The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
But Alaska remains one of the best places on earth to seek mineral deposits
Earlier this month, the Alaska Miners Association held its annual convention in Anchorage amid plummeting metals prices and an over-all atmosphere of economic uncertainty now stretching into its fourth year. Individuals from around North America and beyond were present and conversations outside of the technical sessions seemed to gravitate toward how best to climb out of the doldrums that seem to grip the mining industry on a global scale. One individual was heard to say that he would hold hands and sing "Kum Ba Yah," if he thought it would help but he was quickly informed: "That effort had already been tried, to no avail."
At the same time, Alaska has seen 14 mineral properties change hands during the past year, with other transactions likely to add to this total before the end of the year or possibly early in 2016.
These deals, cut at the bottom of the cycle, will only look better when commodities prices improve.
But therein lies the real crux of the matter: When will things show real improvement? If a recent publication by SNL Metals & Mining is any gauge, not for some time.
The publication, authored by Mark Fellows and entitled "How Does the Mining Sector Cycle Play Out?" compared the late 1990s mining industry crash to the current crash using metals price and capital expenditure indices.
From 1997 to 2002, mining industry capital expenditures fell 42 percent.
Capital expenditures for mine expansions continued to decline until the end of 2002, not recovering to 1997 levels until 2004, a full seven years out.
When Mr. Fellows compared the 1997-2004 crash to our current crash, which started down in earnest in 2012, he found that for the current crash, annual total sustaining and expansion capital expenditures will have declined by 30 percent by the end of 2015.
Perhaps more bothersome, metal prices have fallen 12 percent more than they did during the 1997-2004 cycle and that down trend does not look like it has any intention of stopping in the near term.
Mr. Fellows speculated that the overall market crash may have two more years to run its course before we see the slow rise in markets that usually signals an end to the bearishness.
So where does that leave Alaska now that we know "Kum Ba Yah" is off the table? Well, let's take stock: Alaska is undisputed elephant country for a wide array of mineral deposit types and commodities.
Alaska is embarrassingly under-explored so you are more likely to find an unattended elephant.
Alaska has a stable, pro-development government that manages about 100 million acres of land open to mineral entry.
The Alaska Native Claims Settlement Act was signed into law over 40 years ago, allowing indigenous land owners and the mineral industry to develop an enviable working relationship.
Compared to most places, Alaska is in deep clover.
But we need to beat that drum loud and long, that we are one of the last, best places on earth to explore and mine.
Interior Alaska
Kinross Gold Corp. posted record third-quarter 2015 production results from its Fort Knox mine near Fairbanks. For the quarter the mine produced 115,258 ounces of gold versus 104,815 oz. produced in the 3rd quarter of 2014. Cash costs were $556 per ounce versus $803 per oz. in the previous third quarter. Production increased compared with the same period last year primarily due to higher mill grades, and was fairly consistent with the previous quarter. Cost of sales per ounce decreased by $247 per gold-equivalent ounce, or 31 percent, compared with the same period a year ago, and reached its lowest level in two years, mainly as a result of lower power costs and higher production.
Northern Empire Resources Corp. reported results from exploration conducted at the Democrat Zone of its Richardson project in the Richardson District.
The program included review of all available historic data, prospecting, and the collection of 256 soil samples and 25 rock samples.
Exploration focused on soil sample lines north of the Democrat Pit, portions of the adjacent intrusive body known as the Wide Zone, and at Tenderfoot Creek.
Significant results include rock grab samples from outcrop in the Democrat Pit zone that returned 71.2 grams per metric ton gold and 48.6 g/t silver; 4.6 g/t gold and 111 g/t silver; 2.0 g/t gold and 233 g/t silver, 5.88 g/t gold and 6.09 g/t silver and 1.78 g/t gold and 67.3 g/t silver.
Soil samples collected on two east-west soil lines to the north, 800 meters and 400 meters respectively, of Democrat Pit both returned anomalous gold-in-soils values.
Soils collected here are also statistically high in silver.
Soils collected along two east-west reconnaissance lines in the Wide Zone returned anomalous gold and copper values.
Soils samples from 400 meters to the north of the brecciated quartz feldspar porphyry in the Democrat Pit highlighted the potential for a gold-bearing structural corridor extending at least 800 meters to the north from the northern margin of the Democrat Pit, where a 70,000-short-ton bulk sampling program in 1988 recovered 2,000 oz. of gold.
Rock grab samples from an outcropping brecciated quartz feldspar porphyry from within the exposed Democrat Pit zone returned 71.2 g/t gold and 48.6 g/t silver and 2.0 g/t gold and 233 g/t silver.
Exploration targeting in 2016 will be based upon the 2015 results, supported by a compilation and review of historic results which includes data from a bulk sample and drilling at Democrat Pit, more than 2,000 soil, rock and stream samples collected in the Richardson gold district and trenching.
Freegold Ventures Ltd. announced the results of its 2015 drilling program on its Shorty Creek copper-gold project south of Livengood.
The 2015 drill program was designed to test a combination of geochemistry, geophysics (airborne and induced polarization surveys) as well as favorable geology based on the results of the 2014 program and previous work.
Of particular interest are the large magnetic highs with coincident copper, gold and molybdenum soil chemistry.
Drilling commenced in the area of the previous Asarco RC drilling and the presence of quartz feldspar porphyry was noted in holes SC-15-01, SC 15-02, and SC 15-03.
Results suggest holes SC 15-01 and SC 15-02 were drilled in the pyritic halo.
Hole SC 15-04 collared in high-gold chemistry was abandoned twice due to difficult ground conditions; however the presence of significant argillic and sericitic alteration was noted.
Hole SC15-03 was collared within a distinct magnetic high at Hill 1835 which covers roughly a 750- by 1,000-meter area, and is located some 250 meters to the southwest of any previous drilling.
This hole returned 91.4 meters grading 0.14 g/t gold, 7.02 g/t silver and 0.55 percent copper.
A similar but undrilled magnetic and geochemical signature at target Hill 1710, which lies 2,500 meters northwest of Hill 1835.
The geochemical anomaly there is 2,000 meters long and remains open along strike.
It directly correlates with the magnetic anomaly, which is in excess of 6,000 meters in length and up to 1,500 meters in width.
Endurance Gold Corp. announced the final result from its summer 2015 exploration program on its 4,960-acre Elephant Mountain gold project near Manley Hot Springs.
Exploration has confirmed an intrusive-hosted target area of at least 1,800 meters by 600 meters in size encompassing two soil and rock gold anomalies (the North and South zone targets) and an untested induced polarization chargeability anomaly at the Central Zone is located between the two soil anomalies.
The 2015 program, focused on the South Zone Target, has expanded this soil anomaly to in excess 1,000 meters by about 250 meters in size, with values of greater than 100 parts per billion gold.
The soil anomaly remains open for expansion.
This soil anomaly is associated with grab samples of quartz vein material that assay up to 411.4 g/t gold.
Contango ORE Inc. announced additional results from it Tetlin project, a joint venture with a wholly owned subsidiary of Royal Gold Inc. The total amount spent during the 2015 exploration effort in 2015 is roughly US$7 million, which is under budget as a result of more efficient operations.
The company released additional drill results from its recently completed phase 2 program.
Significant results include hole 15167, which returned 7.76 meters grading 12.414 g/t gold, hole 15171, which returned 16.8 meters grading 17.939 g/t gold and 5.64 meters grading 3.76 g/t gold, hole 15174 which returned 5.54 meters grading 22.077 g/t gold and 11.28 meters grading 3.429 g/t gold and hole 15177 which returned 23.04 meters grading 19.859 g/t gold.
Additional assays remain outstanding for 13 holes completed in phase 2.
The company indicated that the size of the previously discovered Peak deposit will expand to the west.
In addition, a separate zone of mineralization was discovered to the north of the Peak deposit.
Both of these new areas will require more drilling and analysis to define potential resource size.
Peak Gold refers to the areas with significant intercepts as North Peak and West Peak, as they are adjacent to the original Peak Zone.
The 2015 drilling programs, consisting of 14,059 meters of core drilling in 61 holes, confirmed the presence of gold mineralization in previously untested zones up to 3.5 kilometers (2.2 miles) away from the Peak deposit.
Alaska Range
Coventry Resources Inc. reported additional diamond core drilling results from its Caribou Dome copper project in the Valdez Creek District.
Multiple intervals of high-grade copper mineralization were intercepted in hole CD15-26, including 2.2 meters grading 7.8 percent copper from 112.8 meters, 1.8 meters grading 8.9 percent copper from 118.6 meters, 1.4 meters grading 1.8 percent copper from 138.7 meters, 1.1 meters grading 5.7 percent copper from 143.8 meters and 1.4 meters grading 1.4 percent copper from 202.8 meters.
These intersections indicate that high-grade mineralization at Lenses 3 and 4 may be connected through the intervening 200-meter-long corridor.
CD15-28 was drilled at the western end of the 500-meter-long Caribou South Target - a strong induced polarization anomaly that runs parallel to, and is immediately south of, the mineralization (and a coincident IP anomaly) at lenses 2, 5 and 6.
Mineralization in hole CD15-28 revealed that a series of sedimentary rocks are interbedded with volcanic rocks in the tested area, a similar setting where high-grade copper mineralization occurs elsewhere on the project.
The company also announced that results from a 600-plus sample soil sampling program revealed anomalous copper over a 2,000-meter distance, only 700 meters of which have been tested by drilling.
Multiple undrilled copper anomalies have been identified within the 1,300- meter undrilled portion of the soil anomaly.
This portion of the anomaly lies along strike of known copper mineralization and rock chip samples collected within the north-eastern extension of this soil anomaly, known as the Menel Trend, have returned assays up to 9.1 percent copper with coincident IP chargeability anomalies.
The new soil sampling data also highlight very strong copper-in-soil results directly over the strong, undrilled Guardian IP geophysical target.
Rock chip samples from this undrilled area have returned assays up to 16.5 percent copper.
Millrock Resources Inc. announced results from drilling at the Dry Creek prospect, Alaska Peninsula copper project, Alaska.
Drilling was carried out in summer 2015 with funding from First Quantum Minerals Ltd. Two holes were drilled on the Dry Creek prospect.
Both holes tested a previously undrilled induced polarization chargeability anomaly thought to be associated with a mineralized intrusive body at depth.
Hole BC15-10 encountered trace to weak chalcopyrite and more abundant molybdenite associated with porphyry-style veining and alteration hosted in upper Jurassic-aged sedimentary rocks.
A 98.4-meter intercept of quartz-sericite-pyrite altered hornfelsed sediments averaged 0.19 percent copper, 88 parts per million molybdenum, and 42 parts per billion gold.
Hole BC15-11, collared about 350 meters south of BC15-10, encountered similar but weaker vein-hosted copper-molybdenum mineralization and porphyry-style alteration.
Southeast Alaska
Hecla Mining Co. announced additional third quarter 2015 production results for its Greens Creek mine on Admiralty Island.
The mine silver and gold production increased by 5.3 percent and 6.3 percent, respectively, over the year-previous period.
The average grade of ore mined during the quarter was 12.68 oz. per short ton silver compared with 13.04 oz./t silver for the third quarter of 2014.
Average by-product grades were 0.10 oz./t gold, 3.25 percent lead and 8.91 percent zinc.
During the third quarter the mine produced 1,992,037 oz. silver, 14,376 oz. gold, 5,394 short tons of lead and 16,024 short tons of zinc.
The cash cost per silver-ounce of US$4.82 increased from US$3.75 in the third quarter 2014.
The higher silver and gold production resulted from higher recoveries and increased tonnage, partially offset by lower grades.
Silver recoveries increased to 76.5 percent, up from 71.0 percent in the prior-year period as a result of a change implemented in late 2014 to the flotation circuit to more efficiently scalp additional lead concentrate directly to final concentrate, and by introducing carbon dioxide for pH control in the lead flotation circuit.
The increased recoveries positively impacted the operation's revenues by US$1.8 million in the third quarter.
Recoveries for the other three metals also increased period over period.
The mill operated at an average of 2,233 short tons per day in the third quarter.
The per-ounce cost was affected by lower by-product credits and slightly lower operating costs.
Power costs were similar to the 2014 period due to higher precipitation levels in southeast Alaska in both cases resulting in availability of less expensive hydroelectric power, a condition that is expected to last through the fourth quarter.
The mine is estimating 2015 production at 7.7 million to 8.0 million oz. of silver and 59,000 oz. of gold at cash costs of US$3.75/oz. silver.
On the exploration front, definition drilling made progress in refining the resources of the lower NWW, Deep 200 South, Upper Southwest, and West Wall zones.
Exploration drilling of the 9A Zone expanded the resource along the projected trend and mineralization has been intersected on the margins of Southwest Bench and East Ore zones.
Recent drilling of the lower NWW Zone has generally confirmed and upgraded the resource model of the shared and upper limbs and assay results include 71.6 oz./t silver, 0.16 oz./t gold per ton, 8.2 percent zinc, and 4.6 percent lead over 5.4 feet and 36.2 oz./t silver, 1.0 oz./t gold per ton, 5.6 percent zinc, and 2.6 percent lead over 12.2 feet.
Drilling has defined additional West Wall mineralization up to 240 feet down-dip from the current resource model.
More base metal-rich intersections of the West Wall include 5.8 oz./t silver, 0.07 oz./t gold, 27.9 percent zinc, and 7.7 percent lead over 9.4 feet.
Drilling of the Upper Southwest Zone has defined good continuity of multiple, flat-lying mineralized zones toward the northern end of Upper Southwest mineralization.
Recent assay results include 25.4 oz./t silver, 0.11 oz./t gold, 8.8 percent zinc, and 4.5 percent lead over 18.2 feet and 24.0 oz./t silver, 0.12 oz./t gold, 13.2 percent zinc, and 7.4 percent lead over 13.5 feet.
Intersections of Deep 200 South include 35.5 oz./t silver per ton, 0.09 oz./t gold, 1.2 percent zinc, and 0.7 percent lead over 16.1 feet and 34.5 oz./t silver, 0.05 oz./t gold, 1.0 percent zinc and 0.4 percent lead over 9.8 feet along the upper limb.
The mineralization remains open to the south, and exploration drilling recently identified mineralization above and to the east of the bench mineralization.
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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