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Vol. 12, No. 17 Week of April 29, 2007
Providing coverage of Alaska and Northwest Canada's mineral industry

MINING NEWS: Alaska mining news summary: Three new companies come to Alaska; exploration planned on two old producers

Curt Freeman

For Mining News

The author Curt Freeman, CPG #6901, is a well-known geologist who lives in Fairbanks. He prepared this column April 23. Freeman can be reached by mail at P.O. Box 80268, Fairbanks, AK 99708. His work phone number at Avalon Development is (907) 457-5159 and his fax is (907) 455-8069. His email is avalon@alaska.net and his web site is www.avalonalaska.com.

The exploration season has started but not before a bevy of new corporate competitors have entered the Alaska mineral scene and not before a number of past producing mines have been dragged into the 21st century.

During the last month, three new companies have acquired properties in Alaska and two old Alaska producers have been brought out of mothballs to have new exploration done on them. This month’s commodities of interest include gold, copper, lead, zinc, silver, uranium, nickel, palladium, niobium, tantalum, zirconium, beryllium and rare earth metals. How’s that for a metals bouillabaisse!

Western Alaska

NovaGold Resources provided an update for its Rock Creek project near Nome. Following receipt of a modified wetlands permit on March 13, the company has cleared the mill and tailings facilities areas and indicated that plans are still on track for initial production in the third quarter of 2007.

The company has budgeted to expend $37 million, net of revenues, on Rock Creek construction in fiscal 2007, plus an additional $6 million on exploration and other costs. The company also initiated a preliminary economic assessment to evaluate restarting alluvial gold production at its Nome Gold project. Current business plans for Nome Gold include the potential to ultimately produce 25,000 ounces of gold annually, along with several million tonnes of sand-and-gravel co-product.

NovaGold Resources also announced that final drill assay results from the 92,000 meter 2006 Donlin Creek drill program were received at the end of March. Once the results have been evaluated, the company will release a resource update that is expected to significantly expand the measured and indicated resource base on the project. For 2007, JV operator Barrick Gold has budgeted $87 million including 70,000 meters of infill and in-pit exploration drilling, environmental baseline studies, studies of alternative power sources, permitting work and feasibility and engineering work.

Full Metal Minerals and joint venture partner Triex Minerals Corp. reported plans to conduct a $1.5 million uranium exploration program at their Boulder Creek uranium project north of Elim. The program will include approximately 3,000 meters of core drilling, testing multiple targets on both the Boulder Creek and McCarthy Marsh prospects. Half of the drilling will be directed toward delineation of known mineralized zones including the Main Zone, 990 Hill and Carbon Creek zones.

The second component of the program will include drilling of regional targets on the McCarthy Marsh claims. This work is a follow up of 1,841 line-kilometers of airborne radiometrics flown in 2006 that resulted in identification of 53 high priority anomalies. A total of 300 rock, soil and biogeochemical samples also were collected and resulted in coincident uranium and molybdenum anomalies in five areas. Tertiary sediments at McCarthy Marsh occur adjacent to radioactive syenite intrusions on the western flank of the Darby Mountains. The McCarthy Marsh basin is approximately 35 kilometers across.

Full Metal Minerals also said it had optioned the Inmachuck project to Alaska newcomer First Factor Development. To earn a 60 percent interest in the property, First Factor must incur $2.5 million in exploration expenditures, issue 600,000 shares and pay Full Metal $90,000 in cash.

The companies are planning a mechanical trenching and 1,300 meter diamond drilling program that will commence in June. Work completed in 2006 included collection of 267 soil samples on a 100-by-300 meter grid, followed by infill soil sampling on a 100-by-150 meter grid. Soil results range from trace to 735 parts-per-billion gold with an average of 28 parts-per-billion gold. Of these, 22 samples assayed over 50 parts-per-billion gold and eight assayed over 100 parts-per-billion gold.

In additional to gold exploration, two significant base metal enriched carbonate-replacement zones have been identified at Hannum and Harry’s Creek. The occurrences are 1,300 meters apart and appear to be at the same stratigraphic level. The Hannum Creek prospect is characterized by an extensive surface gossan. Previous channel samples collected from trenches completed by Bunker Hill Mining Co. in the 1960s include 15 percent lead, 1.5 percent zinc, 2.2 ounces of silver per ton and 0.23 percent antimony over a 51-foot width.

The Bunker Hill soil program identified an anomalous area about 1,500 meters east-west by 500 meters north-south in which soils returned values greater than 250 parts-per-million lead and 500 parts-per-million zinc. In 1966, Bunker Hill completed 15 diamond core holes totaling 608 meters (the deepest hole was only 75 meters deep).

Work completed by Full Metal during 2006 identified a 1,100 meter by 400 meter, northwest trending silver-lead-zinc anomaly between Harry’s Creek and Hannum Creek. Lead values ranged from trace to 4,220 parts per million with zinc values ranging from trace to 5,390 parts per million. Welcome to Alaska First Factor!

Alaska newcomer Gold Crest Mine plans to complete 10,000 feet of helicopter-supported diamond drilling on several targets within the Kisa project located 140 kilometers southeast of Bethel. In 2006, 1,100 line-kilometers of aeromagnetic and electromagnetic surveys were completed over the project area and portions of the property were mapped and sampled at reconnaissance scale. The Kisa and Arnie prospects cover extensive intrusive-related gold showings.

Surface work on the Kisa property has outlined a 450-by-900 meter intrusive breccia body which is exposed over a vertical relief of 250 meters. The average value of all 27 chip and grab samples collected over the accessible extent of the intrusive body is 1.2 grams of gold per tonne. The highest grade grab sample assayed 8.6 grams of gold per tonne and the best chip sample ran 1.78 grams of gold per tonne over 4.6 meters.

The Kisa and Arnie prospects also cover extensive sheeted felsic dike swarms which contain widespread gold values ranging up to 10 grams of gold per tonne. Welcome to Alaska Gold Crest Mines!

Eastern Interior

Kinross Gold announced revised year-end 2006 mineral resource updates for its Fort Knox mine in the Fairbanks District. Proven and probable reserves stood at 159,673,000 tonnes grading 0.53 grams of gold per tonne (2,705,000 ounces). Additional measured and indicated resources stood at 71,284,000 tonnes grading 0.69 grams of gold per tonne (1,573,000 ounces).

Freegold Ventures reported the results of a rotary air blast drilling program on its Golden Summit project in the Fairbanks District. This program has identified broad zones of gold mineralization over the entire 620-foot width of the drilled area. The width of this zone remains open to the north and south. The work consisted of 4,700 feet of drilling (93 holes) in three parallel lines, spaced 15 feet apart. Highlights of the three lines include a 260-foot wide zone averaging 0.82 grams of gold per tonne from holes 4 to hole 16 on line 1, a 340-foot wide zone averaging 0.74 grams of gold per tonne from holes 62 to 46 on line 2 and a 300-foot wide zone averaging 1.02 grams of gold per tonne from holes 63 to 77 on line 3.

Additional drilling is planned for 2007.

Alaska Range

Nevada Star Resources has merged with Toronto-based Pure Nickel Inc. and changed its name to Pure Nickel Inc. The company said it has hired Larry Hulbert, Ph.D., as its chief exploration officer. Hulbert is a world-renowned expert on mafic and ultramafic rocks and their metallic mineral resources and will be directing exploration of the company’s MAN nickel-copper-platinum group element project in the central Alaska Range this summer.

Northern Alaska

Little Squaw Gold Mining has initiated its 2007 exploration program on its Chandalar gold property in the southern Brooks Range. The company says it intends to complete 17,500 feet of combined diamond core and reverse-circulation rotary drilling to define resources on lode and alluvial gold targets on the project. Of this total, 4,500 feet of diamond core drilling will be completed on seven or eight lode prospects and 90 rotary holes totaling 13,000 feet will be directed toward alluvial gold prospects.

Southeast Alaska

Landmark Minerals Inc. and Alaska newcomer UCore Uranium Inc. have formed a joint venture to explore the past producing Bokan Mountain uranium prospect on Prince of Wales Island in southeast Alaska. Ucore has the right to earn a 75 percent interest in the joint venture.

Uranium mineralization at Bokan Mountain was discovered in 1955 by airborne radiometric surveys. Since then, more than 20 uranium and rare-metal prospects, some with substantial amounts of drill-defined mineralization, have been discovered. All of the prospects are located within, or proximal to, a Jurassic-aged, multi-phase, peralkaline intrusive complex.

During the 1980s the U.S. Bureau of Mines conducted an extensive evaluation of uranium and related strategic mineral resources at Bokan Mountain. Their report suggests that the property hosts in situ resources totaling 11 million pounds of U3O8, 96 million pounds of niobium oxide, 637 million pounds of zirconium oxide, 240 million pounds of rare earth oxides, 2 million pounds of tantalum oxide and 8 million pounds of beryllium oxide in multiple deposits.

Uranium production from the Ross-Adams mine at Bokan Mountain took place in three intervals between 1957 and 1971. Climax Molybdenum produced 15,000 tons grading 1.05 percent U308 in 1957. Standard Metals produced 15,000 tons grading 1.0 percent U308 in 1959-1964. Newmont Exploration produced 55,600 tons grading 0.62 percent U308 in 1971.

Production was terminated each time when sales contracts with the U.S. Atomic Energy Commission were fulfilled. Uranium ore from the Ross-Adams deposit was mined from a steeply dipping pipe-like body with a combination of a small open pit and two underground levels. Previously mined and disturbed areas are being investigated under the Comprehensive Environmental Review, Compensation, and Liability Act of the U.S. Environmental Protection Agency.

Under the terms of the joint venture agreement between Ucore and Landmark, Ucore will fund the first $300,000 of acquisition and exploration costs, by Nov. 20, 2007, to vest its initial 50 percent interest in the joint venture. Ucore has the right to increase its interest from 50 percent to 75 percent by incurring an additional $1.7 million in property costs and paying to Landmark 50,000 Ucore common shares.

The JV controls four separate option agreements with underlying claim owners. In order to earn a 100 percent interest in 84 claims in these four blocks, the JV must make total payments of $850,000 over one year from the date of signing formal option agreements. The vendors will retain net smelter returns production royalties ranging from 2 percent to 4 percent. A high resolution airborne radiometric and magnetic survey is being planned to guide the 2007 exploration program. Welcome to Alaska UCore Uranium!

Pure Nickel Inc. reported the staking of 112 federal lode mining claims over the historic Salt Chuck copper-palladium mine on Prince of Wales Island. The Salt Chuck mine was active between 1919 and 1941 and had a reported production of 300,000 tons of copper sulfide ore grading 0.95 percent copper, 2.0 grams of palladium per tonne, 1.1 grams of gold per tonne and 5.7 grams of silver per tonne. The Silurian age Salt Chuck mafic-ultramafic complex forms an elongated northwest trending body approximately 7.3 kilometers long and 1.6 kilometers wide. The company is formulating plans for exploration of the prospect.



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