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

Contango ORE Inc. Feb. 6 reported that development of the Manh Choh gold mine in Alaska remains on track to begin commercial production in the second half of next year and an updated and expanded resource for the high-grade Lucky Shot gold project is slated for completion in March.

"We look forward to continuing to update shareholders and investors on our progress in developing Alaska's next gold mines," said Contango ORE President and CEO Rick Van Nieuwenhuyse.

The first asset in CORE's portfolio expected to contribute to gold production in Alaska is Manh Choh, a gold-silver project on a large land package leased from the Alaska Native Village of Tetlin near the crossroads town of Tok in eastern Alaska.

Advancing Manh Choh

Being developed under a JV between Kinross Gold Corp. (70%) and CORE (30%), the Manh Choh Mine is expected to produce roughly 1 million gold-equivalent oz, which includes the value of both the gold and silver, over an initial 4.5 years of mining detailed in a 2022 feasibility study.

Manh Choh hosts 3.9 million metric tons of proven and probable reserves averaging 7.88 grams per metric ton (998,000 oz) gold and 13.6 g/t (1.7 million oz) silver.

This operation is based on 3.9 million metric tons of proven and probable reserves averaging 7.88 g/t (998,000 oz) gold and 13.6 g/t (1.7 million oz) silver.

The feasibility completed last year details plans for trucking high-grade ore mined at Manh Choh roughly 250 miles to the Fort Knox Mine. This ore is to then be processed through the existing Kinross Alaska mill and the tailings stored on the Fort Knox property.

The total preproduction capital needed to build the mine is estimated to be approximately $255 million. This includes the development and infrastructure at Manh Choh; modifications to the Fort Knox mill; a fleet of trucks to deliver the ore; and $40 million in contingency.

Construction activities at this mine project are already well underway.

"So far, in 2023, we have completed construction of a 176-person camp near the mine site in the town of Tok, Alaska and continue to advance road construction," said Van Nieuwenhuyse.

With the completion of the camp and upgrades to a roughly 20-mile road connecting the Peak Gold deposits at Manh Choh to the Alaska Highway, the partners will be ready to begin mine development when they receive the requisite permits from the Alaska Department of Natural Resources.

"We expect to announce shortly the selection of a well-established contract miner who will be responsible for mine site preparatory work in advance of actual mining activities," Van Nieuwenhuyse added. "These will include construction of a truck shop and administration buildings, storm water drainage and collection systems, permanent and temporary storage areas for growth media material, waste rock stockpiles, an ore stockpile and loading facility, and other facilities that will support actual mining activities."

Lucky Shot resource soon

While Kinross takes the lead at Manh Choh, CORE continues to advance Lucky Shot, which is expected to be the second gold-producing mine in its portfolio.

A high-grade underground gold project located about 75 miles north of Anchorage, Lucky Shot enjoys the advantages of road access and infrastructure established by previous operators.

It is estimated that from 1918 until being shut down by the federal War Production Board in 1942, these two underground operations produced 250,001 oz of gold from hand-sorted ore averaging around 1.6 oz per metric ton (40 g/t) gold.

Contango ORE Inc.

Crews drive the Ensearch tunnel toward the high-grade vein structure at Contango ORE's Lucky Shot project in Alaska.

A calculation completed for former operators in 2016 outlined 206,500 metric tons of historical measured and indicated resources averaging 18.3 grams per metric ton (121,500 oz) gold and 59,000 metric tons of inferred resource averaging 18.5 g/t (35,150 oz) gold at Lucky Shot.

Looking to update and expand this resource, CORE refurbished and deepened the Ensearch tunnel at Lucky Shot, which served as a platform for 29 holes drilled last year.

The company expects to receive all the assays from the 2022 Lucky Shot drilling and publish an SK 1300-compliant resource estimate for the gold mine project by the end of March.

"Management believes that 2023 will be [a] pivotal year for the company with mining activities commencing at Manh Choh and an initial resource estimate at Lucky Shot," Van Nieuwenhuyse said earlier this year.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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