Mining deaths fall to record low in 2016

The year just past was many things for the mining industry, but one of the bright spots came from the Mine Safety and Health Administration, an agency not known for awarding happy faces or gold stars.

In 2016, the mining industry experienced only 25 deaths in U.S. mines, the lowest level ever recorded.

This, despite the industry having more than 330,000 miners working in 13,000 mines across the country.

The leading cause of death in both coal and metal/nonmetal mines was machinery and powered haulage equipment.

MSHA acknowledged that every year since 2009, injury rates in American mines have declined and death rates fell below all previous annual death rates, except in 2010 when the Big Branch coal mine disaster occurred.

While zero deaths in a year is the ultimate goal, 2016 statistics drive home the point that you are safer in an operating U.S. mine than you are in your own home.

But that was last year, what can the industry, in general and Alaska in particular, expect in 2017? Virtually everyone thinks the new Trump administration will have profound impacts on the U.S. and world markets for commodities.

Trouble is, talk to 10 people and you get a baker's dozen opinions on just what those impacts are going to be.

Regardless of your viewpoint, however, some constants have been and will remain guides to the mining industry: high grade is preferable to low grade; good infrastructure is preferable to poor infrastructure; rule of law is preferable to rule of dictator; simple metallurgy is preferable to complex metallurgy; and local support is preferable to local opposition.

Good hunting in 2017!

Western Alaska

Graphite One Resources announced 2016 milestones and an update on 2017 plans at its Graphite Creek graphite deposit on the Seward Peninsula.

The 2016 milestones included raising more than US$2.8 million in new financing, confirmation of high performance, repeatability and stability of the company's spherical graphite, all required in high-quality graphite for lithium-ion batteries, and continued testing by potential end‐users of exploratory grade samples of coated, spherical graphite.

Millrock's plans for 2017 include completion of preliminary test work on its mineral processing circuit for producing high-grade graphite concentrate from raw ore and completion of a preliminary economic assessment by the end of January 2017.

Most components of the PEA are complete, with some delays reported due to the time required to complete the company's review and approval process.

Redstar Gold released final assay results from its seven-hole, 1,505-meter 2016 drill program at its Unga gold-silver project near Sand Point.

Drilling has expanded high-grade gold-silver mineralization in the Shumagin zone to at least 950 meters of drilled strike length, to depths of at least 330 meters below surface.

Mineralization is not constrained to a northeast-plunging shoot as previously thought.

Breccia and stockwork zones widen at depth towards the southwest, indicating further expansion potential along strike on the Shumagin zone.

The overall size of the system has expanded 300 meters east to Bunker Hill, and some 400 meters to the southwest of the deepest previous drill hole BM-01 drilled in the 1990s.

Expansion potential exists for an additional 3 kilometers to the Orange Mountain area, another hydrothermally altered zone on the trend.

Significant drill results on the Shumagin trend include hole 16SH019, with 0.9 meters grading 14.95 grams per metric ton of gold, starting at 264.6 meters depth; and hole 16SH020 with 1.15 meters grading 11.3 g/t gold starting at 270.45 meters.

At the Bunker Hill zone, about 300 meters to the northeast of the Shumagin zone's Main Breccia, mineralization extends more than 200 meters in quartz-adularia-carbonate breccias identical to exposures along the Main Breccia.

Significant drill results on the Shumagin trend include hole 16SH022, with 1.5 meters grading 16.97 g/t gold starting at 156.5 meters depth.

The company anticipates initiating a larger drill program during the spring of 2017 to focus on expanding the Shumagin zone along strike to the southwest.

CopperBank Resources Corp. announced that The Aleut Corporation, an Alaska Native regional corporation and the underlying property owner for the company's Pyramid and San Diego Bay projects, has agreed to take an equity position in the company.

Aleut Corporation has agreed to acquire 1,687,500 shares of the company at a price of C8 cents per share.

The San Diego Bay prospect is typified by 40 square kilometers of gossan, strong hydrothermal alteration and intrusive rocks consistent with porphyry systems such as the adjacent Pyramid deposit.

All porphyry alteration facies have been observed at San Diego Bay, including zones of potassic, advanced argillic, phyllic and pyrite zones along with widespread areas of high-temperature clay alteration.

Strongly anomalous precious and base metal values were collected by previous operators and cobbles of copper oxide mineralization have been identified by local Aleut shareholders on beaches adjacent to the alteration zone.

The company believes that San Diego Bay may contain overlapping hydrothermal systems, including potential lithocaps.

Interior Alaska

Freegold Ventures Ltd. provided an update for its Golden Summit project in the Fairbanks District.

Earlier in 2016 the company announced the results of a preliminary economic assessment at the project.

Using a US$1,300 per ounce gold price, the PEA evaluated a two-phase, 24-year open pit mine, generating two gold streams with each operating at 10,000 metric tons per day for 2,358,000 ounces of doré produced over life of mine.

Processing operations for the oxide and sulfide mineralized materials are heap leach and bi-oxidation, respectively.

As a follow up to the PEA, additional metallurgical work to further refine the treatment method to the sulfide material is being planned in order to further enhance the overall project economics.

In particular, further oxidation treatment on all identifiable sulfide materials as well as ultra-fine grind test work will be undertaken in an effort to explore grind size versus recovery relationships.

Limited drilling to delineate additional oxide resources is also being planned for 2017.

A total of 717 soil samples were recently collected and have identified a gold-in-soil geochemical anomaly west of the main resource at the Dolphin deposit.

Initial drilling will be focused to the north of the current mineral resource where previously completed rotary air blast drilling indicates that better grade oxide material may be present outside the current resource base.

Exploration drilling also will focus on areas where the previous induced polarization/resistivity ground geophysics suggests the presence of shallow intrusive rocks to the southwest of the deposit.

International Tower Hill Mines said it has closed a US$22 million financing for its flagship Livengood gold project. The company indicated that it intends to use the funds to complete acquisition of certain mining claims and related rights in the vicinity of the deposit, estimated at some US$14.8 million, for continuation of optimization studies to further improve and de-risk the project, for required environmental baseline studies, and for general working capital purposes.

Freegold Ventures Ltd. also announced final drilling results from a seven-hole, 3,038 meters drilling program at its Shorty Creek project near Livengood.

The new results are from five holes, SC1603 to 1607 (2,019.8 meters), collared on Hill 1710, located 2.5 kilometers northwest of previous drilling on Hill 1835.

The Hill 1710 drilling focused on a portion of a 6,000-meter-by-1,500-meter magnetic anomaly where partial soil coverage indicates a coincident copper-molybdenum soil geochemical anomaly.

To date ground geophysics and soil geochemical surveys have been conducted over only 2,500 meters of this magnetic anomaly.

The holes at Hill 1710 were spaced about 400 meters apart starting on the western edge of the soil geochemical anomaly.

All of the holes intersected copper and molybdenum mineralization with the copper values increasing as the drilling moved to the northeast.

Coincident with the increased assay values was the increasing volume of quartz feldspar porphyry intrusive intersected in holes SC 16-06 and SC 16-07, the two most northeastern holes.

Hole 16-03 was the most westerly hole drilled at Hill 1710 and returned 172.6 meters, grading 0.03 percent copper and 0.034 percent molybdenum.

Hole SC 16-06 intersected quartz-feldspar porphyry with a coincident higher grade interval, including 0.11 percent copper and 0.02 percent molybdenum, while hole SC 16-07 intersected 0.11 percent copper and 0.011 percent molybdenum from surface to 159 meters depth.

Four other areas of the project remain untested by drilling.

These targets, including Hill 1870, Steel Creek, Hill 1890 and Quarry, possess geochemical and/or geophysical anomalies that the company hopes to drill test in the future.

Endurance Gold released additional assay results from the 2016 drill program on its Elephant Mountain gold property near Manley Hot Springs.

During 2016, three diamond drill holes were completed on the South Zone and one diamond drill hole was completed on the North Zone for a total of 598 meters.

At the North Zone target, rubble-crop defines a one-square-kilometer alteration zone consisting of disseminated pyrite-arsenopyrite in pervasively silicified, sericite, and clay-altered granodiorite associated with a gold-arsenic soil anomaly.

This area was previously drill tested by Placer Dome Inc. and others and resulted in six drill holes over a 550 meters across and 100 meters vertical expanse returning gold values in excess of 100 parts per billion gold.

Mineralization was hosted in pervasively silicified, sericite, and clay-altered granodiorite similar to alteration and mineralization observed on surface.

At the North zone, hole EL16-13 was drilled in this target and intersected 150 meters of 1.5 percent pervasive disseminated pyrite and arsenopyrite-bearing quartz veinlets starting at surface.

The entire length of the drill hole is in-part oxidized with the oxidation related to fractures and oxidized quartz-sulfide veinlets.

Significant assays from hole EL16-13 include 0.40 g/t gold over 147.1 meters encompassing more than 48.2 meters averaging 0.63 g/t gold.

Two additional holes were completed at the South zone, with hole EL16-15 returning 0.52 g/t gold over 3.04 meters encompassing1.06 meters averaging 1.13 g/t gold.

This intersection is associated with one of the zones of clay gouge breccia and fault rubble.

Hole EL16-16 returned 0.59 g/t gold over 2.44 meters and 0.48 g/t gold over 2.44 meters.

These intersections are associated with minor pyrite and arsenopyrite associated with a quartz veinlet zone in syenomonzonite and a clay gouge zone in silicified and carbonate altered diorite and sediments.

The company is recommending additional geophysics, soil geochemistry and diamond drilling for future programs.

Northern Empire Resources Corp. said it filed a National Instrument 43-101 technical report with results from its 2016 exploration efforts at the Richardson gold project near Fairbanks.

The report indicates that the recognition of associated fault zones and high-grade gold samples collected in 2016 channel sampling at the Democrat Pit present a compelling target.

Geophysical re-interpretation and follow-up ground geophysical work have identified several magnetic anomalies which are coincident with known faults, gold in soil anomalies and drill-hole gold intercepts (particularly at the Shamrock area).

Magnetic data appear to show an earlier structural fabric which may be related to gold mineralization.

The recognition of lineations at the Democrat Pit parallel to the northwest trending Richardson lineament suggest a right-lateral sense of movement along this structure.

Recommendations for 2017 include 1) expansion of the Democrat Pit exploration area by trenching north of the current Pit and collecting additional trench samples and structural data; 2) diamond drilling is recommended at the Democrat area, targeting high-grade structures away from the Democrat Pit; 3) additional trenching in the Shamrock area is recommended along with structural mapping and follow-up drilling should the trench results be positive; 4) property-wide structural mapping is highly recommended along with additional ground magnetic surveys; and 5) continued soil sampling on areas covered widely in 2016 and, along structures identified in the 2016 ground geophysics that have not already been covered by soil geochemistry.

Contango ORE Inc. announced final drill results from its 2016 Phase 3 drilling program at the Tetlin gold project, a joint venture with a wholly owned subsidiary of Royal Gold Inc. The partners completed 19 core holes in the 2016 phase 1 program, 62 holes in phase 2 and 37 holes in phase 3.

Drilling in 2016 totaled 20,522.8 meters (67,335 feet).

Significant new results from the phase 3 drilling at the North Peak zone included hole 16277, which returned 12.52 meters grading 2.56 g/t gold; hole 16278, which returned 14.05 meters grading 10.58 g/t gold; hole 16281, which returned 8.53 meters grading 22.01 g/t gold; hole 16300, which returned 15.05 meters grading 5.15 grams of g/t gold; hole 16302, which returned 22.74 meters grading 26.61 g/t gold, hole 16304, which returned 21.20 meters grading 11.86 g/t gold and an additional 22.55 meters grading 5.49 g/t gold; and hole 16305 which returned 29.54 meters grading 7.17 g/t gold.

The company indicated that it plans to commence a 6,000-meter drill program in February at the Main and North Peak zones.

CORE is still on-track to release a revised resource estimate later in the first quarter.

Northern Alaska

Goldrich Mining Company and partner NyacAU LLC announced year-end placer gold production figures for their Chandalar mine in the southern Brooks Range. During 2016, the operation produced 10,209 ounces of raw alluvial gold, equivalent to roughly 8,200 ounces of fine gold (approx. 800 fine). Production costs totaled $961/oz., including operating costs and equipment payment costs. Total 2016 production represents a 117 percent increase over the 2015 mining season. Total revenue exceeded US$10 million. Mining expanded beyond previously outlined resources, and the company obtained permits to further expand operations in 2017. Production estimates for 2017 were not released.

Southeast Alaska

Hecla Mining Company reported preliminary fourth quarter and year-end 2016 production results for its Greens Creek mine on Admiralty Island. The mine produced 9.3 million oz. of silver in 2016, the highest annual silver output since Hecla acquired 100 percent of the project in 2008. Greens Creek mine also produced 53,912 oz. of gold for the year. For the fourth quarter, 2.2 million oz. of silver and 14,415 oz. of gold were produced. Increased silver production for the year resulted from higher grades and greater recovery, and lower gold production stemmed from lower grades. The mill operated at an average of 2,229 short tons per day in 2016.

Coeur Mining Inc. announced fourth quarter and year-end 2016 production results from its Kensington gold mine near Juneau.

Fourth-quarter production totaled 33,688 oz. of gold, a significant increase over the 26,459 oz. of gold produced in the previous year.

During the fourth quarter, the mine processed 163,410 tons of ore grading 0.22 oz./t of gold.

Recovery averaged 94.4 percent.

For 2016, the mine's output totaled 124,331 oz. of gold, a slight decrease from 126,266 oz. of gold produced a year earlier.

For 2016, the mine processed 620,209 tons of ore, grading 0.21 oz./t gold per ton.

Average recovery was 94.7 percent.

Work continued on the decline into the Jualin zone.

Work was 64 percent completed at year-end.

Estimated 2017 total production from Kensington is 120,000-125,000 ounces of gold.

Author Bio

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).

• Email: [email protected]
• Phone: 907-457-5159
• Contact Curt Freeman