Dead cat bounce for Alaska mining?
With funding still hard to come by, many explorers get late start to down-sized programs on mineral projects across 49th State
Last updated 8/3/2018 at 5:29am
Although the Alaska mineral industry is in better health in the middle of 2018 than it has been in the last five years, the spirited recovery that was in progress in the first quarter of the year is now looking more like a dead-cat bounce – a minor recovery after a long down trend. This is particularly true of the exploration sector.
Reviewing the Alaska minerals industry, you will note that several exploration projects are only now commencing their 2018 exploration programs, a full two months later than the traditional late-May or early-June start-up time. The reason is not hard to find – funds were harder to come by so the budgets are smaller and the work programs had to be down-sized accordingly, resulting in later than normal start times.
To be sure, more companies are exploring in Alaska this year and they are spending 10-15 percent more than they did in 2017, but macro-economic conditions are still not great for exploration sector.
Novagold Resources Inc. announced second quarter results for its flagship Donlin gold project, owned 50 percent with Barrick Gold Corp. The project is on land owned by mineral estate owner Calista Corp. and surface estate owner The Kuskokwim Corp. During the quarter, the U.S. Army Corps of Engineers completed and published the final Environmental Impact Statement, or EIS, along with a notice of availability in the federal register. The final EIS is available on the Donlin Gold EIS website, http://www.donlingoldeis.com. The Alaska Pollutant Discharge Elimination System (APDES) Wastewater Discharge permit was issued on May 24, 2018. The Corps and Bureau of Land Management are expected to issue a single Federal Record of Decision (ROD) for the project in the second half of 2018. The Pipeline and Hazardous Materials Safety Administration (PHMSA) issued the special permit for the natural gas pipeline on June 5. Other key state and federal permits and approvals are scheduled to be finalized concurrently with or shortly after the ROD in 2018. The Corps also is finalizing other federal consultations under the National Historic Preservation Act, Endangered Species Act, and Magnuson-Stevens Fishery Conservation and Management Act. The companies also continued optimization work aimed at improving capital efficiencies. This new information will be needed to update the 2011 feasibility study. The partners also continued their community outreach programs across the Yukon-Kuskokwim region. The partners also reported that their 2018 budget for the project remains on-track at $28 million for the year.
Riversgold Ltd. announced the start of a 2018 exploration at its gold projects in southwestern Alaska. Efforts will include refinement of drill targets at Luna, Luna East and Quicksilver using field efforts underway that include induced polarization (IP) ground geophysics and surface geochemical sampling surveys, and project-wide geological mapping of the Luna/Quicksilver prospect. Follow-up work will include diamond drilling of high-grade gold targets at Luna, Luna East, Quicksilver and Kisa prospects; drill testing of potential high-grade gold-copper skarn targets adjacent to the North Fork Pluton; and rock chip and soil sampling to outline the extent of high-grade gold-stibnite (antimony) mineralization at the Gemuk Mountain prospect.
Usibelli Coal Mine announced that it is holding a 75th anniversary open house at its coal mining operations near Healy. The event, open to the public, will be held on August 4 from noon to 5 PM. The mine delivered its first 10,000 tons of coal to the U.S. Army in Fairbanks in 1943 and since then has shipped coal to numerous power plants in Alaska and internationally. In 1971, six years before it was required by federal law, the mine pioneered a successful reclamation including the now-standard process of recontouring and reseeding disturbed areas with a mixture of grasses and plants indigenous to the northern regions. Since 1971, over 5,500 acres of land have been reclaimed. Last year, the mine reclamation team planted more than 25,000 trees and seeded 138 acres for final reclamation. The mine recently completed a haul road to access a new mining area known as the Jumbo Dome. This new road provides access to 83 million tons of permitted coal, which provide the operation with a more than 100-year mine-life at current production levels.
Millrock Resources Inc. announced that a program consisting of an induced polarization geophysical survey and geological mapping is planned for August-September at its Liberty Bell gold-copper project in the Bonnifield Mining District south of Fairbanks. Drilling is anticipated in 2019. The project is under option to joint venture with Kinross Gold Corp., whereby Kinross can earn a 70 percent interest in the project.
White Rock Minerals Ltd announced additional drill results from its Red Mountain volcanogenic massive sulfide deposit in the eastern Bonnifield District. Significant results include 4.7 meters grading 19.5 percent zinc, 7.8 percent lead, 466 grams per metric ton silver, 6.9 g/t gold and 1.5 percent copper in hole DC18-79, which was drilled in the Discovery lens of the Dry Creek deposit; and 4.3 meters grading 4.8 percent zinc, 2.3 percent lead, 1,435 g/t silver, 2.2 g/t gold and 0.5 percent copper in hole DC18-77 in the Fosters lens at Dry Creek. The Discovery intercept represents a significant down-dip extension to mineralization, which remains open to expansion. The Fosters intercept expanded the down-plunge extent of mineralization and returned extremely high silver grades. Shortly afterward, the company announced that it had entered into a strategic relationship with Alaska newcomer Sandfire Resources NL, whereby the latter would provide capital and technical expertise to Whiterock to help advance the Red Mountain project. An initial AU$2.5 million investment has given Sandfire 14.2 percent interest in White Rock. Sandfire can earn a 51 percent interest in the Red Mountain project by contributing AU$20 million in project expenditures and increase that ownership to 70 percent by completing a pre-feasibility study. If Sandfire funds all work to take the project through a feasibility study, it will earn an 80 percent interest in the project. Welcome to Alaska Sandfire Resources NL!
PolarX Limited announced that it has intersected copper and gold mineralization up to 850 meters east of the current resource base and 100 meters below the current resource base at the Zackly prospect on its Alaska Range project. The mineralization seen in the strike extension hole 18020 consisted of copper oxides extending from 2.5 to 57.14 meters down‐hole depth, hosted in garnet bearing skarn with copper occurring in veins, fractures, interstitial to grains, as native copper flecks and as silicified chalcocite. An earlier hole, 18016, drilled 300 meters east of the resource base contained a one-meter thick zone containing visible gold. Hole 18018 intersected visible copper and gold mineralization 100 meters below the current resource base. The mineralization occurs in three zones, skarn lenses ranging from 9 to 30 meters thick. These lenses consist of massive magnetite bands in the form of disseminated and interstitial bornite, chalcocite and covellite, or visible gold in strongly chloritized skarn as bornite, covellite, chalcocite and native copper. The current planned program at Zackly includes 5,000 meters of drilling in up to 25 holes.
Hecla Mining announced preliminary second quarter 2018 production results for its Greens Creek mine on Admiralty Island. The mine produced 2 million ounces of silver and 13,720 oz of gold, compared to 1.91 million oz of silver and 13,118 oz of gold produced in the year previous period. The higher silver and gold production was due to higher ore grades as a result of mine sequencing. The mill operated at an average of 2,290 tons per day.
Coeur Mining Inc. reported second quarter 2018 production results from its Kensington Mine. The mill processed 168,751 tons of ore, a slight increase over the 158,706 tons of ore produced in the year previous period. The mine produced 25,570 ounces of gold grading 0.16 oz/t gold with an average recovery of 92.6 percent. Total production, grade and recovery were all down slightly compared to the second quarter of 2017. These lower production figures were anticipated due to mine sequencing. Higher grades, recoveries and production are anticipated for the remainder of 2018. The company also indicated that development work and dewatering of the high-grade Jualin deposit is progressing with production increases expected in the second half of 2018. The company indicated that it expects full-year 2018 production from the mine at 115,000 to 120,000 oz of gold.
Constantine Metal Resources Ltd. and joint venture partner Dowa Metals & Mining Company Ltd. announced initial results from a 10,000-meter diamond drill program at the Palmer volcanogenic massive sulfide deposit near Haines. The first two holes of the 2018 drill program intersected significant intervals of silver-gold-lead-zinc-barite mineralization 150 meters on strike from the AG zone discovery, increasing total strike to at least 350 meters. Significant intercepts include 4.8 meters grading 436 grams per metric ton silver, 1.3 g/t gold, 3.6 percent zinc plus 1.6 percent lead, and an additional 12.5 meters grading 217 g/t silver, 1.8 g/t gold, 5.2 percent zinc and 0.7 percent lead in hole CMR18-109; and 43.3 meters grading 143 g/t silver, 0.5 g/t gold, 6.5 percent zinc and 2.5 percent lead, including 28.8 meters grading 141 g/t silver, 0.5 g/t gold, 9 percent zinc, 3.5 percent lead in hole CMR18-110. Additional drilling results are pending.
Grande Portage Resources Ltd. announced commencement of a drilling program at its Herbert gold project near Juneau. The company intends to drill approximately 18-20 holes from up to three different platforms which will test up to four separate major veins and their satellite structures. The current drill program will test targets primarily focusing on expansion of the gold-bearing Goat and Dep Trench veins. In addition to the drilling program, a LiDAR survey was recently flown over the project area covering approximately 5,000 acres which will provide a significantly enhanced topographic base map of the area.
Curtis J. Freeman CPG #6901
Avalon Development Corp.
P.O. Box 80268
Fairbanks, AK 99708
Phone: 907-457-5159, Fax 907-455-8069
Email: [email protected]