Alaska mining news summary: Exploration activities for gold and base metals this year appear to be on the rise
Geologist Curt Freeman says some 2002 fieldwork already under way; buoyant metals prices contribute to what appears to be shaping up to be an exciting season
Last updated 3/24/2002 at Noon
Spring is in everyone's step in the Alaska mining industry even if spring is not quite yet in the air here in Alaska. Buoyant spirits are related to surprisingly buoyant metals prices and positive economic news from the U.S. economy.
Plans for 2002 are in progress and fieldwork on some projects already is under way. Exploration activities for gold in 2002 appear to be on the rise compared to 2001 as is exploration for base metals.
The professional begging (money raising) season is in full swing for junior and intermediate sized companies while newly merged majors are looking to get their houses in order before swallowing the next big fish or big deposit.
All in all, 2002 is shaping up to be an exciting year in Alaska.
Teck Cominco American said it plans to reduce zinc production at its mines and smelters worldwide in order to dry up supplies and strengthen base prices for the metal. These cutbacks affect its Red Dog mine which is scheduled to decrease production in 2002 by 60,000 tonnes of concentrate to 1,000,000 tonnes. This equates to a total reduction of approximately 33,000 tonnes of zinc metal.
Novagold Resources announced that preliminary economic studies conducted on its Donlin Creek deposit in southwestern Alaska suggest that something like 18 of the deposit's 23 million ounce gold resource could be economically recovered. The company will continue to refine its preliminary feasibility study but estimated that it is hoping to begin construction on a new mine-mill complex by 2003 with production start-up the following year.
Alaska newcomer TNR Resources Ltd. said it has entered into an agreement with Novagold Resources to acquire the Rock Creek gold deposit in the Nome District.
TNR can earn a 49.9 percent interest in the one-million ounce Rock Creek deposit by spending $10 million on exploration and development by December 2004 and issuing 500,000 shares of its common stock to NovaGold.
The Rock Creek deposit contains resources in all categories of 1,118,000 at a grade of about 2.7 grams of gold per tonne.
The deposit remains open to expansion.
The companies plan to conduct exploration on the project at an accelerated pace in order to bring the property to production within 3 years.
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EMEX Corp. announced results from 2001 exploration conducted through its subsidiary North Star Exploration at its Takotna gold project in the Ophir District. During 2001 the company completed 2,924 feet of drilling and additional surface prospecting on the project. 2001 drilling results included 16 feet grading 1.97 grams gold per tonne in hole TH-01-01 and 15 feet grading 1.22 grams gold per tonne in hole TH-01-03. Mineralization was hosted in altered Tertiary granitic rocks. The Takotna project is on lands owned by Doyon Ltd. The North Star-Doyon agreement expired on Feb. 1, 2002 and is in the process of being renegotiated.
TNR can earn a 50 percent interest in the one-million ounce Shotgun deposit by spending $3 million on exploration and development by December 2005 and issuing 250,000 shares of its common stock to NovaGold.
TNR can earn an additional 20 percent interest by expending $6 million by December 2008 at which point NovaGold has the option to regain a 50 percent interest in the project by expending the next $8 million.
The Shotgun deposit currently contains resources of 980,000 ounces of gold at a grade of 0.93 grams of gold per tonne.
Mineralization at this high-level intrusive-hosted occurrence remains open to expansion and at least 10 high-priority exploration targets have been targeted for additional exploration.
Kinross Gold announced year-end results from its Fort Knox and True North operations in the Fairbanks District.
The combined operations churned out 411,221 ounces of gold at a cash cost of $236 per ounce.
Initial production targets of 450,000 ounces of combined production were not met due to trucking delays in shipping of True North ore to the Fort Knox mill and lower than anticipated grades at True North in the third quarter.
During 2001 the mill processed 14.2 million tonnes of ore grading 1.05 grams of gold per tonne.
Mill recovery was 85 percent.
Total production costs including $107 per ounce for depreciation, depletion, reclamation and amortization were $314 per ounce, a $20 per ounce decrease over 2001 levels.
The company also announced that resources in all categories now stand at 3.78 million ounces at approximately 1 gram of gold per tonne.
Permitting for an expansion of its operations at True North is in progress and is designed to increase mine life at True North by several years.
EMEX announced results from 2001 exploration conducted through its subsidiary North Star Exploration at its Northway polymetallic project near the Yukon border.
During 2001 the company completed 6,991 feet of drilling, auger soil drilling, and IP and magnetic surveys.
2001 drilling results included 7.8 feet grading 1.89 grams gold per tonne and 121.2 grams silver per tonne in hole RM-01-06 and 9.9 feet grading 2.1 grams gold per tonne in hole RM-01-13.
A strong IP chargeability anomaly was outlined over an area measuring 1,650 feet by 1,600 feet.
The anomaly is located west of previous drilling and remains open to expansion.
The Northway project is on lands owned by Doyon Ltd. The North Star-Doyon agreement expired on Feb. 1, 2002 and is in the process of being renegotiated.
EMEX announced results from 2001 exploration conducted through its subsidiary Platinum Palladium Holdings at its Chip Loy and Roberts nickel - copper - platinum group metals prospects in the western Alaska Range.
During 2001 the company completed 2,416 feet of drilling and additional surface prospecting.
Surface samples returned grades up to 16.9 grams of platinum group elements per tonne, 2.27 percent nickel and 1.31 percent copper.
2001 drilling results at Roberts included 15 feet grading 2.38 grams platinum plus palladium per tonne, 0.43 percent copper and 0.90 percent nickel in hole R-01-01B while drilling results at Chip Loy include 4.5 feet grading 1.54 percent nickel and 0.37 percent copper in hole CL-01-02.
Additional work is planned on these mafic-sill hosted occurrences.
Project operator Golconda Resources and partner Shear Minerals have completed four reverse circulation holes on their Shulin Lake diamond project near Talkeetna.
The drilling followed up on the discovery of volcanic crater facies mafic pyroclastics that were intersected by previous diamond drilling in 2001.
Tests carried out for diamond indicator minerals revealed a suite of eclogitic garnets, chrome diopsides and diamond stability field chromites.
These rocks may be the source of the indicator minerals which were discovered in surface and stream samples on the property.
The drilling completed in 2002 intersected pyroclastic rocks over an area of 1000 feet by 1000 feet.
At least three different igneous phases were identified while country rocks in the area consist of Tertiary sediments.
Golconda indicated that the drilling had intersected a pipe-like structure of lamproitic or similar composition.
The samples are being tested for diamonds and diamond indicator minerals in Calgary.
The companies said a diamond drill rig would be moved to the property shortly to further explore the property.
Kennecott (70.3 percent) and Hecla (29.7 percent) announced fourth quarter and year-end 2001 production results from the Greens Creek mine on Admiralty Island.
The mine reported increased silver production for the year from higher grade ore.
The total cash cost per ounce of silver at Greens Creek in 2001 was $2.41.
During 2001 the mill processed 658,076 tons of ore (1,802 tons per operating day) at a cost of $47.42 per ton.
For the year, the mine produced 10,965,068 ounces of silver at a cash cost of $2.41 per ounce.
The mine also produced 87,591 ounces of gold, 24,870 tons of lead and 70,215 tons of zinc.
Year-end total production costs were $4.79 per ounce of silver produced, down slightly from $4.87 per ounce total cost for 2000.
Total proven and probable reserves at the mine now stand at 7,590,524 tons grading 0.133 ounces per ton gold, 16.7 ounces per ton silver, 4.6 percent lead and 11.6 percent zinc.
Total resources in all other categories now stands at 1,989,680 tons grading 0.141 ounces per ton gold, 16.1 ounces per ton silver, 4.6 percent lead and 11.3 percent zinc.
Silverado Gold Mines Ltd. announced that it intended to reopen production at its Nolan Creek placer gold operation in 2002. The underground mine will operate on a year-round basis with initial mining from its 140,000 ounce reserve block. Historic production from Nolan Creek is approximately 200,000 ounces of gold including a 135 troy ounce nugget.
The endless permitting muddle at Redfern Resources' Tulsequah Chief project in British Columbia has gotten worse with a recent court ruling that struck down the Project Approval Certificate issued to the project by the British Columbia government. Alaska has played its own ugly part in thwarting development of this deposit. Unofficial response from a British Columbia regulator was "People who celebrate unemployment of those who most need it are a perverse lot."
Seabridge Resources announced that it had entered into an agreement with Wheaton River Minerals to acquire a 100 percent interest in the Red Mountain gold project near Stewart, British Columbia. Seabridge can acquire its interest by issuing 800,000 common shares of its stock. The structurally controlled deposit contains resources in all categories of approximately 483,000 ounces of gold at a grade of about 7 grams of gold per tonne.