Mining Explorers 2017: State witnesses major upturn in activity
Global miners, Australian juniors track minerals wealth across Last Frontier
Last updated 1/24/2018 at 11:55am
Alaska's minerals exploration sector is on an upswing, thanks to Australian mining explorers looking north and mining majors upping their activities in the state.
South32 Ltd., a Perth, Australia-based miner spun out of BHP Billiton Plc, is the largest mining company from Down Under to express an interest in Alaska's mineral potential this year.
South32, which has eight operating mines in the Southern Hemisphere, secured an option to acquire a 50 percent interest in Trilogy Metals Inc.'s Upper Kobuk Mineral Projects in Northwest Alaska for US$150 million.
"This will be their first venture north of the 67th Parallel, in Alaska," said Trilogy Metals President and CEO Rick Van Nieuwenhuyse.
Juniors PolarX Ltd. and White Rock Ltd. are other mining explorers that have ventured north from Australia to the Last Frontier.
This Australian investment, combined with an influx capital from global miners needing to replenish reserves and expand their portfolios, is revitalizing Alaska's mining sector.
"I feel the invigorated Alaska mining industry is seeing the front end of a simple supply and demand cycle, driven largely by steady or increased production of commodities that coincides with the four-year exploration and development downturn that has resulted in fewer new deposits discovered, developed and put into the production pipeline," said Avalon Development President and CEO Curt Freeman.
The longtime Alaska geologist calculates that "more than 60 percent of the announced exploration budgets for Alaska for 2017 are being funded by major producing companies. Meanwhile, the majors and intermediate producing companies are actively seeking new acquisitions in Alaska, several of which will likely be (disclosed to the) public before the end of the year."
Big programs in Northwest
More than US$33 million were invested this year in exploring extremely high-grade copper and zinc deposits in Northwest Alaska, one of the richest minerals regions on the planet.
Roughly US$17 million of this outlay went toward advancing Trilogy Metals' Upper Kobuk Minerals Project, a district-scale endeavor that includes a block of state mining claims and Alaska Native lands that blanket a 70-mile-stretch of the Ambler Mining District.
Arctic and more than a dozen other volcanogenic massive sulfide deposits and prospects rich in copper, zinc, lead, gold and silver are found on the state claims.
Bornite and similar copper-rich carbonate-hosted prospects are located on lands within the project owned by NANA, the Alaska Native regional corporation that represents the Iñupiat of Northwest Alaska.
To keep its option on UKMP, South32 agreed to invest US$30 million in the rich minerals district over the next three years. This outlay includes US$10 million in an exploration program at Bornite this year.
"With only three field seasons of exploration drilling at Bornite, we have already identified a resource in excess of 6 billion pounds of copper," said Van Nieuwenhuyse.
About 2.7 billion pounds of this copper is encompassed in an open-pit resource, averaging roughly 1 percent copper; and roughly 3.7 billion lbs. is located in a deeper underground resource that averages about 2.9 percent copper.
To get a sense of just how big this resource could be, Trilogy and South32 drilled 10 widely spaced holes to the north that could roughly double the Bornite footprint.
In addition to expanding Bornite, Trilogy invested another US$7 million or so in collecting the final bits of information needed for a pre-feasibility study on Arctic, which is located about 16 miles to the north.
A 2013 preliminary economic assessment outlined plans for an open-pit mine at Arctic that would produce roughly 1.5 billion lbs. copper, 1.8 billion lbs. zinc, 289 million lbs. lead, 30.5 million oz silver and 349,000 oz gold over a 12-year mine-life.
The plan will be further refined in the PFS, which is expected by early 2018.
About 180 miles northwest of Arctic, Teck Resources Ltd. continues to add high-grade zinc reserves and expand new deposits near the Red Dog Mine, where world-class zinc ore continues to feed the mill after 27 years in operation.
Going into 2017, Red Dog had 50.9 million metric tons of probable reserves, averaging 15 percent zinc, 4.2 percent lead and 76 grams-per-metric-ton silver on lands owned by NANA.
This year, Teck invested about US$16 million in exploring Aktigiruq, an exploration target about 7.5 miles north of the mill with grades very similar to the reserves currently being mined.
While Aktigiruq has not been drilled sufficiently to calculate an NI 43-101-compliant resource estimate, the 25 widely spaced holes drilled before 2017 suggest this exploration target has somewhere between 80 million and 150 million metric tons of material averaging around 13 percent zinc and 4 percent lead.
Teck President and CEO Don Lindsay said drilling at the Aktigiruq deposit will show its potential to be one of the best undeveloped zinc deposits in the world."
Colorado-based Solitario gained a 50 percent interest in Lik through the acquisition of Zazu Metals, a junior that had been exploring the burgeoning zinc project near Red Dog.
Lik South has an indicated resource of 18.74 million metric tons grading 8.08 percent zinc, 2.62 percent lead and 52.8 grams per metric ton silver; plus an inferred resource of 1.23 million metric tons grading 6.80 percent zinc, 2.12 percent lead and 35 g/t silver.
Lik North contains 5.18 million metric tons of inferred resource averaging 9.65 percent zinc, 3.25 percent lead and 51 g/t silver.
Solitario President and CEO Chris Herald said that expanding the deeper Lik deposit, which is open at depth and to the north, is an attractive exploration target that can still be reached by surface drilling. The company plans to test this area in 2018.
Australians in Southcentral
Australian miners are also chasing high-grade copper prospects along the southern slopes of the Alaska Range, in the southcentral region of the state.
In fact, two such Down-Under explorers, Coventry Resources and Vista Minerals, merged to form PolarX Ltd., a new Alaska-focused copper explorer.
Coventry, which bought the privately owned Vista in 2017, had been exploring and expanding high-grade copper on its Caribou Dome property for the past two years.
Vista Minerals was earning rights on Stellar, a copper-gold project immediately northeast of Caribou Dome owned by Millrock Resources.
The main Caribou Dome deposit hosts 2.8 million metric tons of total resource (measured, indicated and inferred) averaging 3.1 percent (190 million lbs.) copper.
A number of other areas of high-grade mineralization have been identified along an 11-mile stretch of Caribou Dome and trend onto PolarX's newly acquired Stellar property.
Zackly, a skarn deposit on the Stellar claims, hosts a historical resource of 1.54 million metric tons grading 4.5 g/t (218,944 oz) gold and 2.9 percent (66.9 million lbs.) copper.
Bringing these two assets together provides PolarX with roughly a 22-mile-long stretch of highly prospective ground just north of the Denali Highway.
In addition to Coventry and Vista, the property merger also involves Millrock, which gained roughly a 10.6 percent equity position in PolarX in exchange for Stellar.
Millrock managed the 2017 Stellar exploration program, which included roughly 3,000 meters of drilling.
The primary objective of the 20-hole program is to upgrade the Zackly resource to JORC standards, which is the Australian equivalent to NI 43-101 minerals reporting standards in Canada.
The secondary objective is to discover strike extensions of the deposit.
A Stellar-Caribou Dome pre-feasibility study is planned for completion in 2018.
About 55 miles north of Stellar, White Rock Minerals Ltd. is also expanding VMS deposits on its Red Mountain property.
In April, the company reported a maiden JORC-compliant resource of 16.7 million metric tons averaging 4.1 percent (1.49 billion lbs.) zinc; 1.7 percent (630 million lbs.) lead; 0.2 percent (57.3 million lbs. copper); 99 g/t silver (53.5 million oz) silver; and 0.7 g/t (352 oz) gold.
This resource is contained in the Dry Creek and West Tundra Flats deposit. White Rock said it has identified 30 targets with similar geophysical signatures across its 35,350-square-kilomter property.
"We are highly encouraged by this initial mineral resource estimate, especially as it only encompasses a small portion of our total tenement holding, and we look forward to adding considerable additional discoveries in the near future," said White Rock CEO Matt Gill.
Anchored by Kinross Gold's Fort Knox Mine and Sumitomo Metal Mining's Pogo Mine, which together account for nearly 75 percent of the state's gold production, Interior Alaska is prime hunting grounds for aurum explorers.
Tetlin, a large minerals rich property just south of the Alaska Highway near the crossroads town of Tok, continues to be one of the most exciting gold plays in this eastern region of the state north of the Alaska Range.
Peak Gold, a partnership between Contango ORE and Royal Gold to advance the Tetlin project, published an updated resource in June that significantly expands the gold-rich skarn deposits – Peak and Peak North – outlined at Tetlin so far.
The global resource for these two deposits – measured, indicated and inferred – now stands at 15.65 million metric tons averaging 2.98 g/t (1.5 million oz) gold, 14.68 g/t (7.39 million oz) silver and 0.16 percent (55 million lbs.) copper.
With a substantial amount of gold, silver and copper outlined in these two adjacent skarn deposits, the partners spent most of the balance of 2017 investigating some of the dozens of other targets identified across the 843,400-acre (341,319 hectares) Tetlin land package.
This work included drilling six priority prospects in the immediate vicinity of the Peak zones; and prospecting, sampling and mapping exciting finds across the wider property.
In September, operator Contango reported nice gold intercepts at West Peak Extension, an area immediately northwest of the Main Peak zone.
The best hole drilled there cut 8.1 meters averaging 5.22 g/t gold from 103 meters; and 29 meters of 2.53 g/t gold from 117 meters.
The size and grade of the skarn deposits found at Tetlin has other explorers wondering if similar deposits might be found in Alaska's Interior.
In fact, Kinross has joined Millrock in exploring Liberty Bell, a property about 190 miles west of Tetlin where past explorers identified one small skarn deposit that looks remarkably similar to the Peak zones. The property also shows the potential for bulk tonnage porphyry copper-gold deposits.
Kinross can earn a 70 percent joint venture interest in Liberty Bell by investing US$5 million in exploring the property over a five-year span.
The 2017 program included sampling, mapping and prospecting aimed at identifying targets for a drill program planned for 2018.
Kinross is looking for other golden investment opportunities in Alaska's Interior, especially ones found close to infrastructure.
While Interior Alaska is not renowned for porphyry copper-gold deposits, Freegold Ventures is changing that with its discoveries at the Shorty Creek project about 75 road miles north of Fairbanks.
The company first tapped porphyry mineralization at Shorty Creek in 2015 and expanded upon its find last year.
Hole SC 16-01, drilled at the property's Hill 1835 target, cut 434.5 meters averaging 0.57 percent copper-equivalent, which accounts for the value of the copper, gold and silver. This hole also encountered a 207-meter tungsten-rich zone that averaged 0.045 percent tungsten trioxide.
The 2017 drilling at Shorty Creek focused on further expansion of Hill 1835; initial testing of Steel Creek, a large magnetic and geochemical target directly northeast of Hill 1835; and Quarry, a vast northeast trending magnetic anomaly about 5,000 meters east of Hill 1835.
Across the Elliot Highway from Shorty Creek, International Tower Hill Mines is refining the ideal mine plan for its 11.5-million-oz Livengood gold project.
Along the eastern border of the Livengood property, Endurance Gold Corp. is exploring McCord Creek, one of two gold properties it is chasing in Alaska's Interior. The other is Elephant, which is located about 60 miles to the southwest.
Endurance Gold completed an auger drill program this spring that turned up some interesting gold and indicator mineral results in an area of the McCord Creek valley.
At Elephant, the company carried out geophysical surveys, soil and rock sampling, trenching and prospecting to narrow down targets for the next drill program on the property.
Silver-rich VMS deposits, such as those feeding the mill at Hecla Mining Company's Greens Creek Mine, and high-grade gold deposits, like those at Coeur Mining Inc.'s Kensington operation, were the top exploration targets in Southeast Alaska this year.
At Greens Creek, Hecla continues a tradition of replenishing its silver reserves by expanding the many high-grade zones it has discovered at this mine near Juneau.
Going into 2017, Greens Creek had 7.6 million tons of proven and probable reserves averaging 11.7 oz/t (88.9 million oz) silver; 0.09 oz/t (673,000 oz) gold; 7.6 percent (576,130 tons) zinc; and 2.9 percent (217,280 tons) lead. This is nearly identical to the previous year's reserves and provides the operation with another 10 years of ore.
It is nearly identical to the mine's reserves in 2016 despite the record 9.3 million oz of silver recovered from the operation during the year.
Considering the success of the 2017 drill program through the first half of this year, Greens Creek will likely again have a decade of reserves going into 2018.
As Hecla extends high-grade reserves at Greens Creek, Constantine Metal Resources Ltd. and Dowa Metals and Mining are drilling Nunatak JAG, a VMS discovery at the Palmer property near Haines with similar high-grade silver.
The discovery hole at Nunatak JAG, an exploration target about 3,000 meters south of the South Wall-RW deposit at Palmer, cut 9.2 meters of massive barite-sulfide averaging 312 g/t silver and 0.9 g/t gold.
Follow-up drilling continued to tap high grades at Nunatak, including one hole that cut 24.6 meters grading 260 g/t (8.3 oz/t) silver.
The 2017 program at Palmer also had success in finding extension of South Wall-RW, a deposit with 8.125 million metric tons of inferred resources averaging 5.25 percent (940.4 million lbs.) zinc, 1.41 percent (252.6 million lbs.) copper, 0.32 grams per metric ton (83,600 oz) gold and 31.7 g/t (8.3 million oz) silver.
One hole drilled west of South Wall cut 45.4 meters grading 2.5 percent copper, 7.4 percent zinc, 39 g/t silver and 0.3 g/t gold.
"The new South Wall intercepts will enhance the resource and demonstrate the ability of the South Wall to produce thick intersections that build tonnes quickly," said Constantine President and CEO Garfield McVeigh.
Given the success at Nunatuk and South Wall, Constantine and Dowa expanded the 2017 drill program to 10,000 meters.
At Kensington, situated roughly midway between Greens Creek and Palmer, Coeur is nearly ready to begin mining Jualin, a deposit with gold grades substantially higher than the operation's historic average.
By mid-way through 2017, Coeur had completed 17,677 meters of drilling at Kensington, primarily focused on upgrading and expanding Jualin.
This year's drilling also targets higher grade gold zones around the main deposit at Kensington, including the Raven South structure and Zone 12.
"Mining from Jualin and Kensington Main along with the Raven zone should lead to overall higher grades and production levels and lower unit costs during the remainder of the year," said Coeur Mining President and CEO Mitchell Krebs.
About 20 miles southeast of Kensington, Grande Portage Resources Ltd. is exploring similar high-grade veins at its Herbert Gold project.
So far, the company has outlined 821,000 metric tons of indicated resources averaging 6.91 g/t (182,400 oz) gold; and 51,600 metric tons of inferred resources averaging 7.73 g/t (12,800 oz) gold.
This year, geologists took a newly exposed outcrop sample from Goat, one of five veins identified so far at Herbert that returned 6.75 oz-per-short-ton gold.
Goat also was the primary target of a 3,700-meter drill program completed on the property this year.
Grande Portage said all holes have good visual indicators, including quartz with disseminated arsenopyrite, pyrite, galena and sphalerite and visible gold.
"We are extremely pleased to have defined a substantial increase in the mineralized strike length located in the eastern test areas, and to confirm the mineralization at depths beneath previous drilling," said Grande Portage CEO Ian Klassen.
Ring of Fire explorers
Stretching some 1,600 kilometers (1,000 miles) off Southwest Alaska into the Pacific Ocean, the Alaska Peninsula and trailing Aleutian Islands is rich with porphyry copper-gold and epithermal gold systems.
CopperBank, which sees the need for copper rising sharply as the world shifts to renewable energy sources, believes its Pyramid porphyry copper-gold-molybdenum project on the Alaska Peninsula could help supply that growing demand.
Pyramid hosts roughly 1.1 billion lbs. of copper in 122.5 million metric tons of inferred resource averaging 0.41 percent copper, 0.1 g/t gold and 0.021 percent molybdenum, according to a resource estimate calculated in 2013.
CopperBank is looking to upgrade and grow this resource with the first program carried out since it acquired Pyramid from Full Metal Minerals in 2014.
"This long anticipated drilling program will give our technical team the direction for next steps in the development of the project, and specifically a better view of the higher grade sections of the deposit," said CopperBank Executive Chairman and CEO Gianni Kovacevic.
The 2017 program primarily focused on zones that demonstrate the potential to increase the grade and size of the Pyramid deposit.
While drills were turning at Pyramid, geological crews took a closer look at San Diego Bay, a prospect about 4.5 miles to the east.
A 15-square-mile red-stained anomaly from the pervasive alteration there indicates the potential of another large porphyry system near or even connecting to Pyramid.
Exploration carried out there has turned up some interesting results, including rock samples with grades as high as 16 percent copper and more than 1 g/t gold.
This year's reconnaissance program at San Diego Bay investigated these areas of promising copper and gold values with prospecting and soil sampling in preparation for a more robust program in 2018.
About 20 miles south of Pyramid, Redstar is expanding high-grade gold mineralization at its Unga gold project on an island by the same name.
"Preliminary drilling has extended the known strike length of Shumagin to 1,600 meters by intersecting the Shumagin structure in 10 out of 12 holes," said Redstar President and CEO Peter Ball at the end of the summer drill program at Unga.
Highlights from this drilling include 2.2 meters averaging 9.9 g/t gold and 29.3 g/t silver; and one meter averaging 2.1 g/t gold and 27 g/t silver.
In preparation for a second phase of 2017 drilling, Redstar completed soil sampling that, when combined with previous programs, provides comprehensive coverage of 4,500 meters of the same trend that hosts the Shumagin gold zone.
Redstar began a roughly 3,700-meter fall drill program at Unga in late September.