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Vol. 22, No. 2 Week of January 08, 2017
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: On frozen ground

Explorers are besting the challenges of winter drilling in Interior Alaska

Shane Lasley

Mining News

While the mineral exploration season in Interior Alaska typically runs from the time the ground dries in the spring, usually mid-May, until snow and cold weather make logistics too cumbersome and expensive in October, an increasing number of explorers are carrying out successful winter programs in this especially frigid region of the Far North State.

Without a doubt, mounting a successful exploration program in temperatures cold enough to make metal brittle and with only about six hours of daylight is a challenge. However, with the right equipment and a bit of experience, winter drill programs are not only doable but can be advantageous.

Avalon Development President Curt Freeman, who has been involved with a number of successful winter drill programs in Interior Alaska, told Mining News that keeping water liquid is the key.

“If you can manage your water, the rest is relatively simple,” the Fairbanks-based geologist and consultant explained.

He said a water truck that avoids pumping water long distances and a bit of diesel to fuel the heaters and equipment are the key ingredients to drilling in subzero weather.

A number of advantages are offered to explorers that successfully best the travails of working through the dark and cold of an Interior Alaska winter. Key among the advantages is the ability to traverse and drill boggy and tundra covered areas that are nearly impossible to navigate in warmer months.

Alaska’s winter explorers also find that they can get discounted rates from drilling companies who want to keep their employees working and drills turning during the slow season in the north.

This year, three exploration companies – Freegold Ventures Ltd., Peak Gold and Great American Minerals Exploration Inc. – are slated to have drills turning this winter at gold projects in Alaska’s notoriously cold Interior region.

Winter veteran

Undaunted by the dark and cold, Freegold Ventures is a veteran when it comes to carrying out successful winter drill programs at its Golden Summit project, where it is not uncommon for the mercury to dip to 40 degrees Fahrenheit below zero.

After successfully completing a more than 6,000-meter winter drill program early in 2011, the junior explorer has regularly kicked off its yearly exploration with winter drilling at this Interior Alaska gold project.

One reason for Freegold’s winter drilling success is Golden Summit lies alongside a paved highway only 25 miles north of Fairbanks. This idealistic locale means the project enjoys the advantages of grid power; drill crews have cell phone service; and parts and support can be car delivered from Fairbanks in about 30 minutes.

"The Golden Summit project has a number of competitive advantages including existing infrastructure, a favorable permitting climate and proximity to Fairbanks.,” Freegold President and CEO Kristina Walcott explained. “The site is within five miles of Kinross Gold's Fort Knox mine, a heap leach and milling operation, which has done tremendously well for Alaska."

The junior explorer recently said it is planning yet another winter drill program at Golden Summit; this time to expand upon the shallow oxide resource found there.

A preliminary economic assessment completed for Golden Summit in 2016 outlines early plans for a mine that would average 96,000 ounces of gold annually over a 24-year mine life.

The PEA proposes developing this mine in stages, starting with a stand-alone 10,000 metric-ton-per-day valley heap leach operation that would process the shallow oxide portion of the resource, and then transitioning to a larger milling scenario that involves a 10,000 tpd bio-oxidation plant for the sulfide material.

The area being considered for mining in the PEA hosts 61.5 million metric tons of indicated resource averaging 0.69 grams per metric ton (1.36 million ounces) gold; and 71.5 million metric tons of inferred resource of averaging 0.69 g/t (1.58million ounces) gold.

Additionally, a resource was calculated for the oxide portion of this deposit, which is found largely within the upper 60 meters of the overall resource. At a 0.3 g/t gold cut-off, this oxide cap hosts 16.2 million metric tons of indicated resource averaging 0.66 g/t (345,000 oz) gold; and an inferred resource of 9.6 million metric tons averaging 0.59 g/t (183,000 oz) gold.

Freegold has identified areas in and around the deposit where it believes it can expand the oxide resource.

The company said recent sampling has identified a gold-in-soil anomaly west of the deposit and previous shallow rotary air blast drilling results indicates that better grade oxide material may be present to the north.

Initial drilling will be focused to the north of the current mineral resource in an effort to incorporate material now classified as waste material in the PEA to resource. Exploration drilling will also focus on areas where geophysical data suggests the presence of shallow intrusive rocks to the southwest of the deposit.

Winter connection

About 180 miles southeast of Golden Summit, Peak Gold, a joint venture between Contango Ore and Royal Gold Inc., is finding similar winter drilling success at its Tetlin gold project near the town of Tok.

While Tetlin may be slightly closer to the equator than Golden Summit, it is situated in one of the coldest areas of Alaska, or North America for that matter, where minus 70 degrees Fahrenheit temperatures have been recorded on several occasions. Tetlin, however, enjoys many of the advantages of its counterpart – road access, cell phone service and a nearby town that provides basic services.

Royal Gold, operator of the JV, can earn up to a 40 percent interest in Tetlin by investing US$30 million in Contango Ore’s 735,000-acre underexplored project by October 2018.

In 2015, when the JV was formed, the Peak deposit hosted the equivalent of 1.2-million ounces of gold, when accounting for the value of the copper and silver present in this most advanced zone at Tetlin.

In its first year as a Peak Gold partner, Royal Gold invested US$6.8 million in a 2015 exploration program that expanded the breadth and depth of the Peak deposit and Peak North, a seemingly parallel zone of mineralization with similar grades and thicknesses about 250 meters to the north.

Excited about the discoveries made in 2015, Royal Gold upped the ante, depositing US$11 million in the Peak Gold bank account to fund a 2016 exploration program that started in February.

This first ever winter drilling at Tetlin expanded Peak; revealed that North Peak, a second zone about 250 meters away, could have the size and tenor to rival the main deposit; and tapped the Connector zone, indicating that these seemingly separate Peak deposits may link up.

Despite these successes, the drill program did not reach the number of holes or meters envisioned by the JV. Ironically, this smaller than anticipated winter program had less to do with harsh winter conditions than an early spring breakup, which cut the program short.

After the snow melted and the ground dried, Peak Gold returned to Tetlin for two additional phases of drilling in 2016.

Overall, the three phases of exploration at Tetlin included 20,523 meters of drilling in 118 holes.

All of the drilling completed since Royal Gold joined the project in 2015 will be included in a Peak-Connector-North Peak resource currently being calculated.

“We remain encouraged by the joint venture’s drilling results and technical expertise provided by Royal Gold,” said Juneau. “We look forward to releasing a resource estimate of the joint venture’s Alaskan gold deposit in the spring of calendar year 2017.”

In the meantime, the Peak Gold partners are considering plans for a 2017 winter drill program at Tetlin. While details of this program are not yet finalized, North of 60 Mining News believes that areas immediately north and east of North zone and much of the Connector zone that are undrilled due to permafrost cover would be likely targets for winter drilling. Successful drilling in this area could fill the gap between Peak and North Peak, delineating a roughly 2,000-meter arc of contiguous high-grade gold mineralization.

New winter game

Great American Minerals Exploration is currently planning for a winter exploration program at its 55,465-acre SAM project about midway between Sumitomo Metal Mining’s Pogo Mine and Fairbanks.

GAME, as the company is commonly known, spent 2016 reassembling Uncle Sam, a gold property previously explored by Kennecott Exploration and others, and cutting a deal with Sumitomo Metal Mining for Monte Cristo, a large gold property bordering the south of Uncle Sam.

Known now as Sam, this newly consolidated land package allows Game to explore the previously separated district-scale potential.

“To finally be able to start working the geology and eliminate the property lines seems to be in everybody’s best interest,” said Game Chairman and CEO Dennis McDowell.

On the Monte Cristo side of the now erased border, SMM Exploration Corp. – a subsidiary of Sumitomo Metal Mining– has already outlined significant gold mineralization in a zone known as Naosi.

A total of 79 holes drilled by SMM Exploration has been incorporated into an independent resource being prepared for Game by a third party contractor.

At a cut-off grade of 0.51 g/t gold, Naosi hosts an estimated 48.4 million metric tons of inferred resource grading 1.85 g/t (2.88 million ounces) gold and 33 g/t (51.4 million oz.) silver, or 3.42 million gold-equivalent ounces.

Intriguingly, this deposit remains open for expansion and trends towards Lone Wolf, a zone of similar gold mineralization that has been tapped with drilling on the north side of the former Monte Cristo-Uncle Sam border.

On-Line Exploration, an Alaska-based geological consulting firm, and Game have compiled the data from some US$20 million of past exploration completed on both sides of the former border in preparation for a 2017 program.

Excited to explore Sam’s larger potential, Game is putting the pieces in place to carry out a winter drill program.

“Game is working closely with On-Line Exploration and GroundTruth Exploration to complete the logistics and permitting for a winter exploration program,” Game President Patrick Smith told Mining News.

GroundTruth – an innovative exploration company started by famed Yukon prospector Shawn Ryan and wife, Cathy Wood – has developed a number of exploration tools particularly well suited for far north winters.

A late winter sampling program slated to begin in March will utilize GroundTruth’s exclusive GT Probe, an efficient and minimally invasive way to sample the soil-bedrock interface, and GT RAB, a rotary air blast drill to provide early stage tactical drilling. Both rigs are rubber track mounted, making them well suited for snow and tundra travel.

“GroundTruth has also developed a lightweight (40lb), high powered auger drilling system mounted on a backpack for soil sampling in winter and permafrost conditions,” Smith explained. “Extensive winter sampling programs have been successfully conducted with this unit.”

When asked about the advantages to a winter program, Smith quipped, “No bugs!”

He added that Kennecott has already had winter drilling success at Sam and the property has a number of winter trails that can be easily traversed by the GT Probe and GT RAB drills while the ground is frozen. This, coupled with ability to commute to the drill sites via snowmachine, will reduce costs associated with helicopter transport.

The ability to explore on frozen ground is expected to jumpstart Game’s 2017 exploration at Sam.

“The information gained during this winter sampling program will be extremely useful for designing an effective summer season core drilling program,” Smith explained. “The core drilling program will aggressively expand upon known oxide gold mineralization, test higher grade Naosi gold zones at depth, and will test the very strong priority gold-in-soil anomalies patiently waiting for their day in the sun.”



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