The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Large programs slated for Manh Choh and Lucky Shot projects North of 60 Mining News – January 21, 2022
An aerial view of the Peak Gold deposits being advanced toward development under a joint venture between Kinross Gold and Contango ORE.
Capping off a successful year of mine predevelopment activities at its 30%-owned Manh Choh gold mine project in Interior Alaska and acquisition of the historic high-grade Lucky Shot gold mine project in Southcentral Alaska by up-listing its share to the New York Stock exchange, Contango ORE Inc. is well-positioned for 2022 success.
"2021 represented another year of COVID, but despite the difficulties of working in a continued pandemic environment, the company achieved its main objectives," said Contango ORE President and CEO Rick Van Nieuwenhuyse.
And these achievements take the company one step closer to its larger objective, to become a Fairbanks, Alaska-headquartered gold producing company that boasts the status of having its shares trading on the NYSE American.
"We believe the listing will greatly enhance the company's profile with U.S. capital markets, increasing exposure to a larger and more diverse group of institutional and retail investors, and improving liquidity for our existing shareholders," said Van Nieuwenhuyse.
Considering CORE is on pace to soon be a gold producing company with somewhere around 66,000 oz per year from its share of production from Manh Choh in 2024, followed by additional gold from its fully owned Lucky Shot mine project, plus the company's pipeline of earlier-stage Alaska minerals projects, it is expected that the company will attract plenty of investor interest.
US$48 million program at Manh Choh
Peak Gold Joint Venture – a partnership between Kinross Gold Corp. (70%) and CORE (30%) – carried out a US$19 million program to support feasibility and permitting activities at Manh Choh, a 675,000-acre land package leased from the Tetlin Alaska Native Tribe that hosts two adjacent, high-grade gold-silver deposits discovered and delineated by CORE.
Based on 55,321 meters of drilling, these Peak and North Peak deposits hosted 9.2 million metric tons of measured and indicated resources averaging 4.08 grams per metric ton (1.21 million ounces) gold and 14.19 g/t (4.2 million oz) silver going into 2021.
With the idea of processing high-grade ore from Manh Choh through the mill at its Fort Knox Mine north of Fairbanks, Kinross paid CORE US$93.7 million to buy a 70% JV interest in the relatively high-grade, road-accessible project.
Under Kinross' leadership, the 2021 program at Manh Choh included 10,050 meters of drilling. Most of which infilled the deposit to support a detailed mine plan and feasibility study. The program also included drilling to continue collecting the geotechnical, metallurgical, environmental studies, and water quality data needed for permitting and mine development.
In addition, the Peak Gold JV submitted a permitting package to the US Army Corps of Engineers for a Wetlands Dredge and Fill permit, also known as a 404 permit, just before the end of the year. This permit will allow the JV to upgrade an existing road that runs across the Tetlin property to the deposits.
With community engagement a priority for both CORE and Kinross, Peak Gold JV also carried out more than 20 meetings with the Tetlin Tribal Council and had more than 2,000 stakeholder engagements in communities along the proposed road route to the Fort Knox mill.
The Peak Gold JV also opened an office in the nearby town of Tok, Alaska, hired two community members full-time for environment and community relations, and spent approximately US$2 million directly with local businesses.
With gold production from the proposed Manh Choh mine slated to begin in 2024, the JV partners approved a US$47.9 million program for 2022. This budget, of which CORE will contribute approximately US$14.4 million, will fund a feasibility study, permitting, ongoing environmental monitoring, community engagement, engineering, early construction, and exploration.
Taking advantage of the warm weather and long summer days in Alaska, the 2022 program will include the start of initial construction at Manh Choh. This will consist of building a camp to provide housing in support of ongoing construction efforts as well as future operations of the mine itself. Other areas of construction include roads and lay-down areas.
A feasibility study slated for completion this year will provide more definitive details of the anticipated tons and grades of Manh Choh ore to be delivered to the Fort Knox mill for processing, as well as expected ounces of gold and silver to be recovered based on the reserves detailed in the study.
At the time of buying a 70% JV interest in Manh Choh, Kinross estimated that 1 million oz of gold-equivalent, which includes the value of both the gold and silver recovered, would be produced from the Peak Gold deposits over a roughly 4.5-year mine-life.
"With this program the company will see its Manh Choh discovery finally advancing towards production!" CORE penned in a statement.
Heading underground at Lucky Shot
With Kinross leading the efforts at Manh Choh, CORE is focusing much of its efforts on the recently acquired Lucky Shot, home to a historic gold mine in the Willow Mining District.
"Although it is full steam ahead for the Manh Choh project based on the latest Kinross guidance, the Lucky Shot project represents an exciting opportunity to add significant additional value for Contango shareholders and marks a new focus for the company," Van Nieuwenhuyse said at the time of the August acquisition of the historic mine project.
A road-accessible project about 75 miles north of Anchorage, the 8,590-acre Lucky Shot property blankets a large portion of the Willow Creek Mining District, including the pre-World War II Lucky Shot and War Baby mines. It is estimated that from 1918 until being shut down by the federal War Production Board in 1942, these two underground operations produced more than 250,000 oz of gold from 169,000 tons of ore, indicating an average head grade of around 1.5 oz of gold per metric ton.
In September, CORE hired former Pogo gold mine manager Chris Kennedy as general manager to oversee the exploration and development for the Lucky Shot mine project.
Kennedy wasted no time launching CORE's plans for Lucky Shot and by December had engaged Atkinson Construction to carry out a 2022 exploration and development program that includes the advancement of the Enserch Tunnel to the footwall of the Lucky Shot vein and drift 1,500 feet parallel to the vein and set up drill stations every 75 feet.
Already at the site, Atkinson plans to begin refurbishing the existing underground workings by the end of January. CORE anticipates that the refurbished and expanded underground workings will be ready for it to be utilized as a platform for a roughly 3,200-meter underground drill program by late summer.
Once the drilling is underway, CORE will evaluate a second-stage program that would advance the tunnel through the vein. In addition to providing better access to drill the projected down-dip extension of Lucky Shot, tunneling through the vein would provide a bulk sample and test mining of the vein itself.
Through this work, the company aims to identify a prospective resource of between 500,000 and 1 million oz of gold that can be economically mined.
A 2016 calculation completed for former operators Miranda Gold Corp. and Alaska Gold Torrent Inc. outlined 206,500 metric tons of measured and indicated resources averaging 18.3 g/t (121,500 oz) gold and 59 thousand metric tons of inferred resource averaging 18.5 g/t (35,150 oz) gold at Lucky Shot.
"Clearly there is a lot of work to do over the next two to three years, but the company is well positioned to execute this plan," CORE penned in its 2022 update.
Advancing early-stage assets
In addition to Manh Choh and Lucky Shot, CORE is advancing three earlier staged mineral exploration assets in Alaska – Shamrock, Eagle-Hona, and Triple Z.
Lying alongside the Alaska Highway about 70 miles southeast of Fairbanks, Alaska, Shamrock is a large gold property in the Richardson Mining District that was most recently explored by Coeur Mining Inc., which gained ownership of the property through the acquisition of Northern Empire Resources.
Coeur, which acquired Northern Empire for its properties in Nevada, allowed these non-core mining claims in Alaska's Richardson district to lapse in 2020.
Following the staking of 368 state mining claims covering roughly 53,000 acres over the area of these lapsed claims, CORE purchased an extensive geochemical and geophysical database that Coeur had also gained from its buyout of Northern Empire.
Based on historical exploration, CORE has determined that there are several well-defined soil anomalies with limited drilling that remain underexplored on what is now known as the Shamrock property.
During the 2021 summer program, CORE conducted a detailed sampling campaign focused on two areas – Hilltop and Banner. This included the collection of 835 soil samples using a power auger and 75 surface rock chip samples.
Follow-up trenching and detailed geologic mapping is planned for the summer of 2022.
At the Eagle-Hona, a large block of state mining claims covering early-stage gold exploration targets immediately west of Manh Choh, CORE carried out a detailed reconnaissance of the northern and eastern portions of the large claim block that had not previously been sampled during the 2021 season.
Due to the steep topography, a helicopter was used to execute the program safely. The company collected 2,084 surface rock chip samples, including 97 trench samples, and 62 pan concentrate samples.
Follow-up geologic mapping and sampling is planned for the summer of 2022.
At Triple Z property, a porphyry copper-gold project just north of Manh Choh, the state of Alaska completed a topographic survey to re-establish survey boundaries that were destroyed due to wildfires.
This survey was required to complete a transfer of land from federal to state. Once this transfer is completed, expected this year, CORE plans to begin drilling the exciting porphyry copper-gold-silver target at Triple Z.
"We will continue to advance exploration on our early-stage Shamrock, Eagle-Hona and Triple Z projects at a measured pace to identify high quality drill targets and then test those targets as appropriate," said Van Nieuwenhuyse. "We look forward to updating shareholders and investors throughout the year on our progress."
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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