The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Analysts predict downward slide for metal's prices, industry outlays until 2020; Alaska ranks among top 10 explorer destinations
Before we take a peek at what is happening across Alaska, I'd like to summarize a superb presentation on the world's exploration industry presented by MinEx Consulting's Richard Shodde at a mining conference in South Africa.
He pointed out that since 1990 there has been a very strong correlation between gold price and exploration expenditures. While not earth-shattering in itself, he took the conclusion one step farther: analyst predictions for the gold price through 2020 are invariably down with most analysts coming in somewhere around the $1,200-per-ounce mark.
During the same period, exploration expenditures are forecast to drop from a high of US$29 billion to US$19 billion worldwide, a 34 percent decrease from peak levels.
Alaska was identified as one of the top 10 exploration destinations in the world however, from the standpoint of new discovery rates; Africa topped the list, with 22 percent of the significant discoveries in the past 10 years.
It was followed closely by Canada and Latin America with 19 percent and 17 percent, respectively.
Only 10 percent of the significant new mineral discoveries came from the United States.
Prior to 2000, there was a close correlation between amount of exploration dollars spent and the rate of new mineral discoveries.
Since 2000, exploration expenditures have been rising rapidly, but discovery rates have been dropping.
Hard data shows it has become more costly and technically more difficult to find new mineral deposits.
We are also looking deeper and deeper into the earth to find new deposits, adding to the growing cost per pound or cost per ounce of discovery.
Geochemistry, geophysics and extrapolation from known mineralization are the cornerstones of successful exploration with old stand-bys like geological mapping and prospecting playing progressively less common roles in the discovery process.
This all equates to higher discovery costs: From 1990 to 2005 the average discovery cost for gold and copper was US$25 per ounce and 0.9 cents per pound, respectively.
Since 1995, the average discovery cost has risen to US$32 per ounce for gold and 2.5 cents per pound for copper.
In the end, Mr. Schodde concluded that discovery rates for copper and uranium were close to keeping pace with demand.
Gold discovery rates were marginally below demand and lead and zinc were headed for significant shortfalls.
Western Alaska
NovaGold Resources Inc. announced results for its second quarter ended May 31, and updated the status of the permitting process for its Donlin gold project.
During the second quarter the company completed the Donlin Gold Public Scoping component of the NEPA process.
The company submitted comprehensive Donlin Gold environmental and social baseline data to the US Army Corps of Engineers, the lead permitting agency, to enable preparation of the Environmental Impact Statement.
As part of this process the company met with the Corps and cooperating permitting agencies in Alaska to review essential Donlin Gold data, which will facilitate the NEPA process.
Permitting, which commenced one year ago, is expected to take two to three more years to complete.
The company's share of 2013 expenses at Donlin is estimated at $15 million.
Donlin Gold will continue with permitting, engineering, environmental and community development activities throughout the balance of the year and anticipates that the Corps will draft the preliminary draft environmental impact statement and receive comments from the Federal and State agencies on the PDEIS in preparation for issuance of the draft EIS in 2014.
Fire River Gold Corp. said it had commenced the process of placing its Nixon Fork gold mine on care and maintenance. A core team will remain at the mine site to maintain the infrastructure. The company is taking this action until a revised operating plan has been developed and market conditions improve.
Interior Alaska
Freegold Ventures Ltd. announced the results of an updated Canadian National Instrument 43-101-compliant mineral resource estimate at its Golden Summit project.
Limited drilling (eight new holes) in 2013 has again expanded the resource with an increase of 9 percent in both inferred and indicated resource categories.
In addition, a first-ever oxide resource was calculated.
The oxide cap is contained largely within the upper 60 meters of the resource.
To date, resource drilling has been confined to a 300-meter by 1,500-meter area.
The indicated resource, using 0.2 grams per metric ton gold cut-off for the oxide component, is 25,026,200 metric tons grading 0.55 g/t gold (439,000 ounces).
The inferred resource using a 0.2 g/t gold cut-off for the oxide component is 16,620,510 metric tons grading 0.47 g/t gold (253,000 ounces).
The combined (oxide + non-oxide) indicated resource using a 0.3 g/t gold cut-off is 79,800,000 metric tons grading 0.66 g/t gold (1,683,000 ounces).
The combined (oxide + non-oxide) inferred resource using a 0.3 g/t gold cut-off is 248,060,000 metric tons grading 0.61 g/t gold (4,841,000 ounces).
This brings total resources in the Dolphin/Cleary Hill area to 6,524,000 ounces of gold.
Preliminary bottle roll tests on the oxide material have indicated recoveries in excess of 85 percent in 24 hours.
An extensive metallurgical program currently is underway.
Additional drilling is planned for 2013 and will focus both on expanding the current oxide zone, increasing the global resource as well as upgrading the resource into the indicated category.
The deposit remains open in all directions and to depth.
Bluestone Resources Inc. announced that it has terminated its leasehold interest in the Shorty Creek copper-gold project near Livengood. The company will continue to seek joint venture partnerships or financing opportunities for its Richardson project in Alaska and its Mojave project in the Lower 48.
Contango ORE reported initial 2013 drilling results from its Tetlin gold-copper-silver project near Tok.
The company released results from eight holes drilled and analyzed so far in 2013.
Analytical results are pending from an additional 19 holes.
The 2013 project budget is approximately $10 million.
The newly released 2013 holes intercepted a 100- to 125-foot-wide zone of mineralization.
The drill intervals in holes 13062-064 represent infill drilling while those from holes 13066 to 069 represent infill and expansion drilling.
These early results indicate that the Peak zone will be extended along both strike and dip relative to previously known limits.
Significant results include 64.80 meters grading 13.101 g/t gold, 21 g/t silver and 0.482 percent copper, including 9.2 meters grading 31.640 g/t gold , 28.5 g/t silver and 0.711 percent copper and 5.6 meters grading 33.774 g/t gold , 56.5 g/t silver and 0.833 percent copper in hole 13062, 40.49 meters grading 16.550 g/t gold , 36.1 g/t silver and 0.732 percent copper in hole 13063, 32.8 meters grading 10.638 g/t gold , 6.4 g/t silver and 0.198 percent copper in hole 13064, and 49.70 meters grading 0.001 g/t gold , 10.9 g/t silver and 0.538 percent copper in hole 13069.
Northern Alaska
NovaCopper Inc. announced the results of the second quarter ended May 31 and preliminary exploration results at its UKMP projects in the Ambler District.
The 2013 exploration field season commenced on May 1st and the company operated four diamond core drills throughout the month.
The 2013 exploration program is focused on the Ruby Creek and South Reef zones of the Bornite project and is aimed at expanding resources identified in the 2013 Bornite technical report. As of June 30, the company had completed 6,441 meters of drilling representing approximately 86 percent of the planned 7,500-meter drill program.
Drill results are anticipated to be released in the fall.
The company continues to work on a new preliminary economic assessment study for an open pit scenario at the nearby Arctic deposit which is expected to be completed during the summer of 2013.
Southeastern Alaska
Coeur Mining, Inc. announced second quarter production results from its Kensington gold miner near Juneau. Second quarter production is estimated at 23,162 ounces of gold, an 8 percent decrease over the 25,206 ounces of gold produced in the second quarter of 2012. Estimated 2013 total production from Kensington is 108,000 to 114,000 ounces of gold.
Ucore Rare Metals Inc. reported the completion of further bulk scale ore beneficiation testing on material from the Bokan - Dotson Ridge rare earth deposit on Prince of Wales Island.
A 20 tonne sample, collected from three locations within the Dotson Ridge deposit, was sent to TOMRA (formerly Commodas Ultrasort) of Wedel, Germany.
The sample was processed by a large scale x-ray transmission (XRT) ore sorter.
Results show that 52 percent of the feed was rejected as waste, with 96.3 percent recovery of rare earth oxides, and a net increase in grade from a 0.77 percent rare earth oxide feed to a 1.56 percent output.
At present, a 30-metric-ton bulk sample collected from Dotson Ridge in December 2012 is being prepared for XRT sorting.
The output of that sorting process, scheduled to t1ake place within the next month, will generate the final feed stock required by the company to conduct a comprehensive pilot plant for the project.
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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