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Mining News: Optimism surges among Alaska miners As metals prices climb and world demand resumes upward trend, mineral industry prepares for period of robust activity in 2010 Curt Freeman For Mining News
Metals markets continue to climb out of the basement as the world demand for metals resumes its upward trend. Fueled by this growing demand, numerous Alaska precious, base and rare metal projects reported results of their 2009 exploration, development and production programs. The recent Alaska Miners Association Convention in Anchorage felt this surge of interest with the highest attendance in more than a decade. The atmosphere at the conference was charged with optimism, a commodity that was in short supply during the past year. Plans are already being announced for 2010, which is shaping up to be a busy year for the Alaska mineral industry.
Western Alaska Teck Resources Ltd. reported third-quarter 2009 results from its Red Dog Mine, which turned in operating profits of US$129 million, versus an operating profit of US$147 million in the same period in 2008. For the quarter, the mine generated 150,800 metric tons of zinc and 31,800 metric tons of lead in concentrate versus 131,500 and 29,200 metric tons of zinc and lead, respectively, in the third quarter of 2008. The mine sold 162,100 metric tons of zinc and 71,800 metric tons of lead during the third quarter. Average zinc and lead grades mined were 20.6 percent and 5.8 percent versus 19.9 percent and 5.7 percent, respectively, in the third quarter of 2008. Mill throughput of 890,000 metric tons in the third quarter was up from the 784,000 metric tons milled in the third quarter 2008. During the mid-July to late October shipping season, the mine shipped a total of 1.025 million metric tons of zinc concentrate and 221,000 metric tons of lead concentrate. During the third quarter, the mine paid out US$62 million in royalties to the State of Alaska and its partner, NANA Regional Corp. Profits were up significantly due to higher metals prices. The US EPA approved the company’s Supplemental Environmental Impact Statement for its proposed Aqqaluk deposit, the next orebody scheduled for production at the mine. Additional permits are still required, including a discharge permit from the EPA and a dredge and fill permit from the U.S. Army Corps of Engineers.
Linux Gold Corp. announced results from its Dime Creek gold-platinum property in the Koyuk Mining District. The property has historically produced an estimated 68,464 ounces of placer gold and 198 ounces of by-product placer platinum. Multiple bench and modern stream gold-platinum placers occur on the property. The second tier and higher benches in upper Dime Creek valley are interpreted to be ancestral marine beach gold-platinum placer deposits similar to the placers exploited both onshore and offshore at Cape Nome. Microprobe analysis of the platinum mineralization indicates a rhodium-enriched type of isoferroplatinum that averages 88.59 percent platinum, 8.98 percent iron, about 1.0 percent rhodium, and only minor amounts of other platinum group elements. When combined with accompanying gangue mineral identifications; i.e., chrome-rich diopside, the lode source is probably a Ural-Alaska intrusive complex. The gold in Dime Creek is of exceptionally high fineness, averaging about 960 fines (96 percent). Soils collected during a detailed soil survey on two bench levels of Dime Creek contained up to 160 parts per billion gold, 174 parts per billion platinum, and 144 ppb palladium as well as threshold levels of copper, chromium, and nickel.
Millrock Resources announced preliminary results from its Estelle gold project in the western Alaska Range. The company identified the source of exceptionally anomalous talus fines and mineralized talus blocks that had been discovered in late 2008. Extensive zones of breccia and stockwork style arsenopyrite mineralization are exposed upslope from the talus, and grab samples confirm gold grades of 3 to 5 grams of gold per ton. Chip sampling was completed at several locations at the Shoeshine and Oxide Ridge occurrences. Results are pending.
Kiska Metals Corp. announced drilling results from its Whistler copper-gold project in the western Alaska Range. The first of five holes completed in the Island Mountain prospect returned 0.68 grams of gold per metric ton over 382.9 meters. The hole returned an upper interval, 150.0 meters in drilled length that averaged 0.72 g/t gold and a lower 106.9 meter intersection from 280.0 meters to the end of the hole that averaged 1.22 g/t gold. Copper results are pending. Island Mountain consists of Whistler-equivalent intrusive rocks, anomalous copper and gold in rocks and soils over an area measuring 2.5-by-4.0 kilometers, or 1.5-by-2.5 miles. The discovery hole targeted a 150-meter-diameter exposure of hydrothermal breccia at the southern end of Island Mountain where surface rock samples have returned values up to 1.19 g/t gold, 5.2 g/t silver and 0.2 percent copper. Similar gold and copper bearing breccias are noted 600 meters northeast and 500 meters southeast of the discovery hole, and reconnaissance soil sampling extending 1.6 kilometers to the northeast from this hole are strongly anomalous in copper and gold. Additional drilling is planned for the spring of 2010.
Eastern Interior Kinross Gold Corp. reported third-quarter 2009 production results from its Fort Knox Mine near Fairbanks. For the quarter, the mine produced 60,629 ounces of gold versus 100,969 ounces produced in the 3rd quarter of 2008. Cash costs were $591 per ounce versus $443 per ounce in the previous third quarter. The mine processed 3.091 million metric tons of ore grading 0.80 g/t gold. Recovery for the quarter was 83 percent. Production decreased in the third quarter compared with output during the third quarter of 2008, due to lower mill throughput resulting from geotechnical issues in the pit. These issues have been resolved, and mining will now transition to more competent, higher grade rock, Kinross said. Cost of sales increased US$150 year-on-year, mainly due to lower milling throughputs and increases in the price of fuel and other consumables. The company also said leaching had begun on its new Walter Creek valley leach site and initial gold recovery had commenced.
Following release of additional strong drill results, Teryl Resources Corp. reported that it received a letter of intent for the acquisition of its 20 percent interest in the Gil Joint Venture gold project from its joint venture partner, Fairbanks Gold Mining Inc., a subsidiary of Kinross Gold. The drill results, released in late October, came from the Sourdough Ridge prospect where drilling has extended mineralization over a 1,500-foot zone. Significant results include 60 feet grading 1.71 g/t gold in hole GVR09-513, 65 feet grading 3.42 g/t gold in hole GVR09-521, 105 feet grading 1.37 g/t gold in hole GVR09-523, 75 feet grading 3.08 g/t gold in hole GVR09-534, 105 feet grading 4.79 g/t gold in hole GVR09-540, 35 feet grading 3.42 g/t gold in hole GVR09-526 and 35 feet grading 3.77 g/t gold in hole GVR09-529. Mineralization remains open to the east and a new access road was completed to allow additional soil sampling and magnetics surveys to be completed.
Miranda Gold Corp. reported that it has leased the Ester Dome project in the Fairbanks Mining District from Range Minerals Inc. Historic drilling on the project returned a high-grade gold intercept with 19.7 feet grading 2.7 ounces of gold per short ton. Under terms of the deal, Miranda must pay escalating annual cash payment, make minimum property expenditures and issue 300,000 share warrants in the next 2 years. The geology of Ester Dome comprises a suite of metamorphic rocks, primarily schist separated by thrust faults. The schist is cut by igneous stocks and sills, and mineralization appears to be intimately related to a Cretaceous intrusive event. Over 12,000 surface soil and rock samples provide multiple undrilled gold anomalies on the property. Gold anomalies are on the scale of 1,000 to 2,000 meters long and 200-500 meters wide, including an anomaly that extends 2,000 meters from the significant drill hole intercepts.
Millrock Resources announced acquisition of the Uncle Sam gold project in the Richardson Mining District near Fairbanks from Kiska Metals Corp. Previous work on the project by Kennecott and Geoinformatics returned extensive anomalous surface gold geochemistry and a highlight drill intersection of 10.6 meters averaging 6.1 g/t gold and a total of 18 individual drill intersections of greater than 1.0 g/t gold over drilled widths ranging from 3 to 12 meters. Under terms of the deal, Millrock can purchase a 100 percent interest in the property over the next four years by making cash payments of US$200,000, meeting exploration work commitments of US$2.7 million and by issuing 1 million Millrock shares.
International Tower Hill Mines Ltd. announced additional drilling results from its Livengood gold project. Results from the Sunshine zone include hole MK-RC-267, which returned 117 meters grading 1.2 g/t gold, demonstrating the depth continuity to the south, and hole MK-RC-254, which returned 41 meters grading 1.1 g/t gold and left the mineralized zone open to the southeast. In the Northeast zone, mineralization is characterized by numerous intervals from 10-30 meters thick that coalesce in some areas, as demonstrated by hole MK-RC-0216, which returned 114 meters grading 0.9 g/t gold. In the Southwest zone, new results include 44 meters grading 1.5 g/t gold in hole MK-RC-0278, confirming and expanding the higher grade zones intersected in the winter drilling program in early 2009. This area is scheduled to be the focus of the next phase of drilling to commence in early February 2010 with four drill rigs. Results have now been released for 168 of the 207 holes completed in 2009 (65,000 meters), with assays for 39 drill holes pending. The 2010 program is currently planned to complete 50,000 meters of resource expansion and infill drilling. The first Preliminary Economic Assessment (PEA) for the Livengood deposit, which will focus on the heap leach option, is currently underway using the October 2009 resource model. Results from this initial study are anticipated later this quarter. A new resource estimate, anticipated in the first quarter of 2010, will be announced when all the remaining assay results have been released.
Alaska Range Triton Gold Ltd. said structural mapping and sampling have been completed at its Tushtena gold property in the Delta River District. The program was aimed at gathering detailed structural data around the Discovery, RS and Dave’s zones, ground-truthing historically mapped geological units and contacts and collecting rock chip. A total of 214 rock chip samples were collected. As part of the 2009 field program, new ground was staked to the north and northwest of the claim block. Rock chips were collected over areas of the new ground. Results are pending on all samples submitted. The company plans to complete an 1,800-meter drill program in 2010. Six holes are planned to be drilled targeting potential mineralization at and near the intersection of the Itra Fault with strata-conformable faults such as the Discovery Fault and with steep northeast trending faults.
International Tower Hill Mines Ltd. said it entered into a joint-venture agreement on its Chisna copper-gold project with Alaska newcomer Ocean Park Ventures Corp. Under terms of the deal, Ocean Park can earn a 51 percent interest by conducting US$20,000 worth of exploration work and issuing 1 million common shares over 5 years. Ocean Park can earn an additional 19 percent interest by producing a positive bankable feasibility study. AngloGold has a pre-emptive right for the next 90 days to take Ocean Park’s place in the joint venture. The Chisna project focus is copper-gold-silver porphyry-style mineralization in late Paleozoic rocks intruded by magmas of the Cretaceous Porphyry Belt. Welcome to Alaska Ocean Park Ventures!
Pure Nickel Inc. and partner ITOCHU Corp. reported highlights of their 2009 exploration program on the MAN project. The partners completed 2,672 line-kilometers of airborne ZTEM (Z axis Tipper Electromagnetic) geophysics over the main Alpha and Beta mafic-ultramafic complexes. Analysis of the ZTEM data generated numerous targets of interest. The companies also completed 4,200 meters of core drilling consisting of seven holes. The ultramafic sequence was thicker than expected as seen in hole PNI-09-025, which was drilled to a depth of 1,066 meters toward a deep geophysical target. Drill hole assay results are pending.
Full Metal Minerals said that it had entered into an option agreement with Alaska newcomer Harmony Gold Corp. entitling Harmony to acquire a 60 percent interest the Lucky Shot gold project in the Willow Creek District. Under terms of the agreement, Harmony must make a US$2 million cash payment to Full Metal, issue 4 million common shares of Harmony common stock, and incur US$8 million of exploration and development expenditures on the property before December 31, 2012. In addition, Harmony has also agreed to issue an additional 8 million common shares to Full Metal outside of the option earn-in requirements, of which 3 million shares are to be issued on completion of the processing of a bulk sample from the property of not less than 7,500 metric tons and 5 million shares are issuable on the commencement of commercial production on the Property. Harmony also has agreed to pay an additional sum of US$500,000 at the start of commercial production. Welcome to Alaska Harmony Gold Corp!
Northern Alaska Goldrich Mining Co. announced plans to commence commercial placer gold production in 2010 at its Chandalar property north of Fairbanks. Capital costs are estimated to be about US$5 million, and the company said it has arranged a forward gold sale of up to US$7 million worth of gold from the project at a 20 percent market discount. The company also plans to conduct definition drilling on its Little Squaw Creek placer deposit and completed lode exploration drilling on a stratabound gold target previously identified on the project. A drill program of 15,000 feet is planned to test for extensions of the known mineralized material on Little Squaw Creek and to begin exploration in other drainages. In addition, a 15,000-foot drill program is also planned to test lode mineralization on a stratabound unit nearly five miles in length.
Silverado Gold Mines Ltd. reported additional drill results from the 2009 drill program at its Nolan Creek property. Holes 09SG19 and 09SH20 were drilled at a different azimuth than previously announced drilling to test the other gold-bearing structures that cut at an oblique angle to the Solomon Shear Zone on Pringle Bench, the northeast extension of the vein-fault system on Workman’s Bench. Both drill holes intercepted a stockwork gold-bearing quartz-carbonate veins in addition to the “A” vein gold-antimony zone, and the samples assayed between 0.01 and 1.69 oz/t gold. The network of gold-bearing quartz veins is interpreted to be a 500-600-foot-wide, west-northwest trending brittle fault zone intersecting the Solomon Shear Zone at an oblique angle between Workman’s Bench and Pringle Bench. The company believes that the intersection of these two major structural zones caused an increase in dilational openings for larger vein development as well as a significant increase in vein density. Additional assay results are pending.
Southeast Alaska Hecla Mining reported third-quarter production results from its Greens Creek mine on Admiralty Island. The cash cost per ounce of silver for the quarter was a negative US48 cents, compared with US$3.79 in the third quarter of 2008. The average grade of ore mined during the quarter was 12.63 oz/t silver, compared with 13.32 oz/t silver during the same period a year ago. During the third quarter, the mine produced 1,801,692 ounces of silver, 16,815 ounces of gold, 5,585 tons of lead and 17,835 tons of zinc. Production costs for the quarter totaled US$7.09 per ounce of silver produced, a significant decrease from the comparable US$8.78 per ounce cost in the third quarter of 2008. Lower operating costs were attributed to higher metals prices, increased by-product credits, an increase in mill throughput and lower electrical and consumable costs. The company indicated that the mine is now on full hydroelectric power feeding the Juneau-area power grid. Four surface exploration holes were completed on the northeast contact and analytical results from these holes are pending. The holes intersected multiple and stacked horizons that are interpreted to represent the favorable mine contact near the Greens Creek mine infrastructure. A second drill was added to the program to test the northeast contact from underground set-ups. In addition, underground drills were testing the down dip potential of the Southwest Lower Contact and the potential for new resources in the Northwest-West South zone.
Constantine Metal Resources Ltd. reported final drill results and preliminary down-hole geophysical data for the 2009 exploration program at the company’s Palmer copper-zinc-gold-silver project near Haines. The 10-hole, 4,643-meter 2009 drill program expanded the South Wall zone mineralization by 80 meters along strike, 90 meters vertically down dip, and 40 meters up dip, for a total horizontal strike length of 380 meters and a total vertical extent of 410 meters. The latest drill results include the deepest South Wall copper-rich intersection drilled to date in CMR09-28 that grades 3.55 percent copper, 4.79 percent zinc, 0.28 g/t gold and 80.1 g/t silver over 2.29 meters. Drill Hole CMR-09-30 tested the westernmost part of South Wall Zone 1 and remained in altered footwall rocks with stringer mineralization. A large off-hole geophysical anomaly in CMR09-30 is believed to represent a 100-meter extension of the thick Zone I mineralization and suggests that the zone remains open to the west. The company has completed mineralogical studies with metallurgical bench testing that will be reported on shortly, and will assist in the calculation of the first resource estimate for the project.
Ucore Uranium Inc. announced drilling results from its Bokan-Dotson Ridge rare earth element project. The 2009 drilling program consisted of 2,840 meters of core drilling in 27 holes. Most of the drilling was focused on the road-accessible Dotson Trend, with additional holes testing the Geoduck, Cheri, and Sunday Lake-Geiger Trends. Significant results include hole LM09-56, which returned 1.2 meters grading 1.2 percent light rare earth elements and 0.6 percent heavy rare earth elements; hole LM09-58, which returned 0.52 meters grading 3.62 percent light rare earth elements and 2.7 percent heavy rare earth elements; and hole LM09-61, which returned 1.1 meters grading 0.9 percent light rare earth elements and 2.0 percent heavy rare earth elements. Mineralization at the Dotson Trend consists of multiple sub-parallel rare earth element-bearing dykes and veins localized by shear zones collectively comprising a steeply-dipping mineralized plane. The mineralized structures are remarkably persistent along a strike length of at least 3 kilometers, or nearly 2 miles. Additional drilling results are pending.
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