The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Attracting C$37M, International Tower Hill drilled 65 kilometers at Alaska gold project
International Tower Hill Mines Ltd.'s Livengood gold project can best be compared to the proverbial snowball. As positive drill results continued to roll in so did investment cash, in turn funding an evermore expansive exploration program that has revealed a multimillion-ounce gold resource lying in the shadow of the appropriately named Money Knob.
Raising about C$37 million in 2009, the explorer increased its 2009 drill program at Livengood from 16,000-meters at the onset of the year to around 65,000 meters by October.
The rapidly expanding bulk tonnage gold deposit, which lies adjacent to the highway running north from Fairbanks to the oil fields of Alaska's North Slope, contains 461 million metric tons of ore with an average grade of about 0.84 grams gold per metric ton, or 12.5 million ounces of the yellow metal, according to a September resource estimate.
Southwest for the winter
The 10,000-meter winter drill program at Livengood encountered an unexpected area of higher-grade mineralization in the previously unexplored Southwest zone.
Assay results from the 35 holes drilled into the Southwest zone between February and April of 2009 revealed an area of higher-grade mineralization that rivals the deposit's Core zone outlined by the explorer in 2008.
"The whole southwest area was a real surprise to us in the fact that we ran into significantly higher grades than we hit in most of the rest of the deposit with the exception of our Core zone," International Tower Hill Mines President and CEO Jeff Pontius told Mining News.
The highest grade assay result in the Southwest zone came from hole MK-RC-0118, which intersected 35.05 meters grading 3 g/t gold and included a 3.05-meter layer that assayed at 24.86 g/t gold. MK-RC-0120, drilled 600 meters south and 400 meters west of the nearest reported 2008 resource hole, intersected 45.7 meters with an average grade of 2.11 g/t gold.
"There is no question that these holes represent a major expansion of the deposit, with grades as good as or better than those found in the Core zone defined last year," said International Tower Hill Vice President of Exploration Russell Myers.
Drilling in the Sunshine
The summer program at Livengood, designed to expand the resource in the East and Northeast zones of the deposit revealed the Sunshine zone, an area characterized by long sections of near-surface, oxidized gold mineralization.
Drilling at Sunshine located about 1 kilometer, or about five-eighths of 1 mile, to the northeast of the Core zone, intersected virtually continuous mineralization from the surface to depths in excess of 250 meters, in an area that measures about 400 meters wide by more than 525 meters long.
Hole MK-RC-0160, drilled in the Sunshine Zone, intersected 45.7 meters (starting at the surface) with an average grade of 0.62 grams gold per metric ton. At a depth of 64 meters, the same hole intersected an additional 131.1 meters averaging 0.88 g/t gold. MK-RC-0162 cut 118.9 meters in excess of 1 g/t and an additional 22.9 meters grading 0.98 g/t.
The discovery of the Sunshine zone caused a delay in the completion of a preliminary economic assessment of the Livengood project in order to include Sunshine drill results in the study. The explorer said the long intersects of near-surface, oxidized mineralization make the newly discovered zone a prime candidate for a starter pit and are going to have a big impact on the pit design.
Dedicating two drills to the newly discovered zone, Sunshine was top priority, both on site and at the assay lab, as the company collected data need to complete the study.
Moving away from Sunshine
Once drilling is completed at the Sunshine zone, the three rigs turning at the priority target moved out to the East zone, which continues to show promise with significant higher grade zones of gold mineralization.
Hole MK-RC-0154, drilled about 250 meters east of the Core zone, intersected 45.7 meters starting at 200 meters with an average grade of 1.62 grams of gold per metric ton.
"Before the end of the year we will finish drilling off the East zone and wrap it basically back up into the Sunshine zone," Pontius said. "We think that when we get that put together, we will have roughly 2.5 kilometers of strike length about 1.5 kilometers wide that will have enough drilling to know about the deposit in that area, and a lot of it will be on the 75-meter centers so we can get indicated ounces out of those."
Coring the Core zone
International Tower Hill added a core drill rig to its summer program, to test for a deep feeder zone that company geologists believe exists below the Core zone.
The oriented core - which is produced by marking the orientation of the core with regard to its in-ground position for analysis after it has been removed - has provided the junior's geologists with a first look at the structural controls hidden below the surface.
While the geology revealed by the core drilling was encouraging to the explorer, the altered and fractured rock made it difficult for the rig to reach the depths needed to test for a feeder zone.
On the fourth attempt, drill crews found a deeper high-grade zone in hole MK-09-37. At a depth of 432.4 meters, hole 37 pierced 15.5 meters averaging 6.55 g/t gold. The explorer said defining the extent of this high-grade mineralization will be the focus of future drilling.
Ideal location
In Alaska the infrastructure for a mine does not get much better than that found at Livengood. About an hour and a half drive from Fairbanks, the deposit lies adjacent to the paved highway used to service the trans-Alaska-oil pipeline system and is on the route of two proposed natural gas pipelines. A "bullet line" that would deliver North Slope gas to in-state markets and a much larger gas line that would deliver gas to the lower 48 states.
Natural gas-fired generators utilizing liquefied natural gas trucked down from the North Slope are being considered to power the mine, allowing the project to tap into a gas line when it is built.
The project also has the advantage of being able to use a camp built for construction and maintenance of the trans-Alaska oil pipeline.
International Tower Hill has leased the camp and yard, which is no longer being used for work on the oil pipeline.
Located about five miles from the deposit, the camp has kitchen and bath facilities and more than enough room for offices and sleeping quarters for crews needed to run the exploration program.
The enormous fenced facility has several large shops.
The junior uses one of these buildings to process samples from the drill program and two others to repair and maintain exploration equipment.
Use of the facility played a key role in the success of the company's winter drill program.
Metallurgical studies under way
The metallurgy of the Livengood deposit will determine the type of recovery system and ultimately the economics of a mine built at the Interior Alaska deposit. Initial metallurgical data indicates the deposit is potentially amenable to some type of combined milling and heap leach, similar to the gold recovery system being utlized at the Fort Knox gold mine.
In July the junior hired Kappes, Cassiday and Associates to undertake much more advanced metallurgical studies on the Livengood mineralization. The US$400,000 study is testing six metric tons of material for hardness, gravity recovery, cyanide recovery, and heap leach-ability.
International Tower Hill incorporated the heap-leach portion of its metallurgical data and the Oct. 13 resource estimate into a preliminary economic assessment due to be released by the year-end 2009. This new resource estimate includes assay results from 119 drill holes at the Sunshine, Northeast and East Zones of the deposit through Sept. 25.
The balance of the 2009 drill program will be contained in a second economic assessment the company plans to roll out in early 2010. Pontius said he expects the results from the milling portion of the metallurgical work to be completed in November.
After completing more than 55 kilometers, or 35 miles, of drilling in 2009, the Livengood exploration team will take a much needed break before returning to the gold property in February. The junior anticipates having all four drills churning during the winter program.
Nine Alaska projects
The Coffee Dome gold project near Fairbanks was the only other project drilled by International Tower Hill in 2009.
The 1,000-meter program targeted high-grade vein-style mineralization at the UAF zone at Coffee Dome, located 11 miles, or 17 kilometers, from Kinross Gold Corp.'s Fort Knox Mine. A sample taken from a trench dug to the south averaged 167.5 g/t gold.
International Tower Hill looks forward to advancing Livengood to a mine-ready project so that it can explore the eight other promising exploration projects it has in Alaska.
"I would expect that the Livengood project will grow to a compelling acquisition target for a major gold company in the near term and (International Tower Hill) will then continue on with the exploration and development of its other very attractive exploration assets," company geologist Heather Kelly told Mining News. "ITH has a very robust pipeline of projects, which will receive greater exploration effort following the monetization of the Livengood project."
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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