The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - November 18, 2024
A drill expands the high-grade copper and gold mineralization at the Palmer VMS project in Alaska.
Native copper encountered during 2023 drilling at the Palmer VMS project in Southeast Alaska.
American Pacific Mining Corp. has entered into an agreement with Dowa Metals & Mining Alaska Ltd. to acquire 100% ownership of the Palmer copper-zinc-gold-silver project in Southeast Alaska.
American Pacific gained a roughly 45% joint venture in Palmer through the 2022 acquisition of Constantine Metal Resources Ltd., which was advancing the volcanogenic massive sulfide project near the port town of Haines toward a production decision in partnership with Dowa.
At the time of the acquisition, Palmer hosted 4.68 million metric tons of indicated resource averaging 5.23% (539 million lb) zinc, 1.49% (154 million lb) copper, 30.8 grams per metric ton (4.6 million oz) silver, and 0.3 g/t (451,000 oz) gold; plus 9.59 million metric tons of inferred resource averaging 4.95% (1.05 billion lb) zinc, 0.59% (124 million lb) copper, 69.3 g/t (21.4 million oz) silver, and 0.39 g/t (120,600 oz) gold.
Drilling funded by Dowa over the past two years has continued to cut significant copper and zinc mineralization within and around the main resource area. Highlights include:
• 30.7 meters averaging 2.59% copper, 11.21% zinc, 0.3 g/t gold, and 28.5 g/t silver in hole CMR23-162B.
• 37.1 meters averaging 4.57% copper, 8.44% zinc, 0.5 g/t gold, and 29.3 g/t silver in hole CMR23-167.
• 33.2 meters averaging 5.48% copper, 7.22% zinc, 0.64 g/t gold, and 36.8 g/t silver in hole CMR23-169.
• 23.9 meters averaging 9.03% copper, 3.49% zinc, 0.83 g/t gold, and 41.8 g/t silver in hole CMR23-171.
• 43.8 meters averaging 6.54% copper, 3.15% zinc, 0.42 g/t gold, and 28 g/t silver in hole CMR23-172.
• 2.9 meters averaging 3.5% copper, 0.68% zinc, and 0.3 g/t silver in hole CMR24-192.
Native copper encountered during 2023 drilling at the Palmer VMS project in Southeast Alaska.
As a result of Dowa funding the programs, American Pacific's interest in Palmer had been diluted to around 32%.
Now, Dowa has agreed to hand over full ownership of Palmer to American Pacific and pay the junior exploration company $10 million (C$14 million) for an option to acquire up to 50% of the zinc concentrate produced from a future mine at the Southeast Alaska project. The terms of the zinc contract will be negotiated in good faith as a future mine at Palmer gets closer to production.
"This is a transformative transaction for American Pacific," American Pacific CEO Warwick Smith said in a Nov. 18 statement announcing the deal. "American Pacific receives a significant injection of capital and 100%-control of a project that has an established mineral resource with significant exploration upside throughout the district."
American Pacific said a difference in corporate strategies is the reason Dowa has decided to step out of the JV.
Dowa's primary objective for Palmer is to generate zinc concentrates for its refinery in Japan. American Pacific is looking at the larger exploration potential beyond the main Palmer deposit, which accounts for less than a half-mile (one kilometer) section of a VMS mineralized horizon that extends more than four miles (6.5 kilometers) across that property.
According to a preliminary economic assessment that was updated in 2022, a 3,500-metric-ton-per-day mill at Palmer would produce an estimated 1.1 billion lb of zinc, 196 million lb of copper, 18 million oz of silver, 91,000 oz of gold, and 2.89 million metric tons of barite over an initial 11-year mine life.
With full ownership, American Pacific will continue to advance exploration at Palmer. The first step will be the completion of an update to the resource that was last calculated six years ago.
"An updated mineral resource estimate (MRE) is underway, and this transition consolidates ownership and provides a clear path forward with a renewed focus on advanced exploration and resource expansion, which we believe will create significant value for a project that currently includes a small fraction of the known VMS showings in the current MRE," said Smith.
Following the closing, American Pacific is expected to have more than C$16 million ($11.4 million) in cash and full ownership of Palmer and the Madison copper-gold project in Montana.
The Palmer acquisition and zinc sales transaction with Dowa is expected to close before the end of the 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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