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Week of October 31, 2010
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2010 Mining Explorers: Explorers trek to Last Frontier

Geologists seek next world-class deposit in rugged, under-explored state

Shane Lasley

Mining News

The Last Frontier, as Alaska has long been labeled, is as applicable a moniker today as it was to prospectors who ventured to the territory at the end of the 19th century. Alaska is considered one of the most mineralized provinces on Earth, but due to an inter-related combination of Arctic weather, rugged terrain, limited infrastructure and high exploration costs, the state’s vast mineral potential remains at the edge of exploratory expansion.

Though the Far North state remains largely unexplored, it has given up several world-class deposits over the past 20 years. Among these recent finds are the Pebble deposit, which is estimated to contain 80.6 billion pounds of copper, 107.4 million ounces of gold and 5.6 billion pounds of molybdenum, and the 40 million-ounce Donlin gold project.

It is commonly believed that such large mineral deposits in Alaska can only be found in remote and logistically challenged regions of the state, but geologists are continuing to make discoveries adjacent to Alaska’s relatively few highways and byways. A stone’s throw away from the road running north from Fairbanks to the oil fields of Alaska’s North Slope, International Tower Hill Mines Ltd.’s nearly 20-million-ounce gold deposit at Livengood is one such discovery.

Geologists familiar with Alaska expect that more outstanding deposits lay hidden just below the surface of the vast and underexplored state.

“The thing about Alaska is there are a lot of low-lying areas out there that are covered with vegetation, glacial gravels and things that haven’t been explored thoroughly, or at all,” Millrock Resources Ltd. Vice President of Exploration Phil St. George said. “I, and others, think there is a lot of potential to find other Pebbles, other Donlins, other huge gold systems.”

Tintina Gold Belt

The Tintina Gold Belt – which cuts a swath 850 miles, or 1,350 kilometers, long and more than 200 miles, or 320 kilometers, wide across the middle of Alaska – continues to be a favorite destination for explorers seeking world-class gold deposits.

Two of the three operating gold mines in Alaska (Kinross Gold Corp.’s Fort Knox Mine and Sumitomo Metal Mining’s Pogo Mine) as well as Tower Hill’s Livengood project are all found in the eastern extent of Alaska’s portion of the Golden Arch. Over the past 125 years more than 12 million ounces of alluvial gold have been recovered from this region, but the lode source of many of the historic placer mining districts has yet to be found.

Rolling Thunder, a grassroots exploration program initiated by Full Metal Minerals Ltd., has set out to find the source of more than half a million ounces of alluvial gold recovered from the Fortymile, a placer district that predates the neighboring Klondike by a decade.

“Full Metal and Rolling Thunder is in a unique position for advancing exploration in the area. Our relationship with Underworld Resources has provided the Rolling Thunder technical staff with exploration techniques that were successfully used on the White Gold property,” Rolling Thunder Project Manager Chris Siron told Mining News.

It has long been believed that Money Knob at Tower Hill’s Livengood gold project is the source of much of the half a million ounces of placer gold mined in the Tolovana-Livengood Mining District north of Fairbanks. Over the past four years, Tower Hill has advanced Money Knob from an intriguing gold prospect to a world-class deposit. With six rigs churning out an expected 60,000 meters of drill core in 2010, the company is continuing to expand and upgrade a nearly 20-million-ounce gold resource at this Interior Alaska project.

Beyond Livengood, the Tintina Gold Belt arcs to the southwest. A 400-mile- or 645-kilometer-long belt of gold-rich terrain known as the Kuskokwim Gold Belt dominates this western extent of the Golden Arch.

Donlin Creek— being developed by Barrick Gold Corp. and NovaGold Resources Inc. — is the crown jewel of the Kuskokwim. Over the past several years, majors and junior explorers alike have scoured the region in search of other large intrusive-related gold deposits, uncovering several promising prospects.

In an alliance that melds the major’s financial and data resources with the junior’s exploration savvy, Kinross and Full Metal are exploring this stretch of the Golden Arch. These strategic partners have yet to unveil what their investigation turned up.

Besides Donlin Creek-style mineralization, the Kuskokwim belt also hosts Nixon Fork, a skarn deposit rich in copper, silver and high-grade gold. In preparation for re-opening the mine, Fire River Gold Inc. has initiated a 28,000-meter drill program to expand known high-grade gold mineralization there.

Seward Peninsula draws gold seekers

Gold deposits in Alaska are not confined to Tintina. In fact, aside from the oil-rich fields of the North Slope, gold has been discovered in every region of the state’s 586,412 square miles or 1,518,800 square kilometers.

The Seward Peninsula in Northwest Alaska has drawn prospectors seeking gold since the first strike was made near Nome in 1898. Though an estimated 10 million ounces of alluvial gold has been recovered on the peninsula, NovaGold Resources Inc.’s Rock Creek Mine, not currently in operation, is the only modern hardrock mine in the area. NovaGold’s three properties on the peninsula — Rock Creek, Nome Gold and Big Hurrah — contain 500,000 ounces of probable reserves and 1.9 million ounces of measured and indicated resources of gold.

Millrock had drills turning on two Seward Peninsula gold properties in 2010. This junior, in partnership with Kinross, completed around 2,500 meters of reverse circulation drilling at the Council project northeast of Nome. Following the drilling at Council, Valdez Gold Corp., a Toronto-based junior, funded a 5,000-meter drill program at the Bluff property east of the famous mining town.

TintinaGold Resources Inc., a company formed as a spin-out vehicle for NovaGold’s exploration properties, completed 1,750 meters of drilling at Kugruk, a property about 70 miles north of Nome that hosts copper-iron skarns, silver-lead-zinc prospects and placer gold rich drainages. This program is the first drilling completed on the project since the late 1970s.

Hole KU10-003 drilled in the Billiken Zone encountered three composite intervals totaling 90.8 meters, grading 0.27 percent copper, 0.07 grams per metric ton gold, 2.8 g/t silver, and 33.1 percent total iron. Two of the intersections contain significantly better grade copper mineralization associated with strong precious metals, including a 5.7-meter zone with 1.23 percent copper, 0.2 g/t gold and 7 g/t silver.

Small amounts of placer platinum as a byproduct of gold mining

also have been recovered from the Seward Peninsula. Linux Gold Corp. reports that soil samples collected near Dime Creek, about 100 miles, or 160 kilometers, northeast of Nome, contained up to 160 parts per billion gold, 174 ppb platinum and 144 ppb palladium.

This region of Northwest Alaska also is prospective for tungsten and rare earth elements.

Porphyry-rich Kahiltna, Wrangellia

South of the Tintina Belt lies another band of mineral-rich terranes, or series of related rock formations, drawing the attention of juniors and majors alike. This arc consists of the Wrangellia and Kahiltna terranes, two interrelated but distinct assemblages.

The Kahiltna assemblage was formed when the Wrangellia island arc thrust up the ocean floor as it collided with Alaska.

Pumped with copper and gold-bearing fluids at least twice, the more than 400-mile-, or 650-kilometer-, long Kahiltna Terrane in Southwest Alaska is home to the Pebble deposit and is highly prospective for other world-class porphyry copper-gold and intrusive gold deposits.

The latest resource estimate released by joint venture partners Anglo American plc and Northern Dynasty Minerals Ltd. estimates the Pebble deposit contains more than 107 million ounces of gold, 80 billion pounds of copper and 5.6 billion pounds of molybdenum.

The Pebble Partnership, for the first time since 2002, is conducting drilling outside the Pebble deposit. The partners also have an optioned Full Metal’s Pebble South project and Liberty Star Uranium & Metal Corp.’s Big Chunk and Bonanza Hills properties. The Pebble owners flew geophysical surveys over these surrounding land packages in 2010.

The center of Kahiltna Terrane exploration in 2010 was in the Rainy Pass region, about 180 miles, or about 290 kilometers, northeast of Pebble. Millrock and Kiska Metals Corp., are seeking copper-gold porphyries and intrusive-related gold on their large land holdings in the area.

Kiska, which recently assumed sole ownership of the 203-square-mile, or 527-square-kilometer, Whistler Project, is focused on expanding the 5.75 gold-equivalent-ounce resource at the property’s Whistler Deposit as well as investigating the gold-rich Island Mountain discovery about 14 miles, or 23 kilometers, to the south.

Flanking Whistler to the west is Millrock’s Estelle gold project. Using funds invested by Teck Resources Ltd., the junior completed an airborne geophysical survey and surface sampling at prospective areas in the southern portion of the 32,511-acre property. Chip samples taken at one of the prospects averaged 9.1 g/t gold over a 21-meter traverse.

Kiska’s Copper Joe porphyry prospect; Millrock’s Cristo gold-copper claims; and Corvus’s high-grade Terra project are other Kahiltna Terrane projects investigated in 2010.

The Wrangellia Terrane, which stretches from the Kahiltna Terrane east through southern Yukon and along the coast of British Columbia, is prospective for nickel, platinum group elements and copper-gold porphyries.

Surface showings of up to 15 percent nickel, 7 percent copper and 170 g/t of combined PGE-gold-silver are found at Pure Nickel Inc.’s Man project – located on the southern slopes of the Alaska Range some 250 miles, or 400 kilometers, northeast of Rainy Pass.

Funded by JV partner Itochu Corp., Pure Nickel carried out a US$7.5 million exploration campaign at Man in 2010. Guided by extensive geophysics, the partners are seeking an ultramafic intrusion believed to be the source of the high-grade surface mineralization.

Chisna – only about 20 miles, or 12 kilometers, east of Man – is a 163,460-acre land package that encompasses multiple copper-gold porphyry prospects. A US$6 million exploration program funded by Ocean Park Ventures Corp. and operated by Corvus Gold Corp. focused on two porphyry centers at Chisna. In addition to extensive geophysical surveys and around 5,000 meters of drilling, the partners conducted reconnaissance exploration across the large property.

Young porphyries of SW Alaska

Yet another belt of young porphyries runs the length of the nearly 1,000-mile- or 1,600-kilometer-long Alaska Peninsula southwest of the Pebble deposit. The mineralization in this geologically active section of the “Ring of Fire” is much younger than the others, ranging from 10 million years to current.

Full Metal’s Pyramid project, on this island arc formed by the Pacific Ocean plate diving under the North American plate, hosts 125 million tons of near-surface copper mineralization grading 0.403 percent copper and 0.025 percent molybdenum. Exploration in the late 1980s identified associated gold values that have greatly improved the potential at the project.

Chile-based copper producer Antofagasta Minerals S.A., has optioned this project from the junior and the partners conducted an initial 2,000-meter drill program in 2010.

Full Metal has agreements in place to explore some 1.4 million acres of Native-owned lands along this Southwest Alaska island arc.

VMS, SEDEX dominate northwest

The Brooks Range, a chain of mountains that spans the more than 600-mile-width of Alaska north of the Arctic Circle, contains both high-grade sedimentary exhalative and precious metals-rich VMS deposits.

High zinc grades being mined by Teck and NANA Regional Corp. at the Red Dog Mine are indicative of the SEDEX deposits found in the western reaches of the Brooks Range. The Aqqaluk deposit — which the Red Dog partners started mining in 2010 — contains 51.6 million tons of ore with an average zinc content of 16.7 percent along with 4.4 percent lead.

Anarraaq and Lik, located 7 miles, or 9 kilometers, and 14 miles, or 17.5 kilometers, respectively, from Red Dog, are two other known high-grade SEDEX zinc deposits.

Discovered by Teck in 1999, the Anarraaq deposit consists of a nearly 1-billion-ton barite body and a zinc-lead-silver zone with an estimated resource of about 18 million tons at 18 percent zinc, 5.4 percent lead, and 85 g/t silver.

Teck also is a 50 percent JV partner with Zazu Metals Corp. at Lik, a deposit estimated to contain about 4.6 billion pounds of zinc, 1.5 billion pounds of lead and 41 million troy ounces of silver. Zazu currently has engineers completing a feasibility study, which is expected by the end of the 2010.

Arctic – located about 180 miles, or 290 kilometers southeast of Red Dog – is one of the richest VMS deposits in the world.

An estimate completed in 2008 outlined an indicated resource at Arctic of 16.8 million metric tons containing 4.1 percent copper, 6.0 percent zinc, 0.83 grams per metric ton gold, 59.6 grams per metric ton silver and 0.94 percent lead. The estimate includes an additional inferred resource of 11.9 million metric tons with an average of 3.6 percent copper, 5.0 percent zinc, 0.67 g/t gold, 48.4 g/t silver, and 0.80 percent lead.

NovaGold owns the Ambler District – a 65-mile-, or 110-kilometer-, long belt of VMS deposits and prospects that includes Arctic. The Donlin Creek co-owner has indicated it will spin the Ambler District out into an exploration-focused junior.

Though much of the VMS mineralization discovered in Northwest Alaska is very high grade, explorers have only scratched the surface due to its remoteness.

VMS deposits span SE panhandle

In the opposite corner of the state, stretching from the Niblack Project in the south to the Palmer Project in the north, a belt of VMS deposits can be found along the entire 450-mile, or 725-kilometer, length of the Southeast Alaska panhandle.

The precious-metal-rich Greens Creek Mine is one such deposit. More than 10 million tons of ore have been mined at Greens Creek, and the mine has about another 8 million tons of reserves that are estimated to average 326 g/t silver, 3.1 g/t gold, 10.5 percent zinc and 3.8 percent lead.

On the north end of the panhandle, Constantine Metal Resources Ltd. drilled 4,000 meters at its Palmer copper-zinc-gold-silver project.

Based on 32 holes drilled at Palmer through 2009, an inferred resource of 4.12 million metric tons grading 2.01 percent copper, 4.79 percent zinc, 0.30 grams per metric ton gold and 31 g/t silver has been calculated for the property.

On Prince of Wales Island at the south end of the panhandle, Heatherdale Resources Ltd. is tracing a zone of precious metals-rich VMS mineralization at the Niblack project.

When the junior took over exploration of Niblack in 2009, the project had an indicated resource of 2.27 million metric tons grading 2.42 g/t gold, 34.66 g/t silver, 1.27 percent copper, and 2.36 percent zinc. The deposit also had an inferred resource of 1.712 million metric tons grading 2.08 g/t gold, 32.56 g/t silver, 1.55 percent copper and 3.17 percent zinc.

A zone with values nearly three times greater than the Niblack average has been drilled by Heatherdale and the company plans to include this high-grade region in an updated resource and geological model due out by the end of 2010.

Terrane wreck

Geologically, Alaska is a terrane wreck, with multiple tectonic plates dumping their mineral payloads over the landscape. Geologists are still sifting through the wreckage in many places across the state to determine which mineral deposits were dumped by which terranes and when — a task not always easily accomplished as pileups have resulted, in many cases, from multiple mineralization events happening in the same geographical regions over time.

“We have got all these mineral deposits and mining districts because the geology of Alaska is composed of rocks of multiple ages, formed by a wide variety of geological processes, arranged in these various terranes that slammed into each other in what is present-day Alaska,” explains Alaska Division of Geological & Geophysical Surveys geologist David Szumigala.

Coal, rare earth elements, tungsten, uranium, niobium and diamonds have been found amongst the gold, zinc, copper and other commodities that have spilled across the Far North landscape.

As economic deposits in other politically-stable parts of the world become harder to come by, more explorers will trek to Alaska to sort through the mineral-rich terrane wreckage that makes up the Last Frontier.

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