Alaska mining industry faces credit crunch

The national sucking sound of venture capital exiting the mining industry has now expanded to a worldwide sucking sound as virtually all of the world's economies fight the massive, unprecedented credit crunch which started in the U.S. The mining industry is certainly not alone in feeling the down turn but its effects in Alaska began to be felt last month and continued this month as projects were shortened, plans down-sized or programs cancelled, all in an effort to preserve precious cash reserves.

In this maelstrom of uncertainty, several Alaskan properties stand out as high quality producers and development or exploration properties.

As was the case in the last down-turn about a decade ago, good projects will continue to get funded since the worldwide demand for metals is unlikely to be affected to any significant or long-lasting degree.

Western Alaska

NovaGold Resources Inc. announced third quarter operating results from its Rock Creek gold mine near Nome. During the first month since start-up, the mine completed an initial gold pour and has worked on commissioning all elements of the operation. Production levels from stockpiled ore have been slightly above schedule for the first month of operation, averaging about 50 percent of design capacity through the milling circuit. The gravity circuits have run at approximately 80 percent availability and the carbon-in-leach system is in the process of being charged and commissioned. The mine anticipates continuing to ramp up throughput levels during the remainder of the fourth quarter of 2008.

NovaGold Resources Inc. also announced additional drilling results from its Donlin Creek gold project.

Total exploration and development drilling in 2008 now totals over 32,000 meters.

Drilling in the Phase 2 program includes some additional holes in the East Acma structural zone as well as some select infill holes in the Lewis and Akivik areas.

Exploration drilling has also targeted the potential for oxide/non-refractory mineralization on the project.

Highlights of drilling from the East Acma area include hole DC08-1705 intersected 266.6 meters of 2.64 rams per metric ton gold in 14 mineralized intervals, hole DC08-1708 intersected 208.3 meters of 3.26 g/t gold in 15 mineralized intervals, hole DC08-1709 intersected 65.4 meters of 6.14 g/t gold in 7 mineralized intervals, hole DC08-1710 intersected 332.7 meters of 3.83 g/t gold in 13 mineralized intervals and hole DC08-1715 intersected 112.9 meters of 3.97 g/t gold in 6 mineralized intervals.

Highlights of drilling from the Lewis and Akivik areas include hole DC08-1706 intersected 22.0 meters of 5.03 g/t gold in 3 mineralized intervals, hole DC08-1716 intersected 115.8 meters of 3.15 g/t gold in 11 mineralized intervals, hole DC08-1719 intersected 107.6 meters of 4.25 g/t gold in 10 mineralized intervals, hole DC08-1764 intersected 30.0 meters of 2.84 g/t gold in 2 mineralized intervals and hole DC08-1765 intersected 42.3 meters of 3.22 g/t gold in 3 mineralized intervals.

The broad zone of higher-grade mineralization at East Acma continues at least an additional 500 meters to the east of the current pit-constrained resource along the Donlin Creek anticline, an important ore-controlling structure.

Many of the drill holes from the East Acma area reported grade-times-thickness values from 200 to over 1,200 gram-meters, intercepting mineralization both below and outside the current planned pit limit.

The company also reported that work in other areas of the project suggest the potential for non-refractory gold mineralization.

Broad zones of stockwork quartz veining and traces of visible native gold were encountered in an area of a large surface gold target that is open to further expansion.

Historical results include DC97-392 with two mineralized intervals: 64 meters of 2.8 g/t gold and 97.9 meters of 3.0 grams of gold per metric ton.

Additional soil sampling this season has further expanded the area of surface gold mineralization in several directions.

Zazu Metals Corporation announced additional drilling results from its Lik zinc - lead - silver deposit in the western Brooks Range. Assay results from 23 of 58 holes completed in 2008. Results include 26.82 meters grading 7.84 percent lead, 19.23 percent zinc and 291.3 g/t silver in hole 161, 9.75 meters grading 1.84 percent lead, 10.92 percent zinc and 46.73 g/t silver in hole 166, 14.33 meters grading 1.37 percent lead, 4.32 percent zinc and 135.18 g/t silver in hole 167 and 12.65 meters grading 3.61 percent lead, 7.16 percent zinc and 47.81 g/t silver in hole 168. The company is planning to complete an updated resource estimate following receipt of all 2008 drilling results.

Full Metal Minerals has been informed by New Gold Inc. (formerly Metallica Resources Inc.) that they are terminating the Option Agreements on the Port Moller and Chignik projects in southwest Alaska. Full Metal appreciates the quality technical work completed by New Gold, and will be seeking a new partner to explore these prospective properties.

Eastern Interior

Freegold Ventures announced additional diamond drilling results from its Golden Summit project in the Fairbanks District. Significant results include 303 feet grading 0.027 ounces of gold per ton, 101 feet grading 0.046 ounces of gold per ton and 55 feet grading 0.18 ounces of gold per ton. This drilling tested 200 feet of strike length along the 5,000 foot long Cleary Hill vein system. Follow-up bulk sampling was conducted on this system with approximately 50,000 tons of material sampled during 2008.

International Tower Hill Mines Ltd. announced additional drilling results from its Livengood gold project.

Drilling continues to significantly expand the Core Zone of the deposit southward.

Results include hole MKRC-0039 which returned 25.9 meters grading 3.35 g/t gold and 57.9 meter grading 1.30 g/t gold and hole MKRC-043 which returned 114.3 meters grading 1.32 grams of gold per metric ton.

These new assays, along with early geochemical arsenic 'gold pathfinder' results, indicate that the Core Zone is extensive and remains fully open along strike to the south and east and at depth.

As the zone extends to the south significant mineralization continues to be present in all units, including the upper plate rocks and the lower sedimentary package.

The 2008 drilling has now defined mineralization over approximately 1.5 kilometers of strike and 500-900 meters of width of the Core Zone.

It now appears that the distribution of mineralization may be controlled by the presence of southerly dipping faults and dikes that cross the stratigraphy developing mineralization in all of the units, including the lower sedimentary package, thereby significantly expanding the deposit's potential.

The lower sedimentary package is increasingly well mineralized.

In addition, the favorable host rocks continue to be shallow to the southwest and are projected to begin surfacing a few hundred meters to the south of the existing drill pattern.

Mineralization remains open to expansion.

The company plans to release at updated resource estimate in early November.

Full Metal Minerals announced results from an additional 13 drill holes from the LWM zinc, silver, lead, copper prospect near Chicken.

Significant results include hole LWM08-35 which returned 12.2 meters true width averaging 6.4 percent zinc, 2.7 percent lead and 39.1 grams of silver per metric ton, hole LWM08-44 which returned 2.3 meters true width averaging 12.2 percent zinc, 31.6 percent, lead and 479.2 grams of silver per metric ton, hole LWM08-49 which returned 4.5 meters true width averaging 7.9 percent zinc, 14.5 percent lead and 179.2 grams of silver per metric ton, hole LWM08-49 which returned 6.2 meters true width averaging 18.2 percent zinc, 4.3 percent lead and 165.7 g/t silver and hole LWM08-53 which returned 5.8 meters true width averaging 13.4 percent zinc, 4.3 percent lead and 74.8 grams of silver per metric ton.

Two subparallel zones of massive carbonate-replacement mineralization have been traced over 700 meters of strike length and over 300 meters below surface.

The deposit is open for expansion in all directions.

Drill hole LWM08-45 is the furthest northeastern step-out hole with assays to-date and it encountered 6.95 meters true width averaging 4.9 percent zinc, 11.6 percent lead and 181.3 grams of silver per metric ton.

Additional assays are pending.

Alaska Range

Alaska newcomer YOW Capital Corp. announced the signing of a letter of intent with 1618254 Ontario Ltd. to acquire all of the issued and outstanding shares of 1618254 Ontario by means of a one-for-one share exchange.

1618254 Ontario's principal asset consists of exploration and other rights on the Caribou Dome project (locally known as Denali Copper) in the Valdez Creek District.

The project is owned by Alaska-based C-D Development Corp. and under option to 1618254 Ontario.

Historic exploration and development work on the Property from its discovery in 1963 through 1971 defined a near-surface, high grade copper resource in the form of nine (9) major chalcopyrite-bearing lodes along with numerous smaller lodes that have been explored by trenching and more than 36,000 feet of surface and underground drilling in more than 230 core and percussion holes.

In addition to the extensive drilling and trenching, an adit, 1,189 feet in length, and a decline, 1,706 feet in length, were driven by Alaska Exploration Syndicate (AES) into three of the lodes to expose the mineralization at depth and to provide drill stations for further exploration.

Drilling and underground worked defined a resource of 550,400 tons grading 5.84 percent copper on only three of the nine copper-bearing lodes known to exist on the project.

1618254 Ontario has commissioned a geological report and plans to soon commission a number of other studies, including water sampling and wetlands studies as well as geographical surveys.

Welcome to Alaska YOW Capital Corp.!

Alaska newcomer Australian Mineral Fields Ltd. announced that it had acquired the right to earn an 85 percent interest in the Tushtena gold project from Alaska-based Tushtena Resources Inc. The project is located 20 miles southwest of Tok in the northern Alaska Range.

The agreement allows the company to earn 80 percent of the project by spending $3 million within 5 years of the execution of the agreement.

The company can earn a further 5 percent (to a total of 85 percent) by completing a Bankable Feasibility Study.

The company will complete a minimum of $500,000 of exploration each year, except 2008, during which time the commitment will be $100,000.

The Company will make annual payments of C$100,000 until it earns its 80 percent interest.

Historic rock chip samples of up to 1,450 g/t gold have been obtained from the veins outcropping on the project.

Other samples include 342 grams of gold per metric ton, 105 grams of gold per metric ton, 118 g/t gold and 163.5 grams of gold per metric ton.

Gold is reported to be often free and visible.

During 1986 and 1987, 10 diamond drill holes have been reported to have been drilled at the Discovery Zone, in a variety of orientations and with an average depth of only 135 meters.

Best reported results include seven feet grading 14.3 g/t gold in Hole AR-4, 3 feet grading 9.4g/t gold in Hole AR-3 and 5.7 feet grading 7.01 g/t gold in Hole AR-9.

Mineralization is reported to occur in dominantly east-northeast trending, steep northwest dipping quartz-arsenopyrite-carbonate veins, veinlets and shear veins up to 0.5 meter thick.

Of the 10 drill holes, the Company interprets that only four holes, for a total of 528 meters were drilled in an orientation likely to intersect the mineralized veins.

The Discovery zone, the most significant and advanced prospect to date, is co-incident with a reported one-kilometer-long zone containing greater than 250 parts per billion gold and greater than 500 parts per million arsenic in soils.

Resampling of historic core intervals was conducted in 2008 and indicated general agreement between 2008 and historic assay results.

These results included 2008 results of 9.5 feet grading 24.575 g/t gold in hole AR4 and 6 feet grading 12.956 g/t gold in hole AR9.

Welcome to Alaska Australian Mineral Fields Ltd.!

NORTHERN ALASKA

Silverado Gold Mines Ltd. Announced additional results from drilling at the Workman's Bench prospect at its Nolan Creek property in the Brooks Range.

The company completed 34 drill holes totaling 11,597 feet as part of its 2008 exploration drilling at Workman's Bench.

New results include 2.1 feet grading 0.04 ounces of gold per ton and 42.07 percent antimony in hole 08SH15, 1.8 feet grading 2.88 ounces of gold per ton and 27.657 percent antimony in hole 08SH18 and 1.0 feet grading 0.08 ounces of gold per ton and 63.47 percent antimony in hole 08SH21.

This year's drilling has extended the known lateral extent of the stibnite (antimony)-gold vein systems on Workman's Bench from 600 feet to 1,000 feet.

SOUTHEAST ALASKA

Coeur d'Alene Mines Corp. announced that, due to further substantial delay in the Environmental Assessment process triggered by a federal agency's recent actions, the company has requested the Forest Service to terminate the permitting process for a potential alternative paste tailings plan at its Kensington gold project.

The company continues to pursue its original tailings plan, which is pending before the U.S. Supreme Court. A decision on the appeal is expected in the first or second quarter of 2009.

The company's decision to terminate its alternative disposal plans stems from indications from the Environmental Protection Agency which has now stated it wants Coeur to evaluate yet another new and different alternative for review and raised other issues regarding the modified plan proposal.

The Agency comments triggered potentially months of delay and substantial issues in completing a timely modified plan review.

The most immediate impact of this action was a layoff of about half of the Kensington project's work force, amounting to 41 of 82 jobs being terminated on the project.

Full Metal Minerals Ltd. and Alaska newcomer Mosam Capital Corp. have entered into an agreement whereby Mosam can earn a 60 percent interest in Full Metal's Mount Andrew copper project on Prince of Wales Island.

Mosam has the option to earn a 60 percent interest in the property by incurring exploration expenditures totaling $3 million over four years, making cash payments totaling $125,000 and issuing 1 million shares over the four year option term.

The style of mineralization and alteration encountered at Mount Andrew suggests an iron-oxide copper-gold system.

Copper mineralization occurs within semi-massive to massive magnetite bodies within andesitic volcanic rocks and associated intermediate intrusive rocks, cross-cut by later post-mineralization dykes.

Andesitic rocks commonly exhibit tactite-style alteration, coupled with strong sodic and potassic alteration.

Niblack Mining Corp. announced that, as previously announced, Committee Bay Resources Ltd. has acquired 100 percent of the outstanding shares of Niblack and will begin operating under this new name at the Niblack polymetallic project on Prince of Wales Island.

Ucore Uranium Inc. announced additional rare earth element (REE) drill results from the I&L Zone at its Bokan Mountain uranium project.

Results include 8.38 meters grading 0.028 percent Y2O3, 0.020 percent Nb2O5, 0.148 percent Light Rare Earth Elements and 0.025 percent Heavy Rare Earth Elements in hole LM08-10, 12.81 meters grading 0.244 percent Y2O3, 0.018 percent Nb2O5, 0.108 percent Light Rare Earth Elements and 0.110 percent Heavy Rare Earth Elements in hole LM08-118 and 7.04 meters grading 0.076 percent Y2O3, 0.143 percent Nb2O5, 0.127 percent Light Rare Earth Elements and 0.075 percent Heavy Rare Earth Elements in hole LM08-25.

The company indicated that the I&L zone is significantly enriched in rare earth elements and related metals, including yttrium and niobium along with potentially significant concentrations of highly valuable heavy REE's, including holmium (Ho), lutetium (Lu), terbium (Tb) and thulium (Tm).

These are uncommon at most other North American REE deposits and their value could add materially to the uranium values for which the project is more widely known.

Surface sampling has identified several zones with even higher REE values outside of the main uranium-bearing zones.

Investigations are being made into the area's full suite of mineralization, including uranium, REE's, niobium, beryllium, and zirconium.

Samples from the I&L zone have been submitted to a metallurgical facility for mineralogical and recovery testing.

Author Bio

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).

• Email: [email protected]
• Phone: 907-457-5159
• Contact Curt Freeman