The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Province, metals-rich projects awaits next upswing in metals markets
Mineral and coal exploration spending in British Columbia has dropped nearly 30 percent a year since reaching a pinnacle of C$680 million in 2012, mirroring the downward trend seen during the same period in global exploration expenditures. Mineral-rich B. C., however, is preparing to take advantage of the next upswing in metals markets.
In June, British Columbia Energy and Mines Minister Bill Bennett said the province will provide Geoscience BC with C$5 million in additional funding. Since its formation in 2005, this non-profit organization has helped draw mineral exploration investment to the province with the information it has generated.
The Association for Mineral Exploration British Columbia, which advocated for the formation of Geoscience BC, said this ongoing funding gives the western province a global advantage.
"Compared to other areas around the world, B. C. truly has a competitive edge with regard to its publicly available geoscience data that facilitates mineral exploration and development," said AME BC President and CEO Gavin Dirom. "The continued funding ... will help maintain the province's competitive advantage, particularly when commodity and market conditions improve and foster an upswing in mineral exploration."
Bennett, meanwhile, focused a lot of his attention this year on diplomatic efforts with Alaska aimed at laying groundwork for an agreement that will provide the State of Alaska and Southeast Alaska stakeholders more influence in the process for permitting and monitoring mines in the extremely metal-rich transboundary region of northwestern British Columbia.
"We have had some really excellent discussions with the State of Alaska on what we can do to enhance (its) already existing role in our environmental assessment process," Bennett said during a nearly weeklong visit to Southeast Alaska.
Imperial Metals' Red Chris copper-gold mine, which is located upstream of Alaska, reached commercial production this summer.
At least six Northwest B.C. projects located in the transboundary region - Brucejack (Pretium Resources), Kerr-Sulphurets-Mitchell (Seabridge Gold), Schaft Creek (Copper Fox Metals-Teck Resources), Galore Creek (Novagold-Teck), Kisault (Avanti Mining) and Tulsequah Chief (Chieftain Metals) - are currently in various stages of advanced exploration and permitting.
Exploring the Golden Triangle
The Skeena District, which hosts the six advanced-stage northwestern B.C. projects and numerous other gold, copper and silver deposits and prospects - was the target of some C$161 million of mineral exploration in 2014 and continues to be popular among explorers this year.
The wide swath of prospective geology sweeps southward from Yukon Territory along the entire Southeast Alaska Panhandle.
The Golden Triangle, a particularly gold- and copper-rich area within the Skeena district, continues to be a particularly favored location for mineral exploration.
After completing a C$8.1 million financing in June, the aptly-named Skeena Resources Ltd. kicked off a roughly 7,500-meter drill program at its Spectrum copper-gold property, located about 45 kilometers west of Imperial Metals' recently commissioned Red Chris Mine.
Skeena Chairman Ron Netolitzky is credited for the discovery of two world-class Golden Triangle mines - Eskay Creek and Snip - and believes Spectrum has all of the indicators of a third.
"Spectrum is one of those very rare, high-grade gold occurrences that would attract any explorationist, even in a challenging, risk-adverse market," Netolitzky said upon Spectrum signing a deal on the property in 2014.
The Schaft Creek Joint Venture - 75 percent Teck Resources Ltd. and 25 percent Copper Fox Metals Inc. - carried out a C$4.8 million program at Schaft Creek, a Golden Triangle copper-gold project located about 80 kilometers southwest of Red Chris.
This work included a 2,500-meter drill program to test the depth of surface copper-gold mineralization at the LaCasse zone, located north of the area included in the current mine plan for Schaft Creek.
A feasibility study completed in 2013 outlined a 130,000-metric-ton-per-day open-pit mine operating for 21 years at Schaft Creek based on proven and probable reserves of 940.8 million metric tons averaging 0.27 percent copper, 0.19 grams per metric ton gold, 0.018 percent molybdenum and 1.72 g/t silver.
This year's work also includes the continuation of optimization studies started in 2014.
Teck completed minimal work at GJ and Galore Creek, two other Golden Triangle projects in which it is involved.
At the southern end of the Golden Triangle, two companies continued to expand and confirm deposits at their advanced-stage projects.
Pretium Resources Inc. completed some 50,000 meters of drilling that ranged from confirming the early-mine resource at the Valley of the Kings to grassroots exploration of outlying targets on the encompassing Brucejack gold property.
The plan for mining the Valley of the Kings deposit at Brucejack is based on 13.6 million metric tons of reserves averaging 15.7 grams per metric ton (6.9 million oz) gold. This year, Pretium carried out a 40,000-meter underground infill drill program that bolstered the confidence in the style and grade distribution of the gold mineralization where mining is slated to begin.
On the surface, the company is carrying out 10,000 to 15,000 meters of exploration drilling at two exploration targets within five kilometers (three miles) of the Valley of the Kings.
Pretium obtained two key permits - the provincial Environmental Assessment Certificate and a positive Environmental Assessment Decision Statement from the federal Minister of the Environment - in 2015.
A mine at the Valley of the Kings is expected to average roughly 404,000 oz. of gold annually over 18 years. Pretium is targeting a 2017 start-up.
Immediately west of Brucejack, Seabridge Gold Inc. is continuing to test for higher grade core zones beneath the near-surface porphyry deposits that make up its KSM project.
In March, the company announced an inferred resource of 782 million metric tons grading 0.54 percent (9.3 billion pounds) copper and 0.33 grams per metric tons (8.2 million ounces) gold for Deep Kerr, one of the core zones at KSM.
Seabridge started off the 2015 field season by testing for a core zone beneath Mitchell, the largest of the KSM deposits. While drilling here did encounter zones of copper and gold that are expected to expand the block cave operation planned for Mitchell, the company said these holes encountered evidence of faulting that needs to be analyzed before targeting the core zone with additional holes.
"Although we are excited about where this discovery could lead, we have decided to scale back this year's Mitchell program by about C$2.2 million until we have completed our analysis of all the available data. The balance of the program will concentrate on expanding the block cave shapes associated with the Deep Kerr deposit," Seabridge said in a statement.
Together, the near-surface and deep zones at KSM contain 2.2 billion metric tons of reserves averaging 0.55 g/t (38.2 million oz.) gold and 0.21 percent (10 billion pounds) copper.
Beyond the triangle
South of the Golden Triangle, Dolly Varden Silver Corp. continues to seek and expand high-grade epithermal deposits similar to the Brucejack project located about 100 kilometers (60 miles) to the north, and volcanogenic massive sulfide projects like Eskay Creek located about 25 kilometers (20 miles) farther to the north.
The company started off the 2015 exploration at its namesake property with an economical program that included mapping, sampling and historical data analysis. In addition to prioritizing targets for future drilling, this work informed a maiden resource for the Dolly Varden property.
The initial NI 43-101-compliant resource for Dolly Varden includes an indicated resource of 31.8 million ounces of silver contained within 3.07 million metric tons of material averaging 321.6 grams (10.34 oz) of silver per metric ton for the Dolly Varden, North Star, Torbrit, and Wolf deposits.
Dolly Varden, the highest grade of these deposits, hosts 10.5 million ounces of this silver in 522,000 metric tons averaging 625.1 g/t (20.1 oz/t) silver. Dolly Varden interim President and CEO Rosie Moore said this robust mineral resource "means that this project warrants attention even at today's metal prices."
The four deposits also host 10.8 million ounces of silver at a grade of 373.3 g/t silver in the inferred category.
On the same day the resource was published, Skeena Resources revealed an offer it made to acquire Dolly Varden in a shares exchange deal valued at roughly C$4.2 million.
"The timing of the Skeena offer was highly opportunistic, given that it was made less than nine hours after the company publicly disclosed its resource estimate," Dolly Varden said in response to offer.
Skeena, which characterized a counter-offer made by Dolly Varden as unrealistic, said it is open to negotiating a merger that would be acceptable to management and be beneficial to the shareholders of both companies.
Hecla Mining and another major shareholder provided Dolly Varden with a C$1.5 million loan to carry out a 2,200-meter late season drill program at the high-grade silver property.
To the north of the Golden Triangle, Carmax Mining Corp. continued to advance its Eaglehead copper-gold-molybdenum project with an economical exploration program that included data compilation, re-logging of core and two drill holes to test a chargeability anomaly in the Pass zone area of the project.
Zinc-rich trough
The Kechika Trough, a finger of the Selwyn Basin that stretches some 500 kilometers into north-central B.C., makes the Omineca region of the province a popular destination for explorers seeking sedimentary exhalative zinc-lead deposits.
Key among these explorers is Canada Zinc Metals Corp., which owns a band of properties that blankets 79,870 hectares (197,359 acres) of the Kechika SEDEX belt.
The company has divided this land package into two projects - Akie, which hosts the Cardiac Creek deposit, and the Kechika regional properties, a series of property blocks that extend roughly 140 kilometers (85 miles) northwest of Akie.
According to a calculation completed in 2012, Cardiac Creek hosts an indicated resource of 12.7 million metric tons grading 8.4 percent (2.4 billion pounds) zinc, 1.7 percent (472 million lbs.) lead and 13.7 g/t (5.6 million oz) silver; and an inferred resource of 16.3 million metric tons grading 7.4 percent (2.6 billion lbs.) zinc, 1.3 percent (482 million lbs.) lead and 11.6 g/t (6.1 million oz) silver.
This year, Canada Zinc funded a 5,000-meter drill program that tested the down-dip extents of a high-grade core to the Cardiac Creek deposit.
The first hole of the program, A-15-121, cut 64.3 meters (true width) averaging 6.1 percent zinc, 1.3 percent lead and 14.24 g/t silver, including 28.5 meters averaging 10.2 percent zinc, 2.3 percent lead and 20.45 g/t silver.
Targeting the lateral extension of the core zone, hole A-15-122 cut 39.2 meters (true width) averaging 5.8 percent zinc, 1.1 percent lead and 11.16 g/t silver, including 23.4 meters averaging 8.6 percent zinc, 1.7 percent lead and 14.64 g/t silver.
"Assays from the first two holes of the 2015 exploration drill program continue to confirm our understanding that the high-grade core of the deposit continues laterally and at depth," said Canada Zinc President and CEO Peeyush Varshney.
In 2013, Teck Resources Ltd. and Korea Zinc Co. Ltd entered into an agreement to option three of Canada Zinc's regional properties that stretch northwest from Akie - Pie, Cirque East and Yuen. Under this agreement the Teck-Korea Zinc joint venture can earn up to 70 percent interest in these contiguous claim blocks by investing C$8.5 million in them by 2019, including C$1.5 million by the end of 2015.
The partners invested roughly C$500,000 into these properties in 2014, leaving about C$1 million to meet the 2015 earn-in obligations.
Early in the year, Teck flew an 840-line-kilometer gravity gradiometry survey over the Pie, Cirque East and Yuen properties. At the same time, Canada Zinc flew a 40-line-kilometer survey over Akie property to the south and the Mt. Alcock and Yuen North to the north of the Teck-Korea Zinc optioned claims.
Together, these surveys provided detailed information that will help the companies identify massive sulfide bodies along a contiguous 45 kilometers of the Kechika Trough.
"The gravity gradiometry survey is a key component in Canada Zinc Metals' exploration strategy, representing an effective tool to rapidly assess the company's Akie property and several of the other extensive tenure holdings in the Kechika Trough," Varshney explained.
Canada Zinc hopes the zinc-rich deposits on these extensive holding will help supply a predicted global shortage in the galvanizing metal. Meanwhile, the explorer, like the province as a whole, is readying itself to take advantage of the next upswing in the metals markets.
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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