The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Gold, base metal production and acquisitions accelerated in 2014, signaling potential turnaround for exploration sector in 2015
With a mild winter for most of Alaska behind us and an early spring in progress over much of the state, spring fever has once again laid its grip on the mining industry.
A number of exploration and development programs are slated for the summer season, suggesting the mining industry has finally started to rise from the three-year miasma that has gripped it worldwide.
A couple of macro-scale items also are pointing toward a more robust industry.
The U. S. Geological Survey's "Mineral Commodities Summary 2015" indicated that world gold production reached an all-time high of 91.95 million ounces in 2014.
Putting this into perspective, 2014 world gold production was slightly larger than the cumulative gold production of Nevada's prolific Carlin Trend.
Put differently, this means the mining industry must locate, define and mine one entire Carlin Trend each year! Even better news came from the mergers and acquisition sector where SNL Metals and Mining reported that 2014 saw 73 mining acquisitions with a total asset value of US$21.56 billion, compared with US$11.88 billion in 2013.
Base metal acqusitions, dominated by copper deals, more than tripled, while gold acquisition fell slightly, though the average value of both base metal and gold acquisitions increased, suggesting an end to the bottom feeding that characterized the mergers and acquisitions markets in the last few years.
Oddly enough, gold acquisitions in 2014 paid less on average for producing properties compared to 2013 and more for development projects, suggesting that some companies are starting to refill their depleted development pipelines.
That normally spells good things for Alaska!
Western Alaska
Graphite One Resources Inc. announced that is has received additional technical data for its 100 percent-owned Graphite Creek project located near Nome.
This Stage B work revealed the existence of distinctive properties of the mineralization described as Spheroidal, Thin, Aggregate and Expanded, or STAX. This recent work on drill-hole concentrate samples revealed that naturally occurring graphite occurs in the shape of spheres and close to the size ranges of interest for lithium ion battery-grade graphite.
Screening analysis and optical microscopy also demonstrated significant proportions (7-10 percent or more) of thin, coarse, large flake graphite (+20 mesh, +25-30 mesh).
This included "pressed flake," or aggregated, graphite particles, some in the shape of flakes, alongside integral classic flake and both with high aspect ratios.
Finally, the work revealed the presence of naturally occurring flake graphite with particle architecture closely matching that of expanded graphite.
As a result of this new information, the company is briefly suspending work on its preliminary economic assessment of the project in order to incorporate the findings from the Stage B Report into the PEA.
NovaGold Resources Inc. released its first-quarter financial results and updates for its flagship 50 percent-owned Donlin gold project.
As a routine part of the environmental impact statement process, the company and partner Barrick Gold submitted the comments of six cooperating agencies on the initial draft environmental impact statement to the lead agency, the U.S. Army Corps of Engineers.
The partners anticipate publishing the draft EIS by yearend 2015.
The partners also advanced other major permit applications with state and federal permitting agencies such as air quality, water discharge and usage, pipeline plan of development, wetlands and dam safety permits.
During 2015, the Donlin partners anticipate spending US$26 million to advance the project with emphasis on permitting, community outreach and work force development in addition to US$3 million for technical studies to identify potential design and execution enhancements.
Redstar Gold Corp. reported plans for a 1,500- meter drilling program on its Unga Island gold project near Sand Point. The phase 1 drill program will primarily focus on outlining the high-grade gold mineralization at the Shumagin prospect. The drill program is the first to be undertaken since 2011 and will build on the 50 historic holes already drilled in the Shumagin prospect as well as the encouraging results from last year's surface exploration program on the prospect.
Interior Alaska
Kinross Gold published an updated technical report for the Fort Knox mine and the adjacent Gil deposit in the Fairbanks District.
This report full of interesting information, such as the Fort Knox deposit has been defined by a total of 1,421 drill holes (489 diamond core holes, 792 reverse circulation holes, and 140 geotechnical and dewatering holes) totaling 338,515 meters.
The Gil deposit has been defined by a total of 738 drill holes (comprising 581 RC, 154 diamond, and 25 rotary holes) totaling 73,876 meters.
Resources at Gil at the end of 2014 included indicated resources of 29.515 million metric tons grading 0.56 grams per metric ton (532,700 ounces) gold and inferred resources of 4.026 million metric tons grading 0.49 g/t (62,800 ounces) gold.
The conventional truck-shovel, open pit operation at Fort Knox is capable of loading and hauling rates of up to 92 million metric tons per year.
Higher grade ore is processed in a CIP mill, typically at a rate of about 13.2 million tpa, while an additional 30 million tpa of lower grade run-of-mine (i.e., uncrushed) ore is processed at the adjacent heap leach facility.
The mill is expected to process 58.9 percent of the gold produced in 2015 with the remainder coming from the heap leach.
Gold recovery from the heap leach ore was 49.9 percent to date at the end of December and is predicted to reach 65 percent at the conclusion of the operation.
The operation's capital expenses for the next five years are estimated at US$325 million.
Expected 2015 operating costs are US$8.62/t processed.
Through the end of 2014, the mine has recovered 6,346,286 ounces of gold from roughly 355 million metric tons of ore.
In 2019 the pit is expected to be mined out and the ore haul to the heap leach facility will cease.
It is planned that after this point leaching will continue through 2027 with recovered gold declining each year.
And that is just a tiny bit of the data contained in this report!
Alaska Range
Coventry Resources Inc. announced results of internal studies at its Caribou Dome copper project in the Valdez Creek District.
Outcrops of sediment-hosted copper mineralization have been identified over a 15-kilometer extent, suggesting that the previously drill-tested 750 meters of mineralization is part of a much larger mineralized system.
The two highest priority drill targets, both of which remain untested by drilling, include outcropping mineralization at Lens 2 that is 200 meters long, up to 15 meters wide and coincides with a 350-meter-long induced polarization geophysical anomaly and a 400-meter-long soil anomaly, with assays of up to 0.63 percent copper with a coincident induced polarization geophysical anomaly at the "Caribou South Target." Additional drilling is also warranted to further evaluate the strike and depth extensions of all nine known mineralized lenses, where mineralization remains open along strike and at depth.
Northern Alaska
NovaCopper Inc. announced an update on its Upper Kobuk Mineral Project, a partnership with NANA Inc. The company plans to advance the Arctic deposit to feasibility over a two- to three-year period for a total investment of about US$20 million.
The company hopes to invest roughly US$8 million to US$10 million during the 2015 field season, mainly for in-fill drilling of the Arctic in-pit inferred resources to improve confidence level to measured and indicated and to collect Arctic in-pit geotechnical and metallurgical data.
Funds also will be utilized for environmental and engineering studies to gather information in preparation for a feasibility study.
The company also plans to advance assessment work at Bornite with a focus on evaluating potential synergies between the Arctic and Bornite projects.
The company continued its efforts supporting the Alaska Industrial Development Export Authority in working towards drafting an environmental impact statement to permit the Ambler Mining District Industrial Access Road.
The Consolidated Right of Way application document is substantially complete and the U.S. Army Corps of Engineers has selected a third-party environmental engineer to manage an environmental impact statement on behalf of the Corps.
Southeast Alaska
Hecla Mining Co. announced preliminary first-quarter 2015 production results for its Greens Creek mine on Admiralty Island. The mine produced 2,035,966 ounces of silver and 15,239 ounces of gold, which represent a 14 percent and 2 percent increase, respectively, over the year-previous period. The increase was principally due to mine sequencing, higher silver grades and higher silver and gold recoveries. Changes made to the flotation circuit in the fourth quarter of 2014 continue to result in higher silver recovery, the value of which has outweighed a slight loss in zinc recovery. The mill operated at an average of 2,172 tons per day in the first quarter.
Coeur Mining Inc. reported first-quarter 2015 production results from its Kensington mine.
The mill processed 147,969 tons of ore, or nearly 1,650 tons per day, a significant decrease over the year-previous period.
The mine produced 33,909 ounces of gold grading 0.24 ounces per ton gold with an average recovery of 94.8 percent, a significant increase over the year-previous period.
Higher head grades offset lower throughput in the first quarter, generating strong production in line with fourth-quarter 2014 performance.
The company also released its plans for mining higher grade material from the nearby Jualin zone, located about 8,250 feet from current mining activities.
Resources in the Jualin zone continue to expand based on ongoing drilling and contain an average gold grade over three times the average reserve grade of 0.185 oz per ton.
Annual gold production between 2015 and 2020 at Kensington is expected to average about 128,000 oz and costs are expected to average $820/oz gold.
The current resource base at Jualin is 257,000 metric tons grading 0.46 oz/t (approx.
110,000 oz).
Development of the decline to Jualin is planned to begin in July 2015 with initial production expected in mid-2017 at a mining rate of about 250 tons per day, which is expected to increase to 500 tpd in early 2018 and represent roughly 27 percent of the average daily mill feed.
Recently completed drilling in Jualin Vein 4 cut mineralization about 1,000 feet away from the existing inferred resource included in the mine plan, demonstrating the possibility to expand resources along Vein 4.
High-grade drill results from other zones at Kensington as well as planned drilling in Veins 1, 2, 3, and 5 at Jualin suggest considerable upside exists to increase the size of the overall Jualin zone.
Significant results from Vein 4 include 4.3 feet grading 2.690 oz/t gold and an additional 2.6 feet grading 1.831 oz/t gold in hole JU14-X045 and 4.4 feet grading 0.559 oz/t gold in hole JU15-X006.
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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