Niblack seeks peek under Southeast peak

As summer approaches, Niblack Mining Co. is assembling everything it will need from people to permits to tunnel 6,000 feet into the heart of Lookout Mountain on Prince of Wales Island in Southeast Alaska. The Vancouver, B.C.-based junior wants to explore at depth zones believed to be rich in copper, gold, zinc, silver and other marketable minerals.

Niblack Mining hired Henry Bogert as operations manager for the project in March. Juneau resident Bogert is a longtime mining and civil engineer with degrees from Montana Tech and the University of Idaho.

To his credit, Bogert developed and managed the Golden Sunlight Underground Mine in Montana for Placer Dome Gold and later Barrick Gold Corp. His career also includes projects with TVX Gold, Noranda, Brimstone Gold, St. Andrew Goldfields, and Stillwater Mining, as well as five years service as an officer in the U.S. Navy Civil Engineer Corps, supervising construction in the Aleutian Islands. He also taught mining engineering at the University of Idaho and Montana Tech.

"Henry brings extensive experience and knowledge in underground mine feasibility studies, design, construction, operation, and closure. Now he's working a little closer to home," said Niblack Mining President Paddy Nicol in an interview April 17.

Nicol said the company is also reviewing bids from several contractors that will construct the tunnel.

Niblack is a volcano massive sulphide deposit that sits on 2,000 acres on the southern landward side of the island, near tidewater. Volcano massive sulphide, or VMS, deposits are rich in gold, silver, copper and zinc metals.

Niblack Mining believes the deposit is capable of hosting more than 40 million tons of ore.

Tests needed at depth

A historic property, Niblack was mined at the turn of the century, but production ceased at the mine in 1908 due to litigation. Between 1974 and 1994, several majors explored the area, drilling a total of 59 holes and discovering massive sulphides at the Lookout and Dama zones.

Between 1995 and 1997, Abacus Minerals spent $10 million on more drilling and significantly expanded the Lookout Zone, discovered massive sulphides elsewhere on the property and calculated an in-house estimated mineral resource.

In 2005, investors created Vancouver, B.C.-based Niblack Mining out of Abacus Minerals with a mission of advancing the Niblack property toward delineation of an economic ore deposit.

Two years later, Nicol said that goal is closer than ever. Prior drilling results indicate the presence of a significant zone of ore grade mineralization at the Lookout Zone.

"The main thrust of this underground program is to access the main Lookout Zone at depth and a previously unexplored limb of the syncline," he said in an interview April 17.

"In addition, the underground workings will crosscut through a narrow section of mineralization allowing a more detailed geological evaluation. The crosscut also will allow drill testing of the Mammoth zone which is very difficult to access from surface because of the dip of the mineralization and the topography," he said.

Because of significant costs associated with drilling the deeper mineralization from the surface, Niblack Mining decided the best way to continue exploration is from underground. In addition to providing better drill access to deeper mineralization, an adit will allow confirmation of continuity between existing drill hole intersections, and allow better characterization of mineralization and underground conditions, Nicol said.

The underground program also will give Niblack Mining the ability to have a year-round operation impervious to weather conditions.

"Now, we're confined to working with helicopters during the parts of the year when it is not too windy or rainy," Nicol explained. "But when you're underground, every day is a sunny day."

Permitting under way

In conjunction with its current surface exploration drill program, Niblack Mining has begun construction of a 3,000-foot road in preparation for the underground program. The road will provide equipment and supply access from tidewater to the proposed portal site.

Niblack Mining has been working with the Alaska Department of Natural Resources since last summer to streamline the process for obtaining state and federal permits for the project.

The permits will enable Niblack Mining to not only explore the area but also to operate a self-contained floating crew camp on a barge just offshore at Prince of Wales Island.

DNR will act at the lead agency for permits from various agencies, including the Alaska Department of Environmental Conservation and the U.S. Army Corps of Engineers.

Nicol said the public comment period for some of the required permits starts April 23, and the agencies have scheduled a meeting in Ketchikan in early May. A public hearing will be held shortly afterward, he added.

Niblack Mining's proposal to operate the temporary floating camp also underwent a consistency review with the Alaska Coastal Management Program. A final ACMP determination was expected April 27.

More funds for project

The Southeast Alaska project is Niblack Mining's only asset, and it is an advanced stage 1 capital-intensive project, Nicol said.

In addition to applying for permits, the company has been busy raising capital to finance its 2007 program. Niblack Mining announced successful placement of more than $15 million in securities in March, giving the junior enough capital to perhaps fully fund the underground program.

Nicol said the cost of the underground exploration plan is still being determined, but it will probably range between $15 million and $16 million and take 18-24 months to complete.

The junior also staked 45 additional federal lode mining claims surrounding the core Niblack claim block and the nearby Ruby Tuesday property, which consists of 120 claims totaling 2,300 acres, company officials announced April 18.

Staking both sets of claims was designed to secure highly prospective ground around and to achieve a strategic focus on VMS targets in southeast Alaska, they said.

Previous work at Ruby Tuesday includes 13 drill holes (3,200 meters), with all but one of the holes intersecting significant zinc, gold, copper, lead and silver mineralization.

The target at Ruby Tuesday is a 10 million to 20 million ton precious metal rich copper-zinc massive sulphide deposit, Niblack Mining said.

Exploration plans for 2007 include reconnaissance field work such as mapping and prospecting to further advance drill targets, the company added.