Alaska mining shows signs of resurgence
Fall from peak of an industry cycle can take no time at all, while the climb back for most companies will take slow, hard work
Last updated 10/27/2013 at Noon
As I write this summary, the annual Alaska Miners Association Convention and Trade Show is right around the corner (Nov. 6-8). Despite the softening commodities prices and generally bearish sentiment expressed by the mining industry throughout the year, in the past month or so, I have seen a refreshing resurgence of that single-most important quality of the Alaska mining industry - optimism!
Despite bankruptcies, mine closures, negative feasibility studies and the exodus from Alaska of companies large and small, clear signs of resurgence are at hand. Having personally experienced five of these down-cycles (yes, I counted them), I have learned that when enough people in and out of the industry believe something will happen, it generally does happen. Unfortunately, the fall from the peak of a mining cycle to its trough takes no time at all, while the climb back up is usually slow, hard work. But as Vince Lombardi once said, "A dictionary is the only place you will find success before work".
Novagold Resources Inc. reported its third-quarter 2013 results and provided an update on its 50 percent-owned Donlin gold project.
During the quarter, the company received the Donlin Gold Environmental Impact Statement Scoping Summary Report, which was filed by the U.S. Army Corps of Engineers, the lead permitting agency.
It participated in technical workshops with the applicable agencies reviewing core areas of baseline environmental and social data related to the EIS, it met with Native corporations and other stakeholders of Donlin Gold in conjunction with community initiatives related to the EIS process, and it reviewed project alternatives with the Corps and applicable agencies.
For the remainder of the year, Donlin Gold will continue with permitting, engineering, environmental and community outreach activities.
Donlin Gold also anticipates that the Corps will continue to work on the preliminary draft EIS and receive comments from the federal and state agencies in preparation for issuance of the draft EIS in 2014.
In addition, Donlin Gold continues to optimize the project and evaluate third-party owner-operator agreements to share up-front project capital costs.
Total anticipated 2013 budget for the project is US$30 million.
Graphite One Resources Inc. announced that it commenced drilling its Graphite Creek property north of Nome.
The program is designed to expand the existing industry compliant resource of 164.5 million metric tons grading 4.61 percent graphite by drilling 600 to 800 meters in a minimum of six drill holes.
Past drilling and airborne geophysics indicates the deposit is open along strike and at depth.
The company also will continue to develop and implement bench scale metallurgical testing.
Previous testing demonstrated a leaching process capable of producing a high purity of 99.2 percent graphitic carbon from a rough concentrate.
Mineralization on the property is characterized by coarse crystalline graphite (greater than 80 mesh) within graphite-bearing schists.
Graphite mineralization is exposed at surface.
And occurs as disseminations and high-grade segregations and lenses in distinctive sillimanite-garnet-quartz-biotite schists and/or quartz-biotite schists.
The host schists are continuous over 18 kilometers of strike length, based on mapping, sampling and airborne geophysics.
The company also announced the signing of a memorandum of understanding with the Alaska Department of Natural Resources, Office of Project Management and Permitting for engagement with the State's Large Mine Permitting Team.
This MOU will allow the large mine permitting team to dialog with Graphite One regarding the development of a quality assurance program plan, review and comment on applications and numerous state permit requirements and review, analyze, and evaluate complex technical documents for adequacy and soundness.
Alaska newcomer Hunt Mining Corp. announced that it had signed a letter of intent with a private concern to option the Amanita gold project in the Fairbanks District.
If the option is exercised, the terms of the 12-year deal include an initial payment of US$10,000 for the first year, with annual cash payments increasing by US$10,000 annually, each year thereafter; a US$100,000-per-year work commitment, a US$3 million purchase option with the owner retaining a 3 percent net smelter return production royalty, which Hunt may acquire for US$1 million per percentage point.
The project was previously explored by Kinross Gold Corp. between 1998 and 2001, during which time a 5,000-by-12,000-foot gold soil anomaly was outlined and 15,300 feet of reverse circulation drilling was completed.
This work identified an oxide gold zone to 300 feet depth.
The project was dropped in 2001 due to low gold prices and has seen limited exploration work since then.
NovaCopper Inc. announced initial 2013 assay results from two of 17 holes (8,140 meters) drilled in 2013 at its Bornite project in the Ambler District.
These first two deep holes are offset to the north of both the South Reef and Ruby Creek zones and suggest these two zones are linked at depth in what is referred to as the Lower Reef, significantly increasing the scale of the underground target.
Significant results include RC13-220 which intersected 126 meters grading of 1.59 percent copper including 45.6 meters grading 1.07 percent copper and an additional 80.4 meters grading 1.89 percent copper.
Hole RC13-224 intersected 236.0 meters grading 1.90 percent copper including 229.4 meters grading 1.73 percent copper and an additional 6.6 meters grading 7.70 percent copper.
Hole RC13-224 constitutes the thickest mineralized intercept yet drilled at Bornite.
Three additional drill holes, RC13-227, RC13-231 and RC13-233, were subsequently drilled to further define the potential link between the two deep mineralized zones.
The four most northerly holes exploring the Lower Reef (the first two of which are reported herein) suggest a high-grade continuous zone of stratiform copper mineralization over a kilometer in width with thicknesses exceeding 100 meters.
Additional drilling results are pending and the company indicated it planned to update its resource estimate for the project in 2014.
Mining began in May and gold production commenced in late August.
Under the new mining plan, operations began in a lower and broader part of the valley to establish water control, create a mine design that facilitates maximum future production and provides for reclamation through the life of mine.
The partnership produced about 680 ounces of gold after 330 hours of plant operation at an average processing rate of 125 cubic yards per hour.
About 40,000 cubic yards were processed through the plant and 540,000 cubic yards were stripped or moved for construction during the 2013 mining system.
The overall estimated stripping ratio for life of mine is 0.89:1 with over-all recovered grade of 0.017 ounces of gold per cubic yard (approximately US$22/cubic yard at US$1,300 per ounce gold prices).
Plant expansion is scheduled to be completed in stages through 2016, culminating in a more than 300 percent increase from 125-600 cubic yards per hour.
The partners expect the first and second stages of plant expansion in 2014 to increase plant throughput to between 200-250 cubic yards per hour over a 2,000-hour operating season.
Coeur Mining Inc. announced third quarter 2013 production results from its Kensington gold miner near Juneau. The mine produced 29,049 ounces of gold, a 25 percent decrease from the second quarter 2013, due primarily to higher head grades and increased mill throughput. Cash operating costs per ounce were not announced. Average mill head grade of 0.20 ounces-per-ton gold was slightly higher than the 0.018 head grade during the second quarter 2013. Average recovery was 96.5 percent. The operation mined 122,064 tons of material and milled 147,427 tons of ore during the quarter. Estimated 2013 total production from Kensington is 108,000 to 112,000 ounces of gold.
Drilling was focused on expanding the South Wall and RW zones.
Significant results from a 30-meter step-out on the South Wall zone included 24.7 meters grading 2.02 percent copper, 8.47 percent zinc, 31.7 grams per metric ton silver and 0.51 g/t gold in hole CMR13-49.
At the RW zone hole CMR13-50 intersected 37.5 meters 0.53 percent copper, 2.35 percent zinc, 1.21 percent lead, 123.2 g/t silver and 0.62 g/t gold.
The 2013 program expanded the South Wall zone along strike, up dip and down dip from previous drilling.
Drilling at the RW zone suggests the RW West and RW East prospects are contiguous, delineating a strike length in excess of 600 meters.
Arrowstar Resources Ltd. provided a progress report on permitting and planned drilling at its Snettisham iron ore project near Juneau.
The company reported that U.S. Bureau of Land Management has issued a bond request of US$68,100 for the company's proposed drilling program.
The company anticipates the drilling permit will be issued following posting of the bond.
The drilling permit covers a proposed 3,000 meters of in nine holes ranging in depth from 200 to 500 meters.
Initial review has identified three high magnetic intensity areas over a 750-meter distance with the largest area having a magnetic intensity greater than 78,000 nanoTeslas over an ellipsoidal surface area of about 750 meters by 750 meters.
The drilling program is budgeted at US$1.2 million.
Heatherdale Resources Ltd. announced that it had reached a memorandum of understanding with the Alaska Industrial Development and Export Authority relating to the company's Niblack volcanogenic massive sulfide project on Prince of Wales Island.
Under the MOU, the company and AIDEA will work collaboratively to advance opportunities associated with Niblack, as well as with potential mine processing facilities at the Gravina Island Industrial Complex within the Ketchikan Gateway Borough.
Under the terms of the MOU, Heatherdale and AIDEA will work together to assess the potential for processing, port and tailings storage facilities at the Gravina Island Industrial Complex site near Ketchikan, and to determine how AIDEA can support the development of copper-gold-zinc-silver deposits at Niblack.
Since 2009, Heatherdale has invested some US$37 million and drilled more than 200,000 feet of core to define 5.6 million metric tons of indicated and 3.4 million metric tons of inferred mineral resources at Niblack.
Ucore Rare Metals Inc. announced an upgraded resource estimate for the Bokan Dotson-Ridge rare earth element project.
Using a total rare earth oxide cut-off of 0.4 percent, the revised estimates include an inferred mineral resource of 2.0 million metric tons grading 0.61 percent total rare earth oxide and an indicated mineral resource of 2.9 million metric tons grading 0.61 percent total rare earth oxide.
The ratio of heavy rare earth oxide to light rare earth oxides is 40:60.
The resource update is based on a database of 80 diamond drill holes, totaling 16,000 meters and 56 surface channels totaling 200 meters.
The company plans to incorporate the results of this upgraded resource estimate, together with additional resource modeling, in feasibility study to be released in 2014.