PHOTO BY CHRIS AREND, COURTESY OF USIBELLI COAL MINE INC. Thomas Take, charged with the large task of repairing tires at the Usibelli Coal Mine in Healy, holds one of some 4,500 high-paying mining jobs in Alaska. An employment forecast published by the Alaska Department of Labor and Workforce Development in October pegged the state’s mining sector job growth from 2010 to 2020 at 19 percent. Page 14. A special supplement to Petroleum News WEEK OF October 28, 2012 3 Pentagon backs Ucore innovation Contract ties DoD to Bokan, state-of-the-art method for extracting REEs 11 Emeralds glimmer in gold setting North Country Gold makes rare gem discovery in Nunavut greenstone belt 24 New Gold thirsty for Blackwater Miner drills 250,000 meters, makes vast land grab in gold-rich central BC
Transcript
PHOTO BY CHRIS AREND, COURTESY OF USIBELLI COAL MINE INC.
Thomas Take, charged with the large task of repairingtires at the Usibelli Coal Mine in Healy, holds one ofsome 4,500 high-paying mining jobs in Alaska. Anemployment forecast published by the AlaskaDepartment of Labor and Workforce Development inOctober pegged the state’s mining sector job growthfrom 2010 to 2020 at 19 percent. Page 14.
A special supplement to Petroleum NewsWEEK OF
October 28, 2012
3 Pentagon backs Ucore innovation Contract ties DoD to Bokan, state-of-the-art method for extracting REEs
11 Emeralds glimmer in gold setting North Country Gold makes rare gem discovery in Nunavut greenstone belt
24 New Gold thirsty for Blackwater Miner drills 250,000 meters, makes vast land grab in gold-rich central BC
Ucore Rare Metals Inc. has two thingsthe Pentagon wants – heavy rare
earths and state-of-the-art technology toextract these strategic elements from theore.
The almost magical properties ofREEs – a group of 17 previously obscuremetals that include scandium, yttrium andthe 15 lanthanide elements on the period-ic table – make them an essential ingredi-ent to a number of avant-garde militaryapplications such as drones, lasers, radarsystems and night vision equipment. Themetals are also widely used in high-techconsumer goods like mobile phones andiPods; and green technology applicationssuch as wind turbines and hybrid cars.
Ucore’s Bokan Mountain project inSoutheast Alaska is considered to be therichest domestic source of three heavyrare earth elements – dysprosium, ter-bium, and yttrium – which are critical toseveral advanced weapon systems, suchas stealth helicopters and precision-guid-ed weapons.
Based on 9,550 meters of drillingcompleted at Bokan, Ucore released aninaugural resource estimate for the REEdeposit in 2011. At a 0.4 percent totalrare earth oxide cut-off grade, the proper-ty hosts an inferred resource of 5.3 mil-lion metric tons averaging 0.65 percentTREO. Some 40 percent of the rare earthsin the resource are the higher value heavy
rare earth oxides. A 10,112-meter drill program carried
out in 2011 focused on upgrading andexpanding this resource. The 34-hole pro-gram, which has confirmed the integrityand continuity of the mineralization, isbeing incorporated in an updatedresource estimate expected to be releasedin conjunction with a preliminary eco-nomic assessment due out soon.
“The United States does not yet havethe capability to produce three of theheavy rare earths that occur naturally andin abundance in Bokan Mountain,” saidUcore President and CEO Jim McKenzie.
To gain a foothold on the HREE-richBokan Mountain, the United StatesDepartment of Defense has contractedwith Landmark Alaska L.P., the U.S.operating subsidiary of Nova Scotia-based Ucore.
The program, which will include min-eralogical and metallurgical studies onthe deposit located on Prince of WalesIsland, will be managed by the DoDunder the Defense Logistics Agency.
“This announcement is great news forAlaska and for the United States, whereour need for a secure and domestic supply
of rare earth elements is an urgent chal-lenge,” said U.S. Sen. Lisa Murkowski,R-Alaska. “These and other critical min-erals are essential in the manufacturing ofeverything from modern defense equip-ment to clean energy technologies.”
DoD under fireU.S. lawmakers have taken aim at the
DoD over its apparent laidback attitudetoward ensuring the U.S. Military has anample supply of the REEs critical tomany of the weapons systems in its arse-nal.
“Clearly, rare earth supply limitationspresent a serious vulnerability to ournational security. Yet early indications arethe DoD has dismissed the severity of thesituation to date,” Sen. Murkowski, Sen.Mark Begich, D-Alaska, and Rep. MikeCoffman, R-Colo. wrote in a January2011 letter to U.S. Secretary of DefenseRobert Gates.
The legislators’ alarm over the poten-tial short supply of the REEs essential tomilitary munitions was triggered byexport quotas China has levied on theseelements.
China is estimated to supply between90 and 95 percent of the world’s rare earthoxides, according to a SeptemberCongressional Research Service report.
In a separate briefing published inJune, Congress’ think tank wrote, “In the
3NORTH OF 60 MINING
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� A L A S K A
Pentagon gets footing at Bokan MountainDepartment of Defense inks deal with Ucore for heavy REE deposit in SE Alaska, state-of-the-art method for extracting rare earths
see RARE EARTHS page 4
The rare earth elements yttrium and neodymium are essential for the laser-guided targetingsystem of this General Atomics MQ-1 Predator unmanned aerial vehicle.
case of REEs, the dominance of China asa single or dominant supplier of the rawmaterial, downstream oxides, associatedmetals and alloys, may be a cause for con-cern because of China’s export restric-tions and growing internal demand for itsREEs.”
The DoD contends that REE projectsoutside of China, such as MolyCorp’sMountain Pass Mine in California, andother adjustments in the Western rareearth markets should ensure that there isno military or commercial shortage ofthese strategic elements in the UnitedStates.
“Over the past year, there have been anumber of positive developments withregard to both supply and demand withinthe rare earth materials markets,” DoDUndersecretary Frank Kendall wrote in aMarch 2012 letter to Congress.“Reactions to market forces have resultedin positive developments, such as pricesdecreasing by half from their peak levelsin July 2011, increased investment anddomestic supply of rare earth materials,corporate restructuring within the supplychain, and lower forecasts for non-Chinese consumption. By 2015, thedepartment believes this will help to sta-bilize overall markets and improve theavailability of rare earth materials.”
Capitol Hill does not share the militaryarm’s optimistic outlook.
“Although new mine production maybe able to make up the difference forsome lighter elements (there may be anexcess supply of the lighter elements such
as cerium, lanthanum, and praseodymi-um), several forecasts show that there willlikely be shortfalls of other light rareearths and several heavier rare earth ele-ments, such as, dysprosium, terbium,neodymium, europium and erbium,”according to the June report penned byCongressional Research Service. “Thispotential shortfall has raised concerns inthe U.S. Congress.”
Though not as alarmed over the rareearth market, in general, the Pentagon hasidentified near-term shortages of a pair ofthese elements.
The DoD informed Congress that yttri-um and dysprosium, two of the REEs inabundant supply at Bokan Mountain, areimportant elements in military equipmentand are expected to be in short supplynext year.
The seven metric tons of domesticallyproduced dysprosium in 2013 is forecastto be just enough to meet defense depart-ment needs for the year. The 26 tons ofyttrium projected to be mined in the U.S.next year, on the other hand, does notcome close to meeting the some 119 tonsof the rare earth that is projected to beused by the military.
State-of-the-art technologiesWhile Bokan Mountain is rich in yttri-
um, dysprosium and a suite of the otherprized heavy rare earths, the Pentagon’sinterest in Ucore seems to be as muchabout the cutting edge extraction technol-ogy the company is pioneering as it isabout the strategic metals stowed at itsSoutheast Alaska deposit.
Ucore has been working withMontana-based IntelliMet LLC to devel-op a state-of-the-art method for process-ing the rare earths, referred to in scientif-ic circles as solid phase extraction.
Under the agreement with the defensedepartment, Ucore will provide thePentagon with the most up-to-date data onthis proprietary bench and pilot scalesolid phase extraction nanotechnologyresearch.
“The Department of Defense’s invest-ment in the Bokan deposit and Ucore’sproprietary SPE technology represents asignificant step toward recapturing therare earths technological lead surrenderedto China decades ago,” said McKenzie.“What’s more, the DoD relationship addsa great deal of credibility to Ucore’sdomestic supply chain development, rep-resenting one of the largest purchasingcapabilities amongst prospective cus-tomers worldwide.”
Considered to be a scientific leapbeyond solvent exchange extraction, themethod traditionally used to separateREEs, solid phase extraction utilizes nan-otechnology.
“SPE is a uniquely American technol-ogy which combines rare earth extractionfrom process leach solutions with a sepa-ration regime that utilizes innovativepolymer nanotechnology,” McKenziesaid.
Though cutting edge, the SPE proce-dure follows a much simpler flow-sheetthan traditional REE extraction methods.
In bench-scale tests, IntelliMet treateda representative sample of Bokan ore withnitric acid, generating a solution contain-ing the rare earths and other elementscontained in the ore. Before precipitatingthe REEs out of solution, the Montana-based lab was able to pull out more than99 percent of the non-REE elements –including iron, uranium and thorium.Once these “nuisance” elements areremoved, pure REE oxides can be precip-itated out of the solution.
Follow-up tests by Intellimet success-fully separated dysprosium, neodymiumand erbium from the other rare earth ele-ments suspended in a composite solutiondesigned specifically to replicate the con-tents of the ore from Ucore’s BokanMountain deposit.
“The isolation of a chemical form ofdysprosium from a US-based deposit hasbeen a ‘holy grail’ of sorts in the domes-tic rare earth industry. Now that dyspro-sium has been liberated at laboratoryscale, our intent is to pursue this break-through at a pilot plant level in conjunc-tion with the company’s arrangement withthe US Department of Defense,”McKenzie said.
Next generation REE mineThe less-complicated SPE technology
is expected to result in a smaller and moreefficient facility for transforming BokanMountain ore into rare earth oxides.
Because these developments are likelyto lower capital and operating costs –improving the economics of developingthe Southeast Alaska REE project –Ucore has held off on producing a prelim-inary economic assessment for BokanMountain until this breakthrough technol-ogy can be included.
SPE is not the only cutting edge idea tobe included in the upcoming economicassessment. Ucore has been testing asorter that uses x-ray to identify REE-bar-ren rocks and reject them as waste beforethe ore reaches the mill.
Tests of the dual energy x-ray trans-mission sorter, involving three one-tonbulk samples of Bokan Mountain ore,have demonstrated that nearly half of thefeed could be rejected as waste whileretaining the majority of the REE-bearingmaterial. This essentially doubles thegrade of the ore being fed into the mill.
“Our previous work on X-ray ore sort-ing has shown significant cap-ex andoperating cost advantages, and we’re anx-ious to optimize those advantages,” saidUcore COO Ken Collison. “Previous pro-duction scale sorter tests showed that 50percent of the material mined will berejected as waste, while recoveringapproximately 97 percent of the rare earthmetal content. This is a significant advan-tage, since a 1,500 (metric-ton)-per-daymine will theoretically require only a 750(metric-ton)-per-day mill.”
Ucore increased the scale of testing theunique ore-sorting technology with a 20-ton bulk sample extracted from three sitesalong its Bokan Mountain in June.
A local contractor crushed and segre-gated the material into four specified sizefractions, prior to the samples being trans-ported to Germany to be processedthrough a production scale X-ray sorter toprepare an upgraded ore sample for futuremetallurgical testing.
While not exactly at the cutting edge ofmining technology, Ucore’s plan to use
4NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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RARE EARTHS
see RARE EARTHS page 5
“The Department of Defense’sinvestment in the Bokan deposit
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long-hole stoping to mine the ore atBokan and paste backfill as a means ofdisposing of the tailings are unique toREE extraction and are important devel-opments in minimizing the environmentalfootprint of the proposed mine.
“Ucore has now added to the list of‘firsts’ associated with the company,”touted McKenzie. “The company was thefirst in the rare earth industry to success-fully investigate DEXRT (dual energy x-ray transmission) technology for ore sort-ing and waste rock removal; the first topropose a tailings-free facility at surfacevia state of the art paste backfill tech-nologies; and the first to pursue long holestoping as a means of REE ore extraction,with a minimal prospective environmen-
tal surface footprint. Now, Ucore is thefirst to pursue solid phase extraction, orSPE technology, as an effective means ofREE purification and liberation, and as anefficient and economical alternative totraditional solvent exchange methodolo-gies utilized in China and elsewhere.”
Finalizing tests that are expected toimprove efficiencies on both sides of themill, Ucore is putting the finishing touch-es on a PEA that is expected to illustratethe next generation of REE mines andprocessing facilities.
McKenzie said the separation technol-ogy included in the economic assessment“sets the stage for our post-PEA worktowards mapping a complete mine-to-metal strategy for heavy REEs in theUnited States,” an effort that will be sup-ported by the might of the U.S.Department of Defense. �
By SHANE LASLEYMining News
A work force development agreement struck betweenAlaska and Yukon Territory in October belies the
international border that separates these Far North min-ing jurisdictions.
The accord, signed by the Alaska Department ofLabor and Workforce Development and the YukonDepartment of Education, aims to draw from thestrengths of the mine training programs offered on bothsides of the 750-mile (1,200 kilometers) border.
“Alaska and Yukon have some very similar work forceneeds. With this agreement, we can work together tocoordinate and develop world-class training to fill theseneeds,” Alaska Labor and Workforce DevelopmentCommissioner Dianne Blumer said. “Both theUniversity of Alaska and Yukon College have specializedmine training programs that can benefit from coordina-tion.”
Since the close of the 19th Century, an era when golddrew waves of prospectors to Alaska and Yukon, mininghas been an integral component of the economic healthof these northern neighbors. This commonality has cre-ated a bond forged in frontier spirit and quenched in aneed for 21st Century miners.
“There is mutual benefit for Yukon and Alaska toshare mining-related educational programming andinformation,” Yukon Education Minister Scott Kent said.“This memorandum of agreement provides an opportu-nity for further cooperation in the pursuit of our similarneeds and interests.”
The mine training agreement is an extension of theAlaska-Yukon Intergovernmental Relations Accord
signed by Gov. Sean Parnell and Yukon Premier DarrellPasloski in June, a cooperative agreement focused onpromoting beneficial job training, energy production andeconomic development.
“Resource development, expansion of energy options,improvement and maintenance of roads, and the need forjobs, particularly for our youth and rural residents, areissues that Yukon and Alaska share, along with our1,200-kilometre-long border,” said Pasloski.
The June accord extends “special bonds of friendship
and cooperation” between these northern frontier neigh-bors.
“Alaska and Yukon share a long and unique history ofworking together on broad-ranging issues like tourismmarketing and wildfire management,” Parnell said.“Alaskans and Yukoners benefit from this link in manysectors. There is significant potential in our economicregion to reduce the costs of energy for residents as wellas provide energy for the development of our naturalresources. We will continue to work with Yukon toreview the ways we can accomplish this.”
Both leaders agreed that the initial focus moving for-ward will be on mining and energy. Alaska and Yukonhave seen exploration and development of several signif-icant mines in the last five years. Roughly US$600 mil-lion was spent on mineral exploration in these neighbor-ing mining regions in 2012 and a number of new minesin Alaska and Yukon are on the docket for the comingdecade.
In order to fill the jobs this activity is expected to cre-ate with Alaskans and Yukoners, the strengthened part-nership between the University of Alaska and YukonCollege aims to develop a shared underground and sur-face mine training program that meets industry standardson both sides of the border.
“Mine training provides a solid cornerstone for ourdesire to expand reciprocal opportunities between YukonCollege and University of Alaska,” Yukon College presi-dent Karen Barnes said. “There is a tradition of excellentindustrial training in Juneau, and we hope to learn a greatdeal from our partners there.”
Officials from Yukon College toured the University ofAlaska’s Underground Mine Training Program duringtheir October visit to Juneau. �
� A L A S K A / Y U K O N
Mine training reinforces northern bondsYukon, Alaska seek international accord to create work force development program that meets standards on both sides of the border
Karen Barnes, President, Yukon College; Scott Kent, ministerof education, Yukon; and Dianne Blumer, commissioner,Alaska Department of Labor and Workforce Developmentsign an agreement in October that draws from the strengthsof the mine training programs offered in Yukon and Alaska.
Over the past six months, the single-most common question I have got-
ten asked about Alaska’s mineral indus-try is, “Have there been any significantnew discoveries?” While there may be anas-yet unannounced new discovery inAlaska, it seems the above question isbeing asked more frequently in otherparts of the world as well and the mostcommon answer is a simple “no.”
While information on new discover-ies in other sectors of the mining indus-try is out there, it’s not as well-compiledas Nova Scotia-based Metals EconomicsGroup’s recently released study for gold,“Strategies for Gold ReservesReplacement: The Costs of Finding andAcquiring Gold.” The report speaksdirectly to this issue of declining discov-ery rates and increasing production ratesfor the gold industry. The report indi-cates that for the period 1997-2011, atotal of 99 new, +2-million-ounce golddiscoveries have been reported, contain-ing an aggregate 743 million ounces ofgold. Ignoring the fact that not all ofthese new discoveries will be economicto mine or politically capable of beingmined, and assuming a 75 percentresource-conversion rate (how manyounces in-ground versus how manyounces actually get mined) and a 90
percent mining recovery rate (how manyounces go into the mill/leach pad versushow many ounces turn into doré), these99 new discoveries could potentiallyreplace only 56 percent of the estimatedgold that was mined during that sameperiod. Since global gold production isup 17 percent over the past 10 years,where did the rest of the ounces comefrom? The answer is two-fold: 1)Through brownfields (immediate minearea) exploration at existing mines orolder, known deposits; and 2) newacquisitions where the top 26 globalgold producers collectively replacedalmost 208 percent of the gold they pro-duced. But only slightly more than half
of these producing companies made newdiscoveries and many of these are inpolitically unstable parts of the worldwhere there is no certainty that they willever become producing mines. In theend, the report concludes that thebiggest reserves replacement challengefaced by the industry is not that there isno gold left to find, but that all the easi-ly discovered and mined gold has beenfound. While this conclusion is debat-able, Alaska’s virtually unexplored natu-ral warehouse of precious, base, strate-gic and energy minerals may at last becompeting on a level playing field withthe rest of the globe.
Western AlaskaGRAPHITE ONE RESOURCES INC.
announced additional drill results fromits 18 hole, 4,248 meter 2012 drill pro-gram at its Graphite Creek graphiteprospect on the Seward Peninsula.Results include Hole 12GCH005 whichreturned 172.79 meters grading 5.39percent graphitic carbon, including54.87 meters grading 10.03 percent ,and 42.0 meters grading 12.01 percentgraphitic carbon and hole 12GCH008which returned 177.0 meters grading 3.0percent graphitic carbon including 52.0meters grading 6.02 percent , and 30.59meters grading 7.07 percent graphiticcarbon. The company also reported thatof the 591 rock grab samples collectedin 2012, 314 contains greater than 1percent graphitic carbon and 73 of thosecontain greater than 5 percent graphiticcarbon of which 47 samples containgreater than 10 percent graphitic carbonwith a maximum of 80.9 percentgraphitic carbon.
MILLROCK RESOURCES INC. andfunding partner KINROSS GOLDannounced results from its 1,242 meter,nine-hole 2012 core drilling program atthe Council gold project west of Nome.Exploration drilling was conducted atthe Elkhorn and Upper Ophir prospects.A new discovery was made at theElkhorn prospect where hole COU12-023 cut 7.01 meters averaging 2.58-
grams-per-metric-ton gold within a14.02-meter interval averaging 1.45 g/tgold. The Elkhorn prospect occurs alonga possible northwest-trending fault zonein schist and marble of the NomeGroup. Soil sampling at Elkhorndefined a 7.5-kilometer zone of anom-alous gold and arsenic. The 2012drilling consisted of seven core holestotaling 942 meters with four of theholes intersecting gold mineralization.At the Upper Ophir prospect holeCOU12-025 intercepted 7.62 metersaveraging 1.09 g/t gold. The UpperOphir prospect area geology is similarto that at Elkhorn. A large, strongarsenic anomaly was the focus of thedrilling program where two core holestotaling 287 meters were drilled withboth encountering encouraging goldmineralization.
NORTHERN DYNASTY MINERALSand partner ANGLO AMERICAN PLC,owners of the Pebble copper-gold-molybdenum project, surpassed a sel-dom-achieved milestone on Sept. 12,2012, when the total footage frilled atthe project hit the 1-million-foot mark(yes, Dorothy, 1 million)! Contributingto this milestone were 1,065 core holesdrilled between 1988 and 2012.Congratulations to all who have con-tributed to this remarkable accomplish-ment!
INVENIO RESOURCES CORP.announced that it has terminated itsoptions to acquire the Ganes Creek andCandle Hills gold projects in the OphirDistrict in order to pursue its moreadvance Gold Springs project inNevada.
TNR GOLD CORP. announced finalresults from three-hole, 814-meter 2012drilling program at its Shotgun goldproject. Significant results include 209meters grading 1.02 g/t gold in holeSR12-57 and 83 meters averaging 0.82grams of gold per in hole SR12-58. Allthree 2012 drill holes encountered con-sistent thickness and grade in the south-west zone which remains open to expan-sion. Geophysical surveys indicate acorrelation between resistivity andchargeability results that suggest miner-alized zones continue to depth andalong strike and are also repeated in afault-controlled pattern to the northwestand southeast of the mineralization cur-rently defined at the prospect.
Interior AlaskaFREEGOLD VENTURES LTD.
reported additional drill results from itsGolden Summit project. The companyhas completed is 2012 drilling campaignwhich included 5,203 meters of coredrilling at the Cleary Hill prospect andan additional 9,714 meters of coredrilling at the adjacent Dolphin deposit.Significant new results from theDolphin zone included 290.3 metersgrading 0.67 g/t gold in holeGSDL1219, 288.5 meters grading 0.75g/t gold in hole GSDL1220, 606.2meters grading 0.57 g/t gold in holeGSDL1224. At the Cleary Hill zone sig-nificant results included 61.4 metersgrading 0.67 g/t gold in holeGSCL1216, and 50.3 meters grading1.46 g/t gold in hole GSCL1221, includ-ing a 1.5 meter interval which returned
� C O L U M N
Alaska gold could get its turn at batAs miners face a global reserves replacement challenge, the state’s unexplored areas may finally compete on a level playing field
6NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
TheauthorThe author
Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMANOct. 22. Freeman can be reached bymail at P.O. Box 80268, Fairbanks, AK99708. His work phone number atAvalon Development is (907) 457-5159and his fax is (907) 455-8069. His emailis [email protected] and his website iswww.avalonalaska.com.
Since 1982
Full Line Steel and Aluminum DistributorSpecializing in wear plate
191 g/t gold. A revised estimate for theproject is expected before year-end.
TERYL RESOURCES CORP. reportedcompletion of its five-hole, 760-meterdrilling program at its Westridge projectnear. Assays are pending.
MIRANDA GOLD CORP. announcedthat joint venture partner AGNICO-EAGLE (USA) LTD. has terminated itsexploration agreement on Miranda’sEster Dome project near the Fairbanks.Agnico drill tested large soil anomaliesover the last two summers. Miranda sub-sequently terminated its underlyinglease with property owner RANGEMINERALS.
FULL METAL ZINC announced thatsoil and rock assay results have expand-ed soil anomalies from a surface explo-ration program at its Fortymile poly-metallic project. The 2012 explorationprogram included soil sampling (432soil samples), trenching (27 rock sam-ples). This program was successful inextending and infilling silver, lead andzinc anomalies at West LWM and at thenewly named Marble Nose prospect tothe northwest. Highest samples tend tobe in areas of skarn mineralization, andmapping, focused on extending soil-sampling grids and targeting anomalousareas near the high-grade LWM depositto develop drill targets for the 2013 pro-gram. At WLWM, additional soil sam-pling was successful in extending amulti-element anomaly (>1 gram permetric ton silver, >100 parts-per-millionlead and >300 ppm zinc) 200 meters inboth northerly and southerly directions,for a total of 650 meters by 50- 100meters in width. At Marble Nose, twodistinct 800-meter long soil anomalies(>100 ppm lead and >150 ppm zinc)were identified, associated with two lay-ers of carbonate replacement deposithost marble units. The easternmostanomaly, associated with the thickersection of marble, is as much as 650meters in width, averaging 400 meters.In addition, an area of oxidized sulfideswas identified in a previously unsam-pled area on a ridge west of MarbleNose and north of WLWM. This gossanzone could be found for about 50 metersin length, was 2-3 meters wide, andreturned 0.323 ppm gold, 61.6 ppm sil-ver, 1,700 ppm arsenic, 191 ppm copper,27 ppm molybdenum, 1,750 ppm lead,887 ppm zinc.
Alaska RangePURE NICKEL INC. released its
third quarter 2012 operating and finan-cial result, including a summary ofactivities at its MAN nickel-copper-plat-inum group element project.Approximately US$4.1 million has beenspent during 2012 on core drilling, soilgeochemical surveys, ground-basedinduced polarization geophysical sur-veys and geological mapping. A total of2,550 soil samples were collected and47 line kilometers of induced polariza-tion surveys were completed on fourgrids. The geophysical surveys wereused to follow-up on soil geochemicalanomalies to test for the presence of sul-fide mineralization. A number of newsulfide occurrences were identified inthe Alpha Complex, two of which weretested by subsequent drilling. Eight drillholes totaling 2,234 meters were com-pleted and assay results are pending.
RHYOLITE RESOURCES LTD.reported new assays results from 2011drill holes at its Paxson gold project.Significant revised results from theShalosky zone include hole WG11-12which returned 1.5 g/t gold over 80.5meters, hole WG11-02 which returned1.8 g/t gold over 51.1 meters and holeWG11-13 which returned 0.7 g/t goldover 46.8 meters. The results from theinfill sampling suggest that the mineral-ization in the host schist may havestratigraphic controls as well as structur-al controls, in that the mineralization isnow seen to continue beyond the limitof primary structures. The company alsoreported that surface sampling in 2012identified a new volcanic massive sul-fide occurrence located 6 kilometersnortheast of the Shalosky gold zone.This occurrence, known as the HD-North, is exposed in outcrop andappears to be 2 meters thick strikingN30E and dipping 45 degrees to thesoutheast. A 2-meter by 2-meter chipsample from this zone returned 5.68percent zinc, 2.80 percent lead, 0.48 per-cent copper, 65.6 g/t silver and 0.53 g/tgold.
WESTMOUNTAIN INDEXADVISORS INC. announced completionof 2012 drilling and the production ofits first gold from the Terra property,under option from CORVUS GOLD INC.Over 20 tons of ore were bulk sampledfrom the Ben and Fish veins andprocessed on-site. The concentrates wereshipped to Idaho for assaying and addi-tional metallurgical testing. On theexploration front, the 2012 drilling pro-gram consisted of 3,782 feet in four dia-mond drill holes designed to expand thegold resource at the project. Drillingextended the vein system 200 meters
north and one hole was drilled at theFish vein. The company plans to updateits resource estimate using data fromthese holes. The company also reportedthat assay results from soils and rockchip samples from the Camp CreekMidway porphyry target returned resultsa high of 3.19 g/t gold from soil sam-ples that averaged 401 parts-per-billiongold over 1,500 feet of surface expo-sure.
Northern AlaskaNOVACOPPER INC. and NANA
REGIONAL CORP. INC. announcedadditional 2012 drilling results from theSouth Reef zone of their Upper Kobukproject. Significant results include 50.6Meters at a grade of 3.41 percent copperin hole RC12-200, 69.6 Meters at a
grade of 2.01 percent copper in holeRC12-203, 6.5 Meters at a grade of 4.30percent copper in hole RC12-199, 22.9meters at a grade of 2.60 percent copperin hole RC12-205, 12.2 meters at agrade of 4.80 percent copper in holeRC12-206, 11.7 meters at a grade of5.02 percent copper in hole RC12-207and 71.2 meters at a grade of 3.66 per-cent copper in hole RC12-209. To datethe company has completed 15,457meters of drilling in 22 holes at theSouth Reef zone. Drilling at South Reefhas outlined a 300-meter by 700-meternortheast trending zone of mineraliza-tion that remains open to the north, eastand southwest. An initial industry-com-pliant resource estimate for the South
7NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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ANDOVER VENTURES INC.announced additional 2012 results fromdrill holes at its Sun volcanogenic mas-sive sulfide project. Over the course ofthe 2012 program the company complet-ed 20 core holes totaling 4,350 meterson the Sun, SW Sun, Stu, Sal and PicnicCreek prospects. Significant resultsfrom the Sun deposit area include hole12-41 which returned 10.6 meters grad-ing 1.07 percent copper, 0.49 percentlead, 1.59 percent zinc, 40.7 g/t silverand 0.179 g/t gold and hole 12-42 whichreturned 2.2 meters grading 1.15 percentcopper, 1.63 percent lead, 7.21 percentzinc, 157.6 g/t silver and 0.320 g/t gold.These holes expand the northeastern endof the Main Sun deposit and extend thedrilled resource a full 300 meters downdip and about 50 meters further north-east than previous drilling. The companyalso reported one hole from the SW Sundeposit where hole 12-44 extended min-eralization 100 feet along strike andreturned 2.9 meters grading 2.40 percentcopper, 0.07 percent lead, 0.42 percentzinc, 9.8 g/t silver and 0.541 g/t gold.Mineralization at SW Sun was extendedalong strike by over 250 meters anddown dip to at least 500 meters by the2012 drilling program and mineraliza-tion remains open along strike and atdepth. Results from one hole at thenewly discovered SAL prospect werealso released. Hole SAL-12-01 returned2.7 meters grading 0.69 percent copper,0.84 percent lead, 2.99 percent zinc,10.9 g/t silver and 0.126 g/t gold.
Southeast AlaskaHEATHERDALE RESOURCES LTD.
announced the signing of a memoran-dum of understanding with theKETCHIKAN GATEWAY BOROUGHover preferred infrastructure sites for itsNiblack volcanogenic massive sulfidedeposit. The Gravina Island IndustrialComplex is the preferred site for milland tailings facilities for the project. Theunderstanding allows NIBLACK LLC toundertake a broad range of investigationsto evaluate whether the site is both anacceptable and preferred location for sit-ing such facilities. The investigationswill include environmental, socio-eco-nomic, technical, financial, and engi-neering studies. Consultation with localresidents, land and business owners, andgovernment will also occur. At the sametime the understanding provides for the
Ketchikan Gateway Borough to fullyinvestigate issues relating to public safe-ty, environmental protection and respon-sible resource use before entering intoany development agreement withNiblack, and to broadly consult withlocal communities and other stakehold-ers before decisions are made. In anironic twist, the terminus of the muchmaligned and never built “Bridge toNowhere” would have been GravinaIsland. On the exploration front, thecompany reported that it continued withresource delineation at the project in2012. A 15,000-foot surface drilling pro-gram began in July and is nearing com-pletion. Because of the preliminaryresult of mineralized zones encounteredat the Trio deposit, work has beenfocused in that area. Assay results arepending.
GRANDE PORTAGE RESOURCES
LTD. announced additional 2012 resultsfrom its Herbert Glacier gold projectnear Juneau. Significant drilling resultsinclude hole DDH 311C on the DeepTrench vein which returned 1.98 metersgrading 21.22 g/t gold, hole DDH 311Don the Deep Trench which returned 3.42meters grading 21.55 g/t gold, hole DDH12O-1 on the Main Vein which returned2.84 meters grading 13.85 g/t gold, andhole DDH 326B2 on the Deep Trenchwhich returned 6.14 meters grading24.37 g/t gold. Results are pending fromadditional holes completed in 2012.
PURE NICKEL INC. announced thatdiamond core drilling had begun at itsSalt Chuck copper-palladium projectnear Thorne Bay. The objective of the2,000 meter drilling program is to deter-mine the source of geochemical and geo-physical anomalies previously identifiedin the area. Salt Chuck is Alaska’s onlypast-producing palladium mine
UCORE RARE METALS INC.announced that the U.S. Department ofDefense asked the company to conductmineralogical and metallurgical studieson the company’s Bokan Mountain rareearth element project. Under the agree-ment, Ucore will provide DoD with themost up-to-date data on the project’smineralogy and proprietary bench andpilot scale Solid Phase Extraction nan-otechnology research. The company alsoannounced that it has successfully sepa-rated the critical metals: dysprosium,neodymium and erbium from the otherrare earth elements in a mixed concen-trate. The separation, done on laboratory-prepared samples designed to simulateore from Bokan Mountain, will allow thecompany to pursue this breakthrough at apilot plant level in conjunction with thecompany’s arrangement with the DoD. �
Access to critical minerals and metalsis vital to America’s military strength
and economic health. As we move furtherforward into the technology age, we need arange of non-fuel minerals – from antimo-ny to zinc – for defense technologies thatprotect the homeland and project Americanpower abroad. These same minerals andmetals underpin our manufacturing sectortoo, and the cost of raw materials impactseverything from productivity and innova-tion to economic growth and job creation.
Without smarter policies that increaseaccess to resources under our own soil,America will continue to depend heavilyon China, Russia, Kazakhstan, and othercountries that don’t have our interests atheart.
Based on reports by the U.S.Department of Defense and others,American Resources Policy Network, myorganization, has found that the UnitedStates is at least 50 percent dependent onforeign supplies for 43 vital minerals andmetals that feed our defense and manufac-turing sectors. That’s a greater dependencethan we have on foreign oil. For 19 criticalminerals, we’re 100 percent dependent.
The problem is crystal clear when wezero in on rare earth elements, a group of17 magnetic metals. Although the nation isonce again producing rare earths, Chinastill controls 95 percent of the global sup-ply.
According to the CongressionalResearch Service, 10 of these metals areessential to our modern military technolo-gies – including guidance and control sys-tems, electronic warfare, targeting, electricmotors, and battlefield communications.We also use them for smartphones, LEDtelevisions, automobiles, hybrid batteries,and other products that fuel the U.S. econ-omy and sustain manufacturing jobs.
The irony of U.S. dependence on Chinafor rare earths is that 15 percent of avail-able global resources can be found righthere under American soil. Yet, right nowwe contribute to little more than 1 percentof global supply.
Why? Becauseblessed as we aregeologically withscores of metals andminerals, America isone of the toughestplaces in the world tobring a new mineonline.
Mining compa-nies have to navigatea bureaucratic obstacle course to gainaccess to American mineral resources.According to the annual Behre Dolbearreport on the world’s top 25 miningnations, it takes up to 10 years on averageto obtain all the necessary permits todevelop an American mine. By that meas-ure, America ranks dead last year afteryear.
Under the current administration, feder-al agencies have continued to delay orimpede the development of majorAmerican mineral deposits. In Arizona,one mining company has been trying formore than 15 years to obtain approval fromthe U.S. Forestry Service to mine a copperdeposit just south of Tucson that wouldcreate an estimated 2,900 jobs and US$19billion worth of investment in the state.
The U.S. Environmental ProtectionAgency has even expanded its authorityunder the Clean Water Act to thwart min-ing projects – including before they’veapplied for a permit. In Alaska, anothermining company has discovered whatcould be the largest ever U.S. copperdeposit, and the EPA has pre-emptivelydrafted an environmental assessment of the
nearby Bristol Bay watershed, which itseems bent on using to pre-emptively denya permit to develop this resource.
From a national security perspective,these policies make no sense. Copper isused extensively not only in construction,industrial machinery, transport vehicles,electronics, and power generation, but innext-gen energy alternatives like wind andsolar power. It is also the second-most usedmaterial by the Department of Defense,and a key source of other strategic miner-als through the refining process.
And while U.S. Federal agencies haveblocked efforts to develop domestic copperresources, China continues to stockpilemore copper in its warehouses than theU.S. consumes in an entire year.When it comes to our mineral dependence,President Obama has talked about rareearths, talked about strengthening manu-facturing, and talked about the need for amodern military with state-of-the-artweaponry – all of which depend on a
� G U E S T C O L U M N
Time for U.S. to address mineral problem From Pebble copper to rare earths, our nation needs policies that access domestic minerals for economic growth, national security
On Oct.15, 2012, Joseph A. Main,Assistant Secretary of Labor for
Mine Safety and Health announced that
“recently finalized data shows that in2011, fatality and injury rates were thelowest in history.”
Main went on to say that “in theMetal/Nonmetal mining sector, the fatalinjury rate was .0084 per 200,000 hours
worked and the all-injury rate was 2.28 per200,000 hours worked.”
He said, “No miner should have to dieon the job just to earn a paycheck,” and weall agree. Notably, in the period covered,none of the fatalities occurred in Alaska.
Alaska is a major mining state withgold production the second highest innation as well as significant copper, leadand zinc production. The absence of minefatalities and the concomitant reduction ofmining-related injuries say a great dealabout the quality of the working environ-ment at mines in Alaska.
According to MSHA statistics, minefatalities have been down-trending fairlyconsistently since 1999. In that year,MSHA had 319 inspectors on the job andthere were 55 fatalities in 11,409 metal-nonmetal mines. The number of inspec-tors increased and the number of fatalitiesdecreased almost annually until about2009 when for 12,555 mines there were389 inspectors and 16 deaths. Since then,the number of mines has fallen off as wellas the number of inspectors, while fatali-ties bounced to 23 in 2010 then fell againto 16 in 2011.
The number of injuries has likewisedecreased dramatically since 1999. In thatyear, 4.44 injuries per 200,000 employeehours were reported; last year the compa-rable rate of injuries was 2.28 per 200,000employee hours.
It is interesting to compare non-fataloccupational injuries in the mining indus-try with other industrial categories. In2010, agriculture, forestry and fishing aswell as education and health servicesreport an incident rate of 4.5 per 100 full-time workers, the manufacturing, construc-tion, retail, trade, transportation and publicutilities industries reported rates of 3.9 to4.0 per 100 full-time workers. The miningindustry, on the other hand reported anincident rate of 3.0 incidents per 100 full-time workers for the same period. In brief,according to Bureau of Labor statistics, themining industry is far safer than manyother common occupations.
When traveling to a mine, it is custom-ary to be provided with safety equipment
and to be given a safety briefing. Theindustry has a very high level of con-sciousness about safety issues and justifi-ably tends to be proud of its record; how-ever, whether the favorable statisticaltrends in America’s mines is a function ofthe pressure created by MSHA, is perhapsa different question.
Almost everyone who is confrontedwith an MSHA inspection concurs on atleast one point. The requirements imposedby inspectors sometimes are exceedinglysubjective and trivial and frequently incon-sistent from one inspector to the next.
To Assistant Secretary Main, it isappropriate to say, I think, that we, as anindustry, are pleased with the numbers thatyou are reporting, we acknowledge that thenumbers, theoretically at least, could beimproved; however, mine operators are notthe enemy. There is a public relationsaspect of mine inspection that still appearsto be wanting. Perhaps it is time to find away to revisit the practices and proceduresof the inspection arm so that inspectors arewelcomed at America’s mines as help-mates, sharing with the mine managers ina common goal of a safe and productiveindustry.
There is still a small gap to close. Noone denies that, but now might be a finetime to re-evaluate the tactics used by theagency. It is said that if your only tool is ahammer, everything looks like a nail. Let’sconsider providing MSHA with some bet-ter tools. �
� C O L U M N
MSHA reports record drop in mine deathsAlthough the number of injuries and fatalities in America’s metal and non-metal mines is down, it is not time to celebrate yet
10NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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Mining & thelaw
The author,J.P. Tangen hasbeen practicingmining law in J.P. TANGENAlaska since 1975. He can be reached [email protected] or visit his Web site atwww.jptangen.com. His opinions do notnecessarily reflect those of the publishersof Mining News and Petroleum News.
strong U.S. minerals access policy. Butwithout taking more concrete steps,President Obama can only be judged bythe obstructionist actions his federal agen-cies have taken.
Gov. Romney has directly addressed thepermitting process on the campaign trail,promising to streamline it and move moreauthority from the federal government tostates. Yet his focus has been exclusivelyon energy independence. He shouldexpand his agenda to include resourceindependence.
Ready access to reliable supplies ofmetals and minerals is every bit as criticalto America’s national security, manufactur-ing competitiveness, and job creation.
Daniel McGroarty, president ofAmerican Resources Policy Network, anon-partisan education and public policyresearch organization headquartered inWashington, D.C., served as special assis-tant in the White House and as a presiden-tial appointee at the Department ofDefense.
This column was originally publishedOct. 17 on “The Hill,” www.thehill.com.
In exploring for gold in the centralKivalliq region of Nunavut this field
season, North Country Gold Corp. hasfound evidence of emerald in drill core atthe Anuri prospect on its 300-kilometer-(186 miles) long Committee BayGreenstone Belt Property.
The junior’s Nunavut land package atCommittee Bay consists of 222,623hectares (550,101 acres) and has identifiedfive distinct mineral development centers,including the Anuri-Raven prospect andthe Three Bluffs gold deposit where thecompany has focused exploration in recentyears.
Located 180 kilometers (112 miles)northeast of the Meadowbank Mine,Committee Bay is one of the largestremaining greenstone belts in Canada. Thediscovery of emerald on the property –only the fourth documented occurrence inCanada – brings to all three northern terri-tories known discoveries of the rare gem-stone. Discoveries of emerald also havebeen reported in northern British Columbiaand northern Ontario.
Emeralds in CanadaEmeralds have been discovered at Ghost
Lake near Dryden in northwestern Ontario,near Lened Creek in southwesternNorthwest Territories, at Red Mountainnear Stewart in northwestern BritishColumbia, and on the Tsa Da Glisza (for-merly Regal Ridge) property in southeast-ern Yukon Territory.
Emerald is a rare variety of beryl(Be3Al2Si6O18), a rock-forming cyclosil-icate mineral, generally occurring withingranites and granitic pegmatites. Othervarieties of beryl include aquamarine(blue), red beryl, goshenite (colorless),heliodor (yellow), and morganite (pink orpeach). Of all varieties of beryl, emerald isthe most prized, and can be worth morethan US$100,000 per carat.
Beryl is a relatively rare mineralbecause there is very little beryllium in the
earth’s crust. It is found in small amounts ingranites and pegmatites, according notedemeralds expert, Lee A. Groat, Ph.D.
In addition to the presence of beryllium,emeralds require a sufficient amount ofchromium or vanadium during crystalliza-tion. These two elements are nearly as rareas beryllium in the earth’s crust and evenrarer in granites. In addition, researcherssay the three elements generally come fromdifferent magma sources. Chromium andvanadium are normally found in mafic orultramafic rocks and their metamorphicequivalents, that is, rocks very low in silica,while beryllium generally is found in rockknown as “evolved,” meaning very rich in
silica, such as granites and pegmatites.The classic model of emerald formation
is exactly those conditions under whichevolved rocks (granites and pegmatites)
interact with mafic or ultramafic rocks,according to Groat and others. The neces-sary conditions for emerald formation are,however, extremely complex. The “interac-tion” between the two source reservoirsmust occur through hydrothermal fluids.Hydrothermal fluids are hot water that cancarry dissolved beryllium, chromium orvanadium from their source to the locationof emerald crystallization. These fluidsmust generally be present when the gran-ites, pegmatites, or mafic or ultramaficrocks are deposited, or else when they aremetamorphosed. The fluids travel throughnaturally occurring pores in the rock oralong flaws or cracks. As they do so, they“wash out” the beryllium, chromium orvanadium contained in the rock and carriesit elsewhere. When these elements all cometogether, the chances of emerald formationis increased.
Geologists say the green color of emer-ald reflects the trace amounts of chromiumand/or vanadium replacing aluminum in itscrystal structure; the color may be dimin-
� N U N A V U T
Hunt for gold leads junior to emeraldsRecent discovery by North Country Gold at Anuri prospect gives literal meaning to under-explored Committee Bay Greenstone Belt
11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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Emerald crystal from the Lened occurence, Northwest Territories. The crystal is about 2 cen-timeters in length.
ished by the presence of iron which can adda greyish tint.
There is debate over the differencebetween emerald and green beryl; however,a definition that appears to be attainingbroad acceptance among scientists is thatemeralds are yellowish green, green orbluish green, natural or synthetic beryls,which reveal distinct chromium and/orvanadium absorption bands in the red andblue-violet ranges of their absorption spec-tra.
There are many classification schemesfor emerald deposits. Researchers in 2002divided emerald deposits into the followingcategories: pegmatites without schist, peg-matite and greisen with schist, schists with-out pegmatites, and black shales with veinsand breccias. Beryl occurrences in Canadaare mostly associated with either Archeanpegmatites in the Canadian Shield orMesozoic/Cenozoic granitoids in theCordilleran.
Emeralds in OntarioCanada’s first emerald discovery, known
as the Taylor 2 pegmatite after J.G. Taylor,was reported near Dryden in northwesternOntario in 1940. The Taylor 2 pegmatitebelongs to the Mavis Lake PegmatiteGroup, which is southeast of the S-typeperaluminous Ghost Lake batholith.Porcellaneous white to pale green beryl
crystals, up to several centimeters long and5 centimeters wide, are found within a 3.5-kilometer (2.2 miles) by 1.5 km (0.93 mile)area. The beryl is concentrated in two peg-matite dykes situated 340 meters south ofthe Ghost Lake batholith, but only theTaylor 2 pegmatite contains emerald. Mostof the beryl and emerald occurs within a“zone of mixing” between the southern andcentral limbs of the pegmatite. The “zoneof mixing” consists of relict K-feldsparcrystals from the pegmatite in a matrix ofalbite, biotite, and tourmaline. Scientists
have compared the geologic setting atGhost Lake to that of the Somerset Hillmine in the Gravelotte district in SouthAfrica. This occurrence has also been sug-gested to be of metamorphic origin.
Emeralds in Northwest TerritoriesWhitehorse-based prospector Ron
Berdahl discovered vanadium-rich emer-alds near the Lened tungsten showing inthe westernmost Northwest Territories,adjacent to the Yukon border in the late1970s. The transparent pale-green emeraldcrystals were found 55 kilometers (34miles) northwest of the town of Tungsten inthe Logan Mountains. The occurrence islocated on the eastern margin of theSelwyn Basin, which consists of deformedand weakly metamorphosedNeoproterozoic to Devonian-Mississippiansedimentary rocks interpreted as a conti-nental terrace wedge along the westernmargin of the North American Craton. Thebasin is separated from the craton by amajor tectonic flexure known as theRedstone arch.
Emerald at the Lened emerald showingis hosted by quartz-carbonate veins devel-oped within a skarn assemblage. The veins(2-30 centimeters wide) extend perpendic-ularly from the thrust fault across the skarnand pinch out in overlying rhythmicallybedded limestone. The black shale footwallunit is devoid of emerald mineralization.The emerald is intergrown with quartz andcalcite adjacent to the wallrock and con-
centrations are highest near vein-faultintersections. The veins are surrounded bya 5- to 10-cm-wide alteration zone thatconsists of calcite, dolomite, diopside,hedenbergite, vesuvianite, and base-metalsulfides. Emerald crystals from Lened aretypically euhedral, up to 3 centimeters inlength and 3 millimeters in diameter,although the longest crystals tend to bequite narrow. Most of the crystals are palegreen to yellow, but some are dark grassy-green. Chemical analyses indicate that theemerald is richer in vanadium (up to 0.5 wt.percent V2O3) than in chromium. Theproperty is currently owned by LibertyMineral Exploration Inc.
Emeralds in B.C. and the YukonCrystals of deep-green beryl were dis-
covered in 1989 at Red Mountain, nearStewart on the central coast of BritishColumbia. The beryl occurs as smallopaque crystals having numerous fracturesin narrow quartz-calcite-pyrite veins cut-ting volcaniclastic rocks adjacent to aquartz-monzonite intrusion. Electronmicroprobe analyses show 1,612 ppmvanadium and 1.04 wt. percent ferrousoxide (average of six analyses), and nodetectable chromium.
After further investigation in 1997,geologists reported poorly formed vanadi-an emerald associated with the RedMountain porphyry deposit near Stewart,but information is minimal.
In 1998, Bill Wengzynowski discoveredemerald at Tsa Da Glisza (which means“green stones” in the indigenous languageof the Kaska First Nation) in the southeast-ern Yukon Territory near the town of RossRiver. At Tsa Da Glisza, the emeralds occurin quartz and tourmaline veins that cutacross metamorphosed volcanic rocks. Themineral occurrence is associated green togreen-blue to “emerald green” beryl crys-tals up to 4 centimeters in length that occurin 12 mineralized zones within a 900-meterby 900-meter area. Chromium (average3,208 ppm) is the predominant chro-mophore. Some of the smaller crystals, andsections of larger crystals, are gem-quality,and a number of small gems (up to 2.4carats) have been fashioned from Tsa daGlisza samples. The property currentlybelongs to True North Gems Inc.
Emeralds in NunavutAt the Anuri prospect in Nunavut,
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emerald crystals were initially noted by aNorth Country Gold geologist when inves-tigating highly elevated beryllium valuescontained within potassic altered PrinceAlbert Group komatiites from drill corethat the explorer was evaluating as a goldtarget. Preliminary evaluation of the crys-tals utilizing X-ray diffraction and electronmicroprobe confirmed that the crystals areberyl and that the dominant chromophoreis chromium with essentially no vanadium.The occurrence of the gemstone will be thefocus of a research project at theUniversity of British Columbia under thedirection of Groat, an associate professorin UBC’s Department of Earth and OceanSciences. UBC researchers will investigatethe origin of the Anuri emerald mineraliza-tion and will form the basis of an explo-ration strategy to fully assess the potentialfor discovery of economic emerald miner-alization in the Committee Bay greenstonebelt.
“The discovery of emeralds at Anuri isonly the fourth documented occurrence inCanada,” said North Country GoldPresident and CEO John Williamson inannouncing the Nunavut find Oct. 16.“North Country is pleased to have one ofthe world’s foremost emerald experts,Professor Lee Groat, initiate research onthe emerald mineralization in theCommittee Bay Greenstone Belt, and weare intrigued by the implications of furtherexploration and the potential for more dis-coveries of economic deposits.”
“The discovery of emerald mineraliza-tion at North Country Gold’s Anuri proper-ty is exciting for a number of reasons,” saidGroat. “Emerald is extremely rare becauseit requires unusual geologic and geochem-ical conditions to form, and evaluatingthese conditions will provide importantclues to the genesis of the Anuri prospectas a whole. We, at UBC, are excited to beworking with North Country Gold on char-acterizing the world’s most recently dis-covered emerald occurrence.”
The Anuri occurrence is highlyprospective for gold-silver mineralizationand is characterized by a 0.5-kilometer-(0.31 mile) wide by 1.5-kilometer- (0.93mile) long zone of intensely altered andsulphidized mafic and ultramafic volcanicfloat boulders. Sampling of this bouldertrain has produced high-grade gold and sil-
ver values up to 291.2 grams per metric tongold and 1,769.5 g/t silver, 20.68 g/t goldand 333.0 g/t silver, and 14.44 g/t gold and394.0 g/t silver. Initial drill testing inter-sected gold and silver mineralization, withelevated copper, bismuth, lead, zinc andcadmium values with hole 06AR007Bintersecting 3.75 g/t gold, 63.7 g/t silver,0.75 percent copper and 158.2 parts-per-million bismuth over 10.21 meters. Strongto intense potassic alteration along withsilicification and sulphidation was encoun-tered in the mafic and ultramafic stratigra-phy.
The distribution of Prince Albert Groupkomatiites in the Committee Bay green-stone belt is extensive, forming a 25-kilo-meter (16 miles) by 10 kilometer (sixmiles) belt in the southwest portion of thearea. Potassic alteration has been identifiedthroughout the area in association withbroad zones of shearing and emplacementof late granitoid intrusions, which hasimplications for the widespread occur-rence of emerald mineralization in thearea.
The results of the research into the gen-esis of the emeralds will provide key infor-mation to develop an exploration model tofully evaluate the potential of the new dis-covery in the Committee Bay GreenstoneBelt.
Targeting gold at Three Bluffs depositUntil now North Country Gold has
focused almost exclusively on explorationof the Three Bluffs deposit, a structurallycontrolled lode gold system hosted within
oxide facies iron formation and greywack-es, at Committee Bay. The deposit com-prises a current NI 43-101-compliantresource of 4.30 million metric tons aver-aging 4.90 g/t gold for 678,000 ouncesgold (indicated) and 4.53 million metrictons averaging 5.69 g/t gold for 829,000ounces gold (inferred). The deposit is host-ed within a roughly 50-meter wide, steeplydipping banded iron formation unit whichcan be traced for more than 10 kilometers(six miles).
North Country believes the ThreeBluffs deposit is amenable to developmentas an open-pit mine with underground
potential and is working to define a 3-mil-lion-ounce gold resource. To date, thedeposit has been drill tested at shallow lev-els along a strike length of 4.1 kilometers(2.6 miles). It has been most extensivelydrilled over the eastern 1.3 kilometers ofthe trend where drilling up to 2011 reacheddepths of 300 meters below surface.
Last spring, North Country completed7,005 meters of diamond core drilling in12 holes to depth in the eastern part of thedeposit, which extended the mineralizedenvelope to depths of 500 meters belowsurface with mineralization remainingstrong and open to depth. This new drillingis expected to result in an increase in theunderground inferred resource of thedeposit.
Geological modeling of the ThreeBluffs gold system has identified severalcontrols on high-grade mineralizationincluding steep east plunging shoots andshallow east plunging fold hinges withinthe iron formation. In 2010, North CountryGold completed a Quantec Titan 24 geo-physical survey over the Three Bluffs proj-ect, which indicated that known gold zonesat shallow to intermediate depths displayan excellent correlation with DC-resistivi-ty lows. These resistivity lows extend toleast 500 meters depth over much of thesurveyed area, and the correlation of goldmineralization with the resistivity lows todepth has been confirmed by high gradeintersections to these depths within the2012 drill program. �
13NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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An employment forecast published bythe Alaska Department of Labor and
Workforce Development in Octoberpegged the state’s mining sector jobgrowth from 2010 to 2020 at 19 percent.That is second only to health care, at 31percent, and outpacing the 12 percentaverage growth across all Alaska indus-tries.
Expansion of current operations cou-pled with prospects of building mines atthe world-class Livengood and Donlingold deposits were cited as drivers behindadding new miners to the Alaska workforce.
According to “The Economic Benefitsof Alaska’s Mining Industry,” an annualreport prepared by the McDowell Groupfor the Alaska Miners Association, the
Alaska mining industry accounted for4,500 direct and 9,000 indirect jobs in2011.
At US$100,000 per year, the averagepay in the mining industry is double thestatewide average across all sectors. And,these hefty paychecks are taken home byminers living in 120 communities acrossthe state, half of which are found in ruralregions where employment opportunitiesare sparse and the cost of living is high.
Iliamna Development Corp. CEO LisaReimers – an Alaska Native who has beenoutspoken in her support of the enormousPebble copper-gold-molybdenum projectnear her hometown of Iliamna – speaks tothe need for jobs off the beaten path inAlaska.
“When the long winter comes, the sea-sonal industries leave, and the economyof southwestern Alaska shuts down,”Reimers recently wrote. “The region’s percapita income is US$15,000 a year.Worse, our remote location results in sky-high living expenses – gasoline is US$8-9 a gallon and milk costs even more – sothe poverty rate exceeds 20 percent.”
Pebble jobs unclearThe Bristol Bay region of Southwest
Alaska, where Reimers’ hometown islocated, is blessed with two epic resources– the world’s largest run of sockeyesalmon and Pebble, which is consideredto be the largest undeveloped copperdeposit on the planet.
The juxtaposition of these two world-class resources has fueled a heateddebate, with one side worried that miningthe copper-gold-molybdenum depositmay put the salmon at risk. Pebble sup-porters, on the other hand, say the depositcan be developed in a way that protectsthe fish and would create high-payingjobs for decades to come.
“Our site work program is where ourlocal and regional opportunities are real-ized. This is all about putting people towork and potentially the significantsocioeconomic benefits this project couldbring to the region, which struggles withelevated unemployment numbers, a lackof year-round jobs and outmigration tourban areas,” said Pebble CEO JohnShively, upon rolling out a US$107 mil-lion budget for 2012.
The Pebble Limited Partnership – a50-50 alliance between Vancouver B.C.-based Northern Dynasty Minerals andLondon-based Anglo American – hopesthis work will result in a permit applica-tion it can submit to regulators in 2013.
The U.S. Environmental ProtectionAgency, meanwhile, is fast-tracking itsBristol Bay Watershed Assessment, astudy that could seal the fate of Pebble.
Under Section 404 of the Clean WaterAct, the Army Corps of Engineers ischarged with issuing permits for dredgeand fill discharge into navigable waters,including wetlands. The EPA was grantedveto authority to prohibit, restrict, or denya discharge that poses an unacceptableadverse impact to fisheries or other wateruses.
The EPA initiated the Bristol BayWatershed Assessment in response toconcerns from Alaska Native groups,fishing organizations and others whopetitioned the agency to exercise its vetoauthority to pre-emptively deny thePebble Partnership discharge permits
14NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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World-class project. World-class science.
Pebble is a world-class copper deposit and one of North America’s most significant copper
discoveries. Since 2001, more than 100 independent scientists and technicians have
conducted one of the most extensive environmental studies program in Alaska.
The Pebble Partnership is committed to responsible resource development in Southwest
Alaska — recognizing that a world-class project requires world-class science.
www.pebblepartnership.com
� A L A S K A
Economists forecast mining sector growthIndustry jobs estimated to increase 19 percent over the coming decade; expansion of existing operations, new mines to drive trend
see MINING JOBS page 15
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Devin Waugaman and Ross Nelson drive Caterpillar 785 haul-trucks capable of carrying 150tons of material at the Usibelli Coal Mine near Healy, Alaska.
needed to build a mine at the world-classcopper-gold-molybdenum deposit.
With the pushback from opposition, itis unclear whether the estimated 2,000jobs that Pebble would offer during con-struction and roughly 1,000 mining jobsthat would follow will be realized by2020.
Generations of minersUsibelli Coal Mine, situated near the
town of Healy some 100 miles (160 kilo-meters) south of Fairbanks, is Alaska’slongest running employer of Alaska min-ers.
Of the 130 or so employees currentlyworking for Usibelli Coal Mine Inc.,about 27 percent are second, third andfourth generation employees – a testa-ment to the strong ties built between thefamily-owned coal mining business andthe people that contribute to its success.
Usibelli, which got its start in 1943 bysupplying coal to Ladd Army Air Field(now Fort Wainwright) near Fairbanks,now produces roughly 2 million tons ofcoal per year. Roughly 1 million tons isdelivered to six power plants in interiorAlaska, the balance is shipped overseas.
Located seven miles (11 kilometers)northeast of its current operation at TwoBull Ridge, the 83-million-ton JumboDome deposit is anticipated to provideUsibelli’s domestic and international cus-tomers with coal for the next 30 years andpotentially provide jobs for fifth- andsixth-generation miners at the InteriorAlaska operation.
Wishbone Hill, a coal deposit located10 miles (16 kilometers) northeast of theSouthcentral Alaska town of Palmer, is asecond operation Usibelli hopes to getinto production.
With 6 million tons of bituminous coalcurrently in reserves, Wishbone Hill isforecast to put between 75 and 125 peopleto work for an initial mine-life of 12years.
A dispute has erupted between thestate of Alaska and federal regulators overthe validity of the permits needed toadvance Wishbone Hill. The permits inquestion have been attached to the opera-tion and renewed several times since1991. The federal Office of SurfaceMining claims the permits lapsed in 1996,making any renewal invalid. Alaska offi-cials contend that there is empirical evi-dence the permits are valid.
“OSM has been fully informed of thestate’s decisions, has inspected the minesite on several occasions, and has issuedfavorable reports related to the mine andthe regulatory oversight of it. This is thefirst time in more than two decades thatthe underlying validity of the permitshave been questioned,” Brent Goodrum,director of the Alaska Division of Mining,Land and Water, wrote to the federalagency in defense of the Wishbone Hillpermits.
If Usibelli gets the regulatory greenlight to continue with the development ofWishbone Hill, some 500,000 tons ofbituminous coal is expected to be shippedoverseas to Japan via the loading facilityat Port MacKenzie on the west side ofupper Cook inlet across from Anchorage.
Interior gold minersWhile Usibelli boasts the longest run-
ning mine in Interior Alaska, the region’stwo hardrock gold mines lay claim tobeing the biggest employers of miners inthe Golden Heart of the state.
Kinross Gold Corp.’s Fort Knox Mine,located some 26 miles (42 kilometers)northeast of Fairbanks, employs some 500miners, mostly Fairbanks residents. The
mine currently produces roughly 300,000ounces of gold annually. More than 5million ounces of the precious metal hasbeen extracted from the open-pit opera-tion since 1997.
In 2009, Kinross completed construc-tion of a heap leach facility and expansionat Fort Knox. According to the company’smost recent projections, there is enoughore to feed the mill until 2018 and to con-tinue the heap leach operation through2021. Kinross added 700,000 ounces tothe gold reserves in the Fort Knox area in2011 but has not provided an update onthe expected life of the mill or heap leachoperations.
The Pogo Mine, located about 60 miles(100 kilometers) southeast of Fairbanks,is a high-grade gold operation thatemploys about 330 miners.
Sumitomo Metal Mining Pogo LLC –a joint venture between Japanese firmsSumitomo Metal Mining Company (85
percent) and Sumitomo Corp. (15 per-cent) to operate Pogo – celebrated thefirst 2 million ounces produced at thisunderground operation in July.
The 2,500-metric-ton-per-day mill atPogo churns out around 1,000 ounces ofgold per day. At this rate, the 2.9 millionounces of gold reserves at Pogo will carrythe underground operation through 2019.
With an additional 2.1 million ouncesof gold in resources and two new gold-rich zones found within 300 meters of theore being mined, Pogo employees neednot worry about the mine closing at theend of the decade.
If Pogo or Fort Knox were to shutdown at the end of the decade,International Tower Hill Mines Ltd.would be glad to pick up some experi-enced miners to work at Livengood, a 20-million-ounce gold project located a fewmiles north of Fairbanks that the compa-
15NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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Located across a narrow passage from Ketchikan, regular ferry service could transport mill workers from the Southeast Alaska town to an industrial park on Gravina Island, the proposedsite of a mill for Heatherdale Resources’ Niblack project located on the coast of Prince of Wales Island, approximately 40 miles (65 kilometers) to the southwest. (See Page 17.)
ny hopes to have in operation by 2018.“About the time Fort Knox drops off in
production, we are going to be able topick up some highly-qualified employeesthey are no longer going to be able to have– we look forward to that,” saidInternational Tower Hill Mines Presidentand CEO Don Ewigleben.
According to a preliminary economicassessment completed in 2011, a 91,000-metric-ton-per-day mill at Livengoodwould churn out 12.9 million ounces ofgold over 23 years. A feasibility studyexpected to be completed early in 2013 isinvestigating the appropriate size opera-tion for Livengood.
Ewigleben said the 560,000-ounce-per-year operation anticipated in the PEAis at the low end of various scenariosbeing contemplated.
With permitting slated to begin in2013, Tower Hill is targeting 2016 tobegin building a mine at Livengood andhopes to begin commercial gold produc-tion by 2018. Once in operation, thisupcoming Interior Alaska mine is expect-ed to put at least 500 miners to work,dependent on the scope of the operationthat the company settles on.
NANA works in NorthwestThe Red Dog zinc-lead mine in
Northwest Alaska – situated about as faroff the beaten path as one can get – hasbecome a case study for the employmentopportunities mines can provide to ruralregions.
Nearly 58 percent of the 550 full-timejobs at Red Dog are filled by the share-holders of NANA – the Alaska Nativecorporation that represent the Inupiat who
have called Northwest Alaska home foreons; many of whom have worked theirway up to high-level positions at the mine.
Red Dog, which has been in operationfor more than two decades, has enoughhigh-grade zinc ore in its Aqqaluk depositto carry the operation through 2031. As
the local work force matures, it is expect-ed that more and higher level Red Dogjobs will go to this primarily AlaskaNative population.
Building on its success at Red Dog,NANA is on the hunt for mineral depositsthat will sustain the economic well-being
of its 12,500 shareholders beyond the lifeof the Red Dog Mine.
“We know that one day we will bedone mining at Red Dog, and it is ourhope that we will keep finding depositsaround the area,” NANA Regional Corp.President and CEO Marie Greene toldMining News. “We have always knownthere are minerals in the upper Kobukarea. The question has always been: Howmuch is there?”
To answer this question, NANA hasforged a new partnership withNovaCopper Inc. This alliance – knownas the Upper Kobuk Mineral Project – haspulled together a 331,000-acre (134,000hectares) swath of highly prospective cop-per hunting ground.
The NANA-NovaCopper partnershipalready boasts two deposits with some 3.6billion pounds of high-grade copper plusappreciable quantities of gold, silver, leadand zinc.
About 2.6 billion pounds of this cop-per is found at the Arctic VMS deposit.The remaining 1 billion pounds is con-tained in the Ruby zone at Bornite – a car-bonate replacement style deposit situatedabout 17 miles (27 kilometers) southwestof Arctic.
NovaCopper envisions these depositssupporting two long-lived mines in theUpper Kobuk region and a host of otherprospects have the potential to providemining jobs through the end of the 21stCentury.
The state of Alaska has invested someUS$9.25 million toward studying thepotential of building a road that links thiscopper-rich region to the highway systemsome 200 miles (320 kilometers) to theeast.
“Getting a road into a district likeAmbler will unlock a lot of value and cre-
continued from page 15
MINING JOBS
see MINING JOBS page 17
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Frontier Drilling’s Shane Crum at the Livengood gold project in Interior Alaska. InternationalTower Hill Mines, the owner of Livengood, is targeting 2016 to begin building a mine at the20-million ounce gold deposit and hopes to begin commercial production by 2018.
ate a lot of jobs for multi-generations,”said NovaCopper President and CEORick Van Nieuwenhuyse.
Local miners at DonlinCompanies under Van Nieuwenhuyse’
leadership have established a track-recordof putting local people to work. NovaGoldResources’ 40-million-ounce DonlinGold deposit is a glowing example.
According to the McDowell jobsreport, some 87 percent of the peopleworking on site at the gold project areshareholders of Calista Corp., the AlaskaNative regional corporation for theYukon-Kuskokwim Region of SouthwestAlaska.
On Aug. 7, Donlin Gold LLC – ownedequally by NovaGold and Barrick GoldCorp. – submitted permit applications fordevelopment of the Donlin deposit. It isexpected to take about four years to gainthe permits needed to develop the projectand, if the partners decide to move aheadwith development, construction will takeabout as long.
It is anticipated that upwards of 3,000workers will be needed to build theDonlin gold mine and associated infra-structure. Once in operation, a milestoneNovaGold would like to see achieved by2020, Donlin Gold would employ some1,000 miners for an initial 27 years, amine-life that is expected to be extendedby decades as additional ore is added tothe deposit.
SE Alaska minesSoutheast Alaska currently hosts two
operating mines and two advanced explo-ration projects on the panhandle hope toreach that status by the end of the decade.
Located roughly 45 miles northwest ofJuneau, Coeur d’Alene Mines Corp.’sKensington gold mine employs some 250miners.
During 2011, the first full year of pro-duction at Kensington, the undergroundoperation produced 88,420 ounces ofgold at cash operating costs of US$1,088per ounce.
Late in 2011, Coeur cut processingrates in half to provide an opportunity toundertake several key initiatives aimed atimproving the mine’s production profileand the overall safety of the operation.
The Southeast Alaska mine returnedto full-scale production of about 1,500tons per day in the second quarter. Coeuranticipates full year 2012 gold produc-tion at Kensington to be around 85,000ounces.
Based on current reserves, Kensingtonis expected to provide mining jobs for thenext decade, an open-ended timeline thatis expected to grow as Coeur finds moregold-rich ore.
Hecla Mining Co.’s Greens Creek sil-ver mine near Juneau has been employingSoutheast Alaska miners for more than20 years. Today, the operation boastssome 300 employees.
Hecla spent roughly US$90 million onupgrades at Greens Creek in 2012, thelargest investment in the history of theSoutheast Alaska mine.
Going into 2012, Greens Creek hadabout 98 million ounces of silver inreserves – enough to keep the SoutheastAlaska mine in production for aboutanother 10 years – and Hecla sees plentyof potential to continue replenishingthese stores of silver in the foreseeablefuture.
Prince of Wales neighborsNiblack and Bokan Mountain, two
advanced exploration projects located onPrince of Wales Island southwest ofKetchikan, are vying to become the nextoperating mine in Southeast Alaska.
Targeting the completion of a pre-fea-sibility study for Niblack by mid-2013,Heatherdale Resources Ltd. has engi-neers designing a mine and mill toprocess the gold-copper-zinc-silver ore atthe volcanogenic massive sulfide project.Heatherdale anticipates building a mineat Niblack of similar scale to GreensCreek.
With the slopes of Lookout Mountainplunging steeply into the NiblackAnchorage, there is little room for a millat Niblack. Instead of attempting to mas-ter this challenging topography,Heatherdale is considering barging ore toan offsite location.
Gravina Island, an industrial site nearthe community of Ketchikan and about40 miles (65 kilometers) northeast ofNiblack, has been identified as an ideal
location for a mill and tailings storagefacility.
Ketchikan, a logging town of some8,000 people, has been seeking a newsource of employment since the demiseof the timber industry in the region.
Located across a narrow passage fromKetchikan, regular ferry service couldtransport mill workers from the SoutheastAlaska town to the proposed GravinaIsland mill site.
Since becoming involved withNiblack, Heatherdale has built strongbonds with the residents of Prince ofWales Island and surrounding communi-ties.
A partnership with the Prince of WalesTribal Enterprise Consortium – owned bythe Craig Tribal Association and theOrganized Village of Kasaan – is puttinglocal residents to work and supplyingNiblack with its manpower needs.
“From the outset, Heatherdale hasmade it clear that it wants its mineraldevelopment activities on Prince ofWales Island to benefit local people andcommunities through local hire and con-tracting,” said Powtec CEO Bill Cole.
Dependent on a positive feasibilitystudy, Heatherdale anticipates filing for
permits to develop Niblack in 2013.Projecting three years for permitting andtwo years for construction, the Prince ofWales Island project could be in opera-tion in 2018.
Ucore Rare Metals Inc. is projecting asimilar timeline for developing its BokanMountain rare earth element projectroughly 15 miles (25 kilometers) south ofNiblack.
To gain a foothold on BokanMountain, the U.S. Department ofDefense has signed contract with Ucoreto advance the Prince of Wales Islandproject.
Several of the REEs found at BokanMountain are critical ingredients to theU.S. military’s advanced weapon systemsand other high-tech gadgets.
The agreement penned with thePentagon will help fund Ucore’s pioneer-ing work to free the critical REEs fromthe ore.
Hoping to get the strategic elementsstored at Bokan Mountain to market assoon as possible, Ucore expects to pub-lish a preliminary economic assessmentby the end of 2012 and hopes to beginconstruction at the Southeast Alaska REEdeposit by 2015. �
17NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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continued from page 16
MINING JOBS
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NANA Shareholder, Jason Douglas ofAmbler, assists a driller during the nightshift at the Upper Kobuk Mineral Project inNorthwest Alaska.
The 17,209-meter drill program car-ried out by NovaCopper Inc. in 2012
at the Upper Kobuk Mineral Project in theAmbler Mining District of NorthwestAlaska is revealing a third copper depositwith sufficient size and grade to bedeemed world-class.
When the spin-out of NovaGoldResources Inc.’s copper-rich Ambler proj-ect was completed in May, NovaCopperheld Arctic, a single deposit with an NI43-101-compliant resource.
But the deal also included US$40 mil-lion in start-up money, NovaGold-founder Rick Van Nieuwenhuyse as pres-ident and CEO and a partnership withNANA Regional Corp. to explore anddevelop a 331,000-acre (134,000hectares) swath of highly prospectivecopper hunting ground in the UpperKobuk region.
“We like exploration, we are good at it,and we know how to move projectsthrough the value-creation timeline; frompounds of copper through reserves andfeasibility,” Van Nieuwenhuyse toldinvestors at the John Tumazos VeryIndependent Research Conference inNew York.
The NovaCopper-NANA alliance,known as the Upper Kobuk MineralProject, provides NovaCopper with theopportunity to explore the copper-richdeposits at Bornite, a project locatedabout 17 miles (27 kilometers) southwest
of Arctic, and a host of other mineralprospects across a carbonate-hosted, cop-per-cobalt belt situated on the lands thatNANA brought to the partnership.
In return, Inupiat-owned NANA hasthe opportunity to benefit from the explo-ration and potential development of the
world-class Arctic deposit and dozens ofsimilar volcanogenic massive sulfideprospects located on NovaCopper’s90,624 acres (36 674 hectares) of state,federal and patented mining claims thatblanket a 70-mile (110 kilometers) longstretch Ambler Mining District.
“Both parties are contributingresources to create the opportunity to takea consolidated and cost-effectiveapproach to exploring and developing oneof the richest and most-prospective cop-per districts in the world,” explained VanNieuwenhuyse.
Grade is kingThe NovaCopper leader said the
exceptionally high-grade ore being foundat Upper Kobuk sets the project and itsowners apart.
“What is different about NovaCopperis grade; and, as they say in the business,grade is king,” he told investors duringthe Oct. 3 conference in New York.
Arctic, currently most advanceddeposit of the Upper Kobuk MineralProject, has an indicated resource of19.45 million metric tons averaging 4.05percent (1.73 billion pounds) copper, 5.8percent (2.49 billion pounds) zinc, 59.55grams per metric ton (37.23 millionounces) silver and 0.97 g/t (501,000ounces) gold. Additionally, the deposithas an inferred resource of 11.41 metrictons averaging 3.47 percent (873 millionpounds) copper, 4.84 percent (1.22 billionpounds) zinc, 46.75 g/t (17.15 millionounces) silver and 0.80 g/t (235,000ounces) gold.
In July, NovaCopper released an inau-gural NI 43-101-compliant resource of1.06 billion pounds of copper for theRuby Creek zone at Bornite. Thisresource includes an indicated resource of6.8 million metric tons averaging 1.19percent (178.7 million pounds) copperand an inferred resource of 47 millionmetric tons of 0.84 percent (883.2 millionpounds) copper.
Combined with Arctic, this escalatesthe resources of the Upper KobukMineral Project to 3.6 billion pounds ofcopper, 3.7 billion pounds of zinc, 54.3million ounces of silver, 736,000 ouncesof gold and 616 pounds of lead.
“This is an excellent start toNovaCopper’s life as a public company,”said Van Nieuwenhuyse. “One percentcopper grades in a potentially open-pitresource are rare occurrences these days,as is the addition of over a billion poundsof copper resources to an already robustinventory of 2 billion pounds of copperresources.”
Focused on South ReefSouth Reef, a deeper target at Bornite,
is demonstrating substantially higher cop-per grades than those tapped at the near-by Ruby Creek zone.
“Management believes that SouthReef has the potential to become anotherworld-class copper deposit, and that itcomplements very well our multi-billion-pound 7-percent-copper-equivalentendowment at the Arctic deposit. Thesedeposits are unfolding in a way thatmakes the Ambler district one of the mostexciting copper plays in the world,” saidVan Nieuwenhuyse.
South Reef was first tapped during a5,900-meter drill program carried out byNovaGold in 2011.
RC11-187, the South Reef discoveryhole, cut a continuous 178 meters averag-ing 4 percent copper, including 34.7meters at 12 percent copper.
South Reef – which is separated from
18NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
Fort KnoxFirst things firAt Fort Knox, our priorities are simple. Our people. Our community.Our environment.
Fairbanks Gold Mining Inc.A Kinross company
We invest in our people, so they are trained to do the best job possible.
We support our community with charitable donations, volunteer hours and local purchases.
We adhere to the toughest standards to protect water and air quality. These are our priorities.
Because at Fort Knox, it’s about putting first things first.
� A L A S K A
NovaCopper taps third world-class depositWith its sights set on adding to 3.6 billion pounds of copper at Arctic and Ruby Creek, explorer focuses drilling on South Reef
see NOVACOPPER page 19
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This is a section of core from RC11-187, a hole that cut 178 meters averaging 4 percent cop-per, including 34.7 meters averaging 12 percent copper at the South Reef zone of the UpperKobuk Mineral Project in Northwest Alaska.
Ruby Creek by a major northeast-trend-ing fault known as Iron Mountain – startsat about 300 meters below surface, mak-ing it substantially deeper than the 1-bil-lion-pound copper resource.
After losing several holes beforereaching this target depth, NovaGoldagain drilled the zone about 500 metersnorth of the discovery hole with RC11-194, which cut 110.6 meters of 2.6 per-cent copper.
NovaCopper’s 2012 drill program con-tinues to cut long sections of high-gradecopper at South Reef; highlights include:
•RC12-196 cut three mineralized inter-vals totaling 86.8 meters (within a totalinterval of 97.2 meters) averaging 1.5 per-cent copper, including a higher gradezone of 64.8 meters grading 1.7 percentcopper;
•RC12-198 cut four mineralized inter-vals totaling 84.7 meters (within a totalinterval of 103.4 meters) averaging 2 per-cent copper, including a higher gradezone of 8.5 meters grading 6.4 percentcopper;
•RC12-201 cut four mineralized inter-vals totaling 112.5 meters (within a totalinterval of 142 meters) averaging 2.4 per-cent copper, including a higher gradezone of 12.6 meters grading 9.5 percentcopper;
•RC12-202 cut three mineralized inter-vals totaling 50.1 meters (within a totalinterval of 57.4 meters) averaging 3 per-cent copper, including a higher gradezone of 7.8 meters grading 12 percentcopper;
•RC12-205 cut 46.8 meters averaging1.58 percent copper; and
A cut-off grade of 0.5 percent copperwas used to calculate all of the results.
“All of the holes have demonstratedthe continuity of the high-grade coppermineralization that comes within analready robust and broad +1 percent cop-per envelope,” said Van Nieuwenhuyse.
Increasing the cutoff grade to 1 percentreveals a promising high-grade region ofSouth Reef NovaCopper is eager to fol-low-up on.
“The 71 meters of 3.66 percent in drillhole RC12-209 along the northeast edgeof the deposit is a particularly excitingresult given that it supports our hypothe-ses that the northeast portion of the SouthReef Zone hosts the longest intervals ofhigh-grade copper mineralization. As wemove our drilling to the north and north-east, we will continue to target this high-grade copper mineralization along strike,”explains Van Nieuwenhuyse.
During the 2012 program,NovaCopper drilled 15,457 meters in 22holes at the South Reef. This and the 2011drilling will be incorporated into an inau-gural resource for the zone, expected inthe first quarter of 2013.
Next generation targetsWhile drills are delineating a high-
grade copper resource at South Reef,NovaCopper is seeking the next genera-tion of exploration targets with the poten-
tial to add to the portfolio of world-classcopper deposits being accumulated at theUpper Kobuk Mineral Project.
“Our objective is to outline 10 billion
19NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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NovaCopper’s camp rests alongside the headframe that Kennecott used to explore the Ruby Creek zone at the Bornite copper project in Northwest Alaska nearly half a century ago.
For a junior who lost a substantialfunding partner, BHP Billiton
Canada Inc., at the onset of the recentdownturn in the financial markets,Peregrine Diamonds Ltd. hardly brokestride in exploration momentum in 2012.
The aggressive explorer not onlyforged ahead with a substantial programat its highly prospective Chidliak dia-mond project on Baffin Island inNunavut, it also made significantprogress in identifying new kimberlites atits Lac De Gras projects in NorthwestTerritories.
Further icing its cake, Peregrine suc-cessfully wooed another potential fundingpartner in De Beers Canada Inc., a movethat will fuel the junior’s push to advanceexploration at Chidliak and provide flexi-bility for additional exploration on itsother properties.
“De Beers has already completed tech-nical due diligence on Chidliak and thecurrent focus is on developing the strate-gy to advance the project,” PeregrineCEO Eric Friedland said recently. “Theagreed material terms of the joint ventureprovide a clear financial and technicalpath that could lead to successfully prov-ing up, financing, building and operatinga diamond mine in Canada’s North. Weare pleased to welcome De Beers as ournew partner along with their 124 years ofunrivaled diamond exploration, develop-ment, mining and marketing experience.”
De Beers Canada CEO Tony Guthriesaid, “We see Chidliak as an excitingprospect and complementary to our exist-ing pipeline of diamond operations and
projects, which are the most comprehen-sive in Canada. With 50 years of experi-ence in Canada, we look forward to bring-ing to bear our extensive knowledge ofdiamond exploration and mining as wework with Peregrine’s professional andexperienced management team.”
Billiton pulls out of ChidliakThe opportunity for De Beers arose
when BHP Billiton sold its 51 percentinterest in the 8,580-square-kilometer(3,312 square miles) Chidliak project to
Peregrine in December 2011 in a deal thatgave the junior 100 percent ownership ofthe Nunavut property. Under the terms ofthe transaction, Peregrine will pay C$9million in four installments over threeyears, and grant BHP Billiton a 2 percentroyalty on any future mineral productionfrom Chidliak.
BHP Billiton also agreed to extinguishPeregrine’s royalty obligations and itsown diamond marketing rights on certainCanadian mineral properties includingthe Nanuq property in Nunavut and the
TW, WO and Lac de Gras East and PellattLake properties in the NorthwestTerritories. The transaction closed inJanuary.
Peregrine then undertook a compre-hensive analysis of its 2012 program anddecided to put on hold a 2012 bulk sam-pling program at Chidliak until it deter-mined how best to move forward.
Lac De Gras programIn March, Peregrine commenced a
C$1.5 million diamond exploration pro-gram in the Lac de Gras region of theNorthwest Territories, planning to con-duct ground magnetic and electromagnet-ic geophysical surveys over 15 anomaliesand to test additional priority drill targetsdefined by the surveys.
Lac de Gras is one of the most prolificdiamond districts in the world, hosting theDiavik and EKATI diamond mines aswell as De Beers and Mountain ProvinceDiamond’s Kennady Lake joint venturemine project (Gahcho Kue deposit) that iscurrently undergoing environmentalimpact review and could provide as many
20NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
� N O R T H W E S T T E R R I T O R I E S & N U N A V U T
Peregrine exploration kept pace in 2012Junior discovers kimberlites in two territories; loses, gains major funding partners in advancing diamondiferous Chidliak project
as 49 million carats in diamonds over itslifetime. De Beers Snap Lake DiamondMine is also nearby.
The Lac de Gras projects consist of51,000 hectares (126,021 acres) of claimsowned entirely by Peregrine, 36,400hectares (89,944 acres) of claims heldjointly with Thelon Capital Ltd. (66.2 per-cent Peregrine, 33.8 percent Thelon) andthe 15,107-hectare (37,329 acres) WOJoint Venture (Peregrine 71.9 percent,Archon Minerals Ltd. 17.5 percent andDHK Diamonds Inc. 10.6 percent).Peregrine holds 97.92 percent of the dia-mond marketing rights for the WO JointVenture. The junior also holds a 71.9percent interest in the nine-hectare (22.24acres) DO-27 kimberlite, estimated tohost an 18.2-million-carat resource that isopen at depth.
Though DO-27 could not support amining operation in 2007 when itsresource was calculated, Peregrine hassaid there is a reasonable chance that thekimberlite could one day support a min-ing operation.
Discovery of a new kimberlite witheconomic potential at the Lac de Grasprojects could significantly enhance thevalue of the DO-27 resource, along withfavorable changes in other factors such asdiamond prices, Canadian-US currencyexchange rates, a processing arrangementwith one of the nearby diamond mines,advances in mining and processing tech-nology and regional infrastructure devel-opments.
Of the eight geophysical targets withassociated kimberlite indicator mineralsthat the company prepared for 2012exploration, drilling at the first three iden-tified new kimberlites.
In April Peregrine reported discoveryof the LD-1, LD-2 and LD-3 kimberlites,each measuring about one-hectare (2.47acres) at the surface. LD-1 is a texturallyvariable crater-facies volcaniclastic kim-berlite that contains chrome diopside, gar-net and coarse olivine. LD-2 is a black,re-sedimented volcaniclastic kimberlitewith about 5 percent country rock xeno-liths and contains coarse olivine and gar-net. LD-3 is a dark green to black vol-caniclastic kimberlite with abundantcoarse olivine, garnet and chrome diop-side.
A fourth target was drilled withoutintersecting kimberlite, and planneddrilling of a fifth target was not initiatedbased on the drilling results from thefourth target, the junior said.
“We drilled four targets and discoveredthree kimberlites, an excellent successrate for our world-class explorationteam,” said Peregrine President BrookeClements. “The close proximity of thesekimberlites to the Diavik Diamond Mineand to our DO-27 diamond deposit willbe important if they are proven to haveeconomic potential.”
Bright prospectsAt Chidliak, Peregrine completed its
2012 exploration program in August,reportedly spending about C$7 million ofits planned C$10.5 million budget on def-inition core drilling at the CH-1, CH-6,CH-7 and CH-44 kimberlites in prepara-tion for a planned collection of bulk sam-ples from key kimberlites in 2013,prospecting of priority geophysical andindicator mineral anomalies and helicop-ter-portable reverse circulation drilling ofhigh-priority kimberlite targets.
One new kimberlite, CH-60, was dis-covered during the season by follow-upprospecting. It is defined by a magnetic
anomaly with an estimated surfaceexpression of 0.3 hectares (0.74 acre). Inaddition, four new and separate occur-rences of kimberlite pebbles and cobblesor kimberlite float have been found sug-gesting the presence of yet to be discov-ered kimberlite bodies nearby. “Wemade our first kimberlite discovery atChidliak in July 2008, and it is gratifyingthat after four years of intensive explo-ration, we still continue to find new kim-berlites and kimberlite float. This speaksto the tremendous exploration potential ofthis exceptional diamond project,”Clements said. More than 5,500 line-kilometers of ground geophysical surveyswere completed during the 2012 winterexploration program. More than 40 geo-physical anomalies and 20 target areashosting kimberlite indicator mineralanomalies are scheduled for follow-up byprospecting, mapping and ground mag-netic surveying this summer. Peregrineplanned to drill high-priority targets witha helicopter-portable RC drill rig begin-ning in August. In July, 20 geophysicalanomalies were considered drill-ready. Collection of some 400 indicatormineral samples and continuation of envi-ronmental baseline surveys also wasscheduled.
New partner in De BeersIn October, De Beers Canada Inc.
signed an earn-in and joint venture agree-ment with Peregrine that gives the majoran option to earn a 50.1 percent interest inthe Chidliak project. De Beers completeda C$2.5 million private placement unitoffering in Peregrine priced at C75 centsper unit, and agreed to make a C$2.5 mil-lion payment, due Jan. 31, to BHPBilliton that is required under Peregrine’sagreement to purchase that company’s 51percent participating interest in theChidliak project. Both the private place-ment and the January payment will becredited towards De Beers’ earn-inrequirements for Chidliak.
“Within 24 hours of signing the option,De Beers had a five-member team of sen-ior people visiting Chidliak, Iqaluit andPagnirtung, a sign of their commitment tothe project,” said Peregrine ExecutiveVice President, Business DevelopmentTom Peregoodoff. “Our respective techni-cal teams are engaged, and planning forfuture programs is underway. Under thepotential joint venture, we will ensure thatthe design and execution of all work pro-
grams take full advantage of the extensivediamond experience De Beers brings tothe partnership and Peregrine’s manyyears of successful diamond explorationin Canada.”
If De Beers exercises the option,Peregrine and De Beers will investC$58.5 million in the project with a min-imum work commitment of C$37 millionand finance all work at Chidliak fromwhen it enters into the JV until the com-pletion of a bankable feasibility study,inclusive of appropriate environmental
impact studies necessary for evaluatingthe feasibility of commercial diamondproduction.
Assuming timely delivery of the BFS,Peregrine will reimburse De Beers 49.9percent of all agreed upon Chidliak costsin excess of C$58.5 million to completionof the BFS.
Should De Beers decide to exit the JVprior to completion of the BFS, the twocompanies agreed upon terms for
21NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
Kinross Fort Knox/Fairbanks Gold Mining Inc.Fairbanks, AK 99707Contact: Lorna Shaw, Government and CommunityRelations ManagerPhone: (907) 490-2218 Fax: (907) 490-2250E-mail: [email protected]: www.kinross.comLocated 25 miles northeast of Fairbanks, Fort Knox isAlaska’s largest producing gold mine; during 2011,Fort Knox achieved 5 million ounces of gold pro-duced, a modern record in Alaska mining.
Kiska MetalsSuite 575 – 510 Burrard StreetVancouver, BC, Canada V6C 3A8Contact: Jason Weber: President and CEOContact: Dustin Henderson: Investor RelationsPhone: (604) 669-6660Fax: (604) 669-0898Email: [email protected]: www.kiskametals.comGold and Copper projects in Alaska, BC, andAustralia.
Usibelli Coal MineFairbanks, AK 99701Contact: Bill Brophy, VP Customer RelationsPhone: (907) 452-2625Fax: (907) 451-6543Email: [email protected]: www.usibelli.comOther OfficePO Box 1000Healy, AK 99743Phone: (907) 683-2226Usibelli Coal Mine is headquartered in Healy, Alaskaand has 700 million tons of coal reserves. UCM pro-duces an average of 2 million tons of sub-bituminouscoal each year.
Service, Supply & Equipment
Air LiquideAnchorage, AK 99518Contact: Brian BensonPhone: (907) 273-9762 • Fax: (907) 561-8364Email: [email protected] Liquide sells, rents, and is the warranty station forLincoln, Miller, Milwaukee, Victor and most other
welding equipment and tool manufacturers.
Alaska Air Cargo • Horizon Air CargoP.O. Box 68900 SEAFZSeattle, WA 98168Contact: Joe Sprague, Vice President of CargoPhone: (206) 392-2705 or 800-2ALASKAFax: (206) 392-2641E-mail: [email protected]: www.alaskacargo.comAward winning cargo services to more places, moreoften, with more lift to, from, and within the state ofAlaska.
Alaska Analytical Laboratory1956 Richardson HighwayNorth Pole, AK 99705Phone: (907) 488-1266 • Fax: (907) 488-077E-mail: [email protected] analytical soil testing for GRO, DRO,RRO, and UTEX. Field screening and phase 1 and 2site assessments also available.
Alaska Earth SciencesAnchorage, AK 99515Contact: Bill Ellis, Rob Retherford, ownersPhone: (907) 522-4664 • Fax: (907) 349-3557E-mail: [email protected] full service exploration group that applies earth sci-ences for the mining and petroleum industries provid-ing prospect generation, evaluation and valuation,exploration concepts, project management, geo-graphic information systems and data management.We also provide camp support and logistics, geologic,geochemical and geophysical surveys.
Alaska Frontier ConstructorsP.O. Box 224889Anchorage, AK 99522-4889Contact: John Ellsworth or Chris LedgerwoodPhone: (907) 562-5303Fax: (907) 562-5309E-mail: [email protected]: akfrontier.comAlaskan heavy civil construction company specializingin Arctic and remote site development with the expe-rience, equipment and personnel to safely and effi-ciently complete your project.
Alaska Interstate Construction (AIC)301 W. Northern Lights Blvd., Suite 600Anchorage, AK 99503Contact: Fred Hargrave
Phone: (907) 562-2792 • Fax: (907) 562-4179Email: [email protected]: www.aicllc.comAIC provides cost-effective solutions to resourcedevelopment industries. We provide innovative ideasto meet each requirement through the provision ofbest-in-class people and equipment coupled withexceptional performance.
Alaska Steel Co.1200 W. DowlingAnchorage, AK 99518Contact: Joe Pavlas, outside sales managerPhone: (907) 561-1188Toll free: (800) 770-0969 (AK only)Fax: (907) 561-2935E-mail: [email protected] Fairbanks Office:2800 South CushmanContact: Dan Socha, branch mgr.Phone: (907) 456-2719 • Fax: (907) 451-0449Kenai Office:205 Trading Bay Rd.Contact: Will Bolz, branch mgr.Phone: (907) 283-3880 • Fax: (907) 283-3759Rebar Division1200 W. DowlingAnchorage, AK 99518Contact: Mike Galyon, rebar mgr.Phone: (907) 561-1188 • Fax: (907) 562-7518Full-line steel, aluminum, and rebar distributor.Complete processing capabilities, statewide service.Specializing in low temperature steel and wear plate.
Arctic FoundationsAnchorage, AK 99518-1667Contact: Ed YarmakPhone: (907) 562-2741 • Fax: (907) 562-0153Email: [email protected]: www.arcticfoundations.comSoil stabilization – frozen barrier and frozen core damsto control hazardous waste and water movement.Foundations – maintain permafrost for durable highcapacity foundations.
Companies involved in Alaska andnorthwestern Canada’s mining industry
D I R E C T O R Y
The Red Dog mine in northwest Alaska.
23NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
Geological, geophysical and exploration support servic-es.
Austin Powder CompanyP.O. Box 8236Ketchikan, AK 99901Contact: Tony Barajas, Alaska managerPhone: (907) 225-8236 • Fax: (907) 225-8237E-mail: [email protected] site: www.austinpowder.comIn business since 1833, Austin Powder providesstatewide prepackaged and onsite manufactured explo-sives and drilling supplies with a commitment to safetyand unmatched customer service.
Calista Corp.301 Calista Court, Suite AAnchorage, AK 99518Phone: (907) 279-5516 • Fax: (907) 272-5060Web site: www.calistacorp.com
Chiulista Services Inc.6613 Brayton Dr., Ste. CContact: Joe Obrochta, presidentContact: Monique Henriksen, VPPhone: (907) 278-2208 Fax: (907) 677-7261Email: [email protected] 100 percent Alaska Native owned and operatedcatering company at the Donlin Creek Prospect andwith North Slope experience, catering and housekeep-ing to your tastes, not ours; providing operations andcamp maintenance.
Construction Machinery Industrial, LLC5400 Homer DriveAnchorage, AK 99518Contact: Robert Fairbanks, Sales ManagerPhone: (907) 563-3822Fax: (907) 563-1381Email: [email protected]: www.cmiak.com
ERA Helicopter6160 Carl Brady DriveAnchorage, AK 99502Contact: David Sell, Business Development AlaskaPhone: (907) 550-8607Fax: (907) 550-8608E-mail: [email protected]: www.erahelicopters.comHelicopter charters, flight-seeing tours, aerial photogra-phy, oil and gas support, mineral exploration, construc-tion, seismic remote site work, internal and externalload, heli-hiking and sled-dog adventures.
Everts Air Cargo6111 Lockheed AvenueAnchorage, AK 99502Phone: (907) 249-4317Fax: (907) 248-0458Contact: Paul Abad, Sales ManagerE-mail: [email protected]: www.evertsair.comAn Alaskan owned and operated air carrier that pro-vides scheduled freight service to 12 bush communities& charter service to anywhere in Alaska with suitablerunway conditions. Passenger Charters, HAZMAT, bulkfuel, small package, oversized. Based in Anchorage &Fairbanks.
GCI Industrial TelecomAnchorage:11260 Old Seward Highway Ste. 105Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528Toll free: (877) 411-1484Web site: www.GCI-IndustrialTelecom.comRick Hansen, [email protected] Johnson, Business Development [email protected]:Aurora Hotel #205Deadhorse, Alaska 99734Phone: (907) 771-1090Mike Stanford, Senior Manager North [email protected], Texas:8588 Katy Freeway, Suite 226Houston, Texas 77024Phone: (713) 589-4456Hillary McIntosh, Account [email protected] Industrial Telecom provides innovative solutions tothe most complex communication issues facing industri-al clientele. We deliver competitive services, reputableexpertise and safely operate under the most severeworking conditions for the oil, gas and natural resourceindustries. GCI-your best choice for full life cycle, expert,proven, industrial communications.
HDR Alaska Inc. 2525 C St., Ste 305Anchorage, AK 99503Contact: Jaci Mellott, Marketing CoordinatorPhone: (907) 644-2091
Fax: (907) 644-2022Email: [email protected]: www.hdrinc.comHDR Alaska provides engineering, environmental, plan-ning, and consultation services for mining and mineralexploration clients. Services include: biological studies;cultural resources; project permitting; NEPA; stakehold-er outreach; agency consultation; and environmental,civil, transportation, energy, and heavy structural engi-neering.
Jackovich Industrial & Construction SupplyFairbanks, AK 99707Contact: Buz JackovichPhone: (907) 456-4414 • Fax: (907) 452-4846Anchorage officePhone: (907) 277-1406 • Fax: (907) 258-170024- hour emergency service. With 30 years of experi-ence, we’re experts on arctic conditions and extremeweather.
Judy Patrick Photography511 W. 41st Ave, Suite 101Anchorage, AK 99503Contact: Judy PatrickPhone: (907) 258-4704Fax: (907) 258-4706E-mail: [email protected]: www.judypatrickphotography.comCreative images for the resource development industry.
Last Frontier Air Ventures39901 N. Glenn Hwy. Sutton, AK 99674Contact: Dave King, ownerPhone: (907) 745-5701Fax: (907) 745-5711E-mail: [email protected] Base (907) 272-8300Web site: www.LFAV.comHelicopter support statewide for mineral exploration,survey research and development, slung cargo,video/film projects, telecom support, tours, crew trans-port, heli skiing. Short and long term contracts.
LyndenAlaska Marine Lines • Alaska Railbelt MarineAlaska West Express • Lynden Air CargoLynden Air Freight • Lynden InternationalLynden Logistics • Lynden TransportAnchorage, AK 99502Contact: Jeanine St. JohnPhone: (907) 245-1544 • Fax: (907) 245-1744Email: [email protected] combined scope of the Lynden companies includestruckload and less-than-truckload highway connections,scheduled barges, intermodal bulk chemical hauls,scheduled and chartered air freighters, domestic andinternational air forwarding and international sea for-
warding services.
MRO SalesAnchorage, AK 99518Contact: Don PowellPhone: (907) 248-8808 • Fax: (907) 248-8878Email: [email protected]: www.mrosalesinc.comMRO Sales offers products and services that can helpsolve the time problem on hard to find items.
Northern Air Cargo3900 W. International Airport Rd. Anchorage, AK 99502Contact: Mark Liland, acct. mgr. Anch./Prudhoe BayPhone: (907) 249-5149 • Fax: (907) 249-5194Email: [email protected] • Website: www.nac.aeroServing the aviation needs of rural Alaska for almost 50years, NAC is the states largest all cargo carrier movingnearly 100 million pounds of cargo on scheduled flightsto 17 of Alaska’s busiest airports. NAC’s fleet of DC-6, B-727, and ATR-42 aircraft are available for charters toremote sites and flag stops to 44 additional communi-ties.
Pacific Rim Geological ConsultingFairbanks, AK 99708Contact: Thomas Bundtzen, presidentPhone: (907) 458-8951Fax: (907) 458-8511Email: [email protected] mapping, metallic minerals exploration andindustrial minerals analysis or assessment.
PND Engineers Inc.1506 W. 36th Ave. Anchorage, AK 99503Phone: (907) 561-1011Fax: (907) 563-4220Website: www.pndengineers.comFull-service engineering firm providing civil, structural,and geotechnical engineering, including mining sup-port, resource development, permitting, marine andcoastal engineering, transportation engineering,hydrology, site remediation, and project management.
TTT Environmental LLC 4201 “B” St.Anchorage, AK 99503Contact: Tom Tompkins, general managerPhone: 907-770-9041 • Fax: 907-770-9046Email: [email protected]: www.tttenviro.comAlaska’s preferred source for instrument rentals, sales,service and supplies. We supply equipment for air mon-itoring, water sampling, field screening, PPE and more.
Taiga Ventures2700 S. CushmanFairbanks, AK 99701Mike Tolbert - presidentPhone: 907-452-6631 • Fax: 907-451-8632Other offices:Airport Business Park2000 W. International Airport Rd, #D-2Anchorage, AK 99502Phone: 907-245-3123Email: [email protected] site: www.taigaventures.comRemote site logistics firm specializing in turnkeyportable shelter camps – all seasons.
Total Safety U.S. Inc.209 E. 51st Ave.Anchorage, AK 99503Contact: Tyler Zollinger, District Manager.Phone: (907) 743-9871Fax: (907) 743-9872E-mail: [email protected]: www.totalsafety.comA full service safety company specializing in RemoteMedical Services, H2S Services, Industrial Hygiene, andSafety Consultants. Total Safety provides Service, Rental,or Sales of Safe Breathing Air, Gas Detection, andTechnical Safety Equipment.
URS Corp.700 G Street, Suite 500Anchorage, AK 99501Contact: Joe Hegna, Alaska Vice President/AlaskaOperations ManagerPhone: (907) 562-3366 • Fax: (907) 562-1297E-mail: [email protected]: www.urscorp.comProvide engineering, construction and technical serviceswith capabilities to support all stages of project lifecycle. We offer a full range of program management;planning, design and engineering; construction andconstruction management; operations and mainte-nance; and decommissioning and closure services.
For the dozens of companies thatrushed to stake claims in the
Nechako Plateau of central BritishColumbia three years ago, the area nowknown as the Blackwater Gold District isshaping up to be a better-than-averagebet.
But a series of bold acquisitions byNew Gold Inc. in 2011 has placed themid-tier gold producer solidly in the dri-ver’s seat in one of Canada’s largest mod-ern gold exploration plays. Located about
160 kilometers (99 miles) south-west ofPrince George in central BritishColumbia, the Blackwater Project areahas been actively explored since the dis-covery of anomalous concentrations ofsilver, lead, and zinc in silt samples takenfrom streams draining the Mt. Davidsonarea in 1973 by Granges Inc. Historicwork includes soil geochemistry, geo-physics and reverse circulation and dia-mond drilling.
Richfield Ventures Corp. initiated itsBlackwater Gold Project after recogniz-ing the bulk gold potential of the area.Richfield optioned the Davidson and
Dave claims in March 2009 from SilverQuest Resources Ltd. and the Rozek fam-ily, respectively. Six months later, the jun-ior ignited a staking rush on the NechakoPlateau when it reported a drill intersec-tion of 207 meters of 1.06 grams per met-ric ton gold and 5 g/t silver. Throughout2010 and into 2011, Richfield continuedto announce similar long intersections ofbetter than 1 g/t gold and expanded thedeposit considerably.
New Gold sweeps inIn March 2011 Richfield reported an
initial mineral resource estimate for theBlackwater project, of about 4 millionounces based on 25,263 meters of drillingin 77 holes. At little over a month later,New Gold entered the picture, offering toacquire Richfield in a deal valued atC$550 million. Six months after that,New Gold grabbed a larger portion of theBlackwater Gold Camp by acquiringSilver Quest Resources for C$131 millionand Geo Minerals Ltd. for C$14.5 mil-lion. In the process, New Gold alsogained ownership of Silver Quest’sCapoose Property, located 25 kilometers(16 miles) southwest of Blackwater.
In 2012, New Gold has continued veryaggressive exploration of the 1,000-square-kilometer (386 square miles) landpackage it now controls at Blackwater,launching a remarkable 18 rigs in a C$50million program targeting 250,000 metersof drilling for the year. In September thecompany updated its mineral resource forthe Blackwater Gold Deposit – the sec-
ond update this year – in conjunction withreleasing a preliminary economic assess-ment that envisions a 500,000-ounce-per-year mining operation for the project asearly as 2017.
The current resource estimate forBlackwater, based on drilling throughMay 12, at a cut-off grade of 0.30 g/tgold-equivalent, is 267.2 million metrictons grading 0.88 g/t gold and 4.3 g/t sil-ver (indicated), for 7.52 million ounces ofgold and 36.9 million ounces of silver,and 121 million metric tons grading 0.69g/t gold and 7.3 g/t silver (inferred), for2.66 million ounces of gold and 28.3 mil-lion ounces of silver.
The Blackwater deposit is still open inall directions and at depth.
“Our drilling is remarkably aggressivethis year ... we’re going to drill about 250kilometers of drilling,” New GoldExecutive Chairman Randall Oliphanttold an audience at the Bank of AmericaMerrill Lynch 18th Annual CanadaMining Conference Sept. 7. “I read some-where that this could be the most exten-sive drilling program going on in miningright now, but we’re both trying toupgrade our resource and also expand thesize of it,” he added.
Oliphant said New Gold will updatethe mineral resource at Blackwater, which“is emerging as the flagship” of the com-pany, again by year’s end to reflect resultsof nearly 150,000 meters of drilling sinceMay.
Busy exploration districtOwners of properties that surround
Blackwater, meanwhile, are working toadvance their respective projects throughexploration, joint ventures and/or options.This crowd of mostly juniors includes atleast one major, Kinross Gold Corp.,which controls the 107.5-square-kilome-ter (41.5 square miles) KnewstubbProperty directly east of the NatalkuzLake-Knewstubb Lake system and about10 kilometers (six miles) northeast of theBlackwater project.
Juniors reporting exploration plans orsignificant progress in 2012 includeAmarc Resources Ltd, Copper CreekGold Corp. and Stina Resources Ltd.,Driven Capital Corp., Parlane ResourceCorp., RJK Explorations Ltd. andStoneShield Capital Ltd. and SeaborneMinerals Inc., and Troymet ExplorationCorp.
Exploring GalileoIn June, Amarc Resources reported the
start of mapping and sampling over fiveextensive, sulphide mineralized systemsdefined in 2011 by induced polarizationground geophysical surveys at its 990-square-kilometer (382 square miles)Galileo Project located about 16 kilome-ters (10 miles) west of Blackwater. Amarcsaid intended to prioritize the targets fordrilling.
The junior also said it had receivedresults of 4,000 line kilometers of heli-copter-borne magnetic and electromag-netic geophysical surveys flown in 2011over its expanded claim position in theBlackwater region that identified furtherdeposit-scale targets for ground follow-up. In addition Amarc recently completed600 line kilometers of helicopter-borne,magnetic geophysical surveys over new
� B R I T I S H C O L U M B I A
New district slowly yields its secretsCompanies seeking gold, other minerals near the Blackwater gold deposit could see a substantial payday as exploration play matures
24NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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Fairbanks: 907-452-1181 • Anchorage: 907-243-2545
see BLACKWATER page 25
4710 Business Park Blvd., Suite F-40 Anchorage, Alaska 99503
mineral claims that it has added to theGalileo land package, from which a num-ber of encouraging deposit-scale targetshave been identified for field evaluationin 2012.
Drilling BanditCopper Creek Gold Oct. 3 reported
completing a 15-hole, 1,400-meter per-cussion drilling program over part of a 2-kilometer-by-5-kilometer (1 mile by 3miles) copper, gold and molybdenumanomaly identified in 2011 on its Banditcopper-silver-gold-molybdenum propertyadjacent to the Blackwater project. StinaResources funded the C$250,000-
C$275,000 exploration program on theBandit property under an 2012 optionagreement in which the junior must incurC$2 million in exploration spending overa four-year period and issue 400,000common shares to Copper Creek over athree-year period to earn a 60 percentinterest in the property. Copper Creek isthe designated operator of the project thisexploration season.
“To date, drilling has provided prelim-inary information needed to form anunderstanding of the basic geology of theproperty as well as to gain an understand-ing of this mineralizing system. Thisinformation will allow us to more effec-tively target other untested zones in futureexploration programs,” said KristianWhitehead, vice president, exploration for
Copper Creek.
Sleuthing Blackwater EastIn September, Driven Capital posted
preliminary results from the geophysicalprogram conducted this summer on itsoptioned Blackwater East project. Thirtyline kilometers of ground induced-polar-ization and magnetic surveying was com-pleted over the southeastern portion of theproperty, an area identified as prospectivefrom previously completed soil geochem-ical surveying and prospecting which wasintegrated with public domain regionalgeological mapping and airborne magnet-ics. Several well-defined IP anomaliestrend northerly and northwesterly andoccur adjacent to a major regional linea-ment believed to be a fault structure. The
main north-south anomaly, which hasbeen traced for over 1,800 meters,appears to be located near the westernboundary of a felsic volcanic sequencewhich shows variable sericitic alterationalong with local zones of phyllic (quartz-sericite-pyrite) alteration. Additionally,this area is underlain by a deep magneticfeature about two kilometers (1.24 miles)in diameter, which may represent a buriedintrusive that could be the source of thealteration fluids and anomalous zinc, lead,silver, gold and copper values identifiedby the company’s soil sampling in 2011.
The coincidence of anomalous metalsin soils, major fault structures, felsic vol-canic host rocks, IP chargeability zonespossibly indicative of sulphides, and low
25 NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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resistivity zones possibly indicative ofclay alteration all located adjacent to aninterpreted intrusive body are consideredindications of the possible occurrence ofintrusive-related gold and/or base metalmineralization. Driven said it intends totest these areas with a first-phase drillprogram, the permit for which has beenawarded by the B.C. Ministry of Mines.
Drilling Big BearParlane Resource Corp. Oct. 9 said it
will begin a drill program at its 14,366-hectare (35,498 acres) Big Bear propertyon the Nechako Plateau. Big Bear is situ-ated between two mineralized systems:New Gold’s Blackwater and Capooseproperties. Field work during 2011 and2012 identified five target areas that willbe drill-tested this fall. The drill sites areeasily accessed by a dense logging roadnetwork, and it is anticipated that theplanned 2,000 meters of core drilling willbe completed before the end of November.The Big Bear property is located in theOmineca Mining Division in central
British Columbia, about 100 kilometers(62 miles) south of Vanderhoof, B.C.
Hunting in northeast, westIn September RJK Explorations Ltd.
resumed drilling at its high-grade silverdiscovery on the Blackwater Northeastproperty adjacent to the Blackwater Golddeposit to the east. The junior’s silver dis-covery in June was a high-grade intersec-tion of 3.3 meters averaging 2,710 g/t sil-ver (10.8 feet of 79.04 ounces per ton sil-ver) with true widths unknown.
Since then, the results of detailedground magnetic surveying, drill-holeinterpretation and MMI soils suggest anorthwesterly striking, steeply to vertical-ly dipping contact between the felsic vol-canics and sediments. The MMI soil sam-pling also indicates a weak silver anomalyin deep overburden along this contact overa tested strike length of about 600 meters.
The latest drilling will consist of aseries of angled holes starting from thediscovery hole to test this contact.
At its Blackwater West property, RJKExplorations said about 18.5 kilometers(11.5 miles) of phase-domain inducedpolarization surveying and MMI soil sam-pling was recently completed over four
grids. Interpretation by the company’sconsulting geophysicist indicates thatthere is a significant volume of potentialsulphide mineralization on all four grids,particularly on Grid 4 located at the south-ern part of the property.
On Grid 4, a resistive and chargeablecorridor that contains a 350 meter-widenorth-south by 600 meter-long openended anomaly has been outlined. MMIsoil sampling results also indicate a zinc,silver and erratic gold anomaly here. It isbelieved that the geophysical anomalylocated on Grid 4 may be an extension ofthe mineralization located on the 3TsProperty, located 3 kilometers (2 miles) tothe south where Independence Gold Corp.has reported an inferred resource of394,383 ounces gold and more than 9.89million ounces silver.
All of the anomalies on BlackwaterWest are open to expansion by furthergeophysical work, and RJK said it antici-pates drill testing these highly potentialareas following the completion of drillingon Blackwater Northeast.
Tracing metals at GeldenhoofStoneShield Capital Corp. reported
exploration plans in June for the 2,613-
hectare (6,457 acres) Geldenhoof proper-ty that it optioned from SeaborneMinerals Inc. in January 2011. The prop-erty is comprised of two mineral claimslocated 4 kilometers (2.5 miles) east of theBlackwater project.
StoneShield geologists recommended atwo-phase exploration program atGeldenhoof, with phase 1 following upwork on the anomalous zones of silver,zinc, copper and gold discovered by thecompany in 2011 soil sampling on thewestern half of the property. The promi-nent northwest trending fabric within thesoil geochemistry is compelling in that itcorresponds to the margin of a two-square-kilometer (0.77 square mile) mag-netic high (likely a buried intrusive body)and suggests a strong structural control tomineralization in the area. Follow-upexploration will include geologicprospecting, rock sampling and streamsediment sampling by a team of two geol-ogists.
Phase 2 would consist of an inducedpolarization survey to establish drill tar-gets to test for precious and base metalmineralization at depth.
StoneShield said it is using the adja-cent Blackwater discovery as an explo-ration model for its tenures and is veryencouraged by its preliminary find-ings. The geology at Geldenhoof is similarto that found in the Blackwater area.Mesozoic to Cenozoic volcanic host-rocksare locally brecciated and silicified andcontain bodies of rhyolite of possibleintrusive origin.
Searching the “Key”Troymet Oct. 4 said it contracted
Northspan Explorations Ltd.to conductreverse circulation drill testing of gold tar-gets on its 8,854-hectare (21,878 acres)Key gold project located immediately adja-cent to the Blackwater gold deposit.Drilling was scheduled to begin on Oct. 10and Troymet planned to drill about 1,200meters to test 12 target areas. In 2011,Troymet identified a large hydrothermalsystem with high sulphide content andlocally anomalous silver, gold, zinc andcopper values at Good News Lake, andalong the Good News Lake and East Faults.The junior said this large and deeply rootedplumbing system extends over several kilo-meters and is intimately associated with themajority of the target areas selected for drilltesting. Its large size together with the largenumber of associated target areas indicatessignificant discovery potential in this partof the Key project.
Hungry for answersNew Gold has indicated that its appetite
for growth in the Blackwater district is asstrong as ever.
Oliphant told investors in Septemberthat New Gold’s geologists have yet tounravel the geological mysteries of theBlackwater deposit.
“It’s not a well understood area. … Wehave the Capoose property that’s 25 kilo-meters away. That’s already 800,000 ouncesof gold and 56 million ounces of silver.These deposits never seem to statisticallyhappen in isolation, where you have a 10-million-ounce deposit, and nothing elsearound, whether it’s a 2- or 4-million or 5-million-ounce deposit as well,” he said.
“So what we’ve done is we’ve worked totry and increase our land position, andwe’re now up to about 1,000 square kilo-meters, because frankly the geologists don’tknow what the source was of all this gold.We want to control everything in the areafrom the perspective of dealing with FirstNations, of having complete flexibility ofwhere we put tailing stands, waste, dumps,not having to lay that on other people’sground, Oliphant added. �
26NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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To this end, 1,752 meters (four holes)of the 2012 program tested Sunshine, aVMS prospect about 12 kilometers (7.5miles) west of the Arctic deposit.NovaCopper said historic drilling atSunshine has identified substantial widthsof massive sulfide mineralization in thesame stratigraphic horizon as Arctic.
NovaCopper plans to release an inau-gural NI 43-101-compliant resource forSunshine in the second quarter of 2013.
“Sunshine is not too far from Arctic,and there are some obvious synergiesthere. But there are literally a dozen otheridentified massive sulfide targets in thebelt,” Van Nieuwenhuyse said.
The Ambler VMS belt is not the onlyregion with prospects; the roughly 11-mile (18 kilometers) belt of prospectivestratigraphy hosting the Ruby Creek andSouth Reef carbonate replacementdeposits is also rich in exploration targets.
Two known mineralized occurrenceswest of Bornite – Aurora Mountain andPardner Hill – along with broad areas ofhydrothermal dolomite and anomaloussoil geochemistry occur along the belt.
To gain a better handle on the controlsto mineralization and generate new drilltargets here, NovaCopper carried out aninitial 60 line-kilometer induced polariza-tion survey, 25 line-kilometer soil sam-pling program and geologic mapping.This work will help the company priori-tize targets for a larger drill program onthe docket for 2013.
“We had four rigs this year, we willlikely have six next year,” Van
Nieuwenhuyse said.
Developing the districtThough primarily focused on explo-
ration, NovaCopper’s US$16.5-millionprogram at the Upper Kobuk Mineralproject in 2012 continued the engineer-ing reviews and metallurgical work atArctic as well as initial metallurgical test-ing of Bornite ore.
A preliminary economic assessmentcompleted by SRK Consulting in April2011 and updated for NovaCopper in2012 investigates a 4,000-metric-ton-per-day underground operation at Arctic pro-ducing 1.7 billion pounds of copper, 2billion pounds of zinc, 291 millionpounds of lead, 266,000 ounces of goldand 22 million ounces of silver over a 26-year mine life.
According to the revised PEA, Arcticdemonstrates a base case post-tax netpresent value (8 percent discount) ofC$533 million with an internal rate ofreturn of 26 percent. This scenarioassumes US$2.50 per pound copper,US$1.05/lb zinc, US$1.00/lb lead,US$20 per ounce silver and US$1,100/ozgold.
Plugging in May 9 metals prices(US$3.83/lb copper, US90 cents/lb,US95 cents/lb zinc, US$1,600/oz goldand US$32/oz silver) the base case post-tax net present value (8 percent discount)nearly doubles to C$1 billion with aninternal rate of return of 37 percent.
While the PEA contemplates anunderground mine at Arctic, NovaCopperis investigating the potential of buildingan open-pit operation at the VMSdeposit.
“You can’t really push an undergroundmine more than 4,000 metric tons per day
so we wanted to take a look at this as anopen-pittable target,” said VanNieuwenhuyse.
The investigation will weigh the eco-nomics of a larger mill and high stripratio against the more precise but smallerunderground operation.
“If it (the open pit option) shows morenet present value, you will hear about it,”
he said. Van Nieuwenhuyse told Mining News
that the examination of various miningscenarios at Arctic is one component ofthe company’s broader evaluation of theentire Upper Kobuk Mineral Project.
“We are looking at a variety of oppor-tunities with the concept of developingthe district,” he added. �
Peregrine to buy out De Beers’ interest inChidliak. “When we began discussionswith potential partners for Chidliak lastMarch, our principal objective for anyfuture joint venture transaction was toensure certainty of finance, in a mannerthat minimized share dilution toPeregrine’s shareholders, for completionof a NI 43-101-compliant, bankable feasi-bility study,” said Friedland. “We alsowanted to ensure that the extensive workleading up to and including the bankablefeasibility study would be conducted in aprofessional, comprehensive and timelyfashion. I’m very confident that theseobjectives will be met should our new
partner, De Beers, the world’s most tech-nically proficient, diamond mining andmarketing company and a householdname in the diamond industry for the past124 years, decide to enter into theChidliak Joint Venture.”
Peregrine’s CEO said the closing of theoption with De Beers is an important stepon the road to what the company believeswill be Baffin Island’s first diamondmine. “We are confident that Chidliak isthe world’s premier advanced-stage dia-mond exploration project, and De Beers’commitment of C$5-million for theiroption is a serious expression of theirbelief in Chidliak and Peregrine’s man-agement,” he added.
The option agreement was subject toregulatory approval and BHP Billiton’sconsent. �
27NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF OCTOBER 28, 2012
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