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

The Alaska mining industry was relatively quiet over the last month with most of the news coming from programs completed in 2008. In addition, some programs have already started in 2009 but details are not ready for prime time gossip. A couple items that did catch my eye from the bigger world markets underscore the fact that opportunities still exist in this depressed economic climate and serve to magnify the pitfalls of government intervention in the private sector.

The "opportunity knocks" item was a report from Japan where a company reported that it expects to earn $150,000 this year from the sale of gold recovered from incinerated sludge from one of its sewage disposal plants. The facility, located in a busy manufacturing district, reported assays as high as 1,890 g/t gold from the incinerated sludge!

On the "be careful what you wish for" side of the ledger is the report of inflation rates in Zimbabwe reaching a mind-numbing 231 million percent! Inflation rates were so bad that the government (otherwise known as "root cause of the problem") decided to revalue the Zimbabwe dollar by knocking 12 zeros off the Zimbabwe dollar! That means one trillion former Zimbabwe dollars are now valued at one Zimbabwe dollar! Gold mines operating in the country also were authorized to sell their gold to anyone rather than just to the Zimbabwe central banks, further hastening the flight of wealth from this once prosperous nation.

As we in the United States look for solutions to our own financial problems, we need to be mindful of just how bad things really can get.

Western Alaska

In a series of financial transactions Novagold Resources announced that it had closed its previously announced $75 million financing and converted the remaining balance of a $20 million bridge loan with Auramet Trading LLC to stock. Auramet subsequently announced the sale of the converted shares to a series of institutional investors, including NovaGold's largest shareholder, Electrum Strategic Resources LLC, giving the latter company 28.7 percent of NovaGold's outstanding shares.

Millrock Resources announced results from drilling at the Daniel's Creek prospect and surface sampling at the Koyana prospect at its Bluff project near Nome.

Five holes totaling 403.26 meters were drilled at Daniels Creek with a goal of substantiating historic drill results reported by BHP Billiton and expanding the estimated boundaries of the reported mineralization.

Highlights of the drilling at Daniels Creek include 5.94 meters grading 1.397 grams of gold per metric ton in hole BLF1001 and 1.37 meters grading 3.819 g/t gold in hole BLF1003.

Significant nugget effect was noted in the drilling results and additional drilling will be required to determine the true grade and thickness of mineralization.

At the Koyana prospect, work completed in 2008 extended mineralization 500 meters to the southeast to what is now known as the Koyana Beach showing.

Grab samples of quartz-carbonate-arsenopyrite veins returned significant gold values ranging from 8.8 to 38.6 g/t gold.

Millrock Resources also announced drilling results at its Divide project near Nome.

Significant results include 15.24 meters grading 3.1 g/t gold in hole DIV3004, 1.52 meters grading 9.9 g/t gold in hole DIV3019, 10.67 meters grading 1.2 g/t gold in hole DIV3002 and 6.10 meters grading 1.8 g/t gold in hole DIV3012.

In addition, trenching results include 22.86 meters grading 2.2 g/t gold in trench DIV2016T, 16.76 meters grading 1.5 g/t gold in trench DIV2008T and 15.24 meters grading 1.1 g/t gold in trench DIV2012T. The 2008 exploration program consisted of geological mapping, 22 reverse circulation holes totaling 2,656.3 meters and 24 trenches totaling 1,243.6 meters.

The drilling and trenching successfully tested a previously identified, strong gold-arsenic soil anomaly that measures over 2,600 meters long and 660 meters wide.

Geological mapping identified a strong east-west structural trend with veining that is interpreted to control thicker, higher grade zones.

In addition, Millrock Resources reported that it purchased a 100 percent interest in the Estelle gold project from London-based Hidefield Gold plc, and Mines Trust Co., a privately held Alaska-based company. The consideration paid for the 100 percent interest is $125,000 and issuance of 1.25 million Millrock shares. A 2.5 percent royalty will be payable upon production. This agreement replaces the previous agreement between the parties and eliminates Millrock's $5 million work commitment on the project.

Eastern Interior

International Tower Hill Mines Ltd. announced a year-end update of mineral resources at its rapidly expanding Livengood gold project.

The updated indicated gold resource is 128.6 million tonnes at an average grade of 0.83 g/t gold (3.41 million ounces) and inferred resource of 142.1 million tonnes at an average grade of 0.74 g/t gold (3.39 million ounces), based on a cut off grade of 0.50 grams of gold per tonne.

At a cut off grade of 0.30 g/t gold the indicated resource comes in at 223.4 million tonnes grading 0.64 g/t gold (4.6 million ounces) along with inferred resources of 279.4 million tonnes grading 0.57 g/t gold (5.12 million ounces).

Perhaps most important, higher grade resources grew by 65 percent relative to previous resource estimates and these higher grade zones remain open to expansion to the northeast, southwest and south.

In addition, many of the holes completed in the second half of 2008 bottomed in significant mineralization, suggesting good potential for expanding the deposit at depth.

The company also announced commencement of its 2009 Phase-1-reverse-circulation-drill program which is scheduled to complete 35 infill drill holes totaling 6,000-7,000 meters within key infill and step-out zones adjacent to and within the known resource zone.

Select Resources announced that re-evaluation of 1989 drilling by Asarco at its Shorty Creek gold project near Livengood has indicated one hole with an 80-foot-thick near-surface interval that averages 2.2 g/t gold, including a higher-grade interval averaging over 4.5 g/t gold over 30 feet.

The lower 50 feet of this same hole averages over 0.6 g/t gold and the hole was terminated in mineralization at a 220 foot depth.

The company also reported that drilling in 1990 returned several holes with significant gold over significant widths, including hole RH19 which intersected 235 feet of over 0.49 g/t gold, the upper half of which includes 70 feet of over 0.87 g/t gold starting at surface.

Hole RH16 intersected 170 feet of over 0.50 g/t gold at the top of the hole, and 110 feet of over 0.59 g/t gold in the lower third of the hole.

RH18 intersected 175 feet of over 0.45 g/t gold which includes 90 feet grading over 0.53 g/t gold while hole RH15 intersected 125 feet of over 0.58 grams of gold per tonne, the bottom 60 feet of which averaged over 0.76 grams of gold per tonne.

Hole RH17 intersected 115 feet of over 0.87 grams of gold per tonne.

The company currently is seeking joint venture partners to assist in exploration of the project.

The U.S. Geological Survey recently released data on research conducted in the Mt. Veta area of the Fortymile District.

Included in this work were some surprising findings on mineralized and unmineralized core from the LWM and Fish Creek prospects on Full Metal Mineral's Fortymile project under lease from Doyon Ltd. New results presented include uranium-lead age dates, whole rock and trace element analyses, petrographic data and lead isotope data.

The report, entitled, "Mesozoic magmatism and base-metal mineralization in the Fortymile mining district, eastern Alaska - Initial results of petrographic, geochemical, and isotopic studies in the Mount Veta Area," by C. Dusel-Bacon, J.F. Slack, J.N. Aleinikoff, and J.K. Mortensen is available for downloading at http://pubs.usgs.gov/pp/1760/a/.

Alaska Range

MAX Resources Corp. announced final drilling assays from its Gold Hill molybdenum project in the Valdez Creek district. The company completed a 10-hole diamond drill program (7,664 feet) in 2008. Significant results included 605 feet grading 0.026 percent molybdenum including 160 feet grading 0.043 percent molybdenum in hole 08-1, 670 feet grading 0.032 percent molybdenum in hole 08-5, 1,000 feet grading 0.043 percent molybdenum in hole 08-6 and 510 feet grading 0.050 percent molybdenum in hole 08-6. The program has expanded the identified mineralized system to the north and northeast and has shown that mineralization extends beneath overburden on Gold Hill itself.

Southeast Alaska

Ucore Uranium announced the discovery of additional light and heavy rare earth element mineralization at its Bokan Mountain project near Ketchikan. New assays from the Geoduck zone include drill hole LM08-46, which returned 1.2 meters grading 3160 parts per million yttrium, 3768 ppm zirconium, 515 ppm niobium, 5737 ppm light rare earth elements and 1701 ppm heavy rare earth elements. This mineralization appears to be structurally continuous with the rare earth element-bearing I&L Zone about 2 kilometers to the northwest. As was the case in the I&L zone, mineralization in the Geoduck zone is abnormally enriched in the more economically valuable heavy rare earth elements.

Author Bio

Curt is President of Avalon Development Corporation, a mineral exploration consulting firm based in Fairbanks, Alaska. He is a U.S. Certified Professional Geologist with the American Institute of Professional Geologists (CPG #6901) and is a licensed geologist in the State of Alaska (Lic. # AA 159).

• Email: [email protected]
• Phone: 907-457-5159
• Contact Curt Freeman