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Providing coverage of Alaska and Northwest Canada's mineral industry
May 2008

Vol. 13, No. 21 Week of May 25, 2008

MINING NEWS: Junior tunnels into VMS deposit

Niblack anticipates main access tunnel intersecting Lookout Zone mineralization in early June; updated resource estimate imminent

Shane Lasley

Mining News

Nearly eight months into a concentrated digging program in Southeast Alaska, Niblack Mining Corp. has bored more than 2,200 feet into a mountain on Prince of Wales Island in a plan to create a 3,000-foot main access tunnel to the underground Niblack gold-silver-copper-zinc volcanic massive sulfide deposit.

The tunneling program has been the primary focus of the Vancouver, B.C.-based junior since it began digging in September. The portal is located just above the Mammoth Zone of the deposit and will intersect the Lookout Zone at the lower reaches of known mineralization delineated by surface drilling in Lookout Mountain. In addition to a main access tunnel, Niblack aims to create three 1,000-foot crosscut tunnels, and work on those will begin after the main tunnel is finished.

Underground drill platform

When the tunnel reaches the Lookout Zone, Niblack expects to intersect the lower end of 1,600-foot holes that have been drilled from the surface near the top of Lookout Mountain. The tunnel will continue beyond the mineralized zone for about 200 feet.

Niblack spokesman Fraser Adams told Mining News that once the main access tunnel is complete, crews will stop tunneling to focus on an underground drill program.

The main tunnel will serve as a platform for a 30,000-foot underground drill program that will focus primarily on two areas and is designed to establish continuity between the mineralization discovered with surface drilling.

An additional mile of mineralization

Surface drilling has traced mineralization at the Lookout Zone from near the apex of Lookout Mountain to a depth of about 2,000 feet, or 600 meters. The underground drill program will focus on connecting more than 5,000 feet, or 1,500 meters, of prospective mineralization that lies between the mineralization intersected by surface drilling at the Lookout and Mammoth zones.

Once resumed, the drilling will target the Lookout Zone. Geologists calculate that the Lookout Zone continues downward from what has been previously drilled about 2,000 feet, or 600 meters. Niblack plans to drill downward into this prospective mineralization known as the Lookout zone extension.

Crews also will drill upward from the tunnel intercept crossing areas intersected with deep surface drilling, which currently has a low density of drill holes. The up hole drilling will provide better definition on the geometry and continuity of the zone, ultimately providing better confidence in the resource estimate and assist future mine planning. It will also provide core samples for metallurgical studies on the various styles of mineralization.

Some of the deeper intercepts of the surface drilling into the Lookout Zone encountered grades of 3.26 grams per metric ton gold, 98 g/t silver, 4.52 percent copper and 16.38 percent zinc over 4.5 meters, or 14.8 feet and 4.68 g/t gold, 126 g/t silver, 5.83 percent copper and 6.23 percent zinc over 14.94 meters, or 49 feet.

Niblack also plans to test the Hinge Zone which marks the fold in the mineralization between the Lookout Zone extension and the North Limb area that continues to the Mammoth Zone. The mineralization in the fold is expected to be thicker and has the potential to contain higher grade ores. Locating the Hinge Zone also will give the company a better model of the North Limb mineralized zone, which continues to the Mammoth Zone and will be the next target of the drill program, Niblack said.

Eight underground holes at Mammoth

Given its proximity to the portal entrance, the Mammoth Zone was tested first with eight holes totaling 5,000 feet, or 1,500 meters. Niblack is still waiting on assay results from the drilling. Company spokesman Bill Gillies told Mining News that the holes intersected mineralization at expected depths and encourages the company to believe that previous models of the mineralized zones are correct.

Underground drilling in the Mammoth Zone was designed to follow-up on mineralization intersected with surface drilling. Drilling at Mammoth intersected 61.2 feet, or 18.65 meters, of pyrite dominant, semi-massive and massive sulfide rock, grading 0.47 percent copper, including 14.2 feet, or 4.33 meters grading 1.01 percent copper.

The company said that because of the nature of massive sulfide lenses, the potential for discovery of higher grade mineralization at Mammoth is great.

Resource estimate expected

Niblack is anticipating the release of an updated 43 101 resource estimate for the deposit by early June. The new estimate will include historical data and results of drilling performed by the junior through the end of 2007.

Between 1974 and 1994, several majors explored the area, drilling a total of 59 holes and discovering massive sulphides at the Lookout and Dama zones.

Abacus Minerals purchased the property in 1995, and during the next two years spent $10 million drilling 101 holes as well as significantly expanding the Lookout zone. In 2005, investors created Niblack Mining out of Abacus Minerals with a mission of advancing the Niblack property toward delineation of an economic ore deposit.

The Niblack team said the short-term goal of the company is to successfully define an economically viable deposit at Lookout Mountain in the next 12 to 18 months with a longer term outlook of production within the next 3 to 5 years of a large scale system typical of massive sulfide deposits in production on the west coast of North America.

“Historical resource from previous drilling in the ’90s was about 2.5 million (metric tons) of ore. With the additional drilling performed by Niblack from 2006 to the end of 2007, we are hoping for the new resource estimate to be in that range or greater,” said Gillies. “The summer drilling program from inside the tunnel will hopefully expand our ore body at depth. If we ascertain that there is 5 million (metric tons), then we could begin moving towards production.”






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