The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Manmade, natural forces combine to aggravate modest exploration, development activities across state, while acquisitions continue
Over the past month Alaska's mining industry has suffered a perfect storm of manmade and natural issues that read like something from a pulp fiction novel.
On the man-made side of the ledger, gold, silver, copper, and lead prices have all hit 5-year lows and zinc prices continue to slide lower.
Mining equity markets are still in severe decline, making it extremely challenging for junior exploration companies to raise the risk capital necessary to explore their Alaska projects.
Producing companies are a bit more optimistic and have started looking more seriously at new acquisitions.
But after the billions written down on bad investments in the past several years, caution and due-diligence will be the watch-words for any significant new property acquisition.
On the natural issues side of the ledger, Alaska swung from one of the coolest, wettest summers in 2014 to one of the driest, hottest summers this year. Thrown in for good measure were record-setting electrical storms that have caused wildfires from one end of the state to the other. The smoke, fire and accompanying surface and/or air travel restrictions have adversely affected some of the few exploration programs out there. Although it may not sound like a typical Alaska summer for the mining industry, it is typical in one sense: It is never dull in Alaska!
WESTERN ALASKA
Novagold Resources Inc. announced second-quarter financial results and updates for its flagship Donlin gold project, a 50:50 joint venture with Barrick Gold Corp. During the quarter the U.S. Army Corps of Engineers, the lead permitting agency for the venture, addressed all initial comments from the six cooperating agencies prior to completing the Donlin Gold preliminary draft environmental impact statement, a major step in the National Environmental Policy Act permitting process leading to the publication of the draft environmental impact statement.
The partners also continued community outreach and work force development initiatives in Alaska with increased efforts through the spring and summer months.
The Corps is working toward the publication of the draft EIS around year-end 2015 and continues to anticipate issuance of the final Donlin Gold EIS in early 2017.
Extensive public comment and review periods will accompany both documents.
In addition to actively participating in the National Environmental Policy Act process, the company is working with other agencies on major permit applications for the project.
These include the air quality permit; the water discharge and use permits; the rights-of-way and lease applications for the gas pipeline; the engineering design, evaluation and authorization of the dams proposed for the project, including the tailings storage facility dam; and the Clean Water Act section 404 and 10 permits, including finalizing the determination of the impacts on wetland areas and proposing options for compensatory mitigation.
The partners indicated that the project expended approximately US$7.3 million during its second quarter.
In 2015, Novagold expects to spend about US$12.6 million to fund its share of permitting and related expenditures at the project as well as $1.5 million for joint studies with partner Barrick Gold.
Northern Dynasty Minerals Ltd. got some welcome news from the Alaska Supreme Court which ruled that the Lake and Peninsula Borough's 2011 initiative seeking to restrict large-scale mining in the Bristol Bay region seriously impedes a regulatory process set out in state law, and is therefore unenforceable.
The initiative would have prevented development and mining at the Pebble project and other large-scale projects.
In its decision, the Supreme Court found the initiative impedes implementation of state law putting Alaska's Department of Natural Resources in charge of matters affecting the exploration, development and mining of state mineral resources, because the initiative "purports to give the borough veto power over mining projects on state lands within its borders."
Millrock Resources Inc. announced that First Quantum Minerals Ltd. has exercised its option to joint venture the Alaska Peninsula copper-gold project from Millrock.
The 2015 exploration budget of US$2.0 million will focus on a drilling program consisting of about eight holes, totaling roughly 2,400 meters of drilling on the Dry Creek and the MDB prospects.
Porphyry style copper-gold mineralization is the target at both locations.
Surface and airborne surveys conducted by partners in 2014 identified and characterized zoned rock alteration and metallic mineral distribution patterns typical of this deposit type.
Drilling will be carried out on surface lands owned by Far West Inc. and Chignik Lagoon Native Corporation, two Alaska Native corporations with which Millrock has made surface access agreements.
Bristol Bay Native Corporation owns the subsurface mineral rights and surface rights at certain locations.
Millrock has an exploration agreement with an option to lease the mineral rights from Bristol Bay Native Corporation.
Redstar Gold Corp. announced additional results from the eight-hole drill program completed at the Shumagin zone of its Unga gold project.
Highlights included drill hole 15SH011, which intersected 1.9 meters grading 202 grams per metric ton gold and 82 grams per metric ton silver; drill hole 15SH012, which intersected two meters grading 35.3 g/t gold and 209 g/t silver and an additional three meters grading 16.95 g/t gold and 183 g/t silver; drill hole 15SH013, which intersected four meters grading 11.62 g/t gold and 95.6 g/t silver, and drill hole 15SH018, which intersected five meters grading 9.35 g/t gold and 27.62 g/t silver, including one meter grading 41.2 g/t gold and 130.0 g/t silver.
Overall the precious metal-bearing Shumagin vein system has a strike extent of more than 1.2 kilometers and a depth of at least 330 meters as outlined by drilling and surface trenching.
Drill results indicate that the thickest portions of the Shumagin vein system consists of a zone of coalesced veins and vein breccias comprising an "internal breccia vein" that ranges from about seven to10 meters in true thickness and is fringed on both the hangingwall and footwall by stockwork and subsidiary breccia veins that expand the width of the vein system in areas to about 12-20 meters in true thickness.
The internal breccia vein normally exhibits the highest gold-silver grades and the highest overall grade thicknesses, but high-grade mineralization also has been observed to be associated with syn-mineral dikes within the vein system.
Drilling also revealed an older, Ginguro-sulfide textured epithermal breccia vein intact along the footwall andesite/diatreme breccia contact that was not destroyed by late-stage Shumagin-style vein breccias.
The multi-episodic Ginguro vein breccia consists of banded, crustiform and colloform black-gray chalcedony, green-clay, carbonate, rare amethyst and Ginguro-sulfides (crustiform-colloform pyrite +/- marcasite +/- arsenopyrite?) that commonly occur as breccia bodies or as bodies marginal to vein breccias within footwall andesite.
Ginguro-style sulfides have been observed as clasts within secondary quartz-chalcedony vein breccias containing galena, sphalerite and minor chalcopyrite, and have elevated base metal mineralization.
The Ginguro-sulfides exhibit gold values of one-to-four g/t gold with a distinct elevated arsenic, antimony and mercury geochemical signature that does not exist within the Shumagin vein breccias.
Overall, the system exhibits evidence of multiple hydrothermal events with distinctive mineralization associated with each event.
Additional work is planned for 2015, including continued step-out drilling towards the northeast for an additional 350 meters where exposures of the Shumagin vein system returned high-grade intercepts at shallow depths from drilling during the 1980s.
ALASKA RANGE
Coventry Resources Inc. announced that diamond core drilling had commenced at its Caribou Dome copper project in the Valdez Creek District.
The initial hole, CD15-01 was drilled to validate results reported from historic exploration drilling that targeted the upper portions of Lense 6.
Two significant zones of mineralization were intersected in CD15-01, approximately 12 and 4 meters thick respectively.
The depths and thicknesses of this mineralization are in line with the company's expectations.
Assays are pending on this drilling.
The company also announced that initial results from three-dimensional induced polarization (3DIP) surveys have extended over roughly 1,500 meters of strike.
This survey has highlighted multiple highly chargeable zones that coincide with known mineralization together with comparable responses that appear to highlight significant extensions of the known copper mineralization.
Additional discrete chargeability anomalies in prospective geological settings have also been delineated.
Final interpretation work is ongoing and when completed the 3DIP data will be used to help guide future drilling.
Strongbow Exploration Inc. announced that it has finalized the terms of its acquisition of each of the Sleitat and Coal Creek tin properties with Osisko Gold Royalties Ltd and Mr. R. Netolitzky, and their respective wholly-owned companies, Brett Alaska Resources Inc. and Thor Gold Alaska Inc. Thor holds a 20 percent undivided interest in the Sleitat property and Brett holds an 80 percent undivided interest in the Sleitat property and a 100 percent interest in the Coal Creek property.
The final agreement contemplates the direct acquisition of the properties by Strongbow, rather than the acquisition of Brett and Thor as originally envisioned.
Terms of the acquisition remain unchanged.
Technical information regarding the properties can be found in two technical reports titled "Technical Report on the Sleitat Tin-Silver Exploration Target Southwest Alaska" and "Technical Report on the Coal Creek Tin Exploration Target Southcentral Alaska." The reports have been filed under Strongbow's profile on the SEDAR website at http://www.sedar.com
NORTHERN ALASKA
NovaCopper Inc. announced the start of work on the Arctic deposit pre-feasibility study at its Upper Kobuk project in the Ambler District.
The company has approved a US$5.5 million budget for the 2015 field season to complete in-fill and geotechnical drill programs during July and August.
This field season's work program will include completion of about 2,500 meters of in-fill drilling at the Arctic deposit designed to improve the confidence level of the resource model with the goal of re-categorizing the in-pit inferred resources to measured and indicated.
An updated resource estimate will be completed later in the year.
In addition, other areas of study will include: 1) geotechnical and hydrology drilling to better understand the wall rock characteristics and hydrology within the open pit area; 2) waste rock characterization studies to assess acid generation potential; 3) wetlands delineations studies; and 4) continued environmental baseline studies.
This work will form the basis for completing a pre-feasibility study on the Arctic deposit.
The company also plans to advance assessment work at Bornite with the goal of evaluating potential synergies between the Arctic and Bornite deposits.
SOUTHEAST ALASKA
Hecla Mining Co. announced preliminary production results for the second quarter 2015 and updated annual production estimates at its Greens Creek mine.
The mine's second-quarter production of 1,856,125 ounces of silver exceeded the second quarter of 2014 by 10 percent, while gold production of 13,753 oz was 8 percent lower.
The higher silver production was a result of higher recoveries and grade, partially offset by slightly lower tonnage.
Silver recoveries increased 8 percent, to 75.4 percent over the prior-year period due to changes in the flotation circuit to more efficiently recover additional lead, and by introducing carbon dioxide for pH control in the lead flotation circuit.
The reduction in gold production was the result of lower tonnage and grade, partially offset by increased recoveries due to the previously described plant improvements.
The mill operated at an average of 2,194 tons per day in the second quarter.
As a result of both higher grades and recoveries, the company now expects Greens Creek to produce 7.7 million to 8.0 million oz silver, an increase over the previous expectation of 7.3 million oz silver.
Coeur Mining Inc. announced second quarter 2015 production results from its Kensington gold mine near Juneau.
Second-quarter production is estimated at 29,845 ounces of gold, a significant increase over the 29,089 oz gold produced in the second quarter of 2014.
The mine processed 170,649 tons of ore grading 0.18 oz of gold per ton during the quarter.
Average recovery was 94.9 percent.
Mill throughput was steady at 1,875 tons per day average.
The increased production was the result of a higher throughput offset by lower gold grades during the quarter.
Work on the decline into the Jualin deposit is expected to begin in the third quarter.
Estimated 2015 total production from Kensington is 110,000 to 115,000 ounces of gold.
Ucore Rare Metals Inc. announced that it has commissioned the construction of a pilot plant based on Molecular Recognition Technology. The purpose of the Plant will be to test the use of this technology for the separation of rare earth elements at bulk scale. The test unit, with the project name "SuperLig-One," will be constructed and then moved to a third-party facility for an independent review of pilot-scale test procedures. One high-priority source of pilot-scale test material for the plant will be the company's Bokan-Dotson Ridge project.
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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