The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Mining professionals eschew communications to bury their heads in the dirt as much as possible during state's short field season
Every year about this time, I notice new ways to gauge just how busy the Alaska mining industry is.
This year, it is the silence.
Not the amazing silence of a mountaintop in the Alaska Range but the virtual and literal silence being practiced by the people who make up the industry.
In an age where communications options are abundant and the opportunity to be "connected" is a 24-7 reality, people in the Alaska mining industry go silent in the depths of summer, primarily because they have their head in the dirt, making the most of our short summer season.
Every once in a while, they pick their heads up and let the rest of the world know what they have been up to.
The following is just that sort of information.
Western Alaska
NovaGold Resources Inc. announced that Donlin Gold LLC (formerly Donlin Creek LLC), owned equally by wholly owned subsidiaries of NovaGold and Barrick Gold Corp., is expected to complete a revised feasibility study for the Donlin Gold project in the second half of 2011.
The study will provide updated cash flow projections for the project using current consensus long-term gold prices as well as updated capital and operating cost estimates.
The study is incorporating the use of a natural gas pipeline, which would bring a lower-cost fuel source for on-site power generation instead of previously-assumed diesel fuel.
Optimization studies showed that using natural gas as the primary fuel source should reduce power costs, which account for approximately 25 percent of overall project operating costs.
The project has an approved 2011 budget of approximately $43.5 million.
NovaGold Resources also announced that it has budgeted approximately $8.5 million for 2011 at the Rock Creek project near Nome. The company will focus on continuing to meet permit requirements and environmental responsibilities. While the company continues to solicit offers to sell the project, it is also preparing an updated closure plan for the project in the event that the company's board of directors chooses to close and reclaim the property. It has budgeted a supplemental $6.8 million for preparing the updated closure plan.
Cedar Mountain Exploration Inc. announced commencement of drilling at its Kelly Creek gold property on the Seward Peninsula. The program includes 5,000 meters of diamond core drilling on three high priority gold targets, and collecting 4,000 soil samples on the property to identify additional drill targets.
Fire River Gold Corp. announced that the mill on its Nixon Fork gold-copper deposit was started up on July 4.
Only the gravity and flotation circuits are being run, which will achieve approximately 80 percent recovery of gold from freshly mined ore.
The start up plan for the plant is to process barren waste for a few days to get the material flowing through the mill.
Next, low-grade mineralized rock (2-8 grams per metric ton gold) will be processed during a "breaking in" period for the gravity and flotation circuits.
After the breaking in period, the mill should be fully operational on gravity and flotation circuits and will start processing higher grade feed.
Completion of the cyanide-in-leach (CIL) circuit will be ongoing during start up, with mechanical completion and commissioning projected for late fall.
Adding the third process should bring total recovery up to 96 percent.
The mine and mill should be fully operational and near capacity at 150 tons per day of fresh ore from the mine by the end of October.
By late spring of 2012, ore feed from the mine will be supplemented by recovering an additional 100 tpd of tailings from the existing tailings pond, which grades approximately 7.6 g/t gold.
Meanwhile, under ground the mine has been in operation for several months, with mine rehabilitation, ore stockpiling, waste development, and diamond drilling being the primary activities.
All mine rehabilitation work is complete, the largest project being the refurbishing of the ventilation raise which serves as a secondary egress.
Two primary waste headings are being driven: 1) the Crystal Ramp is being extended to depth to access the down-dip extensions of 3000 and 3300 zones; and 2) a shallow ramp is being driven from the Crystal Mine to connect it to the Mystery Mine.
To date the Crystal Ramp has been driven 42 meters and the Mystery drive has been driven 90 meters.
A ventilation drift for the Crystal ramp extension has also been completed, a distance of 33 meters.
The Mystery Mine connection drift is a shallow ramp, driven at 6 percent grade from the Crystal Mine.
This connection is crucial to future operations, as it will open up the Mystery Mine for mining operations (current resources in the Mystery Mine are 28,400 metric tons indicated, grading 23.7 g/t gold for a total of 20,900 indicated oz gold, using a cut-off grade of 10 g/t gold.
It also will provide excellent drill platforms to explore the zone between the mines, including the Southern Cross and J5A mineralized zones.
Invenio Resources Corp. announced commencement of the exploration program at its Ganes Creek project. Initial work will be focused on an induced polarization geophysical survey targeting favorable geology over four kilometers from Pzs zone to the Katz zone. The IP survey will tie together previous IP grids that targeted these specific zones and will also extend these grids to cover areas that were mapped by previous operators. Upon completion of the geophysical surveys the company plans to integrate the new geophysical data with an extensive geological, geochemical and geophysical database in order to identify diamond drill targets for a program later this summer.
Invenio Resources Corp. also announced that it had acquired an option on the Candle Hills gold project near McGrath.
Gold mineralization in the district is potentially plutonic-hosted stockwork and fault-fill vein style.
Geological and whole-rock geochemical relationships combined with the identification of copper-gold-silver-arsenic-mercury anomalies within the Candle Hills igneous complex indicates strong similarities to other deposits along the Iditarod-Nixon Fork fault.
Placer gold deposits along the upper three kilometers of Candle Creek were mined by hand, mechanized open-cut and bucket-line dredge operations through the 1930's but stopped at the steep slopes just below the property.
Historical reports of this mining activity indicate placer production of approximately 138,000 ounces gold and 12,000 ounces silver.
During the 1990's limited placer mining in Candle Creek recovered gold that was commonly associated with cinnabar; a mercury bearing mineral that is sometimes associated with lode gold deposits.
Under terms of the agreement, Invenio has the option to acquire 100 percent of the property from Interior Alaska Mining by making payments totaling $285,000, issuing 300,000 shares and spending $1,850,000 by the end of 2014.
Upon completion of the option, Invenio will grant Interior Alaska Mining a 3 percent net smelter return production royalty and Interior Alaska Mining will grant Invenio the right to purchase 1 percent of the net smelter return production royalty for $2 million.
Alaska newcomer Silver Predator Corp. announced that it has signed an option to acquire a 100 percent interest in 125 state mining claims in the Illinois Creek silver-gold district.
Between 1997 and 2004 the Illinois Creek mine produced approximately 144,000 ounces of gold and 755,000 ounces of silver at a seasonal, run-of-mine heap leach operation constructed by USMX/Dakota Mining.
More than 500 drill holes have defined precious metal mineralization along a 10 by 2 kilometer structural corridor developed in a metamorphosed Ordovician-age sedimentary package.
The district has potential for significant polymetallic (silver-gold-lead-zinc-copper) replacement mineralization as well as porphyry copper-gold mineralization.
Under terms of the agreement, the company will pay to the optionor $25,000 and issue 25,000 common shares.
To exercise the option, the company will pay and issue an additional $750,000 and 375,000 common shares and incur exploration expenditures of $3.4 million by the end of 2015.
The property will be subject to a 2.0 percent net smelter return production royalty on precious metals and a 1.0 percent net smelter return production royalty on base metals in favor of the optionor.
One percent of the 2.0 percent precious metals royalty can be purchased by the company for $3 million.
Welcome to Alaska, Silver Predator Corp.!
Interior Alaska
International Tower Hill Mines Ltd. provided an update of its Livengood project.
The company is advancing its prefeasibility study toward expected completion in the fourth quarter of calendar year 2011 and it has commenced work to update its preliminary economic assessment.
The company also has begun a district-wide exploration program targeting potential new gold discoveries along the Livengood mineralized trend both to the east-northeast and to the west of the existing Livengood gold deposit.
Results from the drilling program and the geophysical survey are expected throughout the summer and fall of 2011.
To support the completion of these work programs, the company has approved a $67 million budget over the next year.
Alaska newcomer Liberty Gold Corp. announced acquisition of a 60 percent interest in the Money Rock gold project in the Goodpaster District.
Previous exploration revealed quartz veins with dissemnated arsenopyrite in float.
These veins contain up to 2.4 grams of gold per ton with high arsenic (>10,000 parts per million) and anomalous bismuth (27 parts per million) indicating close proximity to an intrusive-hydrothermal source.
Other results include several rock samples with anomalous gold (~150 parts per billion), arsenic, and bismuth.
Soil samples collected in this area are also anomalous in gold (25-50 parts per billion) and arsenic.
Exploration plans for the project were not released.
Welcome to Alaska, Liberty Gold Corp.!
10,000 parts per million) and anomalous bismuth (27 parts per million) indicating close proximity to an intrusive-hydrothermal source. Other results include several rock samples with anomalous gold (~150 parts per billion), arsenic, and bismuth. Soil samples collected in this area are also anomalous in gold (25-50 parts per billion) and arsenic. Exploration plans for the project were not released. Welcome to Alaska, Liberty Gold Corp.!
Alaska Range
Rhyolite Resources Ltd. announced that a minimum 1,500-meter diamond drill program is now under way on its wholly-owned Paxson gold project in the Alaska Range.
The initial drill holes will target the down dip and strike extension of a 2010 surface trench that assayed 8.85 g/t gold over 7 meters within the Shalosky zone.
The Shalosky zone is defined by a 1,100 meter by 50 to 500 meter greater than 100 parts per billion gold-in-soil geochemical anomaly.
Gold-arsenic-antimony mineralization identified within the geochemical anomaly is hosted in an east-northeast trending shear zone that contains quartz-sulfide veining, brecciation and fault gouge within silica-altered schist.
The drill program will also test the nearby Low showing where surface sampling in 2010 returned 13.37 g/t gold over 3 meters.
Alix Resources Corp. announced that the commencement of core drilling at its Golden Zone gold-silver-copper property in the Valdez Creek Mining District.
Initial drilling will focus on the previously undrilled Wells vein on the Lower Riverside prospect where past trench samples returned 25.9 g/t gold across 0.79 meters, 34.6 g/t gold across 1.49 meters and 30.9 g/t gold across 1.40 meters.
Drilling will be targeted to intersect the vein at a depth of about 30 meters below the old trenches.
The company also plans a 1,500 foot hole in the main Breccia Pipe deposit to test the depth potential of this deposit.
This year's exploration efforts have also brought the GAS and South Long Creek prospects to a drilling stage and initial drilling may be done in these prospects in 2011.
Northern Alaska
NovaGold Resources announced an update on its Ambler polymetallic project in the Brooks Range.
The company completed a preliminary economic assessment using resource grades averaging approximately 4 percent copper and 6 percent zinc.
The project's net present value was $718 million and $505 million on a pre-tax and post-tax basis, respectively, using metal price assumptions of $2.50/lb copper, $1.05/lb zinc, $1.00/lb lead, $1,100/oz gold and $20/oz silver.
The corresponding internal rates of return were estimated at 30 percent and 25 percent.
Post-tax cash flows were estimated at $1.7 billion, with full payback occurring in year four of operations.
Using more recent metal prices the pre-tax and post-tax net present value came in at $2.2 billion and $1.6 billion, respectively, with corresponding IRR of 59 percent and 50 percent.
Under these conditions, full payback would occur within two years of operations, with post-tax cash flows estimated at $4.6 billion.
Initial start-up capital was estimated at $262 million with sustaining capital of $134 million for the underground operation.
Drilling is under way at the property to convert the inferred and indicated mineral resources to a higher category and also expand the resource base, and environmental and engineering studies are ongoing to further advance the project.
The 2011 budget for the project is approximately $10 million.
Andover Ventures Inc. announced that drilling had been completed at its SUN volcanogenic massive sulfide deposit in the Ambler District. Approximately 1,500 meters of drilling was conducted in seven holes on the Main Sun and SW Sun prospects. All three exploration drill holes drilled into the S.W. Sun encountered volcanogenic massive sulfide mineralization and have now intersected the S.W. Sun over a strike length of 500 meters. This new deposit is open down dip and to the Southwest. The three completed drill holes on the Main Sun Deposit encountered polymetallic massive sulfide mineralization and semi-massive sulfide mineralization. Assays are pending.
Goldrich Mining Co. announced that it has commenced diamond core drilling it its Chandalar project in the Brooks Range.
The drilling program will test multiple targets with 25 to 30 angle holes averaging 500 to 750 feet deep.
Drilling will explore an established northeast trend of gold mineralization more than five miles long and a half a mile wide.
Gold mineralization occurs where a series of northwest striking shear zones cut a northeast structural feature.
Gold with strong arsenic mineralization along this corridor is hosted within the broad shears and their enclosing metamorphic stratigraphy.
The mineralized metasediments are black graphitic phyllites and chloritic schists within black phyllites that occur peripheral to the gold mineralization, yielding a strong, northeast trending magnetic halo more than five miles long.
Southeast Alaska
Ucore Rare Metals Inc. announced an update on its $8 million 2011 field program at its Bokan-Dotson Ridge rare earth element project. The objective for the 2011 program is to upgrade existing resources from inferred to indicated status. The company also has commenced scoping work for a proposed subsurface adit to expand the understanding of the deposit at depth. The company has begun environmental baseline work which will continue over a minimum of the next 18 months. The current work is designed to help complete project permitting for production within 48 months.
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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