Golden potential, critical opportunities
Mining Explorers 2022 - January 19, 2023
Last updated 2/2/2023 at 6:13pm
Gold dominates Alaska mineral exploration, but a critical shift arises.
Since the discovery of gold in what is now the Alaska capital city of Juneau, prospectors, geologists, and fortune seekers have spent more than 140 consecutive summer seasons exploring The Last Frontier's golden potential. With these endeavors turning up rich aurum lodes in every corner of the state, except for the oil-rich North Slope, the nearly century-and-a-half tradition of seeking and discovering world-class gold deposits will likely continue for many decades to come.
While gold continued to be a dominant metal explored for in Alaska during the summer of 2022, there has been a subtle but distinct shift in the focus of geological investigations across the state toward the 50 minerals and metals critical to United States.
This lean toward low-carbon energy and technology minerals includes whispers of geologists investigating the state's potential for tellurium for thin-film solar panels; renewed exploration of deposits enriched in the nickel and cobalt needed for lithium-ion batteries powering electric vehicles; a new discovery of the lithium that is also highly coveted for EV batteries; advancement of a world-class graphite project toward production; and an expanded U.S. Geological Survey project to better define the known occurrences of antimony, bismuth, platinum group metals, rare earth elements, tin, tungsten, and other critical minerals across America's Last Frontier for critical mineral exploration.
"All the way back to the days of the Gold Rush, Alaska has been famous for its mineral wealth," said USGS Director David Applegate. "These new projects represent the next steps in understanding the mineral potential for commodities that are critical to our national economy and defense."
Exploring world-class gold
The subtle swing toward critical mineral exploration in Alaska is in addition to, not in lieu of, the endeavors to discover, expand upon, and better delineate world-class gold deposits across Alaska.
At least 15 mining and mineral exploration companies invested more than US$150 million on gold-dominant exploration and near-development projects across the state during 2022.
The largest of these programs was a roughly US$60 million campaign at Donlin Gold, which also happens to be the largest pure gold deposit discovered so far in the Far North State.
A 42,331-meter program carried out by Donlin Gold partners Barrick Gold Corp. and Novagold Resources Inc. during the 2022 summer season focused on infill drilling in preparation of finalizing an updated feasibility study and making the final decision to develop a world-class mine at this 39-million-ounce gold deposit in Southwest Alaska.
With intercepts of up to 52.3 meters averaging 14.6 grams per metric ton gold and 42.3 meters of 30.7 g/t gold, the 2022 drill program enhanced the deposit and the developers understanding of it.
"The 2022 drill program has been extremely exciting, not to mention rewarding," said Novagold Resources President and CEO Greg Lang.
Roughly 170 miles southeast of Donlin, Nova Minerals Ltd. is exploring another district-scale property with world-class gold potential.
So far, the Australian exploration company has outlined 9.6 million oz of gold in two deposits at opposite ends of an 18-mile-long trend that spans the company's Estelle property – the Korbel deposit at the north end hosts 869 million metric tons of indicated and inferred resources averaging 0.3 g/t (8.1 million oz) gold, and the RPM deposit at the south end hosts another 23.1 million metric tons of inferred resource averaging 2 g/t (1.5 million oz) gold.
Both deposits are expected to be much larger when the results of the 2022 drill program are incorporated in a mineral resource estimate that will form the foundation for prefeasibility studies slated to begin this year.
"We are only getting started as we continue on our path to increase resource size, confidence and towards commercial production," Nova Minerals CEO Christopher Gerteisen said in October.
Busy year around Fairbanks
Since Felix Pedro discovered placer gold in the streams north of Fairbanks in 1902, the district surrounding Alaska's Golden Heart City has been a popular destination for placer and hardrock minerals alike.
Today, the Fairbanks Mining District is anchored by Kinross Gold Corp.'s Fort Knox Mine, an operation that has produced nearly 9 million oz of gold over the past 26 years.
As Kinross moves ahead with a strategy to heap leach bulk tonnage ore mined from the Fort Knox property itself and mill higher-grade ore delivered to the operation from outlying mines, mineral exploration companies are advancing gold projects that could feed ore to the Kinross Alaska mill or support standalone operations.
One such prospect is Freegold Ventures Ltd.'s Golden Summit project about five miles northwest of Fort Knox.
While Golden Summit already hosted a 3-million-oz bulk-tonnage deposit similar to the one that has been mined at Fort Knox for the past 26 years, recent drilling has tapped very high-grade gold that may be excellent feedstock for the Kinross Alaska mill.
As Freegold builds upon its multi-million-oz gold resource, which benefits from low-cost heap leachable mineralization with a high-grade kicker that could feed a nearby mill, Felix Gold Corp. carried out a large and systematic drill program to build another gold resource in the Fairbanks District.
Under a strategic alliance with Millrock Resources Inc., Felix pulled together a roughly 151-square-mile land package that includes multiple blocks of mining claims across the Fairbanks District.
During 2022, the Australian company named after the discoverer of gold in the Fairbanks District focused an expansive drill program on the Treasury Creek property about 13 miles west of Fort Knox.
In just its second hole drilled in Alaska, Felix cut 29 meters averaging 1.4 g/t gold from a depth of 24.4 meters at the Northwest Array target at Treasury Creek. This was followed up by 33.5 meters averaging 1.63 g/t gold in hole five; 1.63 g/t gold in hole eight; and 7.6 meters averaging 6.48 g/t gold in hole 36.
By October, the company had traced the near-surface gold mineralization at Northwest Array over a 400- by 750-meter area that remains for further expansion.
"NW Array is quickly building into a significant gold discovery," said Felix Gold Managing Director and CEO Joe Webb. "Critically, NW Array and the broader Treasure Creek Project is surrounded by infrastructure within the world-class Fairbanks Gold Mining District, which has produced over 16Moz in historical gold output. Nearby operations include Kinross Gold's Fort Knox Gold Mine, a large-scale gold processing operation that is openly seeking additional sources of ore supply."
Kinross Alaska economic radius
Kinross' strategy to feed ore from satellite deposits through the mill at Fort Knox has implications for high-grade gold deposits within a 300-mile radius of the Fairbanks District.
This is particularly true for the Manh Choh gold project about 250 miles southeast of Fort Knox.
Upon acquiring a 70% interest in Manh Choh from Contango ORE Inc. in 2020, Kinross began the permitting, field programs, and other work required to feed high-grade ore mined from two small pits at Manh Choh through the Kinross Alaska mill.
Upon the completion of a 2022 feasibility study for a mine at Manh Choh, Kinross decided to develop this satellite mine expected to produce roughly 1 million oz of gold-equivalent annually over an initial 4.5 years of mining
The first Manh Choh ore is expected to be delivered to the Kinross Alaska mill in 2024.
With Kinross taking the lead at Manh Choh, Contango ORE focused its 2022 efforts on advancing exploration and underground development at Lucky Shot, an even higher-grade gold deposit within the Kinross Alaska "economic radius".
Lucky Shot is a road-accessible project about 75 miles north of Anchorage that covers a large portion of the Willow Creek Mining District, including the pre-World War II Lucky Shot and War Baby mines, which produced an estimated 250,000 oz of gold from 169,000 tons of ore, indicating an average head grade of around 1.5 oz of gold per metric ton.
A 2016 calculation outlined 206,500 metric tons of what is now being treated as historical measured and indicated resources averaging 18.3 g/t (121,500 oz) gold and 59 thousand metric tons of inferred resource averaging 18.5 g/t (35,150 oz) gold at Lucky Shot.
With its sights set on updating and expanding this resource to at least 500,000 oz of gold, CORE has rehabilitated and is expanding upon historical tunnels, which serves as platforms for the systematic drilling of the high-grade Lucky Shot vein.
"I think this is a pretty easy project for us to move forward and be our second mine in operation in Alaska," Contango ORE President and CEO Rick Van Nieuwenhuyse said during a presentation at the 2022 Precious Metals Summit in Colorado.
The CORE CEO said shipping the ore to the hungry Kinross Alaska mill or processing the free-milling ore at Lucky Shot are potential options for the high-grade underground gold mine.
At the very edge of the Kinross Alaska radius, HighGold Mining Inc. is building high-grade gold resources on its Johnson Tract property.
Located on the west side of Cook Inlet in Southcentral Alaska, the JT deposit at Johnson Tract hosts 3.49 million metric tons of indicated resource averaging 5.33 g/t (598,000 oz) gold, 6 g/t (673,000 oz) silver, 5.21% (400.8 million pounds) zinc, 0.59% (43.1 million lb) copper, and 0.67% (51.5 million lb) lead.
Including the value of all the metals into gold equivalency, this comes to 1.05 million oz of gold-equivalent in the indicated category.
HighGold's 2022 exploration, however, focused primarily on Ellis Zone in the Difficult Creek area about 2.5 miles north of JT deposit.
The 2021 Ellis Zone discovery hole cut 6.4 meters averaging 577.9 g/t (18.58 oz/t) gold, 2,023 g/t (65 oz/t) silver, 2.15% zinc, and 0.3% copper.
While the 2022 drilling did not hit these bonanza grades, they did begin to outline a zone of mineralization that may rival JT in both size and grade. This includes one hole that cut 11.9 meters averaging 21.68 g/t gold, 30 g/t silver, 0.61% copper, and 4.2% zinc.
"While still very early days, it appears we are well on our way to defining a second deposit at Johnson Tract to complement the existing high-grade (plus-1-million-oz) JT Deposit mineral resource that is also open to expansion," said HighGold Mining CEO Darwin Green.
Alaska's silver lining
While gold may be the most sought-after metal in Alaska, it was the bonanza-grade silver being drilled by Western Alaska Minerals Corp. at the Waterpump Creek carbonate replacement deposit on the company's Illinois Creek project that generated the most excitement during 2022.
One hole drilled by Western at the end of the 2021 season cut 10.5 meters averaging 522 g/t silver, 22.5% zinc, and 14.5% lead in the area of a historical resource at Waterpump.
During 2022, Western released a steady stream of assay results from drilling at Waterpump. Some of the highlights include:
• 11.5 meters averaging 337 g/t silver, 16.7% zinc, and 10% lead in hole WPC22-11.
• 2.8 meters averaging 1,304 g/t silver, 2.5% zinc, and 37.1% lead in hole WPC22-13.
• 48.8 meters averaging 144 g/t silver, 9% zinc, and 5.5% lead in hole WPC22-17.
• 101.7 meters averaging 160 g/t silver, 5.4% zinc, and 5.3% lead in hole WPC22-18.
As a result of the drilling achievements in 2022, coupled with the late-summer closing of a C$12 million financing, Western is already making plans for a 25,000-meter drill program in 2023.
"We think we've latched onto a major silver-lead-zinc system so the company has purchased three more drill rigs for more aggressive exploration starting next spring," said Western Alaska Minerals CEO Kit Marrs.
Two of Alaska's five large metal mines – Teck Resources Ltd. Red Dog operation in Northwest Alaska and Hecla Mining Company's Greens Creek Mine on the Southeast Alaska Panhandle – produce silver, zinc, and lead.
Teck's exploration at Red Dog, which is a zinc-dominant mine, is focused on satellite projects across the wider district that will provide ore beyond the current 2031 mine-life.
At Greens Creek, which is more silver enriched, Hecla's drilling is focused primarily on near-mine resource expansion and upgrade targets to support the roughly 9-million-oz-per-year silver output this underground operation has become renowned for.
Roughly 275 miles north of Greens Creek, a joint venture between American Pacific Mining Corp. and Dowa Metals & Mining Alaska Ltd. is advancing exploration and development at Palmer, a volcanogenic massive sulfide deposit enriched with precious, industrial, and critical minerals.
A preliminary economic assessment that was updated in 2022 outlines plans for a 3,500-metric-ton-per-day mill at Palmer that would produce 1.07 billion lb of zinc, 196 million lb of copper, 18 million oz of silver, 91,000 oz of gold, and 2.89 million metric tons of barite over an initial 11-year mine life.
American Pacific gained a 45% ownership of Palmer with the 2022 buyout of Constantine Metal Resources Ltd.
"This is a transformational step for American Pacific as the Palmer Project gives us an established PEA-stage asset with a tremendous amount of exploration upside," said American Pacific Mining CEO Warwick Smith.
While Alaska does not have a large copper producing mine, the Far North State is home to some world-class deposits of this metal in high demand for wiring a world transitioning to electric vehicles charged with low-carbon electricity.
The World Bank estimates that more than 1.1 trillion pounds of copper will be required over the next 25 years to build enough EVS and clean energy infrastructure to meet global climate goals and meet normal demands for the metal, which is roughly equivalent to all the copper mined during the previous 5,000 years combined.
With this much demand on the horizon, it is hard to ignore the world-class Pebble deposit in Southwest Alaska.
According to a 2020 calculation, Pebble hosts 6.5 billion metric tons of measured and indicated resources averaging 0.4% (57 billion lb) copper, 0.34 g/t (71 million oz) gold, 240 parts per million (3.4 billion lb) molybdenum, 1.7 g/t (345 million oz) silver and 0.41 ppm (2.6 million kg) rhenium.
The Southwest Alaska deposit hosts another 25 billion lb of copper in the lower confidence inferred resource category.
The USGS has also noted an "enormous tellurium endowment" at Pebble," but a resource has not been calculated to quantify this critical solar panel metal.
Despite its world-class potential to help supply the world's enormous copper demands, this project has faced stiff opposition due to its relative proximity to the world-class Bristol Bay salmon fishery.
While not as large as Pebble, but much higher grade, the Arctic and Bornite deposits in the Ambler Mining District offer another potential near-term Alaska supply of the copper and other metals critical to the U.S.
Combined, the Arctic and Bornite deposits host roughly 8.9 billion lb of copper, 3.6 billion lb of zinc, 626 million lb of lead, 88 million lb of cobalt, 770,000 ounces of gold, and 58.3 million oz of silver in the indicated and inferred resource categories.
Arctic is the most advanced UKMP project and is slated to be the first mine in the Ambler District.
According to a 2020 feasibility study, a mine at the Arctic deposit 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.
Ambler Metals LLC, a joint venture company equally owned by Trilogy and South32 Ltd., invested roughly US$28.5 million into a 2022 exploration program that included 10,739 meters of drilling targeting resource upgrades within the Arctic deposit and testing earlier-stage copper-rich prospects across the Upper Kobuk Mineral Projects in Northwest Alaska.
In a September letter to the U.S. Bureau of Land Management, Alaska Congresswoman Mary Peltola, an Alaska Native elected to replace the late Don Young as Alaska's at large representative in the House, said a road to the Ambler District is both needed and wanted in the state.
"The mineral resources in the area, including copper, are of critical importance to the country," she inked in a Sept. 29 letter in support of the Ambler Road. "The minerals are there; the state and private interests in exploring and developing those resources are in place; the support of Alaska Native corporation and tribes is strong. What is missing is access, which the (Ambler Access) Project would provide."
49 critical minerals
In addition to copper, Alaska is exceptionally enriched with critical minerals. Recent analysis by Data Mine North has identified 49 of the 50 minerals deemed critical to the U.S. in deposits and occurrences across the 49th State.
This includes the recent discovery of lithium, a critical battery metal that previously had not been identified in quantifiable quantities, in the Coal Creek tin-silver-zinc prospect on Discovery Alaska Ltd.'s Chulitna property midway between Anchorage and Fairbanks, Alaska, and about four miles west of the paved Parks Highway.
A 1980s era calculation estimated that Coal Creek contains 4.8 million metric tons of historical resource averaging 0.27% tin along with appreciable quantities of silver and zinc.
Resampling of the historical drill core shows the deposit also contains roughly 0.12% lithium over core lengths greater than 50 meters.
"We look forward to realising the lithium potential and advancing works toward delineating a maiden JORC resource at our Coal Creek prospect, strategically located close to the major Parks Highway and the state-owned Alaska railroad," said Discovery Alaska Director Jerko Zuvela.
While intriguing quantities of the lithium needed for EV batteries is new, Alaska has long been known for its nickel potential.
During 2022, Millrock Resources began revisiting Nikolai, one of the best known and largest nickel discoveries in the state.
Located about 80 miles south of Delta Junction, Alaska, Nikolai (formerly known as Man) covers a roughly 10-mile- (16 kilometers) long zone of prospective nickel-copper-cobalt-platinum group metal mineralization known as Eureka.
One of the best holes drilled at Eureka cut 319.7 meters averaging 0.25% nickel, 0.09% copper, 0.018% cobalt, 54 ppb platinum, 117 ppb palladium, and 13 ppb gold.
Based on historical drilling, Millrock has identified a roughly 1,200-by-400-by-300-meter body of mineralization at Eureka.
"From historical drilling, it is clear that a large volume of mineralized rock is present in the Eureka Zone," said Millrock Resources President and CEO Greg Beischer. "We believe the demand for nickel, cobalt, and other Critical and Strategic Metals will be exceptionally strong in the coming decades, making low-grade mineralization such as at Eureka of interest."
The most advanced critical battery minerals project in Alaska is the Graphite Creek deposit about 50 miles north of the deep-water port facilities in Nome.
The USGS considers Graphite Creek to be the largest known deposit of this critical lithium-ion battery mineral in the U.S.
A 2022 prefeasibility study envisions a mine at Graphite Creek that would produce roughly 51,800 metric tons of graphite concentrate per year, which would be shipped to Graphite One's planned processing and recycling facility in Washington, a locale selected for its abundant low-cost and low-carbon hydroelectricity.
The Washington plant will upgrade Graphite Creek concentrates, along with purchased graphite material, into 49,600 metric tons spherical coated graphite that serves as the anode material in lithium-ion batteries and 25,400 metric tons of other graphite products per year.
To gather the data needed for a feasibility study, the final step before permitting and development of this Alaska mine to EV battery supply chain, the 2022 program at Graphite Creek included 2,092 meters of infill and resource expansion drilling, environmental baseline studies, and significant camp expansion.
"Our strategy is to build a complete graphite anode supply chain – from mine to battery – located in the United States," said Graphite One CEO Anthony Huston.
"It is anticipated that the 2022 summer drilling program data will be incorporated when the company is in a position to file a feasibility study to advance Graphite Creek during this critical time of under-supply for U.S. strategic materials such as graphite," he added.