The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
HighGold Mining unlocks the high-grade gold potential of the Johnson Tract property on CIRI lands in Southcentral Alaska North of 60 Mining News – August 27, 2021
Nathan Steeves, chief geologist for HighGold Mining, describes the geology and expansion potential of the JT gold deposit.
Much of the district-scale alteration and mineralization seen across the Johnson Tract property has yet to be mapped and sampled by geologists.
A drill tests the DC target, where 1990s era drilling cut 13 meters averaging 8.57 g/t gold, 4.7% zinc, 0.5% copper, 0.9% lead, and 37.7 g/t silver.
A drill tests an expansion target northeast of the JT deposit.
JOHNSON TRACT, Alaska – A nearly half-a-million-ounce gold deposit sitting on a 7.5-mile trend of obvious yet underexplored mineralization just a few miles from the coast in Southcentral Alaska was hiding in plain sight for more than two decades before HighGold Mining Inc. began unlocking the rich potential of this high-grade gold project in 2019.
Owned by Cook Inlet Regional Inc., more widely known as CIRI, Johnson Tract is one of the many mineral-rich properties identified and selected by Alaska Native corporations following the passage of the Alaska Native Claims Settlement Act in 1971.
By the 1990s, an estimated 1.04 million metric tons of resource averaging 10.05 grams per metric ton gold, 7.63 g/t silver, 8.32% zinc, and 1.13% lead had been outlined in what is now known as the JT deposit at Johnson Tract.
Despite these high grades and the evident potential to grow this resource, weak precious metals prices at the end of the 20th century put a halt to plans to develop a mine at Johnson Tract, and the enticing project faded into obscurity.
Wanting to unlock the gold potential on its land, CIRI went on a search for a mineral exploration company known for not only its geological prowess but also an excellent environmental, social, and governance reputation – a search that eventually led to HighGold.
In the two years since leasing Johnson Tract from CIRI, HighGold has validated the high-grade resource at JT and is beginning to unlock the vast potential across this 20,942-acre project that lies only about six miles west of Cook Inlet and 125 miles southwest of Anchorage.
"Our exploration team's mandate in 2021 includes both establishing critical mass at the JT deposit and making new discoveries," said HighGold Mining President and CEO Darwin Green.
Uniquely Alaskan opportunity
With an already well-advanced gold-rich polymetallic project located on highly prospective lands owned by an ANCSA corporation, Johnson Tract offers a uniquely Alaskan opportunity for HighGold, which was spun out of Constantine Metal Resources Ltd. specifically to advance this project. This gold enriched project, however, offers another rare bonus – U.S. Congress and Alaska Legislature guaranteed road access to tidewater.
This assurance of easements for a road and port for delivering metal-rich concentrates produced at a Johnson Tract mine dates back to when CIRI claimed this metal-rich property in 1976.
At about the same time as CIRI selected Johnson Tract, the federal government created the Lake Clark National Park, isolating the gold property.
Relentlessly battling inside and outside of court, early CIRI leaders negotiated the Cook Inlet Land Exchange, one of the largest land swaps in U.S. history.
As part of this exchange, CIRI was granted special rights, ratified by U.S. Congress and approved by the Alaska Legislature, that ensures transportation and port easements through Lake Clark National Park for the development of the rich mineral potential at Johnson Tract.
"CIRI enabled the creation of the park with an exchange of land originally outlined in ANCSA for the Johnson subsurface and surface rights on the south tract and subsurface rights on the north tract," CIRI Corporate Affairs Director Ethan Tyler told North of 60 Mining News.
In 1981, Anaconda Mining signed a joint venture agreement with CIRI to evaluate the precious and base metals potential identified across these tracts of land.
Exploration under this JV led to the discovery of the JT deposit in 1982. The discovery hole cut 102.6 meters averaging 10.94 grams per metric ton gold, 8.01% zinc, 0.75% copper, 2.13% lead, and 8.5 g/t silver.
Mining this rich discovery nearly became a reality when Westmin Resources Ltd. optioned Johnson Tract in the 1990s.
Based on 88 holes, mostly drilled by Anaconda, Westmin calculated that Johnson Tract hosted 1.04 million metric tons of resource averaging 10.05 g/t gold, 7.63 g/t silver, 8.32% zinc and 1.13% lead.
Westmin contemplated shipping ore mined from the JT deposit to its then Premier Mine in British Columbia's famed Golden Triangle. Both properties are near tidewater, which would have made shipping the high-grade ore to the already operating mill on the east side of the Gulf of Alaska fairly inexpensive.
Weak gold prices at the time, however, made the plan infeasible and Westmin's lease on this highly prospective property expired.
After being lost to obscurity for two decades, Johnson Tract reemerged on the Alaska exploration scene with HighGold's agreement with CIRI.
HighGold and CIRI have an initial 10-year term for the exploration and other studies needed to advance the gold-rich project to a mine construction decision, followed by a five-year development term, and then a production term that will continue for as long as mining continues.
Minimum exploration expenditure and annual lease payments are required to maintain the lease until production. Considering the large exploration programs already carried out by HighGold, however, the $10 million minimum exploration requirement is now moot.
"We already exceeded that," said Green.
CIRI maintains certain net smelter return royalties and a back-in right for up to a 25% participating interest in Johnson Tract at the time a decision to develop a mine on the polymetallic gold project is reached.
Larger potential emerges
With a strong partnership with CIRI, a head start on exploration, and an already established camp to work out of, it did not take HighGold long to build momentum and excitement at Johnson tract.
Nine holes drilled by HighGold during 2019 both confirmed and expanded the historical JT deposit.
Based on this and the earlier drilling, an industry-compliant 2.14 million metric tons of indicated resource averaging 6.07 g/t (417,000 oz) gold, 5.8 g/t (397,000 oz) silver, 5.85% (275.3 million pounds) zinc, 0.71% (37.6 million lb) lead, and 0.57% (26.8 million lb) copper; plus 581,000 metric tons of inferred resource averaging 2.05 g/t (38,000 oz) gold, 6.67% (85.5 million lb) zinc, 0.33% (4.2 million lb) lead, and 0.54% (6.9 million lb) copper was established for JT.
This deposit and the wider potential of the Johnson Tract property attracted prominent resource investors such as Franklin Gold Fund, Sprott Asset Management, and Rob McEwen to participate in a C$13.8 million financing that closed in mid-2020. Agnico Eagle Gold Mines Ltd., a senior gold producer that was anonymous at the time, also participated in the financing and maintains a roughly 7% stake in HighGold.
"With the closing of the financing, HighGold has C$23 million in working capital, placing us in a strong position to materially advance our flagship Johnson Tract gold project in Alaska," Green said at the time. "HighGold now looks forward to putting these funds to work."
The exploration company did just that, completing 16,418 meters of drilling during the 2020 season, roughly double what the company planned at the beginning of the year.
Unlocking the potential
The 32-hole drill program completed in 2020 focused primarily on resource expansion targets at and around the JT deposit.
Highlights from 2020 drill intercepts on the margins of the JT deposit mineral resource area include:
• 74.1 meters averaging 17.89 g/t gold, 7.1 g/t silver, 0.48% copper, 7.28% zinc, and 1.31% lead in hole JT20-092.
• 75.1 meters averaging 10.01 g/t gold, 6 g/t silver, 0.57% copper, 9.36% zinc, and 1.11% lead in JT20-093.
• 20.1 meters averaging 11.5 g/t gold, 4 g/t silver, 0.5% copper, and 3.1% zinc in JT20-096.
• 22.8 meters averaging 3.2 g/t gold, 4 g/t silver, 0.4% copper, and 6% zinc in JT20-106.
• 58.6 meters averaging 1% copper and 21 g/t silver, including 12 meters averaging 2.8% copper and 51 g/t silver in JT20-110.
• 18.3 meters averaging 5.9% zinc, 64 g/t silver, and 0.1% copper in JT20-121.
While the drills were turning, HighGold geologists carried out a large-scale regional reconnaissance exploration that has identified exciting targets that are being tested with an expansive drill program carried out this year.
This year's program includes a planned 20,000 meters of drilling that will further test both expansion targets at JT and some of the exciting prospects extending to the north.
The JT deposit area targets include:
• JT Deposit Expansion – Step-out holes along strike and down-plunge from the current resource.
• Revised Fault Offset Target – Which is testing a new interpretation of the JT deposit fault displacement.
• GAP Target – This includes widely-spaced fans of holes to test a poorly drilled area immediately along strike to the northeast of JT deposit.
• Footwall Copper Zone - Step-outs at depth from the copper-rich zone discovered in 2019, where hole JT19-089 cut 20.7 meters averaging 2.4% copper, 4.9% zinc, and 32 g/t silver.
• 2020 VMS Zone – Follow-up on the 7.8 meters at 6.1% zinc, 1.6% lead, 0.2% copper, 0.7 g/t gold, 36 g/t silver encountered in JT20-114, a hole drilled last year.
The Johnson Tract regional prospects being tested this year include:
• DC Prospect –Previously known as Difficult Creek, DC hosts large gossan alteration zones reminiscent of JT deposit, which is about 2.5 miles (four kilometers) to the southwest. These zones include a 500- by 1,000-meter area of silver-rich veins, vein swarms, and siliceous breccias discovered by HighGold geologists last season.
• Milkbone Prospect – Located 400 meters west of the silver-rich vein field, Milkbone is defined by a strong soil anomaly with samples of 70 to 4,390 parts per billion gold that coincide with boulders and subcrop samples that have returned grades as high as 184 g/t gold.
• Kona Prospect – A large-scale alteration zone about 1,000 meters west of Milkbone that is associated with a strong induced polarization geophysical anomaly.
HighGold is roughly 8,000 meters into the planned 20,000-meter drill program testing these targets. Assays are pending from all the drilling completed this year.
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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