The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
As precious metals prices climb, explorers flock to Golden Triangle
Colorado Resources completed extensive drilling at the expansive KSP gold project in northwestern B.C. during 2016.
When judging the health of global mineral exploration, British Columbia seems to be the perfect model.
In 2015, roughly C$272 million was invested in discovering and delineating mineral deposits in B.C., down some C$66 million from 2014. This 19.5 percent drop is in lockstep with the decline in global mineral exploration budgets for the same period, according SNL Metals & Mining's World Exploration Trends report. Likewise, B.C. exploration decreased about 60 percent from the record C$680 million invested in the province in 2012, compared with about a 57 percent decline globally during the same period.
Climbing gold and silver prices, along with a renewed interest in zinc and copper, has sparked a flood of exploration in the westernmost Canadian province.
Northwest BC's Golden Triangle, in particular, has emerged from the prolonged bear market as one of the hottest destinations on the planet for mining explorers,
"The Golden Triangle is truly one of the world's most prolific and best-mineralized slices of the earth's crust," said Millrock Resources Inc. President and CEO Greg Beischer.
In addition to a rich mineral endowment, this region enjoys strong infrastructure thanks in large part to the 2014 completion of the Northwest Transmission Line, an industrial-grade power line that runs through the Golden Triangle.
"The NTL delivers affordable, reliable and clean power to an area that's never before had access to the grid, unlocking the economic potential of northwest British Columbia and supporting new jobs and investment in mining," said BC Energy and Mines Minister Bill Bennett.
Golden slice
Home to Pretium Resource Inc.'s Brucejack high-grade gold mine project and Seabridge Gold Inc.'s world-class KSM copper-gold project, it is no wonder the Golden Triangle slice of the earth's crust is attracting so much attention.
Pretium is on pace to begin producing more than 400,000 ounces of gold per year from the exceptionally high-grade Valley of the Kings deposit at its Brucejack property in 2017.
According to an updated estimate published in July, Valley of the Kings now encompasses 16.4 million metric tons of measured and indicated resources grading 17.2 g/t (9.1 million oz.) gold.
As Pretium closes in on opening the Brucejack Mine, the company continues grassroots exploration seeking porphyry- and epithermal-style mineralization across the wider property.
Immediately west of Brucejack, Seabridge continues to add to the already world-class copper-gold reserves found in a series of zones at its KSM property.
Four of these zones– Kerr, Sulphurets, Mitchell and Iron Cap – encompass enough proven and probable reserves to support a 55-year mine that would average 508,000 oz. of gold, 147 million lbs. of copper, 2.2 million oz. of silver, and 1.1 million lbs. of molybdenum annually, according to a prefeasibility study completed in 2012.
Much of the exploration since the PFS has targeted deep targets below these zones.
One such target, Deep Kerr, hosts 1.01 billion metric tons of inferred resource at Deep Kerr 0.53 percent (11.8 billion pounds) copper and 0.35 g/t (11.3 million ounces) gold.
"In the three years since its discovery, Deep Kerr has taken its place among the world's largest gold-copper deposits," said Fronk. "The shape of the deposit continues to support cost-effective block-cave underground mining methods and the updated resource estimate has been carefully constrained by this mining method."
This year, the company carried out roughly 10,000 meters of drilling designed to expand the block cave shapes that confine the Deep Kerr resource by as much as 800 meters.
An updated PFS that restates the mineral resources for all of the zones at KSM by employing both open-pit and block-cave mining methods was completed in September.
While expanding the enormous bulk tonnage deposits at KSM, Seabridge is investigating high-grade gold targets at Iskut, a property the company acquired through an all-shares buy out of SnipGold Corp.
Following the transaction, Seabridge launched a roughly 3,000 meters targeting some of the high-grade prospects gold-silver-copper property located roughly 30 kilometers (19 miles) northwest of KSM
"This year's objective is to determine which of the many known targets has the best potential, in preparation for a much larger program next year," Fronk said.
Seabridge also added the KSP property to its portfolio when it acquired SnipGold.
Colorado Resources Ltd., which has an option to earn up to an 80 percent interest in KSP, completed extensive drilling of this expansive northwestern B.C. gold project in 2016.
Two other large copper-gold projects situated in the northern margins of the Golden Triangle, Galore Creek and Schaft Creek, are idling at the permitting threshold.
A feasibility study completed in 2011 envisions a mine at Galore Creek producing 6.2 billion lb. of copper, 4 million oz. of gold and 65.8 million oz. of silver over an 18-year span.
With copper prices trending down since completion of the study, joint venture partners Novagold Resources Inc. and Teck Resources Ltd. have been content with maintaining the project and optimizing a mine plan until global markets stabilize and the demand for copper rebounds.
This year's work focused on project mine planning and design; waste rock and water management; and a generalized tunneling practice study to evaluate access and material handling.
The Schaft Creek Joint Venture – 75 percent Teck and 25 percent Copper Fox Metals Inc. – carried out a C$700,000 program at Schaft Creek, a copper-gold-silver-molybdenum project located about 50 kilometers (30 miles) northeast of Galore Creek.
A feasibility study completed in 2012, detailed a mine for Schaft Creek that would churn out 4.88 billion lb. of copper, 4.21 million oz. of gold, 214.9 million lb. of molybdenum and 25.1 million oz. of silver over the course of 21 years.
Teck, which joined Schaft Creek shortly after the feasibility study, has since been funding work aimed at optimizing the project. The 2016 program focused primarily on updating the resource model for the project with an emphasis on gaining a better understanding of the precious metals content of the deposit.
For the time being, the Schaft Creek JV has withdrawn the Schaft Creek project from the Environmental Assessment process and removed the project from the queue to be connected to the Northwest Transmission Line.
Entire spectrum
From grassroots investigations of mineral deposits freshly exposed by receding glaciers to programs aimed at establishing modern operations at the site of past-producing mines, the next generation of Golden Triangle exploration projects colors the entire spectrum.
Speaking of Spectrum, under the direction of legendary Golden Triangle explorer Ron Netolitzky, Skeena Resources Ltd. is advancing a growing number of highly prospective gold, copper and now silver properties in the Golden Triangle – Spectrum, Snip, GJ and Porter Idaho.
The adjoining Spectrum and GJ projects are located about midway between Schaft Creek and Imperial Metals Corp.'s Red Chris copper-gold mine.
After completing 17,356 meters of drilling in 61 holes at Spectrum in 2015, Skeena published a maiden resource for the Central zone, one of 13 known gold prospects across the 3,580-hectare (9,514 acres) property.
This year, the company drilled another 10,000 meters at Spectrum.
"The focus for this season's work program will be to further expand the gold-copper resource with wide-spaced drilling, and to begin to define resources on other high-priority gold and gold-copper targets at Spectrum that have had little or no drilling to date," explained Netolitzky.
Skeena also had drills turning at Snip, a high-grade gold property being acquired from Barrick Gold Corp.
In the 1990s, Barrick produced roughly 1 million ounces of gold from ore at the Snip Mine that averaged 27.5 g/t gold.
While Snip is new to Skeena's portfolio, the company's leadership is intimately familiar with the history and geology of this Golden Triangle property.
In fact, Netolitzky's contributions to the discoveries of the Snip and Eskay Creek gold mines played a large role in getting him inducted into the Canadian Mining Hall of Fame.
Closing a deal to acquire the property in March, Skeena identified a number of high-grade gold targets for a 6,000-meter drill program launched at Snip in August.
"We are excited to renew exploration for additional mineralized shoots in a large shear structure which already demonstrated the presence of a million-ounce, high-grade deposit," the legendary mine finder said.
Skeena's Golden Triangle portfolio also includes GJ, a property adjacent to Spectrum that hosts 133.67 million metric tons of measured and indicated resource containing 940.23 million lb. of copper and 1.56 million ounces gold; plus 53.69 million metric tons of inferred resource containing 312.53 million lb. of copper and 570,000 oz. gold has been estimated for the deposits.
Skeena also added high-grade silver to its portfolio with the purchase of Mount Rainey Silver Inc., a private company that owns the high-grade Porter Idaho silver property overlooking the town of Stewart, at the southwestern corner of the Golden Triangle.
About 15 kilometers (nine miles) northeast of Stewart, IDM Mining Ltd. is closing in on a feasibility study for developing an underground mine at its Red Mountain gold-silver project.
An updated preliminary economic assessment published in July details a 1,000-metric-ton-per-day mill producing 70,000 oz. of gold and 194,000 oz. of silver annually over an initial five-year mine-life.
This year, IDM completed about 5,000 meters of underground drilling aimed at upgrading some of the inferred resources so that they can be brought into the mine plan. Also, a mapping and sampling program across the broader property turned up some intriguing high-grade gold-silver-molybdenum mineralization at Lost Valley, a prospect located about 4,000 meters southwest of the underground resource.
Immediately east of the Red Mountain property, Millrock Resources acquired Willoughby one of four gold and copper properties the project generator has picked up over the past year.
Historic drill intercepts at Willoughby include: 20.5 meters of 25 grams per metric ton gold and 184.2 g/t silver in a hole drilled in 1989; and 2.9 meters of 398 g/t gold and 199.4 g/t silver in a hole drilled in 1995.
"Glaciers have been rapidly receding over the years since the last exploration drilling work was done in 1995. Much more may now be visible and accessible," explained Millrock CEO Beischer.
Millrock's Golden Triangle portfolio includes: Poly, a volcanogenic massive sulfide and epithermal gold property about eight kilometers (five miles) north of Willoughby; Todd, a property that spans an area between Poly and Brucejack that is prospective for precious metals-rich VMS deposits similar to the historic Eskay Creek Mine; and Oweegee Dome, a gold-copper property immediately north of Brucejack.
In anticipation of bringing on partners to advance its Golden Triangle portfolio, the project generator has compiled, digitized, organized and carried out quality control on the tomes of data available for these properties.
Aben Resources Ltd. is another company that accumulated a sizeable land package in the Golden Triangle this year. This property, dubbed Forrest Kerr, blankets nearly 30,000 hectares covering more than 45 kilometers of the Forrest Kerr Fault, from Colorado Resources' KSP property north.
Upon consolidating this extensive land package, which involved individual agreements three vendors plus staking of open claims, Aben compiled all of the historical work into a single database. This was followed by fieldwork to identify drill targets at Forrest Kerr, particularly in the area where the Galore Creek access road passes through the north end of the property.
Beyond the triangle
South of the Golden Triangle, Dolly Varden Silver Corp. spent much of this past year fending off takeover bids from companies with an eye for the high-grade silver- deposits found across its namesake property.
Situated about 60 kilometers (35 miles) southeast of Stewart, the Dolly Varden property hosts 3.07 million metric tons of indicated resource averaging 321.6 g/t (31.8 million oz.) silver in four deposits. Dolly Varden, the highest grade of the four, hosts 10.5 million ounces of this silver in 522,000 metric tons averaging 625.1 g/t.
The four deposits also host 10.8 million ounces of silver at a grade of 373.3 g/t silver in the inferred category.
Within hours of the August 2015 publishing of this resource, Skeena Resources made a bid to buy-out Dolly Varden.
Characterizing the all-shares offer valued at roughly C$4.2 million "highly opportunistic," Dolly Varden countered with an offer Skeena deemed unrealistic.
Hecla Mining Company, which provided Dolly Varden with a C$1.5 million loan to carry out a drill program at the high-grade silver property late in 2015, made its own bid for the junior this year.
With roughly 19.8 percent of Dolly Varden shares under its control, Hecla attempted to buy the balance in an all-shares deal worth about C$12 million.
Again, Dolly Varden rejected its suitor but did not rule out considering an offer by Hecla in the future.
In July, Dolly Varden closed a C$7.2 million financing. Roughly C$2.5 million raised was used to pay back a loan from Sprott Private Resource Lending and others that ultimately paid monies owed to Hecla. Much of the balance was used to fund exploration at Dolly Varden.
"It was a more complex process to become debt-free than anticipated, but Dolly Varden is finally debt-free," said interim Dolly Varden President and CEO Rosie Moore. "With field programs planned for this year and next, we look forward to creating further value for all shareholders."
To the north of the Golden Triangle, Carmax Mining Corp. completed a program aimed at collecting the data needed to complete a PEA for its Eaglehead porphyry copper-gold project.
According to a 2012 calculation, the property hosts an inferred resource of 102.5 million metric tons averaging 0.29 percent (662 pounds) copper, 0.01 percent (22 million pounds) molybdenum and 0.08 grams per metric tons (265,000 ounces) gold. This resource is contained within two conceptual open pits covering the East and Bornite zones.
The 2016 program at Eaglehead included metallurgical work, re-analysis of historical core and geophysical studies.
"On completion of the 2016 work program, Carmax would like to be in a position to make a decision on commencing a preliminary economic assessment of the Eaglehead porphyry copper deposit," explained Carmax President Jevin Werbes.
In September, Copper North completed a small drill program at Thor, a porphyry copper-gold project about 300 kilometers (185 miles) southeast of Eaglehead.
Zinc-rich Kechika
East of the Golden Triangle, Canada Zinc Metals Corp. continues its exploration along a band of properties that blankets 79,870 hectares (197,359 acres) of the zinc-rich Kechika Trough in north-central B.C
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 May, Cardiac Creek hosts an indicated resource of 19.6 million metric tons grading 8.2 percent (3.54 billion lb.) zinc, 1.6 percent (685 million lb.) lead and 13.6 g/t (8.6 million oz.) silver; and an inferred resource of 8.1 million metric tons grading 6.8 percent (1.21 billion lbs.) zinc, 1.2 percent (207 million lb.) lead and 11.2 g/t (2.9 million oz.) silver.
Canada Zinc is considering the potential of developing a decline to further drill deep targets from underground.
In 2013, Teck Resources 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.
Through 2015, the partners had invested C$1.3 towards the earn-in.
Teck and Korea Zinc completed a preliminary 2016 exploration program that included: geological mapping, prospecting and rock sampling over the highest ranking targets across 18.5-kilometer- (11.5 miles) area; 7.3-line-kilometers (4.5 miles) of ground gravity surveys; and soil sampling. This work finalized targets for a roughly 1,000-meter drill program completed at the end of the field season.
Canada Zinc hopes the zinc-rich deposits on these extensive holding will help supply a predicted global shortage in the galvanizing metal.
"The drilling on the Pie and Yuen properties represents a noteworthy step forward in the advancement of these two properties and will showcase the potential of the company's significant mineral tenure that comprises the Kechika Regional project," said Canada Zinc President and CEO Peeyush Varshney.
Meanwhile, mining explorers across British Columbia hope that the strengthening zinc market is the first stage of a renaissance in exploration in the province and around the globe.
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.
Reader Comments(0)