Mining pay ranks No. 2 after oil and gas

There are some new stats out from the State of Alaska that I thought you might like to see.

For 2008, the Alaska mining industry accounted for 3,500 direct jobs and 5,500 indirect jobs.

The industry doled out US$350 million in payroll with the average salary totaling US$82,600 per year, which is 90 percent higher than the statewide average for all sectors.

Mining salaries were higher than all other sectors, except for the oil and gas sector.

The industry paid US$105 million in rents, royalties, taxes and other fees to the State of Alaska and paid local governments US$15.6 million in taxes.

Alaska Native corporations received US$212 million in payments from the mining industry, a 266 percent increase over the previous year.

In 2008 the mining industry paid the Alaska Railroad US$18.5 million in fees for moving coal, sand and gravel, while the Alaska Industrial Development and Export Authority collected US$22 million in user fees for its facilities.

The industry also paid US$1.6 million to the Alaska Mental Health Trust for rents, royalties and construction materials sales.

So, next time you hear somebody wonder out loud about what the Alaska mining industry does for them, whip a few of these numbers on them!

Western Alaska

Teck Cominco American reported fourth-quarter and year-end 2008 results from its Red Dog mine in Northwest Alaska.

In the fourth quarter, the mine produced 115,200 metric tons of zinc in concentrate and for the year the mine produced 515,200 metric tons of zinc in concentrate.

Zinc ore grade for the year remained unchanged at 20.1 percent, while mill recoveries increased slightly to 84.1 percent.

The mine also produced 26,100 metric tons of lead in concentrate during the fourth quarter and 122,600 metric tons of lead in concentrate for the year.

Lead ore grade for the year decreased slightly to 6.1 percent, while mill recoveries increased to 67 percent.

The mine posted a $71 million operating loss for the fourth quarter and a $171 million operating profit during 2008 versus a $174 million operating profit for the quarter in 2007 and an $819 million operating profit for the year in 2007.

A precipitous drop in the prices of lead and zinc over the past 6 months adversely affected production revenue, while a main crusher failure affected fourth-quarter operating costs.

During 2008, the mine paid partner NANA Inc. and the State of Alaska royalties of $111 million.

Zazu Metals Corp. announced remaining drill hole results from its Lik zinc-lead-silver deposit in the western Brooks Range.

Highlights include drill hole 188 with 8.28 percent zinc, 2.55 percent lead and 13.36 grams per metric ton silver over 34.9 meters; hole 192 with 6.31 percent zinc, 1.87 percent lead and 6.01 g/t silver over 23.32 meters; and hole 195 with 6.84 percent zinc, 2.52 percent lead and 45.36 g/t silver over 7.62 meters.

The company also announced a US$650,000 budget for 2009 and goals for the year, including completion of an updated resource estimate, ongoing baseline collection of meteorological and environmental data, conducting a scoping study of the Delong Mts.

shipping facility to determine what changes will be required in order to ship Lik ore from the site, conversion of existing federal claims at Lik to state mining claims, and incorporation of all these data into a scoping study.

Placer Gold Corp., formerly Arctic Oil & Gas Corp., announced plans to finance activities at its Denali on-shore gold deposit and its Norton Sound Alaska Oceanic and Nome offshore mining leases in Norton Sound near Nome.

The company indicated that it is creating a new gold-backed asset that will be supported by in-ground gold reserves.

At Denali, the company said it has a 400-yard-per-hour processing plant already on site.

The company plans to upgrade the existing mine production equipment to a 60,000-ounce-per-year mining operation commencing in 2009-2010, with estimated gold production costs of $300 per ounce.

At Norton Sound Alaska Oceanic the company said it is finalizing plans to construct a new suction-cutter gold dredge to produce 250,000 ounces in the 2010 summer season.

Gold grades at this deposit are approximately 0.50 grams per cubic meter ($13.40 per cubic meter at a gold price of $835 per ounce).

Gold production costs of less than $200 per ounce are anticipated.

At Nome offshore leases, research of previous drilling programs conducted by Westgold and others estimated a total gold resource of approximately 3.3 million ounces within the 3-mile limit that was drill tested.

The company has options over approximately 20 percent of this resource area.

NovaGold Resources announced year-end 2008 summaries and 2009 plans for its Donlin Creek and Rock Creek gold deposits.

At Donlin Creek, the company is expecting completion of a feasibility study, including updated resource estimates, by the end of the first quarter.

The company's share of the US$28 million 2009 budget at the Donlin Creek project is approximately US$14 million, part of which will be incurred in completing the feasibility study and the remainder is planned to be used for permitting activities at the project.

The Rock Creek project is in care and maintenance, pending a review of whether to recommence start-up at the project.

The current care and maintenance budget at Rock Creek for 2009 is approximately $7 million.

The company indicated that it had no plans to recommence the start-up process at Rock Creek in 2009.

In a bit of brighter news, NovaGold and Richard Garnett of previous explorer WestGold, shared the Prospectors and Developers Association of Canada's prestigious Thayer Lindsley Award for their discovery of the Donlin Creek deposit.

Congratulations NovaGold and Richard Garnett!

Northern Dynasty Minerals Ltd. announced that the Pebble Limited Partnership (Northern Dynasty and partner Anglo American plc) has approved a US$59 million budget and work plan for the Pebble project for 2009, with the potential for supplemental spending up to a total of US$70 million.

The focus of this effort will be to complete a pre-feasibility study and prepare the project for permitting in 2010.

Pending the outcome of engineering trade-off studies currently under way, the Pebble Limited Partnership is expected to meet in August to finalize the Prefeasibility Study schedule and authorize additional program expenditures this year.

Currently approved engineering, metallurgical, environmental and sociological studies are expected to be supplemented by additional engineering and site investigation activities in the latter half of 2009, including geotechnical and metallurgical drilling.

Pacific North West Capital Corp. announced that it had exercised the option to acquire from St. Andrew Goldfields Ltd. all of the outstanding shares of Mystery Creek Resources, Inc., a wholly owned Alaskan subsidiary of St Andrew Goldfields Ltd. and owner of the Nixon Fork gold-copper mine.

Pacific North West is in the process of conducting a comprehensive re-evaluation of mine reserves/resources, metallurgy, exploration targets, and mining options.

An updated financial analysis of the mine also is underway.

The conclusion of these studies will form the basis for a possible re-start of mining operations.

Pacific North West believes the current resource is not fully explored and is reviewing the project data with the objective of outlining an exploration program to further define additional resources.

Eastern Interior

Kinross Gold announced year end 2008 results from its Fort Knox mine.

The mine produced 77,133 ounces of gold in the fourth quarter at a cash cost of US$492 per ounce, while year-end totals were 329,105 ounces of gold produced at a cost of US$461 per ounce.

While metric tons mined and milled in 2008 were up over 2007 levels, more refractory ore resulted in slightly decreased production in 2008.

During the fourth quarter the mine processed 3,461,000 metric tons of ore grading 0.80 g/t gold.

Mill recoveries were 81 percent for the fourth quarter.

Cost of production rose 34 percent due primarily to increased commodity, labor and energy costs.

The company also tabled year-end 2008 resource updates that included proven and probable reserves of 252,770,000 metric tons grading 0.47 g/t gold, equivalent to 3,807,000 ounces of gold.

An additional 97,526,000 metric tons grading 0.55 g/t gold, equivalent to 1,723,000 ounces, are classified as measured and indicated resources.

Teryl Resources and JV partner Kinross Gold announced year-end 2008 exploration results and 2009 plans at their Gil gold project near Fort Knox.

The 2008 exploration focused on the Sourdough Ridge and Last Chance areas.

At Last Chance, 103 soil samples were collected while at Sourdough Ridge, 4,477 feet of reverse circulation drilling was completed in nine holes.

Significant drill results include hole GVR08-505 which returned 20 feet grading 0.022 ounces per ton of gold, 25 feet grading 0.018 ounces/t gold, 20 feet grading 0.021 ounces/t gold, 10 feet grading 0.026 ounces/t gold and 40 feet grading 0.061 ounces/t gold.

Plans for 2009 include a ground magnetometer survey on Sourdough Ridge, delineation of mineralized zones, establishing a resource base at Sourdough Ridge and expanding the existing resources at North Gil.

Drill plans call for 10,000 feet of reverse circulation drilling and 6,000 feet of core drilling.

Total expenditures to date at the Gil project are approximately US$7.5 million.

Teck Cominco and joint venture partner Sumitomo Metal Mining announced fourth-quarter and year-end 2008 results from the Pogo mine.

The mine produced 89,000 ounces of gold in the fourth quarter and 347,000 ounces for 2008.

Average grade mined in the fourth quarter was 18.2 g/t gold with mill recovery of 81 percent.

Total cash operating costs for the fourth quarter were US$464 per ounce, down significantly from the US$514 per ounce operating cost in the year previous period.

The mine turned a US$12.5 million profit in the fourth quarter and a 2008 profit of US$57.5 million, both of which are significant improvements over 2007 levels.

Lower recoveries in the fourth quarter were due to lower recoveries in the sulfide flotation circuit.

Projected 2008 production is 340,000-360,000 ounces.

International Tower Hill Mines Ltd. announced results from the first four holes drilled in 2009 at its Livengood gold project.

Hole MK-RC-109 intercepted 38.1 meters grading 1.23 g/t gold, while hole MK-RC-100 intercepted 205.74 meters grading 1.43 g/t gold including 38.1 meters grading 3.08 g/t gold.

Both of these holes ended in significant mineralization.

Holes MK-RC-0111 and MK-RC-0112 were drilled in the northeastern portion of the higher grade Core Zone.

Hole MK-RC-0112 intersected 100 meters of 1.11 g/t gold and 17 meters of 0.97 g/t gold.

Hole MK-RC-0111 intersected 68 meters of 0.59 g/t gold.

Hole MK-RC-0112 is significant because it confirms the presence of a second lower thrust fault that duplicates the favorable host rock section.

In addition, very strong alteration and gold mineralization occur at the bottom of the hole suggesting that there may be another higher-grade center developing in this area.

The company also announced plans to expand its 2009 drilling program from 16,000 to 40,000 meters of combined core and reverse circulation drilling.

To date, work at the Livengood project has been adding ounces for an average cost of only US$2.50 per ounce.

Not surprisingly, the "Tundra Telegraph" says that several major producing companies have expressed interest in acquiring International Tower Hill before it grows and improves the project resource base to a level where a premium will be required to purchase the company.

Southeast Alaska

Hecla Mining Co. announced year-end 2008 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 US$3.29 per ounce with total production costs for the year of US$8.52 per ounce.

The average grade of ore mined during the year was 13.68 ounces/t silver, down significantly from the average grade of 15.45 ounces/t that was mined in 2007.

For the year, the mine produced 5,829,253 ounces of silver, 54,650 ounces of gold, 16,630 tons of lead and 52,055 tons of zinc.

On the exploration front, underground exploration drilling in the Gallagher Zone successfully extended the mineralization in a southerly plunge over 200 feet.

Surface drilling defined extensions of the mine contact rocks northeast of the current mine workings, which can be correlated for more than 2,000 feet and is still open in both directions.

This target area will be drilled in 2009.

Surface drilling during 2008 also confirmed the presence of mine contact rock eight miles north of the mine.

During 2009, drilling will define the lower west dipping contact of the lower southwest zone and extensions to the northwest-west zone.

The company also announced revised resource estimates for the mine, which include probable reserves of 8,064,700 tons grading 11.6 ounces/t silver, 0.108 ounces/t gold, 3.8 percent lead and 10.5 percent zinc; mineralized material of 789,800 tons grading 4.1 ounces/t silver, 0.063 ounces/t gold, 2.0 percent lead and 4.6 percent zinc; and other resources of 2,412,000 tons grading 11.5 ounces/t silver, 0.092 ounces/t gold, 2.7 percent lead and 6.8 percent zinc.

Since 1987 Greens Creek has produced a total of about 155 million ounces of silver and approximately 1 million ounces of gold and currently has more than 141 million ounces of silver reserves and resources.

Ucore Uranium announced the discovery of additional light and heavy rare earth element mineralization at its Bokan Mountain project near Ketchikan.

New assays from the Dotson zone include drill hole LM08-36 which returned 3.51 meters grading 1,797 parts per million yttrium, 2,529 ppm light rare earth elements and 1,065 ppm heavy rare earth elements and hole LM08-37 which returned 2.19 meters grading 2,505 ppm yttrium, 5,376 ppm light rare earth elements and 1,657 ppm heavy rare earth elements.

In addition, rare earth element assays from the I&L zone include hole LM08-10 which returned 9.9 meters grading 993 ppm zirconium, 16,287 ppm yttrium, 1,093 ppm light rare earth elements and 8596 ppm heavy rare earth elements, hole LM08-32 which returned 6.3 meters grading 1,286 ppm zirconium, 23,490 ppm yttrium, 2,577 ppm light rare earth elements and 12,651 ppm heavy rare earth elements and hole LM08-40 which returned 4.3 meters grading 1283 ppm zirconium, 3,730 ppm yttrium, 1,296 ppm light rare earth elements and 2,368 ppm heavy rare earth elements.

This rare earth element-bearing mineralization appears to be structurally continuous over 6 kilometers, or nearly 4 miles, along strike.

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