The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
More drilling, bigger resource, maiden PEA slated for 2018 North of 60 Mining News – May 11, 2018
Constantine and Dowa Metals are planning to expand the copper- and zinc-rich resource at Palmer and test exploration targets across the wider property with a 10,000-meter drill program slated for this year.
While picturesque, the steep slopes of Mount Moran make it difficult to set up drills in ideal locations for upgrading the resource in the South Wall-RW deposit at Palmer.
2018 is shaping up to be a pivotal year for the Palmer copper-zinc-silver-gold project in Southeast Alaska.
A roughly US$9 million exploration program outlined by Constantine Metal Resources Ltd. on May 10 proposes not only the annual tradition of resource expansion and new discoveries but also plans to provide the first peek into the economics of mining the copper- and zinc-rich volcanogenic massive sulfide deposits found there so far.
Being carried out by a joint venture between Constantine (51 percent) and Dowa Metals & Mining Co. Ltd. (49 percent), the 2018 program is slated to include 10,000 meters of drilling; an updated mineral resource estimate; a preliminary economic assessment; and plans to initiate permitting for an underground exploration program at this advanced stage mineral exploration project.
"We look forward to an exciting year in 2018 as we continue to advance the Palmer project and build on the great exploration success of 2017," Constantine President and CEO Garfield MacVeigh said earlier this year.
Dual focus drilling
A lot like the 2017 program, this year's 10,000-meter drill campaign will have a dual focus – expand and upgrade the South Wall-RW deposit while testing exciting new VMS exploration targets across the wider Palmer property.
Last year's exploration drilling at Palmer tapped high-grade silver and zinc at the AG Zone, a VMS discovery about 3,000 meters south of the South Wall-RW deposit.
The discovery hole at AG cut 9.2 meters of massive barite-sulfide averaging 312 grams per metric ton silver and 0.9 g/t gold.
Continued discovery drilling at AG identified stacked strata-bound zones, including a high-grade silver-gold upper zone and a zinc-rich lower zone.
Highlights from the silver zone at AG include:
• 3.8 meters averaging 256 grams per metric ton silver and 1.1 g/t gold;
• 3 meters of 128 g/t silver and 1.7 g/t gold; 2.3 meters of 98 g/t silver and 3.2 g/t gold; and
• 120.1 meters of 31 g/t silver and 0.1 g/t gold.
Highlights from drilling into the zinc zone at AG include:
• 17.8 meters grading 11.7 percent zinc, 0.2 percent copper, 6.3 g/t silver and 0.2 g/t gold;
• 30.5 meters of 7.3 percent zinc, 0.1 percent copper, 6 g/t silver and 0.1 g/t gold;
• 41.3 meters of 5.8 percent zinc, 0.1 percent copper, 9 g/t silver and 0.1 g/t gold; and
• 7.8 meters of 6.7 percent zinc, 0.1 percent copper, 35 g/t silver and 0.3 g/t gold.
The 2017 drilling traced the AG zone for about 225 meters along strike and to a depth of 275 meters. With all edges open to expansion, Constantine said continuing to grow this exciting discovery will be an important component to the 2018 program.
The exploration drilling will also test new targets identified by a 1,137-line-kilometer electromagnetic geophysical survey flown over the Palmer property last year.
The JV partners have identified 11 targets across a roughly 20-square-mile area with geophysical characteristics similar to the South Wall deposit, several of which coincide with areas of VMS-style mineralization and hydrothermal alteration exposed at surface.
About half of these targets are on the Constantine-Dowa joint venture lands and the balance are on Alaska Mental Health Trust lands fully owned by Constantine.
Constantine Vice President of Exploration Darwin Green is excited about a number of these targets.
"We have got a lot of targets to drill, a lot more than we are going to be able to drill in one year, but there are a couple that we really like!" he told Mining News.
Constantine and Dowa plan to prioritize exploration targets before the 2018 drilling at Palmer begins, which is currently slated for early June.
Expanding the resource
While testing the wider potential of the Palmer property, Constantine and Dowa will begin to investigate the viability of developing a mine at South Wall-RW, the large VMS deposit at the heart of the project, by upgrading the resource found there.
By 2015, Constantine and Dowa had outlined 8.1 million metric tons of inferred resources averaging 5.25 percent (940.4 million pounds) zinc, 1.41 percent (252.6 million lb) copper, 0.32 g/t (83,600 ounces) gold and 31.7 g/t (8.3 million oz) silver.
Most of this resource is located within South Wall, which consists of three VMS zones that run nearly vertically through Mount Morlan; the balance is found in RW, a fault separated section of this same mineralization lying at the top of the mountain.
Over the three years since a resource was last calculated for the deposit, drilling has tapped new areas of copper- and zinc-rich mineralization at South Wall. The 2017 program, especially, found expansion areas that are expected to substantially increase the width and grade of mineralization along the western edge of South Wall.
Highlights from the 2017 South Wall expansion drilling include:
• 45.4 meters grading 2.5 percent copper, 7.4 percent zinc, 39 g/t silver and 0.3 g/t gold; and
• 18.7 meters grading 2.3 percent copper, 6.9 percent zinc, 33 g/t silver and 0.3 g/t gold.
In addition to an expanded and upgraded resource for South Wall-RW, the new calculation is expected to include a maiden resource for the AG Zone discovery.
Critical Barite
The resource calculation will also investigate the viability of marketing the massive amount of barite associated with the base and precious metals at Palmer.
In a report published earlier this year, the U.S. Geological Survey named barite among 23 minerals considered "critical" to the economic and national security of the United States.
The 8.1-million-metric-ton South Wall-RW resource area – likely be significantly larger when the new resource is calculated – contains 13 to 15 percent barium, which equates to roughly 22 to 25 percent barite by weight.
The primary use of barite is a weighting agent in drilling mud for oil and gas exploration and development drilling.
Key parameters that determine viability of barite for drilling fluids include density, grind size, presence of impurities and distance to market.
More than 75 percent of the barite used in the United States is imported, with China being the largest supplier of this weighting agent.
Alaska, with its oil and gas fields on the North Slope and in Cook Inlet would be a good market for Palmer barite if the current studies show that the critical mineral can be economically processed to meet American Petroleum Institute criteria.
"The projects excellent location, 60 kilometers (37 miles) by road from deep tidewater facilities enables low-cost shipping to markets," MacVeigh said in February.
Constantine said long term market price for drilling mud-grade barite is expected to average more than US$100 per metric ton.
"Barite constitutes about a quarter of the rock mass of the defined mineralized zones, and if recoverable has the potential to materially enhance the value of the already high-value mineralization. It's recovery as a potential ore-mineral would also reduce ore processing waste," the Constantine CEO added.
In addition to investigating the possibility of adding barite as an ore-mineral, current metallurgical studies are looking into potentially optimizing the recovery of the copper and zinc in the South Wall-RW deposit.
First PEA coming
The upgraded resource, along with the new metallurgical understanding that will come with it, will form the basis of a preliminary economic assessment for Palmer, the first ever look at the viability of developing a mine at the VMS project near the coastal community of Haines.
In January, Constantine named Ian Cunningham-Dunlop as the company's vice president of advanced projects, an appointment that signaled the transition to advanced stage exploration and evaluation work at Palmer.
Cunningham-Dunlop has more than three decades of mineral exploration and mine development experience, including roughly six years at the Eskay Creek gold-silver-copper-zinc-lead mine in northwestern British Columbia, which hosts a VMS system similar in style and age to Palmer.
This experience will come in handy as Constantine and Dowa undertake planning and permitting of an underground exploration program that would include development of an underground access ramp.
While surface drilling was able to outline the upper portion of the South Wall-RW deposit, the rugged and steep Mount Morlan does not provide ideal locales for drilling at the angles needed to define a resource or for reaching lower extensions of the deposit that are believed to exist.
A well-placed exploration ramp, however, would enable the partners to begin the more detailed drilling that would upgrade the resource to support more robust economic assessments of Palmer, including a potential pre-feasibility study for the Southeast Alaska VMS project.
Going underground would also allow for year-round exploration at Palmer, which would be a substantial improvement over the four- or five-month surface drilling that has been achievable in the past.
With a bigger resource, a first look at the economics of developing a mine at Palmer and the beginnings of underground development all in the works, 2018 is shaping up to be an exciting and transitional year for Palmer.
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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