2005 Alaska mining value, highest ever, exceeds $1B for 10th year

As 2006 comes rapidly to a close, a glance backward in time seems appropriate. The Alaska Division of Geological and Geophysical Surveys recently released its annual summary of mining in Alaska for 2005 (yes, 2005). This report reveals that the gross value of Alaska's mineral industry in 2005 was $1.8 billion. This was the 10th straight year the value exceeded $1 billion and was the highest value ever recorded for the industry. Zinc accounted for 61.5 percent of the total mineral production, followed by gold (13.6 percent), and lesser quantities of lead, silver, rock, sand and gravel, coal and peat. The $603 million export value of minerals in 2005 is also a new record.

Mineral exports comprised 16.8 percent of the total exports from Alaska in 2005, with zinc ore accounting for 11.9 percent of the total and the highest value commodity exported from Alaska. The total minerals industry employment in 2005 is estimated to be 2,821 full-time-equivalent jobs while support services provided an average of 6,345 additional. Alaska metal miners made an average monthly wage of $6,188. Exploration expenditures in Alaska during 2005 were $103.9 million, 47 percent higher than the $70.8 million spent in 2004.

The most active region was southwestern Alaska which accounted for $58 million in exploration expenditures. More than 550,000 feet of drilling were completed in 2005 on exploration projects.

Not bad, but 2006 is going to make 2005 look like a depression!

Western Alaska

The fight is over … for now. Barrick Gold Corp. has terminated its efforts to take over NovaGold Resources and has indicated that its efforts have netted it about 14.8 percent of NovaGold's shares. Rumors that the two companies had begun "friendly" takeover discussions were quickly and emphatically denied by Barrick. Life goes on.

NovaGold Resources announced that the U.S Army Corps of Engineers has suspended its previously issued Section 404 permit for the company's Rock Creek mine, now under construction near Nome. NovaGold will continue its activities elsewhere on the project while the Corps reviews the permit and decides how to proceed.

Linux Gold reported additional results from its Granite Mountain project on the Seward Peninsula.

Reconnaissance exploration revealed promising results, including 0.087 ounces of gold per cubic yard and 9.23 grams of platinum per tonne at the Dime Creek alluvial prospect. Surface rock samples near the Saddle prospect yielded 2.58 grams of gold per tonne, greater than 10,000 parts-per-million lead and zinc, and more than 200 grams of silver per tonne, with results as high as 3.48 grams of gold per tonne in soil collected from silicified volcanic rock. Significant molybdenum mineralization on the Peace prospect returned values ranging from 587 to 1,159 parts per million.

The company also reported on diamond drilling results where high quartz vein densities were observed in volcanic rocks exhibiting propylitic, sericitic and potassic alteration assemblages. The best results came from hole KW06-3 which returned 35 feet grading 2,100 parts-per-million lead, plus 6,000 parts-per-million zinc and 4.45 parts-per-million silver. Additional drilling has been recommended for 2007.

Eastern Interior

Freegold Ventures Ltd. said bulk sampling had been completed on its Cleary Hill mine prospect on its Golden Summit project near Fairbanks. Bulk samples were taken from nine different locations - four of which are related to the historically mined Cleary Hill vein while the other five are from a number of veins and shear zones located immediately to the south of, and sub-parallel to, the east-west workings of the Cleary Hill mine.

The bulk-sampling effort has shown that high-grade mineralization is not limited solely to the narrow quartz veins that were selectively mined in the past, but that an extensive area of multi-gram gold mineralization, hosted in smaller quartz veins, is present in both the hanging and foot wall zones.

Mineralized zones up to 100 feet wide have been uncovered along the Cleary Hill structure, which has now been traced over a strike length of more than 3,500 feet. This structure remains open in both strike directions. Approximately 2,800 tons of mineralized material was collected from the Cleary Hill vein eastern extension, while another 3,300 tons of mineralized material was collected from hanging wall vein mineralization.

A second area was bulk sampled along the Cleary Hill structure approximately 1,200 feet west of the Beistline shaft. One channel sample taken on the bulk-sampled structure assayed 31 grams of gold per tonne over 9 feet. Approximately 1,800 tons were taken from two locations located 300 feet apart on the Cleary Hill structure. Five other samples, totaling approximately 2,000 tons, were also collected from a series of east-northeast trending veins and shear zones in an area that extends up to 1,000 feet south of the Cleary Hill mine.

Shears and vein systems sampled include the Wackwitz vein, Currey zone and three new high-grade vein structures in the area between the Wackwitz and the Cleary Hill veins. The company plans to continue drilling and metallurgical testing this winter in preparation for processing of the bulk sample in the summer of 2007.

International Tower Hill Gold Mines announced a new discovery at its Blackshell gold prospect in the northern Richardson District. The results confirm the presence of vein-style gold mineralization hosted within porphyritic rocks of a multiphase intrusive complex.

Gold mineralized veins have been encountered over a two square kilometer area. This mineralization exhibits a bismuth-arsenic association and is associated with quartz-feldspar porphyry. Several styles of mineralization are present, including gold, molybdenum, and tungsten bearing veins and gold, copper, and tungsten mineralization associated with intense sulfide mineralization in surrounding hornfels wall rock.

Two distinct styles of gold mineralization are present, one associated with higher temperature veins with a very strong correlation between gold and bismuth and lower temperature mineralization associated with silicification. Gold values from grab rock samples ranged from 1.64 to 3.82 grams of gold per tonne with bismuth values ranging from 3 to 383 parts per million and arsenic values ranging from 111 to 1,480 parts per million. Variable but anomalous copper, tungsten and silver also were detected.

The company is seeking a joint venture partner to assist in exploration and development of the prospect.

Alaska Range

International Tower Hill Gold Mines also announced additional results from its Chisna copper-gold-silver project in the eastern Alaska Range. Reconnaissance scale geochemical sampling from a number of highly altered zones has defined anomalous copper, gold and silver values within an open-ended target area covering approximately 25 square kilometers. A total of 73 rock samples collected from this area averaged 0.19 percent copper, 0.33 grams of gold per tonne and 2.8 grams of silver per tonne.

The copper-gold-silver mineralization on the project is hosted in the Mankomen volcanic/sedimentary group which underlies the Tetelna volcanic group. This package of rocks hosts the world class copper and copper-gold deposits at Kennicott and Orange Hill to the southeast. The currently defined copper-gold-silver target is related to widespread silica-pyrite alteration zones hosted within the volcanic sequence. The high copper zones contain abundant chalcopyrite and appear associated with an early mineralizing event, whereas higher gold values may be related to a later event.

A possible porphyry affinity is suggested by the presence of a base metal veined intrusive and the general alteration-geochemical association. Additional work is planned for the project in 2007.

Brett Resources Inc. announced drilling results from its Coal Creek tin-silver property in the central Alaska Range.

While the extent of the mineralization was encouraging, faulting and broken ground prevented the completion of the planned program.

Values encountered in drilling were significantly lower than those reported from earlier drilling.

Results included 9.4 meters grading 18.21 parts-per-million silver, 0.41 percent tin and 0.81 percent zinc in hole Coal 06-43; 42.5 meters grading 8.77 parts-per-million silver, 0.15 percent tin and 0.13 percent zinc in hole Coal 06-45; and 11.3 meters grading 13.69 parts-per-million silver, 0.22 percent tin and 0.20 percent zinc in hole Coal 06-46.

Northern Alaska

Little Squaw Gold Mining announced additional results on its Little Squaw project in the Brooks Range. Reconnaissance sampling on the new Aurora Gulch prospect returned numerous multi-gram gold values including 38.8 grams of gold per tonne in silicified carbonate rocks. Mineralization of this style has not been recognized in the district in the past.

In addition to gold-bearing rock samples, 29 soil samples across the area average 470 parts-per-billion gold. The gold in soil anomaly overlays bedrock consisting of black schist and the entire anomaly is within a zone of distinctive hematite staining. Additional work is planned for 2007.

Andover Ventures announced that it had completed acquisition of a 50 percent interest in the Sun prospect in the Ambler District. The purchase price payable was $3 million and the seller, Hastings Base Metals Corp., retains a 1.5 percent net-smelter-return production royalty.

Andover also obtained an option to acquire the remaining 50 percent interest for a purchase price of $10 million payable in cash or shares. The company also announced that it staked an additional 68 160-acre state claims along 10 miles of the prospective metavolcanic belt around and to the west of the Sun prospect. Historical work in this area identified favorable host rocks and alteration along with geophysical and geochemical anomalies that have never been drill tested. Exploration work is planned for 2007.

Southeast Alaska

Niblack Mining announced additional results from drilling at its Niblack volcanogenic massive sulfide project in southeast Alaska. Results include drill hole LO-189 which intersected 4.97 meters grading 9.94 grams of gold per tonne, 139 grams of silver per tonne, 4.87 percent copper, and 15.42 percent zinc; hole LO-188 which intersected 24.5 meters grading 3.63 grams of gold per tonne, 37 grams of silver per tonne, 1.59 percent copper and 0.50 percent zinc; and hole LO-185 which intersected 1.83 meters grading 1.05 grams of gold per tonne, 36 grams of silver per tonne, 0.63 percent copper and 13.56 percent zinc.

Drilling has now extended mineralization within an under-explored portion of the Lookout zone located approximately 500 feet down dip of the main sulfide trend. The mineralization is gold-rich, consists of both massive sulfide and stringer zones, and defines a deeper sub-parallel trend to the main sulfide trend. Mineralization is open in all directions, with up-plunge extensions accessible to drilling from the surface. Deeper extensions of the mineralization will be accessible to drilling from the currently planned underground program.

Thirty-two drill holes totaling 27,000 feet were completed at Niblack in 2006. In addition, the company commenced construction of a 5,000 foot access road from tidewater to the future portal site. The road is now complete and the area of the portal site has been cleared and readied for development. Underground development is scheduled to commence in 2007 pending receipt of final permits.