Mining News: Upturn in mining continues across Alaska
Increased global demand for zinc and gold bodes well for operations at Red Dog, Fort Knox, Pogo and state’s other producing mines
Special to Mining News
The Alaska mining industry continued its increased pace of activities in August, even as the first hint of autumn starts to be felt across the state. Metals prices were relatively stable with increasing demand for zinc and gold, the two metals that generate the most revenue from Alaska’s operating mines. Wood Mackenzie is forecasting a 3 percent increase in global refined zinc demand in 2017 to 14.7 million metric tons. With refined zinc production limited to a 2 percent increase, to 13.8 million metric tons, that leaves the zinc market in deficit again this year. Total reported zinc exchange stocks fell 198,800 metric tons during the second quarter to 356,180 metric tons. Total exchange zinc stocks are now estimated at 9.5 days of global consumption, well below the 25-year average of 23.4 days.
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The World Gold Council reported that during the second quarter of 2017, other than Exchange Traded Funds (ETF) investment, gold consumption rose for bar and coin consumption, jewelry demand, central bank purchases and technology demand.
On the exploration front, several new project start-ups commenced operation in August and promising results from ongoing exploration have begun to trickle in the from field. Stay tuned, there is more to come!
WESTERN ALASKATeck Resources Ltd. and partner NANA Inc. announced second quarter 2017 results from its Red Dog mine. During the quarter, the mine produced 127,800 metric tons of zinc in concentrate. Zinc ore grade decreased significantly to 14.2 percent, while mill recoveries fell slightly to 80.6 percent. The mine also produced 31,600 metric tons of lead in concentrate. Lead ore grade increased to 5.2 percent, while mill recoveries decreased slightly to 54.7 percent. The mine posted a US$114 million operating profit for the quarter, up significantly from the US$71 million profit in the year-previous period. Zinc production in the second quarter was 16 percent lower than the same period a year ago, primarily due to lower grades and recoveries, which were partially offset by higher mill throughput. Lead production increased 17 percent compared with output last year, primarily due to higher grades. Under the operating agreement between Teck and NANA, the mine currently pays to NANA a 30 percent royalty on net proceeds from production. This royalty increases by 5 percent every fifth year to a maximum of 50 percent, with the next adjustment to 35 percent occurring in the fourth quarter of 2017. Royalty costs for the quarter were US$21 million versus US$7 million in the year-previous quarter. The concentrate shipping season commenced on July 1, with expected sales of 145,000 metric tons of contained zinc in the third quarter and 165,000 metric tons in the fourth quarter, reflecting the normal seasonal pattern of concentrate sales.
Redstar Gold Corp. announced encouraging soil sampling results from recent field efforts at its Unga gold-silver project near Sand Point. About 600 soil samples were collected over a 4.5 kilometer (2.8 miles) zone extending from the Orange Mountain area to the Shumagin area of the project. At Shumagin, the combined soil grid data show an approximate 1,500-meter long by 100-meter wide zone containing anomalous gold (from 20 to 50 parts per billion) with higher values near exposed gold-silver bearing breccia outcrops. The 2017 soil grid work covering the Northern Footwall Anomaly returned elevated gold, silver, copper and zinc in soils that are parallel to common northeast-trending structures visible throughout the footwall area. Soils with values of up to 130 parts per billion gold, 1.7 parts per million silver and highly anomalous copper, lead and zinc were found within the areas of observed quartz-sericite-pyrite altered basalt and andesite and quartz-adularia-carbonate veins. At the Red Creek Trend and Saddle Creek Anomaly, soil sampling returned approximately 100 meter wide northeast-trending zones with elevated silver, copper, lead and zinc with sporadic gold with values similar to those that occur along the Main Breccia at Shumagin. Prospecting work within creek beds that cross the Red Creek Trend revealed exposures of sheared and quartz-sericite-pyrite altered basalt and volcanic breccia cut by centimeter scale quartz stockwork with minor carbonate, pyrite and galena that returned highly anomalous Shumagin-style pathfinder elements. In total, the 2017 soil sampling effort confirmed the continuity of alteration and mineralization over a 4.5 kilometer (2.8 miles) long zone. The company plans to conduct follow-up work on several of the newly defined targets while it is conducting drilling on more advanced prospects during its phase 2 program, scheduled to begin in September.
CopperBank Resources Corp. announced that a two-rig drilling program has commenced at its Pyramid project located on Aleut Native Corporation lands on the Alaska Peninsula. The first phase of drilling is composed of a minimum of 3,000 meters of drilling designed to test the lateral extensions of known porphyry style copper mineralized. The second phase of drilling will take bigger step-outs to test areas of known mineralization and/or alteration observed at the surface. An alteration halo of about 12 square kilometers was reported by the U.S. Geological Survey, inside of which is the 2 square kilometer area outlined by drilling to date.
CopperBank Resources Corp. also announced that it will conduct a reconnaissance exploration program at its San Diego Bay prospect located 10 kilometers west of its Pyramid project, both of which are located on Aleut Native Corporation lands on the Alaska Peninsula. The program will consist mainly of prospecting and soil sampling over areas where historical work detected anomalous copper and gold values. Historical copper grades reaching 4.3 percent and 16 percent copper and several gold values exceeding 1 gram per metric ton gold are reported in rock samples. The San Diego Bay prospect covers a 40-square-kilometer area of gossan, strong hydrothermal alteration and intrusive rocks, consistent with porphyry copper systems worldwide. All porphyry alteration facies have been observed, including zones of potassic, advanced argillic, phyllic and pyrite zones. Previous Landsat imagery has identified widespread zones of high-temperature clay alteration within one of the largest color anomalies in southern Alaska.
INTERIOR ALASKAKinross Gold announced second-quarter 2017 results from the Fort Knox mine near Fairbanks. The mine produced 91,848 ounces of gold at a cost of US$635 per ounce in the second quarter versus 97,221 ounces of gold at a cost of US$793 per ounce in the year- previous period. Production decreased compared with second quarter of 2016 largely due to a colder spring season that affected heap leach performance, which was offset by an increase in mill grades. The mill treated 3,069,000 metric tons of ore grading 0.86 g/t gold with a mill recovery of 84 percent. The heap leach saw additions of 5.83 million metric tons of ore grading 0.26 g/t gold.
Endurance Gold Corp. reported the results of the induced polarization and ground magnetic surveys that were undertaken on the Elephant project in the Rampart-Eureka-Manley Hot Springs district. A total of about 43 line-kilometers of induced polarization surveys and 39 line-kilometers of magnetic surveys were completed during the 2017 program. The surveys identified four prioritized resistivity and chargeability anomalies that warrant drilling. The results from the induced polarization survey are dominated by a linear east-west trending low that corresponds to the Elephant Mountain Fault traversing the intrusive. In addition, at least three less dominant linear northwesterly trending resistivity lows intersect the Elephant Mountain Fault complex. Two of these northwesterly trending resistivity lows are coincident with anomalous gold-in-soil, including the high-priority South Zone soil anomaly. Elsewhere on the grid, a well-defined two-lobed chargeability feature, referred to as the North zone and the Pump zone targets what are estimated at 1,200 by 600 meters in size and are associated with pervasively sericite altered granodiorite and 1 percent to 3 percent disseminated sulfides, quartz veinlets and sulfide-quartz veinlets with associated gold. These chargeability anomalies are part of a kilometer-scale, plus-100 part per billion gold-in-soil anomaly, that was partially tested by a 2016 North zone hole, EL 16-13, which returned 0.40 g/t gold over 147.1 meters, including 0.63 g/t gold over 48.2 meters. Future plans at the North, Pump and Central zones will focus on discovery of the feeder zones and/or oxidized lower grade gold zones. At the South Zone target, south of the Elephant Mountain Fault, drilling is recommended to focus on expanding on the South Zone discovery drill hole and identifying the source of the near surface chargeability anomaly.
ALASKA RANGEMillrock Resources Inc. announced an update on its Liberty Bell project, located in the Bonnifield Mining District. The program is funded by a subsidiary of Kinross Gold Corp. The project targets distal skarn gold deposits and possibly porphyry copper-gold deposits. The company reported that about 1,600 soil samples were collected from the property as well as stream sediment and rock samples. Once results are received and compiled with existing project data, drill targets will be selected for a proposed 2018 program.
Coventry Resources announced commencement of 2017 exploration at the Stellar copper-gold project. Diamond drilling has begun at the high-grade Zackly copper-gold deposit with two rigs. Historic resources at Zackly stand at 1.5 million metric tons grading 2.9 percent copper and 4.51 g/t gold. One rig will evaluate the eastern and western extensions of the Main Skarn already identified in previous induced polarization surveys, while the second rig will twin about 12 of the historically drilled holes in the Main Skarn to verify grade-thickness intervals and allow an industry-compliant resource estimate to be completed. The twinned holes also will provide structural details and material for use in metallurgical test-work programs to evaluate current processing options for Zackly skarn mineralization. In addition to drilling, induced polarization surveys and geological mapping will be undertaken at Zackly, as well as the nearby Mars copper-gold target and Senator copper targets. The company recently staked an additional 70 state mining claims over possible extensions of mineralization. The company also indicated that it would conduct detailed geological mapping and structural interpretation of existing drill core at its nearby high-grade Caribou Dome copper deposit to provide further insight on the geometry of mineralized lenses and better plan the next round of drilling.
SOUTHEAST ALASKAConstantine Metal Resources Ltd. announced initial drilling results from its planned 7,000-meter, US$7 million program at its Palmer volcanogenic massive sulfide project near Haines. Results from the newly discovered Nunatak AG zone, 3 kilometers from the current resource base, included hole CMR17-92, which returned 17.8 meters grading 11.7 percent zinc, 0.2 percent copper, 6.3 grams per metric ton silver and 0.2 g/t gold, and 6.7 meters grading 5.7 percent zinc, 2.2 percent lead, 30 g/t silver, and 0.2 g/t gold, hole CMR17-94, which returned 24.6 meters grading 260 g/t silver, 0.5 g/t gold, 1.4 percent zinc, and 0.5 percent lead, including 10.3 meters grading 461 g/t silver, 0.9 g/t gold, 2.0 percent zinc, and 0.7 percent lead and hole CMR17-96, which returned 20.4 meters grading 9.9 percent zinc, 0.2 percent copper, 14.4 g/t silver and 0.1 g/t gold. Strong metal zonation occurs between holes, grading from silver-gold-barite dominant to zinc dominant. Mineralization varies from massive barite-sulfide to semi-massive sulfide, stockwork and replacement. Additional drilling is continuing with assays pending.
Grande Portage Resources Ltd. announced that it has commenced diamond drilling at its Herbert project, a mesothermal vein gold deposit near Juneau. The company intends to drill about 13 holes from up to four different platforms which will test up to four separate major veins and their satellite structures. The company will specifically target the Main, Deep Trench, Ridge and Goat veins and will test targets significantly deeper and further to the east than in past campaigns. The project hosts industry-compliant indicated resources of 821,100 metric tons containing 182,400 oz. of gold at 6.91 g/t gold. It also hosts inferred resources of 51,600 metric tons containing 12,800 oz. of gold at 7.73 g/t gold. The system is open to length and depth and is host to at least six vein-fault structures that contain ribbon structure gold-quartz-sulfide veins.
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