Alaska Native corporation lands.

Other than that, not much to write home about.

Western Alaska

NovaGold Resources and Barrick Gold Corp. continued their fight over the latter's $1.53 billion hostile corporate takeover offer. The dispute has moved to court where efforts by both parties continue. In the meantime NovaGold released updated resource numbers on its Donlin Creek gold deposit. The deposit now hosts measured and indicated resources of 16.1 million ounces grading 2.33 grams of gold per tonne at a 0.76 gram per tonne cutoff grade. Inferred resources stand at 16.6 million ounces grading 2.27 grams of gold per tonne. All this pushes the resources at the Donlin Creek deposit to 32.7 million ounces, an increase of almost 4 million ounces since the last resource update in January.

Rumor also has it that this year's 80,000-meter program has resulted in a new discovery near the ACMA portion of the deposit. No details are available on this new discovery but the Tundra Telegraph is alive with speculation.

NovaGold Resources also announced that construction has commenced at its recently permitted Rock Creek gold deposit near Nome. The 100,000 ounce-per-year operation will derive its 7,000 ton-per-day feed from Rock Creek and the Big Hurrah mines with commercial production due to begin in mid-2007.

New resource updates at Rock Creek include indicated resources of 9.6 million tonnes grading 1.31 grams of gold per tonne (404,000 ounces) and inferred resources of 1.4 million tonnes grading 0.96 grams of gold per tonne (44,000 ounces). At Big Hurrah, indicated resources are 1.8 million tonnes grading 4.61 grams of gold per tonne (273,000 ounces) and inferred resources of 600,000 tonnes grading 3.05 grams of gold per tonne (56,000 ounces).

Northern Dynasty released the first of its long-anticipated results from the deep drilling being conducted at the East zone of its Pebble copper-gold-molybdenum deposit. Highlights include hole 6338 which intersected 1,225 feet grading 0.45 percent copper, 1.03 grams of gold per tonne and 0.040 percent molybdenum. Hole 6339 intersected 2,051 feet grading 0.84 percent copper, 0.49 grams of gold per tonne and 0.032 percent molybdenum. Hole 6341 intersected 2,329 feet grading 0.63 percent copper, 0.27 grams of gold per tonne and 0.052 percent molybdenum. Hole 6342 intersected 1,170 feet grading 0.73 percent copper, 0.37 grams of gold per tonne and 0.036 percent molybdenum.

Holes 6339, 6341 and 6342 are outside the envelope of the 1.8-billion tonne inferred resource previously announced for Pebble East. The company plans to drill through the winter months in order to fully define the Pebble East resource for mine planning purposes.

Andover Ventures has mobilized a drill to its recently acquired Bulk Gold project in the Nome District. The company plans to complete 600 meters of core drilling at the Dripping Gold and Dorothy Creek zones.

Tonogold Resources had completed its drilling and sampling program at the Nyac project in southwest Alaska. Eleven holes were drilled at the Bonanza Ridge, Shamrock and Wallace prospects.

Assays from the first four holes, all at Bonanza Ridge, included 8.6 grams of gold per tonne over 0.6 meters in hole No. 1. Mineralization included quartz-calcite-pyrite-chalcopyrite-bismuthinite veinlets associated with an aplite dike in sericite-altered granodiorite. Several fractures with similar wall rock alteration yielded isolated two meter intervals grading 1.0 gram of gold per tonne.

At the Wallace prospect drilling intersected a coarsely crystalline quartz-calcite-pyrrhotite-chalcopyrite-pyrite vein in drill hole No. 10 with a narrower counterpart in drill hole No. 11. Besides the favorable gangue and sulfides (20 percent sulfides in drill hole No. 10), each vein intercept is characterized by a narrow chalcedonic silica alteration envelope surrounded by a wide propylitic alteration envelope. Host rocks are Jurassic andesitic volcanics. Assays are pending on additional drilling as well as rock and soil sampling.

Pacific North West Capital announced completion of a soil and rock sampling program at its Goodnews Bay platinum project in southwestern Alaska. Assays are pending.

Full Metal Minerals and JV partner Triex Minerals announced preliminary exploration results from its Boulder Creek uranium project on the Seward Peninsula.

Twelve infill and step-out holes were collared at the Boulder Creek deposit while two holes were completed in the nearby Carbon Creek prospect.

Additional surface mapping and sampling was performed concurrently with drilling.

A total of 286 surface geochemical samples were collected over three main target areas to the west of Boulder Creek.

Approximately 1,768 line-kilometers of airborne radiometrics were flown over four main target areas.

Additional reconnaissance exploration work is in progress to follow up on anomalous geochemical and geophysical targets in preparation for the 2007 field season.

Andover Ventures also announced that it had entered into an exploration agreement with Bristol Bay Native Corp. on 18,000 hectares of land on the Alaska Peninsula. The project area includes five high priority exploration targets: KUY, Fog Lake, Kemuk, Chilikat and Samuelsen.

The KUY property is an epithermal gold-silver telluride target where mineralization is hosted in vuggy quartz veins hosted by dacite breccia. Previous samples returned values up to 56 ounces of gold per ton and 163 ounces of silver per ton along with anomalous copper, lead, and zinc. The property geology indicates that a caldera rim-related epithermal system or a porphyry copper-gold system may be present. The company has already completed two 1.5-mile-long induced polarization geophysical lines over the prospect and has identified at least one anomaly for future follow-up work.

The Fog Lake property is a copper-gold target where previous work identified a 700-meter long multi-element soil geochemical anomaly. Of the 130 soil samples in the anomalous zone, 49 contained between 100 and 18,800 parts per billion gold and 65 contained between 70 and 3,200 parts per billion copper. There is no rock exposure at the strongest portions of the soil anomaly; however, narrow massive chalcopyrite veinlets are exposed in the creek bed cutting the soil anomaly. No drilling has been done on this prospect.

The Kemuk property is centered on a strong magnetic anomaly that was identified and drilled for iron ore in the 1950s by Humble Oil Co. Recent sampling of the old drill core identified zones of anomalous platinum ranging between 30 parts per billion and 105 parts per billion.

The Chilikat claims cover coincident magnetic and radiometric geophysical anomalies and gold-copper stream sediment anomalies. The target is within the northeast-trending Mulchatna fault system at the intersection with a northwest-trending structure along which are located a series of volcanogenic, vein-hosted, and porphyry deposits. Very little prior exploration has been conducted in this area.

The Samuelsen block of claims covers anomalous heavy mineral pan concentrate and stream sediment geochemical anomalies. Visible gold grains are present in panned concentrate samples collected by the U.S. Geologic Survey in 2004.

Eastern Interior

Sumitomo Metal Mining announced that project construction costs at the Pogo gold mine have now reached $378 million, a 35 percent increase over original capitalization costs. The mine will continue to operate at 60 percent of design capacity until the end of the 1st quarter of 2007 when additional process filtration capacity will be brought online.

Rimfire Minerals has completed a reconnaissance exploration program at its Goodpaster project southeast of Fairbanks. The work consisted of mapping and prospecting to help define high priority targets discovered in previous work. Results are pending.

International Tower Hill Mines has entered into an exploration agreement with Doyon Ltd. on the West Tanana project 250 kilometers west of Fairbanks. The Monday Creek soil anomaly covers an area of roughly 1.5 kilometers by 1 kilometer and is open in all directions. A total of 117 follow-up soil anomaly confirmation samples taken by Tower Hill have confirmed and expanded these historic anomalies, returning soils values ranging from 3 to 1,010 parts-per-billion gold. Within this anomalous zone are several parallel north-east-trending gold and pathfinder geochemical anomalies. Additional geochemical sampling is being conducted on the project.

Under terms of the agreement, Tower Hill is required to pay Doyon $350,000 over six years, make annual scholarship donations of $10,000 per year and incur exploration expenditures totaling $2,625,000. Tower Hill can convert any area of the agreement to a mining lease with additional performance requirements for each mining lease area. Variable net smelter or net proceeds production royalties also are in place for each mining lease.

Alaska Range

Usibelli Coal Mine announced that it has shipped an additional 73,000 tons of coal to Chile and that the customer has the option to acquire an additional 73,000 tons before the end of 2006. Since initial test shipments to Chile in 2004, Usibelli has exported more than 250,000 metric tons of coal to three utilities that operate power plants along the west coast of Chile.

Brett Resources announced that it has completed three drill holes at its Coal Creek tin project in the southern Alaska Range. Assays are pending however significant mineralization was intercepted extending the known mineralization to depth and testing the configuration of the tin-enriched cupola.

Diamond Gold Corp. has recovered a micro diamond from a lode source on its Sable Creek claims in Southcentral Alaska. The company indicated that seven lamproite pipes and lamprophyre dikes have been identified on the project. Approximately 1,000 pounds of this material is undergoing diamond recovery analysis at present. The company plans to continue placer mining, drilling and bulk sampling in 2007.

Northern Alaska

Little Squaw Gold Mining announced updated results on its Little Squaw project in the Brooks Range. During the program 10 of the holes were drilled along the Little Squaw vein, seven holes were drilled along the Summit vein, seven holes were drilled on the Kiska vein, five holes were drilled on the Eneveloe vein, three holes were drilled on the Jupiter vein, two holes were drilled on the Uranus vein, two holes were drilled on the Crystal vein and three holes were drilled on the Rachet Ridge prospect.

Many of the holes intersected one or more distinct zones of quartz veining, each varying from five feet to 35 feet thick, with the thicker intercepts containing multiple thinner quartz veins. Results are pending.

Southeast Alaska

Coeur d'Alene Mines had some unwelcome news for its Kensington mine project in August. The company indicated that a Federal appeals court had issued a temporary injunction barring work on the Slate Lake tailings impoundment area pending resolution of a lawsuit brought by environmental groups challenging the use of Slate Lake as a tailing impoundment site. Construction efforts elsewhere on the project are continuing.