MINING NEWS: Mining news update from Curt Freeman: Discoveries reported, some properties rediscovered

With summer field results rolling in, and gold pushing $475 per ounce, many companies are already contracting for 2006 work

Curt Freeman

As expected, results from the summer field programs have begun to roll in from all over the state. Discoveries from base and precious metals properties were reported in September and several properties previously explored in the Carter administration were rediscovered and are turning out promising results. Metals prices remain robust with gold pushing the $475 per ounce mark. While Alaska’s mining industry is still trying to catch its breath from this year, many companies already are planning their 2006 campaigns and are locking up personnel, drills and helicopters now, rather than wait until early next year when picking will be slim. The annual Alaska Miners Association convention will be held in early November in Anchorage and promises to showcase mining industry exploration, development and production activities for 2005.

Western Alaska

The Rock Creek mine will be developed as a 7,000 tonne per day year-around, conventional open pit operation producing approximately 100,000 ounces of gold per year at estimated total cash costs of $250-$275 per ounce. Capital costs are estimated at between $55 million and $60 million. Test work has shown favorable metallurgy with more than 75 percent of the gold recoverable using gravity methods. When combined with flotation and cyanidation overall gold recovery is anticipated to be in excess of 90 percent with gold doré poured on-site. The Rock Creek deposit is defined by 43,000 meters of drilling in 516 core and rotary holes.

As part of the final mine plan, additional material from the Big Hurrah property will also be processed at the Rock Creek facility. Integrating the material from Big Hurrah has the potential to enhance the overall economics of the project.

Based on drilling the company is targeting the potential to define an initial mineralized zone at Big Hurrah that could contain 150,000 to 200,000 ounces of gold grading between 5 to 7 grams of gold per tonne beginning at surface. NovaGold’s drilling in 2004 and 2005 at Big Hurrah was designed to confirm historic work and form the basis for a new resource estimate on the property. That drilling included nearly 17,750 meters (58,200 feet) in 292 core and rotary holes. A resource estimate is anticipated to be completed at Big Hurrah in the fourth quarter of 2005 for inclusion in the Rock Creek final mine plan.

Alaska newcomer Triex Minerals Corp. has entered into an option agreement on Full Metal Minerals’ Boulder Creek uranium project 160 kilometers northeast of Nome. Triex has the right to earn an initial 65 percent interest in the property by making an initial cash payment of $75,000, completing $1.5 million in exploration expenditures over four years and issuing up to 200,000 shares of its stock to Full Metal. Triex will have the right to acquire an additional 15 percent interest in the property by issuing an additional 300,000 shares and incurring an additional $1 million in expenditures on or before April 1, 2010.

Uranium mineralization is hosted within Tertiary-aged sandstone peripheral to a Late Cretaceous alkalic quartz monzonite intrusion. Exploration drilling between 1979 and 1981 outlined a resource of 1 million pounds of U308. The deposit is not fully defined and is open along strike and at depth. The average grade of the resource was reported to be 0.27 percent U308 and average thickness is 3 meters within a deposit area of approximately 1,000 meters long by 100 meters wide. Depths of mineralization range from surface to 120 meters.

Mapping, prospecting, grid-based soil sampling and biogeochemistry has been completed in 2005. The objective of this work is to define drill targets for the 2006 program which will focus on resource expansion via in-fill drilling to further delineate the deposit, as well as drilling along-strike to test for deposit extensions and new zones. Welcome to Alaska Triex Minerals!

Northern Dynasty Minerals Ltd announced initial results from a new discovery at its Pebble deposit near Iliamna. Core hole 5327 intercepted 2,619 feet grading 0.87 percent copper, 0.70 grams of gold per tonne and 0.028 percent molybdenum (1.45 percent copper equivalent). Included in this intersection are intervals of 605 feet grading 0.90 percent copper, 1.06 grams of gold per tonne and 0.013 percent molybdenum (1.60 percent copper equivalent) and 290 feet grading 1.08 percent copper, 1.30 grams of gold per tonne and 0.029 percent molybdenum (2.00 percent copper equivalent). Hole 5327 was drilled towards the east at a dip of 65 degrees and entered the new mineralized system at a vertical depth of 1,500 feet below surface.

The mid-point of this intercept is located 2,000 feet east of the main Pebble deposit where recent drilling has encountered the western edge of a previously undetected granodiorite intrusive known as the East Stock. Most of the holes in the East Stock are completely in the granodiorite stock below a cover of post-mineral Tertiary volcanic and sedimentary rocks. Mineralization in the East Stock extends to a much greater depth than has been drilled to the west and is continuous in most drill holes over their entire lengths below the barren Tertiary cover. The geology of these eastern holes exhibits strong potassic alteration, abundant polyphase quartz and quartz-sulfide veins, a high chalcopyrite to pyrite ratio (1:1) and abundant disseminated and vein sulfide mineralization. Mineralization in the East Stock remains open to the east, south, and north and at depth. Additional assays are pending from the project.

Liberty Star Gold Corp. announced on-going results from its Big Chunk copper-gold prospect near Iliamna. Mid-way through the season the company had completed 60 line miles of induced polarization geophysical surveys and collected 1,175 vegetation samples on 600-foot intervals over 146 miles of grid. The company has completed 5,857 feet of diamond core drilling in 15 holes.

Drilling results returned visible copper and some molybdenite-bearing intervals, along with porphyry intrusive rocks and porphyry style alteration zones. Results are pending.

The company also announced that it had acquired an additional 476 Alaska state mining claims covering approximately 119 square miles bringing the project claim block to 1,718 Alaska state mining claims covering 421 square miles.

NovaGold Resources said diamond drilling has begun on its Khotol silver project 60 miles southwest of Galena. The company is planning a 1,200 meter drilling program to test high-grade silver and base metal mineralization at two areas that are defined by coincident elevated soil geochemistry and induced polarization chargeability and gravity geophysical anomalies.

Mineralization occurs as high-grade disseminated to massive sulfide replacements along a regional dolomitic limestone-quartzite contact. Shallow holes drilled by the Anaconda Mining Co. in the early 1980s in a 400 by 400 meter area include hole WP83-006 which intersected 32.0 meters grading 444 grams silver per tonne, 25.9 percent lead and 2.8 percent zinc from 24.1 meters to 56.1 meters depth, hole WP84-027 which intersected 20.1 meters grading 339 grams silver per tonne, 5.3 percent lead and 3.4 percent zinc from 107.3 to 127.4 meters depth and hole WP84-031 which intersected 11.9 meters grading 259 grams silver per tonne, 9.0 percent lead and 11.0 percent zinc from 124.4 to 136.3 meters depth. Mineralization remains open for expansion in all directions.

Geocom Resources Inc. has initiated drilling at its D claims area of the Iliamna project. The company plans to drill a minimum of two 250-meter core holes in order to accomplish its earn-in on the D claims. Additional holes will be drilled, dependent upon initial results and weather.

The size, strength, and disposition of the D claims geophysical anomaly combined with the copper and gold mineralization discovered at the H claims in previous drill programs indicates a strong potential for the discovery of porphyry-style copper-gold mineralization.

Tonogold Resources Inc. released initial results from its Nyac gold project in southwest Alaska. Data from approximately two-thirds of the 3,000 soil and 200 rock samples collected revealed anomalous gold and pathfinder elements within a six square mile area of the property. High gold in soil values ranged from 2.46 to 4.2 parts per million, along with four other samples between 1.0 and 1.8 parts per million gold and 10 additional samples between 0.5 and 1.0 parts per million gold.

Assay data revealed six areas of anomalous gold. Five of these prospects; Bonanza Ridge, Rocky Ridge, Shamrock Head, Pipe and Wallace, are within a five square mile area while the sixth prospect, Rainbow Peak, 2 miles to the northeast, covers an area of about 1 square mile.

All six prospects identified in 2005 have soil that assays over 0.5 parts per million gold and multiple returns over 1.0 parts per million. The Bonanza Ridge Prospect shows the largest and most continuous enrichment with a gold zone, defined by surface soil samples above 0.1 parts per million, over a 300 acre area. Mineralization is hosted in altered volcanic rocks intruded by intrusive rocks which are cut by gold-bearing veins, veinlets, shears, faults and dikes. Gold is associated with highly anomalous bismuth. Gold is spatially associated with widespread sericite-chlorite-carbonate alteration and associated quartz-chlorite-calcite veins and veinlets containing pyrite, chalcopyrite, bismuthinite, molybdenite and native gold.

Eastern Interior

Initial results from 222 of these soil samples from the southern portion of the grid have returned highly anomalous gold, silver, arsenic, bismuth, antimony, tellurium and tungsten values. Anomalous gold and pathfinder elements from this grid cover an area measuring 1,700 meters NE-SW by 900 meters NW-SE. Gold, arsenic and bismuth values are highly anomalous over the entire area of the grid from which samples have been received. Additional results are pending.

Select Resources also said it is planning to drill its Richardson gold property near Delta Junction. The program anticipates a total of several thousand feet of diamond core drilling in three or more core holes to evaluate potential gold mineralization at the Democrat Prospect and related prospective areas. Drilling will be focused along a structural zone that is interpreted as a favorable conduit for gold-mineralizing fluids. The Democrat prospect is one target along this zone for which previous drilling identified gold mineralization hosted in intrusive rocks.

Canaco Resources announced results from Phase I exploration at its Hajdukovich property in the central Alaska Range. The Sneaker zone is the most advanced exploration target at Hajdukovich and is defined by several occurrences of visible gold in sheeted quartz veins which occur over a minimum 600-meter by 900-meter area. Surface sampling, mapping and prospecting at the Sneaker Zone in 2005 has confirmed the presence of high grade gold values from mineralized quartz veins, expanded the area of prospective mineralization, and identified extensions to known zones.

A total of 212 bedrock samples were collected from the Sneaker Zone of which 51, or 24 percent, assayed greater than 1.0 grams of gold per tonne and returned a high value of 122 grams of gold per tonne. While most of the gold values are attributed to veins, gold has now been identified in altered and brecciated granites and stockwork zones within the host rock to the sheeted vein systems. Three holes totaling 462 meters were drilled at the Sneaker zone however, none of these holes reached their targeted depths due to technical difficulties relating to the drill. As a result, the high-grade gold-bismuth mineralization identified at surface remains untested by drilling.

Potentially significant copper mineralization has been returned from the UPEG Saddle Zone where altered granites with disseminated sulfide mineralization returned values ranging from anomalous to 2.05 percent copper and 75 grams silver per tonne. Prospecting and sampling completed in the PW area returned bedrock gold values from silica altered schist and massive sulfide lenses ranging from 2.1 to 8.6 grams of gold per tonne and a single sample from a quartz vein grading 50.7 grams of gold per tonne. These results are indicative of a prospective mineralizing system and, in response, Canaco has acquired additional ground in this area through the staking of 38 claims covering a total of 5,120 acres.

Alaska Range

Drill hole 8 was drilled to test strong multi-element geochemical anomalies associated with a sulfide gossan (1 kilometer long by 150 meters wide) in the centre of an embayment feature along the base of the Fish Lake Complex. The drill hole encountered massive iron-nickel-copper sulfide mineralization within ultramafic rock approximately 70 meters above the basal contact. Assay results include 0.97 percent nickel, 0.14 percent copper over 1 meter, including 3.22 percent nickel and 0.38 percent copper over 22 centimeters from 150 meters depth and a 2 centimeter thick massive sulfide zone calculated to contain 12 percent nickel. Drill hole 6 was drilled to test strong multi-element geochemical anomalies at the west end of the embayment feature tested by drill hole 8. Assay results include 0.27 percent nickel and 0.06 percent copper over 12 meters from 358 meters, including 0.39 percent nickel and 0.05 percent copper over 1.5 meters.

Drill hole 1 was drilled in the footwall to the Tres Equis massive sulfide showing (6.7 percent nickel, 1.0 percent copper, 1.5 grams platinum group elements per tonne) and encountered disseminated sulfide mineralization. Results include 0.31 percent nickel, 0.14 percent copper and 0.2 grams platinum group elements per tonne over 33 meters from 103 meters depth, including 0.50 percent nickel, 0.23 percent copper and 0.4 grams platinum group elements per tonne over 2 meters.

Results suggest the presence of several kilometer-scale zones of weak disseminated sulfide mineralization within the Fish Lake Complex. This low-grade mineralization could provide a vector to structural traps within which higher grade massive sulfide deposits may have formed.

In August the companies completed a follow-up program consisting of ground electromagnetics, ground magnetics, soil geochemical and geological surveys. This work was completed in order to develop and refine targets for an anticipated spring 2006 drill program.

Piper Capital Inc. announced that Hidefield Gold plc has elected to exercise its option to acquire up to 50 percent of the company’s interest in the Golden Zone gold project in the Alaska Range. Piper currently has a 58.12 percent interest in the project and is in the process of increasing that interest to 75 percent by a combination of exploration expenditures, share issuances and cash payments. The Golden Zone mineral showings occur in fault-bounded northeast-trending zones of hydrothermal alteration associated with Cretaceous alkalic granitic rocks. The property also hosts a large number of untested or partially tested gold and gold-copper prospects.

Full Metal Minerals announced that assay results from seven drill holes (920 meters) at its Lucky Shot mine project in Southcentral Alaska have discovered an additional high-grade extension to historic mineralization. The Lucky Shot mine was the largest historic gold producer in the Willow Creek mining district with reported production of 250,000 ounces of gold recovered from 1921 to 1940 at an average grade of 1.48 ounces per ton.

Drill hole C05-12 encountered 219.06 grams of gold per tonne over a 4.0 meters true width (uncut), including 1,267.52 grams of gold per tonne over a 0.66 meter true width. Hole C05-12 is a 50 meter step-out hole to the west of hole C05-09, which intersected 3.05 meters true width averaging 62.23 grams of gold per tonne. Both intersections occur approximately 200 meters up-dip from historic underground workings. All drill holes intersected the Lucky Shot shear, which is typified by strong chlorite-sericite-carbonate alteration, brecciation and silicified cataclasites. Mineralization remains open for expansion to the west and south.

The company also completed surface sampling on additional mineralized structures on the property during the 2005 program. A single grab sample of mineralized material from an old dump at the Nippon Vein six kilometers east of Lucky Shot averaged 56.6 grams of gold per tonne. A channel sample within a steeply dipping fault zone south of the Nippon Vein averaged 2.69 grams of gold per tonne over 6.1 meters.

The company is planning a drill program in 2006 to fully delineate the Lucky Shot vein and complete a resource estimation for the deposit. Other targets on the property targeted for drilling in 2006 include the Nippon Vein, the Gold Bullion Shear, the Hope Vein, the DeWitt Vein and the Gold Top Vein.

Southeastern Alaska

Bravo Venture Group announced results from its Woewodski Island project near Petersburg. Two gold trends were explored along the southwestern margin of the island exposing high-grade gold in narrow quartz veins in hand-dug trenches. Vein quartz, often with a distinctive blue color, was found throughout the southern and western parts of the island as rare outcrops near shoreline and as float in linear drainages extending inland.

Mineralized trends are marked by anomalous gold in soils (20 to more than 400 parts per billion), gold in streams sediment (50 to more than 300 parts per billion) and visible gold in float and rare outcrop samples. High-grade quartz float in three separate occurrences extends for over 400 meters up Blue Quartz Creek.

Follow-up hand-trenching at one of these sites (where float samples graded up to 69.5 grams of gold per tonne) revealed two narrow quartz veins containing 0.1 meter of 124 grams of gold per tonne and 0.15 meter of 17.8 grams of gold per tonne. Wallrock between the veins contained 2.75 meters of 0.1 grams of gold per tonne and a grab of wall rock adjacent to the northwest vein contained 0.5 grams of gold per tonne.

Float samples grading from 8.98 to 154.0 grams of gold per tonne are dispersed along a 35 meter section of the stream in the area of the trench. Soil sampling returned a high of 1.82 grams of gold per tonne immediately over the occurrence, while more subdued anomalies (ranging from 45 to 53 parts per billion gold) extend away from the occurrence and may reflect the trend of the veining. Follow-up exploration will include higher density grid-soil sampling, hand trenching at the main occurrences on the trend and ground magnetic geophysics.