The mining newspaper for Alaska and Canada's North

Exploration outlook brightens for 2014

More mining companies plan to return to field next season with work programs, according to two recent resource sector reports

For those of you that could not attend, the annual Alaska Miners Association Convention and Trade Show was well-attended, with most people pleasantly surprised by the strong turnout.

Compared to a year ago, more companies are planning to get back in the field with exploration and development programs in 2014, a sentiment making up one of the few bright spots in a recent IntierraRMG resource sector exploration summary.

This report and a similar snapshot of the exploration industry by SNL Metals Economics Group released in late October suggest that the mining sector is still depressed, but its general rate of decline finally slowed in the last quarter.

SNL reported that total 2013 nonferrous metal exploration expenditures were about US$15.2 billion, a 29 percent drop from 2012 levels.

Canada and the United States were the hardest hit with year-on-year declines in exploration of 41 percent and 38 percent, respectively.

On the brighter side, drilling rates were nearly level over the last three months, with IntierraRMG reporting 1,044 companies drilling targets in the third quarter of 2013 versus 1,099 companies poking targets in the second quarter.

Maybe there is finally a growing recognition within the industry that doing nothing might preserve capital, but it does not advance projects or companies.

Western Alaska

Teck Resources Ltd.'s reported third-quarter 2013 results from its Red Dog mine, which turned in operating profits of US$143 million versus an operating profit of US$121 million in the same period in 2012.

For the quarter, the mine generated 142,500 metric tons of zinc and 23,400 metric tons of lead in concentrate versus 128,900 metric tons of zinc and 22,400 metric tons of zinc and lead, respectively, in the third quarter of 2012.

The mine sold 174,300 metric tons of zinc and 59,800 metric tons of lead during the third quarter.

Average zinc and lead grades mined were 16.3 percent and 3.8 percent, respectively, versus 18.1 percent and 4.3 percent in the third quarter of 2012.

Mill throughput of 1.030 million metric tons in the third quarter was well above the 880,000 metric tons milled in the third quarter of 2012.

The mine's zinc production increased by 11 percent, compared with the same period a year ago due to lower silica ore with coarser sulfide grain size.

The 2013 shipping season was completed on October 23 with shipments of zinc concentrate, totaling 1.12 million metric tons, and lead concentrate, totaling 200,000 metric tons.

During the third quarter, the mine paid out US$56 million in royalties to its partner, NANA Regional Corp.

Graphite One Resources Inc. announced results from the first two holes of its 1,023 meter, 10-hole drilling program at its Graphite Creek property north of Nome.

The program was designed to expand the existing industry compliant resource of 164.5 million metric tons grading 4.61 percent graphite.

Significant results from the first two holes include 33.16 meters grading 7.02 percent graphitic carbon and an additional 12.84 meters grading 9.71 percent graphitic carbon in hole 13GCH009 and 39.85 meters grading 7.13 percent graphitic carbon and an additional 16.20 meters grading 10.22 percent graphitic carbon in hole 13GCH010.

Drill holes 13GCH009 and 13GCH010 were drilled east of the 2012 drilling and extend mineralization an additional 400 meters to the east.

Drill holes 13GCH011 to 017 were designed to fill in the 2.2-kilometer gap between the 2012 inferred resource step-out hole 12GCH008.

Additional drilling results are pending on these holes.

All of the drill holes completed in 2013 hit visible graphite mineralization.

The deposit still remains open along strike both east and west and at depth.

The company has yet to drill test the Araujo or South Conductor which contains rock grab samples with up to 80.9 percent graphite on surface.

Interior Alaska

Kinross Gold Corp. announced record third-quarter 2013 production results from its Fort Knox mine near Fairbanks.

For the quarter the mine produced 122,037 ounces of gold versus 106,698 oz produced in the third quarter of 2012.

Cash costs were US$555 per ounce versus US$648 per ounce in the previous third quarter.

The mine processed 3.374 million metric tons of ore grading 0.76 grams-per-metric-ton gold through the mill and treated an additional 10,330,000 metric tons of ore grading 0.28 g/t gold on the heap leach pads during the third quarter.

Recovery from the mill for the quarter was 84 percent versus 84 percent in the year-previous period.

The mine's strong performance was due to the start-up of the second carbon-in-column plant along with a decrease in the stripping ratio for tonnage sent to the mill.

International Tower Hill Mines Ltd. announced that it will continue to concentrate on cash conservation and preservation of its Livengood assets while moving the project forward. The company is continuing the necessary environmental baseline activities to maintain the integrity and usability of the five years of historical data already compiled. The company recently received recognition for excellent exploration reclamation work from the Alaska Department of Natural Resources. The company indicated that it had sufficient capital on hand to sustain its planned operational level into 2015.

Contango ORE Inc. announced additional drilling results from its Tetlin project near Tok.

The company completed 14,349 meters of core drilling in 69 drill holes during the 2013 exploration season.

All of the drilling released is part of the Peak zone, discovered by the company in June, 2012.

Significant results include 84.43 meters grading 4.988 g/t gold, 16.7 g/t silver and 0.167 percent copper in hole TET13098, 95.92 meters grading 5.748 g/t gold, 6.9 g/t silver and 0.140 percent copper in hole TET13100, 142.6 meters grading 2.529 g/t gold, 2.4 g/t silver and 0.082 percent copper in hole TET13104, 159.25 meters grading 7.010 g/t gold, 6.6 g/t silver and 0.102 percent copper in hole TET13107, 96.93 meters grading 9.060 g/t gold, 4.3 g/t silver and 0.093 percent copper in hole TET13110, 134.83 meters grading 4.848 g/t gold, 2.9 g/t silver and 0.084 percent copper in hole TET13117 and 135.5 meters grading 3.240 g/t gold, 3.6 g/t silver and 0.115 percent copper in hole TET13124.

Mineralization remains open to the southeast.

A recent presentation at the Alaska Miners Convention revealed that the Peak zone mineralization resembles a reduced retrograde calcic skarn similar to the Fortitude deposit in the Copper Canyon District, Nevada.

Elsewhere in the Peak zone area, the company has discovered A-type quartz-magnetite veins in a quartz monzonite porphyry and an arsenic-bearing polymictic breccia at the Saddle Zone, which is interpreted to be an magmatic diatreme vent with potential for gold-silver mineralization.

Alaska Range

Pure Nickel Inc. and partner ITOCHU Corp. announced results the 2013 exploration results from its MAN project in the Alaska Range.

The program included an eight-hole, 2,991-meter drill program primarily targeting the Eureka Zone in the central part of the Alpha Complex, as well as prospecting and mapping work in various parts of the property.

The 2013 drill program intersected the Eureka Zone in six of the seven holes that were targeted, with one hole being abandoned in a fault zone.

An eighth hole, PNI-13-70, targeted coincident induced polarization and soil geochemical anomalies to the south of the Eureka Zone.

The drill results confirm the presence of what is now interpreted as a continuous zone of magmatic sulfide mineralization containing elevated concentrations of nickel, copper, cobalt, gold, silver, platinum and palladium.

Estimated true widths of intersection for 2013 drill holes cutting the Eureka Zone in the central Alpha segment range from 120 to 250 meters.

Composite intersection grades across the mineralized zone in the drill holes range from 123 to 212 parts-per-billion gold plus platinum plus palladium, 0.05-0.16 percent copper, and 0.17-0.24 percent nickel.

The mineralization also includes minor silver and cobalt.

Higher grade mineralization over narrower widths is present in most of the holes.

The Eureka Zone extends over a minimum strike length of 15 kilometers (nine miles) as defined by drilling and mapping.

Prior years' drilling in the zone has encountered intersections ranging up to 320 meters estimated true thickness.

Millrock Resources Inc. reported 2013 exploration results firm their Stellar copper project in the Alaska Range.

Work was conducted with funding from an unnamed third-party interest with a first right of refusal to option the property.

The exploration work consisted of 1) 950 line-kilometers of airborne magnetic, electromagnetic and radiometric surveys, 792 soil samples collected on 500-meter centers, 198 rock samples and 452 additional rock samples collected at a majority of soil sample sites.

A hand-held spectrometer was used to analyze the specimens, primarily for the presence of hydrothermal alteration minerals.

Three areas, the Jupiter, Mars and Gemini, returned anomalous results.

The Jupiter target area lies along the northern margin of the same diorite stock that occurs adjacent to and possibly responsible for the formation of the Zackly copper-gold skarn deposit located two kilometers to the southeast.

The area is underlain almost entirely by andesite and basalt commonly exhibiting albite and chlorite alteration.

The Jupiter multi-element geochemical anomaly measures 2.3 kilometer by 1.7 kilometer and occurs with a corresponding magnetic high.

The anomaly consists of 33 soil samples with copper results range between 246 parts per million to 3850 parts per million and have an average copper value of 832 parts per million.

Gold values in these soil samples average 92 parts per billion and range from 5 parts per billion to 178 parts per billion.

In addition to high copper and gold the soils contain anomalous silver and cobalt.

The anomaly is lineated to the north-northeast and the west-northwest and seems to be formed along an offset structural intersection.

Sampling at the previously identified Mars prospect better defined the geochemical anomalous zone discovered in 2012.

The soil anomaly is based on 28 samples and measures approximately 1.4 kilometer by 0.8 kilometer.

The area is characterized by strong copper-in-soil values, along with anomalous molybdenum and gold, centered on a magnetic high.

Copper values within the anomaly range from 258 parts per million to 3510 parts per million and averaging 977 parts per million copper.

Gold values range from 38 parts per billion to 339 parts per billion and average 116 parts per billion.

The anomaly is underlain by locally altered andesite, basalt, gabbro and diorite in a structurally complex setting.

Rock grab samples of altered bedrock and float were collected from the prospect.

Seven of those samples assayed over 1 percent copper with values up 7.4 percent copper and up to 1.78 parts-per-million gold.

The Gemini target area is a newly discovered anomaly generated in the recent exploration program.

It is a strong copper-in-soil anomaly centered on a chlorite (+skarn +potassic) alteration zone in andesite and basalt.

The anomaly is defined by 12 samples over an area measuring 3.0 kilometers by 1.8 kilometers with copper values ranging from 356 parts per million to 1130 parts per million and averaging 568 parts per million copper.

The company indicated that, despite these encouraging results the unnamed third party has declined to exercise its right to option the project.

Alix Resources Corp. announced it has incurred sufficient expenditures to earn 51 percent of the Golden Zone gold property. Industry-compliant resources the property now stand at 10.26 million metric tons of measured, indicated and inferred material averaging 1.44 g/t gold and containing 431,389 oz of gold, 2,214,517 oz of silver and 6,081 metric tons of copper.

Northern Alaska

NovaCopper Inc. announced additional 2013 assay results from its 17-hole, 8,140-meter 2013 exploration program at its Bornite project in the Ambler District.

These holes are primarily between 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.

Significant results include RC13-221 which intersected 123.8 meters grading of 1.23 percent copper, hole RC13-219 which intersected 42.5 meters grading 1.44 percent copper, hole RC13-218 which intercepted 73.8 meters grading 1.20 percent copper and hole RC13-217 which intercepted 63.3 meters grading 0.99 percent copper.

This year's drilling appears to link the two north-northeast trending mineralized zones in the Lower Reef at depth into one continuous horseshoe-shaped mineralized zone.

The four most northerly holes exploring the Lower Reef (the first two of which are reported in an Oct. 3, 2013 news release) suggest a high-grade continuous zone of strata-bound copper mineralization over a kilometer in width with thicknesses exceeding 100 meters.

Andover Mining Corp. announced its first industry compliant mineral resource estimate for its SUN volcanogenic massive sulfide deposit in the Brooks Range.

Using a cut-off of US$75 per metric ton in-ground value, the combined Main SUN and Southwest SUN deposits contain an indicated resource of 2.165 million metric tons grading 1.42 percent copper, 1.06 percent lead, 4.11 percent zinc, 57.6 g/t silver and 0.21 g/t gold (3.9 percent copper-equivalent).

The inferred resources are 11.648 million metric tons grading 1.14 percent copper, 1.37 percent lead, and 3.91 percent zinc, 76.8 g/t silver and 0.24 g/t gold (3.9 percent copper-equivalent).

This resource estimation indicates a minimum deposit size as the Main SUN remains open to the northeast and down dip and the Southwest SUN remains open to the southwest and down dip.

The resource estimation utilized the database of 97 drill holes totaling 19,123 meters.

Southeastern Alaska

Hecla Mining Co. announced third quarter production results from its Greens Creek mine on Admiralty Island.

The cash cost per ounce of silver for the quarter was $5.00 compared to $3.52 in the third quarter of 2012.

The average grade of ore mined during the quarter was 13.15 oz of silver per ton compared to 10.56 oz of silver per ton in the year previous period.

Average by-product grades were 0.12 oz of gold per ton, 3.13 percent lead and 8.23 percent zinc.

During the third quarter the mine produced 1,807,781 oz of silver, 4,542 oz of gold, 4,542 tons of lead and 13,367 tons of zinc.

Mining and milling costs per ton were up by 10 percent and 24 percent, respectively, in the third quarter, as compared to the same period in 2012.

The increase in milling costs was primarily due to diesel fuel costs related to the generation of more power on-site due to lower availability of less expensive hydroelectric power, the result of lower precipitation levels in Southeastern Alaska.

Both mining and milling costs were impacted by an increase in labor costs.

Definition and exploration drilling of the Deep 200 South area has made significant progress in defining three stacked folds of high-grade mineralization that represent up to 600 feet of down-dip continuity.

Drill intersections continue to include high grade silver, gold and lead-zinc intercepts including: 16.59 ounces per ton silver, 0.51 oz/ton gold, 15.43 percent zinc and 9.01 percent lead over 24.6 feet and 21.01 oz/ton silver, 0.46 oz/ton gold, 12.75 percent zinc and 2.81 percent lead over 28.8 feet.

In addition, in-fill drilling is expected to convert up to 700 feet of strike length of the newly defined Deep 200 South resource to reserves, and step-out exploration drilling to the south has confirmed these mineralized folds for another 500 feet of strike length.

The Deep 200 South resource remains open to the south, west and east.

Portions of this mineralization are expected to be added to reserves over the next two to three years.

Surface drilling at Killer Creek, located approximately 0.5 miles west-northwest of the Greens Creek mine infrastructure, intersected broad mineralized zones up to 400 feet with stringer veins containing copper, gold, zinc, lead, and silver mineralization in the mine footwall rocks.

In general, the northern holes are more copper-gold rich and the southeast area is more zinc, lead and silver rich.

The 12 holes drilled in this area may have defined a vein-dominant mineralized vent that could be the feeder to either the Greens Creek deposit or a satellite deposit.

Coeur Mining Inc. announced additional third quarter 2013 production results from its Kensington gold miner near Juneau.

The mine produced 29,049 oz of gold, a 25 percent decrease from the second quarter 2013, due primarily to higher head grades and increased mill throughput.

Cash operating costs were US$988/oz versus US$1,298/oz in the year-previous quarter.

Cost reductions included reduced contract services and lower underground backfill costs due to lower prices for backfill material.

Average mill head grade of 0.20 oz/ton gold was 11 percent 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 oz to 112,000 oz of gold.

On the exploration front, drilling began on the Jualin area, which is located south of the Kensington mine.

Drilling targeted the number 4 vein, one of several, discrete gold-bearing zones at Jualin.

Consistent with historic results, occurrences of visible gold and high-grade mineralized intervals were intersected with the first five holes completed this year.

Significant results include 1.4 meters grading 40.5 g/t gold and 1.4 meters grading 53.9 g/t gold.

Underground drilling was conducted during the quarter on the new Ann zone situated less than 200 feet to the east of the main Kensington deposit.

Significant intercepts in this zone include 0.85 meters grading 76.5 g/t gold.

Exploration to define and expand known mineralization on the southern margins of upper Zone 10 and Zone 20 in main Kensington returned 4.4 meters grading 41.5 g/t gold and 0.64 meters grading 66.9 g/t gold with mineralization remaining open to the south.

Constantine Metal Resources Ltd. and funding partner Dowa Metals & Mining Co. announced metallurgical results from their Palmer volcanogenic massive sulfide deposit near Haines.

The deposit exhibits a very good response to conventional metallurgy.

Locked cycle flotation tests yielded smeltable copper and zinc concentrates, with high metal recoveries produced at moderate grind sizes (26 microns for copper concentrates and 31 microns for zinc concentrates).

Average copper recovery was 89.6 percent in a copper concentrate containing 25.5 percent copper.

Average zinc recovery was 84.9 percent in a zinc concentrate containing 59.1 percent zinc.

Combined total silver and gold recovery reporting to copper and zinc concentrates was 89.7 percent and 75.0 percent, respectively.

The majority of precious metals report to the copper concentrate; 73.7 percent percent for silver and 61.5 percent for gold.

Zinc concentrates produced from the locked cycle tests are of very good quality, with low impurities and no potential penalty or problematic elements.

Grande Portage Resources announced its 2014 plans for the Herbert gold project near Juneau.

Pending additional financing, the 2014 plans include up to 30,000 feet of diamond drilling, further detailed mapping and surface sampling and trench sampling as was done in 2010-2012.

The program will consist of up to three drill rigs, two larger rigs and one smaller, more portable rig.

The larger drills will use timbered drill pads, with most pads being used for multiple holes with the average length of hole about 550 feet.

Current industry-compliant resources at the project include indicated resource of 821,100 metric tons containing 182,400 oz of gold at 6.91 g/t gold and inferred resource of 51,600 metric tons containing 12,800 oz of gold at 7.73 g/t gold.

Author Bio

Author photo

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).


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