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Vol. 17, No. 31 Week of July 29, 2012
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Alaska geologists unearth rare earths

DGGS conducts strategic survey of state’s REE potential; finds critical metals in streams draining Interior Alaska’s Ruby Terrane

Shane Lasley

Mining News

Putting Alaska on the map as a domestic source of rare earth elements and other strategic and critical minerals is a priority of Alaska Gov. Sean Parnell. During the 2012 budget cycle, Alaska lawmakers approved US$498,000 proposed by the administration to begin a statewide REE evaluation. This year’s budget includes US$2.7 million for a three-year project to continue this initiative.

“Alaska can become America’s source for rare earth elements,” Alaska Gov. Sean Parnell proclaimed when rolling out his proposed Fiscal Year 2012 Budget in December 2010. “We cannot afford to be dependent on foreign sources of rare earth elements – and we believe Alaska’s subsurface contains vast quantities.”

The unique properties of REEs – a group of 17 previously obscure metals that include scandium, yttrium and the 15 lanthanides – are key ingredients of a number of military applications such as guided missiles, lasers, radar systems and night vision equipment; high-tech consumer goods like mobile phones and iPods; and green technology applications such as wind turbines and hybrid cars.

In order to substantiate Gov. Parnell’s conviction that stores of these critical elements are lurking in the substrate, the Alaska Division of Geological and Geophysical Surveys initiated a strategic assessment of the 49th state in the summer of 2011.

This project – which has identified more than 150 REE occurrences in Alaska – includes a review of historical data, new geochemical analyses of REE-prospective samples stored at the state’s Geologic Materials Center in Eagle River and field investigations of some of the more promising strategic metals targets in the state.

A 2011 field investigation has unearthed some high concentrations of REEs in the Melozitna mining district, one of several rare earth-prospective areas associated with the 3,000-square-mile (8,000 square kilometers) Ruby batholith in Interior Alaska.

“Today we are making an announcement on some very positive anomalies in regard to gold and rare earths,” Alaska Department of Natural Resources Commissioner Dan Sullivan announced on July 13.

“We did some stream-sediment sampling, and we are publishing the geochemical report today,” DGGS Minerals Resources Section Chief Melanie Werdon expanded. “There are a couple of streams that are really high in rare earth element values.”

Melozitna REEs

DGGS – which had flown detailed geophysical surveys over the Melozitna mining district in 2010 – chose this area on the north banks of the Yukon River about 25 miles (40 miles) west of the community of Tanana as an initial target for its field investigation of Alaska’s REE potential.

“Melozitna is an older mining district, and we did see some anomalies in there earlier,” explained DGGS Director Bob Swenson. “We shot a geophysical survey there two summers ago, and there were some anomalies in that data.”

Blanketed by the tundra and taiga forest typical of Interior Alaska, the Kokrines Hills of the Melozitna district provide geologists with few clues to the bedrock hidden below. The geophysical data gathered in 2010 provided the state geologists with a glimpse below this pervasive cover.

“In Interior Alaska, there is not a lot of exposure. We deal a lot with exposures and so it is really important that we go out and shoot high-resolution geophysics,” Swenson explained.

Anomalous concentrations of REEs and uranium were first identified in this portion of Interior Alaska’s Ruby Terrane by National Uranium Resource Evaluation – a program originally charged with evaluating domestic uranium potential when initiated by the U.S. Atomic Energy Commission in 1973 and later expanded to test for REEs and other strategic metals – during a late 1970s assessment of Alaska.

Using the geophysical and NURE data to guide their search, DGGS geologists collected 32 stream-sediment and 28 pan-concentrate samples from rivulets draining the most promising rare earth targets of the Melozitna study area.

In addition to the full suite of REEs, the results of this 2011 geochemical survey revealed promising levels of tungsten, titanium, chromium and niobium.

DGGS disclosed the sample results in a July 13 report, “Geochemical trace-element and rare-earth element data from stream-sediment and pan-concentrate samples collected in 2011 in the Melozitna mining district, Tanana and Melozitna quadrangles, Interior Alaska.”

One pan-concentrate sample, 2011LF540A, stands out for its particularly high concentrations of REEs and strategic metals.

Collected from Wolf Creek – a drainage on the north side of a mountain-bearing the same name – sample LF540A returned more than 28,900 parts per million (2.9 percent) total REEs (365 ppm dysprosium, 70.7 ppm terbium, 6,020 ppm neodymium, 1,460 ppm yttrium, more than 1,000 ppm praseodymium, 7,950 ppm lanthanum, more than 10,000 ppm cerium, more than 1,000 ppm samarium, 607 ppm gadolinium, 129 ppm ytterbium, 154.5 ppm erbium, 62 ppm holmium, 18.4 ppm lutetium, 30 ppm scandium, 22 ppm thulium and 6.6 ppm europium).

In addition to rare earths, the sample contained a suite of metals considered critical: 10,400 ppm manganese, 8.82 percent titanium, 890 ppm tungsten, 144 ppm chromium, 60 ppm gallium and 147.5 ppm niobium.

Strong mineralization of a stream sediment sample collected at the same location corroborates the results of the pan concentrate.

Similar concentrations of REEs – about 25,260 ppm (2.5 percent) TREEs – were analyzed from pan-concentrate sample 2011514B, collected from a creek draining the east side of Wolf Mountain and about eight miles (15 kilometers) to the southeast of 2011LF540A.

Several other samples collected in this area also returned elevated concentrations of REEs and other strategic metals.

“Pretty exciting – it is exactly what we were hoping would happen on our first try,” Sullivan said, referring to Alaska’s strategic mineral assessment.

The geochemical samples collected by DGGS coupled with the geophysical surveys and mapping completed by the state geologists could supply the private sector with potentially ground staking information.

“When the geophysics come out, the maps come out and the reports come out; that is when we see these big spikes in the staking,” said Swenson.

Claims blanket Wolf

Contango ORE Inc., or CORE, did not wait for DGGS to assess the potential before staking its claim to the mineral rights of Wolf Mountain. Based upon historical data that was reviewed and analyzed by Avalon Development Corp., the Houston Texas-based explorer blanketed this most prospective region of the Kokrines Hills with some 200 mining claims in May 2010.

“CORE has leased or filed mining claims on 759,800 acres in Alaska, with about 650,000 acres focused on gold and related mineral exploration and approximately 100,000 acres focused on rare earth element exploration,” CORE Chairman and CEO Kenneth Peak said when the mineral exploration company went public late in 2010.

Wolf and three other properties – Swift, Spooky and Alatna – account for 97,280 acres of CORE’s initial REE land position and are found at some of the state’s promising rare earth areas from the Alaska Range to the Brooks Range.

The company’s two remaining rare earth prospects, Salmon Bay and Stone Rock Bay, are located along a trend of prospects and deposits on Prince of Wales Island in Southeast Alaska that includes Ucore Rare Metals’ Bokan Mountain project.

CORE – which is currently focusing its exploration on the Tetlin gold-copper project in eastern Interior Alaska – has only completed reconnaissance stage work on its REE properties over the past two years. The company has budgeted some US$400,000 to continue this work in 2012.

The geophysical data completed by DGGS indicates some prospective REE areas may exist beyond CORE’s Wolf property. It is unclear whether the Texas-based explorer has added to its claims based on the results of the state survey.

Though the Melozitna mining district currently does not have road access, studies for a road linking Tanana to Alaska’s highway system are currently in the advanced stages and the preferred route for a highway that continues westward to Nome would transect the REE-prospective area.

DGGS eye Ray Mountains

Following up on its 2011 success, this year DGGS is investigating the REE potential of the Ray Mountains, another Ruby batholith-related prospect area that spans an enormous region from just north of the Yukon River along the Dalton Highway to about the Arctic Circle.

A belt of highly prospective strategic metals hunting ground stretches along from the Kokrines Hill in the Melozitna district for at least 150 miles northeast were it crosses the Dalton Highway, the transportation corridor that links the oil-rich plains of the North Slope to Fairbanks.

“The Ray Mountains and the Kokrines Hills area of the state is one of the places that stand out of rare earths,” Avalon Development President Curt Freeman told Mining News.

Avalon Development – a Fairbanks-based mineral exploration consulting firm – has an extensive database of REE occurrences in Alaska.

A suite of 110-million-year-old granitic rocks with a unique chemical signature containing anomalous tin, tungsten, uranium, REEs and other strategic metals have been identified along this stretch of the Ruby Terrane.

While the U.S. Bureau of Mines and a handful of private companies completed reconnaissance assessment of the mineral potential of the Ray Mountains at the end of the 20th Century, no comprehensive exploration of the region has been undertaken since that time.

“That terrane has been known to have rare element content for a long time – no one has gone out to look specifically for them until very recently,” said Freeman.

Several Ruby batholith associated plutons – bodies of intrusive igneous rock that crystallized from magma cooling below earth’s surface – identified in the Ray Mountain study area and are the targets of the state’s REE assessment there.

The Hot Springs pluton – an area tested by the Bureau of Mines in the 1980s – is a primary focus of the DGGS assessment of the Ray Mountain study area.

In addition to the historical data, portions of the Hot Springs pluton are free of vegetative cover, providing state geologists with relatively good bedrock exposure for mapping and sampling.

DGGS hope this reconnaissance work at Hot Springs and other plutons in the region will help unlock the REE potential of the Ray Mountains.

Ucore studies placers

State geologists are not the only ones that recognize the REE potential of the Ray Mountain region of Interior Alaska. While DGGS is investigating plutons for potential hardrock strategic metals occurrences, Ucore Rare Metals Inc. is seeking alluvial deposits of REEs and associated minerals that have been weathered off the Ruby batholith into the Ray River drainage.

The junior explorer – best known for the work it is doing at its Bokan Mountain heavy rare earth deposit in Southeast Alaska – has draped with claims an 11,400-acre (4,613.5 hectares) area of the Ray Mountains prospective for economic placer deposit of REEs, tin, tungsten, tantalum and niobium.

“The State of Alaska has shown tremendous support for Ucore and our plan to expedite the development of America’s pre-eminent heavy REE asset at Bokan Mountain, Prince of Wales Island,” Ucore President and CEO Jim McKenzie said. “With this in mind, we’ve elected to even further invest in Alaska REE exploration and development. With the Ray Mountains acquisition, we’ve now covered what we believe to be two of the most prospective remaining REE exploration targets.”

To better understand the placer potential of its Ray Mountain property, Ucore collected alluvial samples from upper Kilolitna River, Ray River, and No Name Creek during a field investigation carried out in 2011.

Using a shaking table – a standard gravity separation tool common to placer gold mining – Ucore concentrated these measured samples collected from the Ray Mountain drainages.

That assays of these concentrates returned up to 50 percent tin; as much as 10 percent total REE; and 0.01 to 1 percent tungsten, tantalum and niobium. Heavy rare earths – including terbium, dysprosium, erbium and yttrium – make up 15 to 25 percent of the total rare earth content in the majority of samples. As much as 60 percent of the TREE content of samples collected at No Name Creek is the prized HREEs.

The company said most of the initial samples were collected directly from surface exposures, and the heavy mineral content can be expected to increase at greater depths within the alluvium. In some areas the gravels are reported to be as much as 100 meters deep.

“The Ray Mountains project has select areas rivaling HREE content at our Bokan property, and the remarkable advantage of collateral tin, niobium and tantalum mineralization which enhances prospective values per ton. Ucore will be advancing the Ray Mountains area as a priority exploration target as it transitions its Bokan flagship into mine development,” McKenzie said in January.

The shaker table used to concentrate the alluvial samples captured some 75 to 80 percent of the REEs and associated metals, demonstrating the potential of using simple gravity methods at the promising placer deposit.

This technique, used by placer gold miners across Alaska and around the world, is typically simpler and quicker to permit and develop.

Additionally, the technology to separate the individual REEs from the concentrates has long been known elsewhere in the world and poses no new metallurgical challenges.

The Spooky claims held by CORE are also found in the Ray Mountains region of the Ruby Terrane.

Explorers laud state

The DGGS REE assessment of the Ruby Terrane in Interior Alaska is part of the Parnell administration’s five-part strategy on strategic minerals. This plan, which focuses heavily on rare earths, involves:

• Undertaking a statewide assessment of strategic mineral potential;

• Providing incentives for the development of known, or highly-prospective, strategic mineral occurrences;

• Making improvements in the structure and efficiency of Alaska’s permitting processes;

• Strengthening partnerships and cooperation with other government entities, Alaska Native corporations and potential developers; and,

• Attracting new investments and markets for Alaska’s mineral resources.

“The timing is right for rare-earth development,” Parnell said. “We’re on track to assess, incentivize and develop the rare earth elements we can provide the world.”

Companies interested in developing Alaska’s rare earths are lauding the governor on this initiative.

“The State of Alaska continues to take an active role in the development of its enormous rare earth and critical minerals potential,” said Ucore’s McKenzie. “The allocation of substantial funding specifically targeting rare earth and strategic resource development at Bokan Mountain and across the state is a tremendous advantage for a very young industry with immense upside potential for employing Alaskans and adding to the state’s export revenue. We applaud Gov. Parnell’s initiatives and look forward to working with the state to advance its critical metals revenue base.”

“It is nice to see the state take that first step to have a program on the rare earths,” Freeman said. “I take my hat off to the state for getting out in front of the curve and trying to get some new information generated – whether it is rare earths or other elements.”

The Avalon Development president is among a growing group of exploration geologists who have told Mining News that the geological and geophysical surveys being conducted by the state provide the private sector with information vital to unraveling the complex geology of Alaska’s vast expanse.

“I think we are going to have to use more remote-sensing exploration technology – geophysics, airborne surveys – and I think we are going to have to build up our regional database,” NovaCopper Inc. President and CEO Rick Van Nieuwenhuyse told Mining News. “Certainly the state has been active in that in the past, and I hope they continue to do so because it really does form good baseline information for exploration geologists to use.”

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