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December 04, 2014 --- Vol. 08, No. 49December 2014

Alaska News Nuggets

COPPER/GOLD – Millrock Resources Inc. Dec. 2 reported that First Quantum Minerals Ltd. will exercise its exclusive right to enter into an option to joint venture agreement on the Alaska Peninsula project. In January, First Quantum agreed to fund an initial US$600,000 exploration program in exchange for an exclusive right to enter into an option to joint venture the large copper and gold project in Southwest Alaska. The program was executed by Millrock with participation by First Quantum geologists in July and August of 2014. Geochemical sampling, geological mapping, prospecting and airborne magnetic surveys were carried out. Millrock Chief Exploration Officer Philip St. George said, “The results of the initial exploration program are quite encouraging and we look forward to testing the drill targets that emerged from the program in 2015.” The Alaska Peninsula project is comprised of surface lands owned by five different Alaska Native village corporations and the Bristol Bay Native Corp. All of the subsurface mineral rights, covering an area of more than 501,600 acres (203,000 hectares), are owned by BBNC. Millrock has previously made an exploration agreement with option to lease through which it can secure a 100 percent leasehold interest from BBNC. The land package is more than 75 miles (120 kilometers) long and up to 37 miles (60 kilometers) wide, covering an area of interest covering approximately 650,000 hectares (1.6 million acres). Prior to Millrock's involvement, three known porphyry occurrences had been identified: Kawisgag, Mallard Duck Bay and Bee Creek. At the Kawisgag prospect, there are two main zones of mineralization and alteration, which locally contain disseminated and vein-hosted chalcopyrite, molybdenite and pyrite at surface. These two zones are inferred to merge below the ridge that separates them. Airborne magnetic surveys carried out this year now define the limits of the magnetic intrusions and magnetic alteration. Zoned, large-scale, multi-element geochemical anomalies and porphyry copper-gold deposit alteration zones were defined. Several viable, high-potential drill targets have been identified. Mallard Duck Bay is comprised of a large zone of hydrothermal alteration that has seen very limited exploration, but mineralization appears to be associated with a multiphase diorite stock. A strong chargeability anomaly is coincident with surface geochemical anomalies and an exposed potassic alteration zone that was identified by prior workers, but never drilled. Airborne magnetic surveys, mapping and rock sampling have helped refine the geological interpretation. Geochemical sampling done in 2014 delineated several strongly anomalous zones. Drilling is under consideration. Mineralization at Bee Creek is hosted in hornfelsed sediments intruded by multi-phase diorite intrusive rocks containing mineralized veins and disseminated chalcopyrite, molybdenite and pyrite. Hydrothermal alteration exposed at surface comprises a central potassic alteration zone that is bordered by a discontinuous halo of phyllic alteration at higher elevation. The prospect was initially explored by Bear Creek Mining with five drill holes in 1976. In 2005 and 2006, Metallica Resources Inc. and Full Metal Minerals Ltd. carried out geochemical and geophysical surveys, and drilled two holes. One of the holes cut 118 meters averaging 0.31 percent copper, 0.009 percent molybdenum and 0.126 grams per metric ton gold. Mineralization, alteration and anomalous copper values in soils and rocks extend over a broad area at the Bee Creek prospect. As a result of the work done this year, Millrock now knows that mineralization, alteration and metallic anomalies in soil occur over a substantial area. A 2014 airborne magnetic survey indicates the known mineralization may continue to the southwest below a ridge in that area. The soil geochemical results indicate a zoned distribution with high copper, gold and molybdenum in a core area surrounded by a halo of anomalous zinc, lead and manganese. Several drill holes are planned for this prospect.

COPPER/GOLD – Kiska Metals Corp. Dec. 2 reported results from a drill program Copper Joe is a copper-gold-molybdenum porphyry prospect. The fall program, funded by First Quantum Minerals Ltd under an agreement announced in August, involved two holes (885 meters) targeting coincident geological, geochemical and geophysical anomalies. Kiska says the drilling did not return any significant assay results, but confirms the presence of a strong porphyry-hydrothermal system. Kiska and First Quantum are currently undertaking an alteration and mineral chemistry study of rocks from surface and drill core to further evaluate the property and potentially identify vectors towards the core of the porphyry system. Hole CJ14-01 targeted a zone of magnetite breccia and banded quartz-magnetite veins mapped at surface. This hole intersected two separate zones, approximately 80 to 100 meters thick of heterolithic, magnetite flooded breccia cross-cutting a porphyritic quartz monzonite. The quartz monzonite is moderately to strongly sericite-pyrite altered, and contains local magnetite and k-feldspar alteration with trace chalcopyrite mineralization. The hole ended at 450 meters in rock-flour breccias with sericite-pyrite alteration and patchy magnetite alteration. Hole CJ14-02 targeted a large conductivity anomaly coincident with anomalous copper-in-soil geochemistry. This hole intercepted moderately to strongly chlorite-epidote altered quartz monzonite breccia intruded by weakly altered biotite-feldspar porphyry. Numerous intervals of anomalous copper, molybdenum, zinc and silver occur throughout the hole; the best of which are hosted in strongly chlorite-epidote altered quartz monzonite and magnetite altered breccia containing fragments of biotite altered porphyry with disseminated chalcopyrite. This hole ended at 435 meters within a late-mineral, biotite-feldspar porphyry which contained sparse copper mineralization in narrow hematite-pyrite-chalcopyrite veins. Copper Joe is located in the Alaska Range about 20 miles (30 kilometers) southeast of Kiska’s Whistler project.

GOLD – Contango ORE Inc. Dec. 2 said shareholders will be mailed a proxy statement in connection with a proposed joint venture transaction with Royal Gold Inc., the election of directors of the company and other matters and will be entitled to vote at the annual meeting of stockholders. The proxy statement will be mailed on or about Dec. 5 and the annual meeting will be held at the company’s headquarters in Houston, Texas on Jan. 8. Contango ORE previously announced that it had entered into a master agreement with Royal Gold for the formation of a joint venture to advance exploration and development of its Tetlin properties, subject to the approval of the company’s stockholders and the satisfaction of other conditions. The agreement calls for the formation of a joint venture to advance exploration and development of its Tetlin properties. Contango ORE and Royal Gold anticipate forming a limited liability company to hold the joint venture assets, and the joint venture will be managed by the management committee of the joint venture company. Royal Gold will invest an initial US$5 million to fund exploration activity, and will have the option to earn up to a 40 percent interest in the joint venture by investing up to US$30 million (inclusive of the initial US$5 million investment) prior to October 2018. The proceeds of Royal Gold’s investment will be used for additional exploration and development of the Tetlin properties. Holders of roughly 39 percent of Contango ORE stock have already agreed to vote in favor of the joint venture. Contango ORE President and CEO Brad Juneau said, “Our board of directors has unanimously approved and recommended to stockholders approval of the proposed transaction with Royal Gold that will allow Royal Gold to invest up to US$30 million in cash to fund further exploration and development of the Tetlin properties including the Peak discovery zone in our Chief Danny prospect. The additional work may add appreciable value to our interest in the joint venture company, if the exploration and development is successful in delineating a sufficient gold resource that is of commercial size and scale. Royal Gold has demonstrated experience and expertise in the gold industry and we look forward to working with Royal Gold on this venture.” In addition to voting on the proposed joint venture transaction with Royal Gold, stockholders will be asked to elect a board of directors until the next annual meeting of stockholders; ratify the appointment of BDO USA, LLP as independent auditors; and ratify and approve, on a non-binding basis, the compensation of the company’s executives.

GRAPHITE – Graphite One Resources Inc. Dec. 1 reported results of the first 10 holes of a 20-hole drill program recently completed at the Graphite Creek project near Nome, Alaska. Graphite One has received results for drill-holes 14GCH001 to 14GCH010 which in-filled between previous drill holes completed in 2012 and 2013. All 10 holes cut significant widths of high-grade, near-surface graphite mineralization. The highest grade intercept was 38.9 meters of 10.6 percent graphite, including 7.1 meters of 21 percent graphite in hole 14GCH007. Other high-grade intercepts include 10.2 meters of 12.7 percent graphite in 14GCH005; 6.2 meters of 17.3 percent graphite in 14GCH006; and 15 meters of 9.3 percent graphite in 14GCH010. “These high-grade near surface assays continue to demonstrate that the Graphite Creek deposit stands to be the premier large flake, high grade graphite deposit in North America. The mineralization continuity is outstanding and the favorable geological structures are impressive. We look forward to releasing the final 10 holes in the near future,” said Graphite One President and CEO Anthony Huston. “We are charging ahead on our inaugural PEA to demonstrate to end buyers and shareholders the economic viability of this project.” The drilling was designed to increase the vertical and lateral drill spacing for a 1,000-meter strike length of the 4,800-meter long Graphite Creek deposit, in preparation for a revised NI 43-101 compliant mineral resource inventory to be completed in the first quarter of2015. Graphite One released an updated mineral resource inventory in January of 2014 totaling 284.71 million metric tons of 4.5 percent graphitic carbon, and 37.68 million metric tons of 9.2 percent at cut-offs of 2 percent and 7 percent graphitic carbon, respectively.


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