Mining makes mark across Alaska in 2011

There are some new statistics just out from the Alaska Miners Association that I thought you might like to see. For 2011, the Alaska mining industry accounted for 4,500 direct jobs and 9,000 indirect jobs. The industry paid US$620 million in payroll with the average salary totaling US$100,000 per year, which is double the statewide average for all sectors. The industry paid US$148 million in rents, royalties, taxes and other fees to the State of Alaska (up 170 percent over 2010) and paid local governments US$17 million in taxes. Alaska Native corporations received US$172 million in payments from the mining industry.

In 2011 the mining industry paid the Alaska Railroad US$28 million in fees for moving coal, sand and gravel, while US$41.1 million was paid to the Alaska Industrial Development and Export Authority for user fees on its facilities (DeLong Mountain Regional Transportation System and Skagway Ore Terminal.) The industry also paid US$1 million to the Alaska Mental Health Trust for rents, royalties and construction materials sales.

Over the course of the year, the mining industry spent US$300 million on exploration programs all over Alaska, with 60 exploration projects spending more than US$100,000, of which 30 projects spent more than US$1 million.

The year also saw US$175 million spent on mine construction.

Total value of minerals produced from Alaska was up 16 percent from 2010 to US$3.8 billion.

These revenues came from the Red Dog, Greens Creek, Fort Knox, Pogo, Kensington, Nixon Fork and Usibelli mines, as well as from more than 200 placer mines and 120 rock, sand, and gravel operations.

The industry provided mostly year-round jobs for residents of more than 120 communities throughout Alaska, half of which are in rural Alaska.

Western Alaska

Teck Resources LTd.

and partner NANA Regional Corp. announced fourth quarter and year-end 2011 results from its Red Dog mine.

In the fourth quarter, the mine produced 135,300 metric tons of zinc in concentrate and for the year the mine produced 555,900 metric tons of zinc in concentrate.

Zinc ore grade for the year was 19.1 percent while mill recoveries increased slightly to 81.5 percent.

The mine also produced 22,100 metric tons of lead in concentrate during the 4th quarter and 84,000 metric tons of lead in concentrate for the year.

Lead ore grade for the year decreased slightly to 5.0 percent while mill recoveries decreased significantly to 45.9 percent compared to 57 percent for 2010.

Operating profit after depreciation, amortization and price adjustments for the 4th quarter was $144 million, compared with $199 million in 2010.

Operating profit after depreciation, amortization and price adjustments for the year was $496 million, compared with US$524 million in 2010.

Zinc and lead output dropped due to lower ore grades as the operation transitioned from Main pit to Aqqaluk pit mill feed.

Record mill throughput for 2011 was 3.67 million metric tons, 3 percent higher than the previous year.

During 2011, the mine paid partner NANA Development Inc. and the State of Alaska royalties of US$129 million versus royalties of US$173 million in the year-previous period.

In addition, the net profits royalty paid to NANA Development Inc. increased to 30 percent in the fourth quarter of 2011 from its previous level of 25 percent.

Northern Dynasty Minerals Ltd. announced that the Pebble Limited Partnership has released its Environmental Baseline Document for the Pebble copper-gold-molybdenum project.

This document characterizes existing physical, biological and social conditions in the project area, in anticipation of initiating project permitting.

The Pebble Partnership said it spent five years and US$120 million compiling information for this document, which contains more than 27,000 pages of scientific data and analyses characterizing a broad range of environmental and social conditions in southwest Alaska, including climate, water quality, wetlands, fish and aquatic habitat, wildlife, land and water use, socioeconomics and subsistence.

Research for this document was conducted by more than 40 independent research firms, utilizing over 100 scientific experts and engineering groups, laboratories and support services.

The Pebble Partnership and many of the consultants who contributed to the Environmental Baseline Document recently presented summaries of their work to state and federal agencies in Anchorage.

Copies of the consultants' presentations are available along with the complete Pebble Environmental Baseline Document at http://www.pebbleresearch.com.

Invenio Resources Corp. announced that it is preparing to conduct a diamond drilling program at its Ganes Creek gold project in the Ophir District. The upcoming 6,000 meter drill program will test approximately 1.2 kilometers of the 11.5 kilometer long Yankee-Ganes Creek gold trend and will focus on Pzs Ridge and Katz zones within the Main Ridge prospect. Both areas exhibit various styles of gold mineralization hosted in steeply dipping felsic intrusions and altered sediments. Induced Polarization geophysical signatures of these prospect areas indicate continuity along strike for approximately 800 meters at Pzs Ridge and 900 meters at Katz and both areas remain open along strike.

Cedar Mountain Exploration Inc. announced that it has entered into an option agreement to earn 100 percent interest in the Graphite Creek project, located 65 kilometers (40 miles) north of Nome.

Minimal production of high grade graphite has come from this are in the past but limited work has been done on these occurrences in the last 30 years.

The prospect hosts large-flake, high-grade graphite mineralization which is exposed at surface and primarily hosted by a garnet biotite quartz schist.

Graphite occurs as disseminations and high-grade segregations over 5 kilometers of strike length with an approximate thickness of 100 meters.

It has been exposed over dip lengths of 100 to 200 meters.

Four 2011 samples of the garnet-bearing schist contain 9.1- 21.8 percent graphite.

Sampling of high-grade lenses within the garnet-bearing schist returned up to 56.9 percent graphite.

A historical composite chip sample across a 16 meter outcrop of garnet-bearing schist contained 8.36 percent graphite.

Under terms of the agreement, Cedar Mountain can earn a 100 percent interest in the project over a three-year period through exploration work totaling US$1,525,000 and cash payments of US$425,000.

Upon completion of the work and cash payment provisions of the option agreement the project will be governed by a 20-year lease with automatic renewal provisions.

The lease agreement allows for a 5 percent production royalty, which can be reduced to 3 percent by cash payment of C$2 million for each 1 percent purchased.

Redstar Gold Corp. announced surface sample results from its Unga project near Sand Point.

At the Sitka vein, sampling of the historic shaft returned 13.2 grams per metric ton gold and 398 g/t silver over 2 meters includes quartz vein material which assayed 94.7g/t gold and 1840 g/t silver.

A grab sample of vein material from the mine dump returned 15.2g/t gold and 316 g/t silver.

Mineralization occurs in an east-northeast-trending galena-rich quartz vein stockwork zone within volcanic rocks.

The width of the mineralization is not known; however, an extensive quartz-stockwork vein zone is exposed in a series of trenches indicating a minimum width of at least 50 meters.

Modern exploration work at Sitka is limited to an early 1980s effort by Alaska-Apollo Gold Mines, who completed underground sampling and drilling, including 31.82g/t gold over 1.8 meters on the 150 level, 15.08 g/t gold over 1 meter in one of the trenches and 22.63 g/t gold over 0.6 meters in a drill hole from the 150 level.

At the Zachary Bay porphyry copper-gold target, the company reviewed historic drill core and confirmed that the prospect is a classic porphyry copper-gold system with abundant disseminated hydrothermal biotite, magnetite and chalcopyrite within a quartz-diorite intrusion with pink potassium feldspar phenocrysts.

The strong correlation between copper and gold is also indicative of a porphyry system.

There has been no exploration at Zachary Bay since 1975.

Surface rock-chip sampling in 1974 returned 46 meters of 0.36 percent copper and 0.550 g/t gold.

Four drill holes completed in 1975 by Quintana Minerals Corp. and Duval Corp. intersected disseminated copper-gold mineralization in intrusive rocks.

The deepest drill hole (Z1, 117 meters) was mineralized over its entire length, with 107 meters grading 0.11 percent copper and 0.280 g/t.

Additional exploration planned for the Sitka vein and the Zachary Bay prospect in 2012.

Full Metal Minerals Ltd. and joint venture partner Antofagasta Minerals S.A. announced that it has engaged SRK Consulting (Canada) Inc. to prepare an initial mineral resource estimate for the Pyramid copper-gold-molybdenum project on the Alaska Peninsula. The company is targeting to release the mineral resource statement and accompanying technical report during the second quarter of 2012.

Interior Alaska

Freegold Ventures Ltd. announced additional 2011 and 2012 drilling results from the Cleary Hill and Christina prospects area at its Golden Summit project.

Significant results from the Cleary Hill mine area include 21.18 meters grading 1.17 g/t gold and an additional 83.82 meters grading 0.65 g/t gold in hole GSDC11-59, 30.63 meters grading 1.8 g/t gold in hole GSDC11-62, 74.68 meters grading 0.72 g/t gold in hole GSDC11-71, 102.7 meters grading 1.12 g/t gold in hole CL12-01 and 129.7 meters grading 0.83 g/t gold including 30.6 meters grading 1.62 g/t gold in hole CL12-02.

Drilling to date has identified bulk tonnage style mineralization over a 700-meter strike length in the Cleary Hill area.

The company commenced drilling with two drill rigs in early January, one at the Cleary Hill area, the other 3.3 kilometers to the east at the Christina prospect.

The Christina area hosts a +5,000-foot long shear zone which supported several past-producing high grade gold mines.

Historic drilling on the Christina prospect from 1978 through 1988 focused on defining high grade resources on several northwest striking, southwest dipping vein systems, however, the broad intervals intercepted by Freegold indicate that the Christina area may have potential to host bulk tonnage resource similar to that which is being defined in the Cleary Hill/Dolphin area.

Significant results from the Christina drilling program include 84.9 meters grading 0.64 g/t gold in hole GSDC11-75 and 64.7 meters grading 1.75 g/t gold in hole GSDC11-76.

Additional drilling is under way at both prospects.

Miranda Gold Corp. and partner Agnico-Eagle (USA) Ltd. announced the 2011 drilling results from their Ester Dome project near Fairbanks.

The program included 4,224 feet of drilling in six core holes.

The program was designed as an initial test of an approximately 5,900 foot long by 590 to 1,640 foot wide northwest trending soil anomaly associated with granitic bodies that intrude schist and quartzite.

Significant gold mineralization of greater than 0.01 ounce of gold per ton was encountered in four of the six holes drilled.

Mineralization is related to quartz sulfide veinlets and intense fracturing accompanied by iron oxides and local quartz-sericite-pyrite alteration selvages.

Results include 8 feet grading 0.024 oz./t gold in hole 11ED01, 8.5 feet grading 0.024 oz./t gold in hole 11ED02 and 20 feet grading 0.018 oz./t gold in hole 11ED03.

Additional drilling is planned for 2012.

International Tower Hill Mines Ltd. announced that Samuel Engineering, Inc. of Greenwood Village, Colo., has been selected to provide process engineering services for its feasibility study on the Livengood gold project. The company has also engaged AMEC Environment & Infrastructure, Inc. of Denver, Colo., to provide geotechnical infrastructure engineering services for the feasibility study. Feasibility level work will commence immediately and is expected to be completed in the first half of 2013. Publication of the company's in-progress Prefeasibility Study remains on schedule to be completed by the summer of 2012.

Corvus Gold Inc. announced results from the 2011 drilling program completed by former joint venture project partner First Star Resources Inc. on the LMS gold project in the Goodpaster District.

The drilling has confirmed down-dip continuity on the host Camp Breccia, a stratiform black breccia body which dips gently to the west from the 300 meter long surface outcrops.

Significant new results include Hole LM-11-42 which returned 1.8 meters at 2.7g/t gold and 17.7 g/t silver in the black breccia and hole LM-11-43 which intercepted 1.8 meters at 2.7g/t gold and 41.7 g/t silver in the black breccia.

The 2011 drilling expanded the gold bearing black breccia horizon in the Camp target to nearly a kilometer down dip and 200 to 400 meters in width with the zone remaining open to expansion.

Gold within the host horizon appears structurally controlled and related to a large through going shear zone.

The host breccia has formed in an interval of highly fractured graphitic quartzite which has focused gold rich fluid flow.

The matrix to the breccias is a dark fine-grained mixture of silica and pyrite, which together with the graphite, leads to the term "black breccia".

In addition to the stratiform black breccia mineralization there are a number of high-grade gold-silver veins and stockwork zones cutting through the entire system which can produce spectacular grades.

Initial metallurgical test work on the project indicated high gold recoveries (95 percent) can be obtained with simple gravity separation followed by cyanidation.

The bulk of the project is covered by a thin veneer of windblown sand obscuring its potential until deep basal soil sampling was conducted, revealing a number of strong gold in soil anomalies.

These anomalies have many geochemical features in common with the Camp Breccia and represent high priority, new discovery targets for the 2012 exploration program.

Additional work is planned for 2012.

Freegold Ventures Ltd. announced 2011 drilling results from the Michigan prospect at its Rob project in the Goodpaster District.

A total of 2,984 feet in three holes was drilled in 2011.

This was the first drilling ever done in the Michigan prospect, where gold mineralization is hosted in a pervasively sericite altered granodiorite with sheeted and stockwork quartz-sulfide-gold veins covering a 2-3 square kilometer area.

Significant results from hole Rob 11-02 include 5 feet grading 57.1 g/t gold, an additional, 11.5 feet grading 7.04 g/t gold, an additional 16.5 feet grading 2.16 g/t gold, and an additional 30 feet grading 2.58 g/t gold.

Holes 11-01 and 11-03 both intersected anomalous values but no significant intervals.

Full Metal Zinc announced the 2011 drilling results from its 3,509 meter core drilling program from the Fortymile silver-lead-zinc property.

Drilling at LWM extended the strike length of mineralization to the southwest to 970 meter and extended down-dip mineralization to the northeast.

The 2011 exploration program included 3,229 meters of diamond drilling on LWM and 280 meters on West LWM, located 3,500 meters to the southwest of LWM. Additional soil sampling and geological mapping was also completed.

Several exploratory holes (LWM11-81, 83-87) were drilled in the LWM area to test targets generated from soil anomalies.

Highlights include hole LWM11-88, which intersected multiple zinc rich mineralized zones approximately 100 meters down-dip from a previous intercept, including 1.90 meters of 0.16 percent lead, 14.75 percent zinc and 10 g/t silver, as well as 1.97 meters grading 0.53 percent lead, 22.19 percent zinc and 55.1 g/t silver.

Drilling also expanded the known strike length of LWM to the southwest, where drill holes LWM79, 80 and 82 all intersected lead/zinc/silver mineralization, including LWM11-80, which intersected 2.20 meters grading 1.51 percent lead, 3.78 percent zinc and 51.1 g/t silver.

Two sub-parallel zones of mineralization have been encountered in drilling within dolomitized marble host rock, with the primary zone located adjacent to the Ketchumstuck fault zone.

The LWM deposit is open to the southeast along strike and down dip.

A 3,000-meter drill program is planned for 2012, after which the company plans to calculate its first industry-compliant resource estimate at LWM.

Contango ORE, Inc. announced 2012 exploration plans for its Tetlin copper-gold project, under lease from the Tetlin Village Council near Tok.

The company plans to conduct drilling at its Chief Danny prospect along with smaller drilling programs at its Copper Hill, Taixtsalda, MM and Triple Z prospects.

Total exploration budget is estimated at US$6.35 million.

The Chief Danny prospect is comprised of two distinct mineralized areas, the Chief Danny South zone and the Saddle zone.

The Chief Danny prospect was discovered during rock, stream sediment and pan concentrate sampling in 2009 and since then has been explored using top of bedrock soil auger sampling, trenching, ground IP geophysics, airborne magnetic and resistivity surveys and core drilling.

Results from this work indicate the presence of a zoned hydrothermal system consisting of a gold-copper-iron enriched core covering six square miles at Chief Danny South and a fault-offset arsenic-gold enriched zone to the north covering three square miles at the Saddle zone.

Mineralization remains open to expansion, particularly to the west and south.

A total of 8,057 feet of drilling in 11 holes was conducted at the Chief Danny prospect in 2011.

Significant results include 12 feet grading 3.1 g/t gold, 300.2 g/t silver and 0.26 percent copper in hole 5, 21 feet grading 7.4 g/t gold, 4.9 g/t silver and 0.15 percent copper in hole 7 and 32 feet grading 1.18 g/t gold, 3.1 g/t silver and 0.04 percent copper in hole 10.

The company has budget $3.6 million to drill an additional 20,000 feet in 15 to 30 holes in the Chief Danny South area during 2012.

The company has also budgeted $2.75 million on the Copper Hill, Taixtsalda, MM, W, Chisana and Triple Z prospects.

Previous work in 2009-2011 revealed visible gold to 23g/t gold in pans from the Copper Hill, Chisana and W zones, multiple pan concentrate and stream sediment samples in the 0.1 to 1 gram of gold per tonne range at the MM prospect and coincident circular magnetic and resistivity anomaly at the Taixtsalda prospect.

Triple Z was drilled as a porphyry copper target in the early 1970s.

There are no data from that period in the public domain and no follow up drilling since that time.

Alaska Range

Usibelli Coal Mine Inc. recently received permits from the Alaska Department of Natural Resources to allow the company to begin activities at its planned Jumbo Dome mine, about 6 miles from its current operation at the Two Bull Ridge mine.

The newly planned operation will see coal extracted from the same seam as currently being mine but the new mine will supply lower sulfur coal than the current operations.

The company has been working on the Jumbo Dome mine permit for about 10 years and expects the new seam to produce 80-90 million tons of coal over the next 30 years.

The company will eventually have to post a US$6.2 million reclamation bond before it can begin surface excavations at the site.

Northern Alaska

Andover Mining Corp. announced planned 2012 work programs for the Sun copper-silver-lead-zinc-gold volcanogenic massive sulfide project in the Ambler District. The $3.5 million will include two drill rigs, one focused at the Main Sun and S.W. Sun deposits, the second at its exploration targets. The main Sun drilling program, estimated at 19,000 feet of drilling, is designed to further extend and delineate the Main Sun deposit and to extend and further test the S.W. Sun deposit. The second drill will test other prospects over a 16-kilometer strike length, including the Picnic Creek area.

Southeast Alaska

Hecla Mining Co. announced exploration results and year-end mine resources at its Greens Creek volcanogenic massive sulfide mine.

Underground drilling in the Gallagher zone has delineated several higher-grade zones within a thicker mineralized body.

Grades of 0.20 oz./t gold, 12-15 oz./t silver and 10 percent combined lead-zinc over approximate widths of 5 feet are typical of drilling in this new zone and additional work is planned.

Drilling in the 200 South zone continues to outline a precious metal enriched body.

In-fill drilling along sections of this body added 35,000 tons to reserves at a grade of 0.55 oz./t gold, 59.5 oz./t silver, 26.7 percent zinc, and 12.4 percent lead.

In the NWW zone, in-fill drilling converted 100,000 tons of resources to reserves at a grade of 0.16 oz./t gold, 7.78 oz./t silver, 2.9 percent lead, and 7.9 percent zinc.

Significant assay results from recent drill holes in the Gallagher zone include 5 feet grading 0.21 oz./t gold, 18.5 oz./t silver, 17.8 percent zinc, and 6.9 percent lead and 6.4 feet grading 0.21 oz./t gold, 18.5 oz./t silver, 4.1 percent zinc, and 1.7 percent lead.

Significant assay results from 200 South zone include 9.4 feet grading 0.21 oz./t gold, 18.5 oz./t silver, 4.1 percent zinc, and 1.7 percent lead and 14.85 feet grading 0.24 oz./t gold, 16.3 oz./t silver, 4.8 percent zinc, and 1.8 percent lead.

In addition, encouraging drill results were returned from surface holes at the West Bruin, Cub #4 and Cub #5 targets located north of the mine.

Drill testing of the East Ore trend encountered some mineralization over a strike length of 300 feet.

Mineralized intervals of the mine contact from each of these areas confirm that follow-up drilling is warranted in 2012.

The 2012, exploration expenditures at Greens Creek are expected to be approximately $7.0 million.

The underground exploration will continue to explore extensions of the 200 South, 5250, West Wall, and Gallagher zones, and along the NE Contact.

The company also released resource estimates for the mine including proven and probable reserves of 11,681,800 tons grading 12.6 oz./t silver, 0.064 oz./t gold, 5.0 percent lead and 7.2 percent zinc.

In addition, the mine contains 445,900 tons of mineralized material grading 5.9 oz./t silver, 0.109 oz./t gold, 3.0 percent lead and 7.0 percent zinc and 4,416,700 tons of other resources grading 11.9 oz./t silver, 0.093 oz./t gold, 2.3 percent lead and 5.7 percent zinc.

Ucore Rare Metals announced additional 2011 drilling results from its Bokan-Dotson Ridge rare earth element project.

The 2011 drill program produced a total of 10,112 meters of core from 34 diamond drill holes, bringing project totals to 134 drill holes comprising 19,662 meters of drilling.

Highlights include hole LM11-101 which returned 2.20 meters grading 0.59 percent light rare earth elements and 0.20 percent heavy rare earth elements, hole LM11-105 which returned 3.71 meters grading 0.62 percent light rare earth elements and 0.24 percent heavy rare earth elements, hole LM11-112 which returned 2.9 meters grading 0.58 percent light rare earth elements and 0.17 percent heavy rare earth elements, hole LM11-115 which returned 1.94 meters grading 0.67 percent light rare earth elements and 0.51 percent heavy rare earth elements and an additional 1.21 meters grading 0.59 percent light rare earth elements and 0.44 percent heavy rare earth elements, hole LM11-123 which returned 3.36 meters grading 0.62 percent light rare earth elements and 0.47 percent heavy rare earth elements, hole LM11-126 which returned 1.9 meters grading 0.99 percent light rare earth elements and 0.36 percent heavy rare earth elements, hole LM11-127 which returned 1.56 meters grading 1.60 percent light rare earth elements and 1.47 percent heavy rare earth elements and an additional 1.76 meters grading 1.37 percent light rare earth elements and 0.70 percent heavy rare earth elements, hole LM11-129 which returned 2.76 meters grading 1.07 percent light rare earth elements and 0.55 percent heavy rare earth elements and an additional 1.86 meters grading 1.57 percent light rare earth elements and 0.64 heavy rare earth elements.

The company plans to utilize the 2011 drill results to upgrades it current resource estimate which now contains an inferred mineral resource of 3,669,000 metric tons grading 0.746 percent total rare earth element oxide at a cutoff grade of 0.5 percent .

Pure Nickel Inc. announced that the permitting process has been started to conduct exploration at its Salt Chuck copper-palladium-silver project near Thorne Bay. The property consists of 146 contiguous federal lode mining claims. The historic Salt Chuck mine produced approximately 300,000 metric tons of ore grading 0.95 percent copper, 1.96 g/t palladium, 1.12 g/t gold and 5.29 g/t silver. The mine was the largest producer of palladium in the United States during its era of production in the early part of the past century. Specific exploration plans and budgets were not released.

Author Bio

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).

• Email: [email protected]
• Phone: 907-457-5159
• Contact Curt Freeman