Alaska exploration recovers from COVID-19
Gold, Sprott, Kinross Alaska help infected sector to recover Mining Explorers 2020 - Published January 19, 2021
Last updated 2/4/2021 at 4:01pm
Strong metal prices and an infusion of cash from notable resource investors helped to salvage much of a 2020 mineral exploration season in Alaska that became lethargic with disruptions, delays, and shelving of field programs infected by the COVID-19 pandemic early in the year.
At its onset, 2020 was looking like it would be the best year for Alaska's mining sector in a decade. Australia-based mining companies were slated to invest nearly US$100 million in mineral exploration and mine development. This does not include the investments made by Canadian miners – the traditional bread and butter of mineral exploration across the 49th State.
Government and corporate measures put in place to flatten the curve on the spread of coronavirus, however, disrupted several winter drill programs in Alaska, delayed the start of most summer exploration, and even caused some companies to shelve their 2020 programs as a precautionary measure aimed at ensuring their work did not contribute to introducing the COVID-19 virus to rural Alaska residents.
Fortunately, rising metals prices, especially gold, helped to revitalize a mineral exploration sector that was locked down for roughly two months beginning in late-March. While several programs remained on the shelf until 2021 and others were reduced due to COVID-19 encroaching on the summer field season, mineral exploration spending in Alaska topped US$100 million during 2020.
Alaska's gold exploration sector got an extra boost of vitality in October, when Kinross Gold Corp. unveiled a strategy to source gold-rich ore from projects along Alaska's road, rail and river system to feed the underutilized 14-million-metric-ton-per-year mill at Fort Knox.
"There is an economic radius around Fort Knox given the mill capacity that makes a good chunk of Alaska attractive for potential bolt-on," said Kinross Gold Chief Technical Officer Paul Tomory.
It is expected that Kinross's new strategy will bolster exploration in 2021 and beyond as companies look to outline bolt-on gold projects within Fort Knox' circle of influence.
A microcosmic analogy of 2020 mineral exploration in Alaska, Barrick Gold Corp. and Novagold Resources Inc. launched the largest program in 12 years at Donlin Gold, only to idle down drills before the program could really get started.
In March, Donlin Gold LLC – a 50-50 joint venture between Novagold and Barrick – launched an 80-hole resource optimization drill program to validate new geological models and test potential extensions of high-grade zones within the 39-million-oz gold deposit at Donlin.
By early April, however, COVID-19's rise to pandemic levels prompted Novagold and Barrick to idle down drills and close camp to help prevent coronavirus from spreading into the Yukon-Kuskokwim region of Southwest Alaska where Donlin is located.
With more than half the Donlin Gold workforce being Alaska Natives, many from rural communities, working alongside employees and contractors from Alaska hub cities and out of state, it was essential that strict protocols were established before work resumed at Donlin Gold.
After meeting with Alaska Native leaders, Donlin Gold established COVID-19 measures that met state and local requirements, and by late-May drills were once again turning on the project.
"We have ensured that our operations are working as safely and responsibly as possible alongside our Native corporation partners, Calista and TKC (The Kuskokwim Corp.), providing extensive resources and support in Alaska, particularly in the remote Yukon-Kuskokwim region closest to the project," said Barrick Gold President and CEO Mark Bristow.
By mid-September, the Donlin Gold partners had exceeded the original scope of the program, completing 23,400 meters of drilling in 85 holes.
With drill intercepts like 41.9 meters averaging 11.61 grams per metric ton gold, 6.9 meters averaging 43.1 g/t gold, and 4.2 meters averaging 80.6 g/t gold, this drilling also achieved the objectives set out by the partners.
"These early drill results have improved our understanding of the orebody, supporting the more recent geologic modeling. They also underscore Donlin Gold's significant potential as well as extraordinary optionality to the gold price over multiple cycles and in a mining friendly jurisdiction," said Bristow.
No program, no matter
While Donlin Gold managed to exceed its originally planned program, others opted to not carry out field programs that would be plagued by the complicated logistics and higher costs of ensuring their work did not contribute to the spread of COVID.
One of the most notable programs to remain on the shelf during 2020 was the Upper Kobuk Mineral Projects, an enormous block of state and NANA-owned lands covering the prolific Ambler Mining District in Northwest Alaska.
In late 2019, Australia-based South32 Ltd. entered into a 50-50 joint venture partnership with Trilogy Metals Inc. to advance development of the Arctic Mine project, continue to grow the world-class Bornite copper deposit, and explore dozens of other high-grade targets across the Ambler District.
While Ambler Metals LLC was excited to continue its exploration, the newly formed JV cancelled the US$22.8 million field program it had planned for UKMP during 2020 to avoid the possibility of spreading the coronavirus in an exploration camp where the traditionally large local workforce at UKMP would mingle with colleagues from other parts of Alaska and the world.
"Ambler Metals gave due consideration to the merits of carrying out an abridged work program at the UKMP. However, given the continued uncertainty resulting from COVID-19, ongoing safety concerns (despite added safety protocols including physical distancing, protective equipment and testing) and the fact that, due to COVID-19, the planned field season had already been delayed to the point at which any field season would provide limited critical path benefits, the decision has been made not to proceed with a 2020 field season," the joint venture explained in a statement.
Ambler Metals, however, does not expect the suspension of the program to delay the overall development timeline for UKMP.
A feasibility study for developing a mine at the world-class Arctic deposit was completed in August.
This study details a financially robust operation that would produce 1.9 billion lb of copper, 2.3 billion lb of zinc, 388 million lb of lead, 386,000 oz of gold, and 40.6 million oz of silver over an initial 12-year mine life.
Permitting is now underway for mine development at Arctic.
In the meantime, Ambler Metals continued to make headway at Bornite by updating the geological model of this large deposit about 16 miles southwest of Arctic that hosts roughly 6.4 billion lb of copper and 77 million lb of cobalt.
The updated geological model for Bornite will help identify priority targets for future drilling.
Contango ORE Inc. was another company that chose not to proceed with a 2020 field program. CORE leadership, however, was busy behind the scenes putting together a deal that would catapult the company from explorer to gold producer and change the dynamics of mineral exploration across much of Alaska.
In late-September, Kinross announced that it agreed to pay US$93.7 million to buy a 70% stake in Peak Gold, a project CORE discovered and owned a 60% stake in at the time.
Kinross invested this money to buy all of Royal Gold Inc.'s 40% interest and half of CORE's interest in Peak Gold.
At the time of Kinross' buy-in, Peak Gold hosted 9.2 million metric tons of measured and indicated resources averaging 4.08 g/t (1.21 million oz) gold and 14.19 g/t (4.2 million oz) silver in two near-surface deposits.
Kinross plans to mine these high-grade deposits just south of the Alaska Highway and truck the ore 250 miles northwest to its underutilized mill at Fort Knox for processing.
Roughly 1 million oz of gold-equivalent, which includes the value of both the gold and silver, from Peak Gold ore over a 4.5-year mine life, or roughly 222,000 oz per year.
The lack of need for a mill and tailings facility on the Tetlin property where the Peak Gold deposits are located will reduce the environmental footprint and simplify the permitting process.
As a result, Kinross expects to have Peak Gold ready to deliver ore to Fort Knox in 2024.
CORE, which received US$32.4 million in cash and US$12.1 million of its own shares in exchange for half of its 60% interest in Peak Gold, retained 100% interest in 170,000 acres of state lands adjacent to the Peak Gold property.
"I see this as a launching platform for an Alaska-based exploration and development staged company," CORE President and CEO Rick Van Nieuwenhuyse told Mining News.
It is also serving as a launching pad for Kinross Alaska, a new strategy to feed the mill at Fort Knox with ore from smaller high-grade gold projects within a roughly 300-mile-radius of the iconic mine about 20 miles north of Fairbanks.
"We see a great future ahead for Kinross and we expect our continuous improvement culture will continue to provide opportunities to extend mine life and optimize mine plans," said Fort Knox General Manager Jeremy Brans. "It has also led to a shift in thinking: It is no longer just 'Kinross Fort Knox'; it is 'Kinross Alaska...with Fort Knox at its heart'."
Kinross Alaska influence
Without the need to outline a project large enough to support the building of a gold recovery and tailings disposal system, the Kinross Alaska strategy is changing how gold exploration companies evaluate and explore road, rail and river accessible assets across much of Alaska.
The most intriguing potential source of ore for the Kinross Alaska mill could be at Freegold Ventures Ltd.'s Golden Summit property immediately north of Fort Knox.
The first hole of Freegold's 2020 winter program at Golden Summit cut 188 meters averaging 3.69 g/t gold, including two meters averaging 169.5 g/t (4.9 oz/t) gold.
This bonanza grade intercept is reminiscent of the historic Cleary Hill Mine, which produced 281,000 oz of gold from ore averaging 1.3 oz per ton before the operation was shuttered during World War II.
Freegold believes the high-grade gold tapped in the Cleary Hill vein system may extend west and to depth from the historic mine workings toward the 61.5 million metric tons of indicated resource averaging 0.69 g/t ton (1.36 million oz) gold; and 71.5 million metric tons of inferred resource averaging 0.69 g/t (1.58 million oz) gold already outlined at Golden Summit.
Another junior, Avidian Gold Corp., is exploring the Amanita and Amanita NE properties south and east of Fort Knox.
Exploration by Avidian and others have identified potential oxide gold resources within the Tonsina Trend, a structural corridor at Amanita that extends northeast onto the Fort Knox property.
Avidian's 2020 program at Amanita included drilling to test strong gold mineralization encountered with trenching completed in 2019. Highlights from that trenching include 94.5 meters of 3.04 g/t gold and 27 meters of 4.22 g/t gold.
Amanita NE, acquired by Avidian in 2020, is about four miles east of the area currently being mined at Fort Knox and immediately west of Kinross' Gil deposit.
Looking at similar potential in the Fairbanks Mining District, Millrock Resources Inc. cut a deal to acquire the Treasure Creek gold project about 20 miles west of Fort Knox Mine. According to Alaska Division of Geological and Geophysical Survey reports, more than 148,000 oz of placer gold has been mined from the streams draining the Treasure Creek claim block.
"The abundance of placer gold mined at surface underscores the potential we see to discover a large intrusion-related gold deposit of similar scale to Fort Knox," said Millrock Resources President and CEO Greg Beischer.
The primary focus of Millrock's 2020 exploration, however, lay in the Goodpaster Mining District about 80 miles southeast of Fort Knox.
Goodpaster has reemerged as a hot spot for gold exploration in Alaska since Australia-based Northern Star Resources Ltd. acquired the Pogo Mine there in 2018. It was not so much the acquisition that spurred the rush to Goodpaster – the gold discoveries made by Northern Star beyond the immediate mine area underscored just how prospective the district is.
Millrock was an early and major mover into Goodpaster, accumulating 160,000 acres of property across nine claim blocks – West Pogo, Shaw, Eagle, LMS-X, South Pogo, East Pogo, North Pogo, Last Chance, and Divide – in the district.
Toward the end of 2019, Australia-based Resolution Minerals Ltd. cut a deal to earn a 60% joint venture interest in this large gold project by investing US$20 million in exploration, plus cash payments and share issuances to Millrock, over four years.
Excited to test targets on the Goodpaster project that was renamed 64North, the newly formed partners launched a US$5 million drill program on the West Pogo block in March.
Northern Star traced high-grade gold in the Goodpaster discovery zone on the Pogo property westward to the border of West Pogo.
Highlights from Northern Star's drilling in the Goodpaster zone include: 2.1 meters of 44.5 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 the West Pogo property.
Like others who attempted to get an early jump on the 2020 exploration season in Alaska, Millrock and Resolution were forced to delay drilling before the program really got started.
Drilling resumed in June and by the end of September the partners had completed seven holes, five at Aurora and one each in the Echo and Reflection prospects to the north.
While some holes tapped the veins and alterations, none of the first seven holes encountered the high-grade gold being sought by Millrock and Resolution. This, however, has not discouraged the partners, which resumed drilling at Aurora in November.
Another Goodpaster District explorer, Tectonic Metals Inc. expanded zones of high-grade gold mineralization on its Tibbs property about 20 miles (32 kilometers) southeast of the Pogo Mine.
During 2020, Tectonic completed 3,202 meters of rotary air blast drilling following up on its 2019 success, which included one hole that cut 29 meters averaging 6.03 g/t gold in the Michigan zone.
Slightly more than half the 2020 meterage at Tibbs was completed in 11 holes drilled at Michigan. Highlights include 9.1 meters averaging 6.71 g/t gold; 12.9 meters averaging 2.61 g/t gold; and 7.6 meters averaging 3.73 g/t gold.
The balance of the 2020 drill program at Tibbs tested for additional Michigan-style structures at Lower Trench and Wolverine, targets along a prospective corridor that extends 3,000 meters northeast from Michigan.
In addition to drilling, Tectonic completed soil sampling that has identified gold anomalies in the western part of Tibbs, where recent mapping highlights low-angle faults within moderately dipping gneissic rocks, which are key characteristics of the Pogo geological model.
"This is a powerful new observation, as gneissic rocks also host the Liese veins at Pogo, just 35 kilometers away," said Tectonic President and CEO Tony Reda.
Tectonic also completed a 26-hole rotary air blast drill campaign at Seventymile, a gold exploration project on Doyon land about 65 miles (105 kilometers) northeast of Tibbs, during 2020.
This reconnaissance drilling largely targeting previously overlooked shear zones believed to be conduits for the gold mineralization along the Flume trend that were not tested by previous drilling.
The company said the structurally controlled mineralization was intersected where predicted by its new interpretation of Seventymile.
"Our 2020 RAB program has now identified targets warranting aggressive follow up in the future," said Tectonic Metals Vice President of Exploration Eric Buitenhuis.
Larger Kinross Alaska radius?
It is hard to say just how large Kinross Alaska's economic radius is but it is not hard to imagine that HighGold Mining Inc.'s Johnson Tract property about 375 miles (600 kilometers) to the southwest could test the boundaries of ore shipments to Fort Knox.
Situated on Cook Inlet Region Inc., or CIRI, land on the west side of Cook Inlet, Johnson Tract hosts high-grade gold mineralization that is further enriched by associated silver, copper, zinc, and lead.
According to an early 2020 calculation, the JT deposit at Johnson Tract hosts 2.14 million metric tons of indicated resource averaging 6.07 g/t (417,000 oz) gold, 5.8 g/t (397,000 oz) silver, 5.85% (275.3 million lb) zinc, 0.57% (26.8 million lb) copper, and 0.71% (37.6 million lb) lead.
While it is currently unclear whether the recovery system at Fort Knox would work well for this mineralization, it is interesting that in the 1990s Wetmin Resources Ltd. studied the economics of shipping ore from Johnson Tract to its Premier Mine in British Columbia for processing.
It is not hard to imagine a similar scenario where ore is barged the short distance to the Alaska Railroad for low-cost transport to Fort Knox.
Either way, HighGold is expanding the mineralization and options for this high-grade gold project.
Much like Johnson Tract, Western Alaska Copper & Gold's Illinois Creek gold-silver property may benefit from low-cost transportation to deliver ore to the Kinross Alaska mill.
While Illinois Creek is roughly 150 miles west of Alaska's road system and about 275 miles from Fort Knox, it has the advantage of lying next to the Yukon River. This advantageous location means that ore could be barged to Tanana or Fairbanks and then trucked onward to Fort Knox.
According to a 2019 calculation, Illinois Creek hosts 6.76 million metric tons of indicated resource averaging 1.04 g/t (226,000 oz) gold and 34.3 g/t (7.5 million oz) silver; plus 2.03 million metric tons of inferred resource averaging 1.06 g/t (70,000 oz) gold and 38.8 g/t (2.5 million oz) of silver.
While Kinross has not publicly expressed its interest in Illinois Creek, company executives did say "the company has also considered using barges to transport ore on Alaskan rivers to Fort Knox."
Gold seeking Aussies
In addition to Resolutions Minerals' work in the Goodpaster District, three other Aussie juniors – Nova Minerals Ltd., White Rock Minerals Ltd., and PolarX Ltd. – had drills turning on gold-rich properties in Alaska last year.
Nova carried out an aggressive drill program focused on building a large bulk tonnage resource at its Estelle property.
According to a calculation completed in October, the Korbel deposit at Estelle hosts 291 million metric tons of inferred resource averaging 0.4 g/t (3.3 million oz) gold and growing as results from the roughly 40,000-meter drill program completed in 2020 roll in.
This resource expansion drilling is expected to be incorporated into an updated resource and a preliminary economic assessment that provides a first look of a mine at Korbel.
In addition to expanding the gold mineralization to depth and along strike, this drilling is connecting previously disparate blocks of gold mineralization into a cohesive deposit of gold mineralization that covers at least a 2,000- by 1,000-meter area and extends to depths of 500 meters.
And Korbel is one of several gold-rich targets across Nova's 85-square-mile (220 square kilometers) Estelle property.
RPM, which is about 16 miles (25 kilometers) south of Korbel, is an earlier staged Estelle target that shows higher grade gold potential.
One hole drilled by a previous operator in 2012 cut 177.4 meters averaging 0.79 grams per metric ton gold from a depth of 4.3 meters at RPM, including 50.2 meters of 1.75 g/t gold.
A rock sample collected by Nova geologists about 50 meters southeast of the 2012 discovery hole contained 291 g/t gold and a second sample from about 50 meters further southeast averaged about 5 g/t gold.
In an area about 750 meters further southeast, Nova collected rock samples with grades as high as 103 g/t, 13.1 g/t, 9.3 g/t, 9 g/t, and 8.8 g/t gold.
In parallel to continuing to expand Korbel, Nova plans to test RPM and other exploration targets with at least 80,000 meters of drilling slated for 2021.
White Rock discovered a gold-rich target on its 308-square-mile (798 square kilometers) Red Mountain property about 60 miles (100 kilometers) south of Fairbanks.
The eastern end of this property already hosts two volcanogenic massive sulfide deposits rich in copper, zinc, lead, silver, and gold. While exploring for additional polymetallic deposits, White Rock geologists discovered intrusion-related gold mineralization at the Last Chance target area at the western end of the large property.
Further sampling identified a roughly 3,550- by 500-meter core at the Last Chance target that was the focus of an eight-hole drill program carried out in 2020.
White Rock plans to follow-up on this Last Chance discovery program with further drilling this year.
For its part, PolarX explored a major expansion of the gold-rich Zackly skarn on its Alaska Range property about 100 miles (165 kilometers) south of Fairbanks.
The Zackly Main deposit hosts 3.4 million metric tons of Australian Joint Ore Reserves Committee- (JORC) compliant inferred resource averaging 1.2% (90.4 million pounds) copper, 2 g/t (213,000 oz) gold, and 14 g/t (1.5 million oz) silver.
ZX‐18020, a 2018 hole drilled about 850 meters east of the Zackly Main resource boundary, cut 54.6 meters averaging 2.8 g/t gold, 0.6% copper, and 9.4 g/t silver.
PolarX said the high grades and thick, sub‐horizontal geometry of the mineralization encountered in this and other Zackly East holes could be suitable for low cost open‐pit extraction.
After completing trenching, mapping, sampling, and an ultra-high-resolution drone magnetic survey to narrow down targets, PolarX carried out a 23-hole drill program at Zackly East in 2020.
Hole ZX20035, drilled 60 meters east of ZX18020, cut 11.6 meters averaging 1.86 g/t gold and 0.38% copper; and ZX20040, drilled about 60 meters further east, cut 68.6 meters averaging 0.6 g/t gold and 0.3% copper.
"When the rapidly growing size of Zackly East is combined with the significant open-ended resource nearby at Zackly Main, it is clear that we have a strong project with immense potential on our hands," said PolarX Managing Director Frazer Tabeart.
Gold was also a main target for many companies exploring the length of the Southeast Alaska Panhandle.
Constantine Metal Resources Ltd., which has traditionally focused its exploration on the polymetallic volcanogenic massive sulfide mineralization for which its Palmer project is renowned, shifted its focus to gold in 2020.
With the Palmer property covering key gold prospects upstream from the Porcupine Creek gold placer operations made famous by Discovery Channel's Gold Rush series, the hardrock gold potential at Palmer has long been known.
This prospectivity upstream of the Porcupine placer gold deposits, however, has not been systematically explored.
Something Constantine intends to rectify.
Even closer to Juneau, Grande Portage Resources Ltd. is expanding the high-grade veins on its Herbert Gold property.
According to a 2019 calculation, Herbert hosts 1.88 million metric tons of indicated resource averaging 10.03 grams per metric ton (605,000 ounces) gold; plus 553,429 metric tons of inferred resource averaging 14.15 g/t (251,700 oz) gold.
This resource is contained within three roughly parallel vein structures – Goat, Main and Deep Trench.
A 21-hole drill program completed in 2020 extended the gold encountered in these primary veins, as well as intersecting several other nearby veins such as North, Sleeping Giant, Ridge and Elusive.
"Our team has known that the Herbert gold discovery has significant expansion potential, and this is evidenced by the fact we continue to intercept gold bearing veins laterally and at depths not encountered before," said Grande Portage Resources President Ian Klassen.
Toward the southern end of the Southeast Alaska Panhandle, a renewed Heatherdale Resources Ltd. returned to Niblack copper-gold-silver-zinc project on Prince of Wales Island.
Rob McLeod, a geologist noted for his work in Alaska and British Columbia, cut a deal last year to breathe new life into this company that has laid dormant for the better part of a decade.
Acquiring a major stake in Heatherdale and taking over as CEO of the company, McLeod launched the first drill program at Niblack in roughly eight years.
According to a 2011 calculation, the Lookout and Trio deposits at Niblack host 5.64 million metric tons of indicated resource averaging 0.95% (118.1 million pounds) copper, 1.75 grams per metric ton (317,220 ounces) gold, 29.5 g/t (5.35 million oz) silver, and 1.73% (215 million lb) zinc; plus 3.39 million metric tons of inferred resource at 0.81% (60.7 million lb) copper, 1.33 g/t (144,710 oz) gold, 20.1 g/t (2.19 million oz) silver and 1.29% (96.3 million oz) zinc.
A roughly 3,000-meter drill program that got underway in November tested extensions of Lookout, which host the bulk of this resource, as well as extensions of the historic Niblack Mine, the source of very high-grade ore produced at the onset of the 20th century.
"I am thrilled for this opportunity to restart exploration at the high-grade Niblack project, with multiple compelling targets to expand current resources and make new discoveries," said McLeod.
Heatherdale plans to resume this resource expansion and exploration drilling when crews return to the project in February.