By Curtis J. Freeman, Cpg #6901
PNA Contributing Columnist 

Alaska mining news summary from geologist Curt Freeman

Freeman says although budgets for major companies for Alaska are not likely to change drastically in 2002 despite the fact metals prices are up, junior equity markets are surprisingly buoyant and should provide more immediate capital for investment in Alaska this year


April 14, 2002

The snows are rapidly retreating and the Alaska mining industry is busy sharpening picks and pencils as it prepares for the summer season.

Metals prices are on the rebound and a surprisingly vigorous economic recovery is under way in the United States. Although budgets for major companies for Alaska are not likely to change drastically in 2002, junior equity markets are surprisingly buoyant and should provide more immediate capital for investment in Alaska this year.

Western Alaska

Novagold Resources announced the results from preliminary economic studies at its 23 million ounce Donlin Creek gold deposit in southwestern Alaska.

The study was based on an initial 20,000 ton per day milling operation, a similar tonnage throughput from a larger tonnage base and a scaled operation that would start at 8,000 tons per day and scale up to 20,000 tons per day.

Annual production for years one to five would range from 1.05 million to 743,000 ounces using a lower cut-off grade of 2 grams gold per tonne. Average grade for the first five years ranges from 4.9 to 5.3 grams of gold per tonne while life of mine average grades are 3.78 to 3.83 grams gold per tonne. Waste to ore stripping ration would range from 5.0 to 5.9.

Pebble Partnership copper gold molybdenum mine project Alaska Northern Dynasty NAK NDM

Initial capital costs would range from $378.2 million for the scaled operation to $604.9 million for the full-scale operation.

Cash costs would range from $172 to $177 per ounce produced with total production costs of $226 to $241 per ounce.

The analysis indicated that the project would achieve a pre-tax rate of return of 15-25 percent based on gold prices ranging from $300 to $350 per ounce.

The study presented a series of recommendations designed to improve the economics of the property including additional metallurgical studies, off-site refining of a high-grade concentrate and investigation of bio-oxidation heap leaching on lower grade (0.5-2 gram per tonne) material.

The company also announced that it expected to close a $20 million Canadian private placement by mid-April. Proceeds from this financing will go toward a planned US$8 million exploration program that will see the company vest at 70 percent interest before the end of 2002.

Navigator Exploration and partner Chapleau Resources announced exploration plans for their Kougarok tantalum-tin project on the Seward Peninsula.

The partners plan to conduct a $600,000 drilling program in 2002. Approximately 2,400 meters of drilling will be concentrated on the Real Top, Hill Top and Main Plug prospects. Work is expected to begin in early June.

Quaterra Resources said it plans to raise approximately $1.2 million via private placement to conduct exploration on its Think Zinc, Rocky Mountain, Sinuk River and Big Bar base metal projects on the Seward Peninsula. Work planned includes drilling of on all four projects where previous work outlined gravity and geochemical anomalies.

17 helicopters, Cessna 206 support plane, mining and oil exploration,  precision long line, core and seismic drills

Eastern Interior

Kinross Gold has been sent back to the drawing board for additional economic impact studies relating to its satellite True North operation in the Fairbanks District.

A recent court ruling asked the company and the state Department of Natural Resources to conduct additional impact studies directed at how the True North operation affects local tourism-related businesses.

True North ore is trucked approximately 10 miles to the company's Fort Knox mill complex and it is along this haul road that the additional studies are to be completed. The combined Fort Knox-True North operations churned out 411,221 ounces of gold at a cash cost of $236 per ounce in 2001.

Crowley Fuels keeps Soloy Helicopters moving across Alaska

Teryl Resources said it has entered into a joint venture with LinuxWizardry Systems Inc. that will allow Teryl to acquire a 50 percent interest in 30 mining claims on Fish Creek adjacent to Teryl's Gil joint venture with Kinross Gold.

Teryl can earn its interest by issuing LinuxWizardry 200,000 shares of its common stock and paying LinuxWizardry a 5 percent production royalty up to $2 million.

Teryl can purchase the 5 percent royalty interest within the next year for $500,000 and must expend $500,000 on property exploration and development within three years.

Rimfire Minerals Corp. said it has entered into two option agreements with AngloGold U.S.A. Exploration Inc. whereby AngloGold can earn up to a 70 percent interest in the Eagle and ER-OGO-Fire prospects in the Goodpaster District.

AngloGold can earn an initial 50 percent interest in these projects by spending $400,000 on exploration and paying Rimfire $100,000 in staged payments over four years. AngloGold may increase its interest to 70 percent by expending an additional $500,000 per property on exploration.

Previous work at Eagle included limited drilling within a 1.5 by 3 kilometer gold-arsenic-bismuth-tungsten anomaly while exploration at ER-OGO-Fire identified an as-yet untested gold-arsenic-antimony-silver-bismuth soil anomaly that measures 400 meters by 1,800 meters.

Alaska Range

As part of planned corporate changes, Nevada Star Resources Corp. said Monty Moore has resigned as president and has been appointed chairman of the board of the corporation.

Gerald Carlson was appointed as president of the company.

The company also said it is proceeding with its takeover of M.A.N. Resources.

M.A.N.'s primary asset is the Tangle Lakes platinum group element project in the central Alaska Range.

Project operator Golconda Resources and partner Shear Minerals have announced that core drilling has commenced on their Shulin Lake diamond project near Talkeetna.

The drilling is designed to follow-up reverse circulation drilling completed earlier this year which intersected a pipe-like volcanic structure at shallow depths. These holes returned diamond indicator minerals including eclogitic garnet and chrome diopside.

The current core drilling program is designed to test the pipe to a depth of 700 feet and to define the geometry of the pipe.

Southeast Alaska

Quaterra Resources said it plans to raise approximately $1.2 million via private placement to conduct exploration on its Duke Island copper-nickel-platinum group element project near Ketchikan.

Work planned includes a low-level airborne geophysical survey followed by targeted ground geophysics to develop additional drilling targets.

The company also said it is in discussions with potential joint venture partners on its Union Bay platinum group element project north of Ketchikan.

Other News

The 18th Biennial Conference on Alaska Mining was held in Fairbanks in early March and as usual, was well attended and well organized. Compliments are due to conference leaders Rich Hughes and Tom Bundtzen and to the entire organizing committee who made the conference such a success!

If you have not already acquired a copy, go out, now, and buy "Rock Poker to Paydirt - The History of the Alaska's School of Mines and its Successor" by Leslie Noyes in cooperation with Earl Beistline and Ernie Wolf.

It's a great read and will bring back memories, both good and bad, for anyone who attended the school.

The state Division of Geological and Geophysical Surveys has released new airborne geophysical data for the Broad Pass, Liberty Bell and Salcha-Pogo areas of the state.


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