North of 60 Mining News - The mining newspaper for Alaska and Canada's North

As Alaska's mining industry nears the end of another hectic year during which metals prices and investor sentiments rose and fell as precipitously as the world's major stock exchanges, the industry is naturally looking into its crystal ball trying to anticipate what the new year will bring.

EY Global Mining and Metals does this sort of forecasting by putting out an annual "risk radar" for mining and metals. The idea is to find out what the industry perceives as the top ten risks facing them in the near future. The most recent edition states that "Our number one risk this year is digital effectiveness." Yes, digital effectiveness, whatever that is. And a close second for risk was competitive shareholder returns. Okay, since the officers serve at the pleasure of the board of directors and the directors serve at the pleasure of the shareholders, pleasing shareholders seems like an important thing. Risks 3, 4 and 5 were cyber issues, new world commodities and regulatory risk, respectively. In 2008, regulatory risk was number 10 and was the only one of the current's year's top five that was in the top ten. In short, mining risks change often and change dramatically.

To be sure, global risks also affect Alaska, but Alaska has some serious Alaska-centric risks that our competitors do not share. For example, in July of this year CNBC came out with its 2018 Top States for Business rankings. Alaska did not fare well. In fact, we could not have fared worse, taking the dubious dishonor of being the Worst State in America for business. While some of the reasons Alaska ranked so low are hard to argue with, such as access, infrastructure, and near-zero GDP growth, nothing the mining industry was doing, or not doing, was mentioned as being a drag on Alaska's business ranking.

It is a rare day that somebody doing a survey does not take a cheap shot at the mining industry, so I am taking CNBC's ranking as a major-league compliment to Alaska's mining industry and look forward to 2019 and the chance to find out what "digital effectiveness" is all about.

WESTERN ALASKA

Teck Resources Ltd. and partner NANA Inc. announced third quarter 2018 results from their Red Dog mine. During the quarter the Northwest Alaska mine produced 148,000 metric tons of zinc in concentrate. Zinc ore grade was down slightly to 15.7 percent while mill recoveries were up slightly to 85 percent. The mine also produced 26,400 metric tons of lead in concentrate. Lead ore grade decreased marginally to 4.4 percent while mill recoveries decreased slightly to 53.8 percent. The mine posted a C$266 million operating profit for the quarter, down significantly from the C$328 million profit in the year previous period. Zinc production in the second quarter was 3 percent lower than a year ago as lower zinc grades were mostly offset by higher mill throughput and recoveries. Lead production declined compared to a year ago primarily due to lower grades and recoveries. The mine shipped 150,500 metric tons of contained zinc in concentrate in the third quarter and expects to ship 180,000 metric tons of contained zinc metal in the fourth quarter. Work continues on the US$110 million mill upgrade project known as Value Improvement Project 2. Construction started in late 2017 and is expected to increase average mill throughput by about 15 percent over the remaining mine life helping to offset lower grades and harder ore, with planned start-up in the first quarter of 2020. The mine also applied for state and federal permits to build a 10-mile road to its Anarraaq and Aktigiruq deposits. The road with support facilities at its terminus will allow exploration to move underground where production may be possible when the mine's current resources are exhausted in about 2031.

Novagold Resources reported third quarter 2018 results and activities at its Donlin gold deposit a 50-50 partnership with Barrick Gold. Following receipt of several major state and federal permits during the last few months, the partners continued to carry out optimization work to improve capital efficiencies at the deposit and enhance the project's execution plan with the objective of updating the 2011 feasibility study. The partners also continued their community outreach efforts, including collaborating with their Native corporation partners, Calista Corporation and The Kuskokwim Corporation, to visit multiple villages to provide updates on Donlin Gold's recent achievements, participate in an environmental initiative that identified and removed hazardous waste from six Kuskokwim River villages, and support educational opportunities for more than 100 students. The company indicated the 2018 budget for Donlin Gold is US$22 million, half of which would be contributed by each partner.

Western Alaska Copper and Gold Company and Piek Inc. announced that they have formed a joint venture to consolidate the mineral prospects in the Illinois Creek District, the first such consolidation of holdings in almost 40 years. The 25,120 acre project now hosts the Round Top copper-molybdenum-silver project where 4,432 meters of drilling were completed this past summer, the drill-proven Honker gold-silver deposit, the past-producing Illinois Creek oxide gold mine, the drill-proven Waterpump Creek lead-zinc-silver prospect, a high grade carbonate replacement deposit located four miles northeast of the Illinois Creek mine and multiple additional prospects such as TG North lead-zinc-silver prospect. The historic gold resource at Illinois Creek has been defined by approximately 550 drill holes (more than 57,000 meters) completed by Anaconda Minerals Co., North Pacific Mining, Echo Bay and Dakota Mining. Past production is estimated to have been 140,000 ounces of gold and over 600,000 oz silver with a remaining non-industry compliant gold-equivalent resource of 400,000 oz. The JV has commissioned an updated resource estimate to bring the resources up to Canadian National Instrument 43-101-compliant standards. Results are pending on this summer's drilling programs.

An unexpected treat came my way recently when long-time Alaska geologist Phil St. George sent me a fascinating exploration discovery history of the Pebble copper-molybdenum-gold project. The document summarizes the earliest days of the project, naming names, dates and places where one of the world's largest mineral deposit lay hidden until about 20 years ago. The document can be accessed at https://pebblewatch.com/the-pebble-deposit-30-years-later. For those of us lucky enough to have been involved in mineral discoveries, the details of who did what and when often become blurred over time – sometimes because human memory sometimes fails, others because revisionist history is seldom kind to anyone but the teller. As Winston Churchill said, "History will be kind to me for I intend to write it." If you have been an integral part of a major mineral discovery, I challenge you to write down the story, talk to those involved, and preserve what otherwise gets lost in the tailings impoundments of time.

Riversgold Ltd. announced additional results from its 2018 exploration at its Luna-Quicksilver, Gemuk and Kisa gold projects in southwestern Alaska. The company reported multiple high-grade gold values from outcropping sulfide veins and identification of a new 600-meter-long gold-silver-arsenic-antimony soil anomaly has been outlined approximately 1,500 meters northeast of the main Quicksilver target. Sampling outlined a north-south striking massive arsenopyrite vein which returned multiple high gold grade results in the range of 5.85 to 10.4 grams of gold per metric ton over 150 meters of strike. A parallel vein was sampled approximately 35 meters to the east and returned a result of 7.86 g/t gold. A newly identified outcropping vein 300 meters to the east along the ridgeline returned a high-grade gold result of 8.99 g/t gold whilst historical sampling of an outcropping sulfide vein 140 meters down-slope to the southeast previously returned similar tenor gold results averaging 8.7 g/t gold from two samples. The massive sulfide veins now cover approximately 1,000 by 500 meters with soil sampling indicating anomalous gold over a 200-meter-long zone on the ridgeline just east of the outcropping veins. The company subsequently acquired additional land at the Midway Hill target, on the 40-kilometer- (25 miles) long trend about halfway between Luna-Quicksilver and Gemuk. Recent assay results from samples taken at Midway returned up to 11.65 g/t gold along with associated silver, arsenic and antimony. At Gemuk, 15 kilometers (9.3 miles) to the northeast, the company conducted ridge and spur soil and rock sampling and came up with significant gold in rocks up to 90.2 g/t gold and gold-in-soils up to 1.27 g/t gold. Mineralization was extended for more than 2,000 meters along the Pluton fault zone. The project remains open to expansion along strike with additional geochemical sampling and airborne magnetics surveys are recommended for next year. At the Kisa project, the company reported rock sample results along a 1,000-meter section of the Golden Dyke pluton. This effort revealed a number of outcropping quartz-feldspar dykes with varying amounts of arsenopyrite and/or stibnite mineralization. Samples returned results in the range of 2 to 3 g/t gold with values up to 12.15 g/t gold along with anomalous silver, arsenic, copper and stibnite over a strike length of approximately 500 meters. Mineralization remains open to the north and south.

INTERIOR ALASKA

Northern Star Resources Ltd. reported third quarter 2018 results from its newly acquired Pogo gold mine. For the quarter, the operation mined 184,256 metric tons of ore grading 11.2 grams of gold per metric ton resulting in production of 54,474 ounces of gold at a 91 percent recovery rate. Cash operating costs were US$924 per ounce with all-in sustaining costs of US$1,059/oz. The mine also reported its first industry compliant resource update at the mine, tabling indicated resources of 3,316,000 metric tons containing 1,674,000 oz of gold at an average grade of 15.7 g/t gold. It also reported inferred resources of 5,477,000 metric tons containing 2,476,000 oz of gold at an average grade of 14.1 g/t gold. This new resource represents an increase of 24 percent, or 800,000 ounces over the resources when the company acquired the mine a month ago. On the near-mine exploration and development front, the company reported that underground drilling accelerated with four underground diamond drilling rigs focused on resource definition drilling across the mine including Liese veins (L2, L3, Fun Zone), North Zone and the X-Vein together with extensional drilling down dip on the L3 veins. On the exploration front farther afield, the company reported surface drilling programs with four diamond drill rigs through the quarter. A single helicopter-supported rig focused on the Goodpaster prospect, located west of the mine area, testing for potential continuation of the Pogo mineralization across an interpreted fault offset. The final holes of the Goodpaster program cut several notable intersections of quartz and/or mineralized material. Assays are pending.

Endurance Gold Corp. announced results from their 2018 trenching, soil and rock sampling, and geological mapping programs on the Trout and South Fork targets within the Elephant Mountain gold project. At the Trout prospect, five rock samples within the Trout Syenite have returned gold grades exceeding 1 gram of gold per metric ton. In the area of the higher gold-in-soil values, one grab sample returned 23 g/t gold associated with silicified syenite which is the highest gold-in-rock value sampled to date from the Trout target. This rock sample was collected within an area defined by gold-in-soil values of 470, 300, and 395 parts per billion gold. Hand trenching 160 meters to the northeast of the highest grade gold sample returned 0.51 g/t gold over 12.19 meters in Trench 1. This mineralization was associated with oxidized and weathered pervasively silicified fine grained to porphyritic syenite with quartz veinlets throughout the mineralized interval. Trench 2 and Trench 3 had less success in achieving weathered bedrock over their excavated length, but channel sampling did encounter anomalous gold values in similar weathered bedrock of 0.194 g/t gold over 18.29 meters and 0.16 g/t gold over 9.14 meters, respectively. Infill soil sampling indicated a greater than 100 ppb gold-in-soil anomaly trending northeast to southwest exceeding 300 meters of strike and also exceeding at least 35 meters width. As a result of mapping and sampling in 2018, combined with previous efforts on the project, the company staked additional claims between the Trout and Wolverine prospects. The company indicated that future plans include expanded mapping and geochemical sampling along with drilling at the Trout prospect.

ALASKA RANGE

White Rock Minerals Ltd. announced additional drill results from its Red Mountain volcanogenic massive sulfide deposit in the eastern Bonnifield District. Significant results from the Discovery lens and Fosters Gap targets at the Dry Creek prospect and at the more distant Ram and Megan's South prospect. At the Discovery lens, hole DC18-82 returned 4.2 meters grading 5.9 percent zinc, 2.5 percent lead, 96 grams of silver per metric ton, 0.9 g/t gold and 0.1 percent copper. At the Fosters Gap prospect, hole DC18-84 intersected 5.2 meters grading 2.5 percent zinc, 0.9 percent lead, 12 g/t silver, 0.1 g/t gold and 0.1 percent copper; and hole DC18-85 intersected 5.2 meters grading 2 percent zinc, 0.9 percent lead, 39 g/t silver, 0.2 g/t gold and 0.1 percent copper. At the Ram prospect, hole DC18-86 intersected 7.6 meters grading 1.4 zinc, 0.4 percent lead, 4 g/t silver, 0.1 g/t gold and 0.1 percent copper. The company indicated that its 2018 drilling, mapping and controlled-source audio magnetotelluric geophysical programs indicate that additional massive sulfide potential exists for follow up work in 2019.

PolarX Ltd. announced additional drill results from its Zackly prospect on its Alaska Range project. Hole ZX‐18024 cut 46.7 meters grading 3.1 grams of gold per metric ton, 0.6 percent copper and 3.3 g/t silver starting at 37 meters down hole, including 21.7 meters containing 5.2 g/t gold, 0.8 percent copper and 4.1 g/t silver from 59 meters depth. This zone of mineralization is approximately 40 meters down‐dip from the thick interval previously reported for hole ZX‐18020, which contained 55 meters at 2.8 g/t gold and 0.6 percent copper just 2.5 meters from surface. These two intersections were drilled 850 meters along‐strike from the current Zackly resource and mineralization remains open along strike. The company plans to expand this new zone both along strike and down‐dip with additional drilling. The gold and copper oxide mineralization is associated with quartz and sericite veining and alteration consistent with hydrothermal alteration proximal to a porphyry system. Results remain pending for additional drilling, surface geochemical sampling and airborne geophysics

Avidian Gold Corp. reported 2018 drilling results from its Golden Zone project. Results from the first four drill holes at the Breccia Pipe deposit and Mayflower extension zone included Breccia Pipe hole GZ18-04, which intersected 107.31 meters grading 4.76 grams of gold per metric ton and 21.59 meters grading 1.66 g/t gold, including 3.6 meters grading 5.53 g/t gold; and Mayflower Extension holes GZ18-02, which intersected 5.74 meters grading 3.72 g/t gold and 17.7 meters grading 2.12 g/t gold. GZ18-02 also intersected 17.7 meters grading 1.03 g/t gold, including 3 meters grading 2.6 g/t gold. The company drilled hole GZ18-04 down the plunge of the Breccia Pipe Deposit to test for mineralization within the monzodiorite hosting the Breccia Pipe resources that is not included in the current resource estimate, and to infill the southwestern margin of the pipe. This hole also tested for the continuation of mineralization below the conceptual pit outline and possible root mineralization to the pipe. The Breccia Pipe deposit contains an indicated resource of 267,400 ounces of gold in 4,187,000 metric tons grading 1.99 g/t gold plus an inferred resource of 35,900 ounces in 1,353,000 metric tons grading 0.83 g/t gold. Logging of the bottom of GZ18-02, which remained open at depth, noted 4 percent pyrrhotite with minor chalcopyrite in calc-silicate conglomerate which represents the first time that significant gold mineralization has been found associated with pyrrhotite mineralization in the Golden Zone Breccia Pipe deposit area. The company also reported initial results from the Copper King prospect where hole CK18-01 intersected 9.1 meters grading 8.71 g/t gold, 80.8 g/t silver and 3.57 percent copper from 3.9 meters depth. A surface trench (T18-09) located in the same vicinity as hole CK18-01 returned 30 meters grading 2.24 g/t gold, 67.2 g/t silver and 2.79 percent copper while Trench (T18-05) located approximately 750 meters to the south of CK18-01 and oriented perpendicular to the stratigraphy encountered 3 meters grading 16.08 g/t gold, 50.6 g/t silver and 0.78 percent copper.

Nova Minerals Limited announce that its previously announced 8,000-meter reverse circulation drilling program at its 51 percent-owned Estelle copper-gold project was put on hold until 2019 due to inclement weather and unforeseen site matters. The drilling program was designed to test along strike north and south of the historic discovery hole SE12-001 at the Oxide prospect, which cut 387 meters grading 0.40 grams of gold per metric ton. Hole SE12-04, drilled to the southeast hole SE12-001, intersected 41.5 meters averaging 1.1 g/t gold, indicating higher gold grades approaching a strong geophysical anomaly further southeast. This geophysical anomaly will be tested in 2019 as the potential center of the intrusion-related gold system. The delayed 2018 drilling effort will also delay a planned industry-compliant resource estimate for the project.

NORTHERN ALASKA

Trilogy Metals Inc. and funding partner South32 Ltd. announced additional drilling results from its Bornite deposit at its Upper Kobuk Mineral Projects, a business relationship owned and controlled by Trilogy and NANA Regional Corporation, Inc. Under an option agreement with Trilogy Metals, South32 has the right to form a 50-50 joint venture with respect to Trilogy's Alaskan assets including the Bornite deposit. The results from these four holes comprise approximately 3,871 meters from the recently completed 12-hole, 10,123-meter drill campaign. All four drill holes contain copper mineralization and were designed as infill holes to the 300- to 400-meter step-out holes drilled in 2017. Significant results include hole RC18-246 which intersected three mineralized intervals grading 19.6 meters averaging 2.06 percent copper; 6.1 meters averaging 2.36 percent copper; and 7.6 meters averaging 1.04 percent copper. Hole RC18-244 intersected 20.4 meters averaging 0.83 percent copper and hole RC18-247 intersected 20.1 meters averaging 4.55 percent copper, including 16.4 meters grading 5.34 percent copper and 0.21 percent cobalt and an additional 33.4 meters averaging 0.82 percent copper. The company indicated that the total 2018 budget was approximately US$10.8 million and that it intends to release a revised resource estimate for Bornite in early 2019.

Goldrich Mining Company announced final gold production figures from its Chandalar placer gold mine in the Brooks Range. The Chandalar mine is owned by Goldrich NyacAU Placer, LLC (GNP), a 50-50 percent joint venture between Goldrich and NyacAU, LLC. Total mine production for 2018 was 20,900 ounces of raw placer gold, equivalent to approximately 17,100 oz of fine gold. This compares to total production for 2017 of 15,000 total oz of raw placer gold, or approximately 12,300 oz of fine gold. This marks the fourth time consecutive production increase in the four-year life of the operation. The company indicated that anticipated production figures for 2018 will not allow GNP to meet year-end gold deliveries to Goldrich at which point GNP will be dissolved and mining operations by GNP will cease. The parties entered arbitration earlier in the year and are awaiting the binding final ruling of the arbitration panel.

SOUTHEAST ALASKA

Hecla Mining Company announced preliminary production results for the third quarter 2018 at its Greens Creek mine. The mine's third quarter production 1,876,416 million ounces of silver and 11,559 ounces of gold was compared to 2,344,315 million ounces of silver and 12,563 ounces of gold in the third quarter of 2017. Lower quarterly production was due to lower average grades and mill tonnages, both of which were anticipated by mine sequencing. The mill operated at an average of 2,316 tons per day, a life of mine record for the operation.

Coeur Mining Inc. announced preliminary third quarter 2018 production results from its Kensington mine. The mine produced 26,809 ounces gold during the quarter, a 5 percent quarter-over-quarter increase and 3 percent year-over-year decrease. The operation milled 167,964 tons of ore grading 0.17 oz of gold per ton. Recovery was 91.8 percent for the quarter. Approximately 4,400 tons of ore came from the Jualin portion of the mine complex and contributed an estimated 2,100 ounces of gold grading 0.48 ounces per ton to the quarter's production. The company is estimating full-year production of 115,000-120,000 oz of gold.

Constantine Metal Resources Ltd. and joint venture partner Dowa Metals & Mining Company Ltd. announced an updated mineral resource at the Palmer polymetallic project near Haines. Revised indicated mineral resources at the project currently stand at 4,677,000 metric tons grading 1.49 percent copper, 5.23 percent zinc, 0.30 grams of gold per metric ton, 30.7 g/t silver and 23.9 percent barium sulfate (barite); while inferred mineral resources include 5,338,000 metric tons grading 0.96 percent copper, 5.20 percent zinc, 0.28 g/t gold, 20.2 g/t silver and 22 percent barium sulfate. The resource incorporates all exploration drilling in the deposit area completed to the end of 2017. The structural model for the South Wall and RW zones was generated from 108 exploration diamond drill holes for 44,868 meters and geological surface mapping. Metal grades were estimated using inverse distance cubed interpolation into a 3D block model with block dimensions of six meters. The company anticipates adding to this resource with its planned maiden resource for the AG zone , a precious and base metals-rich massive barite-sulfide discovery made last year about 3,000 meters southwest of the South Wall-RW deposit.

Grande Portage Resources Ltd. announced results from three of fifteen drill holes from its recently completed drill program conducted at the Herbert gold project near Juneau. Significant results include hole 18S-2, which intersected the Deep Trench quartz vein and returned 9.08 meters grading 30.24 grams of gold per metric ton and 40.52 g/t silver. Hole 18S-1 intersected 2.81 meters grading 15.76 g/t gold and 8.7 g/t silver. The Deep Trench vein intercept seen in 18S-1 was approximately 25 meters vertically above the intercept in 18S-2. In addition, hole DDH18M-6 was drilled 170 meters beneath and 25 meters east of an outcrop of the vein in Goat Creek, where one-meter-wide channel samples returned 290 g/t gold and 224 g/t silver. This hole intersected 6.29 meters grading 15.69 g/t gold. The Goat vein structure is a left-lateral strike-slip shear zone in a 7.5-meter-wide zone of coarse-grained quartz diorite at the contact with an underlying quartz-diorite porphyry unit. The company also announced initial metallurgical work from two samples collected from the Goat vein and Deep Trench vein. The combined gravity plus flotation gold recoveries on samples from the Goat vein and Deep Trench vein were 99.5 percent and 97.7 percent, respectively. The whole-ore cyanidation gold recoveries on samples from the Goat vein and Deep Trench vein were 99.6 percent and 98.4 percent, respectively. Combined gravity plus flotation silver recovery was 98.7 percent on samples from the Goat vein and 90.6 percent on the Deep Trench vein sample, whereas whole-ore cyanidation silver recoveries were 94.4 percent and 81.5 percent respectively.

Ucore Rare Metals Inc.

A plane lands on Kendrick Bay in front of Ucore Rare Metals' Bokan Mountain rare earth elements project about 30 miles southwest of Ketchikan, Alaska.

Ucore Rare Metals Inc. announced that it had contracted with R&M Engineering-Ketchikan, Inc. of Ketchikan, Alaska to commence with the required due diligence regarding the purchase agreement of a comprehensive land package for the Alaska Strategic Metals Complex, the company's planned rare earth and strategic metals refinery and separation plant in Southeast Alaska. The SMC land package comprises six acres and two adjacent development lots located on North Tongass Highway in Ketchikan. The company's development of the Alaska Strategic Metals Complex is the initial component of the Bokan-Dotson Ridge rare earth element project and will be able to process and refine non-Chinese rare earth ore and concentrate from around the world into all 16 commercially traded individual rare earth elements.

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]

Website: http://www.avalonalaska.com

Author Bio

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).

• Email: [email protected]
• Phone: 907-457-5159
• Contact Curt Freeman