The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North America has the most +1-million-oz. deposits of the precious metal, but also the lowest average grade at 0.71 g/t gold
As tangible buoyancy returns to the mining industry, I began to wonder if any of the multitude of forecasters had actually predicted the recent return of stronger metals prices.
Since most "forecasters" are actually "hindsighters," I was drawn to a November 2013 summary of gold mines by Roy Sebag of Natural Resource Holdings.
The summary, entitled "Global Gold Mines & Deposits 2013 Ranking," indicated that we were nearing peak gold production because the total in-situ ounces were about 50 percent fewer than what is required to maintain the production volumes.
The forecast was correct; peak production occurred in 2015.
The article was also the third year for such global gold mine rankings, and it noted that in late 2013, there were only 580 mines and deposits on earth with more than 1 million troy ounces of in-situ gold.
My stats show a total of 64 of these deposits are located in the United States, of which 15 are in Alaska.
The study showed that +1-million-oz. deposits contain a total of 3.72 billion in-situ oz. There are only 51 (8.8 percent) projects in the world that have more than 5 million oz. of resource and have an average grade greater than 3 grams per metric ton gold.
Of these, there are only 21 that are not yet in production.
The average grade of all deposits is 1.01 g/t gold.
A total of 199 of the deposits are in production with an average production grade of 1.18 g/t gold.
These deposits are owned by 312 entities including public, private, and government-sponsored corporations, of which 261 of the deposits are owned (or partially owned) by independent junior miners.
The remaining undeveloped deposits, those not in production, have an average grade of 0.89 grams per metric ton of gold, 33 percent lower than the producing mines.
Clearly, higher gold prices were going to be needed to make some of these lower grade deposits economically attractive.
North America has the most +1-million-oz. deposits, but they also have the lowest average grades (0.71 g/t gold), while Africa and Asia tend to have the highest grade deposits.
For Alaska, the take-away is not new or complicated: gold deposits with higher average grade and/or potentially lower operating cost structures are going to be favored over those that don't have these benefits.
Replace the word "gold" in the preceding sentence with the metal of your choice, and the resulting statement is no less true.
Western Alaska
Teck Resources Ltd. and partner NANA Inc. reported second-quarter 2016 results from the Red Dog mine.
During the three-month period, the mine produced 152,900 metric tons of zinc in concentrate.
Zinc ore grade rose slightly to 17.4 percent, while mill recoveries were dipped slightly to 83.8 percent.
The mine also produced 55,300 metric tons of lead in concentrate.
Lead ore grade decreased marginally to 4.6 percent, while mill recoveries decreased significantly to 55.3 percent.
The mine posted a $71 million operating profit for the quarter, down significantly from the $84 million profit in the year-previous period.
Zinc production in the second quarter decreased 1 percentage point from comparable output a year ago as lower mill throughput and recoveries were mostly offset by higher zinc grades.
Lead production declined by 13 percent, compared with results a year ago primarily due to lower grades and recoveries.
Royalty costs for the quarter totaled $7 million versus $6 million in the year-previous quarter.
Zinc production is anticipated to decline in the second half of 2016, consistent with the mine plan, due to lower ore grades.
The mine plans to ship 150,000 metric tons of contained zinc metal in the third quarter and 190,000 metric tons in the fourth quarter.
Redstar Gold Corp. reported the completion of its exploration program at the Unga gold project near Sand Point.
The company focused its efforts on delineation of new drill targets to expand the Shumagin prospect, Empire Ridge and the southwest extension of the historic Apollo-Sitka Mine.
In addition, the company collected 272 soil/talus and 325 rock samples over exposed bodies of silicification at Orange Mountain, silicified and mineralized structures located between Orange Mountain and Shumagin, and exposures of multi-phase breccias and additional structures at the Shumagin Prospect.
The Shumagin prospect is characterized by multi-episodic gold-silver bearing quartz-adularia-rhodochrosite breccia bodies that occur within structurally controlled dilation zones along the +1,200-meter-long Shumagin Scarp.
High-grade gold-silver mineralization is open at depth within the main breccia body at Shumagin.
Multiple dilation zones and coincident gold-silver-bearing breccia bodies exist along strike of the Shumagin Scarp and remain to be fully drill tested.
Analytical results are pending on this summer's program.
CopperBank Resources Corp. reported continuing efforts on its San Diego Bay copper-gold-molybdenum porphyry prospect on lands leased from Aleut Native Corp. There has been no historical drilling and limited field work at San Diego Bay, which is located about 7 kilometers east of the company's Pyramid copper-molybdenum deposit.
The San Diego Bay prospect is typified by a 40-square-kilometer gossan associated with strong hydrothermal alteration and intrusive rocks, consistent with porphyry systems.
All porphyry alteration facies have been observed, including zones of potassic, advanced argillic, phyllic and pyrite zones.
Previous Landsat imagery has identified widespread zones of high-temperature clay alteration.
Strongly anomalous precious and base metal values were collected by previous operators.
An important consideration for exploration is that the adjacent Pyramid deposit hosts a leach cap of 10 to 100 meters in thickness which is underlain by a supergene enrichment blanket.
Cobbles of copper oxide mineralization have been identified by local Aleut shareholders on beaches adjacent to the alteration zone at San Diego Bay.
Interpretations suggest that San Diego Bay may represent overlapping hydrothermal systems, including potential lithocaps.
Interior Alaska
Kinross Gold reported second-quarter 2016 results from the Fort Knox mine near Fairbanks. The mine produced 97,221 ounces of gold at a cost of $793 per oz. in the second quarter versus 116,061 oz. gold at a cost of $606/oz. per ounce in the year-previous period. Production increased compared with the previous quarter as a result of higher mill throughput and recoveries. Production decreased compared with the year previous period mainly as a result of lower mill grades and recoveries. Cost of sales per ounce increased compared with the previous quarter and year-previous period, primarily due to higher costs associated with mined operating waste.
Contango ORE Inc. posted additional 2016 drill results from its phase 2 program at the Tetlin project, a joint venture with a wholly owned subsidiary of Royal Gold Inc. Significant results from the North Peak zone included hole 16117 which returned 10.75 meters grading 18.62 g/t gold, hole 16232 which returned 13.68 meters grading 5.52 g/t gold, hole 16235 which returned 38.88 meters grading 51.62 g/t gold, hole 16237 which returned 14.19 meters grading 45.33 g/t gold, and hole 16238 which returned 15.67 meters grading 49.67 g/t gold.
The company also indicated that it was testing geological targets at West Peak and East Peak and currently had completed 20 additional holes for which assays are pending.
The company indicated its intention to complete and update a resource estimate early in 2017.
Alaska Range
White Rock Minerals said it has doubled the area of its highly prospective claim position at the Red Mountain volcanogenic massive sulfide project in the Bonnifield District.
Following evaluation of known and prospective stratigraphy and volcanic rocks in the area as well as utilizing the distinctive conductivity signatures at the Fosters and West Tundra Flats deposits, the company acquired an additional 114 state mining claims to add to the original 110 mining claims that make up the project.
White Rock Minerals now controls in excess of 143 square kilometers (55 square miles) of mining claims in the Sheep Creek basin, a geological target hosting several significant volcanogenic massive sulfide deposits and targets.
The company believes the shallow erosional levels seen at some massive sulfide targets are prospective for gold-enriched mineralization, an element that has not been targeted during previous exploration efforts in the 1970s through 1990s.
Coventry Resources Ltd. posted additional results from its Caribou Dome copper project in the Valdez Creek District.
To date, five drill holes (2,371 meters) have been completed as part of a planned 8,000-meter drilling program.
Two recently completed induced polarization geophysical surveys, along with drilling and mapping has extended the strike extent of mineralization at the Menel IP Trend by more than 1,000 meters.
While two holes drilled were not deep enough to intersect the source of the IP anomaly, the second hole drilled in this area, CD16-005, intersected 46 meters of mineralized sediments at the target depth.
Variable quantities of chalcopyrite were noted in drill core, assays of which are pending.
These sulfide-bearing horizons are located at the contact between the sediment and volcanic sequences, the same stratigraphic position that the Caribou Dome deposit occupies.
This extension is contiguous with and immediately northeast of the previously drilled 700-meter-long corridor of known high-grade copper mineralization.
Mineralization has been intercepted to a depth of 290 meters in this new extension where two rigs currently are focusing on determining the geometry and grade of copper mineralization.
The company also indicated that additional IP surveying is now progressing to the west and southwest of the deposit, to test previously identified soil anomalies and outcropping copper mineralization.
Southeast Alaska
Hecla Mining Company posted updated production results for the second quarter of 2016 and updated annual production estimates at its Greens Creek mine in Southeast Alaska.
The mine's second-quarter production of 2,117,084 million oz. of silver exceeded the second quarter of 2015 by 14 percent, while gold production of 11,528 oz. was 16 percent lower.
Operating costs increased to $5.38 /oz. of silver versus $3.30 /oz. in the year-previous period.
The average grade of ore mined during the quarter was 13.25 oz. /ton silver, up from the average grade of 12.33 oz. /t that was mined in the second quarter of 2015.
During the three months that ended June 30, the mine produced 2,117,084 oz. silver, 11,528 oz. gold, 5,346 tons of lead and 15,575 tons of zinc.
The mill processed 203,388 tons of ore during the quarter, up from 199,694 tons milled in the year-previous period.
Increased silver production resulted from higher grades as well as slightly higher throughput.
Gold production was impacted due to a one-time adjustment in the gravity circuit.
The mill operated at an average of 2,235 tons per day in the second quarter.
As a result of both higher grades and recoveries, the company now expects the mine to produce 8.3 million oz. of silver and 52,000 oz. of gold at a cost of $5/oz. of silver.
On the exploration front, recent definition drilling of the 9A Zone confirmed continuity of the mineralization and refined the geometry of a mostly vertical eastern limb of mineralization.
Drill intersections include 20.4 oz./t silver, 0.09 oz./t gold, 16.2 percent zinc, and 5.2 percent lead over 17.5 feet and 15.1 oz./t silver, 0.08 oz./t gold per ton, 11.2 percent zinc, and 4.1 percent lead over 15.6 feet.
Drilling of the northernmost targets of the NWW Zone defined mineralization with a geometry similar to the resource model but thinner and slightly less extensive.
Recent drill intersections include 76.4 oz./t silver, 0.17 oz./t gold, 19.9 percent zinc, and 4.4 percent lead over 10.2 feet and 56.1 oz./t silver, 0.13 oz./t gold, 3.3 percent zinc, and 0.8 percent lead over 10.2 feet.
Revised resource models for the 5250, 9A, West Wall, NWW and Deep 200 South zones are expected by the end of the year.
In the 5250 trend, drilling has tested the down-plunge projection of mineralization and attempted to locate the upper shear which defines the upper limit to mineralization at Greens Creek.
This drilling is showing semi-continuous mineralization along the 5250 and Deep 200 South trends in the southern part of the mine that require additional drilling to refine new resources.
Coeur Mining Inc. reported updated second-quarter 2016 production results from its Kensington gold mine near Juneau.
Second-quarter production is estimated at 32,210 oz. of gold, a significant increase over the 29,845 oz. of gold produced in the second-quarter of 2015.
Cash operating costs declined slightly to $740/oz. from the year-previous period's cost of $745/oz. The mine processed 157,117 tons of ore grading 0.22 oz. /t of gold during the quarter.
Average recovery was 94.1 percent.
Mill throughput fell slightly to 1,725 tons-per-day average.
The decreased mill throughput was more than offset by higher gold grades during the quarter.
Work on the decline into the Jualin deposit is now 50 percent complete with a resource update expected at year-end.
Estimated 2016 total production is pegged at 115,000-125,000 oz. of gold at cash operating costs of $825-$875/oz.
Ucore Rare Metals reported that 99.99 percent dysprosium has been produced from pregnant leach solution derived from the company's Bokan-Dotson Ridge project using the SuperLig-One Molecular Recognition Technology pilot plant.
The company indicated that recovery of high-purity dysprosium at industrial scale, solely using Bokan-Dotson Ridge feedstock, and without the use of chemically-intensive solvent extraction technologies, were significant firsts for the rare earth mining industry.
Ucore also said successful scaling of the molecular recognition technology system from the lab-scale to the pilot plant level has demonstrated the feasibility for construction of a full-scale commercial system for rare earth element separation and recovery.
Feed for such a full-scale system could be derived not only from rare earth ore deposits like Bokan-Dotson Ridge, but from above ground sources, including coal and other ashes, mine tailings and by-product streams, oil sands, and secondary sources such as spent magnets, spent catalysts, spent lighting devices, and other recycled products.
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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