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Following COVID hiatus, Aussie major funds UKMP program, Ambler access road; resumes drill program at Shorty Creek North of 60 Mining News – July 30, 2021
Ambler Metals' 2021 program includes resource upgrade of metallurgical drilling at Arctic and the exploration of similar VMS targets near the proposed mine.
Core from a 2018 hole that cut 442.4 meters averaging 0.22% copper, 0.13 g/t gold, 4.03 g/t silver, and 0.02% tungsten trioxide at the Shorty Creek project in Alaska.
When Australia-based South32 Ltd. decided to expand its portfolio into the Northern Hemisphere, Alaska was its first stop. Under a deal struck with Trilogy Metals Inc. in 2017, South32 agreed to invest more than US$175 million to earn a 50% joint venture interest in the massive Upper Kobuk Mineral Projects in Alaska's world-class Ambler Mining District.
After investing more than US$30 million to fully understand the mineral potential at UKMP, the major base metals producer agreed to pay US$145 million to exercise its JV option late in 2019. Ambler Metals LLC, the resultant JV owned equally by South32 and Trilogy, is using these funds to unlock UKMP's world-class potential.
Toward this goal, Ambler Metals had originally planned to invest US$22.8 million toward advancing exploration and predevelopment activities at UKMP during 2020. The partnership, however, determined that it would be best for its long-term plans and the health of the Northwest Alaska communities near UKMP to wait out the COVID pandemic.
Similarly, South32 decided to forego 2020 exploration at Shorty Creek, another copper-enriched Alaskan project the Australian major is investing in.
World-class UKMP program
While a yearlong hiatus from field activities put some of Ambler Metals' plans to advance toward developing the first operation in one of the richest mineral districts on earth behind schedule, the partnership remains on track to begin the permitting process for a mine at the Arctic project later this year.
To help to get the overall UKMP project back on schedule, South32 and Trilogy agreed to a larger US$27 million program for 2021.
Trilogy Metals President and CEO Tony Giardini said this investment would fund one of "the biggest programs in the history of the Ambler Mining District and we have expectations that this program will eventually add to our mineral inventory within this emerging world-class mining district."
Realizing the world-class potential that the Ambler District has to offer, however, will require a road to deliver the metal-rich concentrates produced there to market. That is why Ambler Metals is also investing US$6.5 million into feasibility and permitting activities for a 211-mile industrial access road to the district. Alaska Industrial Development and Export Authority, which would fund the construction and maintenance of the road, is also contributing US$6.5 million toward this summer's work. AIDEA will recoup its investments into the road by collecting tolls for its use.
The advancement of the Ambler Road, along with the historically large 2021 filed program, will help to further de-risk the Arctic Mine project.
A 2020 feasibility study details a financially robust operation at Arctic that would produce 1.9 billion pounds of copper, 2.3 billion lb of zinc, 388 million lb of lead, 386,000 ounces of gold, and 40.6 million oz of silver over an initial 12-year mine life.
This operation is based on 43 million metric tons of reserves averaging 2.32% copper, 3.24% zinc, 0.57% lead, 0.49 g/t gold, and 36 g/t silver.
While high-grade volcanogenic massive sulfide deposits such as this are typically mined from underground, the Arctic feasibility study details an open-pit mine feeding a 10,000-metric-ton-per day mill.
The 2021 field program at Arctic includes 7,600 meters of drilling aimed at both extracting additional material for metallurgical work and upgrading mineral resources into the measured category, which could then potentially be upgraded to reserves.
This includes geotechnical drilling around the mine site, resource conversion and metallurgical drilling in the Arctic deposit, and condemnation drilling at locations where Ambler plans to build the processing plant and tailings management facility.
In addition to collecting the data to further de-risk Arctic, the 2021 field work includes exploration drilling around the Arctic deposit and across the wider 426,600-acre property.
The drills are testing VMS targets and historical deposits similar to Arctic and carbonate-hosted copper targets similar to Bornite, the second most advanced UKMP project.
Located about 16 miles (26 kilometers) southwest of Arctic, Bornite hosts 6.4 billion lb of copper and 77 million lb of cobalt in near-surface and underground deposits.
At a cut-off grade of 0.5%, the open-pit portion of Bornite hosts 40.5 million metric tons of inferred resource averaging 1.02% (913 million pounds) copper; and 84.1 million metric tons of indicated resource averaging 0.95% (1.77 billion lb) copper.
At the same cut-off grade, the Bornite open-pit also hosts 124.6 million metric tons of inferred resource averaging 0.017% (45 million lb) cobalt.
The below-pit portion of Bornite, at a cut-off grade of 1.5%, hosts 57.8 million metric tons of inferred resource averaging 2.89% (3.68 billion lb) copper and 0.025% (32 million lb) cobalt.
"While we will not be drilling at the Bornite project this year, we believe in the potential of this project and plan to resume drilling there soon," said Giardini.
A return to Shorty Creek
While South32 did not fund a drill program on Freegold Ventures Ltd.'s Shorty Creek property last year, the major and junior did carry out some targeting work that is expected to bolster the success of this year's US$2.5 million drill program at this porphyry copper project in Interior Alaska.
Lying alongside the paved Elliot Highway about 75 miles northwest of Fairbanks, Shorty Creek is a relatively early staged exploration project with the potential to host large porphyry-style deposits enriched with copper, gold, silver, tungsten, and cobalt.
Under a 2019 deal with Freegold, South32 has the option to earn a 70% interest in Shorty Creek for US$30 million, less any money the Australia-based major invests in exploring the copper-gold-silver-tungsten targets identified across the property.
To keep the option in good standing, South32 agreed to fund up to US$10.3 million on exploration over a four-year span beginning in 2019.
The Australia major invested the first US$2.3 million into a 2019 program at Shorty Creek, which included a five-hole drill program; induced polarization and magnetic surveys; and geochemical sampling.
The best hole, SC 1901A, cut 99.1 meters averaging 0.29% copper, 0.014 g/t gold, and 1.61 g/t silver northeast of Hill 1835, the primary target of previous drilling at Shorty Creek.
Freegold has drilled 12 holes at the Hill 1835 target since 2015. Highlights from this drilling include 91 meters of 0.55% copper, 0.14 g/t gold and 7.02 g/t silver; 93.5 meters of 0.38% copper, 0.07 g/t gold, and 8.96 g/t silver; 360 meters of 0.24% copper, 0.07 g/t gold, 4.04 g/t silver, and 0.03% tungsten trioxide; and 442.2 meters of 0.24% copper, 0.09 g/t gold, 4.74 g/t silver, and 0.02% tungsten trioxide.
The 2019 program included three other holes at Hill 1835 and one hole at Hill 1710, a very large porphyry target about 2,000 meters northwest of Hill 1835. Due to difficult drilling conditions, however, only one of these holes reached targeted depth.
While drills did not turn at Shorty Creek during 2020, several prospective target areas were identified that are being tested this year.
Freegold is carrying out the South32-funded programs at Shorty Creek. After each year's drill program, the Australian major may exercise its option to acquire its 70% interest in the project by putting the balance of its $30 million earn-in amount into a JV company that will continue advancing Shorty Creek.
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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