The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
But the fortunes of some mining companies foundered even as commodities prices marched steadily higher during the past 12 months
Although commodities prices have improved for the mining industry over the past year, 2009 has been the kind of year most of us hope not to repeat.
The best analogy I can come up with is the one that says "All boats rise and fall with the tide." Under this scenario, company fortunes fell as the general market declined.
Unfortunately, not all boats (companies) rise when the tide goes back up.
Some get holed on the rocks of economic misfortune and remain on the bottom.
Fortunately, sunken companies have not been as common in the mining industry as they were in some other industries.
In comparison to the economic roller-coaster ride that most industries faced, commodities prices and the demand for minerals has steadily increased over the course of the year, buoying companies up with them.
In fact, as the clock ticks down on 2009, metals prices are hovering at or near their yearly highs.
Based on what I can gather through the Tundra Telegraph, 2010 promises to be a very busy year in Alaska.
Western Alaska
Zazu Metals Corp. announced that the Alaska Industrial Development and Export Agency has approved a cost reimbursement agreement that would allow it to initiate due diligence on the proposed expansion of the Delong Mountains Transportation System.
The road and port system administered by the Delong Mountains Transportation System currently handles all concentrate produced by Teck Resources Ltd.'s Red Dog mine.
AIDEA will review the cost of financing the 22-kilometer-long spur road connecting Zazu's Lik deposit to the Delong Mountains Transportation System and the cost for additional storage and handling facilities at the port. Under the terms of the agreement Zazu will reimburse AIDEA for its cost of conducting certain Pre-Feasibility Activities as part of these evaluation processes.
Millrock Resources announced that it had terminated its agreement with Alix Resources Corp. on the Divide gold project near Nome. The company cited limited exploration upside and rising property-holding costs as its reasons for walking away from the project.
Kiska Metals Corp. announced additional copper and silver drilling results from its Whistler copper-gold project in the western Alaska Range.
Hole IM09-001, the first of five holes completed in the Island Mountain prospect, returned 0.68 g/t gold over 382.9 meters including an upper interval, 150.0 meters in drilled length, that averaged 0.72 grams per metric ton gold, 2.37 grams per metric ton silver and 0.16 percent copper and a lower interval of 106.9 meters that averaged 1.22 g/t gold, 0.69 g/t silver and 0.05 percent copper.
The upper gold-bearing intersection corresponds to a breccia targeted on surface, consisting of an actinolite-magnetite-altered hydrothermal breccia with pyrrhotite, pyrite and chalcopyrite mineralization.
The deeper gold-bearing zone consists of pyrrhotite veins and net textured pyrrhotite surrounding veins.
The company also announced results from the Raintree prospect where hole WH09-002 returned 471.6 meters grading 0.38 g/t gold, 4.7 g/t silver, 0.09 percent copper, 0.15 percent lead, and 0.35 percent zinc.
The above interval constitutes the entire length of the hole.
Millrock Resources announced preliminary chip channel rock sampling results from its Estelle gold project in the western Alaska Range.
At the Shoeshine prospect, stockwork veining and pervasive alteration returned 1.2 g/t gold over 12.1 meters.
A nearby zone of sheeted quartz veinlets was chip sampled in two separate locations 30 meters apart. The first zone returned grades of 11.7 g/t gold over 1.5 meters and at the second location the grade is 9.9 g/t gold over 1.5 meters.
The mineralization occurs in highly altered granite.
Pathfinder elements show a clear zonation pattern with a base metal halo surrounding the area of strongest gold mineralization.
At the Oxide Ridge prospect, chip channel sampling done across one of several mineralized zones returned 1.0 grams of gold per tonne over 22.86 meters.
The zones appear to be structurally controlled and consist of quartz stockwork with arsenopyrite.
Full Metal Minerals and partner Kinross Gold announced drilling results from their Russian Mountain project under lease from Calista Corp. The 13-hole, 1,308-meter program tested three of six known mineralized zones, the Owhat, Louise and Headwall prospects.
Significant results from the Owhat prospect include hole RM-01 which returned 8.59 g/t gold, 185.6 grams of silver per tonne and 6.03 percent copper over 1.01 meters; hole RM-02 which returned 5.35 g/t gold, 150.0 grams of silver per tonne and 9.97 percent copper over 0.94 meters true width; and hole RM-09 which returned 8.59 g/t gold, 680.0 grams of silver per tonne and 10.35 percent copper over 0.52 meters true width.
Gold-silver-copper-arsenic mineralization was encountered in all holes at Owhat and is associated with quartz-tourmaline veining.
Low-grade mineralization was encountered at Louise and Headwall.
Alaska newcomer Next Gen Metals Inc. announced that it had acquired the Silver Chalice epithermal silver-gold prospect in western Alaska from a private Alaska firm.
Gold-silver bearing polyphase quartz veins are associated with northeast structures that radiate from the eastern margin of the Poison Creek caldera.
The epithermal gold-silver veins are hosted within a zone of outer propylitic alteration and an inner zone of weak to moderate argillic alteration.
Weak silicification is also noted in the country rocks adjacent to the veins.
Country rocks consist of Cretaceous flysch units including lithic sandstone, siltstone and shale.
The Poison Creek caldera consists of bimodal Eocene to Paleocene volcanic units that range from andesite to rhyolite in composition.
The epithermal veins at the project appear to be intimately associated with this volcanic activity.
Rock chip samples from surface rubble-crops and boulder trains return values up to 10 grams of gold per metric ton and 462 grams of silver per metric ton.
Average silver-to-gold ratio is approximately 40 to 1.
Two historic drill holes intercepted two veins - one 7.6 meters and the other 8.2 meters true width.
Fluid inclusion analysis suggests that if the hydrothermal fluids contained significant amounts of gold and silver, it is likely that gold-silver mineralization precipitated at boiling levels somewhere in the epithermal system.
Under the terms of the acquisition agreement, Next Gen Metals Inc. can earn a 100 percent interest in the property over a two-year period by issuing the vendor 500,000 shares of stock, paying US$5,000 on signing, US$20,000 on the first anniversary and US$25,000 on the second anniversary, issuing 100,000 shares of stock upon transfer of the property to a third party and issuing 300,000 warrants exercisable at US30 cents per share for a period of two years.
Based on preliminary field, laboratory and literature studies completed to date, the company is planning an extensive 2010 exploration program consisting of follow up mapping, trenching, rock and soil sampling and geochemical work to identify targets for a proposed 2,000-meter diamond drill program.
Welcome to Alaska Next Gen Metals Inc!
Eastern Interior
International Tower Hill Mines Ltd. announced the results of a preliminary economic assessment for its Livengood gold project.
The heap leach assessment indicated a life of project average annual gold production of 459,000 ounces of gold for 12.6 years, at a 0.78-1 strip ratio, producing a pre-tax net present value at 5 percent of US$440 million, with an internal rate or return of 14.6 percent using an US$850 per ounce gold price.
The assessment was based only on the heap leach oxide component of the estimated resources, with approximately 40 percent of the deposit excluded pending the addition of a milling circuit.
The current milling metallurgical test work suggests that high gold recoveries can be obtained from all ore types utilizing an initial gravity concentration circuit followed by standard carbon-in-leach processing of the tails.
A second preliminary economic assessment on a joint mill - heap leach operation with an updated resource estimate is anticipated for release in the first quarter of 2010.
Using a cut-off grade of 0.35 g/t gold, the heap leach assessment utilized indicated resources of 308 million metric tons grading 0.68 g/t gold for 6.7 million contained ounces and an inferred resource of 132 million metric tons grading 0.71 g/t gold for 3.0 million contained ounces.
The assessment drew on data from 308 diamond and reverse circulation drill holes totaling 83,200 meters of drilling.
Average gold recovery was estimated at 60 percent with production pegged at 100,000 metric tons per day.
Mining costs were estimated at US$1.80/t with processing costs of US$3.80/t and general and administration costs of US60 cents/t.
Operating costs were estimated at US$533 per ounce with initial capital costs of $665 million plus sustaining capital over the life of the mine of $296 million.
International Tower Hill Mines Ltd. also announced the results of an initial core drilling program on its Coffee Dome gold project near Fairbanks.
Five core holes, totaling 1,356 meters, were drilled at two of three priority target areas, the UAF and Zesiger zones.
Results from the UAF area returned multiple, thick zones of low grade gold, highlighted by 17 meters grading 0.3 g/t gold and 22 meters grading 0.21 g/t gold in hole CD-09-03.
Results have defined a large, broad zone of stratigraphically controlled gold mineralization within part of the larger UAF-Miller target area that extends for at least 2 kilometers to the north.
The UAF target is focused along a projected northeast trending, steeply south dipping target with coincident resistivity and gold in soil anomalies.
The target as currently defined extends for approximately 500 meters by 250 meters.
The drilling showed that the resistivity anomaly is due to the presence of a flat-lying quartzite unit and that the quartzite unit is preferentially mineralized due to strong fracturing.
Very little sulfide mineralization was encountered in the drilling and the system appears to contain only gold and arsenic in this area.
One hole was drilled in the Zesiger target and was designed to cross a projected fault zone which hosted high-grade mineralization in surface trenching.
The hole encountered the fault zone but failed to return significant gold mineralization.
Northern Alaska
Silverado Gold Mines Ltd. announced discovery of possible bulk minable mineralization at its Nolan Creek property. Visible gold was identified in the core within the wall rock forming a mineralized envelope in the hanging and footwall of the A-Zone, B-Zone, C-Zone and West Zone. Previous drill programs targeted high-grade stibnite-quartz-gold vein-faults and did not assay all of the core from each drill hole. Silverado has initiated a program to obtain additional assay information from wall rocks adjacent to the higher grade gold-antimony veins.
Southeast Alaska
Ucore Uranium Inc. announced additional drilling results from its Bokan-Dotson Ridge rare earth elements project. Significant results from the Sunday Lake prospect include hole LM09-65, which returned 4.8 meters grading 0.1 percent light rare earth elements and 1.73 percent heavy rare earth elements, and hole LM09-66, which returned 1.72 meters grading 0.07 percent light rare earth elements and 0.81 percent heavy rare earth elements. This is the first drilling ever conducted at Sunday Lake, located more than 4 kilometers, or 2.5 miles, from the Dotson trend where most of the past drilling and exploration has occurred. Additional drilling results are pending.
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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