Mining news update from Curt Freeman: Alaska miners out in the field this summer

High summer in high north has people out breaking rocks, drilling holes and crushing ore; some results out, others still busy in field


Last updated 8/28/2005 at Noon

I have had numerous people ask me the same question over and over again for the last month - "What's going on in Alaska; everyone is so quiet?" My response has been and remains the same - everyone is too busy breaking rocks, drilling holes or crushing ore to be bothered with new releases and grandiose public announcements.

After all, it is high summer in the high north, a time of seasonal frenetic activity that makes the lot of us look and feel like a mouse in a habitat wheel! Despite the fact that a dozen or so companies announced results of their recent activities, well over a dozen other companies and projects remained off the radar screen as they collect and evaluate data from field exploration, development and production activities.

I suspect August will be similar - lots of work but not a lot of hot air (that comes later in the year)!

Western Alaska

Teck-Cominco's Red Dog mine saw continued strong operating profits in the second quarter of 2005 as a result of strong zinc and lead prices which averaged 55 cents and 45 cents per pound, respectively. Operating profit was $9 million vs. an operating profit of $10 million in the same period in 2004. For the quarter, the mine generated 134.4 tonnes of zinc and 23.7 tonnes of lead in concentrate vs. 138.8 and 25.6 tonnes of zinc and lead, respectively, in the second quarter of 2004.

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

The mine sold 52,000 tonnes of zinc and no lead during the second quarter. Average zinc and lead grade mined was 21.7 percent and 5.5 percent vs. 22.3 percent and 5.6 percent, respectively, in the second quarter of 2004. Mill throughput of 741,000 tonnes in the second quarter was significantly up from the 728,000 tonnes milled in the second quarter 2004.

Novagold Resources said at its Donlin Creek project JV partner Placer Dome has increased the 2005 exploration budget from $11 million to $13 million. Placer Dome is completing detailed engineering and design studies for all capital and operating cost estimates to bring information to a Pre-Feasibility level and is preparing extensive baseline environmental data to initiate the permitting process by late 2005.

Placer Dome currently owns a 30 percent interest in the project and has the right to earn an additional 40 percent interest from NovaGold by expending US$32 million toward development of the property, completing a bankable feasibility study and making a positive construction decision by November 2007.

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Tonogold Resources Inc. announced initial results from its Nyac gold project in southwestern Alaska.

To date more than 1,400 samples have been collected from the Wallace, Bonanza Ridge and Bonanza Creek prospects and four adjacent or newly recognized areas. Of the 518 surface geochemical samples reported to date for the Bonanza Ridge prospect, 58 soil grid samples ranged from 0.105 parts per million gold to 2.86 parts per million gold. Seven rock chip samples taken during grid sampling ranged from 0.121 parts per million gold to 15.1 parts per million gold.

One rock chip sample from the Wallace Prospect reported 7.2 parts per million gold. The company anticipates another 630 assay results from Bonanza Ridge and other prospects within a few weeks.

Liberty Star Gold Corp. said drilling began in mid-June at the White Sox prospect on its Big Chunk copper-molybdenum-gold project near Iliamna. The initial drilling intersected strongly quartz veined and silicified rock with occasional chalcopyrite blebs. A total of 7 holes have been drilled so far; results are pending.

Drill sites were chosen to test a combination of airborne magnetic anomalies, geochemical anomalies and induced polarization geophysical anomalies. To date approximately 45 line-miles of induced polarization surveys have been completed, including 9.5 linear miles of responsive IP over five different geochemical anomalies. Induced polarization and geochemical sampling programs surveys are continuing.

Alaska mineral exploration copper gold Mexico British Columbia project generator

The company also said it had staked an additional 261 Alaska state mining claims covering approximately 65 square miles of prospective lands identified by previous geochemical sampling. Liberty Star now owns a total of 1,242 Alaska state mining claims covering about 302 square miles.

Geocom Resources Inc. said it has amended its exploration agreement with TNR Gold Corp. on the Iliamna copper-gold project in southwestern Alaska. Geocom and TNR have earned an interest on the H Claims from property owner BHP Billiton and are in the process of establishing a formal joint venture agreement to govern the continued exploration of this block.

Geocom has now spent in excess of the required funds set forth for the D and H claims in the original agreement, and as a result the partners have amended their option agreement to provide for the establishment of a joint venture on the D Claims as well. Geocom agreed to reduce its potential earned interest from 75 percent to 51 percent, in return for which TNR agreed to begin funding its 49 percent interest immediately. Exploration permits have been filed with the Bureau of Land Management and it is anticipated that drilling will occur on the D claims in late August or early September.

Eastern Interior

Teck-Cominco said construction of the Pogo gold mine in Alaska continues to progress on schedule except for underground development work. A construction work force of more than 400 is currently working on the site. At the end of June the construction was estimated to be 75 percent complete with underground pre-production development work currently about 30 percent complete.

Productivity has been lower than anticipated and progress has also been slowed by poor ground conditions in portions of the access drift areas. As a result, it is anticipated that the overall project completion schedule will be met but that the initial ore feed to the mill will be trucked rather than conveyed from underground.

Production start-up is expected in the first quarter of 2006 with a phased ramp-up to full production in the first half of 2006. The current estimate of total capital costs for the project is US$321 million.

Golden Spirit Mining said it will change its main course of business from mineral exploration to online poker. Management has decided that for now its current Ester Creek Gold property near Fairbanks and its other mineral interests will be held in a wholly owned subsidiary of the parent public company.

Alaska Range

Piper Capital Inc. said drilling has begun at its Golden Zone prospect in the central Alaska Range. Phase 1 drilling consists of approximately 9,000 feet of core drilling in 18 to 20 holes on the Golden Zone Breccia Pipe, veins, mineralized dikes, and replacements in the BLT and Mayflower prospects northeast of the Breccia Pipe and at the Long Creek prospect approximately 1.5 miles south of the Breccia Pipe.

The company also said revised resource estimates for the Golden Zone Breccia Pipe have been completed and include measured and indicated resources of approximately 2,027,000 tons grading 0.106 ounces per ton gold, 0.47 ounces per ton silver and 0.12 percent copper (utilizing a 0.05 ounces per ton gold cut-off). These resources contain approximately 214,862 ounces of gold, 948,636 ounces of silver and 24,000 pounds of copper.

Golconda Resources Ltd. announced results from previous drilling at its Shulin Lake diamond project west of Talkeetna. One white, transparent diamond fragment has been recovered from sample B3 in drill hole 25. The dimensions of the diamond are 0.46 by 0.26 by 0.14 millimeters. Nine samples obtained from drilling of three different magnetic anomalies were sent to SGS Lakefield Research Ltd. for analysis. The other eight samples did not contain any diamonds.

Aurora Geosciences geology and geophysics 35 years of experience in the North

The samples had a total weight of 2,400 kilograms and consisted of volcanic tuffs. The results thus far indicate that different phases of tuff exist, at least one of which is closely associated with diamonds. The company is currently devising a program that will test three potential diamond source areas to determine the origin of the diamondiferous tuff phase, which the company believes is not more than two or three kilometers from the tested areas.

Southeastern Alaska

Quaterra Resources said it plans to conduct a 1,500 meter diamond drill program at its Duke Island copper-nickel-platinum group element project near Ketchikan. The August program will target recently identified gravity, magnetic and electromagnetic anomalies. The drill program follows up on surface sampling that returned values ranging from anomalous up to 2.8 percent copper, 0.25 percent nickel and 1 gram per tonne platinum and palladium and on four earlier widely spaced drill holes that intercepted disseminated semi-massive and massive sulfides over extensive lengths.

Alaska Electric Light and Power has entered into a 15 year sales agreement to sell hydroelectric power to Kennecott/Hecla's Greens Creek polymetallic mine. The power, to be provided by a 9.5 mile long underwater cable, would replace the more costly diesel-generated electrical power now being generated on-site by the mine.

The new cable also would connect Juneau to the town of Hoonah. The companies hope to have power flowing to the mine by early 2006.

Select Resources Corp. Inc. has purchased the Admiral Calder calcium carbonate deposit from Sealaska Corp. and SeaCal LLC. The original deposit was discovered around 1905 and mining commenced in 1907 for high white and statuary grade marble. The original quarries ceased operation in about 1910.

The current mine began production by Sealaska and SeaCal in 1999.

The deposit consists of 13.9 million tons of drill-proven and probable reserves and 12.5 million tons of possible resources of high chemical grade (+98 percent), high brightness and whiteness (+95 Hunter brightness @ -200 mesh) calcium carbonate for use in the paper, plastics and paint filler, whitener, extender and loader markets.

In addition, the property also contains +20 million tons of possible resources of high chemical grade (+98 percent) and medium brightness (+89 Hunter brightness @ -200 mesh) calcium carbonate for use in chemical applications and as off-white fillers, loaders and extenders.

The current resource covers only 15 acres of the 572 acres property of patented mining ground, and includes all operating permits and tideland leases.


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