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Vol. 15, No. 26 Week of June 27, 2010
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Full Metal chases prospects, partners

Junior aims to aggressively explore two core projects, while others tackle more precious, base metal properties spanning the state

Shane Lasley

Mining News

Full Metal Minerals Ltd. currently has two drills turning at its Fortymile property in eastern Alaska near the Yukon Territory border and a drill program slated for August at its recently acquired Grizzly Butte copper-gold property in Alaska’s Wrangellia Terrane.

In addition to drilling these core assets, the Vancouver B.C.-based junior anticipates partner-funded exploration at several of its other properties spanning the state.

“It is our objective to get pretty much all of our properties, except for Grizzly Butte and Fortymile, optioned off this year. So we are looking at bringing a couple more major companies and one or two juniors on to some of our other properties,” Full Metal Vice President of Exploration Rob McLeod told Mining News June 21.

Return to Fortymile

After taking a year hiatus from drilling its Fortymile property, Full Metal has returned to the silver-rich zinc-lead-copper property.

The 5,000-meter program, which has been focused on expanding the LWM deposit since drilling began in May, will soon be investigating silver-rich prospects discovered by geological investigations of the property in 2009.

The LWM deposit, a high-grade zinc-lead-silver carbonate replacement style system, has been Full Metal’s primary exploration target at Fortymile since the junior signed a lease agreement with Alaska Native regional corporation, Doyon Ltd., on the large land package in 2006.

The following year the junior intersected 44.6 meters with an average grade of 15.7 percent zinc, 5.3 percent lead and 76 grams per metric ton silver in hole LWM07-04.

The 13,343 meters of drilling completed at LWM has outlined a zone of continuous mineralization extending 700 meters along strike and 300 meters down dip. Previous drilling on the northeast side of mineralization was hindered by frozen overburden; however, a larger drill has been deployed to test this potential expansion area.

“We have been drilling since mid-May, and we are continuing to step-out at LWM. Right now, we are doing some metallurgical test work, and then we are going to be testing a bunch of our regional targets,” McLeod told Mining News.

Falcon — a silver-rich prospect discovered by Full Metal geologists while exploring the Fortymile property last year — is another high-priority target for this year’s drill program.

Geologists collected 52 rock samples from Falcon — which is situated about halfway between Eva and LWM — that averaged 115.8 g/t silver along with significant copper, zinc and lead credits. Full Metal plans to complete reconnaissance drilling at this prospect as well as the silver-rich Eva and West Eva prospects.

New copper-gold porphyry

Full Metal also will have drills turning at its recently acquired Grizzly-Butte prospect. Signing a deal with Rio Tinto subsidiary Kennecott Exploration Co. in April, the junior kicked off an exploration program at the copper-gold property in mid-June.

While geologists are busy mapping and gathering soil and rock samples, Zonge Engineering is flying overhead conducting a resistivity-induced polarization survey. A five-hole diamond drill-program will follow the geophysical work.

“We are starting off with extending the existing soil-grid and doing some IP geophysics with the intent to start drilling in early August,” McLeod explained. “It isn’t very well exposed so geophysics is going to be key for targeting.”

Exploration of the area in the 1970s revealed the potential for a large copper-gold porphyry system. Kennecott located claims over the prospect in 1998 and followed up on the historical work with its own reconnaissance soil and rock sampling in 1999.

The geochemical work revealed gold anomalies around the western outcropping extent of the intrusive complex. Copper in soil anomalies are more closely associated with the central portion of the intrusive complex and extend to the south across the Grizzly Fault into sediments.

Full Metal said several strong copper and gold in rock anomalies occur in greenstones more than 1,700 meters away from the anomalous soil zones creating a 1,450-acre prospective area that spans two drainages, suggesting the source of the anomalies covers a large area.

“It looks like quite a sizeable system; a one-square-mile geochemical anomaly with some good grades on surface,” McLeod said.

To earn full ownership of Grizzly Butte Full Metal must spend C$5 million on exploration over six years, including C$180,000 this year. Full Metal will pay Kennecott a one-time cash payment of C$10 million upon completion of a feasibility study and pay a NSR royalty of 2 percent from any production from the property.

Full Metal added to the 97 State of Alaska mining claims it picked up from Kennecott by staking an additional 220 claims over the prospect.

Partner advances Lucky Shot

Harmony Gold Corp., Full Metal’s joint venture partner at the Lucky Shot project about 145 kilometers, or 90 miles, north of Anchorage, is targeting reopening the historic high-grade gold mine.

With all infrastructures in place, Harmony intends to be in production within the next 13 months. Once in operation, the mine is expected produce 250 metric tons per day and run year-round.

Harmony Gold estimates it will take nearly US$15 million in capital to begin commercial production at Lucky Shot. Nearly US$9 million will be spent on driving a development ramp to high-grade gold ore in the Coleman Zone.

The highest grade gold intercepts of more than 30,000 meters drilled by Full Metal at Lucky Shot have been at this westernmost zone of the Lucky Shot Shear. These intercepts include hole C05-09 over 3.1 meters grading 62.2 grams per metric ton gold, hole C05-12 over 4.0 meters grading 219.1 g/t gold and hole C06-16 over 4.6 meters grading 51.5 g/t gold.

In order to tighten up the block model in preparation for driving the development ramp to Coleman, a 26-hole drill program was completed by Full Metal in November of last year.

Once Harmony Gold drifts back to the Coleman zone, it plans to extract a 12,000-metric-ton bulk sample, which it will run through an existing gravity recovery circuit at the property.

Harmony Gold estimates recovering 19 grams of gold per metric ton. Operating the plant at 95 percent capacity, the company foresees producing 44,000 ounces of gold per year. Using these figures and US$1,000 per ounce gold, Lucky Shot would generate about US$44 million a year, roughly half of which would go toward operating costs, and the other half would be operating profit.

New deals soon

Full Metal anticipates having option agreements signed in the coming weeks on it Pebble South property and on two of its Alaska Peninsula properties; indications are that other agreements are in the works.

The junior’s Pebble South property, which borders the Northern Dynasty Ltd.-Anglo American plc Pebble property to the south and west, is one property Full Metal has indicated could be joint-ventured soon.

The company believes Pebble-style mineralization trends to the southwest from the Pebble Partnership’s massive deposit onto its property. Geochemical and geophysical surveys have delineated 11 promising prospects on the property.

The Pyramid copper-molybdenum porphyry and Unga-Popov epithermal gold project are two others that show promise for partnerships. These two properties are part of 1.4 million acres of prospective Native-owned lands being explored by Full Metal on the Alaska Peninsula.

The Pyramid copper-molybdenum porphyry deposit hosts 125 million tons of copper mineralization grading 0.403 percent copper and 0.025 percent molybdenum near-surface. More recent exploration by Battle Mountain Gold in the late 1980s identified associated gold values that have greatly improved the potential at Pyramid.

Unga-Popov — which lies on an island about 20 miles, or 32 kilometers, south of Pyramid — hosts two historical resources; Apollo with 280,000 metric tons averaging 27.7 g/t gold and 92.6 g/t silver and Centennial, which has about 6 million metric tons at 1.5 g/t, or 290,000 ounces of gold.

Full Metal told Mining News that it is in the process of acquiring new exploration projects and is continuing to seek out grassroots prospects through the strategic alliance it forged with Kinross Gold Corp.

When asked if Full Metal was actively seeking new Kinross strategic alliance prospects, McLeod said, “We are, but I can’t say where we are working or what we are targeting.”

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