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Vol. 22, No. 45 Week of November 05, 2017
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Upbeat mood buoys outlook for AMA meet

On heels of increased exploration, development and production activities in 2017, Alaska miners welcome signs of industry revival

Curt Freeman

Special to Mining News

In early November, the Alaska Miners Association will hold its annual convention in Anchorage. Unlike the past four or five years, the excitement surrounding the convention this year is palpable due to the steady increase in exploration, development and production activities in Alaska in 2017.

Clear signs of the industry’s long-awaited revival include the fact that 11 new project acquisitions have taken place in 2017, half of which involve companies that are newcomers to the Alaska mineral industry. Total exploration spend for 2017 is up for the second straight year, easily topping the US$90 million mark, and this, after four years of steadily decreasing investments beginning in 2012.

With metal prices stable or rising, output and revenue from Alaska’s mines is healthy and growing.

The same lack of investment in new projects industrywide during the past four to five years, coupled with strong production figures, has created a shortfall in the number of high-quality mid-tier projects that producers can acquire to fill their short and long-term production pipelines. As a result, major and intermediate producing companies have been actively acquiring new Alaska projects at an earlier stage of exploration than typically seen.

While the recovery locally and around the globe is in no way at the “boom” stage, it is clear that 2018 promises to be an exciting year for the Alaska mineral industry.

Western Alaska

Northern Dynasty Minerals Ltd. announced a sweeping series of new development considerations for its Pebble copper-molybdenum-gold project near Iliamna. Among the mine design changes being considered is reducing the footprint of the project’s major mine facilities (pit, tailings storage facility) to roughly 5.4 square miles. Mine operations in the Upper Talarik River watershed region would be eliminated, minimizing the project’s environmental footprint and addressing stakeholder concerns relating to the local salmon population. An enhanced tailing storage facilities (TSF) would be constructed with enhanced buttresses and slopes and a greater safety factor. Potentially acid-generating tailings would be separated from other tailings and stored in a lined TSF. All tailings storage would be consolidated to the North Fork Koktuli River area. The project would no longer require the use of waste rock piles, significantly reducing risk associated with acid rock drainage and potential related environmental impacts. Although safely used in Alaska and around the world to increase gold recovery, the project would not use cyanide in the recovery process. The development would include the creation of a new ferry route across Iliamna Lake, minimizing the total road area, stream crossings, bridges, and culverts and ultimately minimizing the project’s impact on local wetlands. The mine also would be designed to withstand the greatest possible predicted seismicity. Under this scenario, the project’s estimated annual revenue to the Lake & Peninsula Borough would be $19 million to $21 million per year. Estimated annual state revenue would be $49 million to $66 million per year, and estimated jobs created for Alaskans would total 1,500-2,000. A series of other community enhancements also were announced for the project.

CopperBank Resources Corp. reported results from a 13 diamond-drill-hole, 3,690-meter 2017 drilling program on its Pyramid copper project near Sand Point. Significant results include hole 17PY032, which intersected three significant near-surface intervals totaling more than 290 meters at grades higher than 0.33 percent copper, including 201 meters 0.48 percent copper, 0.021 percent molybdenum and 0.1 gram per metric ton of gold, hole DDH 17PY033, which intersected 300 meters of 0.53 percent copper including 40.85 meters of 1.17 percent copper, and hole DDH 17PY034 which intersected 232.88 meters of 0.19 percent copper. Results from the higher-grade portions of these holes fall outside the current resource envelope and mineralization remains open laterally and at depth. Deeper mineralization associated with the main quartz diorite porphyry intrusion is dominantly chalcopyrite with chalcocite disseminated throughout the stratigraphic sequence. However, near-surface mineralization in hole PY034 was hosted in hornfels intruded by numerous porphyry dykes with continuous copper mineralization and higher molybdenum grades than observed elsewhere in the deposit. Mineralization in these near-surface rocks is mainly composed of disseminated chalcopyrite and molybdenite with chalcocite. Additional drilling results are pending.

Redstar Gold Corp. announced completion of 2,641 meters of drilling in 13 drill holes at its Unga gold-silver project near Sand Point. The program tested four zones and Shumagin-style breccias were intercepted in all 13 drill holes. Colloform-textured carbonate breccias were intercepted in eight drill holes at a boiling zone elevation of 85 meters to 125 meters below sea level. Two drill holes intersected Shumagin-style breccia and stockwork in the newly identified Rising Sun gold zone. At the Shumagin Gold Zone, which consists of three zones (Main Breccia, Bunker Hill, East), 11 drill holes totaling 2,407 meters were completed over 750 meters of strike length with depths ranging from 85 to 225 meters below sea level. Previous drilling indicated that moderate-dipping Shumagin-style quartz-adularia +/- carbonate +/- rhodochrosite breccias were localized within the hanging-wall, while a steeper dipping, high-grade colloform textured, carbonate - green clay - pyrite breccia occurred in the footwall. Shumagin-style breccias were intersected in all 11 drill holes targeted in this zone, while colloform-textured carbonate breccias were intercepted in all eight holes drilled deep enough to reach the footwall zone target. At the Rising Sun gold zone near the historic Apollo gold mine in the southern Apollo-Sitka Trend, two holes were designed to test breccias and stockwork that are exposed at the surface that occur sub-parallel to the main Apollo gold zone. Shumagin-style breccias and stockwork were successfully intersected in both drill holes and are similar to those that occur historically along the Apollo-Sitka Trend mined over 100 years ago from the late 1880s to early 1920s. Assays are pending from this program.

Interior Alaska

Endurance Gold Corp. reported additional results of geochemical sampling completed on the Trout prospect, part of its Elephant project in the Rampart-Eureka-Manley Hot Springs district. The 2017 soil survey has identified gold-in-soil values over 1 part per million along a 1,000-meter-long-plus, 100 parts-per-billion soil anomaly. Previous grab rock sample results returned up to 9.64 g/t gold. Mineralization occurs in a northeast-southwest trending shear zone hosted within a syenomonzonite intrusive plug. Mapping identified an iron-oxidize altered intrusive-hosted shear zone which was observed over a variable 8- to 23-meter width with a northeast trending strike. Within this anomaly is a 10- to 15-meter-wide gold-in-soil anomaly averaging greater than 500 ppb gold with an open-ended strike length of about 130 meters. Peak values within this core zone include 2,330 ppb gold and 2,100 ppb gold, and up to 4,130 ppb silver. The higher gold-in-soil results are associated with elevated arsenic values. Due to oxidation and recessive weathering, there is no outcrop within the shear zone but frost boils in the area of the highest gold-in-soil anomaly have yielded oxidized quartz veining with grab samples assaying up to 1,260 ppb and 1,065 ppb gold, and up to 16,400 ppb silver. The shear zone and the greater than 500 ppb gold-in-soil anomaly is open in both directions. Additional follow-up work is planned for 2017.

Endurance Gold Corp. also reported additional results of geochemical sampling completed on its South Fork prospect, also part of its Elephant project. Initial assay results from 2017 sampling on South Fork returned up to 6.6 ppm gold and 1.94 percent lead. Follow-up rock samples returned gold values including 10.35 ppm, 6.73 ppm, 5.15 ppm, 4.10 ppm, and 3.53 ppm, confirming the gold potential associated with one or more structural linear features. The three highest gold-in-rock samples collected in 2017 also returned 0.48 percent lead, 1.280 percent lead, and 1.205 percent lead respectively. Elevated arsenic is also associated with the higher gold values in rock. Mineralization is related to oxidized sulfides associated with quartz veining, vein stockwork, and quartz healed breccia hosted in hornfels altered clastic sediments. Hand trenching exposed the quartz-breccia over about nine meters in estimated true width associated with quartz breccia and quartz vein stockwork with slickensides and oxidized sulfides. Chip sampling averaged 0.547 ppm gold over 9.14 meters, including 0.846 ppm gold over 4.57 meters. With the trench assay and other rock samples, the quartz-breccia mineralization has now been confirmed in rocks over an east-west distance of 250 meters. Additional follow-up work is planned for 2017.

Alaska Range

PolarX Ltd. (formerly Coventry Resources) reported that visible mineralization was encountered in all of the drill holes completed at its high-grade Zackly copper-gold skarn deposit on the Stellar copper-gold project in the central Alaska Range. The company planned to complete 2,000 meters of drilling in 13 holes at Zackly and has completed additional induced polarization geophysics at the nearby Mars porphyry copper-gold prospect. Key geological observations from the drilling include evidence for multiple phases of mineralization including an initial alteration consisting of formation of marbles and weakly mineralized skarns adjacent to a diorite intrusion and introduction of disseminated iron, copper and molybdenum sulfides. A later, stronger mineralizing event included introduction of widespread garnet-bearing skarns containing clots, veins and disseminations of covellite, native copper and bornite, with local formation of secondary chalcocite and zones of massive magnetite-bornite-chalcopyrite skarns up to several thick. Previous drilling in 1981 and 1982 also encountered occasional coarse gold. Drill core also contained porphyry style veins overprinting potassic alteration containing potassium-feldspar and secondary biotite along with sub-vertical hydrothermal breccias, both of which suggest the possible presence of a buried porphyritic intrusion. Assay results from the 2017 drilling are pending. At the Mars prospect, ground geophysics indicates a chargeability anomaly consistent with the top of a mineralized porphyry copper system located approximately 100‐150 meters below surface. The Mars prospect lies six kilometers to the northwest of the Zackly deposit along a mineralized structural corridor which may host several buried porphyry copper-gold systems. At Mars, strong surface copper and gold values occur in soils and rocks, with rock-chip values up to 7.4 percent copper and 1.8 g/t gold. These anomalous rocks and soils lie directly above the induced polarization chargeability anomaly over a two-kilometer strike length. The chargeability anomaly is open to expansion. Assays are pending from this program.

Northern Alaska

Goldrich Mining Co. reported final gold production figures for Goldrich NyacAU Placer LLC from its Chandalar placer gold mine in the Brooks Range. The mine production for 2017 was 14,670 ounces of raw placer gold, which is about equivalent to 12,000 ounces of fine gold. This compares with 10,209 ounces of raw gold, or roughly 8,200 ounces of fine gold, produced in 2016 and 4,400 ounces of raw gold, or about 3,600 ounces of fine gold, produced in 2015. The 2017 production season ran from about June 4 through Sept. 27. In addition, stripping of overburden and stockpiling of pay gravel was completed in mid-October. The partners also completed 231 sonic drill holes, totaling 14,271 feet in 2017. A total of 15,000 feet of previously conducted reverse circulation drilling delineated about 10.5 million cubic yards of mineralized material at an average grade of 0.025 ounces (0.78 grams) gold per cubic yard containing an estimated 250,000 ounces of gold.

Southeast Alaska

Hecla Mining Company announced preliminary production results for the third quarter of 2017 at its Greens Creek mine. The mine’s third-quarter production was 2.3 million oz of silver and 12,563 oz of gold, compared to 2.4 million oz and 11,988 oz, respectively, in the third quarter of 2016. The mill operated at an average of 2,391 tons per day, a life-of-mine record for the operation.

Coeur Mining Inc. announced preliminary third-quarter 2017 production results from its Kensington mine. The mine produced 27,541 ounces gold during the quarter, a 4 percent quarter-over-quarter and year-over-year increase. The operation milled 172,038 tons of ore grading 0.17 ounces of gold per ton. Recovery was 94.1 percent for the quarter. Initial development ore was mined from the newly commissioned Jualin deposit. Production from Jualin is expected to ramp up as planned over the next twelve months. Higher anticipated grades from Jualin are expected to positively impact gold production in the fourth quarter. As a result, the company is estimating full-year production of 120,000 - 125,000 ounces of gold.

Constantine Metal Resources Ltd. reported additional assay results from four drill holes from resource expansion and upgrade drilling at the South Wall Zone of its Palmer volcanogenic massive sulfide deposit near Haines. A total of 10,718 meters were drilled as part of the recently completed dual-focus resource expansion and regional exploration drill program. The 2017 program included 10 holes for 3,221 meters at South Wall, 13 holes for 4,993 meters at the AG Zone, three holes for 1,006 meters at the Cap prospect, and six geotechnical holes totaling 1,499 meters. Drilling at AG Zone has continued to successfully define the zone with step-outs along strike and to depth from the initial discovery holes. Significant new results include 20.9 meters grading 8.4 percent zinc, 0.1 percent copper, 40 grams-per-metric-ton silver, 0.2 g/t gold from hole CMR17-95; 14.5 meters grading 7.5 percent zinc, 1.9 percent copper, 66 g/t silver, 0.4 g/t gold and an additional 10.1 meters grading 8.5 percent zinc, 0.5 percent copper, 57 g/t silver, 0.4 g/t gold from hole CMR17-97, 12.8 meters grading 12.0 percent zinc, 0.5 percent copper, 64 g/t silver, 0.7 g/t gold and an additional 13.4 meters grading 5.4 percent zinc, 1.7 percent copper, 11 g/t silver, 0.2 g/t gold from hole CMR17-88, and 7.9 meters grading 5.3 percent zinc, 1.5 percent copper, 35 g/t silver, 0.1 g/t gold from hole CMR17-100. Collectively, the six 2017 drill holes that tested this part of the deposit have defined a thick new high-grade sub-zone of mineralization over a vertical dip length of roughly 150 meters and over a strike length of about 60 meters, which is open to further expansion. The average cumulative drill width of mineralization in each of the six holes is greater than 20 meters, with a length weighted average of 1.6 percent copper, 7.5 percent zinc, 43.1 g/t silver and 0.32 g/t gold. Additional drill results are pending.

Grande Portage Resources Ltd. announced that it has completed 12 drill holes (3,700 meters) at its Herbert gold project near Juneau. Initial drill results from the Goat Vein include 2.64 meters grading 27.93 g/t gold in hole 17L-2, 1.96 meters grading 7.5 g/t gold in hole 17L-3, and 6.3 meters grading 7.31 g/t gold in hole 17L-4. Significant results from the HW vein include 0.88 meters grading 10.54 g/t gold in hole 17K-1, 0.46 meters grading 26.3 g/t gold in hole 17L-1, and 1.34 meters grading 10.61 g/t gold in hole 17L-4. The drilling results confirmed the continuity of the Goat vein over 300 meters of strike and when combined with new surface samples and mapping, the strike of the Goat vein is now more than 650 meters. The 2017 drilling also confirms significant potential for the development of subsidiary high-grade veins in both the hanging and footwall of the Goat vein structure. Additional drill assays are pending.

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