Worst of funding drought could be over
Recent price volatility is making producers cautious about long-term capital investments, despite more upbeat industry sentiment
Last updated 7/27/2014 at Noon
As is normally the case in high summer in Alaska, news has started to trickle out of the hills on projects where new work is being conducted, and several properties have changed hands or are in the process of changing hands as mining deals are negotiated and announced across the state.
Alaska mines are enjoying slight upticks in metals prices, but recent price volatility has left producers cautious about making long-term capital investments in new or existing projects.
Regardless of the micro- and macro-economic details, there is a growing feeling in the industry, coming from organizations small and large, that we have weathered the worst and that market conditions and public opinions are slowly but surely improving.
With that more upbeat sentiment comes a noticeable increase in interest in mineral resources, Alaska's included.
It's about time!
Congratulations are in order for partners Teck Resources and NANA Inc. on the 25th anniversary of the Red Dog mine! It has been an amazing journey, from the first mention of mineralization at the site back in the 1960s, its turbulent staking and exploration history in the 1970s and its attainment of production in 1989. We will hear a great deal more about the life and times of this amazing mine as the year goes on but the longevity of Red Dog clearly proves that working at an Alaska mine can be a career, not just a job. Congratulations to everyone who helped make and who is keeping Red Dog a shining example of how to do it right in Alaska!
NovaGold Resource Inc. announced second-quarter 2014 financials and a project update for its Donlin Gold project, a 50:50 joint venture with Barrick Gold Corp. During the quarter, the U.S. Army Corps of Engineers, the lead agency for the project's environmental impact statement, and cooperating agencies, completed identification of project alternatives, a major step in the permitting process.
The alternatives comprise variations on certain mine site facility designs, local transportation options, and power supply options.
Preparations of the remaining components of the preliminary draft EIS are well underway and expected to be completed over the next two quarters.
This includes the alternatives development and the analysis of their potential environmental impacts.
The company's share of expenses for the project for the second quarter was $3,131,000.
Fire River Gold Corp. announced that Waterton Global Value L.P. has taken full and unrestricted ownership of the Nixon Fork gold-copper mine and Mystery Creek Resources, Inc., the U.S. corporation that owns the mine.
This action is a result of the default by Fire River on the terms of a credit agreement with Waterton.
Fire River will deliver all rights, debts, properties and obligations on the property to Waterton and Waterton will accept such as full and final satisfaction of the indebtedness due to Waterton under the credit agreement.
As part of the final settlement agreement Waterton also agreed to pay to Fire River approximately $250,000 in cash and other obligations.
Waterton's immediate plans for Nixon Fork were not released.
The U.S. Environmental Protection Agency said it is endorsing its own analysis that would place significant barriers to development of Northern Dynasty's Pebble gold-copper-molybdenum project.
The company stated that " we do not accept that EPA has the statutory authority to impose conditions on development at Pebble, or any development project anywhere in Alaska or the US, prior to the submission of a detailed development plan and its thorough review by federal and state agencies including review under the National Environmental Policy Act." The EPA analysis, conducted before any permits for mine construction have been requested by the project owners, imply the project would cause the loss of at least five miles of streams with documented salmon or loss of 1,100 or more acres of wetlands, lakes and ponds that connect to salmon-bearing streams or tributaries of those streams.
The EPA's claim that their precedent-setting proposal is specific to the Pebble deposit and would not affect other deposits or claims was met with immediate and extreme skepticism by mining companies, mining advocacy groups and natural resource industry representatives.
A public comment period on this decision is open until Sept. 19 and public meetings are planned at several Alaska locations.
To learn more about the decision and the comment period, please see http://www2.epa.gov/bristolbay/public-involvement-bristol-bay-404c-process#comments
Millrock Resources Inc. announced completion of geophysical surveying on its Alaska Peninsula project. The survey included 1,140 line kilometers of high-resolution airborne magnetic and radiometric data collected over three prospects of interest: Bee Creek, Mallard Duck Bay, and Kawisgag. The completed work was the first of a two-phase summer program, which is being funded by First Quantum Minerals Ltd. The second phase is planned to start in mid-July and will consist of a geological mapping and geochemical sampling program and will focus on the geophysically surveyed areas, where known porphyry copper prospects occur.
Redstar Gold Corp announced commencement of field work program at its Unga gold project.
The phase one field program is designed to complete detailed field mapping and sampling of high-grade gold-silver vein systems in preparation for diamond drilling.
The field program will examine the highest-priority targets, such as the Shumagin Vein, where historic shallow drilling in the 1980's intersected significant high-grade mineralization which was confirmed by the company's 2011 drill program.
The vein remains open at depth and along strike.
Other high-priority targets include the Apollo-Sitka and Aquila vein systems.
Veins will be mapped in detail and sampled with a focus on extending known mineralization along strike, determining the distribution of mineralization within vein systems and assessing the geologic structural controls to mineralization.
Freegold Ventures Ltd. reported initial results from metallurgical testing at its Golden Summit project near Fairbanks.
A series of composite samples from the various areas from the Dolphin/Cleary resource area were submitted to SGS Canada Inc. A total of 279 samples of drill core assay rejects which represented the different areas of the resource were composited to form 5 sample types: oxide, transition, hornfels-sulfide, intrusive-sulfide and schist-sulfide.
Overall gold recoveries were obtained from standard 48-our bottle roll tests and 120-hour intermittent agitation leach tests.
Oxide material averaged 88 percent recovery, Transition material averaged 57 percent, Intrusive material averaged 56 percent, and Hornfels-Sulfide material averaged 45 percent.
Standard bottle roll test work was carried out on a variety of grind sizes however recoveries did not increase substantially with finer grinds, with the exception of the transition material which showed recoveries of greater than 70 percent are achievable at a 75 micron grind size.
In addition a series of tests using a variety of methods were completed, including direct carbon-in-leach, pressure oxidation - carbon-in-leach, flotation - carbon-in-leach, and flotation- pressure oxidation - carbon-in-leach.
The highest overall recovery was achieved by pressure oxidation - carbon-in-leach with recoveries greater than 94.3 percent, and averaging 98.1 percent under best conditions tested.
The combination of flotation - pressure oxidation - carbon-in-leach resulted in recoveries of 92 percent.
Although lower recovery than whole ore pressure oxidation, a significant advantage would be a much smaller quantity of material would need to be treated (approximately 10 percent would be subject to pressure oxidation).
Cyanide consumption was lowest under pressure oxidation - carbon-in-leach requiring 0.5-0.7 kilograms of sodium cyanide per tonne.
All other processes averaged one to four kilograms of sodium cyanide per tonne.
Additional metallurgical testing is planned for the project, including a series of column tests, partial oxidation and heap leach amenability investigations.
Sumitomo Metal Mining (85 percent) and Sumitomo Corp. (15 percent) recently updated future plans for their Pogo gold mine.
In 2013 the mine produced 10.5 metric tons of gold (about 337,500 ounces), and the partners are projecting 2014 production of roughly 10.7 metric tons of gold (344,000 oz).
The partners also indicated that commencement of production from the East Deep zone was planned for the first quarter of this year.
The year-end 2013 resource/reserve estimates at Pogo total 59 metric tons of reserve and an additional 85 metric tons in resource for a total of 144 metric tons of gold (approximately 4.629 million ounces) in the Liese and East Deep zones.
Total production from commencement of commercial production to year-end 2013 is 2,472,632 ounces of gold at average head grades of 13-17 grams per metric ton gold (0.38 to 0.49 oz per short ton gold).
Average mill recovery over life of mine to date is approximately 87 percent.
Bluestone Resources Inc. announced that it had defaulted on a previously arranged loan with John Robins, the company's president and CEO. Both parties have now agreed that the company can extinguish the debt by transferring to Robins 100 percent interest in the company's Richardson gold project in the Richardson Mining District, Alaska. Immediate plans for the project were not released.
Freegold Ventures Ltd. announced that is has acquired the Shorty Creek copper gold porphyry project from Fairbanks-based Gold Range Limited.
Under the terms of the 10-year lease, Freegold has agreed to issue 750,000 common shares to Gold Range as consideration.
Gold Range will be responsible for the annual State of Alaska mining claim rents after which point Freegold will be responsible.
Gold Range will retain a 2 percent net smelter returns royalty on production from the project.
The property is located in the Livengood-Tolovana Mining District approximately 100 road kilometers (62 miles) northwest of Fairbanks and 4 kilometers (2.5 miles) south of all-weather paved Elliott Highway.
Total recorded production from the district though is approximately 540,000 oz gold.
The property was originally staked as an antimony prospect in the 1970s but was drilled as a copper-molybdenum show a few years later.
In the mid-1980s soil sampling identified significant gold, copper and pathfinder elements.
Limited shallow drilling (6,843 feet in 20 holes) was completed in 1989 and 1990.
Significant drill intercepts include 220 feet grading 1.22 g/t gold in hole RH89-08 beginning at surface, including 25 feet grading 4.59 g/t gold and 55 feet grading 1.03 g/t gold in hole RH90-19.
A small soil and rock sampling program (566 soil samples and 21 rock samples) was completed in 2005.
Shorty Creek bears similarities to other Tertiary age gold-enriched porphyry copper deposits in eastern Interior Alaska and western Yukon Territory.
In addition to the geochemical signature, widespread alteration and hornfels development with the occurrence of small bodies of biotite granodiorite, quartz porphyry and aplite are present throughout the property.
Freegold is planning a ground geophysical program in order to evaluate the project during the current field season.
Ucore Rare Metals Inc. announced that it has commenced a field program on its Ray Mountains rare earths and tin multi-metal property.
The company plans to complete the resampling and assay testing of key locations recently reported by the Alaska Geological Survey, and earlier U. S. Bureau of Mines work in the area, and examine the geological setting of the Kilolitna River Basin.
A number of samples collected during this effort will be processed for lab testing in the coming weeks.
Rare earths and associated metals such as tin have been found to occur in the alluvial outwash of the Ruby granitic batholith located in the area.
The target metals are contained in heavy minerals such as monazite, xenotime, cassiterite, wolframite and zircon, which are widespread throughout the region.
NovaCopper Inc. announced second-quarter 2014 financials and a project update for its Bornite deposit at its Upper Kobuk Mineral Projects in the Ambler District.
The company's 2014 field program will consist of a re-logging and re-assaying program of between 10,000 and 13,000 meters of historical drill core from Bornite.
Targeted historical holes are located within the extensions of the Upper and Lower Reef mineralization captured in the open pit resource estimate released earlier this year and the up dip portion of South Reef zone.
This effort is a continuation of last year's program of re-sampling and re-assaying which targeted 33 drill holes comprising 11,067 meters of core originally drilled between 1957 and 1975 and only selectively sampled by subsidiaries of Kennecott, the former owner of the property.
The company also indicated that during the first half of 2014, it had focused efforts on supporting the Alaska Industrial Development Export Authority in initiating the permitting process on the Ambler Mining District Industrial Access Road which is expected to provide access to Upper Kobuk Mineral Projects.
In late April 2014, AIDEA's board of directors approved a resolution authorizing AIDEA to proceed with an application for the Ambler road to the federal agencies that have jurisdiction over the Ambler road project and to engage a firm to prepare the environmental impact statement for the project under the direction of the federal agencies.
The State of Alaska approved $8.5 million for use by AIDEA for this purpose during the 2015 fiscal year.
Coeur Mining Inc. reported second-quarter production results from its Kensington gold mine near Juneau. Second quarter production is estimated at 28,089 oz of gold, a significant increase over the 23,162 oz of gold produced in the second quarter of 2013. The mine processed 163,749 tons of ore grading 0.18 oz per ton gold during the quarter. Average recovery was 94.5 percent. Mill throughput was steady at 1,800 tons per day average. The increased production was the result of a 10 percent higher gold grade during the quarter, including an average grade of 0.22 oz/t gold during June. Estimated 2014 total production from Kensington is 105,000 to 112,000 oz of gold.
Ucore Rare Metals announced updated plans for 2014 exploration at its Bokan - Dotson Ridge rare earth element project on Prince of Wales Island. The fully permitted $2.5 million, 5,000-meter diamond drilling program consists of 2,500 meters of infill drilling; 1,500 meters of deep targeted drilling to expand the resource at depth; and 1,000 meters of geotechnical and groundwater drilling to support environmental analysis and planned permitting.