The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Normally at this time of year the mining industry's seasonal peak of activity is over and the paucity of news coming from the bush is a function of the dwindling volume of work going on out there. While there has been the anticipated lull in mining results released to the public in the last month, I can almost hear the deep, slow collective inhalation of breath being taken by the industry as it catches its second wind and launches an unusually diverse series of fall and winter programs. These efforts span the gamut from trenching and drilling to bulk sampling and mine construction and are spread out all over the state. Read on but remember, there is a lot more to come in 2006!
Western Alaska
Somehow Teck-Cominco's second quarter results (released in late July) escaped my attention so to set matters straight (and keep George Cole from hammering me), here is the dope. The Red Dog mine saw continued strong operating profits in the second quarter of 2006 as a result of strong zinc and lead prices. Operating profit was $102 million vs. an operating profit of $9 million in the same period in 2005. For the quarter, the mine generated 132,220 tonnes of zinc and 23,000 tonnes of lead in concentrate vs. 134,400 and 23,700 tonnes of zinc and lead, respectively, in the second quarter of 2005.
The mine sold 58,300 tonnes of zinc and no lead during the second quarter. Average zinc and lead grade mined was 20.4 percent and 5.9 percent vs. 21.7 percent and 5.5 percent, respectively, in the second quarter of 2005. Mill throughput of 780,000 tonnes in the second quarter was significantly up from the 741,000 tonnes milled in the second quarter 2005.
A delay in shipping concentrates due to inclement weather in the third quarter prompted the company to downgrade shipment estimates by 50,000 tonnes in the third quarter. The company still plans to ship 550,000 tonnes of concentrate during the 2006 shipping season.
NovaGold Resources and Barrick Gold Corp. continued their fight over the latter's $1.53 billion hostile corporate takeover offer which was extended in late September and is due to expire again in late October.
In the mean time, the initial results from 2006 drilling at Donlin Creek include hole DC06-1114 with three mineralized intervals totaling 117 meters grading 4.10 grams of gold per tonne, hole DC06-1115 with seven mineralized intervals totaling 104 meters grading 5.01 grams of gold per tonne, hole DC06-1144 with 10 mineralized intervals totaling 194 meters grading 3.64 grams of gold per tonne, hole DC06-1243 with seven mineralized intervals totaling 136 meters grading 3.95 grams of gold per tonne, and hole DC06-1259 with six mineralized intervals totaling 87 meters grading 4.58 grams of gold per tonne.
Drill hole DC06-1144, which starts within the edge of the resource pit, has intercepted new mineralization outside of previous pit boundaries and extends the Acma zone to the east. Through mid-September just over 56,500 meters of drilling had been completed on the approved 80,000 meter 2006 drilling campaign.
NovaGold Resources also announced that SRK Consulting has completed an independent preliminary economic assessment of the Donlin Creek project. The study was based on a conventional open-pit mining operation milling 60,000 tonnes of ore per day with the potential to produce on average 1.4 million ounces of gold per year over the 22-year life of the project.
For the first seven years the mine would produce 1.885 million ounces of gold per year at a cash cost of $223 per ounce. Average life of mine cash cost was estimated at $276 per ounce. At the base case $500 per ounce of gold, SRK estimates a net present value at a 5 percent discount rate of slightly over $1 billion with a payback of capital costs in less than 5 years.
Andover Ventures also announced that it has completed four step-out HQ core holes at the "Big Pig" target on its Bulk Gold project north of Nome. Two of the holes intersected sulfide mineralization consistent with mineralization encountered by a previous exploration company in a vertical core hole drilled in 2000 which assayed 0.5 grams of gold per tonne over 14.6 meters. Core from the 2006 drill holes contained disseminated pyrite, arsenopyrite and/or stibnite and suggest the Big Pig target appears to be a northwesterly dipping, stratiform zone that is open in three directions. Assays are pending.
Brett Resources announced results of the core drilling project completed in August at its Sleitat Mountain tin project in southwest Alaska. The five holes all reached their target depths and all but one encountered substantial thickness of better than 0.2 percent tin, including 104 meters of 0.24 percent tin and 6.48 grams of silver per tonne and 66 meters of 0.29 percent tin and 14.10 grams of silver per tonne.
Limited drilling was targeted at replicating results from previous drilling with 2006 results indicating a close correlation with tin and a more variable range of silver values. The north-south fence of holes verified that the main greisen alteration zone is mineralized with 0.2-0.3 percent tin and better than 6 grams silver, for a minimum of 100 meters in width. Mineralization extends to a depth of 150 meters and along strike for at least 250 meters.
Eastern Interior
Teryl Resources has commenced drilling at its Gil project in the Fairbanks District. The initial drill program will consist of 2,000 feet of drilling in three drill holes to test a new gold target located by integrating previous geological and geochemical with recently acquired geophysical data. Results are pending.
Linux Gold Corp. has located six new geophysical targets on the Fish Creek property near Fairbanks. The targets were generated by recent electromagnetic and magnetic surveys and include conductive gradients at depth or along a structure suggestive of areas of higher fracture density, magnetic highs with good depth extent that are interpreted as intrusives and linear magnetic highs that may be calc-silicate horizons similar to those that host the nearby Gil deposit.
Freegold Ventures Ltd. has begun 2,500 feet of new trenching designed to further extend the strike length and identify other possible parallel structures at the Cleary Hill mine prospect on its Golden Summit project near Fairbanks. Following completion of trenching, the company plans to take a 10,000-ton bulk sample from the highest-grade areas identified by trenching. Each structure mined in the bulk-sampling program will be segregated into separate stockpiles, crushed and sampled to obtain representative head-grade values. Following sampling, the mineralized material will be processed using gravity techniques.
International Tower Hill Mines Ltd. announced the acquisition of an additional 28 square kilometers of land bordering its Livengood gold project. Following this acquisition, the company immediately began a 2,500 meter core drilling program designed to test the project's bulk tonnage potential. The main bulk tonnage target on the Livengood property has been defined by a series of soil and rock surveys conducted over the past 15 years, which collectively define a mineralized area of approximately five square kilometers.
Gold mineralization is associated with multiple stage quartz veining associated with pyrite, arsenopyrite, stibnite and trace elements indicative of a large, high level gold system.
Vein and associated disseminated mineralization are best developed within a volcano-sedimentary rock package that lies in the lower plate of a major thrust sequence and is spatially and possibly genetically associated with a 90 million year old dike and sill complex.
The 10-year renewable lease agreement requires International Tower Hill to make yearly lease payments starting at $75,000 per year, meet yearly work commitments starting at $100,000 per year and pay a 2-5 percent net smelter return royalty on production.
Teck Cominco announced that production from the Pogo gold mine was 15,000 ounces in the second quarter of 2006. Mine operating costs are not being published since the operation has not yet reached full scale production.
Full Metal Minerals announced that the first drill hole at the LWM prospect on its Fortymile project encountered a significant interval of massive sulfides.
Hole LWM06-01 intercepted 12.1 meters grading 110.9 grams of silver per tonne, 0.32 percent copper, 4 percent lead and 11.6 percent zinc including 6.6 meters grading 200.8 grams of silver per tonne, 0.56 percent copper, 7.2 percent lead and 19.3 percent zinc.
Mineralization consisted of coarse grained, banded massive pyrite, chalcopyrite, sphalerite and galena hosted within brecciated and locally silicified argillite.
Diamond drilling targeted a gravity high identified during a ground-based survey, coinciding with a multi-element soil anomaly.
Two additional drill holes were completed at LWM, and further assays are pending.
Alaska Range
Full Metal Minerals announced additional drilling results from its Lucky Shot project in Southcentral Alaska. The most recent assay results include hole C06-37 which returned 1.73 meters true width averaging 29.5 grams of gold per tonne, hole C06-32 which returned 0.91 meters true width averaging 22.3 grams of gold per tonne and hole C06-36 which returned 1.99 meters true width averaging 11.8 grams of gold per tonne.
Holes C06-32 to 34 are the westernmost holes drilled to-date at Lucky Shot. In this area, late brittle faulting has down-dropped the Lucky Shot shear to the north, extending the up-dip potential of the structure. Coarse visible gold mineralization is evident in these holes, and the shear remains open for expansion to the west. To-date, 61 of 90 planned core holes have been completed on the Lucky Shot shear during the 2006 season.
Northern Alaska
Little Squaw Gold Mining announced initial drill results on its Little Squaw project in the Brooks Range.
Results are in for 12 of 39 drill holes completed on the project in September.
High grade exploration potential is indicated by results in holes SUM 7, 8, 9 and 10 at the Summit prospect, which returned values from 3.24 to 9.05 grams of gold per tonne including a 5-foot intercept of 16.15 grams of gold per tonne in hole SUM 8.
Drilling on the Little Squaw vein returned values up to 25 feet grading 4.21 grams of gold per tonne including 5 feet grading 10.75 grams of gold per tonne.
All drill holes that penetrated their targets at the Summit and Little Squaw prospects contain gold mineralization.
Assay results confirm continuity of gold mineralization to at least 200 feet below surface.
The drilling and the systematic surface soil and rock sampling confirm that individual gold-bearing quartz veins and shear zones persist over several thousand feet of strike length.
Silverado Gold Mines announced that recent drilling on a portion of the Slisco Bench, located on the Hammond River portion of its Nolan project has intercepted high grade placer gold mineralization. A total of 39 drill holes were completed at Slisco Bench during the summer 2006 exploration program. To date, 20 out of 39 drill holes at Slisco Bench have been processed and analyzed for placer gold. Out of these 20, 11 drill holes show visible gold with values ranging from 0.009 to 0.495 ounces of gold per cubic yard.
Southeast Alaska
Bravo Venture Group has begun a trenching program at its Woewodski Island project in Southeast Alaska. The next phase of work will utilize mechanical trenching to help identify drill targets in a number of areas including where earlier surface sampling returned gold assays of up to 489.1 grams of gold per tonne (14.3 ounces of gold per tonne) from surface subcrop and float samples.
Full Metal Minerals announced acquisition of the Mount Andrew copper-gold project in southeast Alaska. The company can earn a 100 percent interest in the project from Mount Andrew Mining Co. by expending $800,000 in exploration over four years, and paying $210,000 in cash over four years. Upon commercial production, the owner will receive a 2 percent net smelter return royalty which increases to 4 percent after the fifth year of production. The Mount Andrew mine was discovered in 1989 and produced copper, silver and gold. The company began a six-hole, 600 meter core drilling program immediately after signing the deal.
Other
For those of you who have not heard, Alaska's Mark Myers has been named as the new director of the U.S Geological Survey. Mark was former state geologist, director of the Division of Oil and Gas and director of the Division of Geological and Geophysical Surveys. His new staff of 10,000 has annual budgets in excess of $1 billion. Congratulation Mark!
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