The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Tower Hill protégé begins trading on TSX, NYSE; winds down C$8M partner-funded Alaska exploration, heads to Nevada for winter
When Corvus Gold Inc.'s ticker symbol, KOR, first lit up on the Toronto Stock Exchange and New York Stock Exchange AMEX boards in late August, the junior explorer already had multimillion-dollar exploration campaigns under way on its promising exploration projects in Alaska.
The Vancouver B.C.-based junior, formed to explore International Tower Hill Ltd.'s non-Livengood projects, holds four exploration properties in Alaska and the North Bullfrog project in Nevada.
Under the terms of the transaction, Tower Hill held on to the Livengood gold project in Alaska and about C$41 million in working capital,while Corvus got the five properties and about C$3 million in cash.
The property spin-out allows Tower Hill to focus on developing a mine at its multimillion-ounce Livengood gold project and gives its shareholders the opportunity to enjoy the upside as Corvus applies its exploration expertise at the promising earlier-stage assets.
Tower Hill President and CEO Jeff Pontius will wear the hat of Corvus CEO and chairman. Russell Myers, who served as vice president of exploration for Tower Hill, is the president of the new junior exploration company.
In the months leading up to the creation of Corvus, Tower Hill arranged more than C$8 million in partner-funded exploration on the junior's Alaska properties for 2010. This gave the new company a jump on its objective of becoming a non-operator gold producer with significant carried interests and royalty exposure. Corvus also plans to expand its portfolio by seeking out and acquiring new prospects.
"Corvus, as a separate and independent company, will be able to focus on generating value from the company's current Alaska and Nevada exploration projects through the further exploration of those projects, as well as utilizing our extensive Alaska database to identify and acquire additional prospective projects," Pontius explained.
C$6M grubstake at Chisna
The 163,460-acre, or 661.5-square-kilometer, Chisna project, a large copper-gold porphyry project in the Wrangellia Terrane of eastern Interior Alaska, was the primary focus of Corvus' summer program.
Ocean Park Ventures Corp. spent some US$6 million in exploration at Chisna in 2010 as part of its option to earn a 51 percent stake in the copper-gold prospect by contributing US$20 million in exploration expenditures over five years.
Corvus, which is the operator of the Chisna joint venture for the first two years, kicked off the 2010 exploration at the porphyry copper-gold project by flying an airborne geophysical survey, followed with a ground-based induced polarization survey and drill program.
The Grubstake copper-gold system (formerly referred to as Ahtell) was the primary target of some 5,000 meters of drilling completed at Chisna in 2010. This prospect, located on the southeast end of the land-package, hosts several gold-rich porphyry targets.
Surface mapping, geophysics and geochemical surveys completed by the JV partners has extensively expanded the zone of mineralization of Grubstake. Soil samples with values up to 13.6 grams per metric ton gold have been collected here.
Though assay results were still pending, Myers said that the drills cut promising geology at this porphyry copper-gold target.
"I think we have a couple of definite hits of what we were looking for at Grubstake," the Corvus president told Mining News. "We are pleased with the confirmation of the conceptual model we had at the beginning of summer."
The partners also drilled Pow, another porphyry center about 25 miles, or 40 kilometers, northwest of Grubstake. Fault-hosted mineralization at this prospect has returned surface samples with values as high as 13g/t gold and 9.2 percent copper.
"At Pow two of the holes were completed at their targets and we found some very interesting mineralization," Myers said.
A reconnaissance team led by Nadia Caira has turned up a number of other targets across the 40-mile-, or 65-kilometer-, long belt of gold and copper mineralization at Chisna.
Caira, a geologist with more than 28 years of porphyry copper-gold exploration experience, is Ocean Park's senior technical adviser at Chisna. Though the partners have yet to compile all the data collected by the recon team, Myers believes the program will turn up several new drill targets.
"We had a really good team leader that Ocean Park provided this summer and we really advanced the multiple targets," the Corvus president said.
Promising mineralization near Pogo
West Pogo and LMS, two additional Alaska properties in the Corvus prospectus, are joint ventured to First Star Resources Inc. Both properties lie in the vicinity of Sumitomo Metal Mining Co. Ltd.'s Pogo Mine, a high-grade underground gold producer east of Fairbanks.
LMS, located about 25 miles, or 40 kilometers, southwest of Pogo contains narrow high-grade veins with free gold within lower grade graphitic quartzite breccias.
Based on drilling completed by AngloGold Ashanti, an NI 43-101-compliant inferred resource of 5.86 million metric tons averaging 0.89 g/t gold, or 167,000 ounces, at a cut-off grade of 0.3 g/t gold was calculated for the Camp Zone.
First Star's drill program targeted the Camp Zone in an effort to expand the existing resource and to identify the extent of the high-grade gold vein zones.
Just back from a Sept. 13 visit to LMS, Meyers told Mining News, "The first hole was completed and the second hole was in progress yesterday - they both hit really exciting mineralization."
The mineralization intersected in First Star's initial holes indicates that a structural model completed by Ed Hunter, a geologist with Fairbanks-based consulting firm Northern Associates, is accurately predicting the location of the high-grade gold-veining.
Hunter completed the geological model for Tower Hill in 2006, but due to the discoveries made at Livengood, the junior never returned to test his ideas.
"Ed had a model, and First Star fired a hole at the feeder vein system and hit it where it is supposed to be," the Corvus leader said. "For the first time we have successfully predicted the location of the cross-cutting vein mineralization and hit it."
First Star completed geological mapping at the West Pogo prospect - which lies about 2 miles, or 3 kilometers, west of Sumitomo's underground mine.
Myers said exploration by Tower Hill has encountered Pogo-style mineralization as well as other high-grade gold that lacks the geochemical signatures of the ore being mined at Pogo.
A forest fire that rolled through the West Pogo claims in 2007 has exposed the surface geology, which has greatly assisted the surface mapping completed this year by First Star this summer.
"Based on the mapping they did this year, they will put in a geophysical survey and plan on drilling that structure that is now fairly obvious at the surface," Myers said.
Six of 24 rock samples collected by Tower Hill in this burn area returned greater than 1 g/t gold, the best of which was 118.5 g/t gold.
Partner readies Terra for mining
The Terra project is centered on a 5-mile-, or 8-kilometer-, long trend of high-grade gold vein occurrences which have returned numerous surface rock samples and drill intersection in excess of 50 g/t gold.
This property, located in the southwestern part of the Alaska Range, was optioned to Nevada-based American Mining Corp., a privately held mining company that can earn an initial 51 percent interest in Terra by spending US$6 million on exploration over three years, including US$1 million in 2010, and making cash payments of US$300,000 and issuing 750,000 common shares over the same three-year period.
Corvus also will receive a sliding scale net smelter royalty of between 0.5 percent and 5 percent, depending upon the gold price, on all precious metal production from the property and a 1 percent NSR royalty on all base metal production. The royalty to Corvus is in addition to the current royalty payable to the underlying lessor.
Drilling by Tower Hill in 2006 and 2007 defined an estimated inferred resource of 428,000 metric tons averaging 12.20 g/t gold, or 168,000 contained ounces, and 23.11 g/t silver, or 318,000 contained ounces, at a cutoff of 5.0 g/t gold. In addition to the Ben's Vein, which hosts the resource, drilling at two other vein structures confirm the potential for significant resource additions on the property.
According to Corvus, the gold at Terra occurs as coarse native gold and can be recovered by simple gravity methods, facilitating potentially rapid development of a small mining project.
American Mining is currently in the process of creating Terra Mining Corp., a publically traded company focused on mining the high-grade gold at the Southwest Alaska property.
This year the company completed the preparatory work for a drilling and mining program to begin in 2011. Utilizing a small mill and gravity separator the company plans to begin production by 2012.
Nevada for the winter
Corvus intends to hold sole ownership of its North Bullfrog gold project, which is located about 9 miles, or 14 kilometers, north of Barrick Gold Corp.'s multimillion-ounce Bullfrog gold mine in Nevada.
"North Bullfrog is our main focus, since it is our 100 percent project," Myers explained. "We are trying to develop another low-grade, at-surface, heap-leachable resource."
North Bullfrog hosts an indicated resource of 2.02 million metric tons grading of 0.88 g/t gold and 0.45 g/t silver and an inferred resource of 0.95 Mt grading 0.78 g/t gold and 0.36 g/t silver, both at a cutoff grade of 0.5 g/t gold.
The project contains eight highly prospective gold targets consisting of two bulk-tonnage open pit target areas and multiple high-grade vein targets.
Narrowing down drill targets is expected to be greatly enhanced by geophysical data recently acquired from Barrick.
"Lac Minerals, which was purchased by Barrick, had flown geophysics over the whole North Bullfrog prospect area. We were able to negotiate an agreement with Barrick by which we would get all that data," Myers explained.
Corvus currently plans to spend about C$1 million to complete 10,000 meters of drilling during a winter program at North Bullfrog, scheduled to begin in the fourth quarter.
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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