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Mining News: Look no farther for rare gold deposits The 49th state hosts three of the world’s largest resources of the precious metal, making it a solid bet for future exploration Curt Freeman For Mining News
Some months ago I was talking to a senior exploration manager regarding the lack of new discoveries worldwide in the last few years. The subject came up of just how rare a +1-million-ounce gold deposit really was. Then last week one of our project geologists lays a publication in front of me entitled “How Rare are One Million Ounce Gold Deposits?” by Natural Resources Holdings, Ltd.
Although this publication comes at the question from the standpoint of which new deposits are going to replace the current producers as their reserves begin to dwindle, the data presented by this publication brought out a couple of interesting factoids relating to gold production and resources. For starters, they identified 151 companies that own 296 gold deposits that have more than 1 million ounces of gold in all categories of resources. The current producers, many of whom are also producing from +1-million-ounce deposits, churn out 93 million ounces of gold per year. The top 50 largest +1-million-ounce deposits contain 60 percent, or 1.082 billion ounces, of the total resources of 1.821 billion ounces of gold. To make the elite list of the 50 largest gold deposits, a deposit must have more than 9.3 million ounces of gold resources. Using the criteria of this study, Alaska hosts three of the top six largest Canadian and U.S gold deposits and three of the top 16 largest gold deposits worldwide (Pebble, Donlin Creek and Livengood). And while you can argue with the parameters used to determine which deposits qualify for this particular study, you can’t argue that, if you are looking for gold deposits, you need to be in Alaska!
Western Alaska Northern Dynasty Minerals Ltd. announced that the Pebble Limited Partnership has approved program expenditures of C$91 million in 2011, with the objective of completing a prefeasibility study for the Pebble Project in 2012 and initiating permitting after that point. Activities to be undertaken at the Pebble project in 2011 include engineering to complete a prefeasibility study project design in 2012; environmental studies to support PFS engineering; finalizing an environmental baseline document in preparation for project permitting; and developing a mine closure and reclamation plan. The partnership also plans to prepare a full suite of environmental and social management plans and continue environmental monitoring studies in key areas along with site investigations including 45,000 feet of drilling to support PFS engineering. In addition, a geotechnical drill program, environmental and public affairs initiatives and stakeholder engagement, and public affairs programming including work force and business development, local community relations, public education and community investment are scheduled for completion. Since the Pebble Partnership was established in 2007, 50-50 partner Anglo American plc has invested approximately US$320 million to advance engineering, environmental and socioeconomic studies toward the completion of a prefeasibility study for the Pebble project. Budgeted spending in 2011 will increase Anglo American’s total investment in the project to more than US$410 million.
Zazu Metals Corp. announced the selection of JDS Energy and Mining, Inc. to engineer the Lik deposit to the feasibility study stage. Zazu previously retained JDS to evaluate potential areas of improvement in the positive preliminary assessment study of May 2010. Their subsequent analysis suggested that the internal rate of return on the project could be significantly increased from the original estimates. The Alaska Industrial Development and Export Agency, a public corporation of the State of Alaska and owners of the haul road and port utilized by the Red Dog mine, is currently conducting due diligence on the JDS findings as a precursor to financing regional infrastructure modifications to support the Lik project. AIDEA selected the Behre Dolbear Group, Inc. to complete the due diligence review.
Cedar Mountain Exploration Inc. announced its 2011 exploration plans at the Kelly Creek gold property on the Seward Peninsula. The company plans to test three drill-ready gold target areas with a planned 5,000 meters of drilling set to commence in June. The company has delineated seven gold-in-soil target areas: Kelly Creek, Wolf, Wolverine, South Fox, North Fox, Moose and Jaeger with initial drilling targeting the Kelly Creek, Wolf, and Wolverine prospects. In addition, the company plans to conduct additional soil sampling in the South Fox, North Fox, Moose, and Jaeger prospects and expand reconnaissance exploration work to other parts of the project.
Fire River Gold Corp. announced results obtained from additional underground drilling at the Nixon Fork project. Significant new intercepts in the 3300 zone included hole N11U-028 with 16.0 grams per metric ton gold over 9.9 meters, including 41.2 g/t gold over 2.3 meters, hole N11U-031 with 16.7 g/t gold and 51.2 g/t silver over 10.2 meters, including 58.2 g/t gold and 191.0 g/t silver over 2.3 meters and an additional 8.1 g/t gold over 10.7 meters, hole N11U-032 with 71.4 g/t gold and 40.1 g/t silver over 5.9 meters, including 177.3 g/t gold and 120.1 g/t silver over 0.5 meters and an additional 103.7 g/t gold and 52.4 g/t silver over 3.2 meters, hole N11U-033 with 41.0 g/t gold and 33.8 g/t silver over 9.0 meters, hole N11U-034 with 26.35 g/t gold over 13.1 meters, including 170.0 g/t gold over 0.4 meters and an additional 394.0 g/t gold over 0.4 meters, hole N11U-035 with 24.0 g/t gold over 7.7 meters and hole N11U-036 with 7.2 meters of 146.4 g/t gold over 7.2 meters. The company indicated that high-grade intercepts in the 3300 zone will be targeted for mining in the first six months after mine startup. Grade variability maps showed intercepts of 171 g/t and 232 g/t gold which diamond drilling did not intercept, underscoring the difficulty of maintaining a consistent head grade during planned drift and fill mining operations. Areas requiring shrinkage stoping and longhole stoping also are anticipated during the first six months after start-up. Initial mining will be in the Crystal mine starting with the upper levels of the 3000X and 3300 zones before sequencing into deeper levels of the 3000 and 3300 zones. The company also has started a second development ramp to connect the Mystery mine. This ramp will provide exploration platforms to define additional resources in the intervening J5A and Southern Cross zones.
Full Metal Minerals Ltd. announced that JV partner Antofagasta Minerals has approved the initial 2011 drill program at the Pyramid copper-gold-molybdenum porphyry located in Southwest Alaska. Drilling with two core rigs is expected to commence in June. The companies are planning a phase 1 drill program totaling 5,000 meters, with additional drilling based on results.
Interior Alaska Kinross Gold Corp. announced first quarter 2011 results from its Fort Knox mine near Fairbanks. The mine produced 65,047 ounces at a cash cost of US$628 per ounce versus 69,640 ounces at a cash cost of US$517 per ounce in the year previous period. The production decrease was less than planned due to higher mill throughput and better than anticipated recovery from the valley leach side of the operation. The mine processed 3,466,000 tonnes of ore grading 0.66 g/t gold with a mill recovery of 77 percent. The mine is focusing on pre-production stripping and anticipates lower gold production for the remainder of 2001 as compared to the year previous period.
Teryl Resources Corp. announced that it received a preliminary assessment for the Gil gold project in the Fairbanks District. Based on a five-year mine operation moving 6,000 short tons of ore per day with an average head grade of 0.029 ounces per ton gold, the mine would produce 45,675 oz per year gold. Using a US$1,500/oz gold price, the mine would have a net present value of US$83 million using a 5 percent discount rate. Using a US$1,048 per ounce gold price the mine would have a net present value of US$38 million using a 5 percent discount rate. Total capital costs and costs per ounce were not published.
International Tower Hill Mines Ltd. announced additional drilling results from its winter program at its Livengood project. Significant results from the core include hole MK-RC-0504: which intercepted 33.5 meters grading 8.07 g/t gold, hole MK-RC-0485 which intercepted 93.0 meters grading 1.24 g/t gold, hole MK-RC-0488 which intercepted 88.4 meters grading 0.94 g/t gold and hole MK-11-103 which intercepted 28.6 meters grading 1.83 g/t gold. In addition to these shallower drill holes, a series of deeper (500 meter) drill holes were completed during the winter program in order to define previously intercept higher grade mineralization at depth. Assays for these holes are pending.
First Star Resources Inc. has commenced its 2011 exploration drilling program on its LMS gold project in the Goodpaster District. The property is under joint venture from Corvus Gold Inc. The company intends to drill a minimum of 1,000 meters of oriented diamond core to assess the existing Camp Zone in an effort to expand the gold-bearing graphitic quartzite breccias and to drill a northeast-striking structural corridor within the lower gneiss zone that is known to contain high grade gold mineralization. The company believes this corridor to be an important structural control for gold mineralization. The winter drilling program will be followed up by an aggressive 5,000 meter drilling program this summer. The company intends to have a new resource estimate completed by the end of 2011.
Crescent Resources Corp. has announced the results from the 2011 auger drilling exploration program recently completed at the Uncle Sam gold project the commencement of its 2011 core drilling program on the project. The auger drill program was designed to obtain a geochemical soil sample at the soil horizon beneath windblown overburden (loess) in areas that had not been sampled by previous operators and to confirm previous sampling in some areas. The program was successful in extending the zones of anomalous soil samples in two areas, the Lone Tree and Christmas prospects, by 250 meters in width. A third prospective zone, the Wolf prospect, was not sampled during the 2011 program. At the Lone Tree Prospect the western-most line of auger drilling extended the zone of anomalous soils 250 meters to the north with anomalous soil samples assaying up to 82 parts-per-billion gold. Another sample from a geochemical line 400 meters to the east returned anomalous samples assaying up to 150 ppb gold extending the zone by about 250 meters to the north. The Lone Tree geochemical anomaly now measures approximately 4,000 meters in length and up to 1,000 meters wide. Anomalous soil samples containing up to 216, 363 and 1,225 ppb gold confirmed strong gold mineralization at the Lone Tree Prospect within an area that has returned several significant gold drill intercepts from past drilling. At the Christmas Prospect, located approximately 500 to 800 meters south of the Lone Tree prospect, anomalous soil samples that assayed up to 160 and 206 ppb extended the anomaly 200 meters to the north of previous soil sampling. The Christmas Prospect is a second large, strong geochemical anomaly that now measures approximately 4,000 meters in length and up to 1,000 meters in width. The results of top of bedrock samples collected during this survey, in the known mineralized system, are much higher than results from soil samples collected by previous workers, a phenomenon observed at other loess-covered gold deposits in interior Alaska. The company also announced that it had commenced a US$2.2 million, 2,100-meter of core drilling program at the Lone Tree and Wolf prospects. Previous drilling by other operators at Lone Tree has returned encouraging results such as drill holes USC-011, which contained an intersection of 19.22 meters averaging 2.03 g/t gold and USC-013, which contained 6.0 meters averaging 1.79 g/t gold and 14.0 meters averaging 1.65 g/t gold. Previous reverse circulation drilling at Wolf included hole USRC-22 which returned 4.45 grams of gold per tonne over 15.54 meters and USR-055, which returned 13.72 meters averaging 1.34 g/t gold.
Full Metal Minerals announced that it has made arrangements to spin off Full Metal Zinc as a standalone public entity to explore and develop its Fortymile Project. The arrangement, if approved by regulatory agencies and shareholders, will include a three-for-one consolidation of the common shares of Full Metal, the transfer of Full Metal’s Fortymile zinc project in Alaska to Full Metal Zinc and the transfer of US$1 million from Full Metal to Full Metal Zinc.
Full Metal Minerals also announced that it has staked 23,747 acres of new State mining claims in the Circle District, 100 miles northeast of Fairbanks. Unlike the Livengood, Fairbanks, and Dawson mining districts, no significant lode gold source has been identified to account for more than 1.086 million ounces of placer gold production that have come from the district since the late 1890s. The Circle area is underlain by multiple host rock types that may be favorable to gold mineralization and is equivalent to bedrock in the Clear Creek-Dublin Gulch-Keno Hill area of Yukon Territory. The bedrock consists primarily of northwest oriented stacked thrust sheets of Paleozoic mafic-felsic schists and quartzites with local zones of hornfels associated with Cretaceous and Tertiary aged granitic intrusives and Tertiary mafic dikes. Structurally, the area has been strongly influenced by the Tintina Fault, which forms the northern boundary of the district. Several areas of veining and/or alteration with gold and/or sulfide showings are known throughout the district; however minimal modern exploration has been performed for lode gold. Mineralization appears to occur in all rock types, but is mostly strongly associated with mafic schists and Cretaceous aged intrusive units. It has been suggested that most of the gold in the district is related to the granitic intrusive units. The company is initiating an extensive reconnaissance mapping and soil gridding programs on the four large claim groupings it now controls in the Circle district, and will conduct work throughout the summer field season.
Alaska Range Kiska Metals Corp. reported that recent drilling has expanded gold-copper mineralization at the Raintree West prospect on its Whistler project. Hole WH10-30 intersected 453.2 meters averaging 0.72 g/t gold, 3.2 g/t silver, 0.12 percent copper, 0.04 percent lead, and 0.31 percent zinc (1.01 grams of gold per tonne equivalent), including 328.6 meters averaging 0.93 g/t gold, 3.7 g/t silver, 0.16 percent copper, 0.04 percent lead, and 0.36 percent zinc (1.31 g/t gold equivalent). These new results indicate that the grades of the Raintree West porphyry system improve to the north and it remains open to expansion to the north, west, and south and at depth. This new large porphyry centre has no clear geophysical signature suggesting that other significant porphyry centers with subtle geophysical signatures may exist on the project. The intersection in hole WH11-030 is dominated by high temperature potassic alteration and copper-gold-bearing quartz and magnetite veining with minor intervals of late low temperature silver-gold-lead-zinc bearing quartz-carbonate veins. The intercept is largely hosted by diorite porphyry, which is interpreted to be the mineralizing intrusion. This hole ended in strong gold and copper mineralization with the final 172 meters of the hole averaging 1.13 g/t gold, 3.9 g/t silver and 0.18 percent copper. Drill testing of the Raintree West target will continue in early June, with the aim to expand this new porphyry discovery to the north, west and south as well as to shallower depths. A second drill rig will be mobilized to accelerate this expansion as well as to investigate other high priority targets. Two additional rigs will be dedicated to expanding Island Mountain mineralization where the discovery of a new porphyry gold-copper system was made in 2009 and expanded in 2010.
Pure Nickel Inc. announced that its partner Itochu Corp. has confirmed its continued participation in the MAN nickel-copper-platinum group element project for 2011. Exploration for the coming season will utilize one drill and be mainly focused on the Alpha Complex where extensive platinum and palladium cyclicity patterns have been recognized. Drill holes are anticipated to be much shallower this season. Other potential targets are currently under discussion.
Caribou Copper Resources announced that it had renegotiated the payments due under the option of the Caribou Dome property with the vendor. Under the amended terms, amounts due in 2010 and 2011 have been reduced to US$50,000 and US$100,000 respectively and the balance of payments extended over an additional year. The company is currently putting together a work program and budget for this summer’s work season.
Alaska newcomer Q-Gold Resources Ltd. announced that it had signed a letter of intent with Nycon Resources Inc. for the exploration and development of the Farewell and Gagaryah platinum group nickel-copper properties, located in the western Alaska Range. The Farewell and Gagaryah properties were previously explored by North Star Exploration in 1998 to 2003 and by Nycon from 2003 to present, but have seen a very limited amount of drilling. Geophysical surveys have identified several mafic/ultramafic dikes with associated platinum group nickel-copper mineralization. Under terms of the agreement Q-Gold can earn an 85 percent interest in the properties by spending US$2.3 million on the properties and paying Nycon US$1 million before the end of January 2015. Q-Gold must carry Nycon through completion of a bankable feasibility study and may acquire the additional 15 percent interest by paying Nycon US$2 million and additional compensation based on the resource base as defined by the feasibility study. Welcome to Alaska Q-Gold Resources Ltd!
Southeast Alaska Hecla Mining announced first quarter 2011 production results from the Greens Creek mine on Admiralty Island. The total cash cost per ounce of silver produced at Greens Creek for the quarter was negative US73 cents per ounce versus negative US$6.47 per ounce in the year previous period. The higher costs were due to lower by-product credits, higher mining license taxes and profit sharing costs and increased production costs. Higher power costs were due to increased diesel use to offset decreased hydroelectric power availability. The average grade of ore mined during the quarter was 12.5 oz/t silver, up significantly from the average grade of 10.87 oz/t that was mined in the first quarter of 2010. During the first quarter the mine produced 1,697,584 oz silver, 14,430 oz gold, 4,711 tons of lead and 15,526 tons of zinc. The mill processed 189,767 tons of ore during the quarter. In addition to production, exploration and definition drilling was conducted in the first quarter. On the exploration front, results from underground drilling continue to define high-grade resources at the NWW Zone for over 400 feet strike along two limbs below the current workings. The two mineralized zones remain open along strike in both directions. Drilling from the southern-most section of Deep 200 South intersected white baritic ore with precious and base metals in both zones. This is an 800-foot continuation of a high-grade mineralized trend that does not appear to be weakening in either thickness or grade. Past drilling at the western-most Gallagher Zone defines multiple intervals of dominantly white baritic ore containing bands of massive, fine-grained sulfides including galena and sphalerite. The upper lens varies from 15 to 32 feet in thickness, the middle lens varies from 10 to 25 feet and the lower tail varies from 12 to 20 feet. These broader zones typically vary in grades from 4.5 8.0 oz/t silver, 0.04-0.11 oz/t gold, and 4-16 percent combined lead and zinc. Within these broad zones are higher-grade cores from 4 to 8 feet in thickness that include 5.5-12.6 oz/t silver, 0.08-0.21 oz/t gold, and 6.8-36.3 percent combined lead and zinc. Recent drilling along 300 feet of strike length defined flat-lying mineralization that is continuous for over 500 feet and steepens as it is terminated to the east and west. Drilling has also defined a second discrete orebody near the Gallagher Fault.
Coeur d’Alene Mines announced first quarter 2011 production results from its Kensington gold mine. The mine produced 23,676 ounces of gold at a cash cost of US$988.75/oz and a total production cost of US$1,383.97/oz. Operations are entering higher grade zones that are expected to contribute to higher gold production of the remainder of the year. During the quarter the mill processed 105,820 tons of ore grading 0.24 oz/t gold. Mill recoveries averaged 92.4 percent. Exploration at the mine consisted of 1,430 meters of core drilling to discover new mineralization and expand mineral reserves. The main focus of this drilling was on the Raven structure, a prominent gold-bearing quartz vein and vein splay system situated about 650 meters west of the current Kensington mining area. Several high-grade intercepts were encountered in this drilling. At the end of the quarter, new drilling commenced on a similar, quartz vein target, Comet, located south of Raven.
Ucore Rare Metals Inc. announced its 2011 mine scoping and exploration plans for its Bokan Mountain rare earth element project. The 2011 program is designed to significantly enlarge the size of the existing inferred resource by drilling at greater depth, in addition to upgrading the previously released inferred resource to an Indicated classification via infill drilling. The 2011 budget is US$8 million consisting of 12,000 meters of new drilling. The work includes more subsurface work via a proposed adit in the Dotson zone and the acceleration of metallurgical work to refine ore separation and processing circuits. Bench scale test work is currently under way and a larger scale (60-ton) bulk sample from the Dotson Zone will be obtained from the underground exploration adit and processed for analysis during the 2011 season.
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