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| November 06, 2014 --- Vol. 08, No. 45 | November 2014
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Alaska News Nuggets
COPPER – Coventry Resources Inc. Nov. 5 reported that it has entered into agreements that provide it the right to acquire 80 percent of the Caribou Dome copper project in Alaska, via the acquisition of unlisted Australian company Aldevco Pty Ltd. The 10,240-acre Caribou Dome project is located roughly 155 miles (250 kilometers) northeast of Anchorage. The Denali Highway passes within 13 miles (20 kilometers) of the project and from there a purpose built road provides direct access to the underground workings at the Project. A fully operational railway line is located about 60 miles (100 kilometers) west of Caribou Dome, providing a direct road and rail link to ports of Anchorage, Seward or Port Mackenzie. Copper mineralization was first discovered at Caribou Dome in 1963. Nine lenses of outcropping mineralization were delineated over about 750 meters of strike. Despite this virtually all work was focused on three of these lenses (4, 5 and 6), with a view to developing a small high-grade underground mine. About 1,000 meters of underground workings were installed on two levels (an adit and a decline). 6,024 meters of diamond drilling (43 diamond core holes drilled from surface and 48 diamond core holes drilled from underground) was completed together with 3,283 meters of underground percussion drilling. High-grade drill results include: 18.1 meters grading 9.34 percent copper; 18.4 meters of 6.25 percent copper; 15.4 meters of 7.01 percent copper; 13.1 meters of 7.2 percent copper; and 11 meters of 8.2 percent copper. Aldevco holds the right to acquire an 80 percent interest in the Caribou Dome copper project from Hatcher Resources Inc. by: paying Hatcher US$75,000; maintaining the claims at the project in good standing; and expending a total of US$9 million on the project (which includes yearly and three-year period minimums) or completing a feasibility study on the project by June, 2023. Subject to Aldevco exercising its right to acquire an 80 percent interest in the Caribou Dome, Hatcher will retain a 10 percent interest in the project with the remaining 10 percent held by SV Metals LP. The current owner of the project, C-D Development Corp., would retain a 5 percent net smelter returns royalty, with Coventry retaining the right to purchase this royalty for US$1 million for each 1 percent. Coventry has entered into agreements with all Aldevco shareholders to acquire 100 percent of the shares on issue in Aldevco in consideration for the issue of 60 million Coventry shares, subject to Coventry obtaining all necessary regulatory and shareholder approvals in connection with the transaction. Related parties of two of Coventry’s directors, Michael Haynes and Ian Cunningham, are shareholders of both Aldevco and Hatcher, so the requisite shareholder and regulatory approvals will include applicable related-party approvals under Australian and Canadian law. Coventry intends to obtain such approval in the next 6-8 weeks.
Coventry also advises that it has applied to delist from the TSX Venture Exchange. In the event that it is required by the TSX-V, minority shareholder approval will be sought for the delisting. The decision to apply for delisting from the TSX-V has been driven by: the company’s executive management team being based in Australia, and the majority of shareholders either registered on the Australian share register and/or residing in Australia; the need to reduce the administrative burden and costs associated with a dual listing; and the ASX being a more appropriate listing given the company’s current capital structure, size and stage of development. Coventry also has the right to earn 100 percent interest in the Sam gold project, located near the Pogo Mine in Interior Alaska.
QUARTERLY UPDATE – Hecla Mining Co. Nov. 5 reported third-quarter net income applicable to common shareholders of US$3.5 million (US1 cent per basic share) and a loss after adjustments applicable to common shareholders of US$2.1 million (US1 cent per basic share). Third quarter silver production was 2.9 million ounces, a 25 percent increase over the prior year quarter, at a cash cost, after by-product credits, of US$5.43 per ounce of silver. In addition, gold production increased 15 percent to 42,501 ounces. Hecla’s average realized silver prices in the third quarter were US$18.53 per ounce, compared to US$22.22 per ounce in the third quarter of 2013. Realized gold prices were also lower in the third quarter compared to the same period in 2013, while realized prices for lead and zinc were higher. “All three of our mines performed strongly in the third quarter, leading to higher production over the entire suite of metals we produce,” said Hecla President and CEO Phillips S. Baker Jr. “Our significant lead and zinc production is a competitive advantage, as the diversification helps cushion revenues against weaker gold and silver prices.” The Greens Creek Mine in Southeast Alaska continues to be a strong low-cost silver producer for Hecla. Silver production at Greens Creek was 1.9 million ounces in the third quarter of 2014 at a cash cost, after by-product credits, of US$3.75 per ounce of silver, compared to 1.8 million ounces at a cash cost, after by-product credits, OS US$5.00 per ounce of silver in the third quarter of 2013. The mill operated at an average of 2,221 tons per day during the third quarter of 2014. The per ounce cost was beneficially impacted by lower energy costs, higher silver production levels, and higher prices for zinc and lead, which are by-products of silver production at Greens Creek, compared to the prior year period. Energy costs were lower due to the availability of hydroelectric power, which is expected to continue through the end of the year. Mining costs per ton increased by 3 percent due to higher labor costs, and milling costs per ton decreased 2 percent due to lower energy costs in the third quarter compared to the same period in 2013. Hecla’s exploration and pre-development expenses were US$5.8 million and US$400,000, respectively, in the third quarter of 2014. Due to additional funding at San Sebastian in Mexico, Casa Berardi and at Greens Creek, exploration expense was equal to its level in the third quarter of 2013, while pre-development expense decreased by about US$3.1 million as a result of reduced discretionary spending in response to lower metals prices. Full year exploration and pre-development expenses are expected to be about US$21 million. At Greens Creek, definition drilling continues to upgrade the lower NWW, West Wall and Deep 200 South resources. Exploration drilling tested the upper limits of both folds of the NWW zone and confirmed the fold limbs to the north beyond the current resource. Drill intercepts of the West Wall suggest thicker and more consistent mineralization than currently modeled and intercepts, including 34.7 ounces per ton silver, 0.17 oz/ton gold, 18.5 percent zinc and 5.6 percent lead over 9.6 feet (2.9 meters), are 100 feet (30 meters) further down dip then the current model. Exploration drilling on the southern extension to the Deep 200 South continues to extend the high-grade, upper bench mineralization another 300 feet (90 meters) to the south and recent intersections include 63.6 oz/ton silver, 0.15 oz/ton gold, 5.6 percent zinc, and 2.6 percent lead over 6.6 feet (2.0 meters), and 34.4 oz/ton silver, 0.14 oz/ton gold, 5.5 percent zinc, and 2.8 percent lead over 16.3 feet (5.0 meters). Hecla says intersections at the Deep 200 South continue to be very encouraging and mineralization remains open to the south. Surface drilling of Killer Creek, which is about a mile west-northwest of the mine, was completed at the end of September and has refined the company's knowledge of the distribution of high-grade copper, silver, lead and zinc stockwork mineralization over broad zones. Drill holes from this year’s program crossed the mine contact into the footwall argillite rocks. Within the argillites are continuous 4- to 9-foot (1.2 to 2.7 meters) wide banded sulfides that locally contain lead, zinc and silver-rich zones. These banded sulfides are located in the same host rocks as the Greens Creek deposit and have similar mineralization to those sulfide zones on the fringe of ore zones. Further refinement of this summer’s exploration data in the coming months will determine drilling priorities next spring. For more information on Hecla’s third quarter 2014 financial results as well as further details on exploration and operational results from the company’s other assets, visit: http://www.hecla-mining.com.
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