Alaska mining project roundup

Alaska saw robust mining activity in 2008 across the full spectrum of the industry, from small placer operations to major producers, and from exploration programs to advanced development projects. Here is a look at companies reporting significant progress during the year.

Placer mining

Silverado Gold Mines Ltd. has recovered 26,879 ounces of placer gold from channel and bench deposits in the Nolan Valley through 2007. The largest nugget recovered from the property, located about 280 miles north of Fairbanks, weighed 41.35 ounces and was valued at $16,000 by weight. It sold for $50,000. Due to the coarse nature of the placer gold recovered, Silverado is now seeking the lode source of the gold. The company completed 34 drill holes totaling 3,353 meters as part of its 2008 exploration at Workman's Bench, the Company's prime hardrock exploration target.

Goldrich Mining Co. has 16,850 acres in mining claims that cover most of the Chandalar Mining District, about 190 miles north of Fairbanks. A scoping study of the Little Squaw Creek placer gold deposit outlines a resource of 8.8 million yards of gravel, averaging .0246 ounces of gold per yard for a total of 216,602 ounces of placer gold. Goldrich has begun exploring the Chandalar property for its lode potential.

Producing mines

NovaGold Resources Inc. began production at the Rock Creek gold mine Sept. 19, feeding the 6,500-metric-ton-per-day-mill at 25 percent capacity. Running at full production, the operation is expected to turn out 100,000 ounces of gold per year. The main pit at Rock Creek has a resource of 500,000 ounces. Due to financial and permitting issues, NovaGold suspended operations last fall, and the mine currently is in care and maintenance.

Usibelli Coal Mines Inc. is a fourth-generation family owned company founded in 1943 by Emil Usibelli. The company began supplying coal to the newly constructed Ladd Army Air Field (now Fort Wainright) near Fairbanks. Today Usibelli transports coal to six power plants in Interior Alaska, and ships 500,000 metric tons annually overseas. The company has 30 years of reserves at its current yearly production rate of 1.5 million tons of subbituminous coal and could easily double production in response to market demand.

Teck Resources Ltd. operates the Red Dog Mine in Northwest Alaska. Red Dog is the world's largest zinc mine and accounts for about 80 percent of the zinc and nearly 30 percent of the lead produced in the United States. Teck and partner NANA Inc., an Alaska Native regional corporation for Northwest Alaska, are currently acquiring permits needed to begin mining the Aqqaluk deposit, an extension of the main pit currently being mined at Red Dog. The Aqqaluk deposit contains 51.6 million tons of reserves with an average of 16.7 percent zinc and 4.4 percent lead, enough ore to extend the life of the mine by 20 years.

Teck Resources Ltd. also operates the Pogo Mine, located about 110 miles southeast of Fairbanks. The underground mine is Alaska's second-largest gold producer. It began production in early 2007, and suffered some early setbacks that it has largely overcome. Pogo reported its first profit in the second-quarter of 2008. Teck Resources is a 40 percent owner Pogo, with the remaining 60 percent held by companies within the Sumitomo Group. Teck said the mine was on track to reach its yearly gold production target of 340,000 ounces in 2008 and expected operating costs to remain steady during last year.

Kinross Gold Corp. owns the Fort Knox gold mine about 26 miles north of Fairbanks, and began production in 1996. It currently produces about 330,000 ounces of gold per year. The carbon-in-pulp mill at the open-pit mine processes between 33,000 and 45,000 metric tons of ore per day. In February Kinross' board of directors approved construction of a heap leach facility and expansion of the open pit mine. These upgrades are expected to extend the life of the project from 2012 to 2018 and double the expected life-of-mine production to 2.9 million ounces of gold.

Greens Creek Mine, located about 16 miles south of Juneau, changed ownership this year. Hecla Mining Co., a longtime minority owner with a 29.7 percent interest in the mine, bought out majority owner Rio Tinto Ltd.'s 70.3 percent share last spring. During the second quarter of 2008, Greens Creek produced about 2.4 million ounces of silver, 15,257 ounces of gold, 16,000 tons of zinc, and 9,000 tons of lead at an average cash cost of $3.43 per ounce of silver, after by-product credits. Hecla said it anticipates producing a total of 9 million ounces of silver from the mine in 2008 at an average cost of about $3.25 per ounce, given current metals prices.

Advanced stage exploration projects

Coeur d'Alene Mines Corp. is pursuing the Kensington Gold Project, located about 45 miles northwest of Juneau. The company is expecting a Supreme Court ruling on its tailings permits in early 2009. If the court upholds the permits, Coeur's Alaska subsidiary aims to complete construction of a tailings facility and begin gold production by the end of the year. Once in production, the mine will employ about 200 people, and produce about 140,000 ounces of gold per year. Proven and probable reserves measure about 1.4 million ounces of gold, with an additional 623,000 ounces indicated and 243,000 ounces inferred gold resource.

Donlin Creek LLC, a 50-50 partnership between NovaGold Resources Inc. and Barrick Gold Corp., manages the Donlin Creek project in Southwest Alaska. NovaGold reported a resource estimate of 31.7 million ounces of measured and indicated resources grading about 2.5 grams gold per metric ton. More than 32,000 meters has been drilled at Donlin in 2008. The preferred project design includes a 50,000-metric-ton-per-day plant that would produce more than 1 million ounces per year. A feasibility study is targeted for the first quarter of 2009, with permitting beginning later in the year.

Pebble Limited Partnership, a 50-50 partnership between Northern Dynasty Minerals Ltd. and Anglo American PLC, is advancing the Pebble copper-gold-molybdenum project in Southwest Alaska toward permitting.

The project consists of two deposits: The near-surface Pebble West and the deeper Pebble East.

The combined measured and indicated resource for both deposits, using a 0.30 percent copper-equivalent cutoff, is 5.1 billion metric tons grading 0.77 percent copper-equivalent, containing 48 billion pounds of copper, 57 million ounces of gold and 2.9 billion pounds of molybdenum.

In addition the deposits have a combined inferred resource of 4.0 billion tons grading 0.55 percent copper-equivalent containing 24 billion pounds of copper, 37 million ounces of gold and 1.9 billion pounds of molybdenum.

Committee Bay Resources Ltd., after a recent merger with Niblack Mining Corp., is engaged in advanced-stage exploration of the copper-zinc-gold-silver Niblack volcanogenic massive sulfide property on Prince of Wales Island in Southeast Alaska. The property has a near-surface indicated resource of 1.424 million metric tons grading 2.86 grams per metric ton gold , 41.73 g/t silver, 1.04 percent copper and 2.14 percent zinc and a deeper inferred resource of 1.893 metric tons grading 2.07 g/t gold, 29.21 g/t silver, 1.65 percent copper, and 2.71 percent zinc. Underground drilling continues at Niblack from a main access tunnel complete this year.

PacRim Coal LP's Chuitna Coal Project is a surface coal mining and export development proposal for an ultralow-sulfur, subbituminous coal resource located in the Beluga Coal Field, about 45 miles west of Anchorage. The project proposal consists of a surface coal mine and support facilities, transportation infrastructure, personnel housing, logistic center, and coal export terminal. The current project predicts a minimum 25-year mine life with a production rate of up to 12 million tons a year. A complete permit application for the project was expected to be submitted to Alaska Department of Natural Resources in 2008.

Pacific North West Capital Corp. purchased the Nixon Fork high-grade gold mine in December 2008. The high-grade gold mine is located in Interior Alaska near McGrath and includes a 200-metric-ton-per-day flotation plant with a gravity gold separation circuit, a sulfide flotation circuit, and a newly constructed CIL gold-leaching circuit. Pacific North West Capital reports a current reserve of 220,000 ounces of gold at 25 grams per metric ton, and a resource of about 162,000 ounces of gold at 18.6 g/t, both containing about 1.2 percent copper. The mine is currently on care and maintenance and the new owner of Nixon Fork does not plan to fire up the mill until 2011.

Early stage exploration projects

Full Metal Minerals Ltd. has 11 exploration projects spanning Alaska. The company's two primary projects are the Lucky Shot high-grade gold property about 90 miles north of Anchorage, and the LWM zinc-lead-silver prospect at its 40 Mile property in eastern Alaska. In a joint venture with BHP Billiton, the company is exploring multiple copper-gold porphyry targets on 88,675 acres of land owned by Doyon Ltd., an Alaska Native regional corporation in eastern Alaska. The junior has three exploration projects in Yukon: Nadaleen high-grade silver-lead-zinc project, Angie-Cat silver-lead-zinc project and OG carbonate replacement zinc-silver-lead prospects.

International Tower Hills Mines Ltd. has nine projects in Alaska. The company's primary focus has been its Livengood gold property about 70 miles north of Fairbanks. ITH added a winter drill program at Livengood and intends to outline a 10 million-ounce resource by the end of 2009. Drilling is focused on expanding 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's other primary properties in Alaska are the LMS high-grade gold project, Terra high-grade gold property and the BMP polymetallic property.

Millrock Resources Inc. has an exploration agreement with the Bering Straits Native Corp. to explore 152 square miles of BSNC-owned land on the Seward Peninsula in western Alaska. Millrock's primary focus is the Estelle high-grade gold property about 100 miles northeast of Anchorage. Another priority target for Millrock is the Bluff gold property about 42 miles east of Nome. The company's other properties are the Fortymile gold property in eastern Alaska and the Divide gold property on the Seward Peninsula.

Freegold Ventures Ltd.'s Golden Summit high-grade gold property is about 5 miles to the north of the Fort Knox Mine. Freegold is using a combination of closely spaced shallow drilling, deeper core drilling and an ongoing bulk sampling program using an on-site gravity-based concentration plant. Another exploration target for Freegold is its Rob high-grade gold property near the Pogo Mine. The company is also exploring the Vinasale gold property about 16 miles south of McGrath, where the company has entered into an exploration agreement with Doyon Ltd., an Alaska Native regional corporation in Interior Alaska, with an option to lease the property.

Pure Nickel Inc. is exploring the Man high-grade nickel-copper-platinum group element property in Interior Alaska. In November the company said Itochu Corp., a multibillion-dollar Japanese conglomerate, agreed to invest as much as $40 million to earn up to a 75 percent stake in the 750-square-kilometer Man property. Itochu has agreed to spend up to $6.5 million at Man during 2008 and 2009; this includes reimbursing Pure Nickel for expenditures incurred this year at the project.

Electrum Ltd. entered into a joint venture with Gold Crest Mines Inc. last spring to explore the Kisa, Gossan Valley, Little Swift and Gold Creek properties, totaling 15,320 acres in the Kuskokwim Region of Southwest Alaska, about 120 miles south of the Donlin Creek gold deposit. Electrum also purchased a 30 percent stake in NovaGold Jan. 2 for $60 million. Electrum is a New York-based private company that holds a large and diversified portfolio of precious metals exploration projects.

Mantra Mining Inc. purchased five of NovaGold Resources Inc.'s early-stage Alaska assets. The five properties - Colorado Creek, Kugruk prospect, Baird project, Omalik property and Tintina properties - total about 397,560 acres. Colorado Creek is expected to be one of the company's core properties. Mantra is considering splitting its precious metal and base metal assets into two separate entities. A drill plan and budget will be determined after reorganization.

Newmont Mining Corp. entered into three joint venture agreements with Gold Crest Mines Inc, covering gold exploration on the AKO and Luna properties, which together comprise about 15,200 acres in the Kuskokwim Region of Southwest Alaska about 120 miles south of Donlin Creek. Newmont also will joint venture with Gold Crest on the Chilly property, which is located in the Buckstock Mountains about 75 miles northeast of the AKO and Luna claims.

Zazu Metals Corp. completed a 58-hole, 6,900-meter core drill program in 2008 at the Lik zinc-silver-lead deposit located about 13 miles from Teck Resources' Red Dog Mine. Teck is a 50 percent joint venture partner in the Lik property. Zazu can increase its interest to 80 percent by meeting certain spending commitments by 2018. A historic estimate that pre-dates NI 43-101 requirements outlined a resource at the Lik deposit of 26.7 million metric tons grading 9.16 percent zinc, 3.15 percent lead and 49 grams of silver per ton. Zazu plans to incorporate the results from the drilling completed into an NI 43-101-compliant resource estimate early in 2009.

Ucore Uranium Inc. is exploring the Bokan Mountain uranium property located on the southern end of Prince of Wales Island about 37 miles southwest of Ketchikan. The company's 2008 drill program at Bokan focused on the I&L zone. In addition to uranium, the company discovered rare earth elements and related metals, including yttrium, zirconium, beryllium, and niobium. In 1989, the U. S. Geological Survey estimated that the property hosts more than 11 million pounds of uranium as well as tantalum, niobium, and rare earth elements.

Australian Mineral Fields began exploration of the Tushtena gold property in 2008. The Perth-based explorer analyzed historic core and traversed the property collecting litho-geochemical data, completing hyperspectral analysis in preparation of drilling in 2009. The company reports a near-surface low-grade bulk tonnage deposit, but is targeting the underlying lode-source of the highly altered mineralization.