The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Metals producers, especially gold and copper, are busy kicking the tires across the Last Frontier in hopes of snapping up bargains
I recently returned from the Geological Society of Nevada's once-every-five-years Symposium in Reno and was surprised to learn a number of things regarding Alaska, despite the symposium's tight focus on the Great Basin of the western United States.
First off, mineral exploration guru Brent Cook presented information suggesting we have reached and are "bumping along" the bottom of the current metals market slump.
Reminded me of an overloaded fixed-wing aircraft bumping down the runway.
Not that I have ever seen or ridden in such a craft, mind you .
just using my imagination.
I also was heartened to find out that I was not alone in seeing Alaska's fortunes brightening, for once, possibly ahead of the Great Basin's due to the fact that the latter is considered superb but mature exploration country, while Alaska clearly has superb potential but remains virtually unexplored.
Comparing notes with colleagues old and new, it turns out the producing companies, particularly the gold and copper producers, are the ones kicking tires and acquiring interests in Alaska.
The junior markets are still flat but that plus-three-year slump in the junior explorer market has caused joint ventures, leases and mining claims to unravel, providing well-heeled producers with opportunities to acquire at the bottom of the market.
Expect to see more producers become involved in Alaska's mineral industry this year.
Western Alaska
Teck Resources Ltd. and partner NANA Inc. announced first-quarter 2015 results from its Red Dog mine.
In the quarter, the mine produced 145,900 metric tons of zinc in concentrate, down slightly from the 151,700 metric tons produced in the year-previous period.
Zinc ore grade decreased slightly to 16.5 percent while mill recoveries were up slightly at 83.4 percent.
The mine also produced 30,700 metric tons of lead in concentrate.
Lead ore grade increased slightly to 4.6 percent, while mill recoveries decreased to 62.2 percent.
The mine posted a $108 million operating profit for the quarter, up significantly from the $88 million profit in the year-previous period.
Royalty costs were up significantly to $36 million versus $32 million in the first quarter of 2014.
Mill throughput was down slightly to 1.063 million metric tons versus 1.077 million metric tons in the year-previous period.
Zinc grade and recoveries were slightly lower than 2014, resulting in 4 percent less zinc production.
Higher lead grade than 2014 was partially offset by lower recoveries, which yielded 4 percent more lead production.
Redstar Gold Corp. announced that drilling commenced in late April on the first hole of its 2015 drilling program at its Unga gold project. This first phase of drilling will consist of eight diamond drill holes totaling approximately 1,450 meters targeting the Shumagin Gold Zone, located on Unga Island. The Shumagin zone is part of the much larger Shumagin Trend which extends 10 kilometers and parallels the 10-kilometer long Apollo-Sitka Trend, located three kilometers to the south.
Interior Alaska
Kinross Gold announced first quarter 2015 results from their Fort Knox mine. The mine produced 82,673 ounces at a cash cost of $672 per ounce versus 83,588 oz at a cash cost of $570 in the year-previous period. The mine's production declined slightly compared with the year-previous period's performance primarily due to planned lower grades. The mill treated 3.366 million metric tons of ore grading 0.64 grams per metric ton gold with a mill recovery of 82 percent. The heap leach saw additions of 3.554 million metric tons of ore grading 0.29 g/t gold.
Contango ORE Inc. announced that joint venture operator Royal Gold Inc. planned to commence exploration in late May at the partner's Tetlin gold project near Tok. The partners are planning a first phase of exploration to test new exploration targets, as well as a deeper test under the previously discovered Peak zone. Depending upon the success of this first phase of exploration, the joint venture may enter into a second phase of exploration to follow up on any new discoveries before the end of the year.
Alaska Range
Kiska Metals Corp. announced that the non-binding Letter of Intent with Alternative Earth Resources Inc. regarding the sale of the Whistler project has been terminated. Kiska has reduced the holding costs for the project to a manageable level, allowing the company to maintain the asset as it continues to seek joint venture or other arrangements on this prospective advanced stage exploration project.
Coventry Resources Inc. announced that it had completed a transaction that allowed the company to earn an 80 percent interest in the Caribou Dome copper project in the Valdez Creek District. The company also announced that it is finalizing evaluation of quotes from contractors interested in implementing ground geophysics and drilling programs in the coming months. Field work is expected to commence in late May or early June.
Northern Alaska
NovaCopper Inc. and Sunward Resources Ltd. announced that they have entered into an agreement whereby NovaCopper will acquire all of the issued and outstanding common shares of Sunward.
The new company is expected to have roughly $23 million in cash upon the closing of the transaction and plans to spend $8-10 million to advancing the Upper Kobuk Mineral project during the 2015 field season; and in particular, to complete in-fill drilling of the Arctic in-pit resources, and collection of in-pit geotechnical and metallurgical data.
The funds also will be utilized to advance assessment work at the Bornite deposit, specifically to evaluate potential synergies between the Arctic and Bornite deposits which are in close proximity.
The combination also will provide sufficient cash to advance the Arctic deposit towards feasibility over an estimated two- to three-year period, in parallel with infrastructure development activities related to the Ambler Mining District Industrial Access Road.
Southeast Alaska
Hecla Mining Co. announced first-quarter 2015 production results for its Greens Creek mine on Admiralty Island.
Silver production increased 14 percent over the same period of 2014, as the mine realized an 11 percent increase in silver ore grades and higher recoveries.
The cash cost, after by-product credits per silver oz, increased to $3.23/oz from $1.58/oz in the first quarter of 2014.
Changes made to the flotation circuit in the fourth quarter of 2014 continue to result in higher silver recovery.
Power costs were similar in both periods due to higher precipitation levels in Southeastern Alaska, resulting in continued availability of less expensive hydroelectric power.
Higher labor costs, due to increased staffing levels, and lower milled tons are the largest factors in an increase of mining and milling cost per ton by 10 percent and 4 percent, respectively, in the first quarter compared to the same period in 2014.
The average grade of ore mined during the quarter was 13.78 ounces of silver per ton, up significantly from the average grade of 12.44 ounces per ton that was mined in the first quarter of 2014.
During the first quarter, the mine produced 2,035,966 oz of silver, 15,239 oz of gold, 4,930 tons of lead and 13,920 tons of zinc.
The mill operated at 2,172 tons per day during the first quarter and processed 195,469 tons of ore during the quarter.
On the exploration front, definition and exploration drilling made progress in refining the NWW, 9A and Deep 200 South resources and advancing the Gallagher Fault Block and Deep 200 South trends.
Results from the NWW zone includes 27.9 oz per ton silver, 0.20 oz/t gold, 5.3 percent zinc, and 2.3 percent lead over 22.9 feet and 21.3 oz/t silver, 0.15 oz/t gold, 17.6 percent zinc, and 5.0 percent lead over 16.6 feet.
Drilling of the 9A zone has defined continuous mineralization along the southernmost portion of the mine contact.
Exploration drilling has defined a mineralized zone proximal to the Gallagher Fault for 430 vertical feet and 1,000 feet of strike length.
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.
Recent drill intersections of the folded upper bench mineralization include 67.8 oz/t silver, 0.04 oz/t gold, 3.8 percent zinc, and 2.2 percent lead over 11.7 feet along the upper limb and 29.9 oz/t silver, 0.04 oz/t gold, 2.9 percent zinc and 1.6 percent lead over 12.7 feet along the lower limb.
Mineralization remains open to the south.
Coeur Mining Inc. also reported year-end 2014 reserves and resources at its Kensington mine. The mine reported proven reserves of 417,000 tons grading 0.187 oz/t gold (78,000 ounces), probable reserves of 2,986,000 tons grading 0.185 oz/t gold (551,000 ounces), measured and indicated resources of 1,566,000 tons grading 0.244 oz/t gold (382,000 ounces), and inferred resources of 1,622,000 tons grading 0.351 oz/t gold (570,000 ounces).
Constantine Metal Resources Ltd. and partner Dowa Metals & Mining Co., Ltd. reported an updated independent mineral resource estimate for the Palmer copper-zinc-silver-gold project near Haines.
Using a $75 per-metric-ton cutoff value, the new inferred resource contains 8,125,000 metric tons grading 1.41 percent copper, 5.25 percent zinc, 0.32 g/t gold and 31.7 oz/t silver.
This new resource estimate is almost double the previously published resource and is based on 82 diamond drill holes from the South Wall and RW zones, 48 of which intersect the interpreted mineralized zones in 19,000 meters of core.
Metal grades were estimated using inverse distance cubed interpolation into a 3-D block model with block dimensions of 6 x 6 x 6 meters.
Solids were extended no more than 50 meters up-dip, down-dip and along strike from a drill hole; the inferred mineral resource includes only mineralization within 75 meters of a drill hole.
A total of five solids were constructed for sulfide mineralization: South Wall Zone 1, South Wall Zone 2-3, South Wall EM Zone, RW West, and RW East.
The company also noted that the deposit contains an unusually high barium content in the resource area, averaging 13 to 15.
The company will be evaluating the potential to produce a marketable barite concentrate.
Ucore Rare Metals Inc. announced results from ongoing testing of the use of Molecular Recognition Technology for the separation of rare earth elements from its Bokan-Dotson Ridge project.
The company reported that the final separation test recovered 99.2 percent of the samarium and 99.2 percent of the gadolinium in the test ore.
Pilot scale testing is planned next to confirm the successful laboratory results.
Through a series of steps, the planned process flow sheet is designed to recover each individual rare earth elements at > 99 percent purity.
The company also announced that it had raised $4 million on the sale of a royalty from the project.
The identity of the buyer was not divulged.
The royalty includes a gross royalty equal to 5 percent of gross sales from the company's first MRT installation or installations, payable until the recapture of the investment; and a net smelter return royalty equal to 2 percent of the net sales from the company's first Tier I production client.
A Tier I production client is considered to be one with an estimated gross revenue volume to Ucore exceeding C$50 million per year.
The company also announced an updated resource estimate containing indicated resources at a 0.4 percent cutoff of 4,787,900 metric tons grading 0.363 percent total light rare earth elements and 0.239 percent total heavy rare earth elements for a total rare earth element content of 0.602 percent.
At the same cutoff, the project also has inferred resources of 1,050,000 metric tons grading 0.365 percent total light rare earth elements and 0.237 percent total heavy rare earth elements for a total rare earth elements content of 0.603 percent.
The resource is based on a database of 97 diamond drill holes totaling 20,000 meters and 56 surface channels totaling 200 meters. 99 percent purity.
The company also announced that it had raised $4 million on the sale of a royalty from the project.
The identity of the buyer was not divulged.
The royalty includes a gross royalty equal to 5 percent of gross sales from the company's first MRT installation or installations, payable until the recapture of the investment; and a net smelter return royalty equal to 2 percent of the net sales from the company's first Tier I production client.
A Tier I production client is considered to be one with an estimated gross revenue volume to Ucore exceeding C$50 million per year.
The company also announced an updated resource estimate containing indicated resources at a 0.4 percent cutoff of 4,787,900 metric tons grading 0.363 percent total light rare earth elements and 0.239 percent total heavy rare earth elements for a total rare earth element content of 0.602 percent.
At the same cutoff, the project also has inferred resources of 1,050,000 metric tons grading 0.365 percent total light rare earth elements and 0.237 percent total heavy rare earth elements for a total rare earth elements content of 0.603 percent.
The resource is based on a database of 97 diamond drill holes totaling 20,000 meters and 56 surface channels totaling 200 meters.
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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