Alaska profits from exploration explosion

Mining companies spent an all-time record $103.9 million on exploration in Alaska in 2005, a big jump from the $70.8 million that was spent the previous year, and a long way from the relatively modest $27.6 million in 2003. At least 16 projects had exploration expenditures of $1 million or more. The companies employed 303 people in exploration projects in 2005, up from 184 in 2004 and 88 in 2003, according to the state's Division of Geological and Geophysical Surveys.

These impressive figures in Alaska reflected the story worldwide, where exploration spending has soared from $1.9 billion in 2002 to an estimated $7.1 billion in 2006, as Fairbanks geologist Curt Freeman from Avalon Development told the Alaska Miners Association convention in Anchorage Nov. 8.

"This industry has gone from dead stop two years back to full speed ahead, and the rest of the support industry simply cannot go that fast," Freeman said, explaining why many companies hadn't received their assay results back by late fall.

Historical resource at Shotgun

Freeman's words introduced a session of presentations by some of the companies that are responsible for the surge in Alaska exploration, starting with Vancouver-based TNR Gold, which is in a 50-50 joint venture with NovaGold at the Shotgun project in the Kuskokwim gold belt. Shotgun is 110 miles south of NovaGold's Donlin Creek project, a very large gold deposit that has been the source of intense feuding between NovaGold and its joint venture partner there, Barrick.

Even by comparison with junior NovaGold, TNR is a minnow, but the company hopes that Shotgun's structural similarities to Donlin could indicate a promising target. NovaGold previously completed a 3,100-meter diamond drilling program on the Shotgun deposit and outlined an inferred resource of 1 million ounces of gold (not confirmed by Canadian regulators). The Shotgun deposit is exposed at the surface and is amenable to open pit mining, according to NovaGold.

"When I talk about Shotgun Ridge, I'm specifically talking about the ridge that the historical resource is on," TNR geologist John Harrop told the convention.

"There are a string of almost north-south-oriented prospects that we've worked on for the last few years which include Shot and King and Winchester, which is large enough that we break it into Winchester and Winchester West.

The majority of the work we've done in the last three seasons has been reconnaissance, adding to what NovaGold did throughout this area and around Winchester, working on the premise that to get this property to move somewhere we need to get another zone, we need to get another showing, and Winchester's been the one that's finally stood up and saluted."

Drilling at Shotgun began in 2005, using a rig from Canada that was specifically designed for prospecting work in Alaska. In 2006 two drill rigs were in operation at the project. "The geochemical signature we're finding throughout those prospects all the way from Shotgun Ridge down to Winchester is quite consistent, there are gold-arsenic-bismuth anomalies in common," Harrop said. "The copper-moly-antimony-tin-tellurium and tungsten varies, sometimes within a single ridge or within a single hill, but certainly as you move from the north end, which is Shotgun Ridge, down to Winchester, you will find increases and decreases in things like molybdenum, tungsten and copper."

Brecciation important feature at Shotgun

Brecciation - angular broken rock fragments held together by a mineral cement or in a fine-grained matrix - is a very important feature in the Shotgun Ridge area, an indicator of alteration intensity and fluid volume, while the presence of sills is much more important at the Winchester prospect, where there is little or no brecciation, according to Harrop. Not only Donlin Creek, but the Tombstone district in Arizona, too, should be considered a good analog, because of the diversity of mineralization styles seen at Shotgun, Harrop thinks.

"Walking the ridges was the only place I was able to satisfactorily locate some of these sills, and as it turned out, because these things are recessive, wherever you can see a clearly recessive feature - and occasionally you also get a color trace coming down the hill - that's where the sills are, so we clearly have a good number of them," Harrop said. "The fact that there are sills - they're relatively uncomplicated structural geology - is quite helpful," he added.

"The situation at the end of 2006 is we now have an area of approximately 450 by 350 meters which we know from drilling contains gold-bearing sills," Harrop continued. "Sills range in thickness from 10 centimeters to over 10 meters and the sediments between, when they're close enough together, are carrying enough gold that we end up with a continuous zone, even though we're going in and out of small sills."

Spring trenching program prompts return to Golden Summit

Twenty miles north of Fairbanks, Vancouver-based Freegold Ventures has been getting down and dirty at its 7,500-acre Golden Summit property, where the historic Cleary Hill and Hi Yu mines were formerly located. A trenching program in the spring prompted the company to return in the fall and work at Golden Summit for six weeks with a bulldozer, a backhoe and even an old-fashioned pickaxe to expose the gold veins and take bulk samples. In particular, the area around the historic Beistline shaft showed encouraging results. Curt Freeman is the Golden Summit project manager.

Freegold had to construct a haul road to allow dump trucks to go back and forth between the exploration sites and ore piles. "As they were constructing the road we started noticing a lot of color anomalies out here that were very similar to the things we'd seen at Beistline. We got very interested, and so we had to make a bunch of highwalls along all these road cuts," Freegold's Chris Van Treeck told the mining convention.

"Then we got the big crew out and I think we took about 400 five-foot-long chip channels to try and nail down what kind of control we had in the area, where the grade was coming from, did it extend uphill, should we go uphill, and after that we went in and started sampling the road cuts that we had produced. ... They exposed some very nice alteration, a lot of veins, both north- and south-dipping," Van Treeck said. "Previously everything in the Cleary Hill area was thought to be south-dipping, and we saw north-dipping structures and some fairly flat structures out there," he added.

In total, Freegold collected approximately 2,800 tons of mineralized material from the Cleary Hill vein eastern extension and 3,300 tons from the "bleed" material that splays into the hanging wall of the vein. Another 3,800 tons of material were taken from other locations on the property. All the material was stockpiled according to vein, structure and type of mineralization. Final assays have not yet been reported. "The sun is rising on the Golden Summit project, we never found the end of ore, it's open in five directions, north, south, east west and down," Van Treeck concluded.

Brett Resources looking for tin

Dozens of companies are looking for gold in Alaska, but only one is hoping to find a pile of tin at the end of the rainbow. That company is Vancouver-based Brett Resources, which first came to Alaska in August 2005 when it formed a joint venture with another Vancouver-based junior, Solomon Resources, to explore the latter's Sleitat Mountain deposit in southwest Alaska. In January 2006 Brett also acquired the Coal Creek prospect in the foothills of the Alaska Range, between Anchorage and Fairbanks, by staking state claims.

There was a burst of tin exploration in Alaska in the early 1980s, when the price of tin reached $8 a pound, geologist Bill Ellis from Alaska Earth Sciences, a consulting company, told the convention in his presentation about Brett's activities. A tin cartel dominated by the five major producing countries kept the price high artificially, but after the cartel broke up in 1985, the tin price crashed to between $2 and $2.50 a pound, where it remained for some years.

In 1994 the tin-producing countries got together and agreed on export quotas, which stabilized the price and even caused it to increase steadily to its level today of almost $5 a pound. "Another factor there is one of the major countries is having trouble, the Bolivian tin mines are probably about ready to be nationalized, and that's probably going to halt exploration or halt production from there," Ellis said.

Brett became interested in 2005

Canada's Cominco explored at Sleitat Mountain in the early 1980s and Houston Oil & Minerals had a fairly large exploration program at Coal Creek in the same period, drilling 42 holes there as well as doing an airborne geophysical survey and a ground survey. When Brett became interested in Alaska's tin in 2005, one of the company's directors was an ex-Cominco geologist who had been part of the exploration team that found Sleitat, so it acquired that property, and Ellis suggested that it should also take Coal Creek.

Coal Creek is conveniently close to the Parks Highway and the railroad, and only a few miles east of Denali National Park, but it's an area of the park that doesn't see much tourist activity, according to Ellis.

All of the data collected by Houston Oil & Minerals ended up in Fairbanks with Kinross (the owner of Fort Knox gold mine) and Kinross let Brett have access to it, as the two companies are partners in projects in Ontario and El Salvador.

The drill core was donated to the University of Alaska and then made its way to the Geologic Materials Center in Eagle River outside Anchorage, so Brett's team was able to resample it to verify the historical data.

Results confirmed tin and silver mineralization, but values were one-third lower.

"The type of intrusives we see here are more like Bolivian-style, they're not like the ones on the Seward Peninsula, the deposits out there are different animals ... more like the ones that you see in Russia," Ellis said of Coal Creek.

Brett conducted a short drilling program there last summer, intersecting broad intervals of mineralization in three of four holes. "While the extent of the mineralization was encouraging, faulting and broken ground prevented the completion of the planned program, and the values that were encountered were significantly lower than those reported from earlier work," Brett announced in a release Nov. 23.

Brett had better luck at Sleitat Mountain, where the company was able to locate many of the old drill holes using modern GPS and GIS technology and re-log them. TNR Gold loaned Brett a portable Pioneer drill rig. "We knocked out five 500-foot holes in pretty short order," Ellis said. "TNR also let us use their Shotgun camp, about 45 miles away, so it was a bit of a commute," he added.

"Overall, the tin and silver values compare very well with Cominco's earlier data, providing an increased level of confidence in the historical drill data," Brett said in a release Oct. 5. "The north-south fence of holes verified that the main greisen zone is mineralized with 0.2-0.3 percent tin and better than 6 grams silver, for a minimum of 100 meters width, with mineralization extending to a depth of 150 meters and a strike extent exceeding 250 meters open both to the east and west."