Alaska ranked No. 4 in mine industry survey

The Fraser Institute's "Survey of Mining Companies, 2011/2012" was recently released to the public. This annual survey of exploration and mining companies gauges the pros and cons of working in various countries around the world.

This year's results came from over 800 mineral industry companies working in 93 jurisdictions and representing cumulative 2011 exploration expenditures of over US$6.3 billion. The perception of Alaska from the companies that work here was about the same as last year. Alaska scored first under the Policy/Mineral Potential index with no land use policies in place and assuming industry "best practices," the same lofty spot it held in 2011.

Alaska was a respectable 6th for Mineral Potential with current land use policies in place, behind Botswana, Greenland, Yukon, Saskatchewan and Chile.

The not-so good news is Alaska fell to 25th place (from 23rd last year) for its Policy Potential Index, a measure of all things related to regulatory policy.

All in all, we did pretty well with a 4th place overall finish behind Yukon, Quebec and Saskatchewan for the Composite Policy and Mineral Potential Index.

As usual Alaska's access and infrastructure were widely perceived as a mild to strong deterrent to companies looking to invest in the state.

This negative pressure pushed Alaska well down in the "Room to Improve" ratings, so much so that the validity of the ranking has to be questioned.

For example, the survey indicated that places like Madagascar, Turkey, Romania and Zambia all had less room for improvement than Alaska.

Come now.

Western Alaska

NovaGold Resources announced year-end 2011 operating results and 2012 plans for the flagship Donlin Creek project, which is a 50:50 joint venture with Barrick Gold. The partners have conditionally approved a 2012 budget of approximately US$37.2 million for permitting activities, community development and planning for future development. Project permitting is expected to commence in the first half of 2012 following approval by the partner's respective boards of directors.

NovaGold Resources also announced a budget of about US$30 million for completion of closure activities at the Rock Creek gold project near Nome. An additional US$7 million is budgeted for site care and maintenance. The majority of site closure activities are expected to take place during 2012 with certain activities carrying over to 2013. The company also increased its reclamation bond with the State of Alaska by US$13.4 million for a total bond of $US20.3 million. Bond funds are expected to be returned to the company once closure activities are completed.

Interior Alaska

Freegold Ventures Ltd. announced additional 2012 drilling results from its Golden Summit project near Fairbanks.

At the Cleary Hill prospect, drilling designed to fill in the undrilled gap between Cleary Hill and the company's 1.3 million ounce Dolphin deposit intersected significant grade-thickness intervals, including 127 meters grading 0.69 grams-per-metric-ton gold, including 21.3 meters grading 1.46 g/t gold in hole CL1205, and 16.2 meters grading 0.65 g/t gold in hole CL1207.

The company also reported additional drilling results from the Christina prospect, including 21 meters grading 0.56 g/t gold in hole CH1202 and 34.7 meters grading 0.67 g/t gold and an additional 15.7 meters grading 1.07 g/t gold in hold CH1205.

To date 4,017 meters of its planned 20,000-meter 2012 drilling program have been completed in the Cleary Hill/ Dolphin zones since mid-January.

Teryl Resources Corp. announced that it intends to explore both placer and lode gold prospects on its Westridge project near Fairbanks.

At the Old Glory prospect the company intends to explore a shear and intrusive-hosted target located along a northeast-southwest trending fault.

The +50 parts-per-billion gold-in-soil anomaly is 90-by-90 meters in size with values up to 1,155 parts-per-billion gold in soil.

Three historic trenches and two drill holes have tested the prospect.

The best drill intercept consisted of 10 meters of 1.6 g/t gold from 121 to 131 meters.

The soil anomaly remains open in all directions.

At the Black Dome prospect the company will conduct exploration along the same fault that forms the southern boundary of the now mined-out True North deposit.

Gold mineralization consists of carbon-rich, iron-stained schist and eclogite similar to the host rocks at the True North deposit.

At the West anomaly limited historic drilling tested a northeast trending 1,220-meters-by-914-meters soil anomaly defined by coincident gold and arsenic-in-soils.

Drilling consisted of five drill holes totaling 1,650 feet with gold intersections reported at values up to 6 meters grading 0.93 g/t gold.

At the East anomaly the company plans to explore a 2,230 meter long northeast trending soil anomaly containing gold values from trace up to 1.64 parts-per-million gold in soil.

The Moose Creek anomaly is on trend with the West anomaly and has not been drill tested.

The company plans to complete 610 meters of shallow core drilling utilizing a narrow diameter AQ core drill to initially test lode targets on the Old Glory and Moose Creek prospects.

On positive results, a larger-scale reverse circulation drill program will be conducted.

The total cost to complete 610 meters of lode drilling and 180 meters of placer drilling is estimated at US$200,000.

Miranda Gold Corp. and partner Agnico-Eagle (USA) Ltd. announced approval of a US$700,000 2012 drilling program for their Ester Dome project near Fairbanks. The program will be designed to follow up soil anomalies outlined in 2011 and will begin as early as mid-May.

Corvus Gold Inc. announced that it granted Alix Resources Corp. the right to earn an interest in the West Pogo project in the Goodpaster District.

In order to earn a 60 percent interest in the project, Alix is required to incur US$5 million in work expenditures on the project over 5 years with year one being US$250,000 and making cash payments of US$125,000 to Corvus over 5 years.

Corvus will retain a 2-3 percent net smelter return production royalty on the project, with Alix having the right to purchase 1 percent of the royalty for US$1 million.

Alix holds the adjoining ground to the north of West Pogo and has indicated that it will be drilling targets on their ground as well as the Corvus block this year.

The target concept for the 2012 program is for low and high angle, high-grade gold vein systems similar to the Pogo deposit 5 kilometers to the east.

Surface mapping and sampling in 2011 identified two +1 kilometer long east-west trending zones of alteration and mineralization on the property.

Mineralization is associated with zones of sericite-dolomite alteration in the host quartz monzonite and with silica-flooded breccias which produced grab samples up to 118.5 g/t gold.

In 2011 a three dimensional induced polarization geophysical survey covering five square kilometers over the main alteration zones highlighted a series of northwest-trending cross structures which may be the control on the high-grade mineralization.

International Tower Hill Mines Ltd. has received the results for 73 in-fill drill holes completed late in 2011 which confirm the integrity of the May 2011 resource estimate reported in August 2011 on the Livengood gold project.

Based on the infill holes, a new internal resource estimate calculated for three areas of the deposit have been verified within 1 percent of the same tonnage, grade and contained ounces of gold as those calculated from the nominal 50-meter-spaced grid drilling used to calculate the May 2011 resource.

These results allow the company to turn its focus on district-wide exploration within its 145 square kilometer land package as well as conduct condemnation and geotechnical drilling in support of permitting activities in 2012.

Statistical analyses of reverse circulation, HQ-diameter core and larger diameter PQ core indicate that the reverse circulation results are on average higher grade while the standard HQ core results returned the lowest average grades.

The take home lesson here is one often seen in the industry: the bigger the sample and the less the sample is messed around with between the drill hole and the assay lab, the more reliable the results.

The company also reported some historic resource estimates on the remaining placer gold mineralization on the project.

The 2006 report estimated a resource of about 5.2 million cubic yards of gold-bearing gravel at an average grade of 1 gram of gold per metric ton in several defined areas within the Livengood Placer claims for a total gold resource of approximately 230,000 measured and indicated ounces.

The company plans to conduct a confirmation drill program of 2,275 meters on the Livengood Placer claims beginning April 2012 to assess whether the historical drilling data can be used in the calculation of a current NI 43-101-compliant resource.

Endurance Gold Corp. announced that additional claims have been staked at its Elephant project, bringing the claim block to 4,960 acres. The property was expanded to encompass the most prospective portions of the late Cretaceous-aged host intrusive and associated historic soil anomalies in the area. Previous results indicate that the property warrants a systematic exploration program of rock and soil sampling followed by drilling to confirm historic results. Follow-up work would then expand on those results and identify new exploration targets. A 2012 program is currently in the planning stages.

Alaska Range

Pure Nickel Inc. announced that its partner Itochu Corp. has confirmed funding for the Man Alaska nickel-copper-platinum group element project for 2012. The exploration budget is approximately US$4.9 million. Full details of the program will be released at a later date.

Northern Alaska

NovaGold Resources announced that it has approved a $4.0 million interim budget to support exploration and development activities at NovaCopper's Ambler project. This funding will be utilized in advance of the completion of the proposed plan in which NovaCopper was spun out by NovaGold as a separate public company. Should the plan of arrangement not be completed before the field drilling season begins in May 2012, further funding by NovaGold may be required.

Southeast Alaska

Hecla Mining announced year end 2011 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 negative US$1.29 per ounce versus negative US$1.93 per ounce in 2010.

The average grade of ore mined during the year was 11.5 ounces of silver per ton, down from the average grade of 13.2 ounces per ton in the year previous.

For the year the mine produced 6,498,337 ounces of silver, 56,818 ounces of gold, 21,055 tons of lead and 66,050 tons of zinc.

The 800,000 ounce decrease in silver production year-over-year is due to lower silver ore grade in that portion of the mine worked in 2011.

The lower silver grade was partially offset by higher gold, silver, lead and zinc prices.

In 2012, the company is planning the largest investment in the mine's history, approximately US$90 million.

Some of the key capital expenditures include Deep 200 South access development (US$18 million), mining fleet replacement and additions (US$14 million), tailings dam expansion (US$10 million), East Ore access and ventilation rehabilitation (US$6 million), definition drilling (US$5 million), and the construction of expanded and upgraded camp facilities (US$5 million).

Ucore Rare Metals announced additional results from x-ray transmission sorting tests being conducted on samples from its rare earth elements project. Three one-tonne samples from the deposit were sent to Commodas Ultrasort in Germany and processed by a full-scale production dual energy x-ray transmission sorter.

Results show that 44 percent of the feed could be rejected as waste with 93 percent Bokan-Dotson Ridge recovery of rare earth oxides. A mineralized product and a barren waste were generated from each sample and each screen fraction. All the products from the sorting studies were individually bagged and sent to Hazen Research, Inc. in Colorado where each of the products from the sorter studies were weighed, crushed and a representative portion of each was pulverized for chemical analyses.

The plus-one-quarter-inch screen fractions of samples from an area of the deposit, designated "Zone 28," with a calculated total rare earth oxide grade of 0.873 percent, were treated on the commercial scale sorter at feed rates up to 40 tons per hour.

The mineralized products collected from the sorter operations, combined with the one-quarter-inch screen undersize (not sorted) product recovered 94.4 percent of the total rare earth oxides in the sample while rejecting 44.4 percent of the sample weight.

The sorted mineralized fractions are currently being subjected to further physical beneficiation by magnetic separation.

Final beneficiated mineralized concentrates will then be subjected to acid leaching and separation of the total rare earth oxides.

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