Forecast brightens for Alaska mining

With winter programs winding down and summer efforts rapidly ramping up, it is becoming clear that 2017 will be a much more vigorous year for the Alaska mining industry than the 2013 to 2016 period.

For example, my internal estimates are already pushing $75 million for exploration activity alone and a significant number of projects that have announced exploration plans have not yet announced budgets for 2017, so that number is likely to rise.

Compare this to estimates of less than $50 million at this time last year, and it seems obvious that the tide is rising.

In addition, a number of projects are advancing along the development track with Donlin Gold leading the way with advanced permitting, and projects like Livengood, Arctic, Bornite, Graphite Creek, Palmer, Bokan-Dotson, Niblack, Golden Summit and Lucky Shot moving along the advanced exploration to development trajectory.

And if there is any doubt about the appetite of producing companies for high-quality assets, their intent has been made evident by recent acquisitions by Kinross and South32 here in Alaska, as well as acquisitions of advanced projects in Yukon Territory by the likes of Goldcorp, Newmont, Barrick and Agnico-Eagle.

It is time once again too saddle-up!

Western Alaska

Novagold Resources Inc. released first-quarter financial results and updates for its flagship Donlin gold project, 50 percent-owned with Barrick Gold on land leased from Calista Corp. The partners and the U.S. Corps of Engineers made progress with permitting designed to advance the project to final environmental impact statement, anticipated to be filed in early 2018.

In addition, the project completed an updated preliminary jurisdictional wetland determination, continued developing a compensatory wetland impact mitigation plan, and moved forward on issuance of major state permits.

The company also opened a docket for a special permit to construct the natural gas pipeline through the Pipeline and Hazardous Materials Safety Administration.

The company continued its stakeholder outreach programs on multiple fronts.

Graphite One Resources Inc. reported that its Graphite Creek project was included among the infrastructure projects introduced into testimony to the U.S. Senate Energy and Natural Resources Committee as being one of Alaska's most significant development and infrastructure projects.

State Geologist Steve Masterman noted that natural graphite is a "supply critical mineral" with no current domestic production source.

The project's anticipated 16-mile, all-season access road and power-generating facility will bring important energy and infrastructure components to this part of Alaska.

The project's planners also are exploring opportunities to locate their graphite reprocessing facility in Alaska, which would be an additional boost for local employment and economics.

Northern Dynasty Minerals Ltd. announced that its wholly-owned subsidiary, Alaska-based Pebble Limited Partnership, has received a miscellaneous land use permit from the Alaska Department of Natural Resources for its Pebble copper-molybdenum-gold project. Among other requirements, the permit contains provisions requiring a performance guaranty in the amount of US$2 million related to any potential reclamation liability arising out of permitted activities. The company indicated that will be advancing a program of work in 2017 to prepare the project to initiate permitting under the Federal Clean Water Act and the Federal ¬¬National Environmental Policy Act.

Redstar Gold Corp. reported the start of its spring 2017 exploration program, commencing with a detailed surface geophysics program at the Shumagin gold zone at its Unga gold project near Sand Point.

Previous exploration expanded the drilled strike length of the Shumagin zone by 600 meters, to about 950 meters, and highlighted the strong continuity of high-grade mineralization along strike and at depth.

The ground-based geophysical program will test the potential southwest extension of the Shumagin system and assist in defining new drill targets.

Geophysical surveys will be immediately followed by a 5,000-meter core drilling program.

The thickest breccia bodies and highest gold-silver grades within the Shumagin zone are localized along northeast-southwest trending syn-mineral dilation zones that are part of a major regional structural corridor that crosses Unga Island from coast-to-coast, a distance of over 9.5 kilometers.

CopperBank Resources Corp. reported that it is planning to conduct additional drilling at its Pyramid copper-molybdenum-gold project on lands on the Alaska Peninsula owned by The Aleut Corporation.

The company hopes to complete 1,500 meters of drilling in mid-2017 with an estimated budget of US$750,000.

The company's objective would be to drill step-out holes from the current resource and to depth in advance of infill drilling planned for 2018.

The program is focused on expansion of high-grade resources around hole PY11-16, which returned 155 meters of 0.71 percent copper, 0.18 grams per metric ton gold and 0.018 percent molybdenum, starting at 94 meters.

The bottom 34 meters of this hole returned 0.844 percent copper.

Sad and disturbing news came from PacRim Coal, which announced in early April that after an extensive internal review, the partners funding the company decided to shelve its efforts to permit the Chuitna coal project near Cook Inlet.

Exploration and permitting date back to the early 1970s and at one point in the 1990s, the project was fully permitted to begin construction.

Over the project's life span, more than $150 million has been spent on exploration, engineering and permitting efforts, a third of that in the past 10 years.

The project's +300 million-ton reserve of low-sulfur sub-bituminous coal makes ideal feedstock to blend with higher sulfur coal to allow power plants to meet stringent new sulfur emission requirements.

Interior

Endurance Gold Corp. announced that it has acquired an option to earn 100 percent ownership in the Trout and Wolverine properties located immediately northeast of the company's Elephant Mountain project in the Rampart District.

These two new properties consolidate ownership of the gold-bearing intrusive complexes, which now include five known gold prospects associated with gold in soil and rock samples over a strike distance of about 12 kilometers.

With these acquisitions, the company is planning a larger 2017 exploration program that will expand on the 2016 drill discoveries, including 4.09 g/t gold over 4.6 meters in the South zone and 0.63 g/t gold over 48.2 meters at the North Zone.

Newly acquired properties are located within the Quail and Hutlinana Creek drainages, which have active and historic placer gold production.

The Trout target is an intrusive-hosted soil anomaly, with values in excess of 100 parts per billion gold over a 1,000- by 300-meter mineralized trend.

The best assay results reported included a gold-in-rock grab sample which assayed 9.64 g/t gold associated with a quartz vein hosted by a sheared intrusive.

The South Fork target is a 10- to 20-meter-wide structural zone extending over a 1,000-meter length from which grab rock samples collected by previous companies returned values up to 11.98 g/t gold.

Fine placer gold can be panned from the primary creek immediately downstream from the structure.

The Wolverine target is composed of several anomalies, the most encouraging of which contains anomalous soils and rocks that outline a 300- by 300-meter area containing gold in soils up to 465 parts per billion.

The best reported rock grab samples to date are up to 970 ppb gold.

Significant gold mineralization in samples is typically associated with quartz veins hosted within intrusive.

Alaska Range

White Rock Minerals reported it has commenced its first mineral resource estimate at its Red Mountain lead-zinc-silver-copper-gold project in the Bonnifield District.

The efforts will focus on the two nearby volcanogenic massive sulfide prospects, Red Mt. and West Tundra Flats.

An independent review of the 127-hole, 19,180-meter database on the project recommended additional confirmation sampling of a representative number of drill intervals in both deposits and over a wide time span of drilling extending from the 1970s through the 1990s.

Following completion of this effort, it was determined that the drilling database is reliable enough to permit the resource to be completed under Australian industry standards.

The resource estimate is expected to be published before the end of May. Following release of this first estimate, the company plans to begin field work on the highest-priority targets adjacent to Dry Creek and West Tundra Flats.

These high-priority targets are geophysical conductors located within zones of anomalous surface geochemistry that are indicative of proximal volcanogenic massive sulfide mineralization.

The proposed field work will include surface geochemical sampling and ground geophysics to define drill targets.

Not to be up-staged, Coventry Resources announced its first mineral resource estimate at the Caribou Dome sediment-hosted copper project in the Valdez Creek District.

The estimate came in at 2.8 million metric tons grading 3.1 percent copper, using a 0.5 percent copper cut-off.

About 60 percent of the mineral resource, comprising 1.6 million metric tons, occurs within about 15 meters of surface and has an average grade of 3.0 percent copper.

Within that domain, about 935,000 metric tons averaging 4.4 percent copper at a 2 percent cut-off grade may form part of an open-pit resource.

The company has undertaken a preliminary scoping for a low capital cost, open-pit starter operation.

Copper mineralization remains open to depth and along strike with recent exploration efforts suggesting copper mineralization can be traced over at least 7,000 meters by soil and induced polarization geophysics on the southwestern end of the system where the current resource has been outlined.

In addition, a five-kilometer-long copper-in-soil and rock anomaly has been identified in favorable rocks units over 11,000 meters northeast of the current resource.

The current resource covers only 800 meters of this more than 18,000-meter-long mineralized belt, suggesting significant up-side potential for the project.

Northern Alaska

Trilogy Metals Inc. announced another step in advancing the Upper Kobuk Mineral project, a business relationship owned and controlled by Trilogy and NANA Regional Corporation Inc. Trilogy announced that they had entered into an agreement with Alaska newcomer South32 Limited whereby South32 has the option to earn 50 percent of Trilogy's interest in the Arctic and Bornite projects, the exploration and option to lease agreement with NANA and the remainder of Trilogy's state mining claims along the 70-mile-long Ambler volcanogenic massive sulfide belt.

South32 must contribute a minimum of US$10 million each year, for a maximum of three years, to keep the option in good standing.

To subscribe for 50 percent of the joint venture, which it may do at any time, South32 would be required to contribute a minimum of $150 million, plus any amounts Trilogy spends at the Arctic deposit over the next three years, to a maximum of $5 million per year.

South32's initial $10 million expenditure in 2017 will be spent on exploration at the Bornite deposit to test the extension of high-grade copper previously intersected at the deposit, including hole RC13-0224, which intersected 236 meters of continuous mineralization averaging 1.9 percent copper.

The partners plan to drill up to seven holes, up to 1400 meters deep to test an area measuring 1,000 meters east-west by 400 meters north-south.

Trilogy also announced revised metallurgical, geotechnical and hydrologic results from ongoing studies at the nearby Arctic volcanogenic massive sulfide deposit.

Metallurgical improvements include copper recoveries that improved from 87 percent to 92 percent, zinc recoveries that improved from 87 percent to 88 percent, copper concentrate average grade remaining high at 29 percent, zinc concentrate average grade improving from 56 percent to 60 percent and in-pit geotechnical and hydrology studies that are now completed to a preliminary feasibility study level.

Neither the zinc nor copper concentrate contains significant deleterious penalty metals and are considered excellent quality by world standards.

The lead concentrate contains significant precious metals and is still undergoing further work to determine optimal recoveries for lead, gold and silver.

Metallurgical studies indicate soft to moderate ore hardness and recovery using standard froth flotation methods.

Geotechnical and hydrologic studies also have been completed to the preliminary feasibility study level.

Welcome to Alaska South32 Limited!

Southeast Alaska

Hecla Mining Company announced preliminary first-quarter 2017 production results for its Greens Creek mine on Admiralty Island. The mine produced 1,929,297 ounces of silver and 14,022 oz gold, which represent a 22 percent and 12 percent decrease, respectively, over silver and gold production levels during the year-previous period. Lower silver and gold production was expected and principally due to lower ore grades mined during the first quarter. The mill operated at an average of 2,190 tons per day in the first quarter. Cost of production was 65 cents per ounce of silver compared to $3.96 per ounce in the year previous period.

Coeur Mining Inc. reported first-quarter 2017 production results from its Kensington mine.

The mill processed 165,895 tons of ore, a slight increase over the year of 26,000 oz. from the year-previous period.

The mine produced 26,197 oz. of gold, grading 0.17 oz/t gold with an average recovery of 94 percent, all significant decreases over the year-previous period.

These lower grades, recoveries and production figures were anticipated due to mine sequencing.

Higher grades, recoveries and production are anticipated for the remainder of 2017.

The company also indicated that development of the decline into the higher-grade Jualin deposit is progressing with initial production from Jualin anticipated for late 2017.

Coeur also indicated that it expects full-year 2016 production from the mine to total 120,000 to 125,000 oz gold.

Constantine Metal Resources Ltd. and partner Dowa Metals & Mining Alaska Ltd. announced 2017 plans for the Palmer volcanogenic massive sulfide deposit near Haines.

A budget of US$7 million has been approved that includes plans for 7,000 meters of drilling.

The partners have formulated a plan that includes a dual focus of exploring for new resources across the district-scale property and expanding and upgrading the current inferred copper-zinc polymetallic resource of 8.1 million metric tons grading 12.6 percent zinc-equivalent.

The majority of 2017 drilling is dedicated to discovery of new mineral deposits.

The balance is for expansion and upgrade of the existing South Wall-RW Zone resource, and geotechnical studies.

Other works include additional road construction, engineering and environmental studies, and evaluation of a potential exploration drift for the purpose of continued drill expansion and drill definition on the deeper portion of the existing resource.

Grande Portage Resources Ltd. announced that it has received regulatory approval to commence drilling at its Herbert gold project located within the Juneau Gold Belt. The company plans to drill up to 19,000 feet of diamond drill core to test targets significantly deeper and farther to the east than in previous exploration efforts. The company will specifically target the Main, Deep Trench, Ridge and Goat veins during the 2017 program. The project hosts indicated resources of 821,100 metric tons grading 6.91 g/t (182,400 oz) gold and inferred resources of 51,600 metric tons grading 7.73 g/t (12,800 oz) 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