Alaska exploration extends into mild fall

An abnormally long fall has allowed the Alaska mining industry to extend seasonal work well into mid-October, creating a lot of new information about project work conducted around the state.

Exploration efforts, in particular, benefitted from this additional field time. Based on information available to date, 2019 exploration expenditures are expected to be in the $135-140 million range, well ahead of the $120-125 million exploration spending tracked for 2018.

In addition, producers enjoyed increased or at least stable metals prices over the year. That is good news for Alaskan miners and explorers, but it comes in the face of headwinds on the worldwide stage.

S&P Global Market Intelligence reports that in 2018, major producers allocated a record-low 0.4 percent of their revenue to grassroots exploration and only 1.6 percent of revenue to all forms of exploration. The 2019 exploration allocations are expected to be similar in magnitude to 2018. These numbers are in stark contrast to total exploration allocations in 1997 that topped the charts at 4 percent of revenue.

While I am unashamedly biased, even 4 percent of revenue reinvested in exploration seems extremely stingy. However, the 1997 levels of exploration investment were still 250 percent above the miserly exploration allocations we have seen in the last several years. I recognize that correlation and cause-and-effect are two very different things, but could there be a cause-and-effect relationship between exploration expenditures by major producers and the rate of new mineral discoveries, both of which have been on the decline since the late 1990s?

WESTERN ALASKA

In what can only be described as a "Wait, what?" event that shows just what sort of madness has gripped the anti-Pebble project lobby, a group of entities representing various Bristol Bay region concerns, have sued the Environmental Protection Agency because the federal environmental agency withdrew unlawful restrictions it had placed on Northern Dynasty's Pebble project, restrictions the courts had found were illegal. So let's get this straight: EPA is being sued because it did not continue to do something the courts determined was illegal. I thought I had seen it all, but I was obviously wrong.

Graphite One Inc. announced that it has begun its 2019 drilling program at its Graphite Creek graphic project north of Nome. Approximately 800 meters of HQ core drilling are planned for the program to provide geotechnical information for open-pit mine design and to determine ground conditions at proposed infrastructure sites. Results will be included in an updated resource estimate for a preliminary feasibility study. In addition to the drilling efforts, site visits and field work by the PFS engineering team have been completed and additional environmental baseline data has been collected. The company also reported that material from the project is being tested by a major U.S. multinational electric vehicle manufacturer. The battery-grade purified spheroidal graphite was prepared by the company's U.S. processing partner using Graphite Creek feed from a previously collected bulk sample.

Novagold Resources Inc. announced third quarter 2019 results from its Donlin gold project, owned 50 percent with Barrick Gold Corp. The project is on land owned by mineral estate owner Calista Corp. and surface estate owner The Kuskokwim Corporation. While it continued to advance state and federal permits, the partners commenced a geotechnical program designed to provide design criteria to be submitted to the Alaska Department of Natural Resources for approval and issuance of Alaska Dam Safety Certificates. The field efforts include core and direct-push drilling, installation of down-hole monitoring equipment, seismic refraction and downhole geophysical surveys, and off-site laboratory testing of products. These data will be incorporated into preliminary and detailed design packages as well as final construction design packages that are required before issuance of Alaska Dam Safety Certificates. Looking forward, the company indicated that anticipated expenditures at the project for 2019 will be approximately $26 million.

HighGold Mining Inc. announced completion of its first field program at its Johnson Tract polymetallic project located near tidewater 125 miles ‎southwest of Anchorage. The program included nine core holes for 2,247 meters of drilling within the main Johnson Tract (JT) deposit, as well as a comprehensive field program of prospecting, geological mapping and geochemical sampling on numerous regional targets in the vicinity of the JT deposit. Assay results are pending. The program also included geological mapping and geochemical sampling along the main Johnson Tract-Northeast Offset trend and at North Alteration Zone, as well as Kona Creek and Difficult Creek prospects; and infill sampling of drill core from ten historic drill holes completed by previous operators. The company plans to complete an initial industry-compliant mineral resource estimate for the JT deposit once data from the 2019 program has been received and interpreted.

Redstar Gold Corp. announced that it had signed surface access agreements with The Shumigan Corporation to allow access for exploration efforts on prospects underlying Shumagin lands which are part of the company's Unga epithermal gold-silver project. The company immediately began geochemical and geophysical sampling across historic surface gold anomalies and on-strike projections of high-grade gold veins such as Suzy Rhodo vein, where previous sampling returned assays up to 21 grams of gold per metric ton. The Suzy Rhodo vein is one of five high-grade veins and the flat-lying, near surface Centennial gold occurrence underlying Shumagin lands. Previous work by Battle Mountain Gold at Centennial outlined 4.8 million tons grading 0.042 ounces per ton (201,600 ounces) gold.

INTERIOR ALASKA

On October 9, Kinross Gold Corp. announced that they had poured their 8 millionth ounce of gold at their Fort Knox mine operation. A look back in time shows how impressive this milestone really is: the mine poured its first gold in late 1996, starting a proposed 10-year mine life designed to pour about 3.8 million oz of gold from an initial resource of 4.1 million oz of gold. The mine is now 23 years into that 10-year mine life, and calculating in-ground total ounces, they have poured over 8 million ounces of gold drawing on a 14 million ounce global resource. With the mine transitioning to heap leach production from the Gilmore resource area, operations are expected to continue to 2030, adding an additional 1.5 million ounces of production to the slate. I am betting they will blow by 10 million ounces poured, any takers? Just remember, I won a similar bet on the Pogo mine, so keep in mind: Scotch, neat, and no cheap stuff!

Avidian Gold Corp. reported results from its 2019 trenching program at its Amanita gold project. The company completed a total of six trenches over 1,725 meters within the 4,000-meter by 800-meter Tonsina trend. Significant results include 94.5 meters grading 1.24 grams of gold per metric ton, including six meters grading 11.48 g/t gold in Trench C; 27 meters grading 3.48 g/t gold and an additional 12 meters grading 1.34 g/t gold in Trench D; and six meters grading 2.67 g/t gold in Trench G. The gold mineralization encountered in the trenches is associated primarily with high-angle quartz-iron oxide veins, shears and faults. Gold mineralization is associated with elevated arsenic, bismuth and antimony, with the highest gold values associated with elevated bismuth. Vein widths range from two centimeters to two meters. While much of the mineralized zones are associated with veins, shears and faults, significant intersections can also be found within the metamorphosed sedimentary host rocks such as the 27-meter interval grading 3.48 g/t gold in trench D. The company indicated that the trenching results confirm and expand previous work and that drilling of high priority targets will constitute the next phase of work on the project.

Northern Star Resources announced third quarter results at its Pogo gold mine near Delta Junction, Alaska. The mine produced 29,468 ounces of gold and sold 28,962 oz with all-in sustaining costs of $1,919 per oz sold. Average grade for the quarter was 5.7 grams of gold per metric ton and average recovery was 83 percent. The increased production costs stemmed from lower grade mining sequences and scheduling. The company indicated that cost will decrease, and head grades will rise as development accesses new mining zones and stoping tons increase as a percentage of total ore processed. With lower grade feed removed from the blend, the average grade of the quarter was 8.5 g/t gold. Development meters reached 1,400 meters per month, just 100 meters shy of the 1,500-meter-per-month goal established for the mine. Development meters have increased by 76 percent since new equipment arrived on-site in March. Stoping tons continued to increase, averaging 24,000 metric tons per month for the quarter, with a goal of 65,000 metric tons per month. On the exploration front, additional results from the Goodpaster prospect continues to show promise. Significant new results include hole 18-050, which intersected 2.1 meters grading 44.5 g/t gold; hole 19-087, which intersected 0.2 meters grading 588.7 g/t, 4.5 meters grading 21 g/t, and 2.7 meters grading six g/t gold; hole 19-085, which intersected 1.4 meters grading 19.3 g/t gold; hole 19-073, which intersected 1.1 meters grading 23 g/t gold; and hole 19-091, which intersected one meter grading 11.4 g/t gold.

Northern Cobalt Ltd. announced that it had entered into a joint venture earn-in agreement with Millrock Resources Inc. to acquire up to 80 percent in the latter's Goodpaster gold project near the Pogo Mine. Millrock recently released results from a controlled-source audio magneto-tellurics (CSAMT) ground geophysical survey that indicated a high conductivity response directly along strike from a recent gold discovery on Northern Star Resources' adjacent Pogo Mine claim block. The conductor appears to be gently dipping and is therefore consistent with a low-angle regional shear zone that is known to host mineralization at Pogo. This conductor will be the immediate focus for Northern Cobalt, with construction in progress of a spur road from the main Pogo Mine road to the proposed drill sites to allow for 7,500 meters of diamond core drilling scheduled to begin during the first quarter of 2020. Lidar, field mapping, geochemical sampling and CSAMT ground geophysics surveys will be used to help target gold mineralization at West Pogo prospect and facilitate regional exploration work on other targets in this district scale system. Under terms of the agreement, Northern Cobalt has agreed to pay Millrock US$250,000 to secure a 50-day exclusive option period. Northern Cobalt may elect to pay a further US$250,000 to extend the option period for a further 50 days. After the maximum 100-day due diligence period, Northern Cobalt can earn up to 60 percent interest in a given block by expending US$20 million on exploration over four years, paying Millrock US$200,000 and issuing Millrock up to 38 million shares of Northern Cobalt stock. Over those for years, Northern Cobalt would successively earn 30 percent, 42 percent, 51 percent and 60 percent interest in a single block of the larger Goodpaster project and could form a co-funded joint venture at any time during that period. Northern Cobalt can earn an additional 10 percent interest by completing a bankable feasibility study and paying Millrock US$3 million at the time a decision to mine is made and can earn an additional 10 percent, bringing Northern Cobalt's total interest to 80 percent by carrying Millrock's share of construction costs through initial production.

Northway Resources Corp. announced results from its initial exploration efforts on its Healy gold project in the eastern Goodpaster District. The company reported that all ten of the reconnaissance-level reverse circulation holes drilled this year encountered gold mineralization at the Bronk prospect, the first of seven target areas to be drilled on the project. Significant results included 0.42 grams of gold per metric ton over 49.4 meters in hole HRC19-02, which ended in mineralization; and 0.35 g/t gold over 53.4 meters in hole HRC19-01. The drilling at Bronk target was designed to test a 150-meter-wide gold, arsenic and antimony soil anomaly, one of seven such anomalies that were identified on the project during multiple field seasons completed by both Northway and Newmont Goldcorp. The company indicated that future exploration will focus on some of the most anomalous gold-in-stream catchments where only limited ridge and spur soil sampling, and no mapping or prospecting have been done. The company plans to conduct follow up soil sampling, ground-based geophysics, as well as mapping and prospecting across additional under-explored areas of the property to expand its inventory of targets and prepare for future drill programs.

Freegold Ventures Ltd. announced the completion of the South32 Ltd.-funded drilling program at its Shorty Creek copper-molybdenum-gold project near Livengood. During the 2019 program, 100 line-kilometers of induced polarization and 98 line-kilometers of ground magnetic surveys were completed. In addition, 543 soil samples were collected, and 1,542 meters of core drilling were completed in five holes. Difficult drill conditions resulted in the abandonment of three holes. Two holes were abandoned before their target depth on Hill 1835 and one hole on Hill 1710 area was also abandoned before reaching target depth. Assays are pending.

ALASKA RANGE

PolarX Ltd. announced preliminary results from a single diamond drill hole completed at the Mars porphyry target within its Alaska Range project. Mars occurs within the area subject to the strategic partnership with funding partner Lundin Mining Corp. The Mars target comprises an aeromagnetic anomaly with an associated copper-gold-molybdenum-arsenic soil anomaly covering a 1,500- by 800-meter area. These anomalies are co‐incident with a chargeability high defined in a previous induced polarization survey. The first drill hole at Mars ended in mineralization at a depth of 417 meters. The hole intersected multiple stages of porphyry‐style veins containing visible iron, copper and molybdenum sulfides from near surface to the end of the hole. There is a broad zonation with increasing vein intensity and increasing abundance of copper and molybdenum sulfides with depth. A significant increase in visible copper and molybdenum sulfide abundance occurs from 321 to 417 meters, the end of hole. Visual estimates in this interval range from 0.5 percent to 2 percent chalcopyrite. Mineralized porphyry‐style veins occur from within six meters of the surface to the end of the hole and the veins cross‐cut strongly magnetic andesitic lavas and diorite intrusions which are altered to chlorite, epidote and carbonate, locally with more intense sericite‐carbonate‐silica alteration. The mineralization changes from pyrite dominated to chalcopyrite dominated with increasing depth down hole. Assays are pending.

New Age Metals Inc. provided an update on exploration efforts at its Genesis copper-nickel-platinum group element project near Glennallen. The first-ever application of ASTER and LANDSAT8 imagery over the Sheep Hill massif shows a consistent correlation between a distinctive strong iron oxide alteration signature and the geological and geophysical trace of the previously discovered PGM-copper-nickel sulfide mineralization hosted by a dunite-lherzolite unit. ATSER and LADSAT imagery revealed at least two other sub-parallel alteration zones adjacent to, and east of the known PGM-Cu-Ni mineralization at Sheep Hill. Combining ASTER and LANDSAT8 results with airborne magnetics and resistivity data indicate the total length of the stratabound PGM-Cu-Ni mineralization on Sheep Hill is at least 2,000 meters long and open under alluvial cover in both strike directions. At the adjacent Bernard Mountain massif, ASTER and LANDSAT8 results combined with airborne magnetics and resistivity data indicate a well constrained northeast trending band of iron oxide alteration, conductivity and magnetics extending for at least 2,250 meters along the south flank of Bernard Mountain. The stratigraphic position, ASTER and LANDSAT8 alteration and airborne magnetic and resistivity signatures are identical to those at Sheep Hill. There has been no drilling at Sheep Hill or Bernard Mountain.

Nova Minerals Ltd. announced an operational update at its Estelle gold project in the western Alaska Range. The company indicated that the company's next phase of resource development work will focus on expanding the 2.5 million ounce gold resource at the Oxide Korbel prospect area. This work will include up to 25,000 meters of reverse circulation and diamond drilling focused on increasing both the size and confidence of the resource at Blocks A and B, as well as initial drill testing of Targets C and D which show relatively larger, stronger and untested induced polarization chargeability anomalies. In addition, the company plans exploration drill testing of other high priority targets across the property including the RPM and Shoeshine prospects. Anticipated exploration will be conducted from a purpose-built camp which currently is being permitted and which will be hauled on-site during early 2020.

NORTHERN ALASKA

Trilogy Metals Inc. announced third quarter results at their Upper Kobuk Mineral Projects, a business relationship owned and controlled by Trilogy and NANA Inc. The company and funding partner South32 Ltd. conducted exploration at the Bornite carbonate-hosted copper-cobalt deposit, as well as the Arctic and Sunshine volcanogenic massive sulfide prospects. During the quarter the Bureau of Land Management and National Park Service released their draft environmental impact statement and environmental and economic analysis, respectively, for the Ambler access road. This is a critical milestone for the permitting of the Ambler Road in relation to further exploration and development of the Ambler Mining District. Public comment for both documents closed on Oct. 29, after which both agencies will compile and evaluate comments before releasing final documents with a record of decision, expected in early 2020. During the third quarter the partners used two rigs to drill 2,411 meters in 11 holes at the Arctic deposit. Trilogy anticipates announcing drill results from this work during the fourth quarter of 2019. The main goal of this year's work program at Arctic was to complete engineering and environmental studies to prepare a National Instrument 43-101-compliant feasibility study, which should be released in the first half of 2020. Work is also being done to prepare the Arctic project for permitting that is expected to begin in 2020. The company also completed 7,598 meters of drilling in 10 holes at the Bornite deposit. Within the region, the partners also completed versatile time domain electromagnetic (VTEM) and Z-axis tipper electromagnetic (ZTEM) helicopter airborne geophysical surveys along the entire 100-kilometer- (60 miles) long belt of the favorable stratigraphy hosting known polymetallic volcanogenic massive sulfide deposits, as well as the areas around the Bornite deposit and the surrounding Cosmos Hills area. The company then followed up with 1,357 meters of drilling in six holes at the Sunshine volcanogenic massive sulfide. Assay results are pending on five of the Sunshine holes.

SOUTHEAST ALASKA

Hecla Mining Company announced preliminary third quarter 2019 production results for its Greens Creek mine on Admiralty Island. The mine produced 2.54 million ounces of silver and 13,684 oz of gold, a whopping 36 percent and 18 percent increase, respectively, compared to 1.88 million oz of silver and 11,559 oz of gold produced in the year previous period. The mill operated at an average of 2,321 tons per day in the second quarter of 2019.

Coeur Mining Inc. reported third quarter 2019 production results from its Kensington mine. The mill processed 166,475 tons of ore, a moderate increase over the 160,510 tons of ore processed in the year previous period. The mine produced 34,156 ounces of gold grading 0.22 oz of gold per ton with an average recovery of 93.2 percent. Gold production during the third quarter increased 27 percent year-over-year compared to 2018 production. The higher grade Jualin deposit contributed about 15 percent of the gold during the quarter and is expected to contribute 15 percent of the mine's total production for 2019, largely due to an increase in production from the Main Kensington deposit. The company indicated that it expects full-year 2019 production from the mine at 117,000 to 130,000 oz of gold.

Constantine Metals Resources Ltd. announced additional drilling results from its Palmer polymetallic project, a joint venture between Constantine and partner Dowa Metals & Mining Co. Ltd. The company completed a total of 3,165 meters of drilling in eight holes including step-outs of the RW West and AG zones, as well as a previously untested sub-ice geophysical target to the west of the HG prospect. Drill hole CMR19-140 tested the open down-dip and down-plunge extension of the RW West Zone and intersected massive baritic sulfide mineralization. Significant results included 4.6 meters grading 0.52 percent copper, 4.65 percent zinc, 27.7 grams of silver per metric ton, 0.20 g/t gold and 43.7 percent barium sulfate. The new intercept represents a significant 335 meter step-out of the mineralized zone, which remains open to further expansion at depth as well as along strike to the east and west. At the sub-ice geophysical target, massive sulfide-style barite-zinc mineralization in drill hole CMR19-142 returned 1.3 percent zinc and 8.52 percent barium sulfate with extensive strong pyritic footwall style alteration. Additional exploration is planned for this prospect.

Grande Portage Resources Ltd. announced the results from its field program at the Herbert gold project near Juneau. The program consisted of trenching and channel sampling on the Main Vein, its North Strand and on the Deep Trench Vein as well as geologic mapping, sampling, and prospecting using the company's recently completed Lidar survey. One of the samples from within a sheared zone on the east striking, north dipping Deep Trench Vein returned 2.48 grams of gold per metric ton over 2.54 meters, including 5.03 g/t gold over 0.46 meters. The second sample returned 18.09 g/t gold and 10 g/t silver over a true-width of 1.65 meters. Three samples from the Main vein returned 8.22 g/t gold over 1.64 meters, 6.06 g/t gold over 1.26 meters and 1.64 g/t gold over 2.51 meters. The North Strand of the Main Vein was also sampled and returned 15.32 g/t gold over 1.79 meters and 5.27 g/t gold over 1.58 meters, including 0.33 meters of 24.54 g/t gold. Lidar follow-up efforts returned values of 3.5 g/t gold, 8.1 g/t gold from float along a projected fault trace 1,500 meters southwest of the Deep Trench Vein. Approximately 170 meters further north, float samples returned 42.1 g/t gold, as well as 63.7 g/t gold and 168 g/t silver. This area is believed to be an intersection zone where several structures meet, the predominate one having a northeast trend. The east-trending North Vein which lies approximately 300 meters north of the Goat Vein was also tested and returned up to 11.6 g/t gold in grab samples.

Ucore Rare Metals announced an initial resource estimate for co-products that are present at its Bokan-Dotson Ridge rare earth project on Prince of Wales Island. Using a total rare earth oxide cut-off grade of 0.40 percent, the new resource on metals not previously estimated includes an additional 38,500 metric tons of the critical and strategic metals, including niobium, zirconium, beryllium, hafnium, titanium, and vanadium. At the 0.40 percent cut-off, the new indicated resource contains 4.79 million metric tons averaging 460 parts per million niobium, 1,880 ppm zirconium, 48 ppm beryllium, 37 ppm hafnium, 3,700 ppm titanium, and 97 ppm vanadium. Using the same cut-off, additional inferred resources are 1.05 million metric tons grading 470 ppm niobium, 1,897 ppm zirconium, 46 ppm beryllium, 35 parts ppm hafnium, 4,443 ppm titanium, and 112 ppm vanadium. The resource was based on 20,000 meters of drilling in 97 diamond holes and 56 surface channels totaling 200 meters. The resource crops out at the surface and remains open to expansion along both strike directions and at depth.

Curtis J. Freeman CPG #6901

Avalon Development Corp.

P.O. Box 80268

Fairbanks, AK 99708

Phone: 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