Contango ORE: Alaska's next gold producer
Mining Explorers 2023 - January 18, 2024
Last updated 1/17/2024 at 11:19am
The first high-grade gold ore from the Manh Choh Mine in Alaska fed into the Kinross Alaska mill at the Fort Knox Mine near Fairbanks is elevating Contango Ore Inc. from a unique Alaska focused mineral exploration company to the newest gold producer in the state.
"We are indeed excited to report that mining operations have commenced at Manh Choh and that the construction phase has been achieved on budget and on schedule," Contango ORE President and CEO Rick Van Nieuwenhuyse said during the August groundbreaking ceremony at Alaska's newest metal mine.
Being developed under a joint venture between Kinross Gold Corp. (70%) and Contango (30%), Manh Choh 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 slated to begin around mid-year.
Contango's share of gold and silver anticipated to be recovered from Manh Choh comes to 67,500 gold-equivalent oz per year.
For Kinross, this satellite mine offers high-grade feedstock for its mill. Combined with lower-grade ore mined on the Fort Knox property being stacked on heap leach pads, Kinross Alaska is expected to produce upwards of 400,000 oz of gold per year during the first 4.5 years of production from Manh Choh.
Next up: Lucky Shot
As mining ramps up at Manh Choh, Contango continues to build high-grade gold resources in preparation for developing a second stream of gold production at its Lucky Shot project in Southcentral Alaska.
Located 112 road miles north of Anchorage, Alaska, Lucky Shot encompasses three pre-World War II era underground mines – Colman, Lucky Shot, and War Baby – that produced gold from a high-grade vein system that extends for at least 1.5 miles across the property.
It is estimated that from 1922 until being shut down by the federal War Production Board in 1942, Lucky Shot produced 252,000 ounces of gold from 169,000 tons of ore averaging around 40 grams per metric ton (1.6 oz per metric ton) gold. Additional gold was produced from the Colman and War Baby mines.
Since acquiring the project in 2021, Contango has been working toward establishing a resource that would support a modern, high-grade gold mine at Lucky Shot. This includes the rehabilitation and extension of the historical Enserch tunnel, which served as a platform for a 29-hole drill program the company carried out at the project in 2022.
According to a 2023 calculation, Lucky Shot hosts 226,963 metric tons of indicated resource averaging 14.5 g/t (105,620 oz) gold and 82,058 metric tons of inferred resource averaging 9.5 g/t (25,110 oz) gold.
To build on this resource, Contango carried out a surface drill program on the Coleman segment of the Lucky Shot vein, which hosts about 95,092 oz of the Lucky Shot indicated resource at a grade 15.6 g/t gold and 23,642 of the inferred resource at 9.9 g/t gold.
"The program is designed to extend known mineralization on the Coleman Segment of the Lucky Shot vein, and upgrade resources to a measured category so that we can incorporate into a proper mine plan."
The company plans to resume underground drilling at Lucky Shot with a 12,000-meter program slated to get underway this year. This close-spaced underground drilling is expected to significantly expand the gold resources in the Lucky Shot section of the longer high-grade gold vein.
"Our objective over the next year is to complete the above-mentioned surface drill program followed by the underground drill program at Lucky Shot to identify 400,000 to 500,000 ounces of gold resource that we can then develop a mine plan around," the Contango CEO added.
Deeper in the pipeline, CORE's portfolio of road-accessible Alaska minerals exploration projects includes the Eagle-Hona gold and Triple Z copper-gold projects west and north of Manh Choh, respectively; and the Shamrock gold project in the Richardson Mining District about 70 miles southeast of Fairbanks.