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By Curt Freemen
For Mining News 

Economic jitters sap venture capital

Domestic and international debt crisis threatens to rain on Alaska's recent parade of mineral exploration and development projects

 

Last updated 8/28/2011 at Noon



Despite the abundance of good news from the Alaska mining industry this month, there is an unusual black cloud hanging over the industry that threatens to rain on our parade of projects. Domestic and international markets got a severe case of the jitters during the recent United States debt crisis. The resulting economic uncertainty contributed to significant metal price volatility. For example, the London gold price jumped 20 percent, from about US$1,480 to US$1,770 during the month prior to the debt deferral and has since dropped back to the low $1700s. Many other commodities followed similar patterns.

Are the jitters over? Not hardly, and this is where the Alaska mining industry gets it in the neck: By midsummer each year, many projects like some that are discussed below, have generated positive results. For those so fortunate, going back to the well to raise more venture capital before the summer season ends is a common occurrence. Not this year. Ask anyone trying to raise venture capital out there right now and most will tell you that the enormous pool of venture capital has all but dried up due to domestic and international economic uncertainties. Venture capitalists are sitting on their hands, so if you need more venture capital right now, you may need to start thinking 2012.

Western Alaska

Teck Resources Ltd. announced second quarter results from its Red Dog mine.

During the quarter the mine produced 143,000 metric tons of zinc in concentrate.

Zinc ore grade increased to 18.6 percent, while mill recoveries fell slightly to 81.9 percent.

The mine also produced 21,300 metric tons of lead in concentrate.

Lead ore grade decreased to 4.8 percent, while mill recoveries decreased significantly to 47.4 percent.

The mine posted a US$65 million operating profit for the quarter, up slightly from the US$61 million profit in the year-previous period.

The decreased lead recoveries resulted from producing partially oxidized ore from the near-surface portions of the Aqqaluk deposit.

The mine plans to ship 990,000 metric tons of zinc concentrate and 135,000 tons of lead concentrate from the port facility this shipping season.

The mine paid its partner NANA Inc. a quarterly royalty of US$6 million.

Zazu Metals Corp. announced drilling results from its Lik deposit.

The first two holes of the 2011 program are located at the northern end of the Lik South deposit.

Results closely resemble the drill intercepts from the neighboring drill holes, suggesting good continuity within the deposit.

Hole DDH 225 returned 25.8 meters grading 2.63 percent lead, 7.06 percent zinc and 20.9 grams per metric ton silver, along with a deeper interval of 28.2 meters grading 1.55 percent lead, 4.1 percent zinc and 38.4 g/t silver.

Hole DDH 226 returned 21.5 meters grading 2.59 percent lead, 10.8 percent zinc and 46.7 g/t silver.

Additional drilling, metallurgical, engineering and environmental work continues on the project.

Cedar Creek Exploration Inc. announced that a second diamond drill rig has been mobilized to their Kelly Creek gold project on the Seward Peninsula. The two rigs will be used to follow up previously identified targets derived from soil sampling as well as follow up on soil sampling results currently under way.

Fire River Gold Corp. announced that it has negotiated a three-year contract with Glencore International Ltd. for the sale of copper concentrate produced at Nixon Fork gold mine. The gold-rich copper concentrate is to have moderate copper content, which has varied from 10 percent to 25 percent, historically. Approximately half of the company's revenue from Nixon Fork will be generated from the sale of the gold-rich copper concentrate and the other half from the sale of the doré bars to the Johnson Matthey refinery.

Invenio Resources Corp. announced that exploration had begun at its Candle Hills project near McGrath. The summer work program will consist of geological mapping, rock sampling and a soil sample grid intended to further define gold mineralization previously identified as part of a State of Alaska-funded reconnaissance geological mapping program from 1977-1982.

Invenio Resources Corp. also announced plans to commence drilling at its Ganes Creek project in September. Work to date includes 25 line-kilometers of induced polarization geophysical surveys targeting favorable geology over 4 kilometers (2.5 miles). This work is intended to tie together previous induced polarization grids and also will extend these grids to cover areas that may be underlain by the favorable geology. When completed and interpreted, these geophysical grids will help the company plan its anticipated September drilling program.

Interior Alaska

Kinross Gold Corp. announced second-quarter results from the Fort Knox mine near Fairbanks.

The mine produced 77,727 ounces of gold at a cost of US$678 per ounce.

Production decreased over the second quarter of 2010 when 86,270 ounces of gold were produced as a result of lower head grades and lower gold recoveries.

During the quarter the mill and heap leach processed 10 million metric tons of ore, which included 6,552,000 metric tons grading 0.37 g/t gold placed on the heap leach pad and 3,348,000 metric tons grading 0.59 g/t gold processed by the mill.

Gold recovery in the mill averaged 79 percent.

Gold recovery on the heap leach pad was not released.

The company also reported that two reverse circulation and one core rig continued their 13,000 meter phase 8 drilling program during the quarter.

In addition, Kinross said it provided a three-year, US$1 million endowment to the University of Alaska Fairbanks that is designed to provide training to mining engineering students.

Freegold Ventures Ltd. announced additional drilling results from the 700,000-ounce Dolphin deposit on its Golden Summit project.

Hole GSDC11-47 intersected 516.2 meters grading 0.53 grams of gold per metric ton including 149.2 meters at the bottom of the hole grading 1.03 grams of gold per metric ton.

Mineralization in hole GSDC-11-47 is hosted in pervasively sericite-altered granodiorite and consists of multiple zones exhibiting polyphase quartz-sulfide sheeted veins and sulfide-only veinlets.

Pervasive silicification and albitization also were noted at several locations in the hole.

Sulfides average about 1 percent, primarily as disseminated pyrite and arsenopyrite with or without accompanying arsenopyrite-jamesonite-pyrite veinlets.

The intensity of silicate alteration, sulfide veining and quartz veining increases to depth.

This hole represents the deepest drill hole at Dolphin.

The company also announced that phase two drilling has commenced and is aimed at testing other areas on the property that have not been systematically explored.

Property-wide ground geophysical surveys are also underway in order to delineate additional targets for the phase 2 drilling program.

Teryl Resources Corp. announced that a drilling program is planned this season on the company's Westridge gold property in the Fairbanks District.

One of two areas selected for this work returned soil samples containing gold values ranging from trace up to 848 parts per billion with elevated arsenic and antimony values.

Gold, arsenic and antimony values were consistently higher in soil samples collected over granodiorite intrusive host rocks suggesting a possible genetic association between the intrusive rocks and gold mineralization.

Rock samples collected from the same hand-dug pits where soil samples were collected returned gold values ranging from trace up to 4.3 g/t gold.

Gold was associated with anomalous arsenic and antimony and was hosted by iron oxide stained quartz-bearing intrusives and quartz-mica schist of the Fairbanks Schist.

The extent of the mineralization is open to expansion beyond the areas sampled to date.

Millrock Resources Corp. has announced core drilling results from the Uncle Sam gold project.

Significant results from the Wolf prospect included hole WLF-002, which returned 4.86 g/t gold over 11.4 meters, and WLF-003, which returned 3.05 meters averaging 3.27 g/t gold.

Gold mineralization at the Wolf Prospect appears to strike in a northwest-southeast orientation with a gentle southwest dip, and is open to depth and in both strike directions.

The mineralization appears to have the same orientation as the Naosi prospect, a new gold zone recently announced by Sumitomo at its adjacent Monte Cristo project.

Five diamond drill holes also have been completed at the Lone Tree prospect located northwest of the Wolf prospect in the northern part of the property.

Assay results are pending.

Linus Gold Corp. announced that it will commence an exploration program in September at its Trout project in the Rampart District.

The program will consist of 40 to 60 auger drilling holes, to identify drill targets for future follow-up.

During 1993-1994, previous explorers identified a 3,000 feet long by 1,000 feet wide, northeast-trending, gold-in-soil anomaly which overlies one of two mid-Cretaceous igneous intrusions on the project.

Thirty-nine soil samples contained 65 to 680 parts-per-billion gold and 13 rock chip samples contained 130 to 9,640 ppb gold.

Elevated silver, lead, zinc, arsenic and antimony values also were identified.

During 2010, Linux contractors attempted to verify this anomaly by collecting nine soil and 46 rock chip samples.

The soil samples contained 10 to 967 ppb gold and an average of 156 ppb gold, successfully confirmed the northeast trend of the mineralization and widened it by about 150 feet to the northwest.

The 34 rock chip samples contained up to 411 ppb gold with elevated gold values obtained from quartz veins within the intrusive.

Endurance Gold Corp. announced that exploration had commenced on its McCord Creek gold project in the Livengood District. The project covers streams from which two anomalous gold samples have been reported by the state Division of Geological and Geophysical Surveys. These samples returned 110 ppb and 61 ppb gold. The exploration program consists of geological mapping and collection of 400 soil samples using a powered soil auger when required.

Full Metal Zinc announced that drilling and surface exploration is underway at its Fortymile project. Drilling to date at the LWM prospect has encountered massive silver-bearing sphalerite, galena, chalcopyrite mineralization over 900 meters of strike length, and in excess of 250 meters below surface. LWM remains open for expansion to the south and at depth. Drilling during the 2011 season will target on multiple soil anomalies (> 100 parts per million lead and >200 parts per million zinc) within three kilometers of LWM. Additionally, the company is expanding additional soil grid coverage over favorable carbonate host rocks that underlie the property.

100 parts per million lead and >200 parts per million zinc) within three kilometers of LWM. Additionally, the company is expanding additional soil grid coverage over favorable carbonate host rocks that underlie the property.

200 parts per million zinc) within three kilometers of LWM. Additionally, the company is expanding additional soil grid coverage over favorable carbonate host rocks that underlie the property.

Alaska Range

Corvus Gold Inc. and partner Ocean Park Ventures Corp. announced the results from 769 grab and chip rock samples from the Golden Range target on their Chisna project.

Gold values from these samples ranged up to 79.8 g/t gold and averaged 1.19 g/t gold.

A total of 114 samples returning greater than 1 g/t gold and 22 samples returned greater than 10 g/t gold.

Gold mineralization at the Golden Range target is hosted in sheeted, silicified and sulfide-bearing vein systems with thicknesses from less than 1 meter to more than 20 meters.

Mineralization is associated with a major northwest-trending structural system traced over 9 kilometers (5.6 miles).

In addition, 885 meters of diamond drilling have now been completed in five of 17 proposed phase 1 drill holes.

Results for drilling are pending.

Rhyolite Resources Ltd. announced assay results from the first two holes drilled at its Paxson gold project.

Significant results include hole WG11-01, which intersected 2.8 grams of gold per metric ton over 8.8 meters and an additional 2.1 g/t gold over 7.0 meters, and hole WG11-02, which intersected 3.5 g/t gold over 23.1 meters including 5.4 g/t gold over 13.2 meters.

Holes WG11-01 and WG11-02 targeted the Shalosky zone, which is defined by a 1,100 meter by 50- to 500-meter gold-in-soil geochemical anomaly that runs greater than 100 ppb gold.

Hole WG11-01 tested for mineralization approximately 40 meters vertically below a 2010 surface trench that assayed 8.85 g/t gold over 7 meters.

To date, a total of five diamond drill holes comprising 789 meters have been completed at the Shalosky zone, four diamond drill holes comprising 536 meters have been completed at the Low zone and two holes comprising 323 meters have been completed at the Hunter showing.

Assays are pending on all but the first two holes from Shalosky.

Heatherdale Resources Ltd. announced commencement of a drilling program at the Delta project. One drill rig is testing copper-lead-zinc-silver-gold volcanogenic massive sulfide targets identified on the property. Along with the drilling program, exploration is being conducted to evaluate and sample other potential drill targets on the property.

Millrock Resources Inc. announced that it has commenced drilling at its Estelle gold property.

The work is being managed by Millrock on behalf of Teck American Inc. The first round of drilling is planned to consist of six holes totaling approximately 2,500 meters.

Two holes will be drilled at the Oxide Ridge prospect, two holes at the Shoeshine prospect and one hole at each of the Shadow and Train prospects.

All three prospects, Shoeshine, Shadow and Train, may be part of the same mineralizing system.

Geochemical sampling done by Millrock and by Teck American in prior years indicates an abundance of gold mineralization in quartz veinlets and stockworks over a circular area measuring at least one kilometer in diameter area.

Historic exploration work at Shadow by Teck American includes a drill intersection of 3.0 g/t gold over 29.6 meters and a chip sample grading 18.0 g/t gold over 9.9 meters.

Corvus Gold Inc. and partner WestMountain Index Advisor, Inc. announced the commencement of their 2011 drill program at the Terra gold project in the western Alaska Range.

Initial drilling is targeting the north extension and depth extension of the high-grade Ben Vein system previously drilled in 2006 and 2007.

The Ben vein system is open along strike and at depth, with a minimum strike length of 400 meters and a depth of at least 350 meters.

The mineralized vein has been found to vary in true width from 0.2 to 3 meters with the high-grade zone averaging 1.3 meter in thickness at a grade of 23 grams of gold per metric ton.

In addition, the partners have commenced bulk sampling of the Ben Vein which includes the construction of a pilot mill for the possibility of near-term, small-scale gold production.

Alix Resources Corp. announced an update on the 2011 drill program at its Golden Zone gold-silver-copper property in the Valdez Creek District. Two diamond drill holes have been drilled at the Lower Riverside prospect at the north end of the property. Both holes appear to have encountered the Wells vein, a quartz-arsenopyrite-pyrrhotite-pyrite-chalcopyrite replacement vein in Triassic limestone. The drill has now been moved to the Golden Zone Breccia Pipe prospect where a 500-meter-deep hole is planned. The company anticipates drilling 2,500 meters on the property this summer with US$1.5 million currently budgeted for 2011.

Northern Alaska

Andover Ventures Inc. announced initial assay results from drill holes at its Sun volcanogenic massive sulfide project in the Ambler District.

Significant results from the Sun deposit include hole Sun 11-24, which returned 16.5 meters grading 1.6 percent copper, 3.49 percent lead, 10.25 percent zinc, 86.6 grams of silver per metric ton and 0.24 grams of gold per metric ton.

Significant results from the SW Sun deposit include hole Sun 11-25 which returned 3.86 meters grading 1.13 percent copper, 1.27 percent lead, 4.88 percent zinc, 46.3 g/t silver and 0.23 g/t gold and hole Sun11-26 which returned 7.12 meters grading 0.41 percent copper, 1.57 percent lead, 4.79 percent zinc, 164.2 g/t silver and 0.25 g/t gold.

Hole 11-25 and 11-26 extended mineralization 300 meters to the southwest bringing the known strike length of mineralization at the SW Sun prospect to at least 500 meters.

Drill hole Sun11-27 was drilled 300 meters northeast of the main SW Sun zone and returned 3.58 meters grading 2.1 percent copper, 0.35 percent lead, 1.23 percent zinc, 231.1 g/t silver and 0.62 g/t gold.

Silverado Gold Mines Ltd. announced release of an updated technical report on its Nolan Creek project in the Brooks Range. The update included retraction of a non-compliant economic analysis announced in January 2011. The previously announced resource estimate for the project remains unchanged.

Southeast Alaska

Hecla Mining Co. announced second quarter 2011 production results from the Greens Creek mine on Admiralty Island.

The total cash cost per ounce of silver produced at Greens Creek for the quarter was negative US$2.70 per ounce versus negative US$4.56 per ounce in the year previous period.

Actual operating expenses were up 29 percent year-on-year due to higher cost power generated on-site and higher labor fringe benefit costs.

The average grade of ore mined during the quarter was 10.47 ounces of silver per ton, down significantly from the average grade of 12.42 ounces per ton that was mined in the second quarter of 2010.

During the second quarter the mine produced 1,459,534 ounces of silver, 14.426 ounces of gold, 5,497 tons of lead and 17,069 tons of zinc.

The mill processed 189,483 tons of ore during the quarter.

In addition to production, exploration and definition drilling continued during the second quarter.

The company has retained a contractor to engineer the planned re-access into the East Ore Zone for the development of a mine plan that will extend Greens Creek's mine life.

Currently, reserves in the East Ore Zone are 683,000 tons at 13 ounces of silver per ton and 7.89 percent zinc.

East Ore Zone resources consist of 1.2 million tons at 12.6 ounces per ton silver and 7.14 percent zinc.

Exploration potential remains along strike to the southeast.

Definition and exploration drilling of the western and southern extensions of the Gallagher zone defined a shallow, west dipping baritic ore zone containing lenses of massive sulfides and white carbonate material that vary from 15 to 45 feet in thickness and contain narrower, high-grade intervals.

The mineralization outlined by this drilling measures approximately 120-feet along strike and 400 feet down dip.

Significant intervals include 5 feet grading 33.35 oz/t silver, 0.120 oz/t gold, 5.19 percent zinc and 2.28 percent lead and 15.3 feet grading 16.56 oz/t silver, 0.291 oz/t gold, 7.75 percent zinc and 3.45 percent lead.

Additional surface and underground drilling continue at the 200 South, Lower West Wall, East and Cub zones.

Coeur d'Alene Mines announced second quarter 2011 production results from its Kensington gold mine.

The mine produced 25,758 ounces of gold at a cash cost of US$924 per ounce and a total production cost of US$1,308 per ounce.

Production since the end of the second quarter has been up 15 percent due in part to the mill processing 1,400 tons of ore per day, 150 tons per day over its design capacity.

During the quarter the mill processed 121,565 tons of ore grading 0.23 ounces of gold per ton.

Mill recoveries averaged 93 percent.

Exploration at the mine consisted of 1,000 meters of core drilling to discover new mineralization and expand mineral reserves.

The main focus of this drilling was on the Comet zone, located about 3,300 feet north of the mill.

Quaterra Resources Inc. and Grande Portage Resources Ltd. announced initial 2011 drill results from the Herbert Glacier gold project near Juneau. Significant results include hole 11E-2 which returned 8.76 meters grading 1.08 oz/t gold and hole 11E-1 which returned 6.95 meters grading 0.42 oz/t gold. To date in 2011 Grande Portage has completed 11 drill holes from three platforms totaling approximately 2,000 meters of its planned 4,000 meter drilling program.

Heatherdale Resources announced additional drilling results from its Niblack volcanogenic massive sulfide deposit near Ketchikan.

Key intersections were encountered in the Lookout deposit, the Mammoth zone, and a new gold-enriched zone between the Lookout and Trio deposits.

Significant results from the Mammoth zone include hole U112 which intersected 7.3 feet grading 6.78 percent copper, 7.07 percent zinc, 0.99 g/t gold and 59 g/t silver.

At the Lookout deposit, hole U128 returned 45 feet grading 1.06 percent copper, 1.85 percent zinc, 1.66 g/t gold and 31 g/t silver.

In the new zone between the Lookout and Trio deposits hole 123 intersected 7.8 feet grading 1.67 percent copper, 3.32 percent zinc, 19.51 g/t gold and 263 g/t silver.

Additional drilling is in progress.

Ucore Rare Metals Inc. announced that the U.S. Dept. of Agriculture has granted priority permitting status for roadless areas at its Bokan Mountain rare earth element project. These expedited permit approvals will allow helicopter supported exploration in the roadless areas adjacent to the Bokan Mountain resource, effective immediately.

 

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