The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Japanese firms budget US$17M on expanding high-grade gold finds near mine
Continuing its success in finding new deposits of high-grade gold in the shadow of the mill at the Pogo Mine located in Interior Alaska, Sumitomo Metal Mining Pogo - a joint venture between Sumitomo Metal Mining Company (85 percent) and Sumitomo Corp. (15 percent) - ramped up exploration spending at its Interior Alaska operation to US$17 million in 2014.
"Some of the companies are reducing their exploration costs; we aren't doing that," Sumitomo Metal Mining Pogo General Manager Chris Kennedy informed attendees of the spring Alaska Miners Association convention in Fairbanks. "Without (exploration) you have got no future, and we want to be here for a long time."
Situated some 60 miles (100 kilometers) southeast of Fairbanks, the Pogo Mine currently has enough ore in reserves to last until 2019, however, a number of deposits with gold grades comparable to current reserves have been identified immediately adjacent to the underground working at Pogo.
"They say 'you never run out of gold you can mine, you just run out of gold you can afford to mine,'" Kennedy told symposium participants.
Expansion of two zones adjacent to the mill, East Deep and North, will almost certainly add years to gold that Sumitomo can afford to mine and a number of other deposits and prospects stretching south of the current operation have the potential extend this horizon.
"In the end, we are assuming that we can replace the number of ounces going through the mill each year by finding new reserves and converting known resource into reserves by additional drilling," Lorna Shaw, spokeswoman for SMM Pogo, told Mining News.
Expanding East Deep
First tapped by drilling in 2010, East Deep, a growing zone of high-grade gold mineralization immediately northeast of the processing facilities at Pogo, is one of the primary locations that SMM Pogo has been expanding its resources and reserves.
East Deep appears to be a twin to the Liese zone, three flat-lying, parallel quartz veins that carry high-grade gold that have been the primary source of ore for the mill since mining began at Pogo in 2006.
Geological and metallurgical evidence indicates that East Deep and Liese and East Deep zones were once a single body of gold-rich mineralization that was split by a wedge of gold-barren igneous rock (diorite) some 95 million years ago.
In 2012, Sumitomo drove two drifts through some 300 meters of diorite wedged between these now separate zones. From the underground vantage, SMM Pogo completed 24,596 feet of definition drilling and extracted a 12,000-ton bulk sample during 2013.
In addition to providing a platform for underground drilling, these drifts provided access for a 12,000-ton bulk sample of East Deep ore that was processed during the third quarter of 2013.
To mine the high-grade gold at East Deep, Sumitomo developed the 2150 portal. This year, ore from East Deep makes up a portion of the feed for the mill at Pogo.
At the end of 2013, the Liese and East Deep zones encompassed 59 metric tons (1.9 million ounces) of gold in reserves and an additional 85 metric tons (roughly 2.7 million ounces) of gold in resources.
Finding feeder zones
While East Deep and Liese appear to have been torn apart by intruding igneous rocks, the zones are still linked at the North Zone, a group of higher grade vertical veins that likely provided a conduit to deliver gold mineralized fluids to the flat-lying Liese and East Deep zones.
Liese has long been known to be linked with the North Zone and mineralogical studies have provided compelling evidence that gold-rich fluids flowed up the vertical veins and spread outward into the vertical veins mined at Pogo.
Drilling in 2013 traced East Deep to the North Zone.
In addition to expanding East Deep to the hypothesized feeder zones, this drilling discovered two new North Zone veins, NZ3 and NZ4.
SMM Pogo told Mining News that the expansion of these newly found North Zone veins is one of the primary focuses of the 2014 drilling at the project.
"These veins are significant and are most likely the feeder zones for the main ore body and probably continue down for considerable depth. In addition, drilling this year continues to expand these vein resources along their strike length," Shaw explained.
Roughly US$5 million of the 2014 exploration budget at Pogo is being invested in driving two drifts from the underground workings at East Deep to the North Zone. These exploration drives will provide a better angle for drill the vertical North Zone veins as well as provide a platform for defining the northwest expansion area of the East Deep zone.
"The continuity of the North Zone mineralization is sufficient that part of the resource will most likely become part of the reserve at the end of the year," Shaw said.
Southerly horizon
While underground rigs continue to expand East Deep north and North zone downwards, surface drilling seeks to expand Pogo South, an exploration target located immediately south of the Liese zone.
"There are two helicopter fly rigs drilling at South Pogo for the entire field season. This is augmented by another drill rig drilling from underground in the most southerly drift inside the mine," Shaw said. "So far, we have defined three separate veins in this area that appear to be extensions of the Liese veins in the mine. This drilling will add to the resource at South Pogo and part of this resource may be converted to reserve by the end of year."
The 4021 zone, a known gold deposit located roughly 2.5 miles (four kilometers) southeast of Liese, furthers the southward expansion potential.
Kennedy explained that 4021 has shifted to the east along a major fault separating it from the Liese zones. If the geological units are lined up to their original positions, 4021 is on strike with the Liese zone. This opens up the prospect of gold mineralization between these two known zones.
"The resource at 4021 stands like a beacon on the horizon and serves as an indicator that the mineralization extends out at least that far. Eventually, we will get there as we systematically expand the main Pogo deposit in that direction," explained Shaw.
For the time being, however, the Pogo exploration team has plenty of deposits and prospects immediately surrounding the mill to follow up on - an endeavor that is expected to add years, if not decades, to the life of the Pogo Mine.
"We are going to be here a long time," Kennedy asserted.
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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