Alaska mining news summary: Tight personnel, equipment market in busy mining industry

Okay, the lull is over.

It lasted about 25, maybe 30 minutes, after I wrote those prophetic but ill-considered words in late January! Shortly after that point I was in Vancouver for the annual Cordilleran Roundup mining conference, an annual barometer of mining activity in western North America if not the world.

What I saw at the 2007 conference was a crowd well in excess of 5,000, populated by two types of people: those who were smiling from ear to ear and those whose terrified eyes reminded me of a whitetail deer in the headlights.

Those smiling were providing services to the industry; those not smiling were trying to acquire those services.

The acute shortage of technical personnel, drills, analytical capacity, helicopters and other services has driven costs to record levels with no end in sight for the worldwide demand for metals that is behind it all.

Might as well take off your spurs, this pony is already running flat out!

Western Alaska

Teck Cominco American announced stunning fourth-quarter and year-end 2006 results from its Red Dog mine.

In the fourth quarter the mine produced 133,600 tonnes of zinc in concentrate and for the year the mine produced 557,500 tonnes of zinc in concentrate.

Zinc ore grade decreased to 19.9 percent while mill recoveries decreased slightly to 82.8 percent for the fourth quarter.

The mine also produced 33,000 tonnes of lead in concentrate during the fourth quarter and 123,500 tonnes of lead in concentrate for the year.

Lead ore grade decreased to 5.7 percent while mill recoveries increased to 65.6 percent for the fourth quarter.

As a result primarily of higher zinc and lead prices (average $1.91 and 74 cents per pound respectively for the quarter), the mine posted a whopping $623 million operating profit for the quarter and a $1.079 billion (yes, billion, Dorothy) operating profit for the year, both significant increases over profits for the year and the fourth quarter of 2005.

Another seminal event occurred in the fourth quarter: Capital expenditures for mine construction, including an interest factor, were fully recovered.

In other words, mine payback was achieved and they burned the mortgage!

St Andrew Goldfields Ltd. announced the first shipment of gold doré from its newly recommissioned Nixon Fork mine north of McGrath. The commissioning process was completed at the end of December and the mine is now producing copper concentrates and gold doré at the design rate of 150 tons per day. Installation of a cyanide leach circuit is under way and once completed in the summer of 2007 will allow improved gold recovery from the existing underground ore as well as re-treatment of previously milled tailings. The company anticipates that the mine will achieve a production rate of 40,000 ounces of gold in 2007.

Rio Tinto announced that it had acquired an additional 9.4 million shares of Northern Dynasty bringing the former's cumulative equity interest to 19.9 percent of Northern Dynasty's stock. Northern Dynasty controls the world class Pebble porphyry copper-gold-molybdenum deposit north of Iliamna. The Tundra Telegraph says that Rio Tinto will eventually take over effective control of the company and the deposit; however Rio Tinto indicated it had no current intentions to either increase its ownership position or sell its current share position.

Pacific North West Capital announced year-end results from its Goodnews Bay platinum project under lease from Calista Corp. in southwest Alaska.

Field exploration efforts in 2006 focused on the Susie Mountain area of the project where historical exploration resulted in discovery of plus 1 gram per tonne platinum in rock and soil samples.

The 2006 evaluation program consisted of rock, stream silt, pan concentrate and power auger basal soil sampling.

Soil sampling returned platinum values as high as 268 ppb from the basal soil layer on the southwest flank of Susie Mountain.

The anomalous values are underlain by clinopyroxene dominated rocks.

The approximate 650,000 ounces of placer platinum recovered historically from the Salmon River basin likely originated from Red Mountain which may represent a more deeply eroded, fault offset portion of Susie Mountain.

Additional field work is planned for 2007.

TNR Gold Corp. announced final results from Phase II drilling at its Shotgun project north of Dillingham.

A total of seven holes drilled in the Winchester prospect suggest that gold mineralization is closely associated with light grey, equigranular, fine- to medium-grained felsic intrusive sills and is not restricted to brecciated zones or veins.

The light grey intrusive grades into other phases including a porphyry, where it continues to carry significant gold.

Significant results from five newly released drill holes include 1.2 meters of 9.81 grams of gold per tonne and 9.2 meters grading 1.85 grams of gold per tonne in hole 6-52 and 13.4 meters grading 1.22 grams of gold per tonne in hole 6-53.

Additional drilling is planned for 2007.

Andover Ventures announced 2006 drilling results from its Bulk Gold project north of Nome. Eight core holes totaling 285.7 meters were drilled on two of the four target areas. Significant results include 5.7 meters grading 1.20 grams of gold per tonne in hole 06BGDH-5. Anomalous arsenic and antimony were associated with mineralized intervals in the drilling. In addition, soil sampling in 2006 extended the soil anomaly another 200 meters to the southwest with soil values up to 1.26 grams of gold per tonne. Additional work is planned in 2007.

Eastern Interior

Teck Cominco announced that 2006 production from the Pogo mine was 112,500 ounces of gold. Operating costs were not released because the mine has not yet reached commercial rated production. The mine is expected to reach commercial production by April 2007 following completion of the filter plant expansion project with full production anticipated in May. Gold production for 2007 is expected to be 340,000 ounces.

International Tower Hill Mines Ltd. announced the results of its 2006 drill program at the LMS gold project near Delta Junction. Significant intercepts include 5.7 meters grading 2.7 grams of gold per tonne and 16 grams of silver per tonne in hole LM-06-36, which was a 170 meter step out from earlier drilling. In addition, high grade zones were expanded with intercepts of 1.7 meters grading 12.0 grams of gold per tonne and 59 grams of silver per tonne in hole LM-06-31 and 0.3 meters grading 69 grams of gold per tonne and 18.9 grams of silver per tonne in hole LM-06-25. A total of 2750 meters of core was drilled in eight holes.

The current drilling continues to expand the previously defined Camp Zone mineralization. Soil sampling has also defined new targets along the mineralized zone. Continuity of mineralization has been established over an area of 250 by 450 meters and remains open to the northwest and at depth. Mineralization appears to be preferentially developed on the north dipping limb of a broad fold. A $750,000 core drilling, auger drilling and soil sampling program is planned for 2007.

International Tower Hill Mines Ltd. also announced the results of its 2006 drill program at the Livengood gold project north of Fairbanks.

A total of 1,227 meters were drilled and multi-gram gold grades were encountered in four of the five holes completed.

Higher grade gold was intersected over substantial widths including hole MK-06-07 which returned 94.6 meters grading 1.59 grams of gold per tonne including 30.5 meters grading 2.8 grams of gold per tonne.

Higher grade mineralization is associated with increased vein density within a volcanic or subvolcanic intrusive breccia complex.

The highest grades are associated with poly-phase quartz-arsenopyrite veinlets.

Additional drilling is planned for early 2007.

Northern Alaska

Silverado Gold Mines Ltd. announced a lode gold discovery on its Nolan property in the Brooks Range.

The company's 2006 exploration program included 920 feet of backhoe trenching in an area north of Smith Creek.

The trenching was conducted on the Solomon Shear, a five mile long gold bearing shear zone containing gold-antimony quartz veins.

The "main zone" contains 16 veins over 190 feet across strike.

Individual veins vary in width from a quarter inch to seven inches.

Spacing of veins also varies, from a quarter inch to several feet.

One-to 10-foot channel samples returned values ranging from 0.01 to 0.83 ounces of gold per ton with antimony values ranging from 0.01 percent to 46.33 percent.

A single reverse circulation drill hole targeted at this zone returned several intervals containing anomalous gold and antimony including a 5 foot interval which returned 0.06 ounces of gold per ton and 1.61 percent antimony.

Additional drilling is planned for 2007.

Little Squaw Gold Mining announced that the State of Alaska recently obtained right-of-way access into the Chandalar area where the company is exploring its Little Squaw gold project. In 2005 the State of Alaska sued the U.S. Department of the Interior for rights of way on the historic Coldfoot-Chandalar and Caro-Coldfoot trails. The State of Alaska and the federal government recently agreed to a pre-trial settlement of the action. The company indicated that it has initiated efforts to have an all-weather road built from the existing Dalton Highway to the company's Little Squaw project.

Southeast Alaska

Full Metal Minerals announced drill results from its Mount Andrew copper-gold project in Southeast Alaska.

Four of five holes completed encountered multiple intersections of magnetite-chalcopyrite mineralization which remains open in all directions.

Andestic host rocks commonly exhibit tactite-style alteration, coupled with strong potassic alteration.

Significant results included hole KMA06-01 which intercepted 29.8 meters grading 0.87 percent coppers, 0.12 grams of gold per tonne and 3.55 grams of silver per tonne and hole KMA06-03 which intercepted 48.8 meters grading 0.72 percent coppers, 0.06 grams of gold per tonne and 2.89 grams of silver per tonne.

Historic production from Mount Andrew and adjacent mining operations totaled 5,729 tonnes copper, 1.74 tonnes silver and 216 kilograms of gold.

Additional drilling is planned for 2007.

Niblack Mining announced additional results from metallic screen gold analyses of 2006 drilling at its Niblack volcanogenic massive sulfide project in southeast Alaska.

This re-analysis technique is widely used in systems with coarse visible gold such as Niblack.

Combined metallic screen and standard fire assay results yielded 39.27 grams of gold per tonne and 284 grams of silver per tonne over 6.77 meters in drill hole LO-176, more than doubling the previously reported grade.

The interval occurs within a near-surface oxide zone that is leached of base metal sulfides and is part of a wider 13.2 meter interval grading 23.19 grams of gold per tonne and 152 grams of silver per tonne.

In addition, multi-element analyses have indicated significant enrichment in gallium and indium in drill core.

Individual samples assayed up to 112.5 grams of gallium per tonne and 55.3 grams of indium per tonne.

These rare metals can be important smelter by-product credits in polymetallic concentrates.

The company plans to commence an underground exploration program in 2007 that is designed to expand the Lookout Zone at depth.

Other

Alaska Gov. Sarah Palin announced that Tom Irwin has been named Commissioner of the Department of Natural Resources. Marty Rutherford has been named Deputy Commissioner. Irwin was the Commissioner of DNR from January 2003 to October 2005 while Rutherford was Deputy Commissioner from 1992 to 2005. Both individuals resigned in 2005 over differences they had with then-Gov. Murkowski's handling of the Alaska natural gas pipeline negotiations. Congratulations Tom and Marty!