Alaska mining to get Aussie boost in 2020
South32, Northern Star, five other Australian companies are slated to invest nearly $100M in Alaska mines, mineral projects
Last updated 1/17/2020 at 5:03am
With two Australian companies making major investments and several exploration companies from Down Under chomping at the bit to get into the field, 2020 is shaping up to be the best year for Alaska's mining sector in a decade.
When you add up the investments South32 Ltd. plans to make in the Ambler Mining District and other exploration projects; Northern Star Resources Ltd.'s spending at the Pogo gold mine; and the exploration dollars at least five other Aussie companies are putting into the ground, nearly US$100 million of exploration and development spending in Alaska is expected to flow north from Australia this year.
This is a major shift from the norm for Alaska's mining sector, which has traditionally been dominated by Canada domiciled companies.
So, what is drawing Australian miners to Alaska? It primarily boils down to the fact that the Far North State is seen as a land of low-risk and high-reward for miners looking outside of Oz for mineral rich properties.
"You guys are seriously blessed by Mother Nature here – the geology of Alaska is fantastic!" Northern Star Resources Ltd. Executive Chairman Bill Beament said during a recent visit to Alaska.
"Alaska is a great place to do business," he added.
The Northern Star executive's sentiments are being echoed by a rapidly growing group of Aussie miners looking north to the opportunities Alaska has to offer.
Committed to Ambler
One of the most exciting developments for Alaska's mining sector going into the new decade is the recent announcement that South32 is investing US$145 million to become a 50 percent joint venture partner in Trilogy Metals Inc.'s Upper Kobuk Mineral Projects (UKMP), which covers a more than 70-mile (115 kilometers) stretch of Northwest Alaska uncommonly rich in a variety of precious, base and critical minerals.
This large land package is comprised of state mining claims held by Trilogy and private lands owned by NANA Corp., the Alaska Native regional corporation for Northwest Alaska
While South32 has already invested more than US$30 million on exploration at UKMP over the past three years, it wasn't until the Dec. 19 announcement that it would be exercising its option that the Australia-based major became committed to the long-term development of the world-class deposits found in the Ambler Mining District that UKMP covers.
"Having the support and partnership from a senior mining company like South32 – both in terms of their financial support and technical expertise – is tremendous for Trilogy Metals," said James Gowans, interim president and CEO of Trilogy Metals.
NANA President and CEO Wayne Westlake said the benefits of having a company like South32 involved in UKMP will extend beyond the Ambler Mining District.
"This joint venture is an investment in the future – not only for the UKMP but for NANA shareholders and the people of Alaska," he said.
So far, roughly 9 billion pounds of copper, 3.6 billion lb of zinc, 628 million lb of lead, 77 million lb of cobalt, 58 million ounces of silver and 770,000 oz of gold has been outlined at Arctic and Bornite, the two most advanced UKMP projects.
And there are more than a dozen other known historical deposits and occurrences to explore across the roughly 353,400-acre UKMP land package.
Arctic, the most advanced of the UKMP projects, hosts 43 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.
A 2018 prefeasibility study detailed plans for an open-pit mine to extract the volcanogenic massive sulfide mineralization at Arctic and a 10,000-metric-ton-per-day mill that is expected to produce more than 159 million pounds of copper, 199 million lb of zinc, 33 million lb of lead, 30,600 ounces of gold and 3.3 million oz of silver annually over a 12-year mine-life.
A feasibility study for developing a mine at Arctic is expected in the first half of 2020 and permitting is expected to get started shortly thereafter.
As Trilogy focused on readying Arctic for permitting, South32 invested its US$30 million share of exploration spending on Bornite, a large copper-cobalt deposit on NANA Corp. lands about 16 miles southwest of Arctic.
Bornite hosts 40.5 million metric tons of indicated resource averaging 1.02 percent (913 million lb) copper; and 141.9 million metric tons of inferred resource averaging 1.74 percent (5.45 billion lb) copper and 0.019 percent (77 million lb) cobalt.
South32 is having the resources for Bornite and Arctic recalculated to be Joint Ore Reserves Committee- (JORC) compliant, which is the standard for Australia-listed companies.
The new JORC-compliant resource is expected to be completed during the first quarter of 2020, about the same time as the UKMP JV is officially finalized.
"Forming the UKMP joint venture will be another important milestone as we reshape and improve our portfolio, by adding high-quality copper and base metals development options," said South32 CEO Graham Kerr.
South32 also has 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.
As South32 puts its financial and technical wherewithal behind developing the first of several mines in the Ambler Mining District, a fellow Australian miner, Northern Star Resources Ltd., is putting its underground mining expertise to work at the Pogo gold mine in the Goodpaster Mining District.
Northern Star Resources Ltd. has built a multi-billion-dollar company by breathing new life into aging underground gold mines in Australia. Now, the Perth-based company is applying its mining savvy to Pogo.
This includes heavy investments into exploration, mine development and state of art equipment at the high-grade gold mine.
Including the US$260 million paid to buy Pogo at the end of 2018, Northern Star is investing nearly A$485 million to elevate its new Alaska gold mine to tier-one status, which the company defines as having the ability to produce at least 300,000 ounces of gold annually for at least 10 years.
Much of Northern Star's success over the past decade is built off the company's willingness to invest into exploration.
"If you don't drill you don't find and if you don't find you don't mine – it's a very simple philosophy," said Northern Star Resources Executive Chairman Bill Beament.
And the drills are finding gold to mine at Pogo.
According to a calculation published on Aug. 1, Pogo now hosts 19.3 million metric tons of JORC resources – measured, indicated and inferred – averaging 9.6 g/t (5.95 million oz) gold.
This is on top of the nearly 4 million oz of gold already recovered from this Interior Alaska asset.
"We have owned Pogo for only a year and our exploration results already provide strong evidence that it is an emerging camp-scale system with huge potential to grow the inventory and mine life beyond the current 10 million oz endowment," Beament said in September.
In addition to exploration, Northern Star is investing US$30 million (A$43 million) into upgrades that will increase the annual throughput of the Pogo mill by 30 percent.
The Australian gold miner has begun this mill expansion with a US$10 million investment during its current fiscal year, which ends in June. When these upgrades are complete, expected by early 2021, the annual plant throughput will be increased from the current one million metric tons to 1.3 million metric tons.
According to Mining News calculations the 4-millionth-oz gold pour at Pogo should occur in the first quarter of 2020.
Stone's throw from Pogo
As Northern Star builds gold reserves at Pogo, Aussie exploration companies are chomping at the bit to build their own stores of gold in Alaska. This includes one junior that can see the Pogo mill from its newly optioned property.
Previously known as the Goodpaster project, 64North includes nine claim blocks – West Pogo, Shaw, Eagle, LMS-X, South Pogo, East Pogo, North Pogo, Last Chance and Divide – covering roughly 160,000 acres in the Goodpaster Mining District.
Resolution has the option to earn a 60 percent interest in this large gold project by investing US$20 million in exploration spending over four years.
Upon the initial earn-in, Resolution can earn up to an 80 percent JV interest in one of the 64North claim blocks with additional work.
It is currently expected that West Pogo, which is less than five miles west of the Pogo mill, will be the block Resolution picks.
Last fall, Northern Star announced that it has traced Goodpaster, a discovery zone in the northwest corner of the Pogo mine property, to the border of West Pogo.
Highlights from Northern Star's drilling in the Goodpaster discovery zone include: 2.1 meters of 44.5 g/t gold; 2.2 meters of 28.1 g/t gold; 0.6 meters of 100.1 g/t gold; and 0.3 meters of 170.2 g/t gold.
The stacked zones of high-grade gold mineralization in the Goodpaster zone appear to continue into the Aurora Creek area of West Pogo.
Eager to have drills turning on West Pogo early in 2020, Resolution advanced Millrock cash to build a four-mile exploration road into the Aurora Creek target area, carry out additional geophysics to refine the gold targets that seem to trend into the area and drill a well for the water needed to carry out winter drilling.
"This incredible opportunity for Resolution shareholders to be drilling only a stone's throw from Northern Star's operating high grade Pogo gold mine lease, was created by a unique set of circumstances that a junior is rarely able to grab – timing of change of ownership of the Pogo gold mine in August 2018, Millrock's ground position built over years with their project generator business model (and) Canadian markets focused on other industries," said Resolution Minerals Managing Director Duncan Chessell.
Drilling at the Aurora Creek targets is expected to get underway in February, with this year's US$5 million exploration program investigating other 64North targets during the traditional summer exploration season in Alaska.
"Millrock and Resolution share the view that the Goodpaster gold district has the potential to become one of the world's great gold mining camps," said Millrock Resources President and CEO Greg Beischer.
Uncovering a giant
Another Aussie explorer, Nova Minerals Ltd., is well on its way to defining its own "gold camp" on the Estelle property and is just as eager to get a jump on the 2020 exploration season in Alaska.
Situated about 100 miles northwest of Anchorage, Estelle hosts 181.3 million metric tons of Australian Joint Ore Reserves Committee- (JORC) compliant inferred resource averaging 0.43 g/t (2.5 million oz) gold.
"Not all that many opportunities come around to drill a system this large such as what we have at Estelle, with an established 2.5-million-ounce inferred gold resource on a small area and open significantly in all directions," said Nova Minerals Managing Director Avi Kimelman.
This resource is contained within resource blocks A and B at Oxide Korbel, one of several near surface gold occurrences identified across the roughly 18-mile- (29 kilometers) long Estelle property.
Nova plans to expand and upgrade Oxide Korbel and test at least two other prospects at Estelle with a 25,000-meter drill program slated to get underway by March.
"We are excited to be ramping up our exploration efforts to increase the resource both in size and confidence to commence our preliminary economic studies as part of the project's natural progression to the next level," said Kimelman.
As Nova advances Oxide Korbel blocks A and B toward scoping level mine studies, the Aussie explorer also plans to complete drilling, induced polarization (IP) geophysics and prospecting across its 85-square-mile (220 square kilometers) Estelle property next year.
"We are particularly excited with the potential opportunity to uncover another giant deposit in Alaska," said Kimelman. "The project sits amongst some of the largest gold deposits on the planet within the Tintina Gold Belt with very large and exciting known prospects on the 220-square-kilometer Estelle gold project, and Nova is ready to meet the challenge of exploring each of them."
The most exciting exploration target for 2020 may be RPM, an early staged gold target about 25 kilometers (16 miles) south of Oxide Korbel.
In September, Nova announced results from the re-assaying of core from a hole drilled at RPM in 2012.
The assays from this resampling show this hole, SE12-008, cut 177.4 meters averaging 0.79 g/t gold from a depth of 4.3 meters. This includes 50.2 meters of 1.75 g/t gold from a depth of 75.2 meters.
Nova's 2020 plans for RPM include prospecting, mapping and geophysical programs to further define the mineralized footprint ahead of summer drilling aimed at establishing an inaugural inferred resource at this target.
Shoeshine, an early staged prospect about 4.5 miles (seven kilometers) northeast of RPM, is another target Nova plans to investigate further next year.
Exploration carried out nearly a decade ago outlined a 300- by 1,000-meter anomalous zone at Shoeshine. The average grade of 49 samples collected from a rubble field in this area was 0.59 g/t gold. One sample of porphyry rock cut by sheeted quartz veinlets returned assays of 13.13 g/t gold.
"The Estelle gold project is starting to show all the hallmarks of a district with potential of multiple major mineralized zones that can support standalone operations with Korbel (one of fifteen known targets) showing all the early signs of a tier one operation," said Kimelman.
Exploring Mars, Saturn
Perth-based PolarX Ltd. seems to be closing in on an enormous copper-gold discovery at its Alaska Range project, which is about 125 miles (200 kilometers) northeast of Estelle.
In November, PolarX announced that its discovery hole at Mars, a porphyry target at Alaska Range, cut 102.1 meters averaging 0.22 percent copper, 0.07 g/t gold and 200 parts per million molybdenum.
The Aussie junior believes this hole was not drilled into the hottest core of the porphyry system at Mars, where the highest grades are often found, due to the lack of pervasive potassic alteration in the mineralized intersections encountered.
"The alteration minerals indicate that this hole is not the best part of the system but may be close," said PolarX Managing Director Frazer Tabeart. "When coupled with the size and nature of the surface geochemical and geophysical anomalies, the assays confirm our view that a very large mineralized system may be present."
The 102-meter mineralized intercept was near the bottom of the hole, which was terminated at 417 meters due to difficult drilling and heavy snows bringing an end to the 2019 exploration season at Alaska Range.
Tabeart said PolarX said it is planning for a significant follow-up drill program at Mars.
Mars occurs at the western end of a 7.5-mile‐ (12 kilometers) long mineralized corridor that also hosts the high-grade Zackly skarn and Saturn porphyry targets.
Zackly, which is about 6,000 meters southeast of Mars, hosts 3.4 million metric tons of JORC-compliant inferred resource averaging 1.2 percent (90.4 million pounds) copper, 2 g/t (213,000 oz) gold and 14 g/t (1.5 million oz) silver.
Saturn, which lies at the southeast end of the mineralized corridor, may host another porphyry deposit at Alaska Range. Five holes drilled in 2019, however, did not tap the porphyry mineralization PolarX and Lundin were targeting there.
A gravity geophysical survey carried out toward the end of the 2019 season, coupled with the geology observed in core, suggests that the porphyry system at Saturn lies just south of the 2019 drilling.
"The alteration zoning and geology in the Saturn drill holes again support our view that the gravity anomaly represents an intrusive (potential porphyry) center, which also requires further drilling to complete our first pass evaluation," said Tabeart.
Unlocking Red Mountain
Yet another Aussie explorer, White Rock Minerals Ltd., has pulled together an exciting district-scale mineral property in Alaska.
This property, Red Mountain, covers 183 square miles (475 square kilometers) of zinc-rich VMS deposits and prospects about 60 miles (100 kilometers) south of Fairbanks, Alaska's second largest city.
Red hosts two deposits – Dry Creek and West Tundra Flats (WTF) – with 16.7 million metric tons of JORC-compliant inferred resources averaging 4.1 percent (1.49 billion lb) zinc; 1.7 percent (630 million lb) lead; 0.2 percent (57.3 million lb) copper; 99 g/t (53.5 million oz) silver; and 0.7 g/t (352,000 oz) gold.
Sandfire, a mid-tier Australian mining company with a growing portfolio of assets in the United States, joined the exploration at Red Mountain with an A$2.5 million investment in White Rock shares during 2018.
This initial investment provided Sandfire the opportunity to earn up to a 70 percent JV interest in Red Mountain by investing US$21.6 million over six years into exploring this zinc-rich VMS property and completing a pre-feasibility study for developing a mine there.
With dozens of underexplored prospects across Red Mountain, White Rock and Sandfire primarily focused their more than A$8 million (US$5.4 million) 2019 exploration program on the district-scale potential of this highly prospective land package.
"The agreed exploration strategy with our JV partner Sandfire is to test away from the known high-grade deposits in pursuit of the next big deposit," said White Rock Minerals Managing Director Matthew Gill.
The most exciting discovery from this work, however, was made right next to the Dry Creek deposit.
In November, White Rock reported that the final hole of the 2019 program, DC19-96, cut 1.4 meters of massive sulfide mineralization averaging 13.9 percent zinc, 4.4 percent lead, 115 grams per metric ton silver, 0.8 g/t gold and 0.3 percent copper.
"This aggressive step-out drill hole at Dry Creek has shown that the deposit is wide open with fantastic high-grade zinc and silver persisting over 200 meters deeper than previously drilled," said Gill.
And like his Aussie colleagues across Alaska, the White Rock leader is anxious to follow up on his northern discovery in 2020.
"A targeted drill program early in the 2020 field season could unlock just how significant the resource expansion potential could be," Gil said.