Alaska mining news summary: Companies continue to report 2006 exploration results

Over the last month the Alaska mineral industry continued to report results from 2006 exploration programs including new acquisitions of projects that have been on the back shelf for over 25 years. The industry watched as the American political scene was drastically changed at both the federal and state levels. And despite the fact that the end of the year is nearing, there is no end in sight yet for a number of exploration and development projects while at the same time contracts for work in 2007 already are being inked. If you were thinking there would be a short breather at the end of 2006 before 2007 activities got under way, you were mistaken!

Western Alaska

Teck-Cominco's Red Dog mine had operating profits of $216 million in the third quarter vs. $106 million in the same period in 2005. For the quarter the mine generated 155,300 tonnes of zinc and 32,900 tonnes of lead in concentrate vs. 155,600 and 28,800 tonnes of zinc and lead, respectively, in third quarter 2005. The mine sold 117,200 tonnes of zinc and 52,900 tonnes of lead during the third quarter. Average zinc and lead grade mined was 20.5 percent and 6.1 percent vs. 20.8 percent and 5.7 percent, respectively, in the same quarter last year. Mill throughput of 891,000 tonnes was up slightly from the 872,000 tonnes milled in third quarter 2005.

Despite a late start on shipping concentrates due to inclement weather, Red Dog shipped 1,022,000 tonnes of zinc concentrate and 228,000 tonnes of lead concentrate during the 2006 shipping season.

St. Andrew Goldfields has begun commissioning of the gold mill at Nixon Fork gold-copper mine, a process expected to take two weeks - at which point underground ore from the Crystal Garnet portion of the deposit will be processed at the rated 150 tonnes per day.

Full Metal Minerals and Triex Minerals announced drill program results at the Boulder Creek uranium deposit on the Seward Peninsula. Two holes completed in the core of the deposit confirmed the historic grade and thickness of the deposit for sandstone-hosted uranium deposit types. Hole DV06-54 was completed in the core of the northern part of the deposit and returned 0.317 percent U3O8 over 3.0 meters. Hole DV06-64 contained 0.317 percent U3O8 over 2.0 meters within a larger interval that contained 5.0 meters of 0.165 percent U3O8.

Possible extensions of the deposit are open to the north and south. Two holes were completed at Carbon Creek, seven kilometers northwest along strike from the main deposit at Boulder Creek. These holes did not intersect significant uranium mineralization, but favorable host stratigraphy was confirmed. Results are pending on reconnaissance exploration completed elsewhere on the project.

Full Metal Minerals and Andover Ventures announced results from a five hole, 750 meter diamond drilling and surface exploration program at the Kamishak copper-gold project in southwest Alaska. Significant results include 73.5 meters averaging 0.31 percent copper and 0.28 grams of gold per tonne in hole KS06-1 and 51 meters averaging 0.48 percent copper and 0.46 grams of gold per tonne in hole KS06-4. These holes tested copper-gold mineralization in altered heterolithic breccia containing pyrite, chalcopyrite and magnetite. Copper-gold mineralization remains open ended to the southwest and northeast.

Andover announced preliminary sampling results from its KUY project. Twelve samples collected at one-meter intervals along a 15 to 30 centimeter wide quartz vein cutting Tertiary volcanic rocks returned grades ranging from 6.5 to 869 grams of gold per tonne. The vein is traceable on the surface for at least another 30 meters in a cliff face but is otherwise covered by alluvium and outwash. The sampled vein cuts an altered early Tertiary volcanic section. Area porphyry-copper style geology, mineralization and alteration suggest gold mineralization might be part of a larger hydrothermal system.

In addition to rock sampling, work included two 2.5 kilometer long induced polarization geophysical lines, one over the location of the gold-bearing quartz vein and a second 300 meters to the south. Results suggest highly chargeable and conductive zones at depths of 150 to 300 meters.

TNR Gold said far drilling in the Winchester zone of its Shotgun gold project in southwestern Alaska has discovered gold mineralization over an area of 300 by 300 meters where gold is hosted in multiple, gold-bearing sills and the adjacent highly altered sedimentary rocks that host the sills. Results include 16.6 meters grading 1.07 grams of gold per tonne in hole 44, 23.6 meters grading 1.90 grams of gold per tonne in hole 45, and 12.2 meters grading 1.40 grams of gold per tonne in hole 50.

Full Metal Minerals and JV partner Metallica Resources said two holes were completed at the Bee Creek prospect on their Alaska Peninsula project. Results included 34 meters of 0.26 percent copper and 0.085 grams of gold per tonne in hole BC06-08 and 40 meters grading 0.51 percent copper and 0.212 grams of gold per tonne in hole BC06-09. Copper-gold mineralization is hosted primarily within hornfelsed sedimentary rocks and to a lesser extent in biotite altered diorite as quartz-magnetite-chalcopyrite-bearing stockwork veinlets. Intrusive rocks were poorly mineralized and possibly post-dated mineralization.

Eastern Interior

Kinross Gold said its Fort Knox mine near Fairbanks produced 81,348 ounces of gold in the third quarter vs. 88,298 ounces in third quarter 2005. Cash costs were $281 per ounce vs. $278 in the same period in 2005. Decreased production was due in part to a 17 percent decrease in grade mined and a 2 percent decrease in mill recovery. For the quarter the mine processed 3,507,000 tonnes of ore grading 0.76 grams of gold per tonne with a recovery rate of 86.8 percent. Heap leach feasibility and environmental impact work is on-going.

Freegold Ventures said bulk sampling had commenced at the Cleary Hill mine prospect on its Golden Summit project near Fairbanks.

An initial 10,000 tons of high-grade surface vein material was being extracted from the Cleary Hill Eastern Extension and the Cleary Hill South vein swarm.

Additional 5-foot long channel samples, located 5-10 feet into the hanging wall returned assays of 25.3 grams of gold per tonne, 34.3 grams of gold per tonne, 31.1 grams of gold per tonne and 26.1 grams of gold per tonne.

An area stripped a further 80 feet to the south of the current pit wall returned an additional 22.3 grams of gold per tonne over a 15-foot long channel sample.

The building of the new haul road exposed several previously unknown veins.

One of the new structures, located 80 feet to the north of the Wackwitz vein, assayed 15.45 grams of gold per tonne over 5 feet.

Trenching and sampling of the Currey zone, immediately south of the Wackwitz vein, has extended mineralization an additional 220 feet to the southwest, with preliminary assays from the 5-foot wide channel sampling over the first 120 feet of extension averaging 2.35 grams of gold per tonne.

Pending results from on-going trenching and sampling, the company may apply for a small miners permit to expand activities in 2007.

Teck Cominco said production from the Pogo gold mine was interrupted by a fire at its power facility in October. Power was restored to key facilities but full-scale production will be delayed for equipment replacement. The company also reported production of 18,000 ounces of gold in the third quarter.

Full Metal Minerals announced a second massive sulfide discovery at its Fortymile project.

Drilling on the Fish Creek prospect returned 11 meters grading 205.2 grams of silver per tonne, 0.11 percent copper, 0.20 percent lead and 4.2 percent zinc in hole Fish06-01, 12.8 meters grading 181.3 grams of silver per tonne, 0.09 percent copper, 0.41 percent lead and 4.0 percent zinc in hole Fish06-02 and 8.2 meters grading 1.01 grams of gold per tonne and 118.8 grams of silver per tonne in hole Fish 06-06.

Surface sampling has traced mineralization for 1,500 meters along strike and 250 meters down dip.

Drilling tested approximately 500 meters of strike length and 175 meters down dip.

More work is planned for 2007.

Northern Alaska

Andover signed a letter of intent with Hastings Base Metals to purchase 50 percent of the Ambler Dsitrict's Sun massive sulfide occurrence for $3 million, including a $300,000 non-refundable deposit. Historic surface mineable resources at Sun total 2,399,000 tons grading 1.93 percent copper, 4.51 percent zinc, 1.2 percent lead and 2.39 ounces of silver per ton while underground resources were estimated at 17,891,000 tons grading 1.91 percent copper, 4.46 percent zinc, 1.18 percent lead and 2.37 ounces of silver per ton.

Southeast Alaska

Kennecott (70.3 percent) and Hecla (29.7 percent) announced third quarter production from the Greens Creek mine on Admiralty Island.

The cash cost per ounce of silver was negative $2.61 due to the significant gold, lead and zinc byproduct credits.

The average grade of ore mined during the quarter was 18.05 ounces of silver per ton, up over 2.5 ounces per tonne in the same period in 2005.

During the third quarter the mine produced 2,552,522 ounces of silver, 15,822 ounces of gold, 5,623 tons of lead and 13,932 tons of zinc.

Total production costs were 24 cents per ounce of silver, a drastic decrease from $5.87 per ounce in third quarter 2005.

The companies indicated that good exploration results in the northern extension of the 5250 Zone have resulted in a continued focus on exploration in this area.

Coeur d'Alene Mines said third quarter capital expenditures from its Kensington development north of Juneau totaled $41.9 million as the company continued with construction, primarily of the mill and crusher buildings. Coeur completed more than 4,600 feet of core drilling during the third quarter, bringing the year-to-date total to 32,000-feet-plus. Surface drilling of 4,200 feet on the adjacent Jualin property began in the third quarter.