The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
PricewaterhouseCoopers' annual report on global mining outlines a growing disconnect between profits and stock value
If you are looking for proof that the mining industry is experiencing unparalleled changes, look no further than "Mine 2012: The growing disconnect," the 9th edition of PricewaterhouseCoopers' annual report on the global mining industry.
This recently released report indicates that in 2011 the top 40 global mining companies posted record profits of $133 billion and generated record operating cash flows of $174 billion. However, over the course of the year, market capitalization of these same companies fell by 25 percent to about $1.2 trillion.
The report concluded that investors don't seem to believe the industry's optimistic long-term growth predictions. The disconnect between profits and stock value was attributed to a number of factors, including the fact that the mining industry is a bellwether for the global economy and fears of a slowdown in global growth during the second half of the year as a result of the European debt crisis. The disconnect has continued into 2012.
The report indicated that production volumes in 2011 were up 6 percent over 2010, but for gold and copper in particular, production volumes remained at similar levels to those reported in 2005. Companies were not able to bring new production for these two commodities online in 2011.
Western Alaska
Zazu Metals Corp. announced the start of the 2012 field program at its Lik base metal project.
The 2012 work is designed to provide the data required to advance the project to feasibility and permitting.
Planned work includes environmental baseline studies on air and water quality monitoring, fisheries, cultural resource assessment, wetlands soil and vegetation mapping, hydrology and hydrogeology assessments.
Studies are planned to refine bridge and haul road design and costs.
These included field testing of routes, hydrology testing and spring breakup ice and water conditions assessment.
Refining the resource estimates and pit models based on exploratory and engineering drilling are also planned.
The work also includes metallurgical studies aimed at improving process design and enhancing recoveries.
Lik South contains an indicated mineral resource of 18.74 million tonnes grading 8.08 percent zinc, 2.62 percent lead and 52.8 grams of silver per tonne; plus an inferred mineral resource of 1.23 million tonnes grading 6.80 percent zinc, 2.12 percent lead and 35 grams of silver per tonne, at a 5 percent cutoff grade.
Lik North contains an additional 5.18 million tonnes grading 9.65 percent zinc, 3.25 percent lead and 51 grams of silver per tonne of inferred resource at a 7 percent cutoff grade.
NovaGold Resources announced that it has signed a agreement to transfer the Rock Creek gold property to Bering Straits Native Corp. Bering Straits already owns substantial mineral rights in the region and participated in the development and approval of the closure and reclamation plans at Rock Creek. Terms of the transfer and immediate plans for Rock Creek were not released.
Graphite One Resources Inc. announced completion of an airborne magnetic and electromagnetic geophysical survey over its Graphite Creek graphite prospect on the Seward Peninsula. The electromagnetic conductor that is coincident with graphite occurrences has now doubled to more than 13 kilometers in length. The program was expanded beyond its original size to determine the ultimate size of the anomaly. The survey is part of an aggressive $4.5 million exploration program at the property which will consist of drilling, prospecting, geological mapping and sampling along conductors delineated from the airborne survey and previously defined graphite-bearing schist.
Graphite One Resources Inc. also announced that it had relinquished its option to acquire a 100 percent interest in the Kelly Creek gold property consisting of 105,280 acres on the Seward Peninsula. In conjunction with the relinquishment of the property option, the company intends to write off all capitalized balances of approximately $4,900,000 related to this project.
Northern Dynasty Minerals commented on the draft watershed study recently published by the Environmental Protection Agency, EPA. This report targets development of mineral properties like the company's Pebble copper-gold-molybdenum project.
The company indicated that they felt the report was rushed and inadequate since it took the EPA only a year to categorize more than 20,000 square miles of land while the company has spent eight years and $150 million defining the natural and human environment at just the Pebble deposit.
The EPA also failed to fully consider the data that the Pebble Partnership provided as part of its 27,000-page environmental baseline document.
The EPA has said that information, provided to them last December, came too late to bear their full consideration.
The report generated its findings on a hypothetical mine and the company requested that EPA correct the popular myth that a modern mine occupying less than 1/20th of 1 percent of the land base, within a 400 square mile area that produces just one half of 1 percent of Bristol Bay sockeye salmon, could somehow wipe out an entire fishery.
Public meeting have been scheduled and comments are being accepted on this report.
TNR Gold Corp. has arranged a $3.5 million loan from a private backer to provide funds for the company to conduct drilling and other exploration work on its Shotgun gold project.
Objectives of the Shotgun Gold Ridge prospect drill program include: Infill drilling to support a compliant NI 43-101 resource calculation, testing of new geophysical targets identified in 2011 and further test at depth feeder zones discovered in 2006.
During 2011 a 3-D geophysical orientation survey was conducted across Shotgun Ridge covering the area of historical drilling and extending beyond there along the ridge.
The survey demonstrated that resistivity and conductivity methods are able to detect controlling structures within the ridge.
These targets will be tested prior to completing an updated resource calculation.
Additional geophysical surveys will be conducted on prospects Shot and King prospects to locate similar controlling structures and develop drill targets where extensive geochemical anomalies have not yet identified bedrock sources.
Redstar Gold Corp. is planning an aggressive exploration program at its Unga project in Alaska.
Work is expected to include additional drilling along the Shumagin high-grade vein, where drilling in 2011 intersected high-grade gold mineralization within a wide quartz-vein stockwork.
The 2012 program will focus on expanding the known mineralization at depth and along strike.
Gold mineralization with grades exceeding 1 ounce of gold per ton is known from historic drilling in the 1980s to cover a vertical range of at least 350 meters and a strike length of at least 800 meters.
First-phase drilling is also planned at the Zachary Bay porphyry Cu-Au target 7 kilometers northwest of the Shumagin vein.
Surface rock-chip sampling in 1974 returned 46 meters of 0.36 percent copper and 0.550 grams of gold per tonne.
A short drill hole completed in 1975 intersected disseminated copper-gold mineralization in intrusive rocks over its entire length below overburden, with 107 meters grading 0.11 percent copper and 0.280 grams of gold per tonne.
There has been no drilling conducted since 1975.
Drilling is also planned along the Apollo-Sitka Au-Ag vein system, where sampling by Redstar in 2011 returned high-grade mineralization, including a vein separate of 94.7 grams of gold per tonne and 1,840 grams of silver per tonne within a 2 meter channel sample of 13.2 grams of gold per tonne.
Other targets scheduled for drilling include the Aquila high-grade vein field, where drilling in 1980 intersected 113 g/t over 0.45 meters at the bottom of a 49 meter long drill hole.
There has been exploration at Aquila since.
The Centennial gold deposit on Popof Island is also scheduled for drill testing, with the focus on potential high-grade vein feeder structures underlying the shallowly drilled disseminated gold mineralization defined in the late 1980s.
Results of that work included 1.07 g/t over 62 meters and 18.14 g/t over 3.0 meters.
Interior Alaska
Freegold Ventures Ltd. announced additional drilling results from its Golden Summit project near Fairbanks.
At the Dolphin zone, significant results include 96 meters grading 0.79 grams of gold per tonne in hole GSDL1209 within a broad zone of highly sheared and locally brecciated quartz mica schist and hornfels.
Results also include 260.9 meters which returned 0.51 grams of gold per tonne in hole GSDLS1211 from altered intrusive rocks and hole GSDL1212 which intersected 283.5 meters grading 0.42 grams of gold per tonne including 17.7 meters grading 1.08 grams of gold per tonne and an additional 38.1 meters grading 0.87 grams of gold per tonne.
Host rocks were mixed intrusive and schist with strong, pervasive sericite alteration, quartz and quartz-sulfide veinlets and mineralized breccia zones.
Mineralization is associated with disseminated and quartz vein-hosted arsenopyrite and pyrite with lesser silver and lead sulfosalts.
Additional drilling is ongoing in the Dolphin zone and is planned for other areas of the project in 2012.
Miranda Gold Corp. announced that Agnico-Eagle (USA) Ltd. has started its 2012 drilling program on Miranda's Ester Dome project.
Agnico plans to drill approximately 5,900 feet in nine holes.
Drilling is designed to continue testing a large northwest-trending soil anomaly associated with a cluster of granitic bodies intruding schist and quartzite.
Drilling will test internal northeast-trending geochemical highs within the broader soil anomaly, which may possibly represent controls to higher-grade mineralization, and also magnetic anomalies associated with anomalous gold values and mapped intrusives.
Drilling will test internal northeast-trending geochemical highs within the broader soil anomaly, which may possibly represent controls to higher-grade mineralization, and also magnetic anomalies associated with anomalous gold values and mapped intrusives.
Alix Resources Corp. announced that it has begun its 2012 exploration and drilling programs at its Money Rock and West Pogo gold projects in the Goodpaster Mining District.
Previous work at West Pogo identified two zones of gold mineralization from rock-chip grab samples with up to 118.5 grams of gold per tonne.
At Money Rock, reconnaissance sampling has recovered rock grab samples with up to 200 grams of gold per tonne.
Numerous grab samples with more than 1 grams of gold per tonne have been obtained from both properties.
Drill targets have been identified through integration of geochemical and/or geophysical data, with a cumulative total of 6,000 feet of core drilling planned for the 2012 season.
Geologic mapping and reconnaissance silt, soil, and rock sampling are also planned for the properties.
Liberty Gold Corp. announced acquisition of a 60 percent interest in the 2,200-acre McCord Creek gold project in the Livengood-Tolovana district. The property contains five gold-in-soil anomalies with the maximum soil value exceeding 100 parts per billion gold. The two largest anomalies lie within the same sedimentary and volcanic package of rocks that contain International Hill's nearby Money Knob gold deposit. Terms of the acquisition and immediate exploration plans were not announced.
Alaska Range
Millrock Resources announced that that it has entered into an option agreement with Vale Exploration USA to discover large-scale copper-gold porphyry deposits in target zones of Alaska.
Initial work will focus on the AUDN project, a promising porphyry copper-gold target situated approximately 100 kilometers southwest of the world-class Pebble deposit.
The claim block is situated along a trend of porphyry occurrences.
Aeromagnetic, gravity and radiometric potassium survey data indicate possible buried, mineralized intrusions within the AUDN project area.
The companies plan to carry out geophysical and geochemical surveys in 2012.
Under the terms of the option agreement, Vale may earn a 65 percent interest by expending $3.5 million for exploration on the project over a three-year period and by paying Millrock $200,000.
Vale can earn an additional 10 percent by paying for all costs trough completion of feasibility.
Under the terms of the strategic alliance agreement, Vale is providing funding to Millrock for research and early-stage exploration to identify targets that may be nominated for designated project status.
The work is focused on specific, defined areas of interest in the Alaska Range and Alaska Peninsula porphyry belts.
Strategic Alliance funding consists of a minimum $1 million in the first year, and a further $1 million at Vale's option in the second year.
Northern Alaska
NovaCopper Inc. and NANA Regional Corp. Inc. announced that field exploration activities have begun on its Upper Kobuk project in the Ambler District.
This year's planned program will focus exploration efforts on the Arctic, Bornite and Sunshine deposits.
Four rigs have been mobilized to the project, targeting three principal areas for significant resource drilling: 1) The South Reef zone at Bornite where exploration in 2011 encountered very significant thickness of high-grade copper mineralization; 2) The historically explored Ruby Creek zone at Bornite where an initial resource estimate is expected by the end of June; and 3) the Sunshine deposit, a satellite polymetallic volcanogenic massive sulfide deposit located 12 kilometers west of the Arctic deposit where historical drilling identified significant intersections of massive sulfide mineralization in the same stratigraphic horizon as the Arctic deposit.
A total of roughly 18,000 meters of diamond drilling is currently planned for the 2012 program to define and/or expand resources at these prospects.
Andover Mining Corp. announced mobilization for its 2012 drill program at the SUN copper-silver-lead-zinc-gold volcanogenic massive sulfide project in the Ambler District. The 2012 SUN drilling program will include an estimated 21 hole, 19,000 foot, drill program designed to further extend and delineate the Main SUN deposit (15,000 feet) and to extend and further test the S.W. SUN deposit (4,000 feet).
Southeast Alaska
Grande Portage Resources Ltd. announced that it has received approval to commence drilling at its Herbert Glacier gold project in the Juneau Gold Belt. The company plans to perform a two-rig drill program which will consist of 12,000 meters of close-spaced infill drilling with the objective of converting the existing inferred resource to an indicated resource. In addition, 3,000 meters of exploratory drilling will be targeting other vein targets (Goat and Ridge Veins) and along the open strike extents of the Main and Deep Trench Veins.
Ucore Rare Metals Inc. announced that custom processing has been initiated on a 20 ton bulk sample extracted from three sites along its Bokan Mountain rare earth deposit. The samples will be crushed and segregated into four specified size fractions. The individual samples will then be transported to Germany to be processed through a production scale X-ray sorter to prepare an upgraded ore sample for future metallurgical testing. Previous production scale sorter tests showed that 50 percent of the material mined will be rejected as waste, while recovering approximately 97 percent of the rare earth metal content.
Arrowstar Resources Ltd. announced commencement of its first exploration program on its Snettisham iron ore prospect about 30 miles southeast of Juneau. Work will included mapping, hand held geophysical surveys and geochemical sampling over the prospect. This work is designed to help with a proposed drilling program to confirm the grade and quantity of the previously studied magnetite ore resource situated on the prospect claims. Some of the proposed drilling in the next phase will be designed to confirm results of some of the previous 49 holes drilled on the property for grade and structure.
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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