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

By Curt Freeman
For North of 60 Mining News 

Freeman report: Four million acres of forest fires hit Alaska mining operations

Helicopters commandeered from field programs, smoke limits visibility for fixed wing craft, as summer field season in full swing

 

Last updated 8/8/2004 at Noon



One of the most bizarre summers in Alaska's recent history is in full swing and only the snows of winter will dampen things.

I am speaking of course of the impact that Alaska's plus-4 million acres of wildfires have had on mineral exploration, development and operations in the central and eastern parts of the state.

The fires came along with an unusually dry and warm summer for virtually all of the state.

In addition to the usual problems of who's AWOL after the Fourth of July break and how come the drill didn't hit ore, Alaska also has been struggling with raging fires that have consumed field camps, slowed mine construction, shut down more than one mining operation, commandeered helicopters from field programs and limited fixed wing traffic due to poor visibility.

Add to that the unusual problems of lack of rain in Southeast and lack of suntan lotion on the Seward Peninsula and you have some idea just how odd high summer has been in the Great Land. Despite all this, field exploration continues to forge ahead with a number of properties announcing new results and others planning additional work for later in the summer.

Western Alaska

Teck-Cominco's Red Dog mine saw slightly higher zinc ore grades in the second quarter compared with a year ago resulting in $10 million profit for the quarter.

For the quarter, the mine generated 138,800 tonnes of zinc in concentrate and 25,600 tonnes of lead in concentrate vs. 142,100 tonnes and 30,200 tonnes in the second quarter of 2003.

The mine sold 96,300 tonnes of zinc and 1,800 tonnes of lead during the second quarter.

Zinc prices average $0.47 per pound, up 33 percent over a year ago.

Average zinc and lead grades mined were 22.3 percent and 5.6 percent, respectively vs. 21.5 percent and 6.0 percent for the second quarter of 2003.

Mill throughput was lower than anticipated due to excessive scaling in the mill piping circuitry.

These problems were resolved and third quarter mill throughput is expected to return to normal.

Novagold Resources has initiated the final feasibility study at its Rock Creek gold project near Nome.

In addition, with one year's worth of environmental baseline data in hand, the mine permitting process is anticipated to begin in the second half of 2004.

The company plans additional in-fill drilling and metallurgical test work in 2004 as part of the final feasibility study.

A budget of $5 million is planned for the development work in 2004 at Rock Creek.

Approximately 1,650 meters of triple tube diamond drilling in 20 holes has been completed along with a 1,000 meter trenching program across the main mineralized zone.

In lieu of a bulk sample effort, a drill hole twinning program using improved reverse circulation drilling has also been initiated as part of the reserve definition program developed by engineering firm AMEC E&C Ltd.

Further infill drilling to convert remaining areas of inferred resources to indicated resources has also begun. Initial economic assessments indicate that Rock Creek will produce an average of 100,000 ounces of gold per year at a total cash cost of US$200 per ounce. In a related program, NovaGold is planning a 2,900 meter RC and core drilling program at the nearby Big Hurrah property in the Solomon District to test for near surface gold resources. Historic work on the property has identified multiple shallow mineralized zones grading as much as 10 grams of gold per tonne with similar characteristics to mineralization at Rock Creek.

Novagold Resources also said joint venture partner Placer Dome plans to spend US$6 million in 2004 on engineering and environmental studies for development of the Donlin Creek deposit. Limited geotechnical drilling has been conducted in 2004 and on-going studies have identified feasible alternatives for project access and power supply.

Full Metal Minerals said exploration efforts have commenced on its Ganes Creek gold project in the Ophir district. The Phase I program includes prospecting, detailed geological mapping, detailed soil sampling, mechanical trenching and 1,000 meters of diamond drilling. A Phase II drill program is planned to test the drill targets identified in this year's program. The primary target of the 2004 efforts will be delineation of the source of extremely high-grade coarse placer gold for which the Ganes Creek drainage is well known.

Full Metal Minerals also said exploration efforts had commenced on its Pebble South gold project in the Iliamna district.

The company's Southern Claim Group occurs at the intersection of three major structural trends that are coupled with favorable airborne magnetic anomalies.

Northern Dynasty's main Pebble deposit trend occurs on the eastern margin of the Southern Claim Group.

Full Metal has recently completed a Phase I reconnaissance mapping, sampling and regional stream sampling program on the property and has taken 1,200 samples to date.

More than 35 line kilometers of induced polarization geophysics are planned, with 17 line kilometers completed.

Based on the compiled geological, geochemical and geophysical data, exploration drilling appears to be warranted.

Liberty Star Gold announced interim results from its Big Chunk copper-gold project near Iliamna.

Preliminary interpretation of the airborne magnetic results, detailed structural interpretation and satellite imagery analysis has resulted in the identification of 21 anomalies.

Further computer studies of the magnetic data are under way and identification of other targets is expected from this work.

Follow-up helicopter reconnaissance of the structural and satellite imagery anomalies identified several areas containing hematite or limonite staining in tundra mud and stream bogs.

Stream sediment sampling, water sampling as well as vegetation and soil sampling are on going in these areas.

Field efforts so far this year have resulted in collection of approximately 3,500 vegetation, soil, water, stream sediment and rock samples.

The water and soil samples are processed and have a simple two-element analysis done in the Liberty Star field laboratory at the Iliamna camp.

The results of these geochemical studies will be compared to the magnetic anomaly maps and tested by induced polarization geophysical studies planned for mid-August.

Eastern Interior

Kinross Gold announced second quarter 2004 results for its Fort Knox-True North operations in the Fairbanks district. For the quarter the company indicated that it had recovered 79,007 ounces of gold at a cash cost of $257 per ounce. The lower production and higher cash costs compared to the second quarter of 2003 (101,425 ounces at $241 per ounce) were the result primarily of suspension of mining at True North and lower mill feed grades due to the mine sequence at Fort Knox. Mill feed grades are expected to improve in the second half of 2004 due to improved grade at Fort Knox and the resumption of mining at True North.

Although year-to-date production is lower than the same period of 2003, it is approximately 7 percent better than plan and is on target to meet projections.

Rising fuel and energy costs and lower production contributed to the increase in total cash costs for the second quarter and first half of 2004.

Larger tonnage mining equipment is to be in place at the mine in the third quarter, which will improve total cash costs and increase tonnage to the mill.

For the second quarter the operation milled 3,091,400 tons of ore grading 0.89 grams of gold per tonne.

Mill recoveries averaged 89 percent and total production costs were $355 per ounce.

Projected production for 2004, from the combined Fort Knox and True North open pits, is 340,000 ounces of gold.

On the exploration front, hole FC-716 drilled in the east-central portion of the Fort Knox pit to test the extension of mineralization beneath the current ultimate pit, cut two strong zones of mineralization grading 0.316 ounces of gold per tonne over 65 feet followed by 0.273 ounces of gold per tonne over 35 feet.

Follow-up drilling is currently under way.

Freegold Ventures Ltd. and joint venture partner Meridian Gold announced initial drilling results from its Cleary Hill mine project on its Golden Summit project in the Fairbanks District.

The six-hole diamond drill program intersected the Cleary Hill vein 125 meters below the previously mined workings and indicated the presence of additional mineralized zones above and below the projection of the Cleary Hill vein.

Drilling confirmed that the old mine longitudinal sections from the 1940s accurately portray the trend of high-grade mineralization associated with the high-grade Bankers Stope ore chute on the Cleary Hill vein.

Drilling results included six feet grading 0.283 ounces of gold per ton in hole CHD0401, 10.5 feet grading 0.449 ounces of gold per ton in hole CHD0403 including 6.5 feet grading 0.546 ounces of gold per ton, two feet grading 0.968 ounces of gold per ton in hole CHD0404, three feet grading 0.344 ounces of gold per ton in hole CHD0404 and five feet grading 0.128 ounces of gold per ton in hole CHD0406.

Freegold has drilled below the old Cleary Hill mine workings along a 240 meter strike length.

Underground workings extend over 800 meters along strike of the Cleary Hill vein.

A significant number of other mineralized veins and structures were intercepted in the hanging wall (south) of the Cleary Hill vein.

Gold mineralization in the 2004 Phase 1 drill holes was in the form of fine grained and visible free gold associated with quartz veins, stockworks and quartz-rich shear zones containing between 1-3 percent pyrite, arsenopyrite and jamesonite.

Coarse gold was observed in Phase 1 drill core suggesting that a nugget effect may be present.

Metallic screen analyses have been instituted to quantify suspected nugget effect.

Teryl Resources Corp. said it plans to drill up to 25 vertical eight-inch diameter holes on two lines to explore for a suspected placer gold pay streak on its Fish Creek property.

Each line will be composed of 10 to 15 drill holes spaced 50 to 200 feet apart, and from 45 to 75 feet deep, to test two anomalies located last year by a magnetic survey.

Immediately upstream of these anomalies extremely high-grade placer gold was encountered during the excavation of the Fort Knox mine fresh water dam.

In addition to placer drilling, it is planned to drill up to 40 auger holes on a 200 feet grid and drill two vertical five inch reverse circulation holes up to 300 feet deep along the east flank of Fish Creek valley to explore for lode gold mineralization.

Golden Spirit Minerals has begun fieldwork on its Ester project in the Fairbanks district. The work program will consist of sampling and mapping the altered bedrock cobbles found in mine tailings, examination and sampling of intrusive rock located on the south slope of Ester Creek, geologic mapping on the north facing slope of Ester Creek in the vicinity of a magnetic low, collection of heavy mineral concentrates from lower Moose Gulch and mapping bedrock and colluvium on uppermost Ester Creek.

Rimfire Minerals announced exploration summaries on their ER, Eagle and Beverly prospects, all under option to AngloGold USA Exploration. Efforts at ER will focus on a 1,500 meter by 300 meter gold-arsenic-bismuth-antimony soil anomaly where ground geophysics and additional soil sampling will be conducted prior to planned drilling. Total budget is set at $700,000. A $635,000 budget at Eagle is designed to expand four gold-arsenic-bismuth soil anomalies prior to conducting drilling. At the Beverly prospect the $50,000 budget will be directed toward expansion of the 1 by 1 kilometer gold soil anomaly and additional prospecting.

Alaska Range

Nevada Star Resources' $500,000 summer field program is under way on the MAN project in the Alaska Range.

Exploration efforts will focus on nickel, copper, platinum group element and gold prospects in the Canwell, Rainy, Eureka, and Broxson areas in the northern portion of the MAN property.

Work to be performed will include three dimensional magnetic inversion, University of Toronto Electro-Magnetometer, or UTEM, time-domain geophysical data interpretation, max-min electromagnetic surveys, gravity surveys and rock and soil sampling.

These data will be used to help target 2,000 meters of reverse-circulation drilling with much of the emphasis on evaluating a newly discovered magnetic embayment in the Canwell intrusion.

This embayment was discovered as a result of reprocessing all the data on the Canwell intrusion and incorporating these data into a three-dimensional magnetic inversion model.

The embayment shows a large feeder to the west connecting to the embayment.

Soil and rock samples show elevated levels of platinum group elements as well as nickel over the embayment area.

In addition, UTEM and max-min geophysical anomalies coincide with the location of the embayment.

MAX Resource Corp. said seven diamond drill holes have been completed at its Gold Hill project in the Valdez Creek district. Analytical results are pending on the drilling. Check assays of core previously drilled by Amax were comparable but slightly lower than original analytical results and ranged from 2.396 grams of gold per tonne to 18.813 grams of gold per tonne. Samples collected in Gold Creek also returned rock samples grading 0.25 ounces of gold per ton, 0.57 percent copper and 0.19 percent tungsten trioxide. Additional work is planned for this area.

Northern Alaska

Novagold Resources said it has completed mobilization of equipment and personnel to its Ambler polymetallic project in the southern Brooks Range. The most advanced target on the project is the Arctic deposit hosting a historic inferred resource of 36 million tonnes grading 0.7 grams of gold per tonne, 55 grams of silver per tonne, 4 percent copper, 5.5 percent zinc and 0.8 percent lead. The initial exploration program for this summer will focus on developing an updated geologic model for the project through detailed re-logging of the existing core, and an initial 2,000 meters of new core drilling. Drill start-up is anticipated for early August.

Southeast Alaska

Bravo Venture Group Inc. announced additional drilling results from its Woewodski Island project in southwest Alaska.

Assay results from the Lost Lake prospect include 1.3 meters grading 70 grams of silver per tonne and 13.6 percent zinc in hole LL04-02, 5.9 meters grading 21 grams of silver per tonne and 4.5 percent zinc in hole LL04-02 and 0.9 meters grading 82 grams of silver per tonne and 9.5 percent zinc in hole LL04-03.

Drilling has now doubled the strike length of known mineralization to 800 meters.

Previous drilling estimated resources at Lost Lake at 550,000 tonnes of 2.52 ounces of silver per ton, 0.63 percent lead and 8.1 percent zinc.

The mineralization remains open on strike to the east and to depth.

Only three holes along the full 800 meter strike length have been drilled below 100 meters.

At the East Lake prospect 2004 drilling intercepted 1.8 meters grading 2.0 grams of gold per tonne, 6.0 grams of silver per tonne and 3.3 percent zinc in hole EL04-01.

Massive sulfide mineralization was hosted in fragmental volcanic rocks which included one 0.5 meter interval of delicately banded massive sphalerite and galena that suggests gold-enriched, high-grade mineralization may exist nearby along this horizon.

A thick interval (plus 40 meters) of heavily disseminated (10-30 percent) pyrite with angular, proximal-facies pyritic clasts occurs at the overturned volcanic-sedimentary contact downhole from the main mineralized interval.

Similar pyritic mineralization was observed in the bottom of EL04-02.

These thick zones of pyrite may grade into base-metal-rich sulfides along strike or down dip.

The company indicated that it plans to conduct additional drilling in August-September that will focus on off-setting the high-grade Mad Dog prospect intercepts down plunge and testing several targets in the East Lake and Brushy Creek areas.

Additional gravity surveys are planned at the Mad Dog, East Lake and Brushy Creek targets in preparation for drilling.

Other

Alaska explorer Freegold Ventures has entered an option agreement whereby it may earn up to a 100 percent interest in the Grew Creek gold project near Ross River in the Yukon Territory.

The property is hosted in Eocene volcanic and sedimentary rocks preserved within a graben formed by the Tintina fault.

Epithermal gold and silver mineralization at Grew Creek is hosted by highly permeable felsic pyroclastic tuffs.

Previous work at Grew Creek generated a mineral resource of 773,012 tonnes grading 8.9 grams of gold per tonne and 33.6 grams of silver per tonne.

Freegold's exploration program will focus on expanding the known mineral resources.

A 10-hole diamond drill program is planned for late August.

The drilling will initially test a new model that suggests that the mineralized veins are sub-parallel to the previous drill hole orientation.

This leaves the deposit open to the south and as a result may significantly increase the grade and tonnage of the resource in the Main Zone.

Several other targets including the Rat Creek and Tarn Zones will also be tested during the drilling campaign.

The Rat Creek target is a high priority target because it is up-ice of the gold-in-till anomaly overlying the Main Zone.

Tracing the gold-in-till anomaly up-ice indicates that the source is in the Rat Creek area.

Under the terms of agreement, Freegold will incur exploration expenditures of $1.5 million, make cash payments of $305,000 over five years and issue 200,000 shares of their stock over four years.

The property is subject to a 3 percent net smelter return royalty.

In the event that commercial production has not commenced by the sixth anniversary of the agreement, Freegold shall make an advance royalty payment in the amount of $50,000.

On the seventh anniversary, the annual advance royalty payments shall increase to $100,000.

 

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