The mining newspaper for Alaska and Canada's North

Declining gold production spurs Goldcorp

Canny producer snaps up Yukon explorer along with its 2-million-ounce-plus Coffee gold project in half-billion-dollar takeover

As a follow-up to last month's realization that once again "the game is afoot" in the mining industry, major gold producer Goldcorp recently presented some arresting statistics at the Bank of America Merrill Lynch Global Metals, Mining and Steel Conference.

The presentation showed gold discovery and production information for the global mining industry that indicated that peak gold discovery occurred in 1995, this despite three periods between 1995 and 2015 when exploration funding skyrocketed.

Perhaps more important to Alaska, as elephant country for gold deposits, is the fact that global gold reserves declined 15 percent between 2013 and 2015, while peak gold production took place in 2015.

Gold production forecasts for the next decade show a steady decline in anticipated production, from the 2015 peak of about 95 million ounces per year to a projected production rate in 2024 of less than 80 million ounces per year.

Goldcorp's belief in these dismal forecasts was made clear with their recent C$520 million takeover of Kaminak Gold and its more than 2-million-ounce Coffee gold project in western Yukon Territory.

Talking the talk is one thing, but Goldcorp is walking the walk, and you can bet their actions are not lost on other resource-hungry gold producers.

Western Alaska

Graphite One Resources Inc. announced the results from the initial performance tests on coin cells manufactured with the company's premium grade, coated spheroidized graphite from the Graphite Creek project.

The benchmark test results show that the application of a coating produces little change in the important reversible discharge capacity of the coin cells and an increase in efficiency, measured in terms of reduced irreversible capacity loss.

Reversible discharge capacity for the best coated coin cell was 370.1 Ampere/kilogram or about 0.5 percent below the theoretical maximum for natural graphite.

Discharge capacity is a measure of a battery's energy storage capability once charged.

Coin cell 1220 successfully completed three charge/discharge cycles as seen in the accompanying figure, the second and third discharge curves show almost complete coincident overlap with the first discharge curve, attesting to repeatability in performance across subsequent charge/discharge cycles.

The next product development test phase will use representative graphite from the project to compare with the test results and generate additional sample product for interested third parties.

The test results will be used in the company's preliminary economic analysis, expected in the third quarter of 2016.

Interior Alaska

On July 23, 2016, just over 114 years after gold was discovered in the Fairbanks District, Kinross Gold's Fort Knox mine passed a major milestone - the pouring of its 7 millionth ounce of gold! The mine poured its first ounces in 1996 after going to production with a resource of just over 4 million ounces.

Twenty years into a 10-year mine life (wait, what?) the mine continues to prospect, recovering 401,553 ounces of gold in 2015 with another good year in process for 2016.

The mine has expanded late in life, thanks in part to the Walter Creek heap leach facility where lower grade ore is processed.

Since its start-up in 2009, the heap leach has contributed more than 750,000 ounces of gold to the project's production totals.

At the end of 2015, the mine had resources of 147.32 million metric tons of proven and probable reserves averaging 0.4 grams per metric ton gold (2.02 million ounces).

The mine also holds another 1.42 million ounces of gold in other resource categories that may prove recoverable in the future.

The mine currently anticipates milling gold through 2019 with several years of heap leach production continuing beyond that point.

Congratulations to everyone, past and present, who contributed to the success of the Fort Knox mine!

Freegold Ventures Ltd. announced that it will commence core drilling at Shorty Creek copper-gold project near Livengood.

Previous drilling by Asarco on Hill 1835, one of the current two target areas had suggested the potential for a porphyry system at depth.

The 20-hole Asarco drill program (1989/1990) noted the presence of copper mineralization in conjunction with gold mineralization at depth in most of the shallow drill holes completed.

Following ground geophysics and soil sampling in 2014, the company completed four holes drilled and confirmed the presence of intrusive-hosted copper-gold mineralization, the best interval of which was 91.4 meters, grading 0.55 percent copper, 7.02 grams per metric ton silver and 0.14 g/t gold in hole SC15-03.

Work in the Hill 1835 area in 2016 will focus on extending the known mineralization to depth as well as testing the center of the magnetic high associated with the prospect.

Additional work is planned for the Hill 1710 area where a 6-kilometer-by-1.5-kilometer soil anomaly contains coincident copper (up to 669 parts per million) and molybdenum (up to 235 ppm).

The 2016 drill program will test about a 2 kilometer-by-1.5-kilometer area with 400-meter spaced holes.

Northern Empire Resources Corp. announced the commencement of an exploration program at its Richardson gold project in the Richardson District.

The first phase of the 2016 exploration program has been budgeted at about $500,000.

Phase 1 will consist of about 500 soil samples, 300 meters of trenching, prospecting, 100 line kilometers of ground magnetic surveying, four line kilometers of induced polarization geophysics and re-logging of historic core holes with the goal of delineating drill targets.

The 2015 soil sampling efforts discovered anomalies that will be followed up by trenching in this year's program.

Additional soil work will be done to expand existing targets and also to define new targets, for potential drill testing.

Alaska Range

Coventry Resources Ltd. said a second drilling rig has arrived at its Caribou Dome copper project in the Valdez Creek District.

The company plans to complete 8,000 meters of drilling in 2016.

This program will include initial testing of the Menel, Guardian, Lense 9 and Lense 3 induced polarization geophysical targets, located along strike from the 700 meter-long mineralized zone drilled to date.

All four of these targets consist of strong IP anomalies that coincide with outcropping and/or sub-cropping mineralization and strong copper geochemical anomalies at surface, including rock chip samples that assayed up to 16.5 percent copper at the Guardian target.

In addition to drilling, new IP data will be acquired over extensive soil anomalies delineated over seven kilometers of strike.

While preparing to drill the Menel Target, significant copper mineralization has been mapped directly above and immediately along strike from the Menel IP anomaly.

While preparing to drill the Menel Target, significant copper mineralization was mapped directly above and immediately along strike from the Menel IP anomaly.

Kiska Metals Corp. and partner First Quantum Minerals announced that an exploration team and drill rig has been mobilized to the Copper Joe copper-gold-molybdenum porphyry project in the western Alaska Range.

In 2015, the partners completed detailed alteration and vein mapping, alteration mineral chemistry mapping (white-mica hyperspectral analysis and chlorite chemistry), a 12-square-kilometer, full-tensor magnetotellurics geophysical survey, and applied Fathom Geophysics proprietary three-dimension porphyry footprint lithogeochemical modeling method.

This work has defined two compelling porphyry targets, the Evening Star and Morning Star prospects.

In 2016 the partners plan to drill the core of the Evening Star magnetotellurics anomaly with an 800 meter-long diamond drill hole.

Morning Star has yet to be tested by geophysical surveys or drilling, and will be further investigated in 2016.

Northern Alaska

NovaCopper Inc., soon to be renamed Trilogy Metals Inc., provided an update on its 2016 field program at the Upper Kobuk Mineral project in the Ambler District. The company has budgeted US$5.5 million this year mainly for drilling at the Arctic copper project. A planned 3,000-meter drill program using three diamond drill rigs will continue until mid-August. In addition, the company will complete in-pit geotechnical, hydrological, metallurgical, environmental and waste rock characterization studies. The company will continue to engage with the State of Alaska on the permitting of the Ambler Mining Industrial Access Project.

Southeast Alaska

Hecla Mining reported preliminary second-quarter 2016 production results for its Greens Creek mine on Admiralty Island. The mine produced 2,117,024 oz. silver and 11,528 oz. gold, which represent a 14.1 percent increase and 16.2 percent decrease, respectively, over silver and gold production levels during the year previous period. Higher throughput and average silver contributed to increased silver production. The mill operated at an average of 2,235 tons per day in the first quarter. Silver and gold production for 2016 are now estimated at 8.3 million ounces and 53,000 ounces, respectively.

Coeur Mining Inc. reported second-quarter 2016 production results from its Kensington mine. The mill processed 157,117 tons of ore, a 13,000-ton decrease from the year previous period. The mine produced 32,210 oz. of gold, grading 0.22 oz. per ton gold with average recovery of 94.1 percent, a +2,000-oz. increase in total oz., due primarily to higher ore grades. The company also indicated that development of the decline into the high-grade Jualin deposit is progressing and is over 50 percent complete. The company indicated that it expects full-year 2016 production from the mine at 115,000 - 125,000 oz. of gold.

Constantine Metal Resources Ltd. and funding partner Dowa Metals & Mining Co., Ltd. announced the start of the 2016 drill program at its Palmer copper-zinc-silver-gold project near Haines.

The work is part of a US$3.7 million budget for 2016.

Principal targets for the 1700 meter first-phase drill program include an untested zone of intense volcanogenic massive sulfide footwall-style alteration exposed in a creek drainage about 1,000 meters on strike and east of the mineral resource, a strong conductor anomaly located 1,000 meters to the north of the mineral resource that is identified by geophysical surveys and supported by the presence of mineralized boulders grading up to 16.1 percent zinc and 13.2 g/t silver, and depth and strike extensions of silver-rich massive barite sulfide mineralization at the Cap prospect where limited historic drilling has intersected 134 g/t silver over 23.2 meters and 31 g/t silver over 90.6 meters.

Cap is one of several stratigraphically linked prospects that define a hydrothermal system of comparable scale to the RW-South Wall resource area that is located 2,500 meters to the northeast.

The 2016 field program also includes environmental, hydrogeology, engineering studies, road construction and the completion of several geotechnical drill holes.

Quaterra Resources Inc. announced the sale of its remaining 35 percent participating interest in the Herbert Glacier project, Alaska, to its joint venture partner Grande Portage Resources Ltd. The project carries an indicated resource of 821,100 metric tons containing 182,400 ounce of gold at 6.91 g/t gold per ton. Inferred resource include 51,600 metric tons containing 12,800 ounces of gold at 7.73 g/t gold per metric ton. Drilling has intersected the mineralized vein over a strike length of 370 meters and to a depth of more than 200 meters. The vein can be traced at surface over a strike length of 1,000 meters.

Ucore Rare Metals announced a further update on the commissioning of the SuperLig-One rare earth element separation pilot plant. The first tranche of pregnant leach solution derived from the company's Bokan - Dotson Ridge project in Alaska has been subjected to a series of tests, the most recent of which was separation of the sub-groups samarium-dysprosium and the holmium-lutetium sub-group from the heavy rare earth element class. The separation of the two Sub-Groups was achieved at greater than 99 percent purity and greater than 99 percent recovery.

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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