Full Metal heads full throttle into 2008
Junior advances key exploration projects with seven JV partners across Alaska; two of world's largest metal producers join ranks
Last updated 2/24/2008 at Noon
Full Metal Minerals Corp. is gearing up for a busy 2008 exploration season.
And Rob McLeod, the Vancouver, B.C.-based junior's vice president of exploration, "can't think of a better place to explore than Alaska in terms of mineral potential."
McLeod told Mining News in a recent interview that the company will spend between $17 million and $20 million on exploration this year on ten projects in Alaska and one prospect in Canada's Yukon Territory. Some $6.5 million of that outlay is budgeted for work at Full Metal's 100 percent -owned 40 Mile property in eastern Alaska.
Full Metal also will explore three other wholly owned properties in its Alaska portfolio and possibly begin the permitting process for an underground gold mine in Southcentral Alaska.
Pursuing a business strategy of sharing exploration risk on some projects by bringing in joint venture partners and advancing other properties on its own, Full Metal is making a bold grab for significant returns from promising mineral prospects statewide.
Eight companies have signed up to partner with Full Metal, bringing not only needed capital but also specialized expertise to advance large-scale projects. Two of the JV partners, Freeport-McMoRan Copper and Gold Corp. and BHP Billiton, are among the world's largest metal producers. The rest are savvy juniors that respect Full Metal geologists' talent for ferreting out commercial quantities of precious and base metals. Full Metal recently sold its JV interest in the Kamishak Property to Alix Resources.
"We are proud of the fact that we have brought eight new companies to Alaska," McLeod said.
Massive sulphide potential at 40 Mile
About 35 percent of Full Metal's exploration budget for 2008 will be spent on the 40 Mile property near the eastern Alaska town of Chicken. The company has an option to earn 100 percent interest of mineral rights on more than 800,000 acres owned by Alaska Native regional corporation Doyon Ltd in the 40 Mile Mining District.
The 40 Mile property encompasses numerous zinc-lead-silver targets as well as prospective gold and copper targets. With the discovery of zinc-rich massive sulphide systems at the LWM and Fish prospects, as well as bonanza silver grades and high base metal values discovered in surface samples collected from the Eva prospect, Full Metal geologists believe 40 Mile has the potential to be a new Alaska massive sulphide district.
The LWM zinc-lead-silver prospect will be the primary drill target at 40 Mile in 2008, McLeod said. Earlier drilling encountered mineralization for more than 300 meters along strike length and to depths greater than 200 meters and is currently open in all directions. This year's drilling at LWM will be designed to block out the resource.
Full Metal drilled 21 holes for a total of 3,126 meters at LWM in 2006 and 2007. Drill hole LWM 07-19 had the highest mineralization yet discovered at the carbonate replacement deposit, with an average of 19.9 percent zinc, 2 percent lead, and 30 grams per metric ton silver over 126.5 meters; a subsection of 5.46 meters had an average of 19.9 percent zinc, 31.8 percent lead, and 346.8 g/t silver.
Bonanza grade silver was discovered during surface sampling of subcrop and historic prospect pits at the Eva prospect. Of the 14 samples collected in 2007, silver values in three samples were 3,730 g/t, 1,960 g/t, and 1,280 g/t. The average assay results from all samples collected at Eva were 23.6 percent zinc, 12.6 percent lead, and 957 g/t silver.
Drumstick is located 2.2 kilometers, or 1.4 miles, north of Eva. Even though the two prospects appear to be made of the same type of host rock, McLeod said it would be a stretch to say they are both part of the same system. He said these prospects, particularly Drumstick, look better on the surface than LWM.
McLeod said the Eva, Drumstick and Oscar prospects will definitely see further drilling this year.
Lead Creek is another prospect at 40 Mile that Full Metal intends to take a closer look at.
Historic drilling at Lead Creek has shown significant high-grade silver and lead values.
The company has assay results from 22 holes drilled between 1978 and 2001 by a previous operator of the prospect.
The best intercept of the historic drilling was 9.6 meters, averaging 724.6 g/t silver, 6.4 percent lead, and 0.3 percent zinc.
Though Lead Creek has some good intercepts, it has continuity issues, according to McLeod.
Full Metal wants to do some additional surface work and use the data collected from LWM and other prospects in the area to work up new targets for Lead Creek and the Champion prospect to the west.
Full Metal investigates Lucky Shot
Lucky Shot, a high-grade gold property about 145 kilometers, or 90 miles, north of Anchorage in the historic Willow Mining District will be another area of focus for Full Metal in 2008. The property has the advantage of road access as well as power and rail corridors nearby. It also is the site of the Lucky Shot Mine, which produced more than 252,000 ounces of gold from 1908 to 1951.
Full Metal has drilled 140 holes for 29,000 meters since it acquired about 27,000 acres of state and federal patent mining claims at Lucky Shot in 2005.
Last year, the junior completed an aggressive 50-hole, 13,000-meter step-out drill program to determine the strike extent of the Lucky Shot Shear. Three of the four known fault blocks were tested, turning up significant intercepts in all three blocks that extend the continuous mineralization to 2,400 meters along the strike length and 700 meters downdip. Interceptions included 54.6 g/t of gold for 0.98 meters in the Murphy Zone, 71.6 g/t gold for 1.0 meters in the Coleman Zone, and 77.2 g/t gold for more than 0.5 meters in the Lucky Shot Zone.
Full Metal geologists believe that Lucky Shot, with its known gold resource and excellent infrastructure, has potential for future mining.
They say the property offers an exploration challenge in that it is a mesothermal high-grade, narrow-vein structure; as the structure dips under the mountain it becomes impractical to drill from the surface.
Considering the depth of the resource, future exploration would be better suited underground, and the junior is considering bulk sampling as well as underground drilling, McLeod said.
Full Metal has hired engineering firm JDS Mining to do an in-house scoping study of the project. Impressed with JDS Mining's approach to engineering mining projects, Full Metal sought them out, and is now awaiting the firm's report along with results of metallurgical tests, McLeod said.
Full Metal plans to seek mining permits for Lucky Shot in the second quarter of 2008, and if all goes well, the company envisions reopening the historic Lucky Shot Mine.
Mount Andrew and OG
The two other properties that are owned 100 percent by Full Metal are the OG property in the Yukon Territory, and the Mount Andrew property in southeast Alaska.
A 10,000-foot drill program is scheduled for the OG zinc-silver-lead prospect in 2008. The 11,200-acre prospect is located about 60 kilometers west of Dawson City. The drilling plan includes follow-up on "monster geochem anomalies and gravity geophysical anomalies" discovered during 2007 exploration, McLeod said.
At the Mount Andrew iron-oxide copper-gold property, located about 30 miles west-northwest of Ketchikan, 5,729 metric tons, or 6,315 short tons, of copper, 1.74 metric tons, or 1.92 short tons, of silver, and 216 kilograms, or 476 pounds, of gold, have been produced, according to historic documents.
In 2008 Full Metal drillers will step out from where they intersected very promising copper, iron-ore, and gold mineralization in last year's exploration at Mount Andrew.
Freeport-McMoRan Exploration Corp. to drill Pebble South
Freeport-McMoRan Exploration Corp. signed an option agreement in November with Full Metal to earn an initial 60 percent interest in the Pebble South Property in southwestern Alaska. FMEC is a subsidiary of the world's largest publicly traded copper company, Freeport-McMoRan Copper and Gold Inc.
Like its massive neighbor, Pebble South has substantial quantities of copper and gold. It consists of two land blocks covering about 119,000 acres bordering the Pebble Deposit to the east, west and south.
FMEC has agreed to spend $1.8 million in exploration on the property over the next four years, including drilling a minimum of 2,000 meters in 2008. FMEC could earn an additional 20 percent interest in Pebble South if it decides to build a mine on the property with a minimum processing capacity of 30,000 metric tons, 33 069 short tons, of ore per day.
Pebble South has not been drilled to date and Freeport-McMoRan is planning a first-phase, 2,000-meter drill program, starting in May. The company also will perform surface geophysical and geochemical sampling.
Full Metal collected 1,471 soil, stream, and rock samples, completed 50 line-kilometers (31 miles) of induced polarization (IP) surveys, and 32 line-kilometers of magnetic survey at Pebble South in 2004 and 2005.
Due to the overburden cover on the property IP geophysics was selected as the best method to identify mineralized zones. Eleven IP anomalies were identified. The two most significant finds were the Boo and TYP prospects.
The Boo prospect, which appears to be a continuation of anomalies found at Pebble, lies about 2 kilometers, 1.24 miles south of Pebble, which is owned by Northern Dynasty and Anglo American.
The TYP prospect is situated on the western margin of the Kaskanak Batholith intrusion, and has very similar features to the Pebble deposit, which is 15 kilometers, or 9.3 miles, to the east on the eastern margin of the same intrusion.
The resource giant BHP Billiton signed an option agreement with Full Metal in December to explore six copper-gold-molybdenum porphyry targets in the Tanacross region southeast of the 40 Mile Property. BHP and Full Metal will begin airborne surveys of the prospects in March.
Full Metal initiated reconnaissance-scale mapping and sampling on the properties in 2007. BHP Billiton can earn 60 percent interest in the properties by spending $2.5 million over the next three years and another $3.5 million investment will earn the major an additional 20 percent interest.
By early March, BHP and Full Metal plan to begin airborne geophysical surveys on the properties. The companies also will conduct ground geophysics and mapping this year.
Millrock joins Full Metal on Inmachuck
Vancouver, B.C.-based Millrock Resources Inc. joined the Inmachuck project last year as a joint venture partner. The 10,700-acre Inmachuck property in northwest Alaska is situated about 180 kilometers, or 110 miles, northeast of Nome. Sediment-hosted gold and carbonate-replacement style silver-lead-zinc mineralization are present on the property.
Full Metal began exploring the property in 2006 and identified a 1,000-meter by 400-meter silver-lead-zinc anomaly between Harry's and Hannum creeks.
Last year, Full Metal and Millrock began trenching work on a gold-in-soil anomaly, and drilled the silver-lead-zinc anomaly identified earlier. The partners are currently finalizing the 2008 exploration plan for Inmachuck.
New uranium discovery
Triex Mineral Corp. joint ventured with Full Metal in 2005 on the 6,175-acre Boulder Creek uranium property located in the southeastern Seward Peninsula, 47 kilometers, or 29 miles, north of the coastal village of Elim and 160 kilometers, or 99 miles, east of Nome.
Boulder Creek, Alaska's largest known uranium deposit, hosts a deposit of the same name as well as the McCarthy Marsh and Fireweed uranium prospects. Boulder Creek has an estimated resource of 1 million pounds, or 453,600 kilograms, of U308 at an average grade of 0.27 percent, according to results of drilling completed in 1981.
Though historic exploration was rigorous and documented, Triex geologists do not believe the resource estimate is reliable and in 2005, started systematic geochemical sampling. In 2006, the Vancouver, B.C.-based junior followed up with an initial 14-hole, 1,237-meter drill program.
Last year, Triex discovered significant new uranium mineralization at the Fireweed prospect during a C$1.5 million exploration program at Boulder Creek. The Fireweed discovery is much larger than the Boulder Creek deposit in both the extent of mineralized rocks on the surface, and the concentration of uranium in the soil, according to Triex.
Triex has budgeted C$1.2 million for 2008 exploration of Fireweed, its primary target at Boulder Creek this year.
Metallica and Full Metal explore Alaska Peninsula
Metallica Resources Corp. joined Full Metal to explore more than 1.4 million acres on the Alaska Peninsula and Aleutian Islands in 2005, seeking multiple porphyry copper-gold-molybdenum and epithermal gold-silver prospects. Full Metal has an exclusive 100 percent option agreement with two Alaska Native corporations for mineral rights on more that 2,000 square miles of acreage known as the Southwest Alaska Project.
Early reconnaissance revealed six high-priority targets. The focus of exploration has been on three copper-gold-molybdenum porphyry targets. Bee Creek is the only target that has been drilled and the partners are encouraged by the results.
Full Metal told Mining News that a minimum of $400,000 worth of surface mapping and ground geophysics will be completed on the Southwest Alaska Project in 2008.
Metallica is also considering an initial 1,500 meter drill program at the Kawisgag copper-gold-molybdenum porphyry target this year, said Mark Peterson, the company's vice president of exploration.
Peterson told Mining News Feb. 18 that the cost of such a program would be upwards of $1 million. However, he cautioned that drill rigs may not be available even if the partners decide to drill Kawisgag.
Moore Creek yields source of big nuggets
The 30,270-acre Moore Creek gold property in the Iditarod Mining District about 80 kilometers, or 50 miles, southeast of McGrath, is a property that is really exciting, according to Full Metal's McLeod.
The area is known for its placer gold, much of which is angular in nature and/or still attached to quartz. But until recently, Moore Creek hoarded the secret of its lode source.
With a trenching program in 2007, Full Metal discovered the property's lode source in a 300-meter zone averaging 2.4 g/t gold, including an 11-meter section averaging 8.86 g/t gold,.
McLeod told Mining News that Moore Creek is a big system and is associated with the same structure that hosts Donlin Creek, which lies about 90 kilometers, or 56 miles, to the southwest.
Highbury Projects Inc. joined the project as a joint venture partner in August, and the two companies will begin a first-phase drill program of 10,000 feet in March.
Permits to drill CJ
Full Metal and joint venture partner Altair Ventures are ready to continue drilling a sediment-hosted gold target on Prince of Wales Island known as the CJ Property. The partners completed an eight-hole, 1,015-meter drill program at CJ late last summer. All eight holes encountered gold mineralization, which confirmed a 3,200-meter by 500-vertical-meter strike extent on the property.
The 2008 drill program will step-out from mineralization encountered in 2007, according to McLeod.