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Alaska mineral industry value drops below $1 billion for first time since 1995; exploration expenditures level off after four-year decline Coal production fell by 300,000 tons, but with gold, platinum and silver prices up, the industry expects a turn-around in 2003 Curt Freeman PNA Contributing Columnist
The preliminary numbers are in for the Alaska mineral industry’s performance in 2002 and while exploration expenditures have leveled off after four years of steady decline, Alaska’s total mineral industry value dropped to below the $1 billion level for the first time since 1995.
Production value was $925.1 million, development value was $23.5 million and exploration value was $24.2 million.
Oddly enough gold, silver, lead and zinc production were all higher in 2002 than in previous years but metal prices were depressed across the board and essentially wiped out any gains from increased metal production.
Coal production fell by 300,000 tons in 2002 as a result of cessation of Korean export contracts.
With gold and platinum prices now at seven-plus and 20-plus year highs and with silver and nickel prices up significantly, the industry is looking to 2003 as a turn-around year.
If the buoyant mood at the recent Cordilleran Roundup conference is any gauge of the future, 2003 should see Alaska’s exploration industry return to the more robust levels seen in the mid-1990s.
Western Alaska Teck Cominco American reported fourth quarter and year-end 2002 results from its Red Dog mine. In the fourth quarter the company said the mine produced 157,300 tonnes of zinc in concentrate and for the year the mine produced 578,400 tonnes of zinc in concentrate. Zinc ore grade and mill recoveries increased significantly to 21.6 percent and 84.5 percent respectively from 19.8 percent and 78.9 percent in the previous year’s quarter. The mine posted a $10 million operating loss for the quarter and a $28 million operating loss for the year, thanks in large part to continued low zinc prices which averaged 35 cents per pound.
NovaGold Resources reported additional results from its infill drilling program at its Donlin Creek deposit in southwestern Alaska. The new drilling is expected to upgrade resources from the Akivik, Aurora, 400 Acma and South Acma zones. Results include 20 meters grading 5.3 grams of gold per tonne and 56 meters grading 7.36 grams of gold per tonne in hole DC02-870 at South Acma, 16.3 meters grading 13.31 grams of gold per tonne from hole DC02-878 at East Acma and 19.3 meters grading 9.24 grams of gold per tonne and 25 meters grading 7.29 grams of gold per tonne from hole DC02-941 at the Akivik zone. All eyes are now on Placer Dome, which must decide by mid-February whether or not it will re-acquire a 70 percent interest in the (Donlin Creek) project or retain a lesser interest.
TNR Resources reported on final drilling results from its Rock Creek gold project under option from NovaGold Resources in the Nome District. Drill highlights include hole 101 with 34 meters grading 1.61 grams of gold per tonne, including 2 meters at 17.09 grams of gold per tonne, hole 102 with 61 meters grading 1.50 grams of gold per tonne, including 4 meters at 5.12 grams of gold per tonne, hole 105 with 88 meters grading 1.27 grams of gold per tonne, including 10 meters at 5.49 grams of gold per tonne, hole 115 with 8 meters grading 3.55 grams of gold per tonne and 12 meters grading 4.03 grams of gold per tonne, and hole 116 with 116.3 meters grading 1.73 grams of gold per tonne, including 16 meters grading 3.05 grams of gold per tonne and a separate interval of 28 meters grading 4.60 grams of gold per tonne. The company is now reviewing formal bids for a comprehensive independent preliminary economic assessment study and to calculate updated gold resources on the project. These studies are expected to be completed by June 2003.
Eastern Interior Shareholders of Echo Bay Mines and TVX Gold approved their respective company’s merger plans with Kinross Gold, operator of the Fort Knox mine in the Fairbanks District. The new Kinross Gold will have a stable of 12 operating mines with annual production approaching 2 million ounces per year. The company also indicated that 65 percent of its annual production would come from North America, the higher percentage of North American production for any of the major gold producers.
Freegold Ventures Ltd. said drilling will begin this month (February) on its Currey zone discovery in its Golden Summit project in the Fairbanks District. Previous drilling intercepted 64 feet grading 0.143 ounces of gold per ton and surface trenching returned values up to 12.5 ounces of gold per ton from newly discovered veins.
Teryl Resources and LinuxWizardry Systems Inc. announced plans to conduct limited drilling on the Fish Creek prospect in the Fairbanks District. The February drill program is designed to test several magnetic highs for both lode and alluvial gold mineralization.
Alaska newcomer Geologix Exploration said it acquired an interest in the Macomb gold project from Teck Cominco Ltd. Geologix has the option to acquire a 100 percent interest in the project by expending $2 million by the end of 2007. If Geologix delivers a preliminary feasibility study to Teck Cominco, Teck Cominco may reacquire a 60 percent interest in the project by funding and completing a final feasibility study within four years. Teck Cominco may earn an additional 5 percent interest by arranging any production financing, including guarantees on behalf of Geologix. If Teck Cominco does not exercise its back-in right it will retain a 1.5 percent net smelter returns royalty of which 50 percent may be repurchased by the Geologix for $2 million. The Macomb property covers an intrusive hosted/shear hosted gold target within the Tintina Gold Belt. The property covers a Cretaceous monzonite stock which is similar in geological age to the intrusive rocks at the Pogo deposit, 60 miles to the north. Previous exploration identified a large area of highly anomalous stream sediment samples (gold with arsenic, tungsten, bismuth) with a maximum gold value of 3,770 ppb. Follow-up soil traverses indicated anomalous gold over a 1.6 kilometer by 6 kilometer area. Panning of soil from anomalous sites identified abundant fresh visible gold. Subsequent rock sampling discovered two quartz vein float samples which returned values of 17.6 grams of gold per tonne and 39.2 grams of gold per tonne and one float sample of granitic host rock (quartz/sericite altered) with quartz stockwork which assayed 20.5 grams of gold per tonne. The company is planning to conduct drilling on the north end of the soil anomalies and additional surface prospecting on the property.
Welcome to Alaska Geologix Exploration!
Alaska Range Nevada Star Resources announced results from surface mapping and geophysical programs over its Dunite Hill prospect on its MAN project in the central Alaska Range. The results indicated a coincidence magnetic and gravity high zone consisting of a probable magmatic feeder system on the northwestern end of the project and tabular sills extending to the southeast in the Dunite Hill area. Two survey lines of magnetotellurics geophysics indicated the tabular bodies in the Dunite Hill area are highly conductive suggesting the presence of sulfide mineralization similar to that seen in some surface outcrops on the project. Additional work is planned for the project for 2003.
Northern Alaska Silverado Mines reported that underground development activity at its Nolan Creek placer mine in the southern Brooks Range is expected to be completed in early February and production from working faces will follow. Additional exploration activity is planned for the Smith Creek and Slisco Bench areas of the property. The company recently came under fire in an article published by WorldNetDaily.com but has refuted the charges made in that article as being inaccurate.
Other Two of Alaska’s most respected mining personnel have joined the Alaska Department of Natural Resources: Tom Irwin and Bill Jeffress, both former members of Kinross Gold’s Fort Knox senior management team. (See previous reports in PNA on Tom and news item this issue on Bill.)
While their departure will be felt at Fort Knox, Alaska has gained two top-flight individuals whose experience and talents will greatly aid DNR’s future activities.
Congratulations Tom and Bill!
The Fraser Institute, one of Canada’s leading think-tanks, released its 2002-2003 study of mineral potential and investment attractiveness in 47 jurisdictions around the globe.
Unlike in previous studies, Alaska took a beating in this year’s results placing 21st in policy potential, 11th in mineral potential and 12th in overall mineral investment attractiveness.
Not surprisingly, Alaska’s poorest showing was in regulatory issues, land status uncertainty and infrastructure to support mineral exploration and development.
While it is clear that some of Alaska’s perceived problems do not exist in reality, it is equally clear that the perception of those participating in the survey is in fact reality.
Alaska has work to do in the future if it intends to change these incorrect perceptions.
Anyone interested in this report should log onto the Fraser Institute’s website: www.fraserinstitute.ca.
At long last, Redcorp Ventures’ Tulsequah Chief project received project approval certificates from the government of British Columbia. This watershed event follows 15 years of exploration and research and eight years of environmental assessment reviews, the longest in British Columbia history.
Alaska’s challenge to the mine permit a few years ago contributed ignominiously to this long permitting phase.
Much remains to be done before the first concentrates emerge from the planned 2,470 tonne per day mill but a major milestone has been reached and a pause to smell the roses is in order!
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