North of 60 Mining News - The mining newspaper for Alaska and Canada's North

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

New player Liberty Star Gold acquires largest single claim block in state's history

Canada's Fraser Institute releases annual mining investment survey, Alaska scores 81 out of 100 for mineral potential

 

Last updated 2/15/2004 at Noon



As in past years, Canada's Fraser Institute (www.fraserinstitute.ca) has released the results of its annual mining investment attractiveness survey for 2003-2004. The survey represents responses from 132 junior mining companies and 27 senior mining companies who rated policy potential issues (regulatory and infrastructure), mineral potential and overall investment attractiveness in 53 political jurisdictions around the globe.

The companies participating in the survey accounted for exploration budgets totaling US$642.4 million in the previous year.

As in every year past where this survey has been conducted, Alaska ranked lowest in the policy potential index with a score of 57 out of a possible 100 points - good for a 14th place ranking.

Our mineral potential index was strong, as usual, with a score of 81 - good for a ninth place tie with South Africa.

Alaska's overall investment attractiveness, a weighted combination of the previous two indices, gave us a score of 71 - good for a 10th place finish behind (in order of attractiveness) Chile, Nevada, Western Australia, Quebec, Brazil, Peru, Ontario, Northern Territory (Australia), Russia and Mexico.

Although I can't agree with a ranking that places Alaska below Brazil, Peru, Russia and Mexico in overall investment attractiveness, I am the first to admit that companies vote with their dollars and their perception of a political jurisdiction, not with the facts.

All in all, I think Alaska did well in this year's survey and should improve further in the coming year.

Western Alaska

Northern Dynasty Minerals announced revised mineral resource estimates for its Pebble property copper-gold project near Iliamna.

The resources were based on an additional 19,948 meters of drilling in 59 holes completed in 2003.

The resource estimate indicates that the Pebble deposit contains 26.5 million ounces of gold and 16.5 billion pounds of copper within an Inferred Mineral Resource of 2.74 billion tonnes grading 0.55 percent copper-equivalent (0.30 grams gold per tonne, 0.27 percent copper and 0.015 percent molybdenum above a cut-off grade of 0.30 percent copper-equivalent).

This resource makes Pebble Alaska's second plus-20 million ounce gold deposit behind Donlin Creek's 27.8 million ounce resource.

Perhaps more significantly, the estimate has significantly expanded the higher-grade resources at Pebble to 435 million tonnes grading 0.49 grams gold per tonne, 0.42 percent copper and 0.021 percent molybdenum, or 0.84 percent copper-equivalent above a cut-off grade of 0.70 percent copper-equivalent.

These higher-grade resources are key parts of any future mine planning and capital investment recovery schedules.

The company indicated that as a copper-gold porphyry system, Pebble ranks as the world's third largest deposit close behind Australia's giant Telfer deposit and the galaxy class Grasberg deposit in Indonesia.

Pretty heady company for an otherwise unremarkable patch of Alaskan tundra! Immediate plans for Pebble are to develop drill parameters for definition of measured and indicated resources, complete a preliminary sizing study that will facilitate the start of environmental base line measurements for the permitting process and collect engineering data for specific mine, mill and infrastructure design.

Oddly enough, just a few days before the new Pebble resources were released, Alaska newcomer Liberty Star Gold Corp. announced that it had acquired what ranks as another Alaska superlative - the largest single claim block staked at one time in Alaska history.

The 237 square mile claim block, adjacent to the Pebble project, currently is undergoing a detailed airborne magnetic survey and the company intends to conduct initial exploration and drilling in the 2004 summer season.

While most of the names of the officers and directors of Liberty Star are well known and respected in the mining industry, one of the directors stands out as a giant in the industry: Dr.

John Guilbert. Dr.

Guilbert and colleague J.D. Lowell formulated and published the classic exploration model for porphyry copper-gold systems like Pebble.

This exploration model has been one of the most widely used and wildly successful geological models ever conceived and brings to Liberty Star one of the most experienced minds in the industry.

Welcome to Alaska Liberty Star!

Eastern Interior

Kinross Gold held its annual exploration summary web cast highlighting results of its exploration in 2003 and plans for exploration in 2004.

These results included substantial efforts to be made in 2004 at its Fort Knox mine where the company plans to conduct pit expansion drilling designed to deepen and expand the lateral limits of mineralization in the existing ore body.

Pit expansion targets exist at depth and on the north wall of the pit while depth extensions to known gold zones are suspected on the south wall of the pit.

In addition, infill drilling in the pit suggests areas formerly carried as waste may contain significant resources.

The company also outlined an aggressive schedule of pre-feasibility and feasibility work at its Gil joint venture (80 percent Kinross, 20 percent Teryl Resources, see below) as well as plans to conduct early stage exploration at several other properties in the Fairbanks District, including the Dark Hollow, Last Chance, Fourth of July, Alder Creek, Vault Creek and Treasure Creek prospects.

Kinross Gold also announced that final surface reclamation has been completed at its Ryan Lode gold deposit in the Fairbanks District. Although exploration was conducted on the property in 2003, the company has completed reclamation of past heap leach operations, the first official reclamation and closure of a heap leach mine in Alaska history. The future of the 2.4 million ounce resource at Ryan Lode remains uncertain but currently is being reviewed by the company.

Teryl Resources announced results of drilling at its Gil joint venture property in the Fairbanks District.

During 2003 Kinross Gold, operator of the 80:20 joint venture, completed 27,590 feet of reverse circulation drilling in 127 holes and 7,917 feet of diamond core drilling in 28 holes.

Results released to date include 30 feet grading 0.143 ounces of gold per ton in hole GVR03-393, 135 feet grading 0.087 ounces of gold per ton in hole GVR03-398, 40 feet grading 0.126 ounces of gold per ton in hole GVR03-403, 45 feet grading 0.053 ounces of gold per ton in hole GVR03-407, 40 feet grading 0.126 ounces of gold per ton in hole GVR03-403, 40 feet grading 0.149 ounces of gold per ton in hole GVR03-464, and 105 feet grading 0.170 ounces of gold per ton in hole GVR03-465.

Elsewhere on the project, preliminary hydrology and engineering studies, resource database modeling and baseline environmental data continue to be gathered in accordance with revised work plans.

As a result of these efforts, Kinross Gold announced that in 2003 the Gil deposit had advanced from an advanced exploration stage, through pre-feasibility to the feasibility stage in early 2004.

Teryl Resources also announced results from backhoe trenching at its West Ridge gold prospect in the Fairbanks District.

The most significant results came from highly sericitized granodiorite which returned 15 meters grading 596 parts per billion gold with one meter intervals returning grades up to 2.86 grams gold per tonne and 3,140 parts per million arsenic.

Alteration in mineralized areas consisted of albitization similar to that seen in other intrusive related gold occurrences in the Tintina Gold Belt of Alaska-Yukon.

The granodiorite exposures are within a 100 by 150 meter open-ended soil anomaly where gold values reach 1,000 parts per billion and grab rock samples returned up to 10 grams gold per tonne.

Follow-up ground magnetics and very low frequency electromagnetics (VLF-EM) were completed over the trenches and confirmed the presence of Chatanika Terrane eclogitic rocks capping the intrusive.

Additional ground geophysics and possibly trenching are planned for the prospect prior to drilling.

Teryl Resources also announced discovery of potential placer gold channel gravels on their Fish Creek prospect downstream from Kinross Gold's Fort Knox mine in the Fairbanks District.

Ground magnetics identified five magnetic highs including three shallow (8-12 feet) anomalies that could represent magnetite-ilmenite accumulations commonly associated with placer gold in the district.

High-grade placer gold was discovered 6-700 feet upstream from the geophysical grid during excavation of the Fort Knox fresh water damn however no targeted exploration has been conducted to locate the downstream extension of this rich placer gold channel.

Additional ground geophysics and possible drilling are planned for the prospect.

Freegold Ventures Ltd. announced that it had entered into a joint venture agreement with Alaska newcomer Meridian Gold on Freegold's Golden Summit project in the Fairbanks District.

Meridian may earn a 50 percent interest in the project by making exploration expenditures totaling US$5 million, cash payments of US$390,000 over four years and investing a minimum of US$300,000 in Freegold through private placements.

Meridian may increase its interest to 70 percent by completing a feasibility study, arranging all project financing and bringing the project to commercial production.

Exploration plans for 2004 call for completion of an airborne magnetic survey followed by a $650,000 exploration program on the property.

Welcome to Alaska Meridian!

Teck Cominco and Sumitomo Metal Mining announced that it had received its wetlands permits from the U.S. Army Corps of Engineers for its Pogo gold deposit in the Goodpaster District.

The project received its state of Alaska permits in December and now awaits only its permits from the U.S. Environmental Protection Agency prior to commencement of full-scale construction activities.

EPA is the lead agency for permitting on the project.

Federal permits are expected in February which would allow full-scale production of the project to proceed.

The $250 million construction project will utilize up to 700 people with a total work force after start-up of 385 employees.

Initial start-up would be in late 2006 if all permits are received timely.

Rimfire Minerals announced the results of soil sampling conducted by JV partner AngloGold USA on their Eagle project in the Goodpaster District.

AngloGold's program outlined the Central and NE gold-arsenic-bismuth soil geochemical anomalies, covering 1.6 by 1.2 kilometers and 0.3 by 0.8 kilometers, respectively.

The Central anomaly is defined by a core area with gold values greater than 185 parts per billion and measuring 0.2 kilometers by 0.5 kilometers.

A significant proportion of the granitic rock chips collected with soil samples were altered and in some cases contained sulfide-bearing quartz veins.

Two rock samples returned 1845 and 8080 parts per billion gold.

Associated anomalous elements included arsenic, bismuth and tellurium.

The companies also announced that they have increased the land holdings around their ER and Eagle projects.

The new state mining claims add substantially to both joint ventures with the ER claim holdings now covering 10,560 acres and the Eagle property 15,760 acres.

AngloGold has vested a 50 percent interest in the ER Joint Venture and has elected to exercise its option to earn an additional 20 percent interest.

Plans for 2004 exploration have not been released.

Alaska Range

Nevada Star Resources announced that it has signed a letter of intent with Alaska newcomer Anglo American Exploration (Canada) Ltd to form a joint venture partner on Nevada Star's MAN copper-nickel-platinum group element project in the central Alaska Range.

The agreement covers two areas of the project - Fish Lake and Dunite Hill, which make up approximately 50 percent of Nevada Star's 269 square mile property.

Under the terms of the proposed option/joint venture agreement, Anglo American can earn a 51 percent interest in the property by spending a total of $12 million over a five-year earn-in period.

Should Anglo American complete a feasibility study at its expense, they are entitled to an additional 19 percent, making the partnership a 70/30 split.

Anglo American can earn an additional five percent by arranging production financing for both parties.

Welcome to Alaska Anglo American Exploration!

Nevada Star Resources also announced 2003 sample results for its Rainy and Canwell properties, also within the MAN project.

Work on the Canwell project included excavation of five backhoe trenches, four of which verified a mineralized strike length of 1,100 feet with widths of up to 25 feet.

The other trench did not reach bedrock.

Geochemical results returned values up to 1.6 grams per tonne platinum, 1.1 grams per tonne palladium, 1.6 percent nickel and 0.5 percent copper in channel samples.

The anomalous trench samples were further supported by soil sampling which revealed a 3,000 by 500 foot anomalous zone that returned values ranging from 80 to 276 parts per billion platinum plus palladium plus gold.

In addition, the Northwest Canwell zone has a 3,600 by 1,000 foot soil anomaly that contains values ranging from 80 to 399 parts per billion platinum plus palladium plus gold.

On the Rainy Complex soil sampling was completed at three grids on the East Rainy, North and Central Rainy and the Rainy East Bowl areas.

The East Rainy grid has three anomalous areas: a 2,500 by 500 foot anomalous zone that contains 80-243 parts per billion platinum plus palladium plus gold, a 1,150 by 650 foot anomalous zone that contains 80-244 parts per billion platinum plus palladium plus gold and a 500 by 500 foot anomalous zone that contains 100-254 parts per billion platinum plus palladium plus gold.

Results from East Central Rainy include a 1,000 by 1,000 foot anomalous zone that contains 80-168 parts per billion platinum plus palladium plus gold while sampling at Southeast Rainy to Hail Creek detected a 6,550 by 500 to 2,800 foot anomalous zone that contains 80-535 parts per billion platinum plus palladium plus gold.

The Rainy East Bowl has a 2,300 by 650 foot anomalous zone that contains 80-113 parts per billion platinum plus palladium plus gold.

Western Warrior Resources announced results of the first-ever exploration drilling at its Cliff mine gold prospect near Valdez.

The drill program was successful in intersecting the previously mined vein structures and in determining the geometry of several vein structures.

Additionally, a distinct geochemical zoning or signature about the auriferous vein structures has been observed.

Significant results include 2 feet grading 9.2 grams gold per tonne on the New vein including 0.9 feet grading 32.9 grams gold per tonne, 4.5 feet grading 4.1 grams gold per tonne on the Trustee vein and 3.4 feet grading 3.8 grams gold per tonne on the Cliff B vein.

Additional claims are being acquired in the Cliff mine area and additional exploration work at the mine site and surrounding lands is anticipated in 2004.

Southeast Alaska

Coeur d'Alene Mines announced the issuance of the draft supplemental environmental impact statement at its Kensington gold project in the Berners Bay District in southeast Alaska.

A final pre-feasibility study completed in late 2003 identified significant capital and operating costs savings over previously completed feasibility studies.

The company estimates production averaging 100,000 ounces of gold per year at an average cash operating cost of approximately $195 per ounce.

The company expects to receive all major permits by June 2004, followed by a construction decision.

Mine construction would take 18 months, with potential production startup as soon as 2006.

The Kensington deposit contains 1.8 million ounces of proven and probable gold reserves and 1.4 million ounces of resources.

The company believes that significant exploration potential exists at Kensington that could materially increase the project's total resources.

Pacific North West Capital, Freegold Ventures and Lonmin PLC announced additional results at the Union Bay platinum group element project near Ketchikan.

The 2003 program consisted of reconnaissance sampling on the eastern, southern and western limits of the Union Bay complex, diamond saw channel sampling at Jaguar, Mt. Burnett, North, and Continental zones, and 4,490 feet of diamond drilling at North and Jaguar zones.

Drilling results include 3.8 feet grading 7.01 grams platinum per tonne from hole UB03-11 on the Jaguar zone while the most significant new discoveries made in 2003 were at the Continental and Chevelle zones where rock sampling returned values ranging from 1 to 14 grams platinum per tonne.

The Continental discovery was followed up by preliminary channel sampling which returned up to 6.2 grams platinum per tonne over 3.3 feet.

The significance and extent of mineralization at these new zones is unknown, but the mineralization is hosted by a similar rock type to that present at the North and Jaguar zones lying 5 kilometers to the east.

In addition a zone of copper, platinum and palladium-bearing sulfides was discovered at Cannery Creek on the western side of the Union Bay project, close to the margin of the complex.

The zone is open to the north and the east.

Plans for 2004 have not been announced.

Other

For any of you that attended the recent Cordilleran Roundup convention in Vancouver sponsored by the British Columbia and Yukon Chamber of Mines, you can attest to the following statement: this conference was the most exciting mining conference in the last seven years!

The atmosphere was electric, the activity frenetic and the opportunities for Alaska projects were hanging out for everyone to see, touch and latch on to. The state of Alaska was not only well represented by property owners, companies and prospectors but also state officials from the Division of Trade and Development, Division of Geological and Geophysical Surveys and the Governor's Office were visible and voluble.

Alaska Night, sponsored by Alaskans and those interested in Alaska, spilled out of its confines in the Bayshore Hotel and with the aid of Alaska Miners Association Executive Director Steve Borell expanded to adjacent rooms to accommodate the overflow crowd of enthusiastic people. The conference was yet another sign of the resurgence of the mining industry and the promise of high levels of activity in Alaska in 2004. My hat is off to the organizing sponsors, the Bayshore Hotel and all of the Alaska supporters!

For anybody who still harbors a scintilla of doubt about the rebirth of the mining industry, try these numbers on for size: Since January of 2003, the single-most important metal in terms of annual revenue from Alaska, zinc, has risen a surprising 20 percent.

The other metals are up as well with gold and silver prices rising more than 30 percent.

Platinum has jumped nearly 40 percent, copper has leaped nearly 50 percent, lead is up more than 70 percent and nickel has skyrocketed an astounding 400 percent! Equally important has been the revival of the venture capital markets for mining related projects.

Reuters reports that in 2003 Canada's TSX Venture Exchange raised C$1.28 billion for mining ventures, a whopping 124 percent increase over 2002 levels.

This was part of the $4.2 billion raised by the global mining industry in 2003.

Furthermore, the Metals Economics Group estimated that worldwide exploration expenditures in 2003 totaled $2.4 billion, a 26 percent increase over 2002 levels and the first year-on-year increase in exploration spending since 1997.

So there!

 

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