The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Let me extend my apologies to all those looking for a quick summary of the Alaska mining industry this month. There is nothing "quick" about the tome you are about to read, but don't blame the messenger. I just report what I read, and this month it's a sack full! No need for more words, just read on!
Western Alaska
NovaGold Resources announced results of a newly released report on the Rock Creek project, nearing commercial production outside of Nome. The revised feasibility study envisions a 7,000-ton-per-day operation producing 111,000 ounces of gold at cash costs of $467 per ounce. Average strip ratio will be 2:26 to 1 with estimated capital costs of $158 million. In addition to mine site work, the company has committed $5 million toward exploration to expand existing resources.
NovaGold Resources and partner Barrick Gold have highlighted the potential to expand the Donlin Creek deposit gold resource in the East Acma area. Drill hole DC07-1556 returned 299 meters of 5.26 grams per metric ton of gold and DC07-1564 returned 308 meters of 4.60 g/t, the two best holes for contained gold yet drilled on the property. These holes targeted the shallowly plunging Donlin anticline, which contains the rhyodacite porphyry intrusive bodies that host the majority of the gold mineralization at Donlin Creek. Similar geology projects roughly 1,000 to 1,200 meters further to the east and south from this new East Acma drilling.
Alix Resources Corp. and joint venture partner Millrock Resources announced updated 2008 plans at the Divide gold project near Nome. Exploration plans include 3,600 meters of reverse circulation drilling, 1,800 meters of core drilling, ground electromagnetic and magnetic geophysical surveys, and trenching, geologic mapping and channel sampling. Total approved budget is $1.5 million.
Triex Minerals Corporation and Full Metal Minerals announced updated 2008 exploration plans at the Boulder Creek uranium project on the Seward Peninsula. Drill programs were completed in both 2006 and 2007, and total expenditures to date exceed $2.5 million. Work in 2008 has a preliminary budget of $800,000 and will focus on fully delineating the extent of anomalous surface soils and rocks mineralization previously discovered at the Fireweed prospect.
Full Metal Minerals and JV partner Freeport-McMoRan Exploration Corporation announced plans to conduct a 2,000-meter drilling program at the Pebble South project near Iliamna. This $1 million exploration program, to be funded pending completion and favorable conclusions from an ongoing due diligence review, will test multiple geochemical and geophysical targets.
Full Metal Minerals and JV partner Highbury Projects announced plans to complete 3,000 meters of drilling at their Moore Creek project. The $1.2 million drill program will test coarse-gold bearing quartz stockwork within an open-ended 300-meter-by-400-meter area that was discovered during the 2007 trenching program. Results included 8.9 g/t over 11 meters.
Full Metal Minerals and JV partner BHP Billiton will complete an airborne geophysical survey targeting multiple copper-gold-molybdenum porphyry targets on their Alaska Peninsula reconnaissance project. Follow-up will include surface mapping, sampling and ground geophysics. The partners have approved a $1.3 million budget for this work.
Full Metal Minerals announced that project operator Metallica Resources Alaska is currently reviewing results from its 2007 exploration program on the Alaska Peninsula project. The undrilled Kawisgag and Mallard Duck Bay porphyry copper-molybdenum targets will likely be the primary focus of this year's exploration program. The 2008 program budget will be at least $400,000 to conduct surface mapping, sampling and geophysics which may be followed by a larger program involving 1,500 meters of first pass reconnaissance drilling of the Kawisgag porphyry target.
Linux Gold Corp. announced that a new technical report had been released for its Granite Mountain project on the Seward Peninsula. The report recommended a surface exploration program, designed to clarify existing aomalies followed by a drilling program. Total estimated cost for the work was $830,000.
The most significant news of the month came with the much-anticipated release by Northern Dynasty Minerals and partner Anglo American plc of the revised ore reserves at their Pebble East deposit.
The 2007 drill program consisted of 157,000 feet of core drilling in 36 holes.
The new inferred mineral resources stand at 3,860,000,000 metric tons grading 0.58 percent copper, 0.36 g/t and 0.033 percent molybdenum which equates to a 0.99 percent copper-equivalent grade.
The new resource estimate contains 49 billion pounds of copper, 45 million ounces of gold, and 2.8 billion pounds of molybdenum.
Significant 2007 drill intercepts which helped form the new resource estimates include Hole 7359 which intersected 2228 feet grading 1.42 percent copper equivalent comprising 0.92 percent copper, 0.50 g/t and 0.035 percent molybdenum; hole 7374 which intersected 2,449 feet grading 1.19 percent copper equivalent comprised of 0.61 percent copper, 0.42 g/t and 0.056 percent molybdenum; and hole 7378 which intersected 1,846 feet grading 1.45 percent copper equivalent comprised of 0.91 percent copper, 0.70 g/t and 0.021 molybdenum.
Drilling re-commenced at the project in mid-February with 5 drill rigs and the companies intends to increase that number to 12 by the end of June.
The 2008 program will focus on Pebble East and consists of delineation drilling and infill drilling.
Infill drilling is designed to upgrade the resource of a high grade portion of the deposit to an indicated category in preparation for pre-feasibility mine planning.
Geoinformatics Exploration Inc. announced regional target information surrounding its Whistler project in the western Alaska Range.
A focus of this work was an area of about 15 kilometers by 7.5 kilometers surrounding the Whistler Zone that has been analyzed in detail and which hosts a cluster of at least 50 individual prospective exploration targets, most of which have not been drill tested.
The company believes that results such as those from the Rainmaker prospect which returned a drill intersection of 184 meters grading 0.44 g/t and 0.16 percent copper, confirms that the Whistler Zone is not an isolated occurrence of mineralization on the project.
The 15 kilometer by 7.5 kilometer target area is underlain by a large broad-wavelength magnetic anomaly interpreted to be the main intrusive body at depth in the Whistler Intrusive Suite and the underlying magmatic source of the Whistler Zone diorite porphyry.
Targeting has focused on oval-shaped magnetic bodies in this area, which are potentially individual porphyry-related bodies, comparable to the Whistler Zone.
The company intends to drill test as many regional targets as possible, which include the Rainmaker, Round Mountain, Raintree, Muddy Creek and Island Mountain prospects.
TNR Gold Corp. announced the release of a new technical report on the Shotgun gold project north of Dillingham. Drilling during 2006 at the Shotgun Ridge prospect intercepted 210.5 meters grading 1.29 g/t. Results from this drill hole were key in enabling the company to identify two steeply dipping feeder zones and structurally reinterpret the Shotgun Ridge zone. Based on this new interpretation the zone appears to be open at depth. A $3.1 million exploration program has been recommended which includes drilling at both Winchester and Shotgun Ridge in addition to further surface work on the Shot and King prospects.
Gold Crest Mines, Inc. announced that it has signed two separate term sheets with Newmont North America Exploration Ltd. under which the parties propose to create two joint ventures to explore for gold deposits covering Gold Crest's AKO and Luna claim groups in southwestern Alaska.
Under the proposed terms for each joint venture, Newmont can earn a 51 percent interest in the properties by spending $3 million which includes a minimum of 3,000 meters of drilling on or before December 31, 2011.
In addition, to earn its interest under each joint venture, Newmont must make cash payments of $25,000 on or before January 15, 2009 and $50,000 on or before January 15, 2010.
Newmont has the option to increase its interest under either joint venture to 70 percent by completing an additional $6 million in exploration work, which includes a minimum of 3,000 additional meters of drilling on or before December 31, 2015.
Eastern Interior
Kinross Gold announced year-end 2007 results from its Fort Knox mine.
The mine produced 76,060 ounces of gold in the 4th quarter at a cash cost of $403 per ounce while year-end totals were 338,459 ounces of gold produced at a cost of $344 per ounce.
While production was up slightly over 2006 due to a 7 percent grade increase, cost of production rose 11 percent due primarily to increased commodity and energy costs.
Exploration spending for 2007 totaled $4.4 million while capital expenditures for the year were $30 million.
During the year the mill processed 12,722,000 metric tons of ore ranging in grade from 0.84 to 1.01 g/t.
Recovery ranged from 84 percent to 88 percent.
The Fort Knox heap leach project is continuing its development phase and is expected to extend the remaining life of the mine from 2013 until 2018.
The company tabled its year-end 2007 resource updates that included proven and probable reserves of 240,915,000 metric tons grading 0.50 grams gold per metric ton, equivalent to 3,856,000 ounces of gold. An additional 35,791,000 metric tons grading 0.72 grams gold per metric ton, equivalent to 834,000 ounces, is classified as measured and indicated resources.
Kinross Gold and Full Metal Minerals announced formation of an exploration alliance covering properties in Alaska and the Yukon Territory.
Under terms of the agreement, Kinross will make a one-time cash payment of $50,000 to Full Metal.
Under an initial two-year term, Kinross and Full Metal have each agreed to budget in 2008, $150,000 for compilation and generative field work targeting one or more regions in Alaska and the Yukon with an additional amount in 2009 to be determined.
Alliance projects will be funded on a 50/50 ownership basis for the first $1 million in initial project expenditures.
Following completion of such initial work, Kinross would have an option to increase its ownership to 75 percent by completing a Feasibility Study in respect to each specific Project.
At any time following the initial expenditures, Kinross may terminate its earn-in right for a 2 percent NSR royalty.
Full Metal will have the right to pursue any non-gold targets within the target areas on a 100 percent basis.
Freegold Ventures Ltd. announced resumption of exploration at its Golden Summit project. The company initiated a 40,000 foot Phase 2 continuation of the systematic rotary air blast drill program that was conducted from December 2006 through November 2007. Drilling will be conducted on the Cleary Hill, Beistline and Tolovana prospects. In addition, the company announced commencement of a 15,000 foot diamond core drilling program centered on the Fence 1 area of the Cleary Hill mine. The core program is designed to extend shear-hosted mineralization to depth below the shallow rotary air blast drilling previously completed in this area.
Linux Gold Corp. announced that after a review of the Lost Dog prospect in the Fairbanks District, it has elected not to exercise its option to acquire the property. The company indicated that it is currently reviewing additional properties in Alaska.
International Tower Hill Mines announced initial gold resource estimates for its Livengood gold project north of Fairbanks.
Initial inferred gold resources came in at 3.1 million ounces of gold at an average grade of 0.54 g/t at a cutoff grade of 0.3 g/t.
The company indicated that the 2008 work program will focus on doubling the overall resource, converting a large portion of the inferred resources to indicated and measured and gathering the data needed to complete a preliminary economic scoping study by the middle of 2009.
The company has budgeted a total of $7.5 million to complete this program.
The company also announced the results from a preliminary gold characterization study involving bottle roll cyanide recovery testing which indicates very high, rapid, cyanide extractions for the oxide and weakly oxidized ores (averaging 96.7 percent) with moderate to lower extractions for the deeper non-oxidized ores (averaging 58.7 percent).
Findings of the resource study suggest that the primary ore controls appear to be the intersection of favorable host lithologies with major structural zones which are interpreted to have acted as conduits for intrusion-related gold bearing fluids.
The volcanic rocks form a particularly favorable host and are persistently mineralized.
Mineralization in the Money Knob area occurs at surface and forms stratiform and cross-cutting bodies in a folded and faulted sedimentary and volcanic sequence.
The main body of mineralization lies along an east-west structural zone that is at least 2 kilometers long and varies in width from 300 to 800 meters.
This large structural zone has localized a series of 90 million year old dikes, sills and plugs that are believed to be related to the gold mineralization.
Little Squaw Gold Mining Co. reported that it has canceled an Exclusivity Agreement pertaining to the potential purchase of the Livengood Bench placer gold deposit in the Livengood District.
Full Metal Minerals announced approval of a $6.5 million program to include 15,000 meters of drilling and additional exploration on its Fortymile project near Chicken. The Phase 1 program will include step-out, and infill drilling at the LWM discovery as well as target the highly prospective Oscar, Eva and Drumstick prospects. Additional surface sampling programs will be completed at numerous other showings and anomalies on the project.
Alaska Range
Full Metal Minerals announced that it is currently awaiting results from metallurgical testing from the high-grade Lucky Shot gold property north of Anchorage. The company is considering an underground exploration, development and bulk sampling program within the Lucky Shot shear zone, as well as surface drilling testing of multiple targets on the property. A minimum $2.5 million exploration program is planned for 2008.
Northern Alaska
NovaGold Resources announced results from the 2007 work at its Ambler project in the Brooks Range.
The company completed 3,000 meters of core drilling in five holes, and two exploration holes identified the existence of a deeper limb of a recumbent fold structure containing the same stratigraphy as the Arctic massive sulfide deposit.
These drill results outline an area of about 4.5 square kilometers of productive stratigraphy within drill depth below and adjacent to the Arctic deposit.
The company also has upgraded the historical Ambler resource which now stands at 16.8 million metric tons of Indicated Resource grading 4.14 percent copper, 6.03 percent zinc and 0.8 g/t and an Inferred Resource of 11.9 million metric tons grading 3.56 percent copper, 4.99 percent zinc and 0.7 g/t.
The revised resource is estimated to contain an Indicated Resource of 1.5 billion pounds of copper, 2.2 billion pounds of zinc and 0.4 million ounces of gold, with an additional Inferred Resource of 0.9 billion pounds of copper, 1.3 billion pounds of zinc and 0.3 million ounces of gold.
On an equivalent metal basis, the average metal content exceeds 8 percent copper equivalent grade.
Little Squaw Gold Mines has received draft results of an independent economic scoping study on its alluvial gold deposit discovery in the Little Squaw Creek drainage at its Chandalar project in the Brooks Range.
The study concludes gold-bearing gravels contain a minimum of 231,000 ounces of recoverable gold that could be extracted from 8 million cubic yards of pay gravel at a cash cost of $442 per ounce and a full cost of $711 per ounce.
The company believes the deposit can be substantially expanded through additional drilling and that an increase in its size would significantly increase profitable mine life and lower unit costs.
The scoping study envisioned an open-pit mine plan that would begin with production at 30,000 ounces of gold per year and yield an average of 21,000 ounces of gold per year over an 11-year mine life.
Required start-up capital is estimated at $17.9 million with life-of-mine capital costs at $30.6 million.
Cash flow analyses run at $900-per-ounce gold show a 33 percent internal rate of return on capital investment with a 3.6-year payback.
Cumulative net revenues are projected to total $204 million (after transport cost deduction and refining losses), net cash flow projection totals $44 million and the net present value of cash flow projection totals $12 million using a 15 percent discount rate.
Additional engineering and exploration work is planned for 2008.
Silverado Gold Mines reported assay results from recently completed underground exploration at Workman's Bench on its Nolan Creek project returned gold grades up to 1.04 ounces per ton and antimony grades up to 64.34 percent. To date three main mineralized zones have been identified through the correlations between the underground observations with the drill intercepts from the 2007 Workman's Bench drilling program. The company is planning an extensive drilling program at Workman's Bench to define the gold and antimony mineralization at depth over a strike length of 1,500 feet.
Southeast Alaska
Hecla Mining announced year end 2007 production results from the Greens Creek mine on Admiralty Island.
The total cash cost per ounce of silver produced at Greens Creek for the year was a negative $5.27 per ounce with total production costs for the year of negative $1.93 per ounce.
The average grade of ore mined during the year was 15.45 ounces of silver per ton, nearly unchanged from the average grade of 15.78 ounces per ton that was mined in 2006.
For the year the mine produced 8,646,824 ounces of silver, 68,005 ounces of gold, 21,029 tons of lead and 62,603 tons of zinc.
Exploration efforts from surface and underground continued in 2007 with most of the underground exploration focused on the silver-rich 5250 North Extension zone and the West Gallagher zone.
In the 5250 zone, a hole was drilled 1,000 feet above and along strike of the known reserve and resource and intersected silver grades of 30 ounces per ton (opt) with 18 percent zinc and lead.
This is about 50 percent greater than the average ore grade at Greens Creek, and could lead to a possible addition to resource in 2008.
Surface drilling included 17,540 feet of drilling and included an intersection of the current mine workings that identified multiple zones of mineralization indicative of "mine horizon" intervals.
This intersection could open up a new area to explore for mine extensions in close proximity to the existing underground infrastructure.
The company also announced revised resource estimates for the mine which include probable reserves of 2,513,000 tons grading 13.7 ounces of silver per ton, 0.11 ounces of gold per ton, 3.8 percent lead and 10.2 percent zinc, mineralized material of 103,400 tons grading 5.6 ounces of silver per ton, 0.13 ounces of gold per ton, 3.4 percent lead and 7.9 percent zinc, and other resources of 673,700 tons grading 14.5 ounces of silver per ton, 0.13 ounces of gold per ton, 4.0 percent lead and 10.5 percent zinc.
The company also reported that exploration efforts at Greens Creek has produced a total of about 150 million ounces of silver and 1 million ounces of gold since 1987 and it currently has 116 million ounces of silver reserves and resources, with a mine life extending to 2019.
Full Metal Minerals and JV partner Altair Ventures are currently mobilizing to the CJ gold property near Hollis. A 1,700 meter core drilling program will target the historic Dawson Mine. This $650,000 exploration program will commence immediately following final receipt of exploration permits.
Full Metal Minerals announced that it is planning a minimum 1,000 meter drilling program at its Mt. Andrew copper project on the Kasaan Peninsula. Step-out and infill drilling of areas drilled in 2006 and 2007 are planned for this $500,000 program.
Ucore Uranium Inc. reported the final assay results from 422 meters of core drilling in the I&L zone during its 2007 drilling program at its Bokan Mountain uranium project on Prince of Wales Island. Results included 50.24 meters grading 0.47 percent U3O8 in hole LM07-01 which included 2.68 meters grading 1.24 percent U3O8 and 3.90 meters grading 2.43 percent U3O8, 0.42 percent U3O8 over 15.23 meters in hole LM07-05 and 1.28 percent U3O8 over 1.2 meters in hole LM07-04. The company is planning a drill program in 2008 to test more of the 30 known mineral prospects on the project.
Bravo Venture Group Inc. reported today the company has acquired 100 percent interest in the Woewodski Island volcanogenic massive sulfide project near Petersburg following successful re-negotiation of certain terms in an underlying agreement with the vendors of the property, Olympic Resources.
Bravo reported that in 2007 it completed detailed gravity and 3D IP geophysical surveys and two core holes totaling 432.6 meters at the East Lake target, where previous drilling encountered mineralized boulders of massive sphalerite and several horizons of semi-massive pyrite and fine grained black to grey argillite.
Both holes drilled in 2007 contained +16 meter thick down hole intervals of anomalous silver (>1 part per million) and Zn (>0.1 percent).
In addition to the East Lake drilling, the company completed 33 relatively short core holes, for a total of 2,541 meters, in gold-quartz veins which occur within broad, up to 10 meter thick, strongly carbonate altered shears.
Higher grade results include: 1.13 meters grading 4.0 g/t, and 0.73 meters grading 7.2 g/t however, the high gold grades obtained in surface samples were not obtained in drill core.
No further work is planned on these veins at this time.
Constantine Metal Resources Ltd. announced that a drill contract has been signed for two drills for its Palmer massive sulfide project near Haines.
Drilling planned for 2008 will follow up on two thick high grade massive sulfide intersections drilled late in the 2007 drill season.
The two 2007 drill holes located about1400 feet apart returned 45.90 ft of 3.79 percent copper, 7.24 percent zinc, 0.37 g/t and 47 grams of silver per metric ton in hole CMR07-07 and 79.5 feet assaying 6.46 percent zinc, 1.19 percent copper, 0.45 percent lead, 0.67 g/t and 49.8 grams of silver per metric ton in hole CMR07-09.1 part per million) and Zn (>0.1 percent).
In addition to the East Lake drilling, the company completed 33 relatively short core holes, for a total of 2,541 meters, in gold-quartz veins which occur within broad, up to 10 meter thick, strongly carbonate altered shears.
Higher grade results include: 1.13 meters grading 4.0 g/t, and 0.73 meters grading 7.2 g/t however, the high gold grades obtained in surface samples were not obtained in drill core.
No further work is planned on these veins at this time.
Constantine Metal Resources Ltd. announced that a drill contract has been signed for two drills for its Palmer massive sulfide project near Haines.
Drilling planned for 2008 will follow up on two thick high grade massive sulfide intersections drilled late in the 2007 drill season.
The two 2007 drill holes located about1400 feet apart returned 45.90 ft of 3.79 percent copper, 7.24 percent zinc, 0.37 g/t and 47 grams of silver per metric ton in hole CMR07-07 and 79.5 feet assaying 6.46 percent zinc, 1.19 percent copper, 0.45 percent lead, 0.67 g/t and 49.8 grams of silver per metric ton in hole CMR07-09.0.1 percent).
In addition to the East Lake drilling, the company completed 33 relatively short core holes, for a total of 2,541 meters, in gold-quartz veins which occur within broad, up to 10 meter thick, strongly carbonate altered shears.
Higher grade results include: 1.13 meters grading 4.0 g/t, and 0.73 meters grading 7.2 g/t however, the high gold grades obtained in surface samples were not obtained in drill core.
No further work is planned on these veins at this time.
Constantine Metal Resources Ltd. announced that a drill contract has been signed for two drills for its Palmer massive sulfide project near Haines. Drilling planned for 2008 will follow up on two thick high grade massive sulfide intersections drilled late in the 2007 drill season. The two 2007 drill holes located about1400 feet apart returned 45.90 ft of 3.79 percent copper, 7.24 percent zinc, 0.37 g/t and 47 grams of silver per metric ton in hole CMR07-07 and 79.5 feet assaying 6.46 percent zinc, 1.19 percent copper, 0.45 percent lead, 0.67 g/t and 49.8 grams of silver per metric ton in hole CMR07-09.
Curt is President of Avalon Development Corporation, a mineral exploration consulting firm based in Fairbanks, Alaska. He is a U.S. Certified Professional Geologist with the American Institute of Professional Geologists (CPG #6901) and is a licensed geologist in the State of Alaska (Lic. # AA 159).
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