The mining newspaper for Alaska and Canada's North

BC exploration spending shatters record

As unprecedented growth continues in province, mineral exploration expenditures in Alaska and Yukon dip from 2011 record levels

VANCOUVER, B.C. - British Columbia, Alaska and Yukon Territory - the headliners of the Association for Mining Exploration British Columbia's 2013 Mineral Exploration Roundup - tallied more than C$1 billion of mineral exploration spending in 2012.

This marks the second year running that these neighboring jurisdictions at the northwestern extent of the North American Cordillera topped the C$1 billion mark. But unlike the 2012 Roundup, a year in which explosive exploration spending in the Yukon Territory grabbed the spotlight, market-defying exploration in British Columbia grabbed center stage at the 2013 gathering in Vancouver, B.C.

"British Columbia is blessed with an abundant supply of the resources the world needs and the most innovative mining and exploration sectors," British Columbia Premier Christy Clark touted during a rousing opening address.

Even with these attributes, Clark admitted to delegates gathered at the 2013 Mineral Exploration Roundup that she believed the C$462 million spent on exploration in British Columbia during 2011 "might be a tough record to beat."

"Well this year, exploration spending is expected to reach C$680 million, that is a 47 percent increase," Premier Clark announced during opening remarks at the annual exploration gathering in Vancouver, B.C.

"We are stable in British Columbia, despite a very difficult international economy, and we're growing. It happened because we were purposeful; because we set a goal; because we knew it was important to unleash the dreams, the investment and the energy of the private sector," Clark said.

While British Columbia continues to chalk up unprecedented increases in mineral exploration, Alaska and Yukon reported spending closer to 2010 levels, a slide from the record levels experienced in these northern jurisdictions during 2011.

With coal and base metals fetching lower prices, it is expected mine production values for British Columbia, Alaska and Yukon Territory will be roughly US$11.5 billion for 2012, a slight decrease from 2011 levels.

High-profile BC projects

While British Columbia was not immune to the financial anxiety that dampened mineral exploration globally, some very large, high-profile projects drove the record setting spending in the province.

At roughly C$127 million, New Gold Inc.'s 270,000-meter drill program at the Blackwater gold project accounted for nearly 20 percent of the exploration spending in British Columbia during 2012 and ranks among the largest exploration programs in the world.

This program was successful in boosting the measured and indicated resource at Blackwater to 296.15 million metric tons averaging 0.85 grams per metric ton (8.1 million ounces) gold and 5.9 g/t (56.2 million ounces) silver.

According to a preliminary economic assessment completed in September, the envisioned leach plant at Blackwater would process 60,000 metric tons per day of ore, producing some 590,000 ounces of gold per annum over the initial five years of operation.

"The Blackwater project … will be by far the biggest gold mine in British Columbia," New Gold President and CEO Robert Gallagher told attendees at a Jan. 28 breakfast at Roundup.

Based on resource upgrades made since the PEA, New Gold said its mine plan will be optimized in the feasibility study, due out in late 2013.

During 2013, New Gold plans to spend roughly C$45 million for the feasibility study, permitting and development of camp infrastructure. An additional C$15 million is budgeted for exploration.

New Gold, which began operations at its New Afton gold-copper project near Kamloops B.C. in June, is targeting 2017 for first gold from the low-grade, bulk-tonnage deposit at Blackwater.

On the opposite end of the gold spectrum, Pretium Resources Inc. cut bonanza grade ore that was oft measured in kilograms of gold per ton during a 105,769-meter drill program carried out at the Brucejack project in northern British Columbia.

Brucejack is situated roughly seven kilometers away from Pretium's Snowfield and Seabridge Gold Inc.'s KSM (Kerr-Sulphurets-Mitchell) projects in a region that Bruce Madu, director of the Mineral Development Office of the B.C. Ministry of Energy and Mines, referred to as "the land of the almighties" during his presentation at the 2013 Roundup.

The 306 holes drilled at Brucejack in 2012 more than doubled the strike length of the Valley of the Kings zone to beyond 800 meters. At a 5 g/t gold-equivalent cutoff, the Valley of the Kings has an indicated resource of 16.1 metric tons averaging 16.4 g/t gold for 8.5 million ounces and an inferred resource of 5.4 million metric tons averaging 17 g/t gold for 2.9 million ounces.

The Prospectors & Developers Association of Canada is honoring Pretium with the Bill Dennis Award, which recognizes a Canadian discovery or prospecting success, for its work at Brucejack.

"We are honored to receive the award from our peers, and thank PDAC for this recognition," said Pretium's CEO Robert Quartermain. "We have, at Pretium, a dedicated team that is excited about the further potential for discovery at Brucejack and the plans to advance the Valley of the Kings in the coming year."

These plans include the May completion of an access ramp to the Valley of the Kings from the West Zone historical workings and the excavation of 10,000-metric-ton bulk sample to begin in the second quarter of 2013.

A feasibility study for a high-grade underground mine at the Valley of the Kings also is expected to be completed in the second quarter of 2013.

Other BC explorers that made significant progress on their respective projects in northern and central British Columbia include Homestake Resource Corp., BCGold Corp, Romios Gold Resources Inc., Commander Resources Ltd., SnipGold Corp., Decade Resources Ltd., China Minerals Mining Corp., Clemson Resources Corp., Canasia Industries Corp., Chieftain Metals Inc., Canarc Resource Corp., Yellowjacket Resources Ltd., Brixton Metals Corp., NGEx Resources Inc., Driven Capital Corp., Consolidated Woodjam Copper Corp. and Gold Fields Ltd.

"As advocates for successful mineral exploration in British Columbia, we are excited to see this trend of record numbers, year over year," said AME BC President and CEO Gavin C. Dirom.

BC: Open for business

Acknowledging that very large programs, such as those carried out at the Blackwater and Brucejack projects were major contributors to the robust 2012 exploration spending in British Columbia, Clark said the provincial government deserves some credit for the health of the province's mining industry.

In September 2011, Clark rolled out "Canada Starts Here: The BC Jobs Plan," an initiative that includes a commitment to the creation of eight new mines and the expansion of another nine mines currently operating in British Columbia by 2015.

"When we set those targets in the jobs plan, 17 new and expanded mines by 2015, there were skeptics. There were many people who said it wasn't worth the paper it was written on," Clark told 2013 Roundup attendees. "We are already halfway there. Since 2011, three new mines are in production and three are under construction; five major mines have received approval to expand - Highland Valley, Huckleberry, Quincel, Elk View and Endako."

Madu said 2012 mineral and coal production in British Columbia is expected to be around C$7.4 billion. About two-thirds of this value is from coal and about 18 percent from copper. Zinc, silver, gold, molybdenum, industrial minerals and aggregate were also produced in the province last year.

Reducing the backlog of Notice of Work applications, along with Land Act and Water Act authorizations, as bottlenecks in supporting natural resource development activities was another objective of the BC Jobs Plan. To address this, nearly C$24 million was directed to reduce the time it takes for businesses wanting to invest in natural resource development to get decisions on authorizations, without compromising environmental values or the requirement to consult with First Nations.

"We reduced the backlog for water and land tenures by 53 percent for land and 48 percent for water," touted Clark. "Average turnaround time for all new notice of work applications has been reduced from 110 days on the day I took over as premier down to the current 80 days."

"Our next goal is to get from 80 days to 60 and to do that is going to mean additional investments. So we are going to invest C$7 million over the next six months to focus on the backlog," she added.

In addition to the jobs plan, the construction of the 344-kilometer (213 miles) Northwest Transmission Line from Skeena Substation (near Terrace) north to a new substation near Bob Quinn Lake is playing a role in boosting mineral exploration, development and mining in copper and gold rich northwest corner of British Columbia.

"A real game-changer for our province is going to be power stretching to the northwest, right-of-way clearing is underway," said Madu.

The line, currently projected to cost C$561 million, is expected to bring affordable power within reach of many mine projects being developed in Northwest B.C. BCHydro anticipates offering service via the 287-kilovolt conduit at Bob Quinn Lake in spring 2014.

"The first beneficiary is certain to be the Red Chris project, under construction by Imperial Metals Corporation," Madu added.

A number of other enormous copper and gold projects in northwest British Columbia - KSM (Seabridge Gold), Galore Creek (NovaGold Resources-Teck Resources), Schaft Creek (Copper Fox Metals), and Brucejack (Pretium Resources) are amongst the potential mines expected to benefit from low-cost power being delivered by the Northwest Transmission Line.

"My job, on your behalf, is to let the rest of the world know that we are open for business here in British Columbia - that we are home to the most innovative, environmentally responsible, imaginative mining sector that you will find anywhere on the globe," Clark rallied.

The premier wrapped up her rousing speech by proclaiming January 27 to February 2 as Mineral Exploration Week in British Columbia.

Alaska feels pinch

Curt Freeman, a well-known Alaska geologist and president of Fairbanks-based Avalon Development Corp., informed Roundup delegates that 2012 exploration spending in Alaska is expected to be around 2010 levels of US$264, roughly 25 percent off the million-dollar-a-day pace set in 2011.

"We felt the pinch like everyone else when it comes to exploration," Freeman explained. "Good projects got money, a lot of small projects didn't."

Gold and copper once again topped the list of minerals sought by junior and senior mining companies exploring Alaska in 2012. Explorers also chased clues to stores of silver, zinc, graphite and rare earth elements across the vast expanse of the Far North state.

With a budget of US$107 million, the enormous Pebble copper-gold-molybdenum project was the largest exploration stage program in Alaska during 2012.

The Pebble Limited Partnership - a 50-50 partnership between Vancouver B.C.-based Northern Dynasty and London-based Anglo American plc to explore and develop Pebble - Sept. 20, 2012 surpassed 1 million feet (305,000 meters) of core drilled at the enormous porphyry deposit.

"If you do the math, that is 107 ounces of gold discovered per foot drilled." Freeman pointed out.

According to the most recent resource calculation, the Pebble deposit contains 80.6 billion pounds of copper, 107.4 million ounces of gold and 5.6 billion pounds of molybdenum.

"This is a monster in anybody's book," Freeman said.

Though exploration activity slowed across many regions of Alaska during 2012, a pair of companies spent some US$20 million investigating the Ambler Mining District - a region of Northwest Alaska renowned for a 70-mile- (110 kilometers) long belt of world-class volcanogenic massive sulfide deposits.

A US$16.5 million exploration program carried out by NovaCopper Inc. in 2012 added 2.4 billion pounds of high-grade copper to the some 3.6 billion pounds of resources the company and its predecessors have already outlined at the Upper Kobuk Mineral Project in the Ambler Mining District.

Andover Mining Corp. invested US$3.5 million on expanding the copper-silver-zinc-lead-gold mineralization at its Sun project located some 35 miles (55 kilometers) east of the Bornite and Arctic projects being explored by NovaCopper.

Even in tough financial markets, the prolific Tintina Gold Belt, a vast aurum province that sweeps some 850 miles (1,350 kilometers) across the breadth of Alaska, continues to draw robust exploration programs.

Freegold Ventures Ltd., with a 15,000-meter drill program at its Golden Summit property some 20 miles (32 kilometers) northeast of Fairbanks, was the first and among the most successful of the junior explorers active in Alaska's Golden Arc in 2012.

This program resulted in an explosive 325 percent expansion of the resource.

"The 15,000-meter program took it from 1.3 million to over 6 million ounces of gold," Freeman informed the crowd.

Emerging applications such as lithium-ion batteries, fuel cells, and nuclear power generation has boosted the global demand for graphite and spurred interest in Alaska's prospectivity of this industrial turned high-technology mineral.

To this end, Graphite One Resources Inc. carried out a 4,248-meter drill program at Graphite Creek, a vast deposit of the carboniferous material situated some 65 kilometers (40 miles) north of the legendary gold mining town of Nome, Alaska.

Focused on a five-kilometer (three miles) stretch of a roughly 17-kilometer (10.5 miles) trend, Graphite One outlined an inaugural inferred resource of 107.2 million metric tons averaging 5.78 percent graphitic carbon, or some 6.2 million metric tons of graphite.

This maiden NI 43-101-compliant resource for Graphite Creek catapults the project to among the top graphite deposits in the world.

While exploration expenditures dropped, the value of Alaska's mine production for 2012 is expected to hold steady at the US$3.5 billion level.

Zinc, at around 600,000 metric tons, was the top commodity mined in Alaska and accounted for about 40 percent of the state's mineral production value in 2012. Gold, at roughly 950,000 ounces, accounted for 35 percent of the value. Silver (nine percent), lead (nine percent), peat (four percent), aggregate (three percent), coal, platinum and copper were also produced in Alaska during 2012.

Challenging year in Yukon

Lee Pigage, head of the Minerals Services division at the Yukon Geological Survey, told Roundup delegates that an over-abundance of rain and snow coupled with the under-abundance of venture capital resulted in a challenging year for exploration in the Yukon Territory during 2012.

A late spring that delayed summer programs was followed up by major flooding in June that washed out the Alaska Highway and Nahanni Range Roads and further disrupted 2012 exploration in the territory.

Though less than half the C$300 million spent in 2011, the C$146 million spent on exploration resembled 2010 levels and are considered robust.

"It was challenging but the mining and exploration activity was still very healthy through 2012," Pigage informed the Roundup delegates.

The Yukon geologists said 32 of the more than 80 exploration projects carried out in the territory last year had exploration budgets of more than C$1 million.

At 69 percent, gold dominated the exploration spending in the Yukon during 2012. Zinc-lead (11 percent); copper (nine percent); nickel-platinum group elements (seven percent); and silver (four percent) rounded out the major mineral exploration in the territory last year.

Kaminak Gold Corp.'s 69,100-meter drill program at its Coffee Gold project accounted for nearly C$20 million of the exploration carried out in the Yukon during 2012.

In December, Kaminak produced a maiden NI 43-101-compliant inferred mineral resource estimate for Coffee of 64 million metric tons averaging 1.56 g/t (3.24 million ounces) gold.

Kaminak has drilled 16 gold discoveries at Coffee, but only four deposits are included in the inaugural resource

ATAC Resources Ltd., which carried out a 37,100-meter drill program at its Rackla Gold project, continued to lead the search for Carlin-style gold in the Yukon.

Atac President Rob Carne; Bill Wengzynowski, geological consultant to Atac; and Archer, Cathro & Associates (1981) Limited President Doug Eaton were honored with the Huestis Award for their role in the discovery and development of the Rackla Gold Belt.

This award for excellence in prospecting and mineral exploration was presented by AME BC during a Jan. 30 banquet at the Roundup.

The production value of Yukon's three mines - Capstone Mining Corp.'s Minto copper mine, Alexco Resources Corp.'s Bellekeno silver mine and Yukon Zinc Corp.'s zinc mine - is expected to be around C$600 million, nearly a 50 percent increase over the C$402 million in 2011.

Author Bio

Shane Lasley, Publisher

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Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.


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