Mining Explorers 2011: Teck looks North for new mines
Miner employs trilateral strategy to pursuit of copper, gold, zinc deposits
Last updated 11/6/2011 at Noon
From deploying its own geologists to make grassroots discoveries to partnering with junior explorers with strong geological know-how and enticing projects, Teck Resources Ltd. is seeking new high-quality deposits of zinc, copper and gold across Alaska and Canada's North.
"In terms of our overall exploration strategy, it has three parts to it: One is doing our own grassroots, regional exploration; the second arena we get involved with is joint ventures with junior companies; and the third way is doing equity placements in juniors which gives us certain rights in the future," Teck Resources VP of Exploration Fred Daley explained in a recent interview.
Applying this trilateral strategy, Teck's in-house exploration team roved the Yukon Territory and northern British Columbia in 2011 in search of promising copper and gold prospects, while savvy junior partners Millrock Resources Inc. and NGEx Resources Inc. were busy drilling their respective projects in Alaska and British Columbia.
In its hunt for zinc, Teck need look no further than the backyard of its Red Dog Mine in Northwest Alaska. The diversified miner continues to tap zinc-rich SEDEX deposits there and by applying modern techniques, the exploration team has developed new targets throughout the district.
Although Teck sold off most of its gold assets in 2008 and 2009, the diversified miner is also prospecting Alaska and the Yukon Territory for new deposits to add to its aurum portfolio.
"We are active in the gold exploration and gold development business," Daley told Mining News.
In this pursuit of new gold deposits, Teck has forged an exploration alliance with Millrock Resources Inc. on the junior's Estelle project about 170 kilometers (105 miles) northwest of Anchorage, Alaska.
Though Estelle lies in the heart of the Kahiltna Terrane - an assemblage that hosts enormous copper-gold deposits such as Northern Dynasty Ltd. and Anglo American plc's Pebble project and Kiska Metal Corp.'s Whistler property - the primary metal here is gold.
"We, like several other companies, recognize the new exploration activity in that part of Alaska - some of the positive results that are coming out of other programs in the same district," Daley commented on this highly prospective region of Southwest Alaska.
After assessing several prospects in this district, Teck's technical team concluded that Millrock and its Estelle project provided Teck with the best opportunity.
Since forging a partnership with Millrock Resources Inc. in 2010, Teck has advanced the gold prospect at a rapid rate - funding a US$3.5 million exploration program in 2011. This program gains the senior a 55 percent stake in Estelle, a year ahead of schedule.
"We were really pleased when Teck stepped up to the plate with what I consider to be a very substantial budget for a first-pass drilling program," Millrock President and CEO Greg Beischer said.
In addition to accelerating the exploration program at Estelle, Teck has increased its ownership of Millrock to around 3.9 percent through an early exercise of warrants it acquired as part of the May 2010 Estelle option agreement .
"We are happy with the way the investment and project has turned out," Daley said. "We are moving forward with trying to earn our second option there."
To date, seven main gold zones have been identified across the 246-square-kilometer (95-square-mile) land package. Four of which - Oxide Ridge, Shoeshine, Shadow and Discovery - were drilled in 2011.
The 1,500-meter program, which pierced one hole into each zone, is the first drilling at Estelle since Millrock acquired the property in 2008.
Shoeshine and Oxide Ridge are gold mineralized zones Millrock identified by sampling the broken rocks collected at the base of steep slopes characteristic of this region of the Alaska Range. Testing this talus helped geologist dial in on the source of the gold-bearing rocks collected in the rubble that had eroded from the bedrock above.
Sampling this talus, Millrock outlined a 300- by 1,000-meter gold zone at Shoeshine. The average grade of 49 samples collected from the rubble field at this prospect in the southern portion of the Estelle claim block is 0.585 g/t gold. One sample of porphyry rock cut by sheeted quartz veinlets returned assays of 13.13 g/t gold.
The average grade of 24 talus fines samples collected at Oxide Ridge, situated some 20 kilometer (12 miles) north of Shoeshine, in 2008 is 2.32 g/t gold.
By 2010 Millrock geologists had narrowed down the bedrock source of the gold mineralization found in the talus, providing targets for the 2011 drilling.
The Kahiltna Terrane is not unfamiliar territory to Teck - predecessor, Cominco, investigated this region more than two decades ago. This historical exploration included drilling at Shadow, one of the targets of the 2011 program at Estelle. The historical exploration at Shadow includes a drill intersection of 3 g/t gold over 29.6 meters and a chip sample grading 18 g/t gold over 9.9 meters.
Referring to the past exploration in the Kahiltna Terrane, Daley explains, "Between Teck and Cominco, there is probably over 100 years of exploration data for B.C., Yukon and Alaska. So we have a terrific database for gold and base metals, providing us quite a collection of historical data we utilize for making decisions on exploration."
This century of knowledge is also helping to guide the search for gold in the neighboring Yukon Territory.
"Our work in the Yukon is gold-only, and a fair bit of it is going back into our historical exploration files and coming up with some very encouraging stream sediment anomalies for gold," said the exploration vice president. "So, over the last two years we have gone back to the Yukon and staked a couple of large properties and this year we are following up with some soil surveys and additional rock sampling."
Daley said the Teck exploration team is refining targets for a potential 2012 drill programs at its two large gold properties in the Yukon Territory.
From grassroots exploration to studying the feasibility of building a mine at the colossal Galore Creek deposit, Teck's exploration in northern British Columbia is focused primarily on porphyry copper-gold systems.
"We recently staked three large properties, based on some prospecting a silt sampling we did earlier in the year. So, we will be going back to those next year with some full-scale property programs - mapping, sampling and geophysics," Daley said of Teck's grassroots exploration in northern British Columbia.
One of the primary targets of Teck's search here is CJ, a porphyry copper-gold project about 10 kilometers (6 miles) west of Highway 37 near Imperial Metals Corp.'s Red Chris project.
The senior miner, which optioned CJ from junior explorer NGEx Resources Inc. in August 2010, can earn a 51 percent interest in the project by spending C$12 million by the end of 2014, a stake can be raised to 75 percent by spending an additional $32 million by the close of 2020.
CJ currently has a measured and indicated resource of 153.3 million metric tons averaging 0.321 percent copper and 0.369 g/t gold, or about 1.09 billion pounds of copper and 1.82 million ounces of gold. There is an additional inferred resource of 23 million metric tons grading 0.26 percent copper and 0.31 g/t gold, for an additional 132 million pounds of copper and 0.23 million ounces of gold.
In order to expand this resource and to test other high-priority targets at CJ, Teck funded a C$4.5 million exploration program in 2011 that includes about 5,000 meters of drilling, a 145-line-kilometer induced polarization survey and 125 line-kilometers of ground magnetics.
NGEx President and CEO Wojtek Wodzicki said, "We are very pleased that Teck plans an aggressive field program with a significant amount of drilling that is well in excess of the minimums required by our option agreement."
Teck also has an indirect interest at the Schaft Creek copper-gold project about 110 kilometers (70 miles) southwest of CJ, a project it optioned to Copper Fox Metals Inc. in 2002. Upon the junior completing a feasibility study for Schaft Creek, Teck has the right to buy back into this copper-gold-silver project by funding additional work here.
A prefeasibility study completed for Schaft Creek in 2008 outlines a mine producing 4.76 billion pounds of copper, 4.5 million troy ounces of gold, 32.5 million troy ounces of silver, and 255.2 million pounds of molybdenum over a projected mine-life of 22.6 years. Copper Fox anticipate the completion of a feasibility study by year's end.
About 70 kilometers (45 miles) further southwest, Teck and Novagold Resources Inc. are advancing Galore Creek toward a production decision. Following a July prefeasibility study for this copper-gold-silver project, the project partners have stepped up drilling here.
Proven and probable mineral reserves reported in the PFS total 528 million metric tons averaging 0.6 percent copper, 0.32 grams per metric ton gold and 6.02 g/t silver. The project is forecast to produce 6.2 billion pounds of copper, 4 million ounces of gold and 65.8 million ounces of silver over an 18-year mine life.
Galore Creek Mining Co., a partnership held equally by Teck and NovaGold, approved a C$30.5-million budget to carry out further work at Galore Creek during the second half of 2011. Planned work includes infill drilling to convert inferred mineral resources to the measured and indicated categories, geotechnical drilling on the tunnel alignment and geotechnical drilling in pit-expansion areas.
The partners also will complete further environmental and engineering work in preparation for feasibility level studies.
During the second quarter of 2011, Teck invested the C$373 million required to earn a 50 percent interest in the partnership. The project will advance with Teck and NovaGold equally funding further development.
If put into operation as contemplated by the partnership Galore Creek would likely be Canada's largest producer of both copper and silver.
While many of the other large zinc mines around the globe may be nearing the end of their reserves, Teck's Red Dog Mine in Northwest Alaska has enough ore to continue supplying the industrial metal to global markets for at least another 20 years, and the miner is actively seeking other SEDEX ore-bodies in the region.
Exemplified by Main, a deposit that averaged some 20 percent zinc over the two decades it provided ore to the mills at Red Dog, the SEDEX deposits in this distant corner of Alaska are renowned for their fantastically high zinc grades.
Scooping up the last of the Main Pit ore in 2011, Teck and its Red Dog partner, NANA Regional Native Corp., are now mining Aqqaluk, an adjacent deposit that is anticipated to provide feedstock for the mills until 2031.
Though averaging a slightly lower grade than the ore mined over the past 20 years - the 51.6-million-metric-ton Aqqaluk deposit still offers 16.7 percent zinc and 4.4 percent lead, or 8.6 million metric tons of contained zinc and 2.3 million metric tons of contained lead.
"We have exploration people working on the infill and resource drilling at the new mining sites at Aqqaluk and Qanaiyaaq," Daley said.
Anarraaq-Aktigiruq, a deep zinc-rich prospect that lies about 11 kilometers (eight miles) northwest of Red Dog, is shaping up to be another massive zinc deposit with grades comparable to those currently being mined.
According to a 2004 report written for the Society of Economic Geologists, Anarraaq consists of a barite body, estimated to be as big as 1 billion metric tons, hosting a zone of massive sulfide zinc-lead-silver mineralization.
Teck discovered the deposit while drilling a large gravity anomaly in 1999, subsequently establishing an inferred resource of about 17.2 million metric tons grading 15.8 percent zinc, 4.8 percent lead, and 71 g/t silver.
Hole 1109, drilled at the north end of this 9,000-meter long geophysical target, intersected 4 meters averaging 29 percent zinc. Hole 1114 - drilled about 3,000 meters southeast - cut 14 meters grading 17 percent zinc, including 5 meters at 46 percent zinc. Another 4,000 meters south, hole 1150C cut 32 meters averaging 11 percent zinc, including 3.4 meters at 32 percent zinc.
Teck completed a 17-hole drill program at Anarraaq in 2010 and has one drill extending the known mineralization to the north during the 2011 drill season.
The company is also drilling a new region to the west of Red Dog called Noatak. Integrating modern geophysics, stream sediment sampling and detailed geological mapping - Teck has produced around 20 drill targets on these state of Alaska mining claims.
"We are not going to get them all done this year, it's a pretty short field season at Red Dog, but we are going to try to get four or five of the new targets drilled this year," Daley said.
This broad spectrum of exploration across Alaska, British Columbia and Yukon Territory exemplifies Teck's objective of accessing "high quality, sustainable growth opportunities through the discovery or acquisition of top-tier mineral deposits."
To meet this objective, Teck extends an open invitation via its website to prospectors and explorers.
"Teck has a team of exploration professionals focused on finding new mines and who will assess the potential of every opportunity presented, regardless of the stage of exploration. If you are interested in partnering with us, we are interested in hearing from you," declares the miner.