The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Starts of mining and drilling mark two milestones in one day North of 60 Mining News – September 1, 2023
Heavy equipment on display during the groundbreaking ceremony at the Manh Choh gold mine in eastern Alaska.
Contango ORE plans to drill 12 to 15 surface holes this year to upgrade and expand high-grade gold mineralization within the Coleman segment of the Lucky Shot vein.
Contango Ore Inc. Aug. 30 announced the official start of mining operations at its 30% owned Manh Choh gold-silver mine near the crossroads town of Tok, Alaska, and the launch of 2023 drilling at its Lucky Shot gold mine project in the Southcentral region of the state.
The Manh Choh mine, a joint venture between Kinross Gold Corp. (70%) and Contango (30%), is expected to produce roughly 1 million gold-equivalent oz, which includes the value of both the gold and silver, over an initial 4.5 years of mining slated to begin next year.
Alaska Gov. Mike Dunlevy, Tetlin Tribal Chief Michael Sam, Tetlin Village residents, and representatives from both Kinross and Contango attended an Aug. 29 groundbreaking ceremony for the Manh Choh gold mine being developed on Alaska Native lands about 15 miles southeast of Tok.
"We are indeed excited to report that mining operations have commenced at Manh Choh and that the construction phase has been achieved on budget and on schedule," said Contango ORE President and CEO Rick Van Nieuwenhuyse.
Scheduled to begin trucking ore to the Fort Knox Mine near Fairbanks, Alaska, for processing during the second half of next year, the Manh Choh mine is expected to produce 225,000 ounces of gold-equivalent per year over an initial 4.5 years of mining.
Contango's share of this production is anticipated to average 67,500 gold-equivalent oz per year, elevating the exploration and development company to gold producer.
"At this point, mining operations primarily consist of pre-stripping activities, with any ore encountered to be stockpiled for later transport by road haul trucks to the Fort Knox mill for processing," Van Nieuwenhuyse explained. "Meanwhile, mill modification activities continue at the Fort Knox mill with an emphasis on completing outdoor activities before winter arrives."
He said the mine remains on budget and schedule for first gold in the second half of 2024.
As mining ramps up at Manh Choh, Contango continues to build high-grade gold resources in anticipation of a future mine at Lucky Shot.
Located 112 road miles north of Anchorage, Alaska, Lucky Shot encompasses three pre-World War II era underground mines – Colman, Lucky Shot, and War Baby – that produced gold from a high-grade vein system that extends for at least 1.5 miles across the property.
It is estimated that from 1922 until being shut down by the federal War Production Board in 1942, Lucky Shot produced 252,000 ounces of gold from 169,000 tons of ore averaging around 40 grams per metric ton (1.6 oz per metric ton) gold. Additional gold was produced from the Colman and War Baby mines.
Since acquiring the project in 2021, Contango has been working toward establishing a resource that would support a modern high-grade gold mine at Lucky Shot. This includes the rehabilitation and extension of the historical Enserch tunnel, which served as a platform for a 29-hole drill program the company carried out at the project in 2022.
According to the new calculation completed earlier this year, Lucky Shot hosts 226,963 metric tons of indicated resource averaging 14.5 g/t (105,620 oz) gold and 82,058 metric tons of inferred resource averaging 9.5 g/t (25,110 oz) gold.
To build on this resource, Contango has begun a roughly 3,000-meter exploration drill program on the Coleman segment of the Lucky Shot vein, which hosts about 95,092 oz of the Lucky Shot indicated resource at a grade 15.6 g/t gold and 23,642 of the inferred resource at 9.9 g/t gold.
The 12 to 15 holes planned for this year are designed to in-fill and extend the mineralization down plunge and along strike of known mineralization.
"We will complete as much surface drilling as we can safely accomplish from this single drill pad on top of Box Mountain before winter weather conditions shut us down," said Van Nieuwenhuyse. "The program is designed to extend known mineralization on the Coleman Segment of the Lucky Shot vein, and upgrade resources to a measured category so that we can incorporate into a proper mine plan."
The company plans to resume underground drilling at Lucky Shot with a 12,000-meter program slated to get underway next year. This close-spaced underground drilling is expected to significantly expand the gold resources in the Lucky Shot section of the longer high-grade gold vein.
"Our objective over the next year is to complete the above-mentioned surface drill program followed by the underground drill program at Lucky Shot to identify 400,000 to 500,000 ounces of gold resource that we can then develop a mine plan around," the Contango CEO added.
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.
Reader Comments(0)