|
Iraqi conflict impacts Alaska mining projects
Curt Freeman Petroleum News Contributing Columnist
The results from summer field work have started to roll in from various projects while second quarter mine production has come in for Red Dog and Greens Creek.
Unlike most years, and certainly unlike the last five years, a number of projects are planning, or are committed to, late season programs as a result of the financial hiccups caused by the Iraq conflict.
The uncertainty caused by the Iraq conflict caused people to put venture capital back in their pockets until it was clear that world economies were not going to suffer as a result of the Iraq campaign. This put a four-to-six week hiatus in funding plans and appears to have pushed Alaska’s normal May through September madness back by an equal amount.
As a result, drilling programs and other exploration efforts around the state will be pushing the weather envelope this year in attempts to advance the projects.
Western Alaska Teck-Cominco’s Red Dog mine saw higher throughput and ore grades in the second quarter compared with a year ago resulting in a smaller but still significant $3 million loss during the quarter.
For the quarter, the mine generated 142,100 tonnes of zinc in concentrate and 30,200 tonnes of lead in concentrate versus 136,200 tonnes and 26,300 tonnes in the second quarter of 2002.
The mine sold 97,500 tonnes of zinc during the second quarter. Zinc prices averaged 35 cents per pound, down 1 cent from the second quarter of 2002. Average zinc grade mined was 21.5 percent, unchanged over grades mined in the second quarter of 2002.
NovaGold Resources said highlights of initial drilling results from its Rock Creek project near Nome include RKDC03-118 which intercepted six meters grading 3.4 grams of gold per tonne, RKDC03-126 which intercepted 20 meters grading 3.4 grams of gold per tonne and RKDC03-129 which intercepted 10 meters grading 10.3 grams of gold per tonne including two meters grading 46.6 grams of gold per tonne.
Visible gold was noted in five of the twelve phase-one drill holes.
The company also said engineering work has been initiated at the project for tailings impoundment and site facilities. Environmental baseline studies for mine permitting have also been initiated.
The Alaska Legislature has approved funds for upgrading the Glacier Creek road which connects the project to the city of Nome. Design work on the road project is anticipated to begin this summer.
Northern Dynasty Minerals said it has completed the initial phase of core drilling at the Pebble property copper-gold project near Iliamna.
The program consisted of 25 diamond drill holes totaling 20,693 feet, with 18 holes drilled in the “resource lands” and seven holes completed in the “exploration lands.” Assay results are pending.
A second phase of core drilling will commence in August and will consist of 30,000 feet.
Exploration efforts will focus on defining higher-grade resources within the known 1 billion tonne project resource area.
Recent resource upgrades have pushed the higher grade resources to 141 million tonnes grading 0.48 percent copper, 0.019 percent molybdenum and 0.67 grams of gold per tonne (0.97 percent copper-equivalent).
Exploration to date has revealed three areas within and adjacent to the deposit that have potential to host additional resources. These include two newly identified granodiorite porphyry stocks within the deposit where good-grade gold-copper mineralization and quartz vein stockworks have been encountered in limited previous drilling.
Additional work also will be directed toward reconnaissance drilling in other areas of the 89 square kilometer project.
St. Andrew Goldfields has scheduled a $500,000 diamond drilling program for the Nixon Fork mine near McGrath. The program will consist of 8,000 meters of underground drilling designed to upgrade existing resources to reserve status, delineate additional resources and test several targets with potential to add resources to the operation in the future.
Ventures Resource Corp. said it will begin drilling in August at its Flat gold property in southwestern Alaska. The program will consist of approximately 4,000 feet of core drilling at the Golden Apex and Divide gold targets.
The Golden Apex is 6,000 feet northeast along strike from high grade gold bearing structures previously identified at the Divide prospect. Results at the south edge of Divide include 4.5 feet grading 6.1 ounces of gold per ton in core and five feet grading 2.89 ounces of gold per ton in a trench.
This summer’s program will drill test the extent of these northeast trending structures. Results from last summer’s program at Golden Apex show soil values defining three northeast trending gold anomalies up to 2,700 feet long by 200 to 1,000 feet across.
Gold values range up to 1,805 parts per billion. Arsenic, antimony and mercury anomalies overlap the gold anomalies. Sparse gold quartz float grab samples yielded up to 0.9 ounces of gold per ton. Eastern Interior Kinross Gold said drilling has begun on its Ryan Lode deposit in the Fairbanks District. The program is slated for 68 drill holes on the northern and southern ends of the Ryan lode deposit which was last mined in the early 1990s.
Ryan Lode carries proven reserves of 822,000 ounces grading 0.056 opt with an additional 1,572,200 ounces of inferred reserves. Results from the program are pending.
Teryl Resources Corp. said exploration has begun on its Westridge prospect in the Fairbanks District. Initial efforts will focus on the Western gold anomaly which measures 4,000 by 3,000 feet in size from which soil samples returned up to 4.42 parts per million gold and grab rock sample returned up to 16.45 parts per million gold.
Initial field efforts will consist of auger drilling to better define the target area for follow-up reverse circulation drilling.
The company also said it has acquired 440 acres of fee simple mineral lands adjacent to its Westridge prospect in the Fairbanks District. The property was leased from the Alaska Mental Health Trust in return for an unspecified work commitment, a sliding scale net smelter returns royalty based on the gold price and a 1 percent net smelter returns royalty conveyed to the Mental Health Trust on Teryl’s 100 percent-owned Westridge claim block.
The newly acquired lands are adjacent to previously identified gold in soil anomalies identified on the Westridge claims.
Geologix Explorations has completed initial exploration at its Macomb gold prospect in the northern Alaska Range. Drill targets were selected based on geophysical work and gold in soil geochemical anomalies.
Three diamond drill holes were unable to penetrate the glacial till overburden which is at least 120 meters thick. A fourth drill hole tested a lower priority target and indicated sporadic low level gold values scattered throughout a 15 meter wide altered and faulted structural zone.
AngloGold USA and partner Rimfire Minerals said work had begun on their ER and Eagle gold projects in the Goodpaster District. Work at ER is designed to drill test a 1,500 by 300 meter gold-arsenic-bismuth-antimony soil anomaly outlined in 2002.
The anomaly is coincident with a structural contact between gneissic country rock and a Cretaceous intrusive.
Work at Eagle will consist of additional soil auger sampling to expand a 1,500 meter by 3,000 meter soil anomaly which also appears to be related to the contact between gneissic country rock and younger intrusives.
Tri-Valley Corp. has begun exploration work on its Richardson project. The company plans to drill 108 70 to 90-foot deep holes at three locations across Buckeye Creek to test for a high-grade placer deposit reported in old newspaper columns to contain values up to one-quarter ounce of gold to the pan.
Results from the program are pending.
Alaska Range Nevada Star Resources has acquired the Summit Hill prospect on its MAN copper-nickel-platinum group element project in the central Alaska Range. These claims were staked to cover a strong annular magnetic anomaly of approximately seven miles diameter, an anomaly identified by an airborne magnetic survey recently released by the Alaska Division of Geological & Geophysical Surveys.
Limited sampling from a magnetite-rich showing within the area of the anomaly returned 1.58 percent nickel, 1.07 percent copper, 300 parts per billion platinum, 484 parts per billion palladium and 110 parts per billion gold.
The company believes that the anomaly is caused by mafic to ultramafic gabbro and pyroxenite that are cut by a granitic intrusion that is reflected by the non-magnetic core of the anomaly.
There is potential for metal enrichment within the mafic rocks adjacent to the contact zone in the area of the strongest magnetic zone.
Plans for the new claims include prospecting, geological mapping and geochemical sampling to be followed by geophysical surveys and drilling.
The company also said it has started phase two work on its MAN copper-nickel-platinum group element property in the central Alaska Range. The planned August-September program is slated at $1.25 million and will be focused on the company’s Canwell and Rainy prospects.
Work plans include geochemical sampling, geologic mapping, prospecting, ground geophysics and core drilling.
Golconda Resources has begun drilling on its Shulin Lake diamond project west of Talkeetna to test a 1.5-kilometer diameter circular topographic feature that could represent a volcanic center related to the mantle-derived diamond indicator minerals found in previously collected surface samples.
Previous drilling of 15 holes intersected a mixture of sandy material derived from the Alaska Range and volcanic material derived from a nearby source.
Lab results showed the existence of indicator minerals in these rocks and one interval from hole 10 contained 16 micro diamonds.
The 60th anniversary of Usibelli Coal Mines was celebrated in late July at an open house at the company’s mine site near Healy. (See Aug. 3 edition of Petroleum News for the full story.)
Upwards of 1,500 people showed up for the event which included dedication of the newly opened Two Bull Ridge open pit and a chance for visitors to watch the Ace in the Hole dragline and other heavy equipment working in the pit.
The hosts were wonderful, the occasion auspicious and the rain let up long enough to make the entire day enjoyable.
Thanks UCM!
Northern Alaska Little Squaw Gold Mining Co., a venerable name in Alaska’s lode mining history, has taken on a new life under new management and looks to become more active in the future.
The quartz lodes were last worked from 1979 to 1983, when 8,169 ounces of gold was recovered from 11,819 tons averaging 0.97 ounces of gold per ton. Mineralized material remaining at the four mine sites collectively exceeds 17,000 tons at about 1.5 ounces of gold per ton. Both free-milling and sulfide associated gold were recovered in the company’s 100 ton-per-day gravity and flotation mill.
Gold is hosted in mesothermal quartz veins along four major east-west striking shear zones that cut Paleozoic age quartz-mica schist and calcareous schist. Individual structures, known as the Mikado, Summit, Little Squaw and Envelope, are two to five miles long and frequently extend over 100 feet in width.
Significant past assay results from the property include hole 82-5 at the Mikado prospect which intersected 5 feet grading 0.32 ounces of gold per ton and five feet grading 0.58 ounces of gold per ton, a channel sample from the Summit prospect that returned two feet grading 90.9 ounces of gold per ton, drill hole LS-3 which intersected 60 feet grading 0.166 ounces of gold per ton and drill hole LS-45N which intersected 10 feet grading 0.46 ounces of gold per ton in the Little Squaw vein and channel sample assays of 3.3 feet of 0.66 ounces of gold per ton from the Envelope prospect.
Plans are being formulated for future work by the company’s new management team consisting of names that are welcome and familiar here in Alaska: Dick Walters, Jackie Smith, Jim Duff and Riz Bigelow. Southeast Alaska Kennecott (70.3 percent) and Hecla (29.7 percent) have released second quarter 2003 production from the Greens Creek mine on Admiralty Island.
The total cash cost per ounce of silver at Greens Creek for the quarter was $1, a 45 cent per ounce decrease compared to the second quarter of 2002. The average grade of ore mined during the quarter was 19.11 ounces per ton, down slightly from the 20.07 ounces of silver per ton averaged in the same period in 2002.
During the second quarter the mine produced 2,800,891 ounces of silver, 27,268 ounces of gold, 7,144 tons of lead and 22,657 tons of zinc.
Total production costs for the quarter were $3.66 per ounce of silver produced, a significant decrease over year previous figures.
Coeur d’Alene Mines has signed a memorandum which the company said should speed development and reduce regulatory costs at its Kensington deposit north of Juneau. (See story in last week’s issue of Petroleum News.)
The agreement was signed by the Alaska Department of Natural Resources, U.S. Forest Service, U.S. Environmental Protection Agency and Army Corps of Engineers. It outlines roles and responsibilities of the agencies with respect to the project’s final supplemental environmental impact statement.
The company anticipates receiving all necessary permits for Kensington by the end of January 2004, and plans to reach a final decision on developing the mine after completion of the permitting and a feasibility study update. Kensington contains 1.8 million ounces of proven and probable gold reserves and 1.4 million ounces of additional resources. Capital costs necessary to place the underground deposit into production are estimated at $150 million while gold production is projected to average 175,000 ounces annually at an average cash operating costs of approximately $200 per ounce.
Pacific North West Capital and JV partners Freegold Ventures and Lonmin PLC said drilling and other exploration work has begun at their Union Bay platinum project in the Ketchikan District.
The companies also said an additional 394 claims have been staked in the project area, increasing the size of the existing project by 100 percent. Drilling has commenced in the North Zone while surface channel sampling has been completed on the Jaguar Zone where rock types are similar to those at the North zone.
Holes drilled in 2001 were drilled under North Zone outcrops where previous surface sampling and rock saw trenching had returned values up to 14.6 grams of platinum per tonne and 3.3 grams of palladium per tonne. Assays results are pending. Other Another in a seemingly endless stream of business attractiveness surveys has pounded Alaska flat as a pancake.
Cognetics, a Massachusetts-based business research firm, has produced their list of “Entrepreneurial Hotspots” designed to identify those areas of the country where small business development is progressing most rapidly. The study measures both the number of new start ups in a given area and the speed of their growth after start up.
To make a long story short, Alaska was 50th (dead last) on the Cognetics Entrepreneurial Hotspots list.
Interpret it how you wish.
| 