The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Amid growing attention on the Ambler Mining District, Andover advances PEA at VMS deposit; builds bonds in northwestern Alaska
Andover Mining Corp. is hoping to shed some light on the true potential of its Sun volcanogenic massive sulfide project in Northwest Alaska. To accomplish this, the Vancouver B.C.-based junior has put together US$3.5-million program aimed at expanding the copper-silver-lead-zinc-gold mineralization at the historical Sun deposit and testing new prospects across an expanded land-package in the Ambler Mining District.
"We designed our program this year to enable us to come out with a new resource calculation this fall and then move straight to PEA," Andover Chairman and CEO Gordon Blankstein told Mining News during an August 17 interview.
Sun is found at the eastern end of the Ambler Mining District - a region of Northwest Alaska renown for a 70-mile- (110 kilometers) long belt of world-class VMS deposits rich in copper, silver, zinc, lead and gold that sweep across its breadth.
"It is extremely rich - you don't find many 6-7 percent copper-equivalent deposits in the world and especially in safe geopolitical territory," Blankstein said.
With NovaCopper Inc. and NANA Regional Corp. developing copper-rich projects to the west and the State of Alaska studying the potential of building a 200-mile (320 kilometers) road that would cross the projects' threshold, Andover believes the future of Sun has never been brighter.
Blankstein believes that by working closely with NANA and the state of Alaska, Andover and NovaCopper have "a tremendous opportunity" to develop the copper-rich Ambler Mining District.
This year Andover has two drills turning at Sun. While a larger rig focuses on the continued expansion and confirmation of the Main Sun and S.W. Sun deposits; a smaller rig tested three outlying targets - Sal, Stu, and Picnic Creek.
Return to Sun
First recognized for its VMS potential in the 1960s, Sun was investigated by the likes of Anaconda Copper Mining Co., Cominco Inc., and Noranda Inc. during the 1970s and 1980s.
In 1977, Anaconda had a resource calculated for Main Sun deposit. This historical resource outlined an open-pittable resource of 2.4 million tons averaging 2.39 ounces per ton (81.77 grams per metric ton) silver, 1.93 percent copper, 4.51 percent zinc and 1.2 percent lead. Small when compared to the underground resource of 17.89 million tons averaging 2.37 percent copper, 2.37 opt silver (81.09 grams per metric ton), 1.91 percent copper, 2.46 percent zinc and 1.18 percent lead.
A 20-hole drill program carried out by Andover in 2007 succeeded on confirming the tenor of mineralization and expanding the breadth of mineralization. Significantly, this drilling extended the Main Sun deposit 300 meters toward the Picnic Creek area, a region about 750 meters further northeast.
Highlights of the drilling in this expansion area known as the Hot zone include:
Sun 07-8a cut 3.4 meters averaging 1.2 percent copper, 226 g/t silver, 10.2 percent zinc, 5 percent lead and 0.48 g/t gold.
Sun 07-15 cut 4.63 meters averaging 4 percent copper, 27.8 g/t silver, 2.5 percent zinc, 0.2 percent lead and 0.33 g/t gold.
Sun 07-16 cut 1.15 meters averaging 4.1 percent copper, 70.8 g/t silver, 3.8 percent zinc, 1.3 percent lead and 0.12 g/t gold.
After a three-year hiatus, Andover returned to Sun in 2011. The primary focus of this seven-hole, 1,514-meter drill program was to test the down-dip extension and fill in gaps in the previous drill patterns at the Main Sun.
The continuity and grade of Sun was underscored by two holes drilled into the heart of the deposit.
Starting at a depth of 67.5 meters, Sun11-24 cut 16.5 meters (15 meters true thickness) averaging 1.6 percent copper, 86.6 g/t silver 10.25 percent zinc, 3.49 percent lead and 0.24 g/t gold. From a depth of 57.45 meters, Sun11-28, which tested a 250-meter wide gap in the previous drilling, cut 10.65 meters (10 meters true thickness) averaging 2.56 percent copper, 63.8 g/t silver, 4.47 percent zinc, 0.81 percent lead and 0.22 g/t gold.
Bradley Peek, Andover's general manager for the Sun Project said, "Both the 2007 and the 2011 Andover drill programs added substantially to our understanding, and to the size, of the Sun deposit."
Additionally, three exploration holes tested S.W. Sun, a fault off-set extension of the deposit.
"Main Sun and S.W. Sun were probably one and the same at some point in time," Blankstein explained.
Sun11-27 - the best of the three hole drilled into S.W. Sun in 2011 - cut five meters (3.58 meters true thickness) averaging 2.1 percent copper, 231.1 g/t silver, 1.23 percent zinc, 0.35 percent lead and 0.62 g/t gold.
Sun11-25 - drilled about 500 meters to the southwest - cut four meters (3.86 meters true thickness) averaging 1.13 percent copper, 46.3 g/t silver, 4.88 percent zinc, 1.27 percent lead and 0.23 g/t gold.
"We were successful in proving the S.W. Sun to be another exciting new VMS target for future exploration. The higher silver values we are now seeing at S.W. Sun are very encouraging," according to Peek.
Understanding the deposit
With the goal of establishing an inaugural NI 43-101-compliant resource for the Sun deposit after the 2012 drill season, Andover and Mine Development Associates, a Reno, Nevada-based geological and engineering consultant, poured over the some 15,000 meters of drilling and other exploration historically completed at the project. Utilizing this data, the explorer and consultant modeled the deposit and laid out a drill program that involves a balance of infill drilling and deposit expansion.
"It really is to focus in and understand exactly what this deposit looks like," explained Blankstein.
One of the primary objectives of the 17-hole program at Main Sun is to ensure that the drill density inside the deposit will support a resource calculation.
"We have drilled a lot historically on 150-meter and 300-meter spacing, Mine Development felt we had to do some infill drilling in order to calculate a resource," the Andover CEO told Mining News.
SUN 12-29 - the first hole drill into the Sun deposit this year - was one such hole. From a depth of 71.9 meters, hole 29 cut 8.6 meters averaging 1.5 percent copper, 9 percent zinc, 1.6 percent lead, 66.2 grams per metric ton silver and 0.19 g/t gold. From 100.5 meters this hole intersected 6.2 meters averaging 2.7 percent copper, 6.5 percent zinc 1.3 percent lead, 116.4 g/t silver and 0.40 g/t gold. At a depth of 130 meters, this hole cut 2.3 meters averaging 1.7 percent copper, 1 percent zinc, 0.26 percent lead, 48.9 g/t silver and 0.14 g/t gold.
Grasping the relationship between Sun and S.W. Sun is another goal of the 2012 drilling.
"We are pushing Sun south as far as we can to the fault, and we have been pushing S.W. Sun north and trying to find the offsets," Blankstein explained.
The company said the larger rig will drill at least four holes into S.W. Sun this year.
While a fault cuts off the potential of expanding Main Sun to the south, the deposit remains wide-open to the north. Picnic Creek, a massive sulfide outcrop discovered by Bear Creek Mining in 1966, lies some 750 meters north of the Main Sun deposit. While Blankstein said that it is unclear whether Sun and Picnic are a contiguous orebody, drilling continues to close the gap between them.
Outlying prospects
Late in 2011, Andover more than doubled its land position in the Ambler district by staking 118 new claims that blanket a prospective area surrounding the 112 claims it already held at the Sun project. While the larger drill focus on the Sun deposits, a smaller rig capable of drilling BTW core to a depth of approximately 150 meters is exploring three outlying prospects.
"The other thing that we have been doing is to look at the scope of our project, because we have close to 40,000 acres on the east side of the district," explains Blankstein.
Sal, the first of these prospects to be tested, lies about five miles (eight kilometers) west of Sun.
Strong alteration and iron staining within the highly prospective rock package of the region has been mapped for some 200 meters along strike at Sal before being lost beneath cover. Grab samples from the gossan and altered rocks at this prospect have returned up to 1.8 percent copper, 42 g/t silver, 1.48 percent lead, 1.34 percent zinc and 0.54 g/t gold.
Blankstein told Mining News that the first hole drilled into this prospect has cut massive sulfides.
Once drilling is completed at Sal the portable rig will be moved to Stu, a prospect located about 500 meters to the southwest that also demonstrates strong alteration and gossan. Grab samples collected from the promising rock package at Stu - which has been mapped for 100 meters along strike - have returned values of up to 2.04 percent copper, 0.95 percent lead, 1.21 percent zinc, 64 g/t silver and 0.49 g/t gold.
At the Picnic Creek target area, altered and iron stained gossanous rocks of the highly prospective package outcrop in a roughly 50 meter by 100 meter area. In addition to expanding the Main Sun deposit toward Picnic, Andover hopes to test this outcrop with the smaller drill.
"We were well aware that the Sun project area had more mineralization than just the Sun and S.W. Sun deposits but we are pleasantly surprised at the strength of the mineralization over such a large area," said Kent Turner, Andover's chief operating officer. "With copper-lead-zinc-silver-gold mineralization now documented over at least 10 miles (16 kilometers) of strike length, the Sun project area is worthy of considering as a district by its self within the greater Ambler Mineral Belt, and we intend to aggressively pursue the potential of new deposits within the entirety of our district."
In addition to the work Andover is conducting in the "Sun sub-district," the junior is carrying out reconnaissance mapping and sampling across 57 claims it staked adjacent to Teck Resources' Smucker deposit at the opposite end of the Ambler Belt, some 60 miles (95 kilometers) to the west. The company now holds a total of 45,920 acres in the Ambler Mining District.
"Andover saw this land acquisition as an excellent opportunity to acquire some highly prospective ground in a district that holds outstanding potential for development. As the State of Alaska moves forward with its "Road to Resources" program, this acreage will only become more valuable to our Ambler project area," Peek said.
Road to Ambler
As Andover gains a better understanding of the VMS mineralization across its Sun property, the state is studying the potential of building a road that links the Ambler Mining District to the state's highway system some 200 miles (320 kilometers) to the east.
Alaska's 2013 budget includes US$4 million toward defining an optimal transportation corridor for the proposed road to the copper-rich region; establishing a right-of-way; and beginning the environmental and permitting work. The new funding adds to the US$5.25 million approved by the Alaska Legislature during the past two budget cycles for scoping the viability of establishing a transportation link to Ambler.
"Getting a road into a district like Ambler will unlock a lot of value and create a lot of jobs for multi-generations," said NovaCopper CEO Rick Van Nieuwenhuyse.
NovaCopper and NANA, the Alaska Native regional corporation for Northwest Alaska, have forged a partnership to explore and develop a large portion of the Ambler District that surrounds the Arctic and Bornite deposits.
Arctic - located about 35 miles (60 kilometers) northwest of Sun - has an indicated resource of 19.45 million metric tons averaging 4.05 percent copper, 5.8 percent zinc, 59.55 grams per metric ton silver and 0.97 g/t gold. Additionally, the deposit has an inferred resource of 11.41 metric tons averaging 3.47 percent copper, 4.84 percent zinc, 46.75 g/t silver and 0.80 g/t gold.
The Ruby Creek zone at Bornite - situated about 17 miles (27 kilometers) southwest of Arctic - contains an indicated resource of 6.8 million metric tons averaging 1.19 percent copper, (178.7 million pound) and an inferred resource of 47 million metric tons of 0.84 percent copper (883.2 million pounds).
While studying the economics of building a mine at the Arctic deposit, SRK Consulting (U.S.), Inc. determined that extending a road westward from the Dalton Highway to the village of Kobuk, would be the best route for linking the copper-rich Ambler District to Alaska's road-system.
For purposes of the study, SRK assumed that the road would be designed and constructed by the state, and NovaCopper would then reimburse Alaska over the operating life of the mine. A similar arrangement exists between the state and the Red Dog Mine in Northwest Alaska for its road and port facility.
The Delong Mountain Transportation System - consisting of a 52-mile-long road, storage and port facilities - was built by state-owned Alaska Industrial Development and Export Agency to facilitate the shipment of zinc and lead concentrates from Red Dog. The agency is being reimbursed for its $267 million investment through fees paid by Teck Resources Ltd. and NANA, co-owners of the mine.
Development of projects like NANA and NovaCopper's Bornite and Andover's Sun would add to the positive economics the state would realize from building the road to Ambler.
"There is certainly enough ore here, between the projects, to make this work," Blankstein told Mining News.
Building bonds
With the prospect of AIDEA building a road that would skirt the Sun property, Andover has added Willie Hensley and Jerry Booth - both of which were instrumental in establishing the Delong Mountain Transportation System - to its board of directors.
"With the road studies underway I believe AIDEA is going to take on the permitting process, so we wanted to make sure we are on top of that and had people that are capable of handling that for us," explained Blankstein.
Hensley - a Kotzebue-born Alaska Native with a bachelor's degree in political science from George Washington University in Washington, D.C. - is a founder of NANA. He served as a director of the Northwest Alaska Native corporation for 20 years, concluding his career there as president. During his tenure, Hensley represented NANA's interest in the Red Dog Mine.
In addition to lending his vast experience to Andover, Hensley's seat on the board ensures NANA's interests are represented as the company advances Sun, which is located in the shareholder's traditional territory.
"Obviously, we are going to be visitors in the NANA territory, and it is important that we make sure that their concerns are well met. That is another reason why we wanted Willie on our board. He started NANA Corp., and we think it is important to have somebody there that could represent, and make sure we did things right for, the local communities," explained Blankstein.
Booth - a top Alaska executive for Teck predecessor Cominco during the 1970s and 1980s - worked closely with Hensley during the development of Red Dog, including negotiations with AIDEA on the road and port that services the enormous zinc mine.
"It is going to be exciting to be working with fellow directors and old friends - Dr. Stuart Jackson, Willie Hensley and Andover COO Kent Turner - and the rest of the Andover team in the development of the exceptional Ambler District in Alaska," Booth said.
Turner, who joined Andover in January, further strengthens the company's bonds with it contemporaries in the Ambler Mining District. He and NovaCopper CEO Van Nieuwenhuyse got to know each other while they were earning master's degrees in geology at Arizona State University.
The chief operating officer went on to spend much of his 30-year career with Teck Resources (Cominco) and was involved with that company's exploration programs in Alaska, including the Paalaaq and Anarraq zinc-lead deposits in the Red Dog District of Northwest Alaska.
"Although we have a lot of work to do on the Sun deposit and the S.W. Sun deposit as we continue to advance the project, the high-grade nature of the deposits, the low geopolitical risk of the district, the support of the State of Alaska and local Alaska Native corporation - and the fact that NovaCopper Inc. and Teck Resources Inc. are the additional stakeholders in the district - gives us confidence that we can create significant value for our shareholders from the Sun deposit," said Turner.
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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