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By Shane Lasley
Mining News 

South32 invests in 2 Alaska copper projects

 

Last updated 10/30/2019 at 11:38am

Shane Lasley

A rainbow touches down next to the copper-rich Bornite project in Northwest Alaska's Ambler Mining District.

South32, an Australia-based major base metal and coal producer spun out of BHP Billiton in 2015, is expanding its presence in Alaska.

This company went into business with an impressive portfolio of base and precious metals mining assets in Australia, South Africa and Brazil. While all of South32's initial portfolio was south of the Equator, the Perth-based major is interested in high-quality exploration and mining projects around the globe.

"Our exploration activities are carefully selected to have a high chance of success and are spread around the world, including places we have not operated in before," according to the South32 website.

South32's first exploration foray north of the Equator came in 2017 when it entered into an option to earn up to a 50 percent interest in Trilogy Metals Inc.'s Upper Kobuk Mineral Projects (UKMP), a large land package that blankets most of Northwest Alaska's Ambler Mining District.

To keep its UKMP option in good standing, South32 agreed to invest US$30 million in exploring the copper-rich land package over a three-year period. Under an agreement struck early in 2017, the Aussie major has the option to buy a 50 percent stake in UKMP for US$150 million.

Over the previous two exploration seasons, the company invested US$20.8 million into UKMP, leaving a balance of US$9.2 million for 2019. Similar to the previous two years, this year's funding by South32 is going toward infill and resource expansion drilling at Bornite, a large copper-cobalt deposit.

At a cut-off grade of 0.5 percent, the open-pit portion of Bornite hosts 40.5 million metric tons of inferred resource averaging 1.02 percent (913 million pounds) copper; and 84.1 million metric tons of indicated resource averaging 0.95 percent (1.77 billion lb) copper.

At the same cut-off grade, the Bornite open-pit also hosts 124.6 million metric tons of inferred resource averaging 0.017 percent (45 million lb) cobalt.

The below-pit portion of Bornite, at a cut-off grade of 1.5 percent, hosts 57.8 million metric tons of inferred resource averaging 2.89 percent (3.68 billion lb) copper and 0.25 percent (32 million lb) cobalt.

This year's work at Bornite included roughly 8,000 meters of infill and expansion drilling in 12 holes; additional metallurgical work to optimize copper recoveries and the determination of next steps for the recovery of cobalt; and initial engineering studies in preparation for a preliminary economic assessment currently underway.

While South32 invests in Bornite, Trilogy continues to advance feasibility work and permitting at Arctic, a base and precious metals-rich volcanogenic massive sulfide project about 16 miles north of Bornite.

Arctic, the most advanced UKMP project, hosts 43.04 million metric tons of probable reserves averaging 2.32 percent copper, 3.24 percent zinc, 0.57 percent lead, 0.49 grams per metric ton gold and 36 g/t silver.

In addition to investing in Bornite and Arctic, South32 and Trilogy each contributed US$1 million toward exploring earlier staged Arctic-like deposits and targets along a 60-mile (100 kilometers) VMS belt that spans UKMP.

South32 has until the end of January 2020 to decide to invest the additional roughly US$150 million to acquire half of the prolific mineral district that UKMP blankets.

In March, South32 entered into an agreement with Freegold Ventures Ltd. to earn up to a 70 percent interest in Shorty Creek, an early stage porphyry copper-gold-silver-tungsten project about 75 miles northwest of Fairbanks, Alaska.

Under this agreement, a South32 subsidiary will fund up to US$10 million of exploration over the next four years, including US$2.2 million in 2019.

This exploration spending keeps an option open for South32 to acquire 70 percent of a newly formed project company for US$30 million, less any money the Perth-based major invested in Shorty Creek exploration.

Shane Lasley

A sample of the copper- and cobalt-rich mineralization extracted from an exploration shaft Kennecott Exploration sunk into the Bornite deposit at UKMP during the 1960s.

Freegold Ventures identified the potential for porphyry-style copper-gold mineralization at Shorty Creek in 2014, which was confirmed with drilling the next year.

One of the 2015 holes, SC 15-03, cut 91 meters grading 0.55 percent copper, 0.14 g/t gold and 7.02 g/t silver at the Hill 1835 target at Shorty Creek.

Overall, Freegold had drilled 12 holes at Hill 1835 prior to 2019, outlining a 750- by 300-meter area of porphyry copper-gold-silver-tungsten mineralization, which represents a small portion of the larger magnetic and geochemical anomaly found there.

South32 invested US$2.3 million for an exploration program at Shorty Creek during 2019. This program included geophysical and geochemical surveys carried out early in the season, and roughly 2,000 meters of drilling aimed at further expanding the mineralization at Hill 1835 and further testing of the Hill 1710, another target on the property.

 

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