The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
New players join investigation of compelling geology across Last Frontier
Mineral exploration spending in Alaska hit an apex of US$365 million in 2011, but as venture capital for mining explorers dried these expenditures plummeted 78 percent to US$80 million in 2015.
However, rising gold prices and a loosening of venture capital in 2016 seems to have marked an end to a painfully long bear market for mining explorers in Alaska.
“After taking head shots for the past four years, the industry suddenly came to life over the past month, with new budgets, new players and new targets invigorating Alaska’s mining scene,” Avalon Development President Curt Freeman penned in his July column in North of 60 Mining News.
Richly endowed frontier
From deposits averaging 20 percent zinc in the northwest to high-grade volcanogenic massive sulfide deposits in the Southeast Panhandle and a plethora of world-class deposits in between, Alaska is considered one of the most richly endowed mining jurisdictions in the world.
This high regard for mineral-rich geology in the Last Frontier is reflected in Fraser Institute’s Survey of Mining Companies, where global mining executives ranked Alaska among the top five jurisdictions on the planet for seven years running, including a second-place showing in the most recent survey.
While the survey results are subjective, this consistent strong endorsement by the global mining community speaks volumes about the state’s mineral potential.
“The geology of Alaska is compelling,” said Millrock Resources President and CEO Greg Beischer.
Alaska’s reputation as a place to find world-class deposits has not necessarily translated into dollars spent on exploration.
“Geologists want to come here – they know there are more Pebble deposits, they know there are more Donlin Creek deposits – but the perception is that it is a really tough place to permit a mine,” Beischer added.
The same mining executives that collectively consider Alaska the second-richest mineral jurisdiction rank the state 59th, right below Zimbabwe, when it comes to uncertainty concerning environmental regulations.
The U.S. Environmental Protection Agency’s attempt to utilize its presumed authority under the federal Clean Water Act to proactively veto or place restrictions on permits needed to develop the world-class Pebble copper-gold-molybdenum project seems to weigh heavy on the minds of miners considering the regulatory climate in Alaska.
“The EPA’s effort to circumvent the law and stop Pebble at all costs has had significant negative ramifications on mining development in Alaska,” observed a mining manager responding to the Fraser survey.
Peak Gold in Interior
Alaska’s Interior region continues to be a hot destination for mining explorers. In fact, roughly half of the exploration spending in the 49th State was invested in seeking gold and associated minerals across this 300-mile stretch of the Tintina Gold Belt that runs from the Yukon border west. This includes two of the biggest exploration projects in the state, Tetlin and Pogo.
With a budget of US$11 million aimed at expanding the gold- and copper-rich skarn deposits at Tetlin, joint venture partners Royal Gold Inc. and Contango Ore Inc. laid claim to Alaska’s largest exploration program for 2016.
Discovered by Contango Ore CEO Brad Juneau in 2008, Tetlin is an expansive property situated just south of the Alaska Highway near the town of Tok that hosts a number of promising exploration targets, The most advanced such target is Peak, a skarn deposit with the equivalent of 1.2-million ounces of gold at Peak, when accounting for the value of the copper and silver present in the deposit, according to a resource calculation completed in 2014.
Intrigued by the Peak deposit and larger potential at Tetlin, Royal Gold signed on to earn up to a 40 percent joint venture interest in the project by investing up to US$30 million by October 2018.
Peak Gold, the resulting joint venture funded and operated by Royal Gold, has already invested nearly US$20 million on expanding this deposit.
The drilling this investment funded seems to have traced a roughly 2,000-meter arc of contiguous high-grade skarn mineralization. This would be roughly three times the footprint of the Peak deposit described in the 2014 resource. One hole drilled in this expansion area cut three gold-rich intercepts, including 38.88 meters averaging 51.62 grams-per-metric-ton gold from a depth of 14.5 meters – the best intercept at Tetlin in terms of high-grades over broad widths.
About 100 miles northwest of Tetlin, the Pogo Mine is celebrating its 10th anniversary of operations and, considering the high-grade gold deposits and prospects it has discovered in recent years, the underground mine has more such celebrations in its future.
“Our exploration department is doing a great job – we are finding more resource every day,” said Pogo General Manager Chris Kennedy.
At least five high-grade gold zones – Liese, East Deep, North, Fun and South Pogo – have been discovered within a mile of the mill and are contributing ore to the mill or are expected to in the future.
“So, we are going to be there for a while,” Kennedy said.
To ensure this long tenure, Sumitomo Metal Mining Pogo – a joint venture between Japanese firms Sumitomo Metal Mining Company (85 percent) and Sumitomo Corp. (15 percent) – has allotted healthy exploration budgets in recent years, including US$10 million in 2016.
West of Pogo
From Pogo to the Livengood region, about 150 miles west, a number of companies are exploring compelling gold properties near the road system in Interior Alaska.
Stone Boy Inc., the exploration company credited with discovering the high-grade gold at Pogo, continues to seek new deposits in the larger Pogo area.
Owned by subsidiaries of Sumitomo Metal Mining (95 percent) and Sumitomo Corp. (5 percent), Stone Boy has been exploring Interior Alaska since 1991 and currently holds four properties in the general area of the Pogo Mine – Ink, Monte Cristo, Skippy and Shaw.
In recent years, the Ink claims, located about 15 miles (24 kilometers) southeast of Pogo, has been the Japanese firm’s primary focus. This work has been completed in partnership with Japan Oil, Gas and Metals National Corporation (JOGMEC), which holds an 18.23 percent interest in the property.
Yuki Beppu, the geologist in charge of Sumitomo Metal Mining America’s exploration in Alaska, said exploration at Ink has focused on the Brink Core Zone, a bulk-tonnage gold deposit similar to Kinross Gold’s Fort Knox Mine.
The 29 holes drilled at Brink through 2015 had traced the core zone over an area measuring at least 500 meters wide, 1,700 meters long and to a depth of 500 meters. The best hole cut 514.4 meters averaging 0.427 g/t gold.
Stone Boy’s other promising gold property, Monte Cristo, is located some 40 miles (64 kilometers) west of Pogo.
The Naosi zone, a gold-silver-antimony prospect within the larger Monte Cristo property, had previously been one of the primary exploration targets of the Stone Boy project. In 2011, the partners released results from drilling Naosi, including; 7.92 meters of 7.8 g/t gold, 19.7 g/t silver and 0.1 percent antimony; and 22.83 meters grading 4.2 g/t gold, 48 g/t silver and 0.17 percent antimony.
From 2008 through 2012, Stone Boy drilled 84 holes at Naosi, outlining the deposit for about 1,500 meters along strike and to a depth of about 500 meters.
During a presentation in Anchorage late in 2015, Beppu offered an invitation to companies interested in joining the search for another gold mine in the Pogo region.
Great American Minerals Exploration Inc. has quietly consolidated ownership of its Uncle Sam property, a 26,639-acre land position immediately north of Monte Cristo.
“Game,” as the privately held Nevada corporation is commonly known, first discovered gold on the Uncle Sam property in 1998 and has held onto a position in the region ever since.
Game President and CEO Dennis McDowell further expanded Uncle Sam by cutting a deal on Stone Boy’s Monte Cristo property immediately to the south.
Northern Empire Resources Corp., an exploration property formed as a restructuring of Prosperity Goldfields in 2014, is seeking gold at Richardson, a large land package about five miles southwest of Monte Cristo.
The 2016 program at Richardson included soil sampling, trenching, prospecting, geophysics and re-logging of historic core holes, with the goal of delineating drill targets.
Northern Empire also owns the adjacent Hilltop gold property, which it optioned to Sonora Metals Corp. in 2015.
In the Fairbanks area, Kinross Gold’s Fort Knox Mine celebrated two major milestones in 2016 – 20 years in operation and the pouring of the seven-millionth-ounce of gold produced at the iconic open-pit mine. According to the latest published report, mining at this open-pit operation just north of Fairbanks is slated to end in 2019. Considering that Fort Knox is the second-lowest cost and among the highest-producing gold operations in Kinross’ portfolio, it is likely the company will bring in other resources surrounding the pit and in nearby deposits into an extended mine plan.
“Kinross’ exploration is focused on brownfield projects around existing operations, and we continue to look for ways to further extend our operation,” Fort Knox General Manager Eric Hill explained. “We believe Alaska is an attractive mining jurisdiction and a good place to do business – we have successfully operated Fort Knox for 20 years, and the mine is now 12 years beyond our original plan.”
Kinross is also carrying out early-stage exploration on a large block of claims in the Circle Mining District about 80 miles (130 kilometers) north of Fort Knox.
Only about four miles (seven kilometers) north of Fort Knox, Freegold Ventures Ltd. is sitting on a 6-million-ounce bulk-tonnage gold deposit on its Golden Summit property.
In May, Freegold published a preliminary economic assessment that considers a very low-cost 20,000-metric-tons-per-day operation – heap leach for the oxide and bi-oxidation for the sulfide material – that produces about 2.4 million oz. of gold over a 24-year mine life.
Freegold’s 2016 exploration program focused on Shorty Creek, a 26,000-acre copper-gold project in the Livengood region of Interior Alaska.
Following the acquisition of Shorty Creek in mid-2014, Freegold has identified two large porphyry targets at Shorty Creek, Hill 1835 and Hill 1710. This year’s drilling targeted both.
About 45 miles (70 kilometers) southwest of Shorty Creek, Endurance Gold Corp. completed a small drill program at its Elephant Mountain project, a property drilled by Placer Dome Inc. in 1992. The best of the 10 historical holes drilled cut 99.4 meters of 0.51 g/t gold. In recent years, Endurance has refined drill targets with mapping and sampling across this road accessible property.
Australian invasion
While it is not uncommon for Australian mining companies to be drawn to Alaska’s vast and underexplored mineral potential, no less than three Down Under exploration companies had active drill programs in Southcentral Alaska during 2016.
Perth-based Coventry Resources Inc. is among these companies coming north during the Australian winter.
“Coventry believes there is exceptional potential to discover new economic mineral deposits in Alaska, and indeed that it is likely there are still multiple world-class mineral deposits to be discovered there,” Coventry President and CEO Mike Haynes told Mining News. “We are also attracted by what we believe to be very encouraging geopolitical conditions that are supportive of exploration for, and development of, mineral resources.”
The Australian explorer points to Caribou Dome, a road-accessible high-grade copper property about 155 miles north of Anchorage, as a prime example of Alaska’s potential.
“(W)e believed that the project was very much under-explored, and that in light of the geological style of the mineralization, there was considerable potential to delineate additional mineralization of similar high-grade by undertaking further exploration,” Haynes explained.
Coventry’s 2016 program of ground geophysics, drilling, mapping and soil sampling has gone a long way towards proving this theory.
At the end of 2015, Vista Minerals Ltd., a privately held mineral exploration out of Australia, cut a deal to earn an 80 percent joint venture interest in Millrock Resources’ Stellar property.
Located just 10 miles northeast of Caribou Dome, the Stellar claims cover the Zackly copper-gold skarn deposit and surrounding lands considered prospective for porphyry copper-gold deposits.
Roughly 12,200 meters of historical drilling at Zackly has outlined a non-NI 43-101-compliant resource of 218,944 oz. of gold, 1.19 million oz. of silver and 66.9 million lbs. of copper contained in a deposit of 1.2 million metric tons grading 6.03 g/t gold, 33 g/t silver and 2.7 percent copper.
Another Australia-based explorer, White Rock Resources Ltd., is on the hunt for a large zinc-silver-lead-gold-copper deposit at Red Mountain, a volcanogenic massive sulfide property about 55 miles (34 kilometers) north of Caribou Dome.
Since cutting a deal in February to acquire full ownership of Red Mountain, White Rock began compiling and interpreting the data from exploration spanning four decades.
The company said VMS deposits typically occur in clusters and the known deposits already identified within the Red Mountain project – Dry Creek and West Tundra Flats – is providing valuable clues to where to find others within the larger Red Mountain area.
Historical drilling at Dry Creek cut 4.6 meters grading 23.5 percent zinc, 531 g/t silver, 8.5 percent lead, 1.5 g/t gold and 1 percent copper; and one hole at West Tundra Flats cut 1.3 meters grading 21 percent zinc, 796 g/t silver, 9.2 percent lead, 10.2 g/t gold and 0.6 percent copper.
“White Rock has been able to identify numerous additional targets by aggressively interrogating historic geochemical and geophysics data,” said White Rock CEO Matt Gill. “The process has encouraged us that the Red Mountain project could realize several new discoveries and stamp the district as a significant VMS camp.”
To cover this broader VMS-prospective area, White Rock staked 114 state of Alaska mining claims, which more than doubles the company’s land holdings at Red Mountain.
Whistler area
Australians are not the only explorers who see rich potential along the southern slopes of the Alaska Range.
Where these majestic mountains arc southwest, Brazil Resources Inc. is re-evaluating Whistler, a copper-gold project it acquired from Kiska Metals in 2015.
This fresh investigation started at Whistler’s namesake deposit.
According to an updated estimate prepared for Brazil Resources, the Whistler deposit hosts 79.2 million metric tons of indicated resource containing 1.28 million oz. gold, five million oz. silver and 302 million lbs. copper; and 145.8 million metric tons of inferred resource with 1.85 million oz. gold, 8.2 million oz. silver and 467 million lbs. copper.
In April, Brazil Resources published a maiden resource for Island Mountain, which is located about 14 miles south of the Whistler deposit.
Incorporating 34 of the holes drilled by Kiska, Island Mountain is estimated to contain 25.75 million metric tons of indicated resource with 438,000 oz. gold, 960,000 oz. silver and 34.07 million lbs. copper. Additionally, the deposit hosts 69.23 million metric tons of inferred resources with 1.12 million oz. gold, 2.38 million oz. silver and 91.59 million lbs. copper.
“In addition to the Island Mountain and Whistler deposits, there are several other porphyry centers –Raintree West, Raintree North, Raintree South, Rainmaker and Cirque – with mineralized intersections similar to these deposits,” said Brazil Resources President and CEO Garnet Dawson.
Brazil plans to expand the resources identified in the outcropping deposits, as well as investigate the size potential of some of these more hidden outlying targets.
Just south of the Whistler property, Kiska continues to explore for copper-gold-molybdenum porphyry deposits at Copper Joe.
First Quantum Minerals can earn 51 percent interest in Copper Joe by investing US$5 million in exploration of the property by the end of 2017. Mapping and geophysical work carried out by Kiska and First Quantum in 2015 defined two compelling porphyry targets – Evening Star and Morning Star.
A magnetotelluric geophysical survey conducted in 2015 identified a 1,400-meter-wide anomaly at Evening Star that is coincident with a larger zone of intense phyllic alteration at surface.
In August, the partners drilled one 800-meter-deep hole into the core of the Evening Star anomaly.
Copper, gold in the west
The aptly named Western Alaska Copper & Gold Company completed the first drill program in 34 years at its Round Top porphyry project in the Illinois Creek Mining district near Galena.
Western Alaska Copper & Gold founder and President Kit Marrs was part of the Anaconda Minerals team that discovered and drilled Round Top in the 1980s.
This early work made a number of discoveries across the district that includes a porphyry copper-gold target at Round Top; TG and TG North, high-grade brecciated silver-gold-lead-zinc vein prospects less than a mile northwest of Round Top; Honker, a high-grade gold prospect on separate group of claims about 13 miles to the west; and Illinois Creek, a gold-silver deposit situated about six miles south of Honker.
While the Illinois Creek property was eventually developed into a mine that produced roughly 130,000 oz. of gold and 500,000 oz. of silver from 1997 until 2003, the other prospects have gone largely unnoticed.
This lack of attention worked out well for Marrs, who was able to nab full and unencumbered ownership of the mineral rights to Round Top, TG and Honker by simply staking state of Alaska mining claims over the prospects in 2008.
Since that time, Western Alaska Copper & Gold has steadily built upon the historical exploration with geophysics, sampling, mapping and prospecting in preparation for this year’s drilling.
In Southwest Alaska, Redstar Gold Corp. continued exploration of high-grade gold at its Unga project, which is home of the historic Apollo gold mine on an island just south of the Alaska Peninsula.
The 2016 exploration focused primarily on identifying new drill targets at the Shumagin prospect of its Unga gold project on the Alaska Peninsula, where past trenching and drilling has traced high-grade gold-silver veins for more than 1,200 meters along strike and to a depth of 330 meters.
The program also included mapping and drill targeting at Empire Ridge, the southwest extension of the Apollo Mine. Up to 157 grams-per-metric-ton silver were collected in exposed vein gossans in this area.
In August, Eric Sprott agreed to acquire 30 million Redstar shares through a non-brokered private placement of up to 41 million shares at C10 cents each.
“The company will begin plans to initiate its next drilling program on the high-grade Shumagin gold zone at our 100 percent controlled Unga gold project in Alaska,” Redstar President and CEO Peter Ball said at the time.
About 10 miles (16 kilometers) north of Unga, CopperBank Resources Corp. is exploring 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 four miles (seven kilometers) east of the company’s Pyramid copper-molybdenum deposit.
Exceptional Northwest
From the Ambler Mining District to the Red Dog Mine area, Northwest Alaska is known for hosting large and exceptionally high-grade deposits of zinc, copper and precious metals.
Upper Kobuk Mineral Projects – a partnership between Trilogy Metals Inc. (formerly NovaCopper) and NANA Corp., the Alaska Native regional corporation that represents the Iñupiat of Northwest Alaska – are exploring some 353,000 acres of land that blanket most of the Ambler District.
“(W)e believe the Ambler mining district represents a unique opportunity in the global copper space – not to mention our significant resources of zinc, gold and silver!” said Trilogy Metals President and CEO Rick Van Nieuwenhuyse.
Arctic, the most advanced deposit on the UKMP property, hosts 1.95 billion lbs. copper, 2.6 billion lbs. zinc, 610,000 oz. gold, and 45.3 million oz. silver.
This year, Trilogy Metals invested US$5.5 million at UKMP – a budget identical to 2015 – that continued the collection of data needed to complete a prefeasibility study for an open-pit mine at the Arctic deposit, while continuing to seek areas to expand upon the more than eight billion pounds of copper it has identified there and at Bornite, a second world-class deposit that lies a mere 16 miles to the south.
NANA is also a partner in the Red Dog Mine, another rich deposit on its lands about 180 miles (290 kilometers) northwest of Arctic.
Teck Resource Ltd., the operator of Red Dog, continues to add years to the mine by upgrading high-grade resources in nearby deposits to reserves and seeking out new deposits in the larger Red Dog area of Northwest Alaska.
Anarraaq-Aktigiruq, situated on State of Alaska mining claims roughly eight miles northwest of current operations at Red Dog, is among the high-quality targets Teck is pursuing. Teck discovered Anarraaq in 1999, subsequently establishing an inferred resource of about 19 million tons grading 15.8 percent zinc, 4.8 percent lead, and 2.1 oz. /t silver.
Teck also holds a 50 percent stake in Lik, a zinc deposit about six miles west of Anarraaq being advanced by Zazu Resources Ltd.
In 2014, Zazu published a preliminary economic assessment that envisions a 5,500 metric-ton-per-day mill processing ore from an open-pit mine at Lik South, one of two deposits that make up the project. Over an initial nine-year mine life, this operation is anticipated to mill 17.1 million metric tons of ore averaging 7.7 percent zinc, 2.6 percent lead and 47 g/t silver.
Southeast underground
Coeur Mining Inc.’s endeavor to delineate and develop the high-grade Jualin gold deposit at Kensington was one of the biggest exploration stories in Southeast Alaska this year.
The 12,400-acre Kensington property is divided into two blocks – Kensington, which is where Coeur has been mining since resumption of operations at the Southeast Alaska mine in 2010, and Jualin, which hosts a deposit with higher grade gold.
Surface drilling has delineated 289,000 tons of inferred resource averaging 0.619 oz. /t (179,000 oz.) gold, about triple the grades currently being mined at Kensington.
Underground development and drilling to further define this resource and ready the deposit for mining has been a key focus at Kensington this year.
“We’re … investing about $40 million at Kensington to drill and develop significantly higher grade gold oz. there,” explained Coeur Mining President and CEO Mitchell Krebs.
An inaugural reserve estimate for Jualin is expected by the end of 2016 and first ore is expected to reach the mill at Kensington in mid-2017.
South of Kensington and near the capital city of Juneau, Hecla Mining Company continues to add to the high-grade silver reserves at Greens Creek.
Going into 2016, Greens Creek had 7.21 million tons of reserves averaging 12.3 oz. /ton (88.7 million oz.) silver; 0.09 oz. /ton (677,000 oz.) gold; 8.1 percent (582,640 tons) zinc; and 3 percent (218,400 tons) lead.
The Idaho-based miner, credits much of its success in recent years, to the roughly 60 million oz. of low-cost silver recovered at Greens Creek since the company acquired full ownership of the underground silver mine in 2008.
“Greens Creek continues to drive Hecla’s strong, consistent production performance,” said Hecla President and CEO Phillips Baker, Jr.
To ensure this trend continues, the company is focused on building reserves and finding new deposits at the.
At the northern end of the panhandle, Constantine Metal Resources Ltd. and Dowa Metals & Mining Co. Ltd. is advancing exploration at Palmer.
The Glacier Creek deposit at Palmer hosts 8.125 million metric tons of inferred resources averaging 1.41 percent (252.6 million pounds) copper, 5.25 percent (940.4 million lbs.) zinc, 0.32 grams per metric ton (83,600 oz.) gold and 31.7 g/t (8.3 million oz.) silver for the RW and South Wall zones.
Waiting for approvals to build a road to access the lower expansion areas of this deposit, Constantine and Dowa investigated nearby targets beyond the VMS deposit this year.
“We are excited to be stepping out beyond the immediate resource and begin testing other high-quality prospects that surround the known deposit,” said Constantine President and CEO Garfield MacVeigh.
With the goal of developing another quality underground mine in Southeast Alaska, the partners will return to further expand and upgrade the Glacier Creek deposit in 2017.
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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