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Vol. 16, No. 4 Week of January 23, 2011
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Renewed focus on mineral-rich Ambler

While juniors explore the rich VMS deposits in the district, Alaska engineers study road access to remote northwest region

Shane Lasley

Mining News

The Ambler Mining District, a mineral-rich region of Northwest Alaska, is getting renewed attention in 2011. While two exploration companies expand their copper-rich volcanogenic massive sulfide projects during the upcoming season, State of Alaska engineers will work on penciling in a potential road to the area.

NovaGold Resources Inc. is creating a new company to explore its 36,670-hectare, or 90,614-acre Ambler property and Andover Ventures Inc. plans to return to its Sun property with a drill program in 2011.

“Like many Alaska projects, one of the key development issues at Ambler is infrastructure. Alaska is large and remote, and there is not a lot of established infrastructure, and big projects require road access and power,” NovaGold explains on its website.

Building infrastructure to access Alaska’s natural resources is a priority for Alaska Gov. Sean Parnell and a road to the Ambler district is high on his to-do list.

“Another roads-to-resources goal is to complete environmental permitting, public process, and ultimately access the Ambler Mining District and its rich mineral deposits within five years. The Legislature and I joined forces on this piece with US$4 million during the 2010 session, and I’ve included US$1.25 million more in this proposed budget,” Parnell said while rolling out his Fiscal Year 2012 budget to the Anchorage Chamber of Commerce in December.

NovaMetals IPO

NovaGold President Rick Van Nieuwenhuyse told investors at the Dahlman Rose Emerging Miners CEO Conference Jan. 11 that his company is currently in the process of putting together an initial public offering for a new company that will carry on the exploration and advancement of the Ambler project.

“We will probably be calling the company NovaMetals and spinning this asset out, with NovaGold retaining the majority of the shares,” he said.

NovaGold has held a 51 percent interest in the Ambler project since 2004 and in January 2010 cut a deal with Rio Tinto subsidiary Kennecott Exploration Co. to gain sole ownership of the 45-mile-, or 72-kilometer-long-, belt of VMS prospects.

Arctic, the crown jewel of NovaGold’s Ambler property, contains an indicated resource of 16.8 million metric tons containing 4.1 percent copper, 6 percent zinc, 0.83 grams-per-metric-ton gold, 59.6 g/t silver and 0.94 percent lead. The estimate includes an additional inferred resource of 11.9M with an average of 3.6 percent copper, 5 percent zinc, 0.67 g/t gold, 48.4 g/t silver, and 0.8 percent lead.

“The Arctic deposit ranks among the largest and richest known VMS deposits in the world, based on both total contained metal and value per metric ton. And considerable opportunity exists to identify similar deposits in the region,” Van Nieuwenhuyse said.

In 2010 NovaGold focused on conducting the environmental baseline, engineering and metallurgical studies needed complete a prefeasibility study to assess Ambler’s economics. The company also evaluated the possibility of establishing some 10 miles of road that would link the property to the Bornite area, where a camp and a 5,000-foot airstrip is already established. As part of this study, the company conducted geotechnical drilling in and around the ore-body and along the proposed route.

In 2011 the company plans to resume resource drilling as well as launch a prefeasibility study, likely to be completed in 2012.

NovaGold Resources Inc. President and CEO Rick Van Nieuwenhuyse told an audience at the Arctic International Mining Symposium in Fairbanks in March that if the Ambler region had road access, there is no question that a mine would be operating at the Arctic deposit.

Return to Sun

After a three-year hiatus, Andover Ventures plans to return to its 17,980-acre Sun silver-copper-zinc-lead-gold project with a drill program in 2011.

Located east of NovaGold’s Ambler Project, Sun was explored by Anaconda Copper Mining Company, Cominco Inc., and Noranda Inc. during the 1970s and 1980s

A historical (non-NI 43-101-compliant) resource calculated for Anaconda in 1977 estimates the Sun project has an underground resource of 17.89M tons averaging 73.72 g/t silver, 1.91 percent copper, 4.46 percent zinc and 1.18 percent lead. Additionally, the project has 2.4M tons of ore amenable to open-pit mining averaging 74.34 g/t silver, 1.93 percent copper, 4.51 percent zinc and 1.2 percent lead.

In 2007, Andover drilled 20 holes to confirm results from historic drilling done on the Main Sun deposit. The results from this program will be included in an updated resource calculation currently underway.

The junior said its 2011 program will test a region known as SW Sun as well as extending the Main Sun deposit toward Picnic Creek about 750 meters northeast of Sun.

Andover’s 2007 program included a 300-meter extension of the Main Sun deposit toward the Picnic Creek area, a region about 750 meters further northeast intersected by historic drilling. The junior said it plans to continue to drill in this direction in 2011. A region known as SW Sun will be another target of this year’s drilling.

State studies road

Utilizing the US$4 million appropriated in Alaska’s 2011 budget, State of Alaska Department of Transportation & Public Facilities is studying potential transportation corridors connecting the Ambler Mining District to Alaska’s contiguous infrastructure.

Though an exact route has yet to be determined, it would likely take off from the Dalton Highway about 200 miles, or 320 kilometers, north of Fairbanks and head west along the southern slopes of the Brooks Range.

An earlier state-commissioned study of a road to Nome considered a similar corridor, dubbed the Northern Route, which would have passed about 50 miles, or 80 kilometers, south of the Arctic deposit.

The state says it will consider both road and rail options as well as other infrastructure including power and communications as it completes the study.

The corridor scoping portion of the study is expected to cost between US$2 million and US$3.5 million and be complete in September with a report on the findings due out in December.

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