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By Curt Freeman
PNA Columnist 

Alaska mining news summary: Gold prices take on new luster; exploration sector expects to see first year-on-year increase since '97

Low zinc prices have decreased the total production revenue from the industry's largest single producer, the Red Dog mine

 

Last updated 1/19/2003 at Noon



Another year has come and gone and Alaska's mining industry continues to generate jobs for its citizens and raw materials for the world. Although base metal prices remain mired at low levels, gold and platinum have risen steadily over the last month with gold in particular taking on new luster as it broke the $350 per ounce mark for the first time in five years. Platinum has rebounded from earlier lows and is now flirting with $600 per ounce levels while its geological running mate, palladium, has plummeted to the $230 per ounce level, a four-year low.

The exploration sector in Alaska is expected to see its first year-on-year increase since 1997 while low zinc prices have decreased the total production revenue from the industry's largest single producer, the Red Dog mine.

With any luck, Alaska will generate $1 billion in mine value for the seventh strait year in 2002.

Western Alaska

Novagold Resources announced final 2002 drilling results from its Donlin Creek deposit in southwestern Alaska.

During the year the company completed 195 core holes totaling 39,158 meters of drilling and 152 rotary holes totaling 11,851 meters of drilling.

Encouraging results continued to come in from the ACMA zone including hole DC02-869 with 19.9 meters grading 6.73 grams gold per tonne, hole DC02-870 with 62 meters grading 5.76 grams gold per tonne, hole DC02-869 with 19.9 meters grading 6.73 grams gold per tonne, hole DC02-878 with 16.3 meters grading 1331 grams gold per tonne, hole DC02-881 with 17.2 meters grading 6.21 grams gold per tonne and hole DC02-882 with 31.4 meters grading 5.42 grams gold per tonne.

Metallurgical testing is continuing to refine anticipated treatment processes at Donlin Creek and preliminary flotation tests using Newmont Mining's patented N2TEC flotation process showed recoveries of 96 percent from intrusive-hosted mineralization and 90 percent from sediment-hosted mineralization.

Results from the 2002 drilling programs and from on-going metallurgical tests will be incorporated into an updated preliminary feasibility study to be released jointly by NovaGold and partner Placer Dome in mid-2003.

Ventures Resource reported results from its 2002 exploration programs on its Flat and Donlin Creek North projects in southwestern Alaska.

At Flat work was conducted on the Golden Apex prospect where soil values defined three northeast-trending gold anomalies up to 2,700 feet long by 200 to 1,000 feet across.

Two anomalies are open down slope to the northeast toward the Walter Gulch placer gold mine.

Arsenic, antimony and mercury anomalies overlap the gold anomalies.

Gold values range from 25 to 1,805 parts per billion.

Sparse gold quartz float grabs yielded values up to 0.9 ounces of gold per ton.

Gold anomalous gullies on the west flank of Golden Apex feed into the Alpha Bowl, which yielded 600,000 ounces of historic placer gold production.

At Donlin Creek North, 1,800 stream sediment samples were taken in an 800-square-mile area and 30 new claims were added to the Timb block which abuts NovaGold's Donlin Creek deposit.

The claims straddle nine miles of the Moose Creek trend with which the Donlin Creek mineralization is spatially associated.

The company also announced that a new epithermal gold occurrence was discovered at the Ada claims, 20 miles east of Flat.

Host rocks at Ada are cut by faults associated with breccia which contains silicified intrusive and wall rock fragments and sulfides in chalcedonic silica flooding.

Twenty-six rock samples contain 3 to 369 parts per million mercury, 4 to 3,850 parts per million antimony and up to 750 parts per billion gold.

Soil sampling outlined an 800 by 1,800-foot area with over 20 parts per billion gold, open in all directions.

Eastern Interior

Updated information has become available from Kinross Gold's previously announced third quarter results from its Fort Knox-True North operations.

The combined operations produced 113,449 ounces of gold at a total cash cost of $219 per ounce compared to 101,610 ounces of gold at a total cash cost of $212 per ounce during the second quarter of 2001.

Total production costs for the third quarter were $369 per ounce versus $333 per ounce for the year previous period.

During the third quarter the mill processed 3.66 million tonnes of ore grading 1.13 grams of gold per tonne compared to 3.5 million tonnes of ore grading 1.00 grams of gold per tonne during the third quarter of 2001.

Gold recovery was 85 percent compared to 87 percent in the year previous period.

Total tons milled increased by 4 percent and the grade of ore milled increased by 13 percent over the third quarter 2001 levels.

These improvements were related to a higher percentage of ore being derived from the True North satellite pit and lower hardness of ore treated during the third quarter.

Capital expenditures in the first nine months of 2002 totaled $16.9 million which went into raising the height of the tailings dam, conducting in-pit exploration of the Fort Knox deposit and to designing and constructing a tailings thickener at the mill.

Teryl Resources announced that it has received regulatory approval for its acquisition from LinuxWizardry Systems Inc. of a 50 percent interest in 30 mining claims of the Fish Creek prospect adjacent to Teryl's Gil joint venture with Kinross Gold.

The property hosts three linear magnetic highs trending northeast and parallel to Fish Creek.

The northeastern magnetic high is bisected by Too Much Gold Creek and on the east side by All Gold Creek.

These creeks have yielded gold to panning while intrusive rock cobbles occur within the claim boundaries in the sediments of Fish Creek.

Native bismuth was found in sluice boxes on the south side of Fish Creek which indicates that intrusives similar to those that host the nearby Fort Knox deposit may exist on the Fish Creek claims.

Drilling is planned in early January 2003 to drill the magnetic high on the Fish Creek prospect.

Teryl Resources (20 percent) and Kinross Gold (80 percent) announced preliminary results from the 2002 drilling and trenching program on their Gil project in the Fairbanks District.

Although additional results are still pending, a new zone of mineralization was discovered at the Sourdough Ridge prospect where drilling intercepted 15 feet grading 0.49 ounces of gold per ton (16.80 grams gold per ton) including a five foot section grading 1.34 ounces of gold per ton (45.94 grams gold per ton).

This new zone is associated with anomalous arsenic and bismuth hosted at the contact between overlying but barren calc-silicate altered metamorphic rocks in thrust-contact with underlying sericite-altered muscovite schist.

There is a possibility that the high-grade zone is located where an east-west trending high angle structure intersects with the favorable thrust horizon.

Drilling completed this year and in previous years suggests the mineralization continues to the northeast.

Rimfire Minerals and AngloGold USA Exploration announced results from exploration on Rimfire's ER-Ogo-Fire and Eagle properties in the Goodpaster District.

A large gold auger soil anomaly (greater than 25 parts per billion) measuring 1,500 meters in length and 300 meters in width was outlined on the ER claims on the ER-Ogo-Fire property.

The anomaly is parallel to but slightly offset from a prominent northwest structure that marks the faulted southern contact of a Cretaceous-aged granitic intrusion.

Gold is associated with elevated arsenic, bismuth and antimony and the anomaly remains open to the north.

An orientation soil auger survey was conducted on the Eagle property targeting the intrusive-gneiss contact in two small areas east of the grid sampled in 1999 by a previous operator.

Previous work on the Eagle property includes 275 meters of diamond drilling that tested portions of a 3 by 1.5 kilometer gold-arsenic-bismuth-tungsten soil anomaly.

Hole EA00-03 intersected anomalous gold along its entire 52-meter length, cutting porphyritic granite with quartz, quartz-calcite and quartz-pyrite-arsenopyrite veins.

The new soil sampling adds over a kilometer to the soil anomaly defined in 1999.

The auger sampling technique has proven to be effective in penetrating the loess cover to obtain a better quality sample.

Loess, or wind-blown silt, is unevenly distributed over the Eagle property and its existence masks the geochemical response of bedrock mineralization.

Continental Ridge Resources Inc. announced that AngloGold USA Exploration completed a three-hole, 1,088-meter diamond drilling program to test the Hook prospect on its Gobi property in the Goodpaster District. The Hook target is a 100 meter wide zone of gold mineralization hosted by a newly mapped granodiorite intrusive near its contact with surrounding gneissic metamorphic rocks. Multiple sericite-altered quartz-veined zones were intersected in hole AGGP-1. The best assay results returned 3 meters grading 1.05 grams gold per tonne including 0.5 meters grading 5.26 grams gold per tonne. The company indicated that additional drilling is anticipated for the Gobi property next year.

Alaska Range

Nevada Star Resources announced results from its 291 meter core drilling program on its Canwell nickel-copper-platinum group element property in the central Alaska Range. Results from the West Ridge prospect include hole 02-01 which returned 3.7 meters grading 0.56 percent nickel, 0.50 percent copper, 412 parts per billion platinum and 407 parts per billion palladium and hole 02-03 which returned 4.3 meters grading 0.63 percent nickel, 0.33 percent copper, 628 parts per billion platinum and 664 parts per billion palladium. Only three of seven holes reached intended target depth due to the highly fractured nature of the rock in this area of the property.

Other

Alaska Miners Association Executive Director Steve Borell received the Northwest Mining Association's 2002 Distinguished Service Award at the recent Northwest Mining Association convention in Spokane.

Steve has worked tirelessly for years to promote the Alaska mining industry in particular and the U.S. mining industry in general.

The award is both well deserved and long overdue.

Congratulations Steve! At long last the British Columbia government has issued its project approval for Redfern Resources' Tulsequah Chief mine in northern British Columbia.

The project has been stalled over concerns about the proposed mine's potential effects on the Taku River salmon population.

The $148 million construction phase is expected to create 300 new jobs during construction and 260 permanent jobs once mining begins.

The underground operation is rated at 2,250 tonnes of production per day and will generate copper, lead, zinc, gold and silver.

The mine will be connected to Atlin, British Columbia, via a 120 kilometer limited-access road and is expected to ship its mine concentrates to Pacific Rim markets via the port of Skagway, Alaska.

The National Mining Association released the results of a recent national survey that indicates the general public is largely in favor of mining in the United States. The survey was given to college graduates making at least $50,000 per year income and found that 65 percent of the people surveyed support mining. That approval number rose to 75 percent for people living in active mining districts. Not surprisingly, only 45 percent of those polled in Washington, D.C., supported mining, a clear case of the ignorant leading the informed!

Perhaps the most telling conclusion drawn from the survey is that people who live near active mining operations are more supportive of mining than those that have no personal exposure to mining. Those with little exposure to modern mining practices formed their negative attitudes on mining practices of the 1930s and 1940s, an era long gone and never to return.

 

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