The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Mining Explorers 2024 - January 15, 2025
A drill defines high-grade copper and zinc mineralization under a band of green Northern Lights at the Palmer project in Southeast Alaska.
Native copper encountered during the 2023 drilling at the Palmer VMS project in Southeast Alaska.
With the acquisition of 100% ownership of the high-grade Palmer copper-zinc-gold-silver project in Southeast Alaska, 2024 was a transitional year for American Pacific Mining Corp.
American Pacific gained a roughly 45% joint venture in Palmer through the 2022 acquisition of Constantine Metal Resources Ltd., which was advancing the high-grade volcanogenic massive sulfide project near the port town of Haines toward a production and permitting decision in partnership with Dowa Metals & Mining Alaska Ltd.
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.
All the indicated resources and just over half of the inferred resources are located in the main Palmer deposit, which is comprised of the RW and South Wall zones, with the balance of the inferred resource hosted in the nearby AG Zone.
Drilling funded by Dowa over the past two exploration seasons in Alaska, including a $12.8 million (C$17.5 million) program carried out in 2024, continued to cut significant copper and zinc mineralization within and around the main deposit at Palmer.
This year's program, carried out under a joint venture between American Pacific (32%) and Dowa Metals & Mining Company Ltd. (68%), focused on building upon the success of the 2023 drilling, which cut four of the most significant copper intercepts ever encountered at Palmer.
Highlights from the 2023 drill program include:
Native copper encountered during the 2023 drilling at the Palmer VMS project in Southeast Alaska.
• 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.
American Pacific and Dowa originally planned to drill 14 holes, primarily targeting the expansion of the high-grade copper mineralization within the South Wall zones. Based on positive visual observations and real-time modeling updates, however, the partners expanded the program to 19 holes.
As a result of Dowa funding the programs, American Pacific's interest in Palmer had been diluted to around 32%.
At the end of the 2024 exploration season, however, Dowa agreed to hand over full ownership of Palmer to American Pacific and pay the junior exploration company $10 million (C$14 million) 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.
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.
Upon closing its deal with Dowa, American Pacific had C$16 million ($11.4 million) in treasury and full ownership of Palmer and the Madison copper-gold project in Montana.
"This is a transformative transaction for American Pacific," Smith added.
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