The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Low metals prices continue to hamper industry, despite robust production and significant advances in development, acquisitions
Over the past month, three of Alaska's large mines reported strong quarterly results; two projects in advanced permitting and pre-feasibility reported recent progress; and three exploration properties changed hands.
The latter is a trend putting 2015 on course to be one of the most active years for new acquisitions in the past decade.
Placer gold production has all but ceased for the year; however, output from Alaska's placer mines is not likely to be known with any certainty until early in the New Year.
Despite the positive news, metal prices continue to weigh heavily on producers, particularly producers of lead and zinc like Red Dog and Greens Creek.
Lead and zinc prices remain mired at five-year-plus lows.
Gold and silver prices increased slightly and stabilized somewhat in the latter half of the month but still remain at levels not seen since 2009.
Western Alaska
Teck Resources Ltd. and partner NANA Regional Corp. posted third-quarter 2015 results from their Red Dog mine, which turned in operating profits of US$196 million versus an operating profit of $206.3 million in the same period in 2014.
For the quarter, the mine generated in 130,200 metric tons of zinc and 26,700 metric tons of lead concentrate versus 147,700 metric tons of zinc and 29,100 metric tons of lead, respectively, in the third quarter of 2014.
The mine sold 186,300 metric tons of zinc and 52,300 metric tons of lead during the third quarter.
Average zinc and lead grades mined were 16.8 percent and 5.1 percent respectively, versus 16.5 percent and 4.5 percent in the third quarter of 2014.
Mill throughput was 937,000 metric tons in the third quarter versus 1,079,000 metric tons milled in the third quarter 2014.
Zinc grade and recovery was similar to 2014, however, mill throughput was lower than the third quarter of 2014 due to lower throughput rate and unplanned mill downtime resulting in 12 percent less zinc production.
Higher lead grade offset by lower recovery and throughput than in 2014 resulted in 8 percent less lead production.
Operating costs in the current quarter increased due to the effects of the stronger U.S. dollar.
Capitalized stripping costs were US$11 million in the third quarter compared with US$9 million a year ago.
The operation paid a total of US$64 million in royalties in the third quarter.
The 2015 shipping season was completed in late October with zinc concentrate shipments estimated at 1.048 million metric tons of zinc concentrate shipped.
NovaGold Resources released its third-quarter financial results and updates for its Donlin Gold project, a 50:50 joint venture with Barrick Gold.
The activities this quarter consisted mainly of permitting and outreach efforts.
The environmental impact statement continued to advance with the cooperating agencies and the project submitting preliminary draft environmental impact statement comments.
Once the draft EIS is published, the public comment period, which is anticipated to take about five months, will follow.
The U.S. Army Corps of Engineers continues to work toward the publication of the final project EIS in 2017.
Work also progressed on other major permit applications with the agencies, such as working toward finalizing the air-quality permit; completing approaches to water management, treatment, and discharge to facilitate issuance of the water discharge and use permits; obtaining concurrence of the Calista Corporation and The Kuskokwim Corporation on relocating existing trails that cross the project site, advancing the rights-of-way and lease applications for the gas pipeline, and finalizing plans for the Clean Water Act section 404 permitting process.
Project teams also visited with more than 50 villages throughout the region over the past nine months by giving project updates and encouraging participation in and feedback at the upcoming draft EIS public meetings, as well as delivering safety messages and donating lifejackets.
Expenses at the project for the third quarter were US$5.606 million, bringing year-to-date 2015 expenditures to US$11.906 million for the first nine months of 2015.
An independent review by The Cohen Group of the U.S. Environmental Protection Agency's actions in and around the Pebble project resulted in another condemnation of the EPA's tactics in deciding to pre-emptively restrict mining in the Bristol Bay watershed. The report concluded that the review had not treated all stakeholders fairly and questioned whether the EPA had undertaken the review with a pre-determined outcome as its goal. The report concluded that the EPA had not followed existing permitting requirements laid out in the National Environmental Policy Act and recommended that the Inspector General and Congress investigate EPA's actions regarding the project.
Interior Alaska
Northern Empire Resources Corp. and Sonoro Metals Corp. reported results from its phase 2 exploration program on the Hilltop Project in the Richardson Mining District of Alaska.
The work included collection of 355 soil samples, 42 rock samples, and the resampling of a specific section of trench 5 from phase 1 exploration efforts.
During the period between the phase 1 and phase 2 exploration programs, erosion at trench 5 exposed a larger portion of an Arsenopyrite-bearing quartz vein sampled in phase 1.
Resampling of trench 5 during phase 2 returned high-grade gold values averaging 9.71 grams per metric ton gold over four meters (versus 2.337 g/t gold from this interval in phase 1).
The resampling highlighted gold in rock samples of 11.7 g/t from 0 to1 meters and 26.5 g/t from 1.0 to 2.0 meter in trench 5.
Gold values in the phase 2 soils range from 2.5 to 60 parts per billion and exhibit a positive correlation with arsenic, bismuth, antimony, tellurium, tungsten and lead suggestive of intrusive-related gold deposits.
Infill soil samples at Hilltop South expanded and substantiated a strong east-west trending gold-in-soils anomaly, measuring 1.8 kilometers long by 500 meters wide.
Infill soils were collected at Hilltop North in an area of anomalous top-of-bedrock soils which were collected during the 2011 season by a previous exploration group.
Infill lines along previously sampled anomalous soils further confirmed the anomalous nature of the gold in soils values and also better defined the anomalous area across 100-meter spaced lines.
Anomalous reconnaissance soil samples and rock float samples collected in the Mosquito Creek drainage area (6 kilometers southwest of Hilltop) highlight this area for potential follow-up work in 2016.
Infill soil samples collected in Phase 1 between sections of anomalous sample lines at the Birch Hill Conductor (3 kilometers southwest of Hilltop) further highlight the anomalous nature of this zone.
Millrock Resources Inc. said it has acquired an option to purchase the Liberty Bell gold-copper project in the western Bonnifield District near Healy.
The option was granted by the property owner Boot Hill Gold Inc. and requires Millrock to pay the annual claim rentals and perform adequate assessment work to maintain the property in good standing during the option period.
Millrock may exercise the option to purchase a 100 percent royalty-free interest by paying $600,000 before March 31, 2018.
The project is prospective for replacement-style gold mineralization, gold-bearing quartz veins, stockworks and shears, and intrusion-hosted gold.
The past-producing Liberty Bell Mine produced 8,400 ounces of gold were produced from 17,500 short tons of ore (2.087 oz. of gold per ton) in 1932-33.
Following several phases of exploration in the 1970s and 1980s, NERCO Minerals reported a resource estimate in 1987 of about 150,000 oz. of gold in rock grading 0.08-0.10 oz. of gold per ton.
The most recent exploration conducted on the property was completed from 2007 to 2010, by a subsidiary of New Gold Inc. which carried out a comprehensive exploration program focused on drilling efforts on the western portion of the property.
The presence of significant levels of copper within the Liberty Bell gold mineralization is unlike most other copper-deficient intrusive-related gold occurrences in the Tintina Gold Belt of Interior Alaska-Yukon Territory.
However, recent exploration by Contango ORE Inc. at its Peak deposit near Tok, Alaska, revealed the presence of a previously unrecognized type of late Cretaceous gold-copper mineralization that shares many similarities with the alteration and mineralization described at Liberty Bell.
Gold and copper at the Peak deposit are associated with elevated silver, bismuth and arsenic in a pyrrhotite-bearing distal skarn setting similar to mineralization at the Liberty Bell property.
Peak deposit-style gold skarn mineralization had not yet been discovered when the most recent exploration was conducted at Liberty Bell.
Millrock intends to review existing data and build a comprehensive exploration plan, after which the company will seek joint venture partners to fund exploration and thereby earn an interest in the project.
Alaska Range
Coventry Resources Inc. reported additional diamond core drilling results from its Caribou Dome copper project in the Valdez Creek Mining District.
Six step-out holes were drilled to extend mineralization at Lense 7/8.
Significant results include 3.5 meters at 9.3 percent copper from 72.9 meters and 1.9 meters at 10.8 percent copper from 116.0 meters in hole CD15-15, 2.0 meters at 5.2 percent copper from 24 meters and 2 meters at 13.9 percent copper from 79.4 meters in hole CD15-19 and 6.4 meter at 2.8 percent copper from 173.3 meters in hole CD15-21.
The high‐grade mineralization intersected in CD15‐15 appears to correlate with the down‐dip extensions of mapped Lenses 3 and 7.
In addition, mineralization in the 7/8 Lense remains open in both strike directions.
In addition, at the Lense 2 target, hole CD15-18 returned 3.4 meters at 4.8 percent copper from 51.6 meters.
Assays are pending from three additional holes at Lense 2.
The company's field efforts in 2015 recently concluded after a ground IP program and 4,300 meters of drilling in 28 drill holes.
The company also completed reginal exploration and claim staking over 15-kilometers along the favorable time-stratigraphic horizon that hosts the project's mineralization, commenced, metallurgical testing and conducted initial baseline environmental work.
Kiska Metals Corp. and funding partner First Quantum Minerals posted results of exploration work on the Copper Joe porphyry project in the western Alaska Range.
Exploration in 2015 discovered multiple porphyry centers and indicates potential for a very large system.
Work included geologic mapping, geophysics, and the use of a proprietary 3-D lithogeochemical modelling technology produced compelling new drill targets, including outcropping chalcopyrite mineralization associated with Early Dark Micaceous (EDM) veins.
The project hosts an extensive area of phyllic alteration, including local zones of potassic alteration, porphyry-style veining with chalcopyrite mineralization, and diatreme, pebble dyke, and magnetite breccias in Eocene and Miocene intrusive rocks.
Mineralized intrusions of this age represent a relatively unrecognized yet potentially significant geological province in the Alaska Range.
Work on the property this season included detailed alteration and vein mapping, alteration mineral chemistry mapping (white-mica hyperspectral analysis and chlorite chemistry), a 12 square kilometer full-tensor magnetotelluric geophysical survey, and the application if a proprietary 3-dimensional porphyry footprint lithogeochemical modeling method.
This work has defined two compelling porphyry targets, the Evening Star and Morning Star prospects.
The Evening Star prospect is defined by a 2.5 kilometer diameter area of intense phyllic alteration that hosts an outer margin with significant D-style quartz-pyrite veining and a one-kilometer-wide inner zone defined by significant banded quartz-molybdenite veining.
Porphyry footprint lithogeochemical modeling, hyperspectral white-mica analysis, and chlorite chemistry analysis suggests that this inner zone represents the high-level core of the porphyry system.
Geophysical surveys indicates that this inner zone is centered on a discrete, one-kilometer-wide, conductivity low anomaly about 650 meters below surface.
This anomaly is draped by a 2.5-kilometer-wide chargeability high induced polarization geophysical anomaly.
The core of anomaly defines a compelling drill target.
The newly-recognized Morning Star prospect occurs 2.2 kilometers to southwest of the Evening Star prospect in a relatively low-lying area mostly covered by glacial till.
Morning Star is defined by narrow outcrop exposures in creek gullies that contain chalcopyrite mineralization in EDM veins and B-style quartz veins over a 400-meter-wide area.
Previous grab samples collected from this area returned up to 0.73 percent copper and 0.42 g/t gold.
Morning Star has yet to be tested by geophysical surveys or drilling.
Northern Alaska
NovaCopper Inc. and partner NANA Regional Corp. released results from core drilling completed at its Arctic volcanogenic massive sulfide deposit at the company's Upper Kobuk Mineral Project in the Brooks Range.
During 2015 the company completed 14 diamond drill holes for a total of 3,056 meters of core.
The 2015 in-fill drill program was designed to evaluate vertical and lateral continuity of the high-grade polymetallic copper, gold, silver, lead and zinc mineralization, and support upgrading of inferred resources to measured and indicated resource classifications within the area of the proposed Arctic open-pit.
Significant drill results include hole AR15-0145, which intersected four mineralized intervals - 22 meters of 3.86 percent copper, 0.86 g/t gold, 71.0 grams per metric ton silver, 1.15 percent lead, and 5.36 percent zinc, and 5 meters of 3.82 percent copper, 0.68 g/t gold, 74.7 g/t silver, 1.60 percent lead, and 7.21 percent zinc, and 6.5 meters of 6.67 percent copper, 0.52 g/t gold, 31.4 g/t silver, 0.20 percent lead, and 3.38 percent zinc, Hole AR15-0136 intersected two mineralized intervals, including 32 meters of 3.08 percent copper, 1.56 g/t gold, 45.9 g/t silver, 0.18 percent lead, and 2.72 percent zinc, and 9 meters of 7.36 percent copper, 2.34 g/t gold, 219.3 g/t silver, 0.77 percent lead, and 5.00 percent zinc.
Hole AR15-0138 intersected 18 meters of 4.93 percent copper, 0.74 g/t gold, 102.0 g/t silver, 0.94 percent lead, and 5.11 percent zinc.
Hole AR15-0144 intersected three mineralized intervals, including 11 meters of 7.10 percent copper, 0.70 g/t gold, 80.4 g/t silver, 1.09 percent lead, and 9.04 percent zinc, and 9 meters of 4.22 percent copper, 0.75 g/t gold, 76.7 g/t silver, 0.82 percent lead, and 3.46 percent zinc.
These drill results, along with concurrent and on-going engineering studies, will be used in support of a pre-feasibility study of the Arctic deposit.
This news comes shortly before the State of Alaska released up to US$3.6 million to be used by the Alaska Industrial Development and Export Authority to conduct environmental impact scoping studies on the Ambler Road Project, stalled early this year when budget woes struck the State of Alaska.
While the news was welcomed by the industry, it is a small step along the path toward a full-blown EIS, which is required before road construction can begin.
Southeast Alaska
Hecla Mining Co. reported preliminary third-quarter 2015 production results for its Greens Creek mine on Admiralty Island. The mine produced 1,922,037 oz. of silver and 14,376 oz. of gold, which represent a 5.3 percent and 6.3 percent production increase, respectively, over the year-previous period. The higher silver production was a result of higher recoveries and tonnage, partially offset by slightly lower grades. The mill operated at an average of 2,233 tons per day in the third quarter.
Coeur Mining Inc. posted third-quarter 2015 production results from its Kensington gold miner near Juneau.
Third-quarter production is estimated at 28,688 oz. of gold, a slight decrease over the 30,773 oz. of gold produced in the third quarter of 2014.
The mine processed 165,198 tons of ore, grading 0.19 oz. of gold per ton during the quarter.
Average recovery was 93.6 percent.
Production declined four percent in the third quarter due to lower recovery rates and mill throughput, partially offset by a slight increase in head grades.
Work on the decline into the Jualin deposit began in the third quarter with underground drilling of Jualin expected to begin during the first quarter of 2016.
Estimated 2015 total production from Kensington is 110,000 to 115,000 oz. of gold.
Millrock Resources Inc. said it has acquired the option to purchase the former-producing Apex El Nido gold mine on Chichagof Island.
The option was granted by the property owner, Apex El Nido Gold Mines Inc. Exercisable until Aug. 1, 2018, the option can be maintained by making annual payments of US$1,000 per year and by paying the annual federal U.S. claim rentals on behalf of the owner, which presently total US$4,500 per year.
Millrock may purchase a 100 percent royalty-free interest in the property by paying the owners a minimum of $100,000 if exercised before March 31, 2016 and a maximum of US$500,000 if exercised between Aug. 2, 2017 and Aug. 1, 2018.
Discovered in 1919, the combined production from the Apex and El Nido mines was reportedly 17,000 oz. of gold from ore grading 1.4 oz. of gold per ton.
Remaining resources included 25,168 oz. of gold in rock that grades 0.945 oz. per ton gold.
The only modern exploration work done on the property was executed by contractor WGM for Echo Bay Mines in the early 1980s.
Surface geological mapping and geochemical surveys were completed and targets developed but no drilling was done.
This work demonstrated that a vein swarm can be traced for more than 500 meters along strike and at places is more than 200 meters across.
The mineralized zone contains mesothermal quartz veins and fracture fillings in schist surround by fine-grained sericite alteration envelopes.
Gold mineralization occurs as coarse, free gold associated with arsenopyrite and pyrite along with lesser amounts of chalcopyrite, galena, sphalerite, and tennantite.
Mineralization remains open along strike and at depth.
The property has never been explored by surface or underground drilling.
Millrock intends to review existing data and build a comprehensive exploration plan, after which the company will seek joint venture partners to drill and delineate the deposit and further develop it if warranted.
Alaska newcomer Group Ten Metals Inc. reported the acquisition of the Duke Island copper-nickel-platinum group metal project from a subsidiary of Quaterra Resources Inc. The property consists of 31 unpatented federal mining claims that control the core area of copper-nickel-platinum-palladium sulfide mineralization discovered in the Duke Island ultramafic complex by Quaterra in 2001.
Past exploration expenditures of roughly US$2.5 million have defined four large zones of mineralization on the property by geologic mapping, surface geochemistry, surface and airborne geophysics.
Only one of these zones has been tested to date with 3,434 meters of drilling in 16 holes.
None of the holes are thought to have penetrated the prospective basal contact of the intrusion where the highest grades of copper-nickel-platinum-palladium sulfide mineralization are inferred to occur.
Sulfide mineralization on the property is within an Alaska-type zoned ultramafic intrusion in Alaska's Alexander Platinum Belt.
The Duke Island occurrence is unique in the high percentage of disseminated and net-textured to massive sulfide mineralization within certain phases of the ultramafic complex.
Outcrop grab samples have returned values up to 2.8 percent copper, 0.25 percent nickel and more than 1 gram of platinum, plus palladium per metric ton parts per million.
Core holes drilled at the Marquis prospect have intercepted from 5 meters to 90 meters of semi-massive to massive sulfide containing anomalous values for copper (up to 12,500 ppm), nickel (up to 4,694 ppm), platinum (up to 680 ppb), and palladium (up to 548 ppb).
Marquis is the only target that has partially been drill tested.
Three similar electromagnetic and natural source audio-magnetotelluric geophysical anomalies have been defined in relation to surface mineralization at the Lookout and Scarp targets to the east and the Monte area to the south.
Under the terms of the agreement, Group Ten will purchase the property by the issuance of one million shares to each of two vendors, with Quaterra retaining a 1 percent net smelter production royalty.
Welcome to Alaska Group Ten Metals Inc.!
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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