Mining News: Termination dust heralds good, bad news
Unseasonal cold follows record warm and dry summer as mining exploration cutbacks dominate results of 2013 field season in Alaska
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Having enjoyed one of the warmest and driest summers on record, most of Alaska is now paying the piper as unseasonably cold and in many areas, snowy, weather takes hold of the state. With the termination dust come news that is both good and bad, a common theme in what is turning out to be a year of significant cutbacks for exploration, development and production plans.
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Earlier in 2013, I summarized the expected decrease in exploration expenditures this year. Now that the bulk of the exploration is completed or in the last stages of being completed, a little update is in order. Of the 49 exploration projects I have been tracking around the state, the two largest (Pebble and Donlin), will account for one-third of this year’s estimated exploration expenditures. The top five will account for almost 50 percent of this year’s estimated exploration spending. Unfortunately, 30 of the 49 “active” exploration projects in Alaska look to be on track for spending nothing on exploration during 2013. As far as actual dollars into the ground, it is looking like 2013 exploration expenditures are going to be in the US$125 million range, down almost 50 percent from what we saw in 2012 and only a third of the peak exploration spending levels we saw in 2011.
Western AlaskaThe news that has dominated the Alaska scene this month is not the kind of news our industry was hoping to hear but here it is just the same. Northern Dynasty Minerals Ltd. announced that Anglo American has given notice under the Pebble limited partnership agreement that it has chosen to withdraw from the Pebble copper-molybdenum-gold project, leaving Northern Dynasty with 100 percent interest in the project. Anglo American explained their decision to withdraw from the project as part of a corporate move to prioritize its advanced-stage investments in projects with the highest value and lowest risks. Anglo American has invested approximately US$541 million in exploration expenses since it entered into the project.
Redstar Gold Corp. announced that it has raised funds to complete the purchase of 100 percent ownership of the Unga project from Magnum Hunter Exploration. This property is host to two parallel epithermal vein systems, the Shumagin and Apollo-Sitka trends, the former with an estimated resource of 254,000 metric tons grading 27.4 grams per metric ton gold and 127 g/t silver. Immediate exploration plans for the project were not released.
Interior AlaskaFreegold Ventures Ltd. announced additional drilling results from its summer – 2103 infill and expansion drilling program at the Dolphin – Cleary Hill deposit on the Golden Summit project. Significant results include 522.6 meters grading 0.68 g/t gold of which 27.13 meters averaged 3.00 g/t gold in hole GSDL1312 and an additional 66.14 meters grading 1.76 g/t gold, of which 8.53 meters averaged 7.49 g/t gold in hole GSDL1312. Hole GSDL1313 returned 21.79 meters grading 1.15 grams of gold per tonne and an additional 26.82 meters grading 1.39 grams of gold per tonne. Holes GSDL1312 and 1313 tested the deposit to the north where limited past drilling has been done and multi-ounce gold bearing veins crop out at surface. This area hosts a northeast-trending, south dipping vein swarm containing multiple high grade gold-quartz veins which were mined at several locations by underground methods prior to 1942. The most prominent of these veins, the Tolovana vein, extends for at least 700 meters across the north end of the Dolphin deposit. Gold production from this vein has been limited (approx. 5,000 ounces) however it is noted for its extremely high grade, with published production grades from 1912 ranging from 34 to 171 gpt. The Tolovana vein, along with the high grade Scheuyemere and Parenteau veins, all form part of a swarm of sub-parallel high grade gold-bearing veins hosted in quartz-sericite-sulfide-bearing schist which extend over a true width of approximately 100 meters north-south. Limited recent exploration had been conducted on the Tolovana vein swarm until Freegold conducted a rotary air blast drilling program in 2007 and 2008 along a 300-meter portion of the center of this vein swarm. This drilling returned significant grade-thickness intervals suggesting potential for near-surface bulk tonnage mineralization within the vein swarm. Significant intercepts from this shallow rotary air blast program include 6.4 meters grading 4.26 grams of gold per tonne, 11.9 meters grading 3.25 grams of gold per tonne, 23.8 meters grading 4.11 grams of gold per tonne and 21 meters grading 2.18 grams of gold per tonne. Historic underground workings on the Tolovana vein swarm extend only 60 meters below surface, however, core drilling conducted by Freegold in 2013 extended high grade gold mineralization on the Tolovana vein swarm to at least 450 meters below surface and mineralization remains open to depth and along strike in both directions. In addition to drilling additional ground geophysics was also completed, including a 3-D induced polarization survey over the Dolphin deposit. The results of this survey have indicated the presence of a strong chargeability anomaly to the north and at depth which corresponds favorably to the area of the previous rotary air blast drilling. This may represent increasing sulfide concentrations at depth which warrant future drill testing. Freegold intends to conduct additional drilling along the Tolovana vein swarm with the intention of pulling these higher grade ounces into its existing Dolphin-Cleary Hill resource base. The company also indicated that comprehensive metallurgical test work was underway and that baseline environmental work had commenced on the project.
Contango ORE reported additional 2013 drilling results from its Tetlin gold-copper-silver project near Tok. The results released encompassed data from 34 holes out of a total of the 60 holes completed by mid-September. All of the drilling released is part of the Peak zone, discovered by the company in June 2012. The company indicated that it expected to complete an additional 20-25 exploration holes before the end of the drilling season in early October. Significant results include 27.94 meters grading 2.648 g/t gold, 3.1 g/t silver and 0.123 percent copper in hole TET13078, 37.85 meters grading 4.366 g/t gold, 3.7 g/t silver and 0.203 percent copper in hole TET13079, 21.97 meters grading 5.378 g/t gold, 2.7 g/t silver and 0.070 percent copper in hole TET13080, 87.59 meters grading 4.025 g/t gold, 19.3 g/t silver and 0.3 percent copper in hole TET13082, 25.38 meters grading 5.086 g/t gold, 9 g/t silver and 0.244 percent copper in hole TET13084 and 138.02 meters grading 3.626 g/t gold, 11.4 g/t silver and 0.113 percent copper in hole TET13088. The company indicated that it believed the mineralization in the Peak zone is part of a gold-enriched skarn deposit associated with a nearby intrusive system. The company said it intended to find the limits of the Peak zone as well as explore for similar deposits using its airborne data and extensive surface geochemical data. The company expects to complete its 2013 drilling program in early October, and hopes to release its initial industry-compliant resource estimate during the first quarter of 2014.
Alaska RangeWestMountain Gold, Inc. announced that bulk sampling at the Terra project in the western Alaska Range is progressing as planned. The 2013 mill upgrade was complete and mineralization is being processed. Assays received of samples taken from the Ben Vein open cut level 1338 graded 236.68 grams of gold per tonne and 520.17 grams of silver per tonne while samples from level 1336 returned 335.7 grams of gold per tonne and 623.41 grams of silver per tonne. This material has been mined and moved to the mill for bulk sampling. The company also reported that road construction from camp to the Ben Vein is complete, exploration drilling is on-going, and surface construction of the underground mine portal is underway.
Northern AlaskaGoldrich Mining Co. announced that its 50 percent-owned subsidiary, Goldrich NyacAU Placer, LLC has received the necessary permits to expand its placer gold mining operations at its Chandalar project where production began this summer. The new permit allows for sufficient space to install multiple wash plants. Fabrication of a feeder capable of feeding three wash plants has been substantially completed. It will be shipped to Alaska this winter and will be commissioned for use with the existing plant in 2014. A second and third plant are planned to be added after 2014. The company has completed about 15,000 feet of drilling to date and have outlined a resource of 10.5 million cubic yards at an average head grade of 0.025 ounces of gold per cubic yard, for an estimated total of 250,000 contained ounces.
Southeastern AlaskaUcore Rare Metals Inc. reported that the U.S. Forest Service has approved permitting for the company’s upcoming field program at its Bokan - Dotson Ridge rare earth element project in Southeast Alaska. The planned fieldwork will generate baseline information required for the completion of the final Bankable Feasibility Study, as well as the preparation of the mine construction permit applications. The planned work included infill resource drilling, geotechnical drilling and monitor well drilling as well as construction of an interim field camp from which to base operations.
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