QUARTERLY UPDATE – Novagold Resources Inc. Oct. 8 released third-quarter 2014 financial results and updates for its 50-percent-owned Donlin Gold project in Alaska and its 50-percent-owned Galore Creek copper-gold-silver project in British Columbia. Novagold reported that permitting has passed the mid-way mark at Donlin. A Draft Environmental Impact Statement for the project is expected to be issued for public comment in 2015 and a decision on a final EIS is expected in 2016. Meanwhile, Donlin Gold LLC – owned equally by subsidiaries of Novagold and Barrick Gold Corp. – will work to secure other permits needed to develop the 40-million-ounce gold project located in the Yukon-Kuskokwim Region of western Alaska. “As we progress through permitting and move closer to a construction decision, the Donlin Gold project owners are looking to optimize the project by evaluating development scenarios and capital cost-sharing opportunities with third-party gas pipeline, power plant and/or port facilities owner-operators,” said Novagold President Greg Lang. “Prior to making a construction decision, we expect to update the operating and capital costs, input parameters and underlying assumptions in the Donlin Gold Second updated feasibility study which was published three years ago.”
At the Galore Creek copper-gold project located in northwestern British Columbia, Novagold and partner Teck Resources Ltd. continued to evaluate various scenarios for advancement. “At Galore Creek, the focus in 2014 is to incorporate the drilling results from the 2012 and 2013 programs, including the discovery of the Legacy zone, into a model to advance mine planning and project design. As a follow-up to the workshops conducted in the second quarter, activities in the third quarter focused on narrowing down possible scenarios for an integrated mining, waste disposal and water management plan,” Lang said. “We expect this effort to further improve the value and marketability of the Galore Creek project. We continue to look at ways to monetize our share of this project to strengthen our balance sheet and focus primarily on the advancement of Donlin Gold.” As of Aug. 31, Novagold had US$170.8 million in cash and term deposits, compared with US$176.3 million at the beginning of the quarter. The $5.5 million decrease was primarily related to funding its share of the Donlin Gold and Galore Creek projects and administrative costs. Novagold says it has sufficient working capital available to repay the remaining US$15.8 million of outstanding notes due in May 2015 and advance the Donlin Gold project through the expected remaining permitting process, as well as fund current activities to further enhance the value of Galore Creek. The company continues to expect to spend US$15 million to fund its share of expenditures at Donlin Gold and Galore Creek and US$15 million for general and administrative costs, interest, working capital and other corporate purposes.
RARE EARTHS – Ucore Rare Metals Inc. Oct. 7 provided an update on continuing research being undertaken at the University of Alaska Fairbanks on mineralized material from the Bokan-Dotson Ridge rare earths project in Southeast Alaska. The Mineral Industry Research Laboratory at UAF, with financial support from the State of Alaska, is advancing a research project focused on the mineral processing of material generated from the Bokan site. The research project is under the direction of Rajive Ganguli, Ph. D., chairman, Dept. of Mining and Geological Engineering, College of Engineering and Mines, UAF, and Director of MIRL. It utilizes Bokan feedstock, which has previously been upgraded via x-ray sorting, the first step in Ucore’s proposed mineral processing flow-sheet. “The sustainable development of Alaskan mineral resources is of key interest to our laboratory,” said Ganguli. “Funding support from the Alaska government is enabling us to work directly with Ucore to assess various mineral processing strategies. We are seeking to add value to the excellent processing strategies currently in place. Some of our methods appear to have increased recoveries of heavy rare earths, and are under review with a view to further improving the Bokan processing circuit.” Ganguli’s team is seeking to optimize the recovery of rare earth minerals from the feedstock, including target metals such as dysprosium, terbium and yttrium. The focus of the research is the upgrading of Bokan material including leaching by adjusting a number of factors including acid type, acid concentration, and leach temperature. Ucore said it will be considering the final results of this research and undertaking cost-benefit analysis of the various procedures, as it fine-tunes its mineral processing flow-sheet, prior to undertaking pilot plant testing of the process. “Bokan is the highest grade heavy rare earth deposit on U.S. soil and continues to be the subject of academic study from scholars at a global level,” said Jim McKenzie, president and CEO of Ucore. “We’re very pleased that the excellent facilities at UAF are being deployed to advance the processing regime of this important deposit, and appreciate the economic support from the Alaska government. By partnering with the mining industry and academia, the government is demonstrating best practices in economic development. We hope to incorporate the findings of Dr. Ganguli’s work in our forthcoming feasibility study, scheduled for release in 2015.” The UAF research is being conducted parallel to independent testing by Hazen Research of the process flow-sheet outlined in the preliminary economic assessment prepared by Tetra Tech of Vancouver. Ucore anticipates the results of this testing to be released by the end of 2014.
GOLD – Coeur Mining Inc. Oct. 6 reported high-grade drill results from its Kensington gold mine in Southeast Alaska. Drilling at zones 10 and 20 of Kensington South has encountered high-grade gold immediately beneath current production areas and about 100 to 200 feet (30 to 60 meters) away from current mine development. Highlights from drilling in this area include: 2.4 feet of 4.03 ounces per short ton gold in hole KX13-069; 15.2 feet of 0.969 oz/t gold in KX13-071; and 4.1 feet of 3.416 oz/t gold in hole K14-1560-270-X05. Coeur said grade and thickness of mineralization is improving at depth and to the southern portion of the ore body. Zones 10 and 20 are expected to be further drilled and developed over the next year and bring additional high-grade production into the mine plan beginning in 2016. “The renewed focus of our drilling program at Kensington has discovered high-grade mineralization to enhance the economics of the mine, resulting in a considerable number of drill holes containing multi-ounce gold intercepts,” said Coeur Vice President of Exploration Hans Rasmussen. Drilling at Jualin Veins No. 4 and 5 has encountered several multi-ounce gold intercepts. Highlights include: 1.7 feet of 7.3 oz/t gold in hole JU14-X012; 8.6 feet of 5.54 oz/t gold in JU14-X015; and 7.9 feet of 0.701 oz/t gold in JU14-X029. Jualin Vein 4 remains open at depth and to the north towards Kensington, reaching within 300 feet (100 meters) beneath the Jualin portal, which is near current mine infrastructure. Permitting is underway for underground development at Jualin to provide access to underground drill stations. Drilling in Vein 4 is expected to continue in 2015 and 2016 with initial production expected in 2017. Once underground development has advanced, drilling is expected to also focus on further delineation of Vein 5, which has been encountered only 500 feet (150 meters) beneath Vein 4. Coeur COO Frank Hanagarne said, “The discovery at Jualin has the potential to significantly boost production grades, reduce unit costs, and increase free cash flow.” At the end of 2013, Kensington estimated proven and probable reserves totaled 6.0 million tons at an average grade of 0.15 oz/ton containing 902,000 ounces of gold. Coeur expects to spend a total of US$9.1 million for exploration at Kensington in 2014, including US$1.7 million in capitalized drilling. This is US$3 million higher than the initial budget, reflecting Coeur’s success-based approach to funding exploration. Coeur expects to complete a new resource estimate for Kensington by year-end 2014 and anticipates releasing a new mine plan in early 2015. The new mine plan is expected to reflect higher-grade production, lower unit costs, and higher cash flow over the life of the mine.
