The 2019 mining game is afoot in Alaska

In the famous words of Sherlock Holmes, the game is afoot! After seasonally slower news from Alaska's mining industry in March and April, the dam has broken with over two dozen Alaska mining project news releases issued in the last month.

Including those projects moving forward that have not released their 2019 plans, Alaska has become a very busy place under the sun. All of our major metal mines reported strong performances in the first quarter, several of Alaska's most advanced exploration projects reported significant developments and early stage exploration programs began reporting initial results and near-term plans for projects exploring for gold, silver, copper, molybdenum, lead, zinc, cobalt and carbon.

Destinations du jour include eastern Interior Alaska, southern Brooks Range, northern and central Alaska Range, Alaska Peninsula and Southeast Alaska from its northern end to as far southeast as there is Southeast Alaska.

WESTERN ALASKA

Teck Resources Limited and partner NANA Corp. announced first quarter 2018 results from their Red Dog mine. Zinc and lead production in the first quarter declined by 9 percent and 4 percent, respectively, compared to a year ago due to severe winter weather conditions that closed the access road to the port facility. This road closured forced the mill to shut down for 20 days because the concentrate storage facility at the mine was filled to capacity. Operating costs were also higher in the quarter due to higher diesel prices and higher maintenance costs as some maintenance planned for later in 2019 was conducted while the mill was shut down due to the road closure. Zinc production for the quarter was 110,200 metric tons compared to 121,500 metric tons a year ago. Average zinc grades declined to 15 percent with mill recovery steady at 82.8 percent. Lead production was 18,900 metric tons compared to 19,700 metric tons in the year previous period. Lead ore grades were 4.1 percent with mill recoveries increasing to 51.7 percent. Gross operating profit for the 1st quarter was $149 million, compared with $181 million in 2018. During the 1st quarter the mine paid partner NANA and the state of Alaska royalties of $84 million versus royalties of $74 million in the year-previous period. Work continues on the VIP2 mill upgrade project with planned start-up in the first quarter of 2020. This upgrade is expected to increase average mill throughput by about 15 percent over the remaining mine life, helping to offset lower grades and harder ore. Despite production decreases in the first quarter, forecast production of contained metal in 2019 is expected to be in the range of 535,000 to 555,000 metric tons of zinc and 85,000 to 90,000 metric tons of lead, unchanged from previous estimates.

Graphite One Inc. announced commencement of a pilot program with the first step being the shipment of approximately 12,000 pounds of raw graphitic material from its Graphite Creek deposit to the company's U.S.-based industrial partner for processing into advanced graphite materials. The pilot program is expected to produce data for the company's pre-feasibility study that will outline the mining and processing of graphite from the project and production of coated spherical graphite and other advanced materials at a processing plant whose location has not yet been finalized.

Northern Dynasty Minerals Ltd. reported that the Pebble Limited Partnership has finalized a right-of-way agreement with Iliamna Natives Ltd. (INL), securing the right to use defined portions of INL lands for the construction and operation of transportation infrastructure associated with the Pebble copper-molybdenum-gold project. INL is an Alaska Native village corporation with extensive land holdings proximal to the Pebble site, and represents more than 150 Alaska Native shareholders. A similar agreement was reached last November with Alaska Peninsula Corp., a village corporation with land holdings both north and south of Lake Iliamna. The INL agreement provides the Pebble Partnership with an important alternative ferry landing site and road/utility corridor on the north side of Lake Iliamna. The INL lands addressed in the Right-of-Way Agreement include a ferry landing site east of the village of Iliamna at Eagle Bay, as well as road and pipeline corridors and associated material barrow sites that can be used to link the Pebble mine site to the Iliamna airport and to the Eagle Bay ferry landing site. To secure its right to use defined portions of INL land for the construction and operation of transportation infrastructure, Pebble Partnership will make annual toll payments to INL and pay other fees prior to and during project construction and operations. In addition, INL will be granted Preferred Contractor status at Pebble, which provides a preferential opportunity to bid on Pebble-related contracts located on INL lands. The two parties also have agreed to negotiate a profit sharing agreement that will ensure INL and its shareholders benefit directly from the profits generated by mining activity in the region.

Constantine Metal Resources announced that it finalized its lease agreement with Cook Inlet Region, Inc. (CIRI), an Alaska Native Corporation, on the 20,942-acre Johnson project located near tidewater 125 miles ‎southwest of Anchorage. The prospect hosts the Johnson gold-silver-zinc-copper-lead deposit.‎ The original Johnson project drill discovery reported 102.6 meters grading 10.94 g/t gold, 8.01 percent zinc, 0.75 percent copper, 2.13 percent ‎lead and 8.5 g/t silver, including 50 meters grading 20.0 g/t gold, 9.4 percent zinc, 1 percent ‎copper, 2.8 percent lead and 12.7 g/t silver. The discovery was followed by near-continuous exploration over a 13-year period, including definition of an historical estimate, engineering and economic studies, and the identification of other prospects over a 12-kilometer (7.5 miles) strike length. The project was last explored in the mid-1990s by Westmin Resources Ltd., which evaluated direct-shipping ore from Johnson to the Premier mill near Stewart, British Columbia, approximately 900 nautical miles to the south. Constantine intends to proceed with a restructuring transaction whereby it would spin-out certain gold assets, including the Johnson project, into its wholly-owned subsidiary, HighGold Mining Inc. with the intent of listing the common shares of HighGold on the TSX Venture Exchange.

INTERIOR ALASKA

Kinross Gold announced first quarter 2019 results from their Fort Knox mine. The mine produced 37,617 ounces at a cash cost of $1,023/oz versus 79,928 ounces at a cash cost of $530 in the year previous period. The mine's production decrease reflects the mining and reduced milling strategy recently implemented at the mine. The lower production versus the previous quarter and year was due to the combined effects of lower mill tonnages, the timing of heap leach recoveries, the continued effects of the pit wall slide in the first quarter of 2018, and geotechnical instability as a result of higher than average rainfall in the second half of 2018. During the first quarter the mill treated 1,556,000 metric tons of ore grading 0.72 g/t gold with a mill recovery of 82 percent. The heap leach saw additions of 4,295,000 metric tons of ore grading 0.22 g/t gold. The Fort Knox Gilmore project is progressing on schedule and on budget, with initial ore loading expected in early 2020. Procurement and contracting for 2019 heap construction activities are under way and pre-stripping is on schedule to commence in the third quarter of 2019, with expansion of the dewatering system continuing on plan.

Northern Star Resources Ltd. reported first quarter 2019 production and exploration results from its Pogo gold mine. During the first quarter the mine produced 39,750 ounces of gold at all-in sustaining production costs of $1,468/oz. The operation mined 171,820 metric tons of ore grading 7.2 g/t gold. The mill processed 190,868 metric tons grading 6.2 g/t gold with a recovery of 89 percent. These lower production figures and higher costs reflect the impact of significant mine development activities, including the late delivery of new mobile underground mining fleet equipment and the introduction of long-hole stoping, a new mining method at the mine, which commenced late in the quarter and represented only 11 percent of the quarter's processed metric tons. Eight rigs are now operating underground and a further four rigs are operating on the surface. The mine is on track for a revised resource estimate in mid-year. On the exploration front, underground drilling primarily focused on the major Liese Vein systems (L1, L2, L3), North Zone, X-Vein, South Pogo and Fun Zone areas with significant intersections recorded from the extensions to the L2, L3 and North Zone systems. Significant exploration results from in-mine extensional drilling results included 2.4 meters at 82.5 g/t gold, 1.8 meters at 80.2 g/t gold and 4.5 meters at 30 g/t gold. At the Pogo Central Zone, significant intercepts included 1.5 meters at 48.6 g/t gold, 1.3 meters at 33.2 g/t gold, and five meters at 13.9 g/t gold. Exploration results from the Central zone to date have outlined a zone of flatter dipping Liese-type quartz veins (designated C1 to C6) which drilling has expanded to include several new veins (C0, C2.5, and C5) within a broader vein swarm. Recent intersections also indicate a component of steeper northeast trending veins (North Zone trend) that cross cut the flatter surfaces.

Tectonic Metals Inc. announced plans to become a public company on the TSX Venture Exchange by raising C$5,000,000 via a special warrants offering. Proceeds are intended to be used to advance three Alaska projects, Tibbs in the Goodpaster District, Seventymile in the Seventymile District and Northway in the southern Fortymile District as well as the MCQ project in the Yukon. The company cited a number of factors influencing their acquisitions in Alaska, including prospective but under-explored geology, opportunity to acquire district-scale projects, reasonable infrastructure and stable land status, particularly at Seventymile which is located on lands owned by Doyon, Ltd., a regional Alaska Native corporation, and Northway, which is owned by Doyon and Northway Natives Inc., an Alaska Native Village corporation. At Northway, the Area 6 target hosts a 1,200-meter-long soil anomaly that has returned samples with as much as 597 parts per million copper and 253 parts per billion gold. The elevated copper and gold in the soils is coincident with induced polarization (IP) and magnetic anomalies that provide a clear drill target at Area 6. At exploration Area 7, an 800-meter-long gold-in-soil anomaly returned assays with as much as 2.12 g/t gold. Area 7 also has a coincident geophysical anomaly covering a 3,000-by-5,000-meter area that will guide drilling. At Seventymile the company is testing a new exploration model over the western end of the 25-mile-long belt. The high grade shear-zone hosted model was tested over a small area in 2018 and plans are being made to expand that work in 2019. Efforts will focus on the Flanders and Flume prospects using top of bedrock soil sampling and possible rotary air blast drilling to explore favorable lithologic contacts. The Tibbs prospect hosts gold mineralization similar to that at the nearby Pogo mine. While high angle, high grade gold-quartz veins similar to Pogo's North zone veins have been known at Tibbs for over 20 years, no low-angle veins similar to those being mined at Pogo have been identified and no exploration was been done to focus on such low angle veins. Drilling completed at Grey Lead in 2007 and 2008, hosted in high angle Pogo-style veins, cut 5.7 meters of 19.14 g/t gold, 5.3 meters of 15.76 g/t gold, 4.26 meters of 6.13 g/t gold and two meters of 16.42 g/t gold. About 300 meters east of Grey Lead, Tectonic conducted trenching at the Connector zone that encountered six meters of 8.1 g/t gold and 13 meters of 1.5 g/t gold. Rock samples collected directly on strike of the trenches contained 32.3 and 17.4 g/t gold, bringing the strike length of the Grey Lead vein system to 1,000 meters. Other targets of interest include the low-angle shear-hosted Johnson Saddle prospect that returned 8 meters grading 1.7 g/t gold and the intrusive-hosted Michigan prospect where surface samples have returned grades up to 900 g/t gold.

Elsewhere in the Goodpaster District, Millrock Resources has acquired several large blocks of ground after an equity investment by Alaska newcomer EMX Royalty Corp. In return for common shares and royalty interests in Millrock holdings, EMX Royalty provided funding that allowed Millrock to stake new claims in the district, bringing their Goodpaster project holdings to 1,176 claims covering over 163,000 acres. Claims were staked along the northwest trending Pogo trend as well as the less explored northeast trending Shaw Creek trend. At the eastern end of the Pogo trend the company staked the historic Scott, Boundary, and Cal-Surf prospects which returned elevated gold, arsenic, and bismuth in surface samples related to northeast and northwest-oriented high-angle faults. Drilling conducted on the Boundary and Cal Surf prospects by previous operators intersected gold-bearing intervals. On the Shaw Creek trend the newly staked claims cover stream sediment, soil, and rock samples containing elevated gold, arsenic, and bismuth anomalies that appear to be associated with intrusive rocks near splays off the Shaw Creek fault. These claims cover the historic Eagle prospect and adjoin Gold Reserve Inc.'s LMS prospect, the only other prospect in the district with an industry-compliant resource of 8.32 million metric tons grading 1 g/t (267,000 oz) gold. Welcome to Alaska EMX Royalty Corp.!

EMX Royalty also announced that it had acquired additional royalties, mostly in the Goodpaster Mining District, from Corvus Gold Inc. for $1.25 million in cash and stock in Corvus Gold. On the West Pogo WPX claim block EMX will acquire two thirds of Corvus' 3 percent net smelter return (NSR) royalty on precious metals and 1 percent NSR royalty on base metals. Corvus has retained the remaining one third of its royalty on the West Pogo WPX claim block. The precious metals royalty is subject to a buy down of 1 percent for $2 million, and a buy down of an additional 1 percent for $5 million, both of which will be shared proportionately by the parties. At the LMS project, EMX will acquire Corvus's 3 percent NSR royalty on precious metals and 1 percent NSR royalty on base metals. The precious metals royalty is subject to a buy down of 1 percent for $4 million. Over the remaining Goodpaster District, EMX will acquire all of Corvus's rights to a 1 percent NSR royalty on properties staked within a defined area of interest pursuant to a 2015 agreement with Millrock Resources. The area of interest expires July 21, 2020, and Millrock may purchase one-half of these royalties (i.e., 0.5 percent NSR royalty) for $2 million. At the Chisna project in the central Alaska Range, EMX will acquire all of Corvus' 1 percent NSR royalty on precious and base metals.

Freegold Ventures Limited announced the start of 2019 exploration at its Shorty Creek copper-molybdenum-gold prospect in the Livengood District. The 2019 program, fully funded under the agreement with a wholly owned subsidiary of South32 Ltd., will consist of induced polarization surveys, geochemical surveys and a minimum 2,000-meter core drilling program designed to provide an initial test of the exploration targets outside of the previously drilled Hill 1835 target area. Field operation commenced in mid-May and drilling is expected to commence in mid-July.

Contango ORE Inc. announced that the marketing process was continuing on the Peak project with its partner Royal Alaska, LLC, a wholly owned subsidiary of Royal Gold Inc. While this effort is being conducted, the partners have approved a phase I budget of $6.9 million, which includes surface recon geochemistry, induced polarization geophysical coverage over new and existing exploration targets, permitting activities on the Main Peak and North Peak resource areas, and approximately 5,000 meters of new drilling on exploration prospects with drilling planned for an August start-up. Both porphyry and skarn type exploration prospects have been identified over the 850,000-acre project.

ALASKA RANGE

PolarX Ltd. announced a summary of work completed during the first quarter and preliminary plans for the summer exploration season at its Alaska Range project in the central Alaska Range. At the Saturn prospect, 3D inversion modelling of the aeromagnetic survey has highlighted a steeply plunging intrusive cluster measuring 2,000 by 1,000 meters, with a 3,000-meter vertical extent. This magnetic anomaly is adjacent to the high‐grade copper-gold mineralization at the Zackly prospect. The Saturn magnetic anomaly is surrounded by a zone where the magnetic response has been destroyed, a feature seen around some copper-gold porphyry systems where magnetite-destructive hydrothermal alteration has occurred. The company has staked 30 additional state mining claims covering the southern extent of the down‐plunge target at Saturn. An induced polarization survey to define drill targets at the Saturn target will commence shortly with drilling planned for the third quarter of 2019. The company also indicated that additional drilling is planned at Zackly to increase the size of the current resource, particularly around the thick, high‐grade near‐surface intersections in holes ZX‐18020 which intersected 55 meters grading 2.8 g/t gold and 0.6 percent copper and ZX‐18024 which intersected 47 meters grading 3.1 g/t gold and 0.6 percent copper at the eastern end of the prospect. Zackly and Saturn occur in a 12 kilometer long west-northwest trending mineralized corridor. This corridor also contains the Mars copper-gold target at the western end where geochemical and ground geophysical prospecting techniques have provided targets for drilling in 2019. The company also plans to finalize and commence metallurgical test‐work for the Zackly deposit.

White Rock Minerals Ltd. and its joint venture partner Sandfire Resources NL announced completion of a 500 square kilometer airborne electromagnetic and magnetic survey over its Red Mountain volcanogenic massive sulfide project in the Bonnifield District. Preliminary evaluation of time-domain electromagnetic data indicates numerous conductivity features related to the geology and structure of the district and associated massive sulfide occurrences. Following interpretation of the airborne data, the partners will conduct follow-up satellite spectral analysis, ground geological prospecting, surface geochemical sampling and ground based electrical controlled-source audio magnetotellurics (CSAMT) geophysical surveying ahead of drill testing.

NORTHERN ALASKA

Trilogy Metals Inc. and funding partner South32 Ltd. announced an update for its Arctic volcanogenic massive sulfide deposit and the Bornite copper-cobalt deposit at their Upper Kobuk Minerals project, a business relationship owned and controlled by Trilogy and NANA Corp. The partners completed district-wide VTEM and ZTEM airborne electromagnetic surveys as the first step in its $2 million district-scale exploration program for 2019. The surveys were flown on 200 and 400 meter line spacings over both the Cosmos Hills and the entire 100 kilometer long Ambler volcanogenic massive sulfide belt. The survey data is currently being processed to identify and prioritize targets for follow up geologic mapping, soil geochemistry and drilling. The company also noted that it continues to work closely with the Alaska Industrial Development and Export Authority (AIDEA), which is permitting the Ambler Mining District Industrial Access Project (AMDIAP) to provide road access to the district. The preliminary draft environmental impact statement (EIS) process is on schedule and has been made available to all the cooperating agencies. The draft EIS is expected to go out for public comment on July 19, 2019. A 45-day public comment period is scheduled with public meetings to be scheduled at various locations. The Final EIS is scheduled to be completed Oct.31. The proposed project crosses state lands (61 percent), Native corporation lands (15 percent), and federal lands (24 percent) managed by the National Park Service and lead-agency BLM.

SOUTHEAST ALASKA

Hecla Mining announced first quarter 2019 production results for its Greens Creek mine on Admiralty Island. The mine produced 2,232,747 oz of silver and 14,328 oz of gold, increases of 17 percent and 9 percent, respectively, compared to 1,913,232 oz of silver and 13,118 oz of gold produced in the year previous period. Higher gold and silver production was due to higher ore grades as well as increased recoveries, partially offset by lower mill throughput. The mill operated at an average of 2,298 tons per day compared to 2,349 tons per day in the first quarter of 2018. The cash cost, after by-product credits was negative $0.49 per oz of silver and the all-in sustaining cost, after by-product credits, was $3.24 per silver oz for the first quarter compared to negative $4.99 cash costs and $0.59 all-in sustaining costs in the first quarter of 2018. The mine also produced 4,782 tons of lead and 13,518 tons of zinc. Average grades mined include 13.46 oz/t silver, 0.10 oz/t gold, 2.83 percent lead and 7.32 percent zinc. The company has forecast 2019 production of 7.7 million oz of silver and 50,000 oz of gold. On the exploration front, drilling results have upgraded and expanded the 200 South, East Ore, NWW, Upper Plate, 9A, and Southwest zone resources. In the East Ore Zone, significant assay results included 20.52 oz/t silver, 0.05 oz/t gold, 4.2 percent zinc and 1.19 percent lead over 21.9 feet; and 64.04 oz/t silver, 0.27 oz/t gold, 6.46 percent zinc and 2.36 percent lead over 7.6 feet. Mineralization is still open at higher elevations in the mine. Drilling is planned to continue upgrading this resource throughout 2019. Drilling of the 200 South Zone confirmed three flat-lying, high-grade lenses that are folded to the west and has enabled portions of bench mineralization below historic mining to be upgraded to an indicated resource category and potentially incorporated into the Life of Mine plan. Significant results included 6.87 oz/t silver, 0.25 oz/t gold, 15.7 percent zinc, and 5.39 percent lead over 25.9 feet; and 27.66 oz/t silver, 0.42 oz/t gold, 4.25 percent zinc, and 2.31 percent lead over 14.4 feet. Near the mine portal elevation, drilling of the Upper Plate Zone to the northwest has defined at least two flat-lying zones that are folded to the east. Recent drill results include 42.15 oz/t silver, 0.02 oz/t gold, 10.84 percent zinc and 4.86 percent lead over 16.5 feet along the upper ore band; and 93.59 oz/t silver, 0.39 oz/t gold, 4.95 percent zinc and 2.38 percent lead over 5.5 feet in the lower band. Definition drilling results indicate the upper and mineralization horizon thickens toward the Southwest D Fault from the east and the lower horizon extends up to 150 feet further than modeled also towards the Southwest D Fault. Drilling continued at the southern end and lower portion of the NWW Zone, filling in a gap between the two ore zones. Results from recent drilling include 29.90 oz/t silver, 0.16 oz/t gold, 4.89 percent zinc and 2.74 percent lead over 11.4 feet; and 16.87 oz/t silver, 0.11 oz/t gold, 16.07 percent zinc and 9.41 percent lead over 7.2 feet. Mineralization is generally contained within argillites with a precious metal-rich zone identified west of the current resource and a base metal-rich zone (16-20 percent zinc) extending beyond the current resource. Drilling of the NWW Zone will continue through the first half of 2019. Drilling north of the Southwest Zone targeted an area between the Southwest and NWW zones. Recent drill results include 77.18 oz/t silver, 0.57 oz/t gold, 8.05 percent zinc and 3.94 percent lead over 7.5 feet; and 94.33 oz/t silver, 0.40 oz/t gold, 12.22 percent zinc and 4.83 percent lead over seven feet suggest possible continuity of high-grade mineralization between the current resources. Definition drilling in 2019 will focus on the East Ore, Northwest West, and 9A zones. Exploration drilling in 2019 will target the southern extension of the 200 South Zone and the Deep Southwest. Definition drilling in 200 South Zone is planned to continue to mid-2019 and drilling of the Upper Plate has stopped but is expected to resume in the fourth quarter.

Coeur Mining Inc. reported updated first quarter 2019 production results from its Kensington mine. The mill processed 164,332 tons of ore, a slight increase over the 158,706 tons of ore produced in the year previous period. The mine produced 29,973 ounces of gold grading 0.20 oz/t gold with an average recovery of 90.2 percent. The adjusted cash cost was $990 per ounce, 17 percent above the year previous period. Cost increases were driven by higher mining and employee-related costs. The high-grade Jualin deposit reached commercial production in late 2018, shifting underground efforts from resource development to full production, allowing for longhole stope production at Jualin in future quarters. The Jualin deposit contributed about 10 percent of the gold during the quarter and is expected to contribute 20 percent of the mine's total production for 2019. The average grade of Jualin ore was 0.41 oz/t gold. On the exploration front, three underground core drill rigs were active at the Kensington Main Zone 30, Lower Raven and Elmira zones. Exploration efforts in these zones were focused on capitalized resource infill drilling. The company indicated that it expects full-year 2019 production from the mine at 117,000 to 130,000 oz of gold.

Grande Portage Resources Ltd. announced a new industry-compliant mineral resource estimate for its Herbert gold project near Juneau. Using a cut-off grade of 2.5 g/t gold, the deposit has indicated resource of 606,500 oz of gold in 1,880,500 metric tons at an average grade of 10.03 g/t gold and inferred resource of 251,700 ounces of gold in 553,429 metric tons at an average grade of 14.15 g/t gold. The resource estimate included 154 drill holes and six channel cuts containing 3,463 samples assayed for gold plus 1,171 unassayed intervals that are assumed to be zero grade. Composite sample assays were capped at a grade of 125 g/t gold.

Alaska newcomer Decade Resources Ltd. announced initial results from sampling of the Crest gold property in the Hyder-Stewart area of southeast Alaska. Initial float grab samples returned grades ranging from 3.67 to 2,034 g/t gold and two to 599 g/t silver. The property lies at the west edge of the Golden Triangle of northwestern British Columbia and only seven kilometers (4.3 miles) south of the Premier gold mine. It is underlain by the Texas Creek Batholith, a Jurassic age intrusion that hosts the Mitchell intrusions at Kerr-Sulphurets-Mitchell. This intrusive suite is related to mineralizing events in the Stewart area and in the Sulphurets-Mitchell valleys. The suite of rocks is associated with gold mineralization at Brucejack, Premier gold mine-Silver Coin deposit and the Scottie gold mine as well as numerous porphyry copper-gold occurrences in the district. The company plans further sampling to locate the source of the anomalous rock samples as well as to evaluate the remainder of the property. Welcome to Alaska Decade Resources Ltd.!

Curtis J. Freeman CPG #6901

Avalon Development Corp.

P.O. Box 80268

Fairbanks, AK 99708

907-457-5159, Fax 907-455-8069

[email protected]

http://www.avalonalaska.com

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