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March 27, 2014 --- Vol. 08, No. 13March 2014

Alaska News Nuggets

MANAGEMENT – Redstar Gold Corp. Mar. 25 reported that Ken Booth is joining its board of directors and will act as interim president and CEO of the company exploring the Unga gold project on the Alaska Peninsula. The Redstar board of directors is actively seeking a permanent replacement for R. Bob Singh, who has stepped down as president, CEO and director. “We are enormously thankful for Bob’s efforts to lead Redstar Gold forward during the past two and half years during a time when the company underwent enormous change,” said Redstar Chairman Jacques Vaillancourt. Singh will remain as a geological consultant to Redstar and advisor to the board of directors. Booth, which holds a bachelor’s degree in geology, began his career as a geologist for companies such as Falconbridge, Anaconda and Minnova. Subsequently, he embarked on a career in banking and investment banking at Scotia Bank, BMO Capital Markets and RBC Capital Markets. Since 1998 Booth has been the CEO of several public companies and is currently a director of: El Tigre Silver; Angkor Gold; Invenio Resources; and Gitennes Exploration.

GOLD – Freegold Ventures Ltd. Mar. 25 said it has added 10 Alaska mining claims (about 1,440 acres) to the Coffee Dome prospect of its Golden Summit project in Interior Alaska. Historical work in the Coffee Dome area dates back to 1911 when one ton of material mined from the Charles prospect averaged and estimated 41 grams per metric ton of free milling gold. Later sampling returned values ranging from 1.95 to 43.5 g/t gold. Surface samples collected by the U.S. Geological Survey in 1969 returned gold values ranging from 1.27 to 150 g/t gold. Trenching and rock sampling conducted by Freegold in 1998 indicated that both upper and lower plate lithologies were encountered in trenches and higher gold values are more common in rocks containing abundant iron oxide and manganese oxide. Limited reverse circulation drilling by the company intersected anomalous gold. No follow-up work has been conducted on this drilling. All of the holes drilled by Freegold encountered upper plate Chatanika Terrane rocks suggesting that the Coffee Dome area contained both upper and lower plate lithologies similar to those hosting mineralization in the Dolphin-Cleary Hill resource area and Kinross Gold’s now-mined out nearby True North deposit and unmined Gil deposit. Prior to work completed by Freegold and completion of airborne magnetics and electromagnetics surveys by the Alaska Division of Geological and Geophysical Surveys, the Coffee Dome prospect area was thought to be the eastern-most extent of the Fairbanks Mining District. However, a re-evaluation by Freegold suggests that the Coffee Dome area sits astride two district-scale northeast trending post-mineral faults. Lower plate rocks of the Fairbanks Schist form an up-thrown horst block between these two faults. Published geologic maps of the area indicate upper plate rocks of the Chatanika Terrane occur in a downthrown block to the northwest of the Coffee Dome horst block. Freegold’s recent efforts at Coffee Dome, particularly reinterpretation of the airborne magnetics over the area, suggest that Chatanika Terrane rocks also are present in a down-thrown block to the southeast, an interpretation that differs with current geologic maps of the area. In addition, the presence of high grade gold values with anomalous arsenic, antimony, bismuth and tellurium suggest the potential for an intrusion related gold system. Although no intrusives are mapped at Coffee Dome, such an intrusive could be masked by extensive surficial deposits or be shallowly emplaced and blind at surface. Freegold said the road-accessible Coffee Dome prospect, like the greater Golden Summit project, is close to industrial strength power and an experienced labor force in nearby Fairbanks.

FINANCE – Heatherdale Resources Ltd. Mar. 24 reported that an amendment to Alaska Senate Bill 99 could provide financing for the development of the Niblack copper-gold-zinc-silver project in Southeast Alaska. SB99 unanimously passed the Alaska Senate on Mar. 26. If the legislation passes the House and is signed into law, an amendment would authorize the Alaska Industrial Development and Export Authority to issue bonds of up to US$125 million to finance infrastructure and construction costs of a mineral processing mill, dock, loading and related infrastructure facilities at the Gravina Island Industrial Complex near Ketchikan, and infrastructure at Heatherdale’s Niblack project on Prince of Wales Island. The processing mill and associated infrastructure facilities would be owned and/or financed by AIDEA. “AIDEA has successfully pursued its mandate to advance economic activity in Alaska through strategic partnerships with the mining industry on numerous occasions. I am very pleased that this committee of the legislature has taken this first step in the approval process with AIDEA for our Niblack Project,” said Heatherdale President and CEO Patrick Smith. “In partnership with local communities and public institutions, I am confident that Niblack can become an operating mine and a significant contributor to the economy of southeast Alaska.” In 2013, Heatherdale reached a memorandum of understanding with AIDEA to work collaboratively to advance the Niblack Project. The agreement covers a range of initiatives, including investigating potential plans to assist with financing energy facilities and other infrastructure development. Heatherdale said its Niblack project has excellent potential to support an important copper-gold-zinc silver underground mining operation. The Gravina Island Industrial Complex near Ketchikan, Alaska, is currently the leading site option for a mill to process material from Niblack, and would be a new value-added economic opportunity for Alaskans. If developed, Niblack has the potential to provide 200 full-time jobs, with about two-thirds of workers at the mine site and one-third at the processing facility. Sen. Lesil McGuire, R-Anchorage, sponsor of SB99, said, “I believe we need to use every tool we can to make sure our economy continues to grow, while creating job opportunities for Alaskans in every possible corner of the state.” If SB99 passes, AIDEA also must go through its traditional project evaluation and due diligence process. If the process is favorably completed, AIDEA will have legislative authorization necessary to use bonds in financing the project.

PEBBLE – U.S. House Oversight and Government Reform Committee Mar. 21 announced that its chairman, Darrell Issa, R-Calif., has subpoenaed Environmental Protection Agency Administrator Gina McCarthy for documents related to the proposed Pebble copper project in the Bristol Bay region of Southwest Alaska. A week earlier, Issa, Subcommittee Chairman James Lankford, R-Okla., and Subcommittee Chairman Jim Jordan, R-Ohio, sent a letter to EPA Inspector General Arthur Elkins, Jr. requesting an investigation into the environmental agency’s decision to rely on a rarely-used provision of the Clean Water Act to preemptively veto the proposed Pebble Project. The EPA recently announced its intention to issue an unprecedented and controversial preemptive veto under Section 404(c) of the Clean water Act to prevent development of the Pebble Project, citing completion of the Bristol Bay assessment. Documents obtained by the Oversight Committee show, however, that the EPA discussed vetoing the mine as early as January 2010, nearly a year before the assessment began (p. 29-30). On Sept. 8, 2010, an EPA discussion matrix weighed the pros and cons of issuing the 404(c) veto. The con column of the document lists that the veto had “never been done before” and would result in “immediate political backlash” and “litigation risk” as drawbacks to preemptive action. A pre-emptive veto of Pebble serving “as a model of proactive watershed planning for sustainability” was listed as a pro on the agency’s discussion document. Another document brought to light by House Oversight shows that in December, 2010, EPA requested funds to ““initiate the process and publish a CWA 404(c) ‘veto’ action” for Pebble. The documents are available at:

http://oversight.house.gov/wp-content/uploads/2014/03/01-13-2013-EPA-Proposed-Pebble-Mine-Project-PowerPoint.pdf

http://oversight.house.gov/wp-content/uploads/2014/03/09-08-2010-EPA-Bristol-Bay-HQ-Briefing.pdf

http://oversight.house.gov/wp-content/uploads/2014/03/12-2010-FY11-EPA-Bristol-Budget.pdf

BANKRUPTCY – Andover Mining Corp. Feb. 12 was deemed bankrupt and the company’s assets are being liquidated in accordance with Canada’s Bankruptcy and Insolvency Act. Vancouver, B.C.-based Grant Thornton Limited has been appointed as trustee. The Sun volcanogenic massive sulfide property in Northwest Alaska is among the projects Andover was pursuing prior to bankruptcy.


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