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By Shane Lasley
Mining News 

JV seeks good news in platinum prospects

Major producer teams up with junior to explore Southwest Alaska targets for lode source of 650,000-ounce historic placer output

 

Last updated 6/29/2008 at Noon



Pacific North West Capital and Stillwater Mining Co. have begun the 2008 drilling program at the Goodnews Bay Platinum Project in Southwest Alaska. The $1 million program has two primary targets, Last Chance and Susie West prospects, defined with rock and soil sampling programs in 2006 and 2007.

In addition to about 3,000 meters of core drilling planned at Last Chance and Susie West, the companies will also continue an auger soil sampling program on Susie Mountain which will be used to locate drill targets at Susie West and the adjacent Rock Mite prospect.

The project covers about 82 square miles, or 212 square kilometers of lands owned by the Alaska Native regional corporation, Calista Corp. and hosts the Goodnews Bay Ultramafic Intrusion, which is believed to be the lode source of about 650,000 ounces of platinum recovered from Salmon River placer deposits.

Last Chance

The Last Chance prospect is located on Red Mountain at the head of Dowry Creek, a historic producer of placer platinum and is believed to be the primary source of the placers recovered in the Salmon River drainage. Rock samples taken from an outcrop at the prospect containing platinum-enriched chromium iron oxides have returned assay results up to 2.27 grams per metric ton platinum. Geologists have also discovered platinum and palladium enriched magnetite clinopyroxene veins cutting the dunite. The platinum anomaly identified at Last Chance measures 650 meters by 175 meters.

Susie West

A platinum anomaly in basal mineral soils has been discovered at the Susie West prospect. The owners said the discovery excites geologists because it indicates that the platinum lode source found at Red Mountain on the west side of the Salmon River continues at Susie Mountain on the east side of the river. The two mountains are part of the same intrusion that has been divided by the Salmon River Fault. This means that the recently discovered platinum mineralization at the Susie West prospect is hosted in rock equivalent to what has been eroded from Red Mountain to form the Salmon River platinum placer.

An auger drilling program carried out in 2007 was designed to better define the Susie West soil anomaly. The auger program, which was carried out on a 50-meter-by-100-meter sampling grid to a depth of about 40 feet, outlined a teardrop-shaped area that measures 200 meters east-west by 35 meters north-south and the soil anomaly is open to the west. The assay results from the auger program returned grades as much as 432 parts-per-billion platinum.

Rock Mite

Rock Mite, on the southwestern ridge of Susie Mountain, is another potential drill target at the Goodnews Bay project. Grab samples taken from the prospect in 2006 returned platinum values up to 334 ppb. Geologists collected another 20 samples from the prospect in 2007; seven of the samples returned platinum values of more than 100 ppb and one sample assayed at 603 ppb.

Rock Mite represents another platinum lode source on Susie Mountain and validates the belief that Susie Mountain hosts an extension of mineralization found on the west side of the Salmon River Fault. Auger soil sampling conducted this year will be used to help delineate targets for future core drilling.

Stillwater interested in Goodnews

Stillwater, the only producer of platinum and palladium in the United States, took an interest in Pacific North West Capital shortly after exploration began at Goodnews Bay in 2006. Stillwater subsequently took part in three separate private placements and currently owns about 10 percent of the company.

In addition to owning stock in the company, Stillwater entered into a joint venture agreement with PFN on the Goodnews Bay Project. The platinum producer can earn a 50 percent interest in the project by spending $4 million by the end of 2010. An additional 10 percent can be earned by spending another $8 million on exploration over the following two years or completing a feasibility study and another 5 percent can be earned by arranging for the financing of commercial production by 2015.

Stillwater and PFN also completed limited reconnaissance exploration to locate other potential platinum projects in Alaska. The partners initially planned to spend $500,000 to locate additional platinum exploration prospects but since decided to focus on exploration at the Goodnews Bay project.

Five decades of placer production

The Goodnews Bay region was the primary producer of platinum in the United States for more than five decades. From 1927 through 1978 about 650,000 ounces of placer platinum was extracted from the Salmon River and its tributaries.

Yup'ik residents of the area, Walter Smith and Henry Wuya, first discovered platinum in the streams draining Red Mountain in 1926. The discovery led to a claim-staking rush followed by several small-scale mining operations.

The first large-scale mining of platinum began in 1937 when Goodnews Bay Mining Co. constructed a bucket-line dredge on the property. By 1940 the company had consolidated all the claims in the region and was the sole operator in the area. It operated the dredge through 1978, extracting most of the platinum produced in the region.

R. A. Hanson of Spokane, Wash. bought the Goodnews Bay Mining assets in 1979. Hanson and his associates renovated the dredge and operated it intermittently in the early 1980s.

After Hanson relinquished a large portion of his federal lode mining claims, Calista Corp. acquired them and lands at Susie Mountain under provisions of the Alaska Native Claims Settlement Act.

Increased platinum prices have brought renewed interest to the region. Not only for the lode potential being pursued by Pacific North West Capital and Stillwater, but also for the remaining placers. Additional platinum and gold remain in gravels and tailings in the area, but most placer reserves are believed to be deeply buried in the lower Salmon River Valley.

 

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