The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Economic benefits of industry include paying state's second-highest average wages, substantial share of some local, borough taxes
The Alaska Miners Association recently released an economic benefits summary of the Alaska mining industry.
This summary indicated that in 2009 the Alaska mining industry provided 3,300 direct jobs along with 5,200 indirect jobs in 120 communities in Alaska with a combined payroll of US$320 million.
Average industry jobs came in at US$83,000 per year, which is 85 percent higher than the average Alaska wage and second only to wages in the oil and gas industry.
The industry also paid US$12.3 million in local property taxes, US$35 million in State of Alaska revenue and US$39.8 million in royalties to Alaska Native corporations.
A couple of factoids to lay on the great unwashed next time you are jousting over port and cigars: The Red Dog mine paid the Northwest Arctic Borough US$7.8 million in property taxes, representing 100 percent (that's right Dorothy, 100 percent) of the borough's tax revenue.
The Fort Knox mine was the largest borough taxpayer and paid the Fairbanks North Star Borough US$2.8 million in property taxes, while the Greens Creek mine was the largest City and Borough of Juneau taxpayer, paying US$1.4 million in property taxes.
When the Kensington mine starts production, Greens Creek will fall to second place as the City and Borough of Juneau's largest taxpayer.
Usibelli Coal Mine produced a record 1.8 million tons of coal in 2009 and exported a record 40 percent of that coal to South American and Asian markets.
Lots of other facts and figures to dazzle your friends with, but the point is: mining matters!
Western Alaska
Teck Resources Ltd. and partner NANA Regional Corp. announced fourth-quarter and year-end 2008 results from the Red Dog mine. In the fourth quarter the mine produced 151,300 metric tons of zinc in concentrate and for the year the mine produced 582,500 metric tons of zinc in concentrate. Zinc ore grade for the year was 20.9 percent while mill recoveries decreased slightly to 82.4 percent. The mine also produced 36,400 metric tons of lead in concentrate during the fourth quarter and 131,500 metric tons of lead in concentrate for the year. Lead ore grade for the year decreased slightly to 5.9 percent while mill recoveries decreased slightly to 65.9 percent.
The 2009 production figures were a record for the mine.
The mine posted a US$200 million operating profit for the fourth quarter and a US$399 million operating profit during 2009 vs. a US$71 million operating loss for the fourth quarter and a US$171 million operating annual profit for 2008. The mine shipped 1,020,000 metric tons of zinc concentrate and 220,000 metric tons of lead concentrate during the 2009 shipping season.
During 2009 the mine paid partner NANA Inc. and the State of Alaska royalties of US$144 million vs. royalties of US$111 million in the year-previous period.
On the down side, the partners also announced that an appeal that has been filed against the U.S. Environmental Protection Agency for renewal of the water discharge permit issued at Red Dog. This appeal was filed by the same groups that in January challenged a State of Alaska decision certifying that the same permit complied with the state's water quality standards.
The current operating plan calls for continuing to mine the Main Deposit under existing permits until mid-2011. The Main Deposit ore will eventually need to be supplemented with ore from Aqqaluk, the next orebody slated for production at the mine. If permit delays extend beyond May 2010, the transition plan will be affected and production at Red Dog would likely be curtailed in October and could possibly force a shutdown of all mine operations, throwing 390 employees and 95 full-time contractors out of work.
Zazu Metals Corp. announced positive metallurgical results from its Lik zinc-lead-silver deposit. The studies indicated that a zinc recovery of 85 percent could likely be obtained with silica levels less than 5 percent through standard froth floatation recovery. The test work showed that a zinc concentrate containing less than 5 percent silica could be routinely produced and that both zinc and silica levels could be achieved in a commercial plant. It is likely that a coarser regrind would also achieve target silica grades, but this concept still needs further testing. These data will be incorporated in the company's soon to be released Preliminary Assessment Study.
NovaGold Resources Inc. announced the results from 2009 work programs and plans for 2010 at its Donlin Creek project. During 2009, expenditures at the Donlin Creek project, a 50-50 joint venture with Barrick Gold Corp., totaled approximately US$25.3 million, with 50 percent contributed by each party. Work focused on geotechnical drilling for the location of mine facilities, environmental baseline data collection, pre-permitting community advisory meetings and various optimization studies.
For 2010, the partners have approved a budget of approximately US$28 million. Efforts will focus on completing optimization studies, including the potential to bring a source of natural gas to the project. NovaGold expects that these studies will be completed by mid-2010, at which point the partners will file permit applications for the original project design or, upon unanimous approval, authorize a supplemental budget and proceed to revise the feasibility study to include the natural gas option.
NovaGold Resources also announced year-end results from its Rock Creek gold project near Nome. During 2009, expenditures at the project totaled approximately US$27.7 million. NovaGold worked to improve the project's water management structures and action plan to ensure the project remains in compliance with all environmental regulations. The company is completing a detailed review process to evaluate startup requirements for the project, but does not currently plan to initiate startup activities in 2010.
Northern Dynasty Minerals announced an updated mineral resource estimate for the Pebble deposit. The new resource estimate is based on 509 core holes, including 37 new holes drilled since mid-2008. The new estimate represents a 17 percent increase in resources within the higher confidence measured and indicated categories, and a 12 percent, 14 percent and 16 percent increase in contained copper, gold and molybdenum, respectively.
At a 0.3 percent copper equivalent cutoff grade, the new estimates include measured resources of 527 million metric tons grading 0.33 percent copper, 0.35 grams of gold per metric ton and 178 parts per million molybdenum, indicated resources of 5.414 billion metric tons grading 0.43 percent copper, 0.35 g/t gold and 257 parts per million molybdenum and inferred resources of 4.835 billion metric tons grading 0.24 percent copper, 0.26 g/t gold and 215 ppm molybdenum. Put all these categories together and the deposit contains 80.6 billion pounds of copper and 107.3 million ounces of gold.
The Pebble Partnership, consisting of Northern Dynasty Minerals and a wholly owned subsidiary of Anglo American plc, is working to advance a prefeasibility study for the project and is preparing to initiate project permitting under the National Environmental Policy Act in 2011, a process estimated to take 2-3 years to complete.
Fire River Gold announced plans for its Nixon Fork copper-gold project near McGrath. In 2009 the company began a US$1.25 million evaluation of the project to confirm the status of the geological work, confirm the gold grade from the tailings pond and complete further metallurgical test work.
The evaluation program is continuing into 2010, with key milestones including a determination of a March-April 2010 go, no-go decision for completing the carbon in leach circuit to process tailings, defining exploration targets for underground and surface drilling commencing in May, preparation of a new resource estimate for the property by fall 2010 and the determination of a go, no-go decision for the resumption of underground mining by the end of the year.
The company currently is re-logging and re-assaying selected intervals of past drilling and plans to drill up to 12,000 meters of underground drilling and an additional 8,000 meters of surface drilling in 2010. During 2009 the company completed a drill program to confirm the gold grades of approximately 150,000 tonnes of mill tailings and a study is in progress to determine the grade and metallurgical properties of this material.
Freegold Ventures Ltd. and Western Standard Metals Ltd. signed an option agreement whereby Western Standard can earn a 50 percent interest in Freegold Ventures' Vinasale gold project near McGrath. Freegold optioned the Vinasale project from Doyon Ltd. Under the terms of the agreement Western Standard would pay Freegold US$350,000 on the closing of the deal and make exploration expenditures of US$6.5 million by Dec. 31, 2012.
The 2010 exploration expenditure commitment is US$1.5 million. Western Standard said its initial exploration program will consist of data compilation, verification and target generation followed by geophysics, geochemistry and diamond drilling with the objective of expanding the existing resource and identifying new areas that may have the potential to host additional resources. In addition to the exploration program, samples will be collected for metallurgical test work.
TintinaGold Resources Inc. announced that it had raised approximately US$5 million and intends to use the proceeds for exploration on its Colorado Creek gold project in the Ophir District and its Kugruk copper project on the Seward Peninsula.
Interior Alaska
Kinross Gold Corp. announced year-end 2009 results from its Fort Knox mine. The mine produced 86,614 ounces of gold in the fourth quarter at a cash cost of US$450 per ounce, while year-end totals were 263,260 ounces of gold produced at a cost of US$546 per ounce. Phase 7 exploration more than replaced this production by moving 369,000 ounces of gold to the reserve category. The metric tons mined and milled in the fourth quarter of 2009 were nearly double what they were in 2008. During the fourth quarter the mine processed 6.816 million metric tons of ore grading 0.65 g/t gold. Mill recoveries were 83 percent for the fourth quarter.
Cost of production dropped significantly to US$450 per ounce due primarily to contributions from lower-cost heap leach mining. The company also tabled year-end 2009 resource updates that included proven and probable reserves of 252,945,000 metric tons grading 0.45 grams of gold per metric tons, equivalent to 3.692 million ounces of gold. An additional 105.768 million metric tons grading 0.50 g/t gold, equivalent to 1.694 million ounces, are classified as measured and indicated resources. An additional 12.755 metric tons grading 0.55 g/t gold, equivalent to 226,000 ounces, are classified as inferred mineral resources.
Teryl Resources Corp. announced that partner Kinross Gold had approved a US$1,524,600 budget for 2010 for the Gil gold deposit. The goal of the 2010 program will be to better define the strike extent of the mineralized zones and infill between step-out holes in order to gain a better understanding of ore-zone continuity. The 2010 work plan calls for ground geophysics, 11,000 feet of reverse circulation drilling and 5,000 feet of core drilling. In addition, fieldwork will include mapping, soil and rock sampling, and mobile metal ion geochemical sampling.
Freegold Ventures Ltd. and Western Standard Metals Ltd. announced their intention to merge the two companies. The resultant firm will own Freegold's interest in the Golden Summit and Rob gold projects in Interior Alaska, Freegold's interest in the Vinasale gold project near McGrath, Freegold's 50 percent interest in the Union Bay platinum group metal project near Ketchikan and Western Standard's Almaden gold project in southern Idaho.
In a recent public presentation, Pogo mine officials reported that the mine produced 398,808 ounces of gold in 2009, a 45,000-ounce increase over 2008 production numbers. The mine produced at cash cost of US$423 per ounce and is projecting 2010 production to exceed 385,000 ounces of gold.
International Tower Hill Mines Ltd. announced the start of the first phase of its planned 50,000-meter 2010 exploration drill program at its Livengood gold project. The initial winter phase of this program will focus on the expansion of the Southwest and Western parts of the Money Knob deposit, which contains the highest grade portion of the known deposit. In addition, the area between the Sunshine and Core zones will be infill drilled.
The company also announced an amendment to its lease with the Alaska Mental Health Lands Trust to increase the leased fee simple land by approximately 25 square kilometers, or 9.65 square miles, bringing total leased land to 70 square kilometers, or 27 square miles.
Alaska Range
In a recent public presentation, officials of Usibelli Coal Mine released 2009 operating results from its open cut operations near Healy. Total permitted reserves at the mine are 30.6 million tons of sub-bituminous coal with total defined reserves of approximately 500 million tons. Total resources in the Nenana basin coal field are pegged at an amazing 7 billion tons of coal.
During 2009, the mine produced 975,578 tons of coal for Alaska consumption and an additional 803,751 tons of coal for the export market, more than half of which went to Chile with the remainder going to Asian buyers. The company employs a total of 388 full-time-equivalent employees and does business with 400 vendors in the Fairbanks and Anchorage areas.
Kiska Metals Corp. announced results from wide-spaced surface reconnaissance work conducted in 2009 at the Whistler project. Prospecting and mapping of high-priority areas outlined several new areas of gold mineralization, including the Old Man Breccia target where saw channel sampling returned 3.34 g/t gold over 28 meters of continuous channel sampling, including 7.12 g/t gold over a 10 meters in the South trench, 1.94 g/t gold over 16 meters in the Northeast trench and 0.74 g/t gold over 16 meters of continuous channel sampling, including 0.96 g/t gold over 12 meters in the Northwest trench.
The company also announced that it plans to commence a drilling program in mid-March, consisting of a minimum of 5,500 meters in 15 holes. The initial 2010 program will be overseen by a joint technical management committee from both Kiska and Kennecott Exploration Inc. Completion of the program will provide all the data necessary for Kennecott to decide whether to exercise its one-time right to purchase a 51 percent interest in the Whistler project by refunding 200 percent of the project's exploration expenditures and by advancing the project to a positive prefeasibility study. Kennecott can then earn an additional 9 percent project interest by advancing Whistler to a production decision.
Full Metal Minerals Ltd. and Harmony Gold Corp. announced assay results from 4,200 meters of drilling (26 holes) completed in an infill and step-out drilling program in 2009 at its Lucky Shot gold project north of Anchorage.
Highlights include hole C09-152 which intersected 3.6 meters averaging 24.14 grams of gold per tonne, hole C09-153 which intersected 0.9 meters averaging 102.00 grams of gold per tonne, hole C09-158 which intersected 0.6 meters averaging 58.20 g/t gold, hole C09-169 which intersected 3.7 meters averaging 19.23 g/t gold and hole C09-171 which intersected 7.3 meters averaging 36.38 g/t gold.
This drilling served to extend the high-grade mineralization in the Coleman block on the Lucky Shot shear zone at least 50 meters up-dip of historic workings.
The partners intend to begin underground development and bulk sampling in the second quarter of 2010 in order to complete engineering studies, metallurgical test work and environmental studies. Subject to positive results from this effort, the partners plan to construct underground access to the Coleman block, complete additional surface drilling and collect and process a bulk sample to confirm the continuity of high-grade gold mineralization within the Lucky Shot shear.
Millrock Resources Inc. announced that it has staked two claim blocks in the Kahiltna Terrane that will form the basis of two 50-50 joint ventures with a subsidiary of Altius Minerals Corp.
The St. Eugene and Monte Cristo prospects were identified through the activities of the Millrock-Altius strategic alliance. The Monte Cristo project targets a large tonnage, intrusive-related gold-rich porphyry deposit containing anomalous gold values in rock and soil over a distance of 1.5 kilometers. Soil samples ranged up to 400 parts per billion gold and averaged 86 ppb gold, while rock samples returned up to 4.2 g/t gold and averaged 0.493 g/t gold.
An associated alteration assemblage of carbonate-quartz-sericite typical of many Alaska gold porphyry systems occurs over a broad area of the property. The St. Eugene project is situated on a copper-gold-molybdenum porphyry system initially discovered in the 1970s. Extensive and intense silica, sericite and chlorite-epidote alteration is associated with chalcopyrite and copper oxide minerals, plus molybdenite, pyrite and pyrrhotite. Rock samples returned values up to 2.2 g/t gold and 1.0 percent copper in talus on both sides of a glacier-filled valley spanning 1.2 kilometers, or eight-tenths of 1 mile. Soil samples returned values up to 200 ppb gold and averaged 67 ppb gold.
Millrock Resources Inc. also announced that it staked the Revelation gold project in the Kahiltna Terrane west of the company's Estelle project. A multi-element stream sediment anomaly covering 177 square kilometers surrounds the property. Porphyritic diorite and altered sedimentary rocks and associated quartz stockwork are associated with alteration and oxidized sulfide minerals. A 600-meter-long soil anomaly consisting of 10 samples with values ranging between 95 and 1,200 ppb gold was identified in a first-pass reconnaissance program.
The project was staked following the purchase of maps, data and other information from long-time Alaska consulting geologist Gerald Booth. The purchase agreement consists of payments of US$45,000 made over four years and issuance of 40,000 Millrock shares. A payment of US$2.0 million will be made to Booth upon commencement of commercial production
Northern Alaska
NovaGold Resources Inc. announced 2010 plans for its Ambler polymetallic sulfide deposit in the Brooks Range. The company plans to continue its community engagement programs at Ambler and has appointed a project team to plan exploration activities, advance environmental baseline studies and conduct engineering and technical studies at the project with the goal of gaining a better understanding of the true size and potential of the district as well as the continuity and mineability of the other deposits in the Ambler belt.
Southeast Alaska
Hecla Mining Co. Inc. announced year-end 2009 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 US35 cents per ounce with total production costs for the year of US$7.65 per ounce. The average grade of ore mined during the year was 13.01 ounces of silver per ton, down slightly from the average grade of 13.69 ounces per ton that was mined in 2008. For the year the mine produced 7,459,170 ounces of silver, 67,278 ounces of gold, 22,253 tons of lead and 70,379 tons of zinc.
The decrease in cash costs in 2009 compared to 2008 is the result of increased throughput, increased availability and use of hydroelectric power and lower prices for some consumable products, primarily diesel fuel. Milled tonnage averaged 2,167 tons per day, or 8 percent higher than production in 2008.
On the exploration front, the mine completed approximately 39,000 feet of underground in-fill and exploration drilling in 2009.
The drilling tested the peripheries of known zones including the 5250, Deep 200 South and the NWW-South in the mine resulting in a replacement of tons mined during 2009.
Five exploration holes in the NE contact zone, including three from surface, drilled through the targeted contact horizon encountering disseminated and stringer mineralization in highly altered rocks with local intervals of low grade silver mineralization.
The last drill hole in the program intersected massive and semi-massive pyrite mineralization over a 20-foot interval and suggests proximity to a new massive sulfide body.
The company also announced revised resource estimates for the mine which include probable reserves of 8,314,700 tons grading 13.9 ounces of silver per ton, 0.102 ounces of gold per ton, 3.6 percent lead and 10.3 percent zinc, mineralized material of 789,800 tons grading 4.1 ounces of silver per ton, 0.063 ounces of gold per ton, 2.0 percent lead and 4.6 percent zinc, and other resources of 2,412,000 tons grading 11.5 ounces of silver per ton, 0.092 ounces of gold per ton, 2.7 percent lead and 6.8 percent zinc.
Since 1987 Greens Creek has produced a total of about 162 million ounces of silver and approximately 1.1 million ounces of gold and currently has over 132 million ounces of silver reserves and resources.
Coeur d'Alene Mines Corp. reported the discovery of a new high-grade vein system at its Kensington gold mine near Juneau. The new structure, named the Kimberly, is a gold-bearing vein system exposed in the decline recently driven from the mill to the Kensington mine workings. Results of a 14-hole, 4,080-foot drilling program completed in late 2009 returned high grade intercepts including 2.8 feet grading 0.462 ounces of gold per ton in hole KMB-001, 26.9 feet grading 0.322 ounces of gold per ton in hole KMB-007, 5.5 feet grading 1.293 ounces of gold per ton in hole KMB-007 and 4.6 feet grading 0.536 ounces of gold per ton in hole KMB-013.
Phase-one drilling defined gold mineralization on the Kimberly vein system over a north-south strike length of 600 feet and nearly 600 foot down dip to the southwest. Additional work is planned.
Constantine Metal Resources Ltd. announced an initial resource estimate for the Palmer copper-zinc-gold-silver volcanogenic massive sulfide project. Using a royalty cut-off value of US$50 per metric ton, inferred resources came in at 4.75 million metric tons grading 1.84 percent copper, 4.57 percent zinc, 0.28 grams of gold per metric ton and 29.1 grams of silver per metric ton.
The resource contains a higher-grade copper zone within the overall resource that holds 2.52 million metric tons grading 2.65 percent copper, 3.71 percent zinc, 0.29 grams of gold per metric ton and 27.0 grams of silver per metric ton, based on a 1.5 percent copper cut-off. The deposit is open in most directions, with potential for expansion of the resource base. The company intends to continue drilling on the project in the spring of 2010.
Ucore Uranium Inc. announced 2010 exploration plans for its Bokan-Dotson Ridge rare earth element project on Prince of Wales Island. Drilling in 2010 will focus on the rare earth-bearing zones at the Dotson Trend and the Sunday Lake Zone, which yielded significant heavy rare earth element intercepts in past drilling.
This year's program includes at least 3,000 meters of drilling and will include detailed geological mapping, airborne and ground-based geophysical surveys, detailed mineralogical studies, environmental baseline data collection and bench-scale metallurgical test work. The 2010 work will also include a preliminary scoping study of prospective mining logistics and methodologies.
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).
Reader Comments(0)