The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Rapid advancement of Selwyn, big-time investments in Coffee boost spending
Unlike its neighbors in the North, the Yukon Territory is forecasting a marked increase in exploration in 2014. While well shy of the roughly C$300 million invested in exploration in 2011, the peak of the modern Yukon gold rush, the C$65 million forecast to be invested on exploration in the Yukon during 2014 is roughly a 45 percent leap over last year.
This exploration spending is dominated by an aggressive drill program at the Selwyn zinc project, situated in an area of eastern Yukon Territory renowned for its lead-zinc-silver sedimentary-exhalative massive sulfide deposits.
With its sights set on firing up a 35,000-metric-ton-per-day mine (roughly 3.5 times the size of the Red Dog Mine in Northwest Alaska) by 2020, Selwyn Chihong Mining Ltd. budgeted C$65 million for year-round exploration and development at Selwyn in 2014.
Many other projects received assistance from the Yukon Mineral Exploration Program, a highly successful territory incentive that encourages prospecting, grassroots and early-stage exploration with cash grants totaling C$1.4 million awarded to 42 recipients in 2014.
While the spending on these grassroots programs may seem insignificant, YMEP investments grubstaked legendary Yukon prospector Shawn Ryan, whose discoveries sparked the White Gold Rush in 2009 and played a significant role in the more than C$700 million of exploration investments in the territory over the past five years.
Zinc-rich Selwyn
Expected to produce more than 480,000 metric tons of zinc and 120,000 metric tons of lead annually, the proposed Selwyn mine located near the Yukon-Northwest Territory border is singlehandedly expected to double Yukon Territory's gross domestic product.
The current mine-life is projected to by 10 years, but continued exploration across the 316-square-kilometer (122 square miles) property is expected to tack on substantial reserves to the current plan.
Selwyn Chihong, which is owned by China-based Yunan Chihong Zinc & Germanium Co. Ltd., plans to invest C$22.4 million this year to drill an initial 50,000 meters, averaging 200 meters per hole, for more than 250 holes to meet the requirements of geotechnical, hydrological and metallurgical programs as well as upgrade inferred resources to indicated resources.
During an early August visit to Selwyn, Mining News counted five drills turning and two rigs on standby during the first week of August.
"This thing is the most giving property I've ever worked," enthused J. J. O'Donnell, Selwyn Chihong's vice president of exploration.
Selwyn Chihong aims to complete a preliminary economic assessment for the Selwyn project in 2014, a pre-feasibility study by May 2015 and a feasibility study by December 2015.
"We picked the best deposits to get us over the feasibility study," O'Donnell said. "Since March, we're about 40 percent done, and we're moving the rigs every third day. My deadline is to get all the infill drilling done this year."
Other explorers investigating zinc enriched projects in the Selwyn Basin during 2014 include Alexco Resource Corp. and Manson Creek Resources Ltd.
Alexco continues to focus its exploration on the Bellekeno property that blankets much of the historic Keno Hill District, a particularly silver-rich portion of central Yukon.
A 10,000-meter surface drill program at Bellekeno focused primarily on defining the potential limits of mineralization and adding immediate resources at the Flame & Moth deposit and further defining the nearby Flame & Moth West discovery.
Flame & Moth has an indicated resource of 1.38 million metric tons averaging 516 g/t silver, 5.7 percent zinc and 1.7 percent lead.
Manson Creek is investigating the potential for zinc enriched SEDEX or VMS deposits believed to be responsible for the springs of minerals laden water and a vegetation kill zone at its Guaman project (Tell property). The 2014 program includes drilling to see if the sulfide rich mineralization indicated on the surface translate to metal-rich deposits underground.
"We were able to finance over the last three years enough to test the target, and we still feel great about the potential for volcanogenic massive sulfide mineralization here," Manson President Jean-Pierre Jutras, P. Geol., told Mining News during the first week of August. "We've been drilling for three weeks this summer, and we've found bedded barite in the drill holes, which typically caps VMS mineralization."
Lundin, Beaty invest in Coffee
While zinc is the biggest game in the Yukon during 2014, gold continues to lure investors to the home of the Klondike.
"The biggest development in the Yukon this year is that Lukas Lundin and Ross Beaty, two of the smartest investors in the junior mining space, each bought 10 percent interest in Kaminak (Gold Corp.)," Victoria Gold Corp. President and CEO John McConnell told Mining News during an August visit to the Yukon Territory. "That level of interest shows the project is for real and so is the Yukon."
Lukas, through his family's Zebra Holdings and Investments S.à.r.l., Luxembourg, and noted geologist and entrepreneur Beaty each invested C$6.76 million, collectively C$13.52 million, in Kaminak.
A preliminary economic assessment published in June envisions an open-pit mine and heap-leach facility at Coffee producing an average of 167,000 ounces of gold annually over an 11-year mine-life at an all-in sustaining cash cost of US$688 per ounce.
With a robust PEA in hand and cash in the bank, Kaminak wasted no time initiating on taking Coffee to the next level. In July, the company appropriated C$12 million to launch a feasibility study for the gold project located on the banks of the Yukon River some 130 kilometers (81 miles) south of Dawson City.
Feasibility activities, which began in the third quarter, include infill drilling, additional metallurgical test-work, continued environmental baseline activities and a condemnation drill program.
Kaminak is also completing upwards of 70,000 meters of drilling aimed at upgrading and expanding the rich gold resources at Coffee.
"Ongoing exploration of the numerous high-tenor geochemical anomalies remaining at Coffee continues to demonstrate the resource upside of the project and has the potential to enhance the already positive, high-margin economics at Coffee as demonstrated in the recently completed PEA," said Kaminak CEO Eira Thomas.
As of January, an indicated resource of 14 million metric tons averaging 1.56 grams per metric ton (719,000 ounces) gold and an inferred resource of 79 million metric tons averaging 1.36 g/t (3.43 million ounces) gold had been delineated at Coffee.
Elsewhere in the White Gold District, Comstock Metals Ltd. published a maiden inferred resource of 4.4 million metric tons grading 1.65 g/t (230,000 ounces) gold for its QV project situated some 40 kilometers (25 miles) north of Coffee; Goldstrike Resources Ltd. carried out a reconnaissance level exploration program aimed at identifying additional drill targets on its Lucky Strike gold prospect situated about five kilometers (three miles)east of Kinross Gold's White Gold property; and Centerra Gold Inc. is expected to spend C$1 million on detailed geological mapping, soil and rock chip sampling, and geophysical surveys on the Betty and Hayes properties adjacent to Kaminak's Coffee project.
Gold across the Yukon
Roughly 130 kilometers (80 miles) southeast of Coffee, Rockhaven Resources Ltd. continues to uncover new zones of high-grade gold and silver at its Klaza property.
The 21,000 meters of drilling slated for 2014 is primarily targeting a zone known as Western BRX.
Among the best of these intersections from early drilling at Western BRX are: 26.71 grams per metric ton gold and 172 g/t silver over 2.98 meters including 38.20 g/t gold and 333 g/t silver (44.86 g/t gold-equivalent) over 1.16 meters in hole 150; and 22.43 g/t gold ad 245 g/t silver (27.33 g/t gold-equivalent) including 64.90 g/t gold and 725 g/t silver (79.40 g/t gold-equivalent) over 0.72 meters in hole 151.
"We figure that we're in the sweet spot of the system, and we don't know how much farther it goes out to the west. But we've pulled some pretty phenomenal holes this year," Turner told Mining News during a visit to the Klaza property Aug. 7.
Victoria Gold has found its own sweet spot at Olive, a gold-rich zone expected to enhance the mine-plan at the company's Dublin Gulch gold property, located roughly 160 kilometers (100 miles) east of Dawson City.
Situated some 2.5 kilometers (1.5 miles) northeast of Eagle Gold, a 2.3-ounce gold deposit at Dublin Gulch currently being permitted to mine, the Olive zone has the potential to add at least 10 million metric tons of higher grade material to the mine plan at Eagle.
To follow up on this potential, Victoria launched a 3,000-meter, phase-1 2014 program in May. This initial phase of drilling included 20 holes, three of which were used solely for metallurgical testing.
Highlights from this drilling include 69.7 meters of 2.29 g/t gold in hole DG14-584C; 96.1 meters of 1.22 g/t gold in DG14-586C; 99 meters of 1.02 g/t gold in DG14-588C; 35.3 meters of 1.67 g/t gold in DG14-590C; and 89.6 meters of 1.18 g/t gold in DG14-600C.
Victoria plans to integrate the deposit it is defining at Olive into the mine-plan for Eagle.
"Our confidence continues to increase that the Olive Zone will have a meaningful economic impact on the proposed Eagle Gold Mine," said President and CEO McConnell. "We intend to demonstrate this through a maiden Olive resource estimate followed by an update to the Eagle Feasibility Study and economic model with the incorporation of Olive."
Roughly 100 kilometers (60 miles) southeast of Dublin Gulch, Goldstrike Resources Ltd. completed a 3-D induced polarization survey of the VG zone at Plateau South. The company said this geophysical work outlined a large anomaly under Gold Dome. A nearby hole, PSVG13-03, cut 7.6 g/t gold over nine meters and rocks with visible gold are readily found on the surface.
"We think it's a bigger monster up here, and it's got a lot more appeal," Trevor Bremner, chief project geologist and director of Goldstrike told Mining News during an early August visit to Plateau South. "Geologists we brought in yesterday found eight to nine sample of visible gold in 20 minutes."
Some 100 kilometers (60 miles) north of the Plateau property, ATAC Resources continues its exploration of the massive Rackla gold property.
This 1,700 square kilometer land package is divided into two distinct trends: the 50-kilometer- (30 miles) long Nadaleen Trend which hosts Carlin-type gold deposits at the Conrad, Osiris, Isis East, Sunrise and Anubis zones: and the 20-kilometer- (12.5 miles) long Rau Trend which hosts the Tiger Gold Deposit and the Ocelot silver-lead-zinc-tin discovery.
An initial C$5 million initial phase of the 2014 exploration program continues the company's primary focus on the Carlin-type discoveries towards the eastern end of the extensive property.
"Year over year we continue to make new gold discoveries and expand high-grade gold zones at the Rackla Gold Project. The 2014 Phase I exploration program is specifically designed to continue our excellent discovery rate and support our confidence in the global resource potential of the project," said Atac CEO Graham Downs.
In July, Atac released a preliminary economic assessment for the Tiger deposit in the Rau Trend that envisions a seasonal open-pit mine and tank heap leach operation producing 221,558 ounces of gold from 2.06 million metric tons of oxide material at an average diluted grade of 3.72 g/t gold over four years
"The simplicity of the mining and processing combined with the approach of modular design and construction for the on-site facilities has resulted in an optimized development scenario for this size of deposit. Additional geotechnical and resource drilling at the Tiger deposit combined with exploration drilling at over six untested satellite oxide targets has the potential to significantly enhance the PEA and the district potential of the Rackla Gold Project," explained Downs.
PGM, Nickel in the south
Wellgreen Platinum Ltd. (formerly Prophecy Platinum) is leading a charge to explore for and develop platinum-rich deposits in Kluane ultramafic belt, a stretch of the Wrangellia Terrane that extends from British Columbia, through southwestern Yukon Territory and into Alaska.
A preliminary economic assessment prepared for the company's Wellgreen project in 2012 outlines plans for a 32,000-metric-tons-per-day operation producing 1.96 billion pounds nickel, 2.06 billion pounds copper and 7.12 million ounces platinum-palladium-gold in concentrate over a 37-year of mine life.
The company, however, has been busy expanding the resource since the publication of this scoping level study.
All told, roughly 40,000 meters of new drilling, new sampling or re-logging of historic core has been conducted since the last resource estimate on the Wellgreen project was completed in 2011.
The measured and indicated resources at Wellgreen have increased to 330 million metric tons at 1.67 g/t platinum-equivalent in a pit constrained resource containing 5.53 million ounces of 3E (platinum-palladium-gold), 1,894 million pounds of nickel and 1,021 million pounds of copper. In addition, the project has 846 million metric tons of inferred resources containing 13.8 million ounces of 3E (platinum-palladium-gold), 4,431 million pounds of nickel and 2,595 million pounds of copper.
An updated PEA that investigates starting with lower throughput that initially targets higher grade ore; improved PGM and base metal recoveries based on recently completed metallurgical tests; and the potential of using LNG to power the mine is expected to be completed by the end of 2014.
As Wellgreen edges its project towards feasibility level studies, Duncastle Gold Corp. is investigating earlier staged platinum deposits in the same neighborhood.
In June, the company signed a deal to acquire 262 square kilometers of land in three claim groups - Catalyst, Spy and Ultra -along the Kluane ultramafic belt of southwestern Yukon.
"We are now the largest property owner in that area, mostly within sight of the (Alaska) Highway," said Bill Harris, a longtime Yukon prospector and director of Duncastle.
Duncastle is seeking high-grade platinum mineralization with bulk tonnage potential. One of the properties, the Spy Project, has yielded samples of up to 75 g/t platinum and another sample with 0.5 oz palladium, he added.
With the YMEP program contributing exploration funds, Duncastle is exploring the Arch zone, an area of its Catalyst property adjacent to Wellgreen.
Within the Arch Zone, the Teck showing is located on the western edge of the Wellgreen property and consists of ultramafic rocks in fault contact with sedimentary rocks with historic assays of 0.36 g/t PGM + gold, 581 parts per million nickel and 709 ppm copper from chip samples over two meters.
Duncastle said the YMEP funds will be used to extend geophysical and geochemical orientation surveys previously carried out over the Arch zone.
Roughly 50 kilometers (30 miles) southeast of Whitehorse, First Point Minerals Corp. completed approximately 1,000 meters of drilling at its Mich nickel-iron alloy property.
The Mich claims are underlain by ultramafic rocks of the Cache Creek Terrane, the same belt of rocks that host the awaruite mineralization at First Point's 40 percent-owned Decar project in central British Columbia.
"We see a lot of striking similarities between Mich and our Decar project in terms of recoverable nickel grade, high temperature environment of emplacement and structural controls," said First Point Vice President of Exploration Ron Britten.
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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