The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Industry looks forward to another turn at bat in 2015, in hopes of rebounding from recent, prolonged slump in prices and capital
Amid the volatile metals markets that have become the norm in the past year, miners, developers, explorers, prospectors and investors met in Vancouver at the end of January for the annual Cordilleran Roundup mining convention.
The mood was decidely positive, and having seen a lot of "whistling in the cemetary" at this convention in the past, I know the difference between false bravado and contagious optimism.
Perhaps it was the stabilization of copper prices after a nine month down-trend, or the relative stability of gold prices, which many prognosticators saw falling to the sub-$1,000 per ounce level, or perhaps it was the feeling that was often repeated at the convention: the only way out of a slump is to swing the bat, to do what this industry has done many times in the past, to re-invent itself and rise from the slag heap again.
Regardless of the reasons behind the up-beat mood, the excitement in Vancouver was real for the first time in four years.
How much of that excitement will result in new acquisitions, new discoveries and new strategies? Only time will tell.
But one thing is certain: without that excitement, new acquisitions aren't made, new discoveries can't occur and new strategies aren't developed.
Northwestern Alaska
Teck Resources Ltd. and partner NANA Regional Corp. reported fourth quarter and year-end 2014 results from their Red Dog mine.
In the fourth quarter the mine produced 155,100 metric tons of zinc in concentrate and for the year, a record 596,000 metric tons of zinc in concentrate.
Zinc ore grade for the year was down slightly at 16.7 percent and mill recoveries were up slightly to 84.6 percent.
The mine also produced 37,300 metric tons of lead in concentrate during the fourth quarter and 122,500 metric tons of lead in concentrate for the year, both significant increases over the previous year's output.
Lead ore grade for the year increased to 4.3 percent while mill recoveries increased to 78.9 percent, compared with the average grade in 2013.
Gross operating profit for the fourth quarter was US$200 million, compared with US$94 million in 2013.
Gross operating profit for the year was US$574 million, compared with US$364 million in 2013.
Mill throughput for 2014 was a record 4.3 million metric tons due in part to softer ore, which also contributed to the better recoveries for zinc and lead.
During 2014, the mine paid NANA Development Inc. and the State of Alaska royalties of US$215 million versus royalties of US$125 million in the year-previous period.
Sale volumes for both zinc and lead were both 21 percent higher in the fourth quarter compared with a year ago, reflecting the record production levels and a successful shipping season.
The mine's expected production of contained metal in 2015 ranges from 540,000 to 565,000 metric tons of zinc and 90,000 to 95,000 metric tons of lead.
Graphite One Resources Inc. provided operational guidance for 2015 on its 100 percent owned Graphite Creek project located near Nome.
Final results from its 2014 drilling program was expected in mid-February and was to be incorporated into an updated NI 43-101-compliant mineral resource estimate.
The 2014 program increased confidence in the continuity and distribution of the graphite mineralization over one kilometer of the deposit's 4.8-kilometer-long strike.
In November five bulk samples of grades ranging from 2.5-9.4 percent graphite carbon were composited from one half-drill core from hole 12GC005, which is located in the main resource area.
These samples include mineralization from the graphite-garnet-sillimanite-biotite schist and from the biotite-graphite schist.
The five head samples are being tested by flotation and gravity separation techniques, with the goal of optimizing the process flow sheet for the potential processing facility.
Separation of the waste material from the graphite is being designed with the goal of retaining as much of the large graphite flake particles as possible.
The results of this work, expected to be completed by the end of the first quarter of 2015, will be incorporated into the company's preliminary economic analysis, which is anticipated for release in the second quarter.
Western Alaska
NovaGold Resources Inc. provided a year-end 2014 progress report on its Donlin gold project, a 50:50 joint venture with Barrick Gold.
Permitting efforts moved beyond the halfway mark in the process with the U.S. Army Corps of Engineers completing the initial draft of the environmental impact statement.
The partners also secured key agreements related to the project's surface rights and formed important alliances aimed at protecting Alaska's fish and wildlife.
The partnership sustained its strong financial position with about US$165 million in cash and term deposits, sufficient to advance the project through permitting.
The Corps is now considering all the permit comments and is expected to incorporate the relevant changes into the draft EIS, which is on schedule to be published for public comment in 2015, with a final EIS anticipated to be issued in 2016.
The project continues to work simultaneously with other agencies on major permit applications, such as air quality, water discharge and usage, gas pipeline, wetlands, rights-of-way and dam safety.
Total expenditures at the project in 2014 were roughly $27.8 million.
Anticipated expenditures for 2015 will be about $28 million and will focus on advancing the project through the EIS phase toward a construction/production decision and maintaining strong relationships with all stakeholders in the region.
The partners also announced release of the first segment of a four-part video series on a way of life in Alaska - Yup'ik Language and Culture.
The films tell a story about the people of the Yukon-Kuskokwim region where the Donlin gold deposit is located, their heritage and subsistence way-of-life, as well as the challenges they face living in a remote community.
The first video is now available at http://www.novagold.com/info.
The three subsequent parts of the Alaska Video Series will be released sequentially throughout 2015.
' announced an update on its 2014 exploration program on the Unga Island gold project near Sand Point.
The company completed surface sampling programs testing two prospective areas along the Shumigan Trend, both known to host previously-documented mineralization: the Shumigan and Aquila prospects.
At the Shumigan Prospect, a soil sample grid of about 750 meters by 200 meters revealed a gold and silver geochemical soil signature of 20-50 parts-per-billion gold (up to 615 ppb gold) and greater than 0.5 grams per metric ton silver (up to 6.8 g/t silver) that has been defined over areas of historical trenching as well as extending an additional 400 meters to the southwest.
Rock chip sampling produced results of up to 9.93 g/t gold and 74.4 g/t silver from quartz vein breccias and stockwork that occur in surface outcrops.
At the Aquila Prospect, at the far western end of the Shumigan Trend, a series of reconnaissance soil lines placed within upland areas covering strong argillic alteration zones produced scattered results of about 50 ppb gold (up to 197 ppb gold) and 0.5-1.3 g/t silver (up to 3.51 g/t silver).
A single select rock sample of a narrow breccia vein sampled within an intense argillic alteration zone produced results of 90.2 g/t silver.
The company's efforts have revealed the possible presence of a phreatomagmatic (hydrothermal-magmatic) breccia system interpreted to be intimately associated with a nearby dacitic, hypabyssal dome mapped along Bloomer Ridge.
At depth, hanging wall quartz-feldspar-biotite phyric dacite gradually changes into a 5- to 40-meter wide zone of steeply-dipping, multiphase breccia bodies that are localized along the Shumigan Scarp.
The Shumigan Scarp is interpreted as a pre-existing structure that facilitated emplacement of the breccias.
The breccias contain a variety of lithic fragments consisting of primary igneous rock, fragments of silicified country-rock, phyllic-altered country rock, older breccia bodies, and a variety of hydrothermal vein types.
Matrix material to the breccia phases vary from hydrothermal to intrusive, but most matrix phases exhibit euhedral biotite and fine grained black-gray hydrothermal quartz ± adularia.
A protracted multi-phase, anastomosing and bifurcating, precious metal-bearing quartz ± rhodochrosite + adularia hydrothermal system is part of, and is superimposed upon the breccia phases.
Variable levels of intensity within the hydrothermal system either intensely replaced and/or re-brecciated the phreatomagmatic breccias by open space veins, vein breccias and stockwork zones exhibiting crustiform, cockade and banded textures.
At depths of between 30 meters to 105 meters below sea level, the hydrothermal system (as well as the breccia bodies) widens and bifurcates and exhibits an increase in stockwork veining within the hanging wall to the breccia system.
Above this level, the hydrothermal system narrows and has been telescoped up section along the footwall and along specific breccia phases.
Sulfide minerals are not common; however, when present they occur as very fine-grained pyrite, sphalerite, galena, visible gold and blue-grey metallic sulfides locally within crustiform layers or in stockwork and crackle breccia systems.
Pervasive phyllic alteration (quartz-sericite-pyrite), zones of variable silicification, quartz-adularia-carbonate stockworks and patchy disseminated pyrite occurs throughout the breccia and outbound into the hanging wall overprinting epiclastic sediments and dacite.
These results are helping the company to plan a core drilling program on the project in 2015.
Interior Alaska
Kinross Gold Corp. reported fourth-quarter and year-end 2014 results from its Fort Knox mine.
The mine produced 379,453 ounces of gold at a cost of US$712 per oz versus 421,641 oz gold produced at a cost of US$561/oz in 2013.
During the fourth quarter of 2014, the mill processed 3.261 million metric tons of ore grading 0.86 g/t gold.
Mill recoveries were 84 percent for the quarter.
During the fourth quarter, the mine placed 8.782 million metric tons of ore grading 0.30 g/t gold on the valley leach facility.
The higher year-on-year costs were due to sequencing into parts of the deposit with more operating waste and lower grades during the first three quarters of the year.
The mine also announced year-end revised resources, including a decrease of 460,000 ounces of mineral resources due primarily to depletion.
Proven and probable reserves at the mine were 163.844 million metric tons grading 0.46 g/t gold (2.398 million oz).
Measured and indicated resources at the mine were 105.453 million metric tons grading 0.43 grams of g/t gold (1.446 million oz).
Inferred mineral resources were 13.5 million metric tons grading 0.44 g/t gold (189,000 oz).
Alaska Range
WestMountain Gold Inc. released preliminary pilot production numbers for the 2014 season at its Terra project in the western Alaska Range.
The company processed about 500 short tons of ore from the Fish and Ben Veins in the pilot mill.
The processing produced roughly 2,250 oz gold doré equating to about 1,350 oz gold bullion for the season.
The 2014 production was a 500 percent increase in production from the previous year.
Based on the preliminary numbers, an estimated 2.1 oz/t gold was recovered from the Ben Vein.
The gold doré processed resulted in an average content of about 60.5 percent gold and 24.5 percent silver and 15 percent other metals.
With mill improvements and adjustments to the pilot processing method toward the end of the 2014 season, the gold concentration in the doré increased to 65-70 percent gold content.
The company is planning additional bulk sampling in the 2015 field program.
Northern Alaska
NovaCopper Inc. provided a 2014 year-end update on its Bornite and Arctic deposits at its Upper Kobuk Mineral project in the Ambler District.
At Bornite, the company completed a re-logging program of about 13,000 meters in 37 historical drill holes from Bornite previously drilled by Kennecott Copper Co. Targeted historical holes were located within the near-surface Ruby Creek zone of the Bornite deposit.
Of the 37 holes sampled, five holes had intervals of copper grading more than 0.5 percent copper, and 21 holes contained mineralization grading more the 0.2 percent copper demonstrating continued success from a similar effort in 2013.
Environmental baseline data collection continued in 2014 and annual maintenance of the stream gauges and the meteorological station on the property were performed.
Water quality sampling continued marking 7 years of continuous environmental baseline data collection.
The company also held 37 meetings in the NANA Inc., region during 2014 bringing the cumulative in-region meetings to about 140.
During 2014, the company focused considerable effort on supporting the Alaska Industrial Development and Export Authority with its activities towards advancing the Ambler Mining District Industrial Access Road, which is anticipated to provide access to the mineral district.
AIDEA continued to collect community input at meetings held through the winter of 2013/2014 in various local villages.
In late April 2014, AIDEA's board of directors approved a resolution authorizing AIDEA to proceed with an application for the Ambler road to the federal agencies that have jurisdiction over the AMDIAR project and to engage a firm to prepare the environmental impact statement for the project under the direction of the federal agencies.
Environmental baseline studies were conducted during the summer field season in preparation for the submission of the environmental impact statement.
The Army Corps of Engineers selected a third-party environmental engineer to manage the environmental impact statement process on behalf of the Corps.
During 2014 the company spent US$2.5 million on the Upper Kobuk Mineral Project for cumulative project expenditures of US$53.8 million.
The company plans to shift its focus in 2015 to the Arctic massive sulfide deposit, where it plans to advance the project to feasibility with a total investment of roughly US$20 million.
Subject to obtaining financing, NovaCopper hopes to invest about $8 million to $10 million during the 2015 field season, mainly for drilling the Arctic in-pit resource from inferred to measured and indicated confidence levels to support the classification of resources and collect Arctic in-pit geotechnical and metallurgical data.
Funds also will pay for environmental and engineering studies to gather information in preparation for a feasibility study.
At the same time, sufficient work will be completed to assess the viability of a mining operation at Bornite, specifically with evaluating potential synergies between Bornite and Arctic.
Southeast Alaska
Hecla Mining Co. reported 2014 exploration and year-end resource estimates for its Greens Creek mine on Admiralty Island.
On the exploration front, mine definition drilling during 2014 replaced or added reserves at the NWW and Deep 200 South, while definition and exploration drilling made progress in refining the NWW and West Wall resources, extending the Deep 200 South trend and defining a potential resource at the Gallagher Fault Block area.
Drilling of the Deep 200 South has defined three stacked folds of high-grade mineralization that represent up to 600 feet of down-dip continuity.
The 200 South and Deep 200 South zones currently represent a mineralization trend that extends over 3,000 feet along strike and over 1,000 feet of dip.
Recent drill intersections of the Deep 200 South, which remains open to the south, include 49.8 oz/ton silver, 0.08 oz/t gold, 3.4 percent zinc and 1.6 percent lead over 11.1 feet and 30.5 oz/t silver, 0.05 oz/t gold, 15.5 percent zinc and 8.0 percent lead over 13.9 feet.
Definition drilling tested the lower limits of both folds of the NWW Zone and confirmed the fold limbs below the current resource.
Recent drilling of the NWW Zone includes 21.0 oz/t silver, 0.34 oz/t gold, 30.3 percent zinc and 8.4 percent lead over 14.9 feet and 25.8 oz/t silver, no gold, 1.9 percent zinc and 1.0 percent lead over 8.0 feet.
Drill intercepts of the West Wall Zone suggest thicker and more consistent mineralization than currently modeled, and intercepts, including 29.9 oz/t silver, 0.23 oz/t gold, 19.7 percent zinc and 6.7 percent lead over 11.0 feet are 400 feet further down dip then the previous resource model.
For 2015 an underground drilling program is anticipated for three drills to be active all year.
Definition drilling is budgeted at $5.8 million and includes 126,700 feet that concentrate on the Lower NWW, Deep 200 South, East Ore, Deep Southwest and 9a zones and will consist mainly of in-fill drilling in order to develop mine plans in all of these areas.
Exploration drilling includes 46,000 feet of drilling and budgeted at US$2.4 million in order to test for mineralization: along the Deep 200 South, 5250 and 9a zones trends, down-plunge of the Central West and East ore zones, and along the Southwest Bench upper contact and Gallagher Fault Block area.
A planned 10,000-foot surface drilling program should continue to evaluate a broadly defined, mineralized stockwork veins and horizons at Killer Creek which is about a mile west-northwest of the mine.
This surface program is also expected to assess the High Sore target which has surface base metal mineralization and is less than a mile southeast of the mine.
The company also reported year-end 2014 reserves and resources for the mine, including proven and probable reserves of 7.796 million tons grading 12.2 oz/t silver, 0.10 oz/t gold, 3.1 percent lead and 8.3 percent zinc.
In addition, the mine contains measured and indicated resources of 823,000 tons of indicated resources grading 11.0 oz/t silver, 0.12 oz/t gold, 3.5 percent lead and 8.0 percent zinc.
The mine also reported inferred resources of 3.452 million tons grading 13.6 oz/t silver, 0.09 oz/t gold, 2.8 percent lead and 6.6 percent zinc.
I know we are not supposed to do this, but if you add up the silver in all resource categories, the mine is carrying almost 150 million ounces of silver in resource!
Constantine Metal Resources Ltd. reported final drill results from its Palmer volcanogenic massive sulfide deposit and that it had received a US$250,000 option payment joint venture partner from Dowa Metals & Mining Co., Ltd., bringing the total option payments received from Dowa to date to US$1 million.
Dowa has indicated its participation in year three of its earn-in, having spent about US$10 million to date.
New results include three massive sulfide intersections; two from the new South Wall EM target discovery and a third located one kilometer to the northwest at the RW Zone.
South Wall massive sulfide (EM plate target) was intersected in drill holes CMR14-64 (4.1 meters grading 0.55 percent copper, 4.98 percent zinc, 21.1 g/t silver, 0.16 g/t gold) and CMR14-66 (11.3 meters grading 0.30 percent copper, 3.95 percent zinc, 27.2 g/t silver, 0.23 g/t gold; including 1.5 meters grading 0.21 percent copper, 7.01 percent zinc, 128.4 g/t silver, 0.87 g/t gold) along the western, up-dip edge of the EM plate target.
These large step-outs, which are in the zinc-barite rich part of the massive sulfide lens, are located 215 meters and 140 meters, respectively, west of copper rich CMR14-54 (22.1 meters grading 2.48 percent copper and 4.05 percent zinc).
The widest and highest grade intersections are on the edge of the area drilled and are entirely open to expansion.
RW Zone drilling intersected massive sulfide mineralization in hole CMR14-67 (3.9 meters grading 0.19 percent copper, 5.11 percent zinc, 92.5 g/t silver, 0.37 g/t gold, within a broader 15.3 meter zone of 0.13 percent copper, 3.12 percent zinc, 30.7 g/t silver, 0.14 g/t gold).
The step-out intersection is located 220 meter northwest of the RW Zone resource (Figure 3), and 125 meters down-dip of a surface occurrence where past chip sampling includes 4.6 meters grading 7.0 percent copper, 13.0 percent zinc, 219 g/t silver and 0.63 g/t gold.
The new intersection substantially expands the RW Zone footprint, and extends the total unfolded length of continuous RW-South Wall mineralization to more than 1,500 meters.
Dowa has notified Constantine of their expenditure commitment for this year's program, with budget and program scope to be finalized early in 2015.
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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