The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Prospective buyer could advance Southcentral Alaska porphyry project
It has been nearly four years since any significant exploration has been carried out at the Whistler property, but a preliminary deal for Kiska Metals Corp. to sell it could mean a renewed focus on this copper-gold project in Southcentral Alaska.
Under a non-binding agreement reached April 9, Alternative Earth Resources Inc. would acquire full ownership of Whistler in exchange for issuing Kiska 24.5 million of its shares, which would represent half of the company's shares upon completion of the exchange.
This Whistler deal is part of Kiska's ongoing strategy to realize value from its extensive portfolio of exploration properties in Alaska, British Columbia, Ontario, Nevada and Australia.
"This transaction further strengthens Kiska's commitment to the prospect generator business model and greatly increases the company's flexibility," explained Kiska President Grant Ewing. "Kiska will no longer incur any holding or exploration costs, and it retains excellent carried participation in the future upside of the Whistler Project through its large shareholding in AER."
Thermal to mineral
Alternative Earth Resources, which until recently was focused on finding and developing geothermal resources, has been seeking the right project to jump into mineral exploration sector.
"I believe the timing is right relative to possible improvement in gold and metal prices; however, Alternative Earth's available cash is sufficient to sustain the company and the Whistler assets through several years, if necessary," Alternative Earth CEO Brian Fairbank said, upon announcing the proposed acquisition.
At the end of 2014, Vancouver, B.C.-based Alternative Earth had US$2.18 million in cash and was expecting to recover US$150,000 from bonds being held to secure reclamation work on geothermal wells in Nevada and California.
Much of the money the company has in the bank is from the sale of its geothermal assets in 2014, funds it plans to put toward "opportunities in the mining sector with projects having indicated resources in safe jurisdictions," according to Alternative Earth's financial filings for the end of 2014.
The company believes the Whistler project fits the bill.
"Alternative Earth is pleased with the potential acquisition of the significant Whistler deposit, the encompassing porphyry gold-copper district and the physical project assets following an extensive search and due diligence process," said Fairbank.
Whistler deposit
Located in the Alaska Range about 95 miles northwest of Anchorage, the Whistler property is situated in the Kahiltna Terrane, an assemblage highly prospective for world-class porphyry copper-gold and intrusive gold deposits. The massive Pebble copper-gold-molybdenum project - situated about 165 miles southwest of Whistler - is the largest such deposit found there.
"The super-giant Pebble deposit and the Whistler deposit are the only porphyry copper-gold resources currently defined in the Kahiltna assemblage, which speaks to the immature exploration setting of this belt," Kiska said in a 2014 report on Whistler.
The 65-square-mile Whistler property, itself, is known to host at least two porphyry centers and one area prospective for an intrusive-related gold deposit.
The Whistler property is anchored by its namesake deposit, which was discovered by Cominco Alaska in the late 1980s and was further delineated by Kennecott Exploration, Geoinformatics Exploration Inc. and Kiska Metals.
A total of 48 holes drilled into the Whistler deposit through 2011 has outlined an indicated resource of 79.2 million metric tons grading 0.51 grams per metric ton gold, 1.97 g/t silver and 0.17 percent copper (2.25 million gold-equivalent ounces), and an inferred resource of 145.8 million metric tons averaging 0.40 g/t gold, 1.75 g/t silver and 0.15 percent copper (3.35 million gold-equivalent ounces).
In addition to upgrading the substantial open-pit delineated inferred resource at Whistler, infill drilling is expected to expand upon some higher-grade zones within the deposit. These include an area of shallow higher grade mineralization seen as ideal place to start mining, an area in the northern part of the deposit, and a higher grade core zone hypothesized to exist at depth.
Orbiting Whistler
While Whistler is the most advanced deposit, roughly 20 other prospects and deposits have been identified on the property.
Many of these prospects are found in the Whistler orbit, a roughly 20-square-mile region that includes the Whistler deposit as well as the Raintree and Rainmaker discoveries.
"All of these bona fide porphyry prospects are open for expansion with further diamond drilling and represent immediate growth potential to the resource base," Kiska said of the discoveries in the Whistler orbit.
While the Whistler deposit outcrops on a ridge, making it easy to find, the other prospects in the Whistler orbit are largely covered with a 10- to 15-meter layer of glacial till in the valley below, making the underlying geology tough to discern from the surface.
Located some 1,800 meters east of the Whistler deposit, Raintree West has the most drilling of the Whistler orbit prospects.
Like all of the blind prospects at Whistler, Raintree West was first identified with airborne geophysics. Drilling in 2008 and 2009 identified two zones of mineralization. Both of these zones were intersected in hole WH09-002, which cut 128.7 meters of 0.56 g/t gold and 0.16 percent copper from a depth of 59 meters; and 40 meters of 0.98 g/t gold and 0.21 percent copper from 429 meters.
Drilling at Raintree North, Raintree South and Rainmaker has identified porphyry copper-gold mineralization similar to Raintree West.
Dagwood and Snow Ridge, two other prospects in the larger Whistler corridor area, show geophysical and geochemical characteristics that suggest peripheral-style porphyry mineralization may exist, but have yet to be drilled.
Gold-rich targets
Island Mountain and Muddy Creek, situated in the southern half of the Whistler property, provide additional gold-rich exploration targets.
Island Mountain, located about 14 miles south of the Whistler deposit, was discovered by Kiska in 2009.
IM-09-001, the discovery hole at Island Mountain, cut two distinct mineralized zones. The upper 150 meters - which averaged 0.72 g/t gold, 2.37 g/t silver and 0.16 percent copper - is similar to the mineralization found at the Whistler deposit. The mineralization in the lower 106.9 meters of the hole - which averaged 1.22 g/t gold, 0.69 g/t silver and 0.05 percent copper - more closely resembles the gold-dominant mineralization being investigated at Millrock Resources Inc.'s Estelle property a couple of miles to the west.
Muddy Creek, a gold target about six miles northwest of Island Mountain, is a promising intrusion-related gold target.
Muddy Creek's potential is underscored by the 4.72 g/t gold average grade of 150 rock samples collected over a four-square-mile area. This geochemical work in conjunction with a geophysical survey has outlined seven prospects.
Only three holes have been drilled at Muddy Creek, two of which intersected gold mineralization. MC11-001 cut 38.8 meters averaging 0.52 g/t gold-equivalent and MC11-002 cut 44.2 meters averaging 0.51 g/t gold-equivalent.
If it finalizes a deal for the Whistler project, Alternative Earth said, "New exploration will incorporate an in-depth review, fresh analyses and integration of the considerable trust of geophysical, geological, drilling and assay data, along with new prospecting and geophysical surveys."
The company indicates that further geophysics "to map structure, better determine the geometry of established targets, identify new targets, and to prioritize future exploration and development drilling" is among its top priorities for the property.
In addition to a large land package with an established porphyry deposit and a number of promising copper and gold prospects, the Whistler project comes with a number of physical assets and upgrades that will make future exploration easier and less expensive.
In 2011, Kiska completed the construction of a 50-person camp and a gravel airstrip capable of landing a Boeing DC-3 aircraft near the Whistler orbit area of the property.
A four-mile gravel road connects the camp and airstrip to the Whistler deposit.
In addition to living quarters, the camp comes with a generator; wireless satellite phone and internet system; wireless cell phone service; water well; septic system; two core logging facilities; core cutting facility; core storage area; and a large maintenance garage for servicing all rolling stock and camp equipment.
The on-site rolling stock includes a Cat D6 bulldozer; two skid-steers; a 30-ton articulating haul truck; 10 snowmachines; and eight all-terrain vehicles.
A definitive and binding agreement for the Whistler project is expected in April and Alternative Earth Resources' shareholder meeting to approve the transaction is scheduled for June 23.
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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