The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Global trend favors Alaska because of its multitude of prospects, large primary deposits and stellar political and social climate
Reuters recently reported that the 10 largest gold-producing companies worldwide have steadily increased their near-mine exploration budgets over the past few years to 56 percent in 2015 from 45 percent in 2013. They also reduced their higher-risk greenfields exploration budgets to 21 percent from 25 percent in the same time period.
This retrenchment of exploration by the larger producers is occurring, while global gold output is declining with an expected reduction of 9 percent over the next three years.
Mainly, this is good news for Alaska, since it is home to more than 3,300 documented gold prospects and several of the world's largest primary gold deposits.
Factor in an enviable cost per ounce discovery rate that is less than 25 percent of the worldwide average and the fact that most recent gold discoveries are at or near the surface, and the odds of finding a significant new gold deposit in Alaska rank right up there with the best-endowed jurisdictions in the world.
Further enhancing Alaska's stature as a mining destination is its zero rate of mine-site insurrections, kidnappings, contagious incurable diseases, poisonous critters and drug-cartel murders.
Sure, we have our proble's, but starting out further along the value chain has got to make Alaska just that much more attractive to the world's mining community.
Western Alaska
Graphite One Resources Inc. closed a $1.3 million financing that will allow it to proceed with exploration and development of its Graphite Creek graphite project on the Seward Peninsula. The company also will work toward final preparation of a preliminary economic assessment on the project, estimated for completion in the third quarter of 2016.
Redstar Gold Corp. reported initial exploration results from its Unga gold project near Sand Point.
The company completed an infill rock-chip sampling and geological mapping program along steeply-dipping breccias along the two-kilometer- (1.24 miles) long Shumagin Zone, part of the larger nine-kilometer- (5.6 miles) long Shumagin Trend.
These rhodochrosite-rich breccias are the main exploration target on the project.
During 2016 the company collected 44 rock chip samples covering about 325 meters of strike along the Main breccia.
These samples returned grades ranging from less than 1.0 grams-per-metric-ton gold up to 54.4 g/t gold and from less than 1 g/t silver up to 137 g/t silver.
Samples taken along the Main breccia at Shumagin returned high-grade gold and silver values, including a composite surface-chip sample taken across the exposed width of weathered quartz-adularia rhodochrosite breccia, which returned a weighted average grade of 37.26 g/t gold and 103.7 g/t silver over a true width of 2.3 meters.
The company also collected 15 rock-chip samples along similar rhodochrosite breccias at the Bunker Hill prospect where historic shallow diamond drill intercepts from DDH26 returned intervals of 37.7 g/t gold and 20.6 g/t silver over 0.76 meters and 11.48 g/t gold and 15.1 g/t silver over 1.21 meters.
Rock-chip samples taken along 10- to 20-meter wide, east-west trending exposures of oxidized and manganese oxide-stained quartz-adularia breccias returned anomalous values of gold (up to 453 parts per billion) and silver (up to 26.4 parts per million).
These breccias are enriched in tellurium (up to 20.4 ppm) and manganese (up to 8,190 ppm).
Interior Alaska
International Tower Hill Mines Ltd. posted the results of a pre-feasibility study on an optimized configuration for its Livengood gold project.
The engineering optimization studies selected a project that will process 52,600 tons per day of ore and produce 6.8 million ounces of gold over 23 years.
Compared to the 100,000-tpd project evaluated in a September 2013 feasibility study, this improved configuration reduced the capital costs by 34 percent, or $950 million to $1.84 billion; reduced the process operating cost by 28 percent, or $2.97 per ton to $7.48 /ton; and reduced the all-in sustaining costs by 16 percent, or $242 to $1,263 per oz. of gold.
Average annual life of mine production would be 294,100 oz. from ore grading 0.71 oz. /t gold, with output of 378,300 oz. per year in years one through five from ore grading 0.88 oz. /t gold.
Average life of mine recovery is estimated at 75 percent.
Ore would be mined from a conventional truck and shovel open pit with a 1.3 to 1 waste-to-ore stripping ratio and processed in a single-line semi-autogenous and ball mill circuit.
Total project electrical demand would be 55 megawatts drawn from a purpose-built, 50-mile-long 230 kV commercial electrical line brought in from Fairbanks.
The revised study also included elimination of two previously planned fresh water supply reservoirs due to the inclusion of a subsurface fresh water supply from a local aquifer; elimination of a permanent accommodations camp as a result of the planned daily transport of workers to the mine site during operations; and owner, instead of contractor, operators in the placement of large development earthworks using mine pre-production material.
At a $1,300-per-oz. gold price, the revised configuration has a negative $404 million net present value, calculated at 5 percent discount rate, with a 1.8 percent rate or return on investment and a 15-year payback period.
The company is continuing optimization studies designed to further reduce capital and operating costs and improve project economics.
Just across the Tolovana River from the Livengood project but in a completely different geological terrane, Freegold Ventures Ltd. announced results from its first drill hole from the 2016 drilling program at its Shorty Creek copper-gold porphyry project.
Three additional holes have been completed and drilling is ongoing at the project.
Hole SC 16-01 was collared in the center of a 1.0 kilometer by 0.75 kilometer magnetic high at Hill 1835, about 125 meters southwest of hole SC 15-03, which returned 91 meters grading 0.55 percent copper, 7.02 g/t silver and 0.14 g/t gold.
Hole SC 16-01 intersected 434.5 meters grading 0.36 percent copper, 7.46 g/t silver and 0.12 g/t gold from the base of oxidation at 86.1 meters to end of hole at 520.6 meters.
This same interval also contained elevated tungsten, averaging 273 ppm over the same interval.
Mineralization is hosted in quartz vein stockworks and sulfide disseminations within strong secondary biotite alteration in a carbonaceous flysch unit intruded by feldspar quartz porphyry sills and dikes.
Endurance Gold Corp. announced the commencement of drilling on its 100 percent optioned Elephant Mountain gold project near Manley Hot Springs. Three targets are prioritized for drilling with five drill holes planned with initial focus on the South and North zones. Gold mineralization on the property is associated with three generations of quartz veinlets crosscutting altered granite and syenite and occurs in drainages where historic placer gold mining has occurred. The company believes the mineralization is similar to other intrusive-related gold deposits in the Tintina Gold Belt of eastern Alaska and western Yukon Territory.
Contango ORE Inc. reported additional 2016 drill results from its phase 2 drill program at the Tetlin gold project, a joint venture with a wholly owned subsidiary of Royal Gold Inc. Significant results from the North Peak zone included hole 16242 which returned 26.35 meters grading 5.55 g/t gold, hole 16243 which returned 17.51 meters grading 4.97 g/t gold, hole 16244 which returned 15.92 meters grading 11.74 g/t gold and hole 162248 which returned 9.06 meters grading 5.02 g/t gold and an additional 10.79 meters grading 4.05 g/t gold. The company also indicated that it was testing geological targets at West Peak and East Peak, for which assays are pending.
Alaska Range
White Rock Minerals Ltd. reported additional information on newly acquired claims at its Red Mountain volcanogenic massive sulfide project in the Bonnifield District.
The high-priority targets are conductors located within zones of anomalous surface geochemistry that are indicative of proximal volcanogenic massive sulfide mineralization.
The highest priority conductors are located within the identified geochemical target areas, some of which are coincident with strong base metal and precious metal anomalies from historic sampling.
The resulting assessment identified 30 coincident geophysical and geochemical anomalies with the top five, Dry Creek West, ReRun, West Tundra Flats, Smog and Glacier target areas, considered as highly prospective for additional volcanogenic massive sulfide deposits.
Most of the prospective target areas occur within Paleozoic volcanic and sedimentary rocks along a distinctive time-stratigraphic contact within the Sheep Creek syncline.
The company plans to conduct surface geochemical sampling and ground geophysics at the highest priority target to define drill targets for the coming field season.
Millrock Resources Inc. reported that induced polarization geophysical surveys were being conducted on its Stellar gold-copper project located near the Denali Highway in the central Alaska Range.
The work is being carried out by Vista Minerals (Alaska) Inc., which acquired an option on the project last year.
The geophysical surveys are being conducted at the Jupiter copper occurrence and on the west flank of the high-grade Zackly gold-copper skarn deposit.
Earlier this year, Vista significantly expanded the original claim block which now covers more than 17,000 acres (6,880 hectares).
The historic resource at Zackly includes 185,724 oz. of gold and 61.6 million pounds of copper contained in 1,128,500 metric tons, grading 6.03 g/t gold and 2.19 percent copper.
At the Mars prospect, 10 kilometers (six miles) west of Zackly, soil sample lines across altered zones consistently returned anomalous copper values, including 950 meters averaging 763 ppm copper, and 1,200 meters averaging 462 ppm copper.
At the Jupiter prospect, Millrock previously identified a multi-element geochemical anomaly measuring 1.7 kilometers by 2.3 kilometers which is underlain by a corresponding magnetic high.
The anomaly consists of 33 soil samples with average values of 832 ppm copper and 92 ppb gold.
In addition to high copper and gold, the soils contain anomalous silver and cobalt.
The newly discovered Gemini target area is a strong copper-in-soil anomaly centered on a chlorite alteration zone in andesite and basalt.
The anomaly measures 1.8 kilometers by 3.0 kilometers and averaged 568 ppm copper in limited sampling.
The core copper anomaly is accompanied by strongly anomalous lead, gold, and molybdenum, and is surrounded in a zoned halo of zinc, iron and manganese.
The Moonwalk prospect is an intrusion-related gold prospect in moderately dipping sedimentary rocks intruded by a granodiorite sill.
Quartz veins are mapped over a broad zone of east-trending veining, which appears to cut both intrusive and sedimentary rock.
Rock and soil samples from Millrock's work returned results consistently anomalous in gold, antimony, arsenic, bismuth and zinc.
Soil samples covering an area roughly 500 meters by 700 meters over the altered and veined granodiorite averaged 1.15 g/t gold with rock samples returning grades up to 30.4 g/t gold.
Southeast Alaska
Constantine Metal Resources Ltd. and funding partner Dowa Metals & Mining Co. Ltd. reported the start of road construction and provided an update on work programs at their Palmer volcanogenic massive sulfide project near Haines.
The road will provide significantly improved access for exploration, environmental and geotechnical work at the project.
The 2016 summer drill program included four reconnaissance exploration holes (1,465 meters) and three geotechnical holes (502 meters) for a combined total of 1,967 meters, with assays now received for three of the four exploration holes.
Highlights from drilling include a 20.5-meter thick zone of chert and semi-massive pyrite intersected at the CAP prospect.
The intersection, which is anomalous in silver and other pathfinder elements, is significant because at the South Wall and RW zones, located 2,500 meters to the northeast, chert grades laterally into high-grade massive sulfide mineralization.
The thickness of the chert horizon at CAP, which occurs at the contact between overlying argillite and altered footwall volcanics, suggests good potential for a well-developed massive sulfide system within the immediate area.
Mapping and rock and soil sampling programs were completed at several other areas of the project with the objective of advancing prospects to the drill stage.
Results of this work will be summarized following receipt of assays.
Inferred resources at Palmer currently include 8.1 million metric tons grading 1.41 percent copper, 5.25 percent zinc, 0.32 g/t gold and 31.7 g/t silver.
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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