The
annual Fraser Institute "Report on Mining Companies, 2009-2010" was recently released
to a thundering silence. Several oddball items may help explain the lackluster
response but Alaska fared well in the survey of 333 companies working in 72 jurisdictions
worldwide. Alaska ranked 18th of 72 under the Policy Potential index, which measures
the regulatory attractiveness of a jurisdiction. Not unreasonably, Alaska was
beaten by some mining heavyweights like Chile, Quebec, Nevada and South Australia.
Using current regulatory and land use policies, Alaska's mineral potential bumped
it to 9th place while Alaska skyrocketed to 2nd place when using best management
practices and no land use restrictions when considering mineral potential. Who
was first in this fantasy-world classification: would you believe the Democratic
Republic of the Congo? No, I'm serious, really. But wait, there's more: Alaska
was 5th behind Quebec, Nevada, Chile and Saskatchewan in the composite index which
is weighted 40% mineral policy and 60% mineral potential. All in all, Alaska scored
a bit better in most categories compared to the year-previous survey. We can all
sleep better now.
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Western
Alaska
Best
news of the month: Teck
Resources Limited announced
that some of its Red Dog mine permit issues have been resolved and that
necessary permits are in hand to allow its Aqqaluk deposit to be brought into
production on schedule. Until the remaining legal issues are resolved, the mine
will continue to operate under existing permits.
Cedar
Mountain Exploration Inc. announced that
it has raised $2 million to go toward exploration of its Kelly Creek gold
project on the Seward Peninsula. Details relating to 2010 plans were not released.
Alaska
newcomer Valdez
Gold Inc. announced that it has signed a
joint venture agreement on Millrock
Resources Inc.'s Bluff project
on the Seward Peninsula. Under the terms of the agreement Valdez has the
right to earn a 55% interest in the project by incurring $3 million in qualified
expenditures over a three-year period, making a cash payment to Millrock
of $50,000 and issuing 300,000 common shares of Valdez stock on signing,
making a cash payment of $100,000 and issuing 300,000 common shares of Valdez
by December 31, 2010, and making a cash payment of $150,000 and issuing 300,000
common shares of Valdez on December 31, 2011. After earn-in, Valdez
would have the option to increase its share to 75% by spending an additional $3
million over three years, making further staged cash payments totaling $600,000
and issuing 1.1 million common shares of Valdez by the end of the fifth
year. Details relating to 2010 plans were not released. Welcome to Alaska Valdez
Gold Inc. !
NovaGold
Resources Inc. and Barrick
Gold Corporation announced that a feasibility
study revision has been initiated at the Donlin Creek gold project to consider
the possible construction and operation of a natural gas pipeline to supply project
power. The 2009 project feasibility study estimated Donlin Creek's total
cash costs for the first full 5 years of operation at US$394/oz using a combination
of diesel and wind as the source of on-site power generation. The partners have
since completed preliminary optimization studies to evaluate the potential of
bringing natural gas to the project. These studies indicate that using natural
gas to generate on-site power may result in a reduction of power costs, which
represent approximately 25% of the projected total operating costs at the project.
The plan envisions construction of a 12-inch diameter underground pipeline over
a 525 kilometer route from upper Cook Inlet to the proposed mine site. Gas from
the pipeline would be used to produce electricity at site. The partners also announced
approval of a supplemental budget for 2010 of US$18.7 million bringing the total
2010 budget to US$47 million. The 2010 work program will complete the majority
of the environmental and engineering studies required to review the pipeline option
and revise the feasibility study and mine plan based on on-site power generation
using gas. The pipeline studies and feasibility revision will take 12 to 18 months
to complete.
The
State Department of Natural Resources announced that it had finished its review
of the Pebble project's water use permits and has reinstated theose permits.
This action will allow partnersNorthern
Dynasty Mines and Anglo
American PLC to continue drilling on the
project. The permits were under review because the partners extracted drilling
water from 45 unpermitted sources over the last 3 years. The reinstated permits
require a comprehensive water use plan to be developed and carries a fine of $45,000.
Fire
River Gold Corp. announced additional results
from previously unreleased drilling at its Nixon Fork gold project near
McGrath. Significant results include 3.7 ounces of gold per ton over 16.7 feet
in hole N07U048, 2.2 ounces of gold per ton over 4.6 feet in hole N07U047, 1.4
ounces of gold per ton over 13 feet in hole N07U033, 0.83 ounces of gold per ton
over 15.5 feet in hole N07U037, 2.28 opt gold over 15.8 feet in hole N07U050 and
1.47 opt gold over 16.5 feet in hole N07U052. Results are pending for 79 additional
underground holes drilled in 2007 and 2008.
Liberty
Star Uranium & Metals Corp. announced
additional geophysical results from its Big Chunk copper-gold project near
Iliamna. A recent airborne geophysical survey has suggested 6 to 7 geophysical
signatures that are compatible with porphyry copper systems. The survey has defined
resistivity features that resemble typical potassic-altered cores and pyritic-propylitic
halos over known porphyry systems. The company continues to seek joint venture
partners to drill these porphyry anomalies
Interior Alaska
Kinross Gold
announced first quarter 2010 production results from its Fort Knox mine.
The mine produced 69,640 ounces at a cash cost of $524 per ounce versus 48,626
ounces of gold at a cash cost of $672 per ounce in the year previous period. The
significant production increase came in part from 660,000 tonnes of new heap leach
ore placed on the pads during the first quarter and a higher head grade during
the current quarter. The mine processed 3,969,000 tonnes of ore grading 0.71 grams
of gold per tonne with a mill recovery of 80%. Unfortunately, the company also
reported that an electrical problem caused failure of a pumping system that allowed
305,370 gallons of water to spill within the mill. This water contained traces
of sodium cyanide. The mill containment system kept all by 30-35,000 gallons of
water within the mill. The remaining water was spilled on the gravel pad outside
the mill. This gravel was excavated and placed in the heap leach facility and
on-going soil and water monitoring started.
International
Tower Hill Mines LTD announced additional drilling results from
its 20,000 meter 2010 winter drilling campaign at its Livengood gold project.
Significant results include hole MK-RC-0321 which returned 32 meters at 0.85 grams
of gold per tonne, hole MK-RC-0328 which returned 21.24 meters at 2.88 grams of
gold per tonne and an additional 77.72 meters at 0.77 grams of gold per tonne,
hole MK-RC-0329 which returned 28.95 meters at 0.83 grams of gold per tonne, hole
MK-RC-0334 which returned 71.63 meters at 1.11 grams of gold per tonne, hole MK-RC-0338
which returned 19.81 meters at 4.43 grams of gold per tonne, hole MK-10-58 which
returned 29.24 meters at 1.26 grams of gold per tonne, hole MK-RC-339 which returned
21.3 meters at 2.20 grams of gold per tonne and hole MK-RC-345 which returned
128 meters at 1.32 grams of gold per tonne. These holes continue to expand and
fill in the drilling gap between the Sunshine Zone and Core Zone. The company
also announced that it has hired Fairbanks-native Karl Hanneman as its
new Project Manager. Prior to spending the last 12 years working with Teck
at both the Pogo and Red Dog mines, Karl spent much of his professional
career developing and mining placer gold and exploring for lode gold in the Livengood
District. Welcome back to Livengood Karl!
International
Tower Hill Mines LTD also announced that it plans to transfer its
non-Livengood project assets to a new public company, Corvus Gold Inc.
This new company, which will have $3 million in the treasury at start-up, will
take control of Tower Hill's North Bullfrog project in Nevada as well as
its Chisna, Terra, LMS, and West Pogo projects in Alaska. Under terms of
the divestiture, each current Tower Hill shareholder would receive one
new share of Tower Hill and one-half share of Corvus for each current
Tower Hill share. The divestiture is designed to allow the new company
to focus on exploration while Tower Hill focuses on development of its
flagship Livengood gold deposit.
Tri-Valley
Corporation announced completion of an independent technical
report identifying a large porphyry copper-gold-molybdenum system at its Shorty
Creek project near Livengood. The report indicates that the Shorty Creek
project porphyry system covers an area approximately eight miles in diameter.
Work recommended includes follow up drilling along with additional reconnaissance
exploration and ground geophysics.
Alaska Range
International
Tower Hill Mines LTD announced acquisition of the Ahtell
porphyry copper prospect from Alaska-Native corporation Ahtna Inc. The
Ahtna lands add an additional 75,520 acres to the existing 87,940 acres
of Alaska State mining claims that make up the Chisna project. Under terms
of the agreement, Tower Hill has exclusive rights to explore the subject
lands for a six-year period, and the option to enter into a mining lease to develop
and mine the lands. The agreement calls for annual option payments of $1.00 -
$1.25 per acre and annual minimum exploration expenditures of $4 - $8 per acre
along with Ahtna-shareholder training and hiring provisions and $10,000
per year scholarship payments to the Ahtna Heritage Foundation. Additional terms,
including increased exploration expenditures, advanced royalties and a working-interest
back-in right, apply once the exploration agreement has been converted to a mining
agreement.
Kiska
Metals Corporation announced results of the first five drill holes
of the spring exploration program at the Whistler copper-gold project.
To date, 11 holes of a 15-hole program have been completed, testing geophysical
targets over a 50 square kilometer area with widely-spaced reconnaissance diamond
drill holes. Each of these holes intersected porphyry-related alteration including
a hole at the Raintree East prospect that returned 90 meters grading 0.42 grams
of gold per tonne and 0.1% copper. Mineralization occurs in low density sheeted
to stockwork quartz-chalcopyrite-pyrite veins hosted in andesitic volcanics. Drilling
also tested new targets in the 3 by 4 kilometer Spur area almost 5 kilometers
northeast of the Whistler resource area. The two holes, separated by approximately
one kilometer, intersected strong peripheral-style alteration and carbonate-base
metal veining, both of which suggest the presence of porphyry mineralization nearby.
Millrock
Resources Inc. announced that it has signed a letter agreement
with a subsidiary of Teck Resources Limited for a private placement financing
for further exploration of Millrock's Estelle gold project. Teck
will invest C$600,000 in Millrock through the purchase of 1,363,636 units
(2.8% of outstanding shares) at $0.44 per share. Each unit consists of one common
share and one share purchase warrant. Millrock will advance the property
in summer 2010 by conducting a comprehensive geological, geochemical and geophysical
program that will be designed in consultation with Teck. Upon completion
of the initial exploration program, Teck can earn an initial 55% interest
in the property by incurring $3.6 million in expenditures over two years. Teck
can then earn an additional 10% interest by funding an additional $5 million in
optional expenditures on the property and making optional cash payments to Millrock
totaling $400,000 prior to the end of 2014.
Southeast
Alaska
Hecla
Mining announced first quarter 2010 production from the Greens
Creek mine on Admiralty Island. The total cash cost per ounce of silver produced
at Greens Creek for the quarter was negative $6.47 per ounce with total
production costs of $2.18 per ounce of silver produced. The average grade of ore
mined during the quarter was 10.87 ounces of silver per ton, down significantly
from the average grade of 14.12 ounces per ton that was mined in the first quarter
of 2009. During the first quarter the mine produced 1,601,655 ounces of silver,
16,862 ounces of gold, 6,680 tons of lead and 19,681 tons of zinc. The mill processed
198,124 tons of ore during the quarter. In addition to production, exploration
and definition drilling was conduced in the first quarter. Drilling in the 5250
zone returned 4.2 feet grading 37.6 ounces of silver per ton while drilling encountered
a 14-foot thick massive sulfide interval on the southwestern extent of the 200
South zone. Pre-production drilling in the NWW zone extended mineralization to
the west and allowed this zone to move into the mine planning stage. Additional
surface and subsurface drilling is planned for the NE contact zone.
Coeur
d'Alene Mines announced that commissioning work has been completed
on the Kensington mine mill system and final modifications are being made
to the crusher system. Underground drilling and blasting are underway at the mine
and the tailings impoundment is now 90% complete. Construction of the underground
paste backfill plant and water treatment plant are on schedule and the mine is
expected to produce 50,000 ounces of gold in 2010.
UCore
Uranium announced a conceptual deposit model for the first two
target exploration zones comprising the Bokan-Dotson Ridge rare earth project.
The model spans a combined strike length of 2,425 meters over the initial two
target zones, and projects mineralization to a depth of 200 meters below surface.
Based on a detailed analysis of drill results at the I&L and Dotson Shear Zones,
the model has generated an estimated 2.7 million tonnes to 5.1 million tonnes,
at a prospective grade range of 0.50% to 0.92% total rare earth oxides. The model
also indicates that heavy rare earths comprise approximately 60% of the total
rare earth concentrations in the targeted areas. Actual element grade ranges are
895-1663 ppm neodymium oxide, 314-584 ppm gadolinium oxide, 68-126 ppm terbium
oxide, 419-773 ppm dysprosium oxide, 233-433 erbium oxide, 166-309 ytterbium oxide
and 2994-5560 ppm yttrium oxide. In addition to the rare earth elements, the I&L
and Dotson Shear Zones contain significant estimated concentrations of non-rare
earth elements, including zirconium, tantalum, niobium, and beryllium. Actual
element grade ranges for these metals are 3636-6753 ppm zirconium oxide, 36-68
ppm tantalum oxide, 651-1208 ppm niobium oxide and 158-293 ppm beryllium oxide.
In 2010, a 5000 meter drill program will be conducted with 4000 meters on the
combined I&L and Dotson Shear Zones and the remaining 100 meters in hallow diamond
drill holes along the Cheri, Geoduck and Sunday Lake trends. The company hopes
to complete a Canadian National Instrument compliant mineral resource estimate
by the end of 2010.
