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

Mining news update from Curt Freeman: Alaska one of best places to find raw metals


Last updated 5/22/2005 at Noon

The good news from Teryl, Kinross, Geoinformatics, Midas, Geocom and others is tempered by the loss of Alaska's gentleman scientist Ernie Wolff, who passed away on May 3; Liberty Star Gold appoints Phil St. George as VP of exploration

s I write this summary of recent activities in Alaska's mining industry I am attending a once-every-five-year symposium in Reno put on by the Geological Society of Nevada. Some 1,500 attendees, mostly exploration geologists, are eagerly lapping up hours of new and previously unheard ideas on how, when and where the next big discovery will be made.

This event, one of the best of its kind world-wide, never fails to fire the blood and inflame the imagination of those of us who think breaking rocks and drilling holes is true paradise!

Alaskans are well represented here as is the realization that Alaska remains one of the last best places on earth to find the raw metals that are being demanded by a growing worldwide consumer base. In listening to those who work in the Great Basin, I hear concerns that are common to those of us who work in Alaska: Byzantine regulations, lack of manpower, Native American rights issues, the need for new blood in the industry and the desire to apply new tools to one of the world's oldest professions. Comforting and disturbing at the same time, I am sure I will come away from this meeting with a few new ideas about mining prospects in the Great Land.

Western Alaska

Teck-Cominco's Red Dog mine saw continued strong operating profits in the first quarter of 2005 as a result of increased zinc and lead prices which averaged 60 cents and 44 cents per pound, respectively.

Operating profit rose to $43 million vs. an operating profit of $38 million in the same period in 2004.

For the quarter, the mine generated 136,400 tonnes of zinc and 20,700 tonnes of lead in concentrate vs. 130,400 and 26,500 tonnes of zinc and lead, respectively, in the first quarter of 2004.

The mine sold 109,000 tonnes of zinc and 1,800 tonnes of lead during the first quarter.

Average zinc and lead grade mined was 22.2 percent and 4.8 percent vs. 22.8 percent and 6.2 percent, respectively, in the first quarter of 2004.

Mill throughput of 711,000 tonnes in the first quarter was significantly up from the 670,000 tonnes milled in the first quarter 2004.

Geocom Resources released results from its 2004 drilling on the Iliamna project in southwestern Alaska.

The 2004 drill program targeted geophysical anomalies that were delineated by an early 2004 three-dimensional induced polarization geophysical survey and expanded upon copper-gold mineralization discovered during 2003.

The best result from the seven-hole program was hole 1 which intercepted 208.8 meters grading 231 parts per million copper, 0.019 grams gold per tonne and 9 parts per million molybdenum.

The company also completed two age dates on the intrusives hosting mineralization and estimate the age of intrusives is about 60 million years.

This date corroborates evidence that intrusive rocks become younger to the west of the Northern Dynasty's Pebble deposit.

The company also reported that as a result of the 2004 drill program, it had spent the requisite amounts and completed the specified work to earn its interest in the H block claims on the project.

Accordingly, property owner BHP-Billiton Minerals Exploration was notified of Geocom's completion of earn-in requirements effective March 5, 2005.

BHP-Billiton has a six month period to elect to exercise its back-in right to recover a 70 percent interest and take over operation of the project.

Liberty Star Gold Corp. has appointed Phil St. George, its vice president of exploration, to the company's board of directors. Phil managed the 2004 exploration programs on the company's Big Chunk project near Iliamna. Extensive geochemical, geologic and geophysical programs culminated in diamond drilling during the initial exploration year on the project. Congratulations Phil!

Eastern Interior

Kinross Gold Corp. still has not released its year-end 2004 and fourth quarter 2004 results due to accounting changes being made to its reporting procedures. It did indicate that the Fort Knox mine had produced 73,953 ounces of gold in the first quarter of 2005 vs. 75,980 ounces produced during the first quarter of 2004. The company indicated that improved productivity at its operations helped offset increased fuel, energy and other consumables costs.

Teryl Resources Corp. and joint venture partner Kinross Gold Corp. have approved a $793,800 2005 exploration budget to move the Gil project in the Fairbanks district from the exploration to the development stage.

Baseline permitting work will include data gathering on fugitive emissions, geochemistry, surface and groundwater hydrology, aquatic biota, wetlands delineation, cultural resources survey, socioeconomic analysis, and noise and visual impact studies.

The cultural resources survey and wetland delineation were completed in 2004.

Surface and ground water hydrology was initiated in 2000 and are on-going.

Engineering projects include deposit model, pit design, mine plan, access road design, geotechnical review for pit slope angles and dewatering reviews.

A high resolution airborne magnetic and resistivity survey will be flown along 100 meter spaced lines and at a 30 meters ground clearance.

Approximately 300 line kilometers survey will be flown over the project.

The purpose of the survey is to provide resolution of subtle magnetic textures like those associated with the adjacent Fort Knox deposit and to add resistivity as a complimentary data set.

Freegold Ventures Ltd. has commissioned a revised resource calculation of its Dolphin deposit on the Golden Summit project near Fairbanks. In addition the company is reviewing plans to conduct additional large diameter deep drilling and ground geophysics on the Golden Summit project in order to determine the potential of the project for high grade mineralization beyond depths previously explored. Details relating to work plans and budgets were not released.

Teck-Cominco said Pogo mine construction is on schedule for a first quarter 2006 start-up. The only other news from Pogo was a battle with a common but highly contagious norovirus that sent dozens of mine construction personnel to the infirmary with gastrointestinal troubles. Quick action by the company and help from the Department of Environmental Conservation put down the virus in a few days and things returned to normal. Lesson for the rest of us that work in remote camps: clean up your act or suffer the slings and arrows of outrageous gastrointestinal disorders!

Geoinformatics Exploration Inc. has entered into an agreement with Alaska newcomer Midas Resources Ltd. whereby Midas can earn up to a 75 percent interest in Geoinformatics' Uncle Sam gold project in the Richardson district.

Midas has agreed to spend $3 million over three years on the property to earn a maximum 75 percent interest, with a minimum commitment in the first year of $250,000 and 1,000 meters of diamond drilling.

Geoinformatics will have the right to restrict Midas to 51 percent interest by contributing to expenditures to maintain its interest at 49 percent after Midas has expended $1 million.

Midas plans to implement an exploration program in June 2005 based on shallow geochemical drilling and induced polarization geophysical surveys followed by diamond drilling of key structures and geochemical targets.

Welcome to Alaska Midas Resources!

Alaska Range

Nevada Star Resources said ground geophysics and diamond drilling had begun on its MAN copper-nickel-platinum group element project being operated by joint venture partner Anglo American Exploration USA. The winter 2005 geophysical program began in March and utilized a Crone SQUID B-field geophysical sensor to survey selected target areas identified from previous geological, geochemical and geophysical surveys.

A total of nine separate loop locations are planned to cover the anomalies.

A helicopter-supported diamond drill program designed to test coincident geological, geophysical and geochemical anomalies started in mid-May and is designed to include up to 19 drill holes.

In addition, a number of targets generated from detailed structural interpretation of airborne magnetics in 2004 will be ground-checked in 2005.

Southeastern Alaska

Coeur d'Alene Mines has received all of the remaining state of Alaska mine permits that it requires to build and operate its Kensington gold mine project near Juneau. Receipt of these permits from the Alaska Department of Natural Resources clears the way for the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency to issue the final permits required by the project. Current timetables indicate the federal permits should be received during the second quarter of 2005 which will allow mine construction to begin with start-up slated for late 2006.

Kennecott (70.3 percent) and Hecla (29.7 percent) announced first quarter 2005 production from the Greens Creek mine on Admiralty Island.

The total cash cost per ounce of silver produced at Greens Creek for the quarter was $1.05, up slightly from the 98 cents per ounce costs for the year previous period.

The average grade of ore mined during the quarter was 21.42 ounces of silver per ton, up significantly from the average grade of 16.69 ounces per ton that was mined in the first quarter of 2004.

During the first quarter the mine produced 3,016,720 ounces of silver, 20,854 ounces of gold, 6,212 tons of lead and 17,228 tons of zinc.

Total production costs for the quarter were $3.35 per ounce of silver produced vs. $3.39 per ounce for the first quarter of 2004.

The company also reported on exploration efforts being conducted west of the Gallagher fault where no mineralization was known to exist prior to 2003. To date, 51 exploration drill holes have been completed through the Gallagher fault, with 27 of those holes intercepting various amounts of white barite, white carbonate and massive sulfide-bearing lithologies similar to ore currently mined at Greens Creek. Drill results indicate the presence of at least two mineralized zones dipping shallowly to the southwest. However, true thicknesses of the mineralization are still unknown and the zones are open to the west and south.

The most significant mineralized intercepts to date include 90 feet of continuous massive sulfide mineralization with composite grades of 0.15 ounce per ton of gold, 4.8 ounces per ton of silver, 6.8 percent lead, and 20.5 percent zinc.

Additional significant drilling results include 108.8 feet of continuous massive sulfide, white carbonate and white baritic mineralization with composite grades of 0.26 ounce per ton of gold, 3.2 ounces per ton of silver, 4.6 percent lead and 11.5 percent zinc, 52 feet of massive sulfide and white carbonate mineralization with composite grades of 0.2 ounce per ton of gold, 10.3 ounces per ton of silver, 5 percent lead and 11.3 percent zinc and 12.7 feet of massive sulfide and mineralized argillite mineralization with composite grades of 0.05 ounce per ton of gold, 41.7 ounces per ton of silver, 3.9 percent lead and 7.6 percent zinc.

What makes these results all the more amazing is that these intercepts and the new mineralization were discovered a full 30 years after the Greens Creek deposit was originally discovered! Hat's doffed to the management and staff at Greens Creek who thought this discovery into being.

Alaska loses a giant: Ernie Wolff

Alaska's mining industry has lost another giant: Ernie Wolff passed away on May 3 at the age of 86.

For the thousands of miners, prospectors, students and business folks that knew and loved this man, it was indeed a sad day.

In 1938 Ernie left his birth state of Minnesota to continue his education at the Alaska Agricultural College and School of Mines (the present day University of Alaska-Fairbanks).

Over the next 60 years Ernie became the Dean of Alaska Placer Mining, a practical, no-nonsense instructor and champion of the small miner.

He taught and practiced his profession all over Alaska and was equally well known for his big heart and unfailing belief that there was good in every person on the planet.

Ernie is co-author of a book recently published on the history of the University of Alaska's School of Mines but the book for which he will be most remembered is his 1964 epic: "Handbook for Alaskan Prospectors." This book stands as one of the most valuable contributions to Alaskan mining literature ever written.

The book is an historical gold mine of practical, common sense prospecting techniques.

At the same time the book remains a snapshot of a way of life quickly receding into mining lore.

Where else can you learn how to read a topographic map, hard face a pick point in your own forge and construct shelter without hammer and nails?

But Ernie's ability to give freely of himself and his assets is the quality that I think will be most missed by all of us he has left behind.

I know of no better example of this than an experience which has left an indelible mark on my memory but which I have discovered Ernie did not even recall only a few days after it happened.

Early one cool fall morning in the late 1980s, Ernie and I were heading out to the Cleary Summit area near Fairbanks to evaluate the underground workings of the old Nordale adit.

We needed a couple of hard hats which Ernie indicated he could supply.

On the way to the mine I stopped by Ernie's house and followed him to a well-used work shed where he kept the hard hats.

We opened the shed door and stepped inside.

There, on a threadbare old couch, was a rumpled young man, fast asleep.

Ernie stopped, looked at the man and said "Hmm, there's somebody on my couch." He quietly retrieved the hard hats and we left the man still asleep.

As we drove the 25 miles up to the Nordale adit I waited for Ernie to bring up the odd incident of the stranger on his couch.

But he said nothing.

Finally, too curious to keep silent, I asked Ernie "Who was that man on your couch?" Ernie simply said "I don't know." Nothing more was ever mentioned and to this day the identity of the sleeping man and the circumstances surrounding his presence on Ernie's couch remain a mystery.

It wasn't that Ernie did not care that someone was using his couch as a bed.

What was obvious to Ernie was that the man needed a place to sleep.

If the man had asked for a place to stay, Ernie would surely have given it to him.

To Ernie there seemed to be no distinction between needing help and asking for help.

Ernie's rare quality of human compassion combined with his technical training and no-nonsense common sense experience make Ernie Wolff one of the few men I know who qualify as "gentleman scientists" in the 21st century.

Good bye Ernie and good hunting.


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