The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
10,000-meter drill program at Southeast Alaska VMS project is shaping up to be among largest completed in the state this year
As a result of its timely partnership with Dowa Metals & Mining Co. Ltd., Constantine Metal Resources Ltd. has launched the largest single-season exploration program ever carried out the Palmer volcanogenic massive sulfide project near Haines in Southeast Alaska. At US$6.2-million, this year's exploration expenditures at the precious metals enriched copper-zinc project also ranks among the largest programs expected to be carried out in the 49th state during 2014.
"The Palmer project stands out as one of the more active and high-quality copper-zinc exploration projects in today's North American marketplace. With the largest program to date at Palmer, there is tremendous potential in 2014 to expand the existing resource and discover new deposits," said Constantine President and CEO Garfield MacVeigh.
This program marks the second year of exploration funding by Dowa Metals & Mining Co. Ltd., which has the option to earn a 49 percent joint venture interest in Palmer by investing US$22 million over four years. The investment is part of the Tokyo-based smelting and mining company's strategy of securing copper and zinc concentrates by investing in mines and promising exploration projects.
Situated 33 miles (53 kilometers) from a Pacific Rim deep-sea port at Haines, a mine at Palmer would be well-situated to provide feedstock for Dowa's state-of-the-art Kosaka smelter in Japan.
In 2013 the company invested roughly US$3 million on a program that allowed it to get a first-hand understanding of the geology and metallurgy of the volcanogenic massive sulfide mineralization at Palmer.
Satisfied with what it learned during the inaugural program, Dowa has agreed to fund a second program that includes at least 10,000 meters of drilling focused on growing the deposit at Glacier Creek as well as testing some of the other tantalizing VMS prospects across the Palmer property.
To meet its earn-in commitment, it is anticipated that Dowa will fund the 2015 and 2016 programs at similar levels as this year.
Expanding the resource
Since 2007, Constantine's exploration at Palmer has focused primarily on expanding Glacier Creek, a prospect that consists of five inter-related subzones of massive sulfide mineralization - RW East, RW West, and South Wall zones 1, 2 and 3.
The South Wall zones are parallel layers of nearly vertical VMS mineralization. At the upper extent of South Wall, a fault cuts and folds the three layers at which point they lay nearly flat. South Wall Zone 2 and Zone 3 are of the same age strata as two strata drilled at RW, the flat lying limb of the mineralization.
Based on 32 holes drilled through 2009, an inferred resource of 4.75 million metric tons averaging 1.84 percent copper, 4.57 percent zinc, 0.28 grams per metric ton gold and 29 g/t silver (using an NSR cut-off of US$50/t) was calculated for the RW and South Wall zones at Glacier Creek.
Constantine believes that, given the grades, increasing the tonnage of this resource to around 10 million metric tons would make Glacier Creek a compelling deposit to evaluate the economics of building a mine.
Considering the resource calculation does not include the results from 7 holes that Constantine drilled into the Glacier Creek deposit in 2010 and a 10-hole program funded by Dowa in 2013, the partners have already made headway towards their target.
Seven of the holes drilled last year cut significant mineralization, two of which penetrated the flat-lying RW zone, the balance tapped the plunging zones at South Wall.
Drill-hole CMR13-44, a roughly 100-meter eastward step out from the nearest drill intersection at RW, cut a 3.36-meter zinc-rich intercept averaging 0.51 percent copper, 9.18 percent zinc, 0.92 percent lead, 46.2 g/t silver and 0.21 g/t gold.
Precious metal-rich oxide mineralization was intersected at the RW zone in hole CMR13-50, including 37.5 meters of 123.2 g/t silver and 0.62 g/t gold. The intersection includes a partially un-oxidized subinterval of 13.7 meters grading 0.51 percent copper, 4.97 percent zinc, 1.61 percent lead, 134.3 g/t silver and 0.71 g/t gold.
Another three holes of the 2013 program tapped South Wall zone 1:
Hole CMR13-43, which represents roughly a 35-meter down-dip step-out of South Wall Zone I, cut 25.23 meters grading 1.17 percent copper, 0.43 percent zinc, 8.5 g/t silver and 0.07 g/t gold;
CMR13-45, a 65 meter up-dip step-out at Zone I, cut 21.71 meters averaging 2.36 percent copper, 9.06 percent zinc, 0.13 percent lead, 28.8 g/t silver and 0.33 g/t gold; and
CMR13-49 intersected 24.7 meters near true width of 2.02 percent copper, 8.47 percent zinc, 31.7 g/t silver and 0.51 g/t gold.
Hole 49 was drilled roughly 30 meters up-dip of CMR10-40, a hole drilled in 2010 that cut 20.8 meters grading 1.03 percent copper and 5.01 percent zinc. Both these intersections are outside the limits of the resource estimate and are located 80 meters east of the nearest South Wall intersection in CMR08-11, which cut 36.3 meters grading 1.7 percent copper and 5.74 percent zinc.
At South Wall zone 2, CMR13-46 cut 20.58 meters averaging 0.92 percent copper, 7.18 percent zinc, 0.25 percent lead, 45.3 g/t silver and 0.32 g/t gold approximately 50 meters west and 50 meters up dip of previous drilling.
Constantine said the intersection in hole 46 significantly expands an area of thick Zone 2 mineralization, and opens the potential to add additional tons between the base of Zone 1 and the currently defined top of Zone 2. The breadth of Zone 1, which has been defined over an area measuring roughly 200 meters by 450 meters, has largely been defined.
There is strong evidence, however, that zones 2 and 3 continue to plunge down the mountain.
Hole CMR10-39, drilled into South Wall Zone 3, cut 2.45 meters averaging 1.1 percent copper, 4.52 percent zinc, 0.13 g/t gold and 24.8 g/t silver. This represents the deepest massive sulfide intersection to date and expands Zone 3 by 110 meters down plunge and to the west.
Downhole geophysics has outlined a 400-square-meter conductive plate that continues downward and to the west of hole 49. This geophysical anomaly that continues along the trend of zones 2 and 3 is the primary target of two drills dedicated to expanding the resource.
South Wall zones 2 and 3 also remain open downwards and to the east, another probable target area for resource expansion drilling at Palmer this year.
Constantine Vice President of Exploration Darwin Green told Mining News that the company plans to test the extent of these zones with relatively wide-spaced drilling and tackle infilling once the scope of these massive sulfide layers is established.
He said Constantine will likely update the Glacier Creek resource with the results of the 2010, 2013 and 2014 drilling, following the completion of this year's program.
Beyond the resource
While two rigs trace the South Wall zones down the mountain, a roving drill will test some of the other intriguing exploration targets at Palmer.
"It is going to be a fun year that way," Green said.
He said the exploration drill will likely test four or five targets beyond the resource but within the larger Glacier Creek prospect area.
Mount Henry Clay, the source of enormous high-grade massive sulfide boulders that occur near the limits of a stranded glacier, is another potential target for the roving drill.
Twenty-six samples of various boulders collected by the U.S. Bureau of Mines at the toe of a small ice sheet near this prospect also known as MHC returned an average grade of 19.3 percent zinc, 1 percent copper, 0.4 percent lead, 38.2 g/t silver, 0.22 g/t gold and 20.6 percent barium. The source of these boulders, some of which measure up to six feet in diameter, has yet to be discovered.
Work completed by Constantine and Dowa in 2013, however, has provided a vector to a prospective source of these massive VMS stones trailing at the tail of the receding ice cap roughly two miles (3.2 kilometers) west of the Glacier Creek resource area.
Armed with GPS and chipping hammers, project geologists spent three days last fall locating and sampling more than 100 massive sulfide boulders strewn across the MHC prospect area.
Green said this exercise has outlined a narrow band of high-grade boulders that points to a small and "very compelling" target under the relatively thin ice sheet above.
CAP, a silver-rich target about 2.5 miles (four kilometers) south of Glacier Creek, is another prospect in queue for exploration drilling.
CAP01, drilled by Constantine in 2007, cut 23.2 meters of barite rich mineralization averaging 134 g/t silver. Constantine will apply what it has learned at Glacier Creek to target a larger zone of massive sulfide mineralization at this promising prospect.
Adding acreage
Constantine recently secured the right to lease a 99,257-acre (40,168 hectares) tract of land adjacent to its 16,000-acre (6,475 hectares) Palmer property, adding significantly to the company's prospective land position in the region.
This sizable block of property was awarded through a competitive lease offered by the Alaska Mental Health Trust Authority, a state corporation within Alaska. The trust owns the subsurface mineral estate of the Haines block, and for a small subset of the block, located adjacent to the Palmer property, land is held fee simple for which the trust owns both the surface and subsurface estate.
The terms of the agreement are currently being finalized.
General lease terms are expected to include annual rental of US$25,000 per year for the initial three-year term; and work commitments of US$75,000 per year, escalating US$50,000 annually. The lease is also expected to include certain production royalties.
Constantine said the Haines block, which has sat virtually unexplored in recent decades, shares similar geology to the Palmer property and is considered prospective for hosting high-grade massive sulfide mineralization.
MacVeigh said, "We are very pleased with the opportunity to secure this large, prospective and strategic land package. The Haines Block further consolidates Constantine's district-scale property position and provides control of the entire tract of available land in the region with known volcanogenic massive sulfide potential."
In addition to VMS prospects, the Haines Block also covers areas upland of the active Porcupine placer gold district, which has historically produced an estimated 82,489 ounces of alluvial gold.
Green said that the company has yet to formalize its plans for exploring this newly acquired expansion of the Palmer property.
Favorable metallurgy
Beyond financial surety, Dowa brings 130 years of experience in processing and refining complex VMS ore to the Palmer project.
The Japanese smelting and mining company has been improving its expertise in separating the various precious and base metals from VMS deposits since it began mining Kuroko ore in northern Japan during the 1880s.
Kuroko is a black-colored massive sulfide ore composed of sphalerite, galena, chalcopyrite, pyrite, barite and other minor minerals. Although Kuroko ore contained abundant precious metals such as gold and silver, they were difficult to smelt due to the ore's complex mineral composition.
As a result of technological improvements over the decades, Dowa overcame the metallurgical challenges of Kuroko ore. Today, Dowa's Kosaka Smelter is the largest zinc smelter in Japan and among the most technologically advanced smelters of complex ore in in the world.
This long history of refining massive sulfide ores makes Dowa ideally suited for understanding the best techniques for producing zinc and copper concentrates from the polymetallic mineralization at Palmer.
Working with metallurgists from Dowa, SGS Canada carried out locked cycle flotation tests on a composite of 212 assay sample rejects from past drilling at Palmer. These samples, which represent a blend of all major ore-types encountered during drilling of the South Wall resource area, had a head grade assay of 1.56 percent copper, 6.47 percent zinc, 28.5 grams per metric ton silver and 0.19 g/t gold.
The metallurgical testing yielded smeltable copper and zinc concentrates, with high metal recoveries produced at moderate grind sizes.
"This is the first flotation test work done on the deposit, and we are very pleased with the response to conventional metallurgical processing," MacVeigh said, after reporting the results in November.
This relatively straightforward process returned copper recoveries of 89.6 percent to a concentrate containing 25.5 percent copper, and 84.9 percent of the zinc reported to a concentrate containing 59.1 percent zinc. Of particular importance to Dowa, which may very well want to refine potential future zinc concentrates from Palmer is the zinc concentrates produced from the locked cycle tests had low impurities and no potential penalty or problematic elements.
The concentrates produced during testing captured 89.7 percent of the silver and 75 percent of the gold in the samples; with 73.7 percent of the silver and 61.5 percent of the gold reporting to the copper concentrate.
"In addition to achieving high copper and zinc recoveries, particularly for an initial test program, we are also pleased with the precious metal recoveries. These favorable metallurgical results continue to remove project risk as the company advances Palmer," said MacVeigh.
No follow-up metallurgical testing is planned for 2014, which indicates that Dowa, as a likely smelter of concentrates from any future mine developed at Palmer, also is satisfied with the metallurgical results.
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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