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While money is undeniably tight across the mineral exploration sector, a numberof juniors mounted multimillion-dollar exploration programs on promising metalsprojects across Alaska, including a US$2.5 million program at Constantine MetalResources’ Palmer volcanogenic massive sulfide project near Haines.

A special supplement to Petroleum NewsWEEK OF

November 24, 2013

3 Golden paychecks for Pogo miners Alaskan economy bolstered by local buys, high wages delivered by mine

5 Federal issues permeate AMA talks Overzealous EPA, drawn-out permitting top miners’ concerns at gathering

14 Brucejack bonanza grades probed Mineral consultant bails out, lawyers jump into mix at B.C. gold project

http://www.miningnewsnorth.com/

2NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF NOVEMBER 24, 2013

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By SHANE LASLEYMining News

M iners in Alaska make good money!How good? Well, a report recently

published by the McDowell Group foundthat the 329 direct employees at the Pogogold mine averaged a whoppingUS$116,916 before benefits during 2012.

Roughly 217 of these six-figure pay-checks were brought home by Alaskans,including about 167 going to employeesliving in the Interior region of the statewhere the high-grade underground mine islocated.

“Mining is good for Alaska and Pogo,specifically, is an important factor in theInterior’s economy!” Lorna Shaw, a com-pany spokeswoman told Mining News inan email.

Operated by Sumitomo Metal MiningPogo LLC – a joint venture betweenJapanese firms Sumitomo Metal MiningCo. (85 percent) and Sumitomo Corp. (15percent) – Pogo is a 2,500-metric-ton-per-day underground gold mine located in theheart of the Tintina Gold Belt.

Since 2008, this mecca of high-payingjobs situated some 85 miles (137 kilome-ters) southeast of Fairbanks and 38 miles(61 kilometers) northeast of DeltaJunction, has produced roughly 1,000ounces of gold per day and is on track toproduce 352,000 ounces of gold in 2013.

Currently, there is enough gold inreserves at Pogo to keep the high-gradeunderground mine in operation until 2019,but discoveries of new gold-rich zones inthe immediate mine area are expected toprovide enough ore to keep this InteriorAlaska gold mine in operation for yearsand possibly decades beyond current pro-jections.

Golden jobsAccording to the data collected by

McDowell, Sumitomo Metal Mining Pogopaid US$38.5 million in wages to the aver-age 329 million workers at the InteriorAlaska gold mine in 2012.

Averaging US$116,900, the annualwage brought home by Pogo Mine workersis more than double the statewide averageof US$50,100 for Alaska residents in 2012.This does not factor in the US$15.3 millionof medical, retirement and other benefitspaid to the mine workers.

Dialing in on the Southeast FairbanksCensus Area – a 25,000-square-mile region

of Interior Alaska that encompasses Pogo,Delta Junction, Tok and several smallertowns between Fairbanks and the YukonTerritory border – demonstrates theimpacts of these high-paying jobs.

Not including Pogo jobs, the some7,000 residents of the Southeast FairbanksCensus Area made an average wage ofUS$52,258 in 2012. Factoring in the pay-checks brought home by the roughly 15Pogo workers that live in this region booststhis median some 16 percent toUS$60,804.

Above and beyond providing good-pay-ing jobs, Pogo is bolstering Alaska’s econ-omy by buying local.

Including payroll, Sumitomo MetalMining Pogo Mine spent US$255.3 millionon keeping the mine in operation during2012. Nearly half of this money, US$127.2million, was spent on goods and servicesbought from some 290 Alaska-based ven-

� A L A S K A

Pogo provides golden jobs in Interior Interior Alaska gold mine is making its mark on regional, statewide economy; new discoveries likely to expand horizon of benefits

3NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF NOVEMBER 24, 2013

North of 60 Mining News is a monthly supplement of the weeklynewspaper, Petroleum News. It will be published in the fourth orfifth week of every month.

Shane Lasley PUBLISHER & NEWS EDITOR

Rose Ragsdale EDITOR-IN-CHIEF (contractor)

Mary Mack CEO & GENERAL MANAGER

Susan Crane ADVERTISING DIRECTOR

Heather Yates BOOKKEEPER & CIRCULATION MANAGER

Bonnie Yonker AK / INTERNATIONAL ADVERTISING

Marti Reeve SPECIAL PUBLICATIONS DIRECTOR

Steven Merritt PRODUCTION DIRECTOR

Curt Freeman COLUMNIST

J.P. Tangen COLUMNIST

Judy Patrick Photography CONTRACT PHOTOGRAPHER

Forrest Crane CONTRACT PHOTOGRAPHER

Tom Kearney ADVERTISING DESIGN MANAGER

Renee Garbutt ADVERTISING ASSISTANT

Mapmakers Alaska CARTOGRAPHY

ADDRESSP.O. Box 231647Anchorage, AK 99523-1647

NEWS [email protected]

CIRCULATION 907.522.9469 [email protected]

ADVERTISING Susan Crane • [email protected]

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FAX FOR ALL DEPARTMENTS907.522.9583

NORTH OF 60 MINING NEWS is a monthly supplement of Petroleum News,a weekly newspaper. To subscribe to Petroleum News and receive the monthly

mining supplement, call (907) 522-9469 or sign-up online atwww.PetroleumNews.com. The price in the U.S. is $98 per year, which includesonline access to past stories and early access to Petroleum News every week.(Canada/Mexico subscriptions are $185.95; overseas subscriptions are $220)Or, just purchase the online edition of Petroleum News, which also includesthe mining supplement and online access to past stories, for $69 per year.

Several of the individualslisted above are

independent contractors

Contact North of 60 Mining News:Publisher: Shane Lasley • e-mail: [email protected]

Phone: 907.229.6289 • Fax: 907.522.9583

see GOLDEN JOBS page 4

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dors and contractors in 2012.The goods provided by Alaska vendors

ran the gamut, from paperclips to heavyequipment; and services ranged fromcouriers to engineering.

In addition to being an economic hub inthe private sector, Pogo Mine paid a total ofUS$24.2 million in taxes and fees to stateof Alaska in 2012.

With these funds circulating in Alaska’seconomy, it is estimated that the Pogo Minesupported 664 direct, indirect, and inducedjobs in Alaska and a total statewide payrollof US$64.5 million during 2012.

Expanding horizonsPogo currently has enough gold in

reserves to ensure the mine remains an eco-nomic engine in Interior Alaska until 2019,but the recent success of the mine’s explo-ration team indicates that the property hasenough high-grade gold on the property tolast decades.

At the end of 2012, Sumitomo MetalMining Pogo reported 2.4 million ouncesof gold in reserves (5.06 million metrictons of ore averaging 13.58 grams per met-ric ton gold) and 2.4 million ounces of goldin resources (6.84 million metric tons aver-aging 10.83 g/t gold).

The reserves are enough to keep theoperation going to 2019 and if theresources are converted reserves, Pogominers are looking at their workplaceremaining open another six years. Nearly 1million ounces of the gold reserves arelocated in the newly discovered East Deep,a zone of quartz-vein structures withgrades and thickness that are strikinglysimilar to the Liese zone, which has beenthe primary source of ore for the mill at

Pogo since production began there in 2006.Through the end of 2012, 75 holes

drilled into East Deep have outlined964,000 ounces of gold reserves (2.36 mil-lion metric tons averaging 12.7 g/t) of goldand 514,000 ounces of gold resources of(1.23 million metric tons averaging 13 g/tgold). An underground definition drillingprogram carried out at East Deep in 2013will likely boost the reserves in this newmining area at Pogo, resulting in an exten-sion to the life of the mine and the jobs itsupports.

Exploration drilling, meanwhile, is

finding new horizons of resource andreserve expansion.

The Liese and East Deep zones arebelieved to converge at the North zone, ahigh-grade gold deposit located adjacent tothe mill at Pogo.

The North zone is distinctive due to thevertical orientation of the veins foundthere. These narrower but higher gradeveins are believed to be feeders that pro-vided a conduit to deliver the gold-rich flu-ids to the flat-lying veins that comprise theLiese zone to the south and the East Deepzone to the east.

During the summer of 2013, SumitomoMetal Mining Pogo completed roughly33,000 meters of surface drilling focusedon expanding the East Deep zone westwardto the North and Liese zones. In addition toincreasing the size of East Deep, this

drilling discovered two new veins at theNorth zone.

With the mill sitting about where thesethree zones meet, accessing the ore at EastDeep will be essentially the same as thezone for which the operation was built.Sumitomo Metal Mining Pogo has devel-oped the 2150 portal to access East Deep.With permits in-hand, the company plansto begin commercial mining of high-gradeore from this zone in 2014.

In addition to growing the zones that liedirectly adjacent to the mill, the 2013 sur-face program followed up on a discoverymade about 0.8 miles (1.2 kilometers)south of the processing facility. The 16holes drilled at this new area dubbed PogoSouth have intersected three new veins,expanding the horizons of the InteriorAlaska mine and the jobs that it supports. �


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GOLDEN JOBS

The efforts of geologists such as Raylene Wentz are helping ensure that the Pogo Mine in Interior Alaska continues to have the ore need-ed to provide high-paying jobs for years to come.

The 2150 portal was developed to mine East Deep, a zone of high-grade ore located directlynorth of the facilities at Sumitomo Metal Mining's Pogo Mine in Interior Alaska.

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By SHANE LASLEY Mining News

ANCHORAGE – “Mining in Alaska:Build it, keep it, grow it” was the

theme of the Alaska Miners Association2013 Convention, but “screwed by thefederal government” was an underlyingrefrain that permeated conversations fromchats over coffee to keynote speeches atthe annual gathering.

“If there is a poster-child for beingscrewed by the federal government,Alaska is the one,” Rep. Doc Hastings, R-Washington told the mining communityduring his Nov. 6 opening speech at theconvention.

The latest in this series of posterswould depict images of a U.S.Environmental Protection Agency-ledband of armed agents wearing jacketsemblazoned with POLICE descending onfamily-run placer mines near the commu-nity of Chicken, in the Fortymile districtof eastern Alaska.

“In the Fortymile district, we had theEPA storm-troopers descend, and it isreally something we don’t really needfrom our federal overlord,” NovaCopperInc. President and CEO Rick VanNieuwenhuyse said during a Nov. 7luncheon.

While posters portraying EPA bureau-crats pondering a pre-emptive veto of thepermits needed to develop the enormousPebble copper project is less provocative,the precedent set by such a decision on

state-owned lands would likely be feltacross the nation.

During the banquet that marked theclose of the 2013 AMA convention,Pebble was one among a number ofAlaska mining projects that Sen. LisaMurkowski, R-Alaska, listed as being, orhas been, hampered by federal over-reach.

“Our opportunities, quite honestly, arestrangled or stifled by what comes out ofWashington D.C.,” Alaska’s senior sena-tor bluntly stated.

“We have been successful in overcom-ing many of the obstacles, and I think it isbecause we know what we have to offer,we know how we can do the job and webelieve in our potential here,” she added.“But, we have got some things we have todeal with back in Washington (D.C.) andthe first comes with how we deal withaccessing resources when you have got abroken permitting process.”

Hastings kicked off the conventionwith a similar message.

“We are not, in America, utilizing ournatural resources as we should be. In fact,the trend has gone the other way to thepoint that we are reliant on minerals andenergy products we have here in theUnited States,” the Chairman of theHouse Committee on Natural Resourcestold the Alaska miners. “I think, in thelong run that could be very detrimental tothe health of our country and certainly tothe health of our economy.”

Alaska Department of NaturalResource Deputy Commissioner EdFogels said the well-being of the FarNorth state is particularly vulnerable tofederal or state policies that undermineresource development.

“I am not sure if there is any other statethat has as much to lose or gain as Alaskadoes; we are so dependent on resourcedevelopment in our state,” he said in aNov. 7 address at the AMA convention.

“The more we stop development here,the more we shift development to placesthat may not have as stringent environ-mental standards as we do – I don’t thinkanybody does, quite frankly,” he added.

EPA storm-troopers The federal government’s seemingly

heavy-handed involvement in Alaskamining is not only a hot topic inAnchorage but was the cornerstone of anOct. 10 U.S. Senate Subcommittee onEnergy and Mineral Resources hearingprovocatively titled “EPA vs. AmericanMining Jobs: The ObamaAdministration’s Regulatory Assault onthe Economy.”

“In Chicken, Alaska, an EPA Swatteam of heavily armed and armoredagents conducted ‘paperwork’ inspectionson small mining operations, in whatappears nothing more than an effort tointimidate and scare hardworkingAmericans,” said Energy and MineralsChairman Doug Lamborn, R-Colorado,during opening testimonies at the hear-ing.

Rep. Peter DeFazio, D-Oregon, con-siders the characterization of theFortymile EPA Clean Water Act inspec-tions as Swat raids to be hyperbole.

Describing the federal-state environ-mental task force as armed with holsteredsidearms, the ranking member of theHouse Natural Resources Committeesaid, “Let’s not get overboard here and saysomehow that constitutes a Swat team.”

“For the gentleman from Oregon, I amgoing to remind him that he was notthere, and there is testimony that theywere carrying M-16s and assault shot-guns; fully armored; and said policeagents. This is a Swat team,” retorted

� A L A S K A

Federal stranglehold tops AMA dialogueLengthy permitting, EPA ‘raids’ in Chicken, Pebble beleaguer Alaska miners in 2013; Capitol Hill takes notice of ‘poster-child’

5NORTH OF 60 MINING


REP. DOC HASTINGS DOUG LAMBORN

see FEDERAL STRANGLEHOLD page 6

“Our opportunities, quite honestly,are strangled or stifled by whatcomes out of Washington D.C.”

—Sen. Lisa Murkowski, R-Alaska

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Rep. Don Young, R-Alaska. “You are supposed to be for the little

guy; you are for big government,” Youngadded.

During his Oct. 10 testimony beforethe subcommittee, Fortymile MiningAssociation President Sheldon Maierdescribed how squads of three-to-sevenarmed and armored men descended upon30 mining sites in the Fortymile districtand proceeded to conduct inspections andsampling without introducing them-selves.

“We consider them raids, it was a seri-ous invasion,” Maier said, “This is defi-nitely not professional conduct of a law-enforcement agents.”

In response to this show of force,Young introduced House Resolution3281, a bill that would remove the EPA’scriminal enforcement authority, andinstead rely upon the law enforcementcapabilities of the Federal Bureau ofInvestigation.

“The EPA-led task force’s invasion wasan unnecessary intrusion into the lives ofAlaska miners, who want simply nothingmore than to continue to practice the great

Alaska tradition of placer mining. TheFBI already has the expertise and author-ity to investigate federal crimes, and H.R.3281 would simply ensure that thisauthority is streamlined in one agencythat specializes in law enforcement,” saidYoung.

Undermining credibility The federal environmental agency also

was tasked for its handling of the Pebblecopper project in Southwest Alaska dur-ing the “EPA vs. American Mining Jobs”hearing.

Rep. Lamborn characterized theBristol Bay Watershed Assessment – anEPA study to determine the effects large-scale mining would have on the areawhere Pebble is found – as “an effort topre-emptively veto mining across a whole

region of Alaska.” During a Nov. 7 presentation at the

AMA convention, Pebble PartnershipVice President of Public Affairs MikeHeatwole said EPA’s handling of thePebble project creates an air of uncertain-ty that will affect projects well beyondSouthwest Alaska.

“As developers we need a stableprocess to evaluate our projects. Actionslike this cast doubt, not just on the devel-opment of Pebble but on any other poten-tial development within the watershedsand frankly across the country,” he toldthe crowd gathered to get an update on thePebble project.

The ranking member of the HouseSubcommittee on Energy and MineralResources, Rep. Rush Holt, D-NewJersey, contends that, given the signifi-cance of the salmon fishery in BristolBay, EPA’s actions are prudent.

“It is my belief that the Bristol BayWatershed is too important and too frag-ile to allow a massive open-pit mine,industrializing the landscape and creatinglong-term waste management chal-lenges,” testified Holt.

“It is why I believe it is appropriate forthe EPA to study carefully the impacts oflarge-scale mining in the region, to see ifI am right,” he added. “Any efforts to por-tray the EPA’s enforcement as an attack onmining, I think, are misguided.”

Lamborn believes that by allowingfederal agencies such as the EPA to deter-mine the fate of a project outside of thealready stringent permitting processmeant to protect the environment wouldundermine the credibility of the process.

“At the heart of this issue is the lack ofconfidence in permitting by the federalgovernment,” testified . Lamborn. “If,without cause, an agency can retroactive-ly veto issued permits or prospectivelyveto permits not applied for, then how canany company, contractor or concession-aire have confidence to invest in Americawhen their permit is not worth the paper itis written on?”

Critical and strategic legislation The record-setting duration of the per-

mitting process in the United States washigh among the concerns expressed byHastings and Murkowski during theirrespective keynote addresses that openedand closed the AMA convention.

“Permitting delays are the most signif-icant risks to mining projects in the

United States,” Murkowski said. “We aretied for the worst in the world, along withPapua New Guinea, as the two countrieswith the most numerous permittingdelays. That doesn’t happen by accident,in my view, that is intentional. That is anovert act that says, ‘we just don’t want toencourage it here.’”

Congressman Hasting informed themining community gathered inAnchorage that the “National Strategicand Critical Minerals Production Act of2013,” a bill aimed at streamlining thepermitting process for mineral develop-ment while protecting the environmentalreview process, has gained traction onCapitol Hill.

Introduced by Rep. Mark Amodei, R-Nevada, H.R. 761 would designate anyproposed mines that would produce“strategic and critical minerals” as infra-structure projects as described by thePresidential Order, “ImprovingPerformance of Federal Permitting andReview of Infrastructure Projects.”

The executive order signed byPresident Barack Obama in March 2012 isdesigned to “significantly reduce theaggregate time required to make decisionsin the permitting and review of infrastruc-ture projects by the Federal Government,while improving environmental and com-munity outcomes.”

Congressman Amodei’s bill aims to“enhance government coordination for thepermitting process by avoiding duplica-tive reviews, minimizing paperwork andengaging other agencies and stakeholdersearly in the process” for strategic and crit-ical mineral projects.

“What it simply says is this: ‘Duringthe permitting process, there has to be adecision made within 30 days',” Rep.Hastings summarized during his Nov. 6presentation at the AMA convention.

The legislation nabbed 57 co-sponsorsand passed the House 246-148.

“We have passed it out of the House,and we are waiting for action in theSenate. And, since I am a member of theHouse, I can say we wait on the Senate alot,” quipped Hastings.

Murkowski introduced a similar pieceof legislation, “The Critical MineralsPolicy Act of 2013,” in the Senate Oct.29.

This bill, S.B. 1600, targets the revital-ization of the United States’ critical min-erals supply chain by directing theSecretary of the Interior to establish a listof up to 20 minerals critical to theAmerican economy and provides a com-prehensive set of policies to address issuesassociated with their discovery, produc-tion, use, and re-use.

“We don’t want to be sitting in a situ-ation where the Chinese are making all ofthe decisions as to what we are going to bemanufacturing – how, when and where –because they have access to all the criticalminerals,” she added. “We have got themhere, we just need the ability to developthem.”

Alaska’s senior senator said shebelieves S.B. 1600, which is cosponsoredby nine Democrats and eight Republicans,has a good chance of gaining traction andgetting a vote on the Senate floor.

“We have got to change the dynamichere, in this country, with how we viewthe importance of minerals to our nation,”Murkowski said. “We can’t move forwarduntil Washington (D.C.) gets out of ourway.”

Murkowski rallied Alaska miners’support of the Alaska congressional dele-gation to push back against an over-reach-ing federal government.

“When I say we need public commentsby the industry, we really do mean it,” shetold attendees at the AMA banquet. �

6NORTH OF 60 MINING



FEDERAL STRANGLEHOLD

SEN. LISA MURKOWSKI ED FOGELS

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By CURT FREEMANFor Mining News

For those of you that could not attend,the annual Alaska Miners

Association Convention and Trade Showwas well-attended, with most peoplepleasantly surprised by the strongturnout.

Compared to a year ago, more com-panies are planning to get back in thefield with exploration and developmentprograms in 2014, a sentiment makingup one of the few bright spots in a recentIntierraRMG resource sector explorationsummary. This report and a similar snap-shot of the exploration industry by SNLMetals Economics Group released in lateOctober suggest that the mining sector isstill depressed, but its general rate ofdecline finally slowed in the last quarter.SNL reported that total 2013 nonferrousmetal exploration expenditures wereabout US$15.2 billion, a 29 percent dropfrom 2012 levels. Canada and the UnitedStates were the hardest hit with year-on-year declines in exploration of 41 per-cent and 38 percent, respectively. On thebrighter side, drilling rates were nearlylevel over the last three months, withIntierraRMG reporting 1,044 companiesdrilling targets in the third quarter of2013 versus 1,099 companies poking tar-gets in the second quarter. Maybe thereis finally a growing recognition withinthe industry that doing nothing mightpreserve capital, but it does not advanceprojects or companies.

Western AlaskaTECK RESOURCES LTD.’S reported

third-quarter 2013 results from its RedDog mine, which turned in operatingprofits of US$143 million versus anoperating profit of US$121 million inthe same period in 2012. For the quarter,the mine generated 142,500 metric tonsof zinc and 23,400 metric tons of lead inconcentrate versus 128,900 metric tonsof zinc and 22,400 metric tons of zincand lead, respectively, in the third quarterof 2012. The mine sold 174,300 metrictons of zinc and 59,800 metric tons oflead during the third quarter. Averagezinc and lead grades mined were 16.3percent and 3.8 percent, respectively,versus 18.1 percent and 4.3 percent inthe third quarter of 2012. Mill through-put of 1.030 million metric tons in thethird quarter was well above the 880,000metric tons milled in the third quarter of2012. The mine’s zinc productionincreased by 11 percent, compared withthe same period a year ago due to lowersilica ore with coarser sulfide grain size.The 2013 shipping season was complet-ed on October 23 with shipments of zincconcentrate, totaling 1.12 million metrictons, and lead concentrate, totaling200,000 metric tons. During the thirdquarter, the mine paid out US$56 millionin royalties to its partner, NANAREGIONAL CORP.

GRAPHITE ONE RESOURCES INC.announced results from the first twoholes of its 1,023 meter, 10-hole drillingprogram at its Graphite Creek propertynorth of Nome. The program wasdesigned to expand the existing industrycompliant resource of 164.5 million met-ric tons grading 4.61 percent graphite.Significant results from the first twoholes include 33.16 meters grading 7.02

percent graphitic carbon and an addition-al 12.84 meters grading 9.71 percentgraphitic carbon in hole 13GCH009 and39.85 meters grading 7.13 percentgraphitic carbon and an additional 16.20meters grading 10.22 percent graphiticcarbon in hole 13GCH010. Drill holes13GCH009 and 13GCH010 were drilledeast of the 2012 drilling and extend min-eralization an additional 400 meters tothe east. Drill holes 13GCH011 to 017were designed to fill in the 2.2-kilometergap between the 2012 inferred resourcestep-out hole 12GCH008. Additionaldrilling results are pending on theseholes. All of the drill holes completed in2013 hit visible graphite mineralization.The deposit still remains open alongstrike both east and west and at depth.The company has yet to drill test theAraujo or South Conductor which con-tains rock grab samples with up to 80.9percent graphite on surface.

Interior AlaskaKINROSS GOLD CORP. announced

record third-quarter 2013 productionresults from its Fort Knox mine nearFairbanks. For the quarter the mine pro-duced 122,037 ounces of gold versus106,698 oz produced in the third quarterof 2012. Cash costs were US$555 perounce versus US$648 per ounce in the

previous third quarter. The mineprocessed 3.374 million metric tons ofore grading 0.76 grams-per-metric-tongold through the mill and treated anadditional 10,330,000 metric tons of oregrading 0.28 g/t gold on the heap leachpads during the third quarter. Recoveryfrom the mill for the quarter was 84 per-cent versus 84 percent in the year-previ-ous period. The mine’s strong perform-ance was due to the start-up of the sec-ond carbon-in-column plant along with adecrease in the stripping ratio for ton-nage sent to the mill.

INTERNATIONAL TOWER HILLMINES LTD. announced that it will con-tinue to concentrate on cash conserva-tion and preservation of its Livengoodassets while moving the project forward.The company is continuing the neces-sary environmental baseline activities tomaintain the integrity and usability ofthe five years of historical data alreadycompiled. The company recentlyreceived recognition for excellent explo-ration reclamation work from the AlaskaDepartment of Natural Resources. Thecompany indicated that it had sufficientcapital on hand to sustain its plannedoperational level into 2015.

CONTANGO ORE INC. announcedadditional drilling results from its Tetlinproject near Tok. The company complet-ed 14,349 meters of core drilling in 69drill holes during the 2013 explorationseason. All of the drilling released is partof the Peak zone, discovered by the com-pany in June, 2012. Significant resultsinclude 84.43 meters grading 4.988 g/tgold, 16.7 g/t silver and 0.167 percentcopper in hole TET13098, 95.92 metersgrading 5.748 g/t gold, 6.9 g/t silver and0.140 percent copper in hole TET13100,142.6 meters grading 2.529 g/t gold, 2.4g/t silver and 0.082 percent copper inhole TET13104, 159.25 meters grading7.010 g/t gold, 6.6 g/t silver and 0.102percent copper in hole TET13107, 96.93meters grading 9.060 g/t gold, 4.3 g/t sil-ver and 0.093 percent copper in holeTET13110, 134.83 meters grading 4.848g/t gold, 2.9 g/t silver and 0.084 percent

copper in hole TET13117 and 135.5meters grading 3.240 g/t gold, 3.6 g/t sil-ver and 0.115 percent copper in holeTET13124. Mineralization remains opento the southeast. A recent presentation atthe Alaska Miners Convention revealedthat the Peak zone mineralization resem-bles a reduced retrograde calcic skarnsimilar to the Fortitude deposit in theCopper Canyon District, Nevada.Elsewhere in the Peak zone area, thecompany has discovered A-type quartz-magnetite veins in a quartz monzoniteporphyry and an arsenic-bearingpolymictic breccia at the Saddle Zone,which is interpreted to be an magmaticdiatreme vent with potential for gold-sil-ver mineralization.

Alaska RangePURE NICKEL INC. and partner

ITOCHU CORP. announced results the2013 exploration results from its MANproject in the Alaska Range. The pro-gram included an eight-hole, 2,991-meter drill program primarily targetingthe Eureka Zone in the central part ofthe Alpha Complex, as well as prospect-ing and mapping work in various partsof the property. The 2013 drill programintersected the Eureka Zone in six of theseven holes that were targeted, with onehole being abandoned in a fault zone. Aneighth hole, PNI-13-70, targeted coinci-dent induced polarization and soil geo-chemical anomalies to the south of theEureka Zone. The drill results confirmthe presence of what is now interpretedas a continuous zone of magmatic sul-fide mineralization containing elevatedconcentrations of nickel, copper, cobalt,gold, silver, platinum and palladium.Estimated true widths of intersection for2013 drill holes cutting the Eureka Zonein the central Alpha segment range from120 to 250 meters. Composite intersec-tion grades across the mineralized zonein the drill holes range from 123 to 212parts-per-billion gold plus platinum pluspalladium, 0.05-0.16 percent copper, and

� C O L U M N

Exploration outlook brightens for 2014More mining companies plan to return to field next season with work programs, according to two recent resource sector reports

7NORTH OF 60 MINING


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TheauthorThe author

Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMANNov. 15. 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.

see FREEMAN page 8

http://www.taigaventures.com/

8NORTH OF 60 MINING

0.17-0.24 percent nickel. The mineraliza-tion also includes minor silver andcobalt. Higher grade mineralization overnarrower widths is present in most of theholes. The Eureka Zone extends over aminimum strike length of 15 kilometers(nine miles) as defined by drilling andmapping. Prior years’ drilling in the zonehas encountered intersections ranging upto 320 meters estimated true thickness.

MILLROCK RESOURCES INC.reported 2013 exploration results firmtheir Stellar copper project in the AlaskaRange. Work was conducted with fundingfrom an unnamed third-party interest witha first right of refusal to option the prop-erty. The exploration work consisted of 1)950 line-kilometers of airborne magnetic,electromagnetic and radiometric surveys,792 soil samples collected on 500-metercenters, 198 rock samples and 452 addi-tional rock samples collected at a majorityof soil sample sites. A hand-held spec-trometer was used to analyze the speci-mens, primarily for the presence ofhydrothermal alteration minerals. Threeareas, the Jupiter, Mars and Gemini,returned anomalous results. The Jupitertarget area lies along the northern marginof the same diorite stock that occurs adja-cent to and possibly responsible for theformation of the Zackly copper-goldskarn deposit located two kilometers tothe southeast. The area is underlainalmost entirely by andesite and basaltcommonly exhibiting albite and chloritealteration. The Jupiter multi-element geo-chemical anomaly measures 2.3 kilometerby 1.7 kilometer and occurs with a corre-sponding magnetic high. The anomalyconsists of 33 soil samples with copperresults range between 246 parts per mil-lion to 3850 parts per million and have anaverage copper value of 832 parts per mil-lion. Gold values in these soil samplesaverage 92 parts per billion and rangefrom 5 parts per billion to 178 parts perbillion. In addition to high copper andgold the soils contain anomalous silverand cobalt. The anomaly is lineated to thenorth-northeast and the west-northwestand seems to be formed along an offsetstructural intersection. Sampling at thepreviously identified Mars prospect betterdefined the geochemical anomalous zonediscovered in 2012. The soil anomaly isbased on 28 samples and measuresapproximately 1.4 kilometer by 0.8 kilo-meter. The area is characterized by strongcopper-in-soil values, along with anom-alous molybdenum and gold, centered ona magnetic high. Copper values within theanomaly range from 258 parts per millionto 3510 parts per million and averaging977 parts per million copper. Gold valuesrange from 38 parts per billion to 339parts per billion and average 116 parts perbillion. The anomaly is underlain bylocally altered andesite, basalt, gabbro anddiorite in a structurally complex setting.Rock grab samples of altered bedrock andfloat were collected from the prospect.Seven of those samples assayed over 1percent copper with values up 7.4 percentcopper and up to 1.78 parts-per-milliongold. The Gemini target area is a newlydiscovered anomaly generated in therecent exploration program. It is a strongcopper-in-soil anomaly centered on achlorite (+skarn +potassic) alteration zonein andesite and basalt. The anomaly isdefined by 12 samples over an area meas-uring 3.0 kilometers by 1.8 kilometerswith copper values ranging from 356parts per million to 1130 parts per millionand averaging 568 parts per million cop-per. The company indicated that, despite

these encouraging results the unnamedthird party has declined to exercise itsright to option the project.

Alix Resources Corp. announced it hasincurred sufficient expenditures to earn51 percent of the Golden Zone gold prop-erty. Industry-compliant resources theproperty now stand at 10.26 million met-ric tons of measured, indicated andinferred material averaging 1.44 g/t goldand containing 431,389 oz of gold,2,214,517 oz of silver and 6,081 metrictons of copper.

Northern AlaskaNOVACOPPER INC. announced addi-

tional 2013 assay results from its 17-hole,8,140-meter 2013 exploration program atits Bornite project in the Ambler District.These holes are primarily between theSouth Reef and Ruby Creek zones andsuggest these two zones are linked atdepth in what is referred to as the LowerReef. Significant results include RC13-221 which intersected 123.8 meters grad-ing of 1.23 percent copper, hole RC13-219 which intersected 42.5 meters grad-ing 1.44 percent copper, hole RC13-218which intercepted 73.8 meters grading1.20 percent copper and hole RC13-217which intercepted 63.3 meters grading0.99 percent copper. This year’s drillingappears to link the two north-northeasttrending mineralized zones in the LowerReef at depth into one continuous horse-shoe-shaped mineralized zone. The fourmost northerly holes exploring the LowerReef (the first two of which are reportedin an Oct. 3, 2013 news release) suggest ahigh-grade continuous zone of strata-bound copper mineralization over a kilo-meter in width with thicknesses exceeding100 meters.

ANDOVER MINING CORP.announced its first industry compliantmineral resource estimate for its SUNvolcanogenic massive sulfide deposit inthe Brooks Range. Using a cut-off ofUS$75 per metric ton in-ground value,the combined Main SUN and SouthwestSUN deposits contain an indicatedresource of 2.165 million metric tonsgrading 1.42 percent copper, 1.06 percentlead, 4.11 percent zinc, 57.6 g/t silver and0.21 g/t gold (3.9 percent copper-equiva-lent). The inferred resources are 11.648million metric tons grading 1.14 percentcopper, 1.37 percent lead, and 3.91 per-cent zinc, 76.8 g/t silver and 0.24 g/t gold(3.9 percent copper-equivalent). Thisresource estimation indicates a minimumdeposit size as the Main SUN remainsopen to the northeast and down dip andthe Southwest SUN remains open to thesouthwest and down dip. The resourceestimation utilized the database of 97 drillholes totaling 19,123 meters.

Southeastern AlaskaHECLA MINING CO. announced third

quarter production results from its GreensCreek mine on Admiralty Island. The cashcost per ounce of silver for the quarterwas $5.00 compared to $3.52 in the thirdquarter of 2012. The average grade of oremined during the quarter was 13.15 oz ofsilver per ton compared to 10.56 oz of sil-ver per ton in the year previous period.Average by-product grades were 0.12 ozof gold per ton, 3.13 percent lead and8.23 percent zinc. During the third quarterthe mine produced 1,807,781 oz of silver,4,542 oz of gold, 4,542 tons of lead and13,367 tons of zinc. Mining and millingcosts per ton were up by 10 percent and24 percent, respectively, in the third quar-ter, as compared to the same period in2012. The increase in milling costs wasprimarily due to diesel fuel costs relatedto the generation of more power on-sitedue to lower availability of less expensivehydroelectric power, the result of lowerprecipitation levels in SoutheasternAlaska. Both mining and milling costswere impacted by an increase in laborcosts. Definition and exploration drillingof the Deep 200 South area has made sig-nificant progress in defining three stackedfolds of high-grade mineralization thatrepresent up to 600 feet of down-dip con-tinuity. Drill intersections continue toinclude high grade silver, gold and lead-zinc intercepts including: 16.59 ouncesper ton silver, 0.51 oz/ton gold, 15.43 per-cent zinc and 9.01 percent lead over 24.6feet and 21.01 oz/ton silver, 0.46 oz/tongold, 12.75 percent zinc and 2.81 percentlead over 28.8 feet. In addition, in-filldrilling is expected to convert up to 700feet of strike length of the newly definedDeep 200 South resource to reserves, andstep-out exploration drilling to the southhas confirmed these mineralized folds foranother 500 feet of strike length. TheDeep 200 South resource remains open tothe south, west and east. Portions of thismineralization are expected to be added toreserves over the next two to three years.Surface drilling at Killer Creek, locatedapproximately 0.5 miles west-northwestof the Greens Creek mine infrastructure,intersected broad mineralized zones up to400 feet with stringer veins containingcopper, gold, zinc, lead, and silver miner-alization in the mine footwall rocks. Ingeneral, the northern holes are more cop-per-gold rich and the southeast area ismore zinc, lead and silver rich. The 12holes drilled in this area may havedefined a vein-dominant mineralized ventthat could be the feeder to either theGreens Creek deposit or a satellitedeposit.

COEUR MINING INC. announcedadditional third quarter 2013 productionresults from its Kensington gold miner

near Juneau. The mine produced 29,049oz of gold, a 25 percent decrease from thesecond quarter 2013, due primarily tohigher head grades and increased millthroughput. Cash operating costs wereUS$988/oz versus US$1,298/oz in theyear-previous quarter. Cost reductionsincluded reduced contract services andlower underground backfill costs due tolower prices for backfill material. Averagemill head grade of 0.20 oz/ton gold was11 percent higher than the 0.018 headgrade during the second quarter 2013.Average recovery was 96.5 percent. Theoperation mined 122,064 tons of materialand milled 147,427 tons of ore during thequarter. Estimated 2013 total productionfrom Kensington is 108,000 oz to 112,000oz of gold. On the exploration front,drilling began on the Jualin area, which islocated south of the Kensington mine.Drilling targeted the number 4 vein, oneof several, discrete gold-bearing zones atJualin. Consistent with historic results,occurrences of visible gold and high-grade mineralized intervals were inter-sected with the first five holes completedthis year. Significant results include 1.4meters grading 40.5 g/t gold and 1.4meters grading 53.9 g/t gold.Underground drilling was conducted dur-ing the quarter on the new Ann zone situ-ated less than 200 feet to the east of themain Kensington deposit. Significantintercepts in this zone include 0.85 metersgrading 76.5 g/t gold. Exploration todefine and expand known mineralizationon the southern margins of upper Zone 10and Zone 20 in main Kensington returned4.4 meters grading 41.5 g/t gold and 0.64meters grading 66.9 g/t gold with miner-alization remaining open to the south.

CONSTANTINE METAL RESOURCESLTD. and funding partner DOWAMETALS & MINING CO. announcedmetallurgical results from their Palmervolcanogenic massive sulfide deposit nearHaines. The deposit exhibits a very goodresponse to conventional metallurgy.Locked cycle flotation tests yieldedsmeltable copper and zinc concentrates,with high metal recoveries produced atmoderate grind sizes (26 microns for cop-per concentrates and 31 microns for zincconcentrates). Average copper recoverywas 89.6 percent in a copper concentratecontaining 25.5 percent copper. Averagezinc recovery was 84.9 percent in a zincconcentrate containing 59.1 percent zinc.Combined total silver and gold recoveryreporting to copper and zinc concentrateswas 89.7 percent and 75.0 percent,respectively. The majority of preciousmetals report to the copper concentrate;73.7 percent percent for silver and 61.5percent for gold. Zinc concentrates pro-duced from the locked cycle tests are ofvery good quality, with low impuritiesand no potential penalty or problematicelements.

GRANDE PORTAGE RESOURCESannounced its 2014 plans for the Herbertgold project near Juneau. Pending addi-tional financing, the 2014 plans includeup to 30,000 feet of diamond drilling, fur-ther detailed mapping and surface sam-pling and trench sampling as was done in2010-2012. The program will consist ofup to three drill rigs, two larger rigs andone smaller, more portable rig. The largerdrills will use timbered drill pads, withmost pads being used for multiple holeswith the average length of hole about 550feet. Current industry-compliant resourcesat the project include indicated resourceof 821,100 metric tons containing182,400 oz of gold at 6.91 g/t gold andinferred resource of 51,600 metric tonscontaining 12,800 oz of gold at 7.73 g/tgold. �


FREEMAN

9NORTH OF 60 MINING


Fifteen years ago Mike traded his Army helmet for a hard hat, and since then he’s worn lots of “hats” at Fort Knox. Mike’s Alaskan odyssey began after he returned from a grueling tour in Somalia as an Army infantryman. Poised to leave the service, he was offered a posting at Fort Wainwright, and jumped at the chance to fulfill a boyhood dream to live in Alaska. Leaving the Army in 1998, he landed a temporary job as a lab tech at Fort Knox that turned into “a great opportunity to move his career forward,” he says. Today Mike serves as Ore Processing Superintendent, overseeing more than 100 employees. Mike says Fort Knox “offers workers the chance to grow and develop new skills and recognizes hard work with good pay and benefits.” He and his family enjoy living in Fairbanks and he appreciates the community’s strong historic ties to mining and its continuing support for the industry. At Fort Knox, we’re glad that fate and the U.S. Army conspired to bring Mike here.

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� C O L U M N

Court upholds river arrest by Park Service It is appropriate for the executive branch to have the tools needed to do its job, but it should not be at the expense of justice

By J. P. TANGEN Special to Mining News

A t the end of October this year, theU.S. District Court for the District of

Alaska handed down a case brought byAlaskan John Sturgeon, as another in along list of decisions upholding the federalgovernment’s power to circumscribe ourrights to use reasonable and appropriatemethods of access to remote areas of theState.

Without criticizing either the outcomeor the reasoning that was used to achievethat outcome, this case, if it withstandsappeal, will be just one additional land-mark along the way to the apparent objec-tive of turning virtually all of Alaska intoa permanent, vacant wasteland akin to thedreams of generations of science fictionwriters dating back to the days of yore.

There can be no doubt that the wilder-ness of the Last Frontier has inspired inthe minds of adventurers and theirwannabe ilk a vision of untamed lands and“the wildlife that has never known har-ness.” On the other hand, there has been asteady stream of others who have comeinto the country for the sea otters, the fish,the timber, and the minerals, includingcopper, gold, zinc, coal, oil and gas. Morerecently, there has been an influx of thosewho come to gape and stare.

Inevitably, the competing interests ofthe visitors, whether arrived 10,000 yearsago or just got off the cruise ship, clashwith those who have come before. Somestay, some move on, but all seem to leave

their mark. Without putting too fine apoint on it, the conflicts that Alaska haswitnessed never seem to end. Many of ushoped that with statehood, the resolutionof some such conflicts would devolve to aregional level; however, Native LandClaims were unresolved, so state landselections reasonably had to be put onhold.

Similarly, there was an over-riding needto carve out at least some of the morespectacular natural components of thestate because of their uniqueness – MountMcKinley is the highest mountain on thecontinent.

Foreseeably, the best efforts and inten-tions to resolve these differences havespawned schools of subsidiary problemswith which we all have to live. The recent-ly-decided Sturgeon case is an illustrationof the ongoing frustration with the prob-lem-solving tools that we are called uponto endure.

In that case, Sturgeon was operating ahovercraft on the Nation River, a naviga-ble river ceded to the State of Alaska atstatehood. As he passed through ANIL-CA-designated national parklands, he wasapprehended by Park police who cited himfor violating Park Service regulations.Sturgeon defended himself unsuccessfullyon the theory that he was on state-ownedwaters. He was found to be in violation ofthe Park Service rules. Sturgeon chal-lenged the application of the rules and thefederal district court denied relief.

The court’s reason for doing so wasstraightforward. Under the AdministrativeProcedures Act, which governs judicialchallenges to federal regulations, the courtcan only consider the administrativerecord prepared by the agency in question.If the agency acted properly in the cre-ation and administration of the regula-tions, the court has no power to questionthe application. The burden is on the chal-lenger to prove, by a preponderance of theevidence, that the agency acted in a waythat was arbitrary, capricious or withoutbasis in fact. In this case, the evidence didnot support such a conclusion, and thechallenge failed.

The problem with the case is not thatthe law was not properly applied by any-one. Nor was it a situation where thebroad general concept is somehow mis-conceived. The problem is that the resultis – plain and simple – wrong.

The Administrative Procedures Acthas been carefully reviewed by theSupreme Court of the United States in

scrupulous detail, and there is a massivebody of administrative law that hasemanated from this statute and its endlessimplications. Every federal agency thatdecides anything falls within its ambit,and its uniform application touches thelife of every citizen. Brilliant scholarshave supplemented the literature withendless cascades of pedagogy on thetopic.

Unfortunately, all the king’s horsesand all the king’s men still cannot over-come the fact that the ability of a citizento successfully challenge a bad law, prop-erly enforced and implemented, is miss-ing from the equation.

We look to our courts for equity andjustice. It is a travesty that what we getis bureaucratic blather.

Driving a hovercraft on the NationRiver not only does no harm, it is also areasonable method of transportation in avery remote part of the State. Surely thePark Service should reconsider its regula-tions; however, more to the point, in thiscase at least, the AdministrativeProcedures Act needs to be revisited byour lawmakers to include at least onemore standard for considering the appli-cation of regulatory requirements to indi-vidual citizens – “does the result complywith basic standards of justice?”

Alaskans, indeed all Americans, areraised in the fiction that our courts areprepared to administer justice. It isalways a shock and a disappointmentwhen we learn, again and again, that isnot the case. �

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.

http://www.kinross.com/

By ROSE RAGSDALEFor Mining News

Splayed across several steep slopes thatplunge into the Yukon River some 78

kilometers (48.4 miles) south of DawsonCity in Yukon Territory, the early-stageQV Project is beginning to answer somegeological questions that surfaced at leastfour years ago. That’s when UnderworldResources Inc. captured internationalattention with the discovery of the GoldenSaddle gold deposit on its White GoldProject nearby and touched off a modern-day gold rush to the Yukon.

Underworld since has been acquiredby Kinross Gold Corp., and the GoldenSaddle deposit defined with measuredand indicated resources of 1.005 millionounces grading 3.19 grams-per-metric-ton gold and inferred resources of578,000 oz gold.

Across the Yukon River 10 kilometers(six miles) to the north, Comstock MetalsLtd. is continuing to explore the QV(quartz vein) project where it reporteddiscovery in 2012 of significant mineral-ization in the VG (visible gold) Zone.

Meanwhile, investor interest in the so-called “White Gold District” has wanedalong with investment in the entire juniormining sector as capital markets havetightened in recent years. But Comstock’senthusiasm for its QV Project remainsundaunted as the company completes asecond exploration season on the proper-ty.

Results of both 2012 and 2013 explo-ration confirm a potential bulk-tonnage

target at the QV project, which is con-tiguous to the system that hosts theGolden Saddle deposit. Comstockbelieves the VG zone, where it has con-firmed a 3.25-square-kilometer (1.26-square-mile) soil anomaly, is emerging asone of the largest individual gold-systems

in the White Gold district. “The presence of parallel and mineral-

ized structures at the VG zone, includingthe VG zone (Telegraph Fault), Adit Fault,and VG North Fault together with theShadow and Stewart zones would suggestthat the QV Project hosts one of the larg-

er gold mineralized systems in the WhiteGold District of Yukon,” ComstockPresident and CEO Rasool Mohammadsaid in a Nov. 7 statement. “Our work in2013 significantly expanded the potentialof this project, not only at the VG zonebut also at the multiple gold targets thathave been developed over the pastsix months. Compilation of our 2013exploration results is well underway, andwe look forward to a follow-up explo-ration program in 2014.”

More White Gold discoveriesThe QV claims (14,180 hectares or

35,000 acres) were optioned from Yukonprospector Shawn Ryan in June 2010, andall exploration expenditures under theoption agreement have been completed,with one remaining payment, due June22, 2014, to acquire a 100 percent interestin the QV Property.

Ryan was instrumental in the discov-ery of the Golden Saddle deposit.

But it is the QV project that saw explo-ration activity during the capital droughtof 2013, while no activity was apparentdownriver at Golden Saddle.

Comstock spent about C$1.8 millionon diamond drilling, geological mapping,rock and soil geochemical sampling,ground magnetometer surveys andprospecting in its 2013 exploration pro-gram at the QV project.

In what was initially intended to be aphase 1 drill program but ended up beingthe company’s only drilling in 2013,Comstock completed nine core holes atQV totaling 2,188 meters on the VG zone.The drilling included one significantstep-out drill hole 650 meters alongstrike. Highlights returned from the firstfour core drill-holes (QV13-009 toQV13-012) included 2.06 g/t gold over36.40 meters from 8.6 meters depth(QV13-012).

Comstock discovered the VG zone in2012 through systematic soil-samplingand trenching followed by diamonddrilling. Seven out of eight diamond-drill

� Y U K O N T E R R I T O R Y

Junior refines new White Gold discoveryComstock outlines 3.25 square-kilometer soil anomaly and identifies new targets on QV Property; samples other Yukon prospects


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holes intersected near-surface gold miner-alization, and hole QV12-004 drilled 2.34g/t gold over 89.85 meters starting at43.75 meters, including 3.04 g/t gold over45.5 meters.

The 2012 drilling program at QV con-sisted of eight core holes totaling 1,334meters. The drill program was designed totest strong gold enrichment discovered intrenches at the VG Zone, including 3.31g/t gold over a 95 meters sample lengthfrom trench QVTR12-06 and 3.77 g/tgold over 45 m in QVTR12-15.

Work at the VG zone brings to 3,422meters in 17 holes total diamond drillingcompleted at the QV project, substantial-ly expanding the VG zone’s footprint to350 meters by 350 meters and 250 metersdeep. The zone remains open in all direc-tions.

Gold mineralization in the VG zone ishosted within units of massive, silicifiedgneiss cut by swarms of quartz veinstockworks and breccia, with disseminat-ed and vein controlled pyrite and occa-sionally visible gold.

Comstock’s mapping and prospectingprograms also focused on parallel struc-tures and mineralization to the TelegraphFault, which hosts the VG zone. The com-pany completed sampling on the VGNorth structure located 1,200 metersnorth of the VG zone, the Adit Fault, 450meters south of the VG zone, and theShadow zone located 14 kilometers (8.7miles) north of the VG zone, along withthe VG zone. Gold mineralization withsimilar grades and geological setting tothe VG zone (Telegraph Fault) was con-firmed in these structures.

Mapping completed on the Adit Faultshows the host to be biotite schist withsericite alteration and quartz veiningassociated with an east-west trending ver-tical fault (Adit Fault) and low angleshears dipping about 30 degrees to thenorth-northeast.

Channel samples reported Aug. 1include a 4.67 g/t gold grab sample yield-ed 2.90 g/t gold over a 0.50 meters-widequartz vein, 0.083 g/t gold over 1.00meters below the quartz vein, and 0.676g/t gold over 0.50 meters above the quartzvein. Two grab samples collected sevenmeters from the channel samples alongthe vein structure returned 5.61 g/t goldand 3.31 g/t gold.

Comstock Vice President ofExploration Duncan McBean, P.Geo, saidthe samples were taken from the samelocation.

“A grab sample taken from a quartzvein in June returned 4+ grams. Wereturned in August to take a channel sam-ple, which is more representative andsample the host rock for mineralization.The channel samples returned 2.90 g/tgold over a 0.50 m-wide quartz vein,0.083 g/t gold over 1.00 meter footwallside, wall rock and 0.676 g/t Au over 0.50meters hangingwall side of vein, wallrock,” he explained.

“These are good results with anom-alous gold into the host rock disseminatedand not just a high-grade narrow veinsample,” he added.

McBean said the historic adit locatedat the Adit Fault that goes in about three tofour meters along the river offers goodexposures in the cliff face of a structurethat is parallel to the VG zone, which isobscured by dense overburden fartherupslope.

“To me, (the Adit Fault) is good sur-face proof of the VG zone’s parallel sys-tem to surface. That will be a drill targetfor 2014,” he explained.

Comstock had planned to mount a

five-hole, phase 2 diamond drill programon the VG zone later in the field season,but given the poor reception juniorsreceived in the capital markets in 2013,the company opted to hang onto to its“limited resources” and work to carry outa bigger drill program in 2014, McBeansaid.

“The idea will be to raise more moneyand do more extensive drilling,” he toldMining News.

Geology fits Tintina settingThe QV property is situated in the

Tintina Gold Belt, a highly prospectivecluster of gold mines, prospects anddevelopments stretching from southwest-ern Alaska into southern Yukon. Since1985 exploration companies have discov-ered more than 160 million ounces ofgold in this boomerang-shaped regionthat stretches from northern BritishColumbia through southern and centralYukon Territory to southwestern Alaska.The White Gold District is perhaps thelatest hotspot in the Tintina belt since dis-covery of Golden Saddle.

The QV property is underlain by unitsof highly deformed Late Paleozoic schistand gneiss, derived by the metamorphismof volcanic and sedimentary strata, andcut by stocks and sills of Mesozoic andTertiary-aged intrusive rocks. The gneissunits of volcanic origin (metavolcanics)

are important host to mineralization, andthe same units that host Golden Saddlecan be traced north to QV.

Faults are an important feature in thedistrict as the Tintina Gold Belt isdemarked by long-lived, deep crustalstructures of all scales and types. At QV,Comstock Metals has recognized sets ofeast- to northeast-trending, shallowlynorth-dipping faults that display strongshearing and fracturing of the metavol-canic gneisses that are the focus of goldmineralization and alteration.

At the VG zone, a wide band of felsic(quartz-feldspar) gneiss is the preferredhost. The full extent of this unit is notknown, however narrow bands of maficgneiss (biotite-hornblende-quartz-feldspar) occur in the eastern portion ofthe zone where it has returned lowergrades and narrower mineralized inter-cepts. Recent drilling (hole QV2013-13)has re-established both the felsic gneissand the zone of mineralization east of thisband, leaving the target room for contin-ued expansion.

Gold mineralization at the VG zone ishosted in a unit of massive grey and whitequartz and siliceous breccia that liesunderneath the east-trending fault. Pyriteoccurs as disseminated crystals, some-times as fine-grained micro-veins, oftenwith traces of molybdenite. Gold grainshave been noted in a number of core sam-ples, but is usually too fine-grained to be

seen unaided, and the presence of goldcan only be reliably determined by fireassay. Strong potassic feldspar alterationand sericite is common beneath thequartz, rarely as lenses within it. Deeperin the system strong alteration is seen inzones of fracturing and veining markedby hematite, albite and quartz.

The predictable nature of the control-ling fault structures, the spectacularquartz veining and brecciation, plus theintensity of alteration at the VG zone,coupled with its strong zonation, hasallowed Comstock geologists to rapidlyunderstand the mineralizing controls atthe zone, and to apply this knowledge toexpansion drilling elsewhere on the prop-erty.

Though the VG zone is similar in styleand geology to the Golden Saddledeposit, Comstock points to significantdifferences. The VG zone has up to 50-meter-thick zones of quartz-sericitealtered gneiss and prophyry dyke, andzones of massive silification and brecciathat contain traces of pyrite, sometimeswith visible gold; VG mineralization dipsat a shallow angle (30 degrees) beneath alow-rising hill; and it’s early days withonly 17 holes drilled at the VG zone, com-pared with 208 holes (54,733 meters)completed at Golden Saddle.

By contrast, gold mineralization atGolden Saddle is preferentially hostedwithin metamorphosed felsic intrusiveunits, as well as felsic and mafic metavol-canic rocks, and is associated with quartzveins, stockworks and breccia zones, aswell as pyrite disseminations that formnortheast-striking and moderately north-west-dipping (plus/minus-50-degree) tab-ular bodies of gold mineralization.

Other QV targetsElsewhere on the QV property,

Comstock advanced other targets in 2013,including the Stewart and Shadow targets.

“Near the VG (zone), we have detectedtwo new targets – one 2,000 meters northand another 600 meters south. Both arereturning encouraging results. The VGzone structure itself has been traced over700 meters to the west and at least 1,000meters east. Other new targets, such as theShadow Zone and Stewart Grid, havebeen found well east of the VG zone.Limited trenching has returned anom-alous gold and pathfinder geochemistry,additional mapping, trenching, and IP

11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF NOVEMBER 24, 2013


YUKON PROSPECTS

see YUKON PROSPECTS page 12

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Comstock Metals Ltd. has expanded the VG Zone’s footprint at its early-stage QV Project to350 meters by 350 meters and 250 meters deep. The junior discovered near-surface gold min-eralization in the VG zone in 2012. The zone remains open in all directions.

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surveying required before drilling,”McBean said.

Unlike the VG zone, the Stewart andShadow targets are suggestive of an intru-sion-associated mineralized system,according to McBean.

“We’re looking for east-west structuresoffsetting north-south structures,” heexplained.

Significant gold-in-soil and gold-in-rock anomalies have been defined.Ongoing exploration is focused on prepar-ing these targets for drill testing.

The Stewart Grid, located seven kilo-meters (4.34 miles) to the northeast of theVG zone, is a large soil anomaly wherelimited trenching yielded weak mineral-ization. Drill ready targets identified.

Comstock conducted an induced polar-ization survey at Stewart along with asmall amount of mapping and soil sam-pling, and drill-ready targets have beenidentified.

On the Shadow Zone, located 12 kilo-meters (7.4 miles) north of the VG zone,two structures have been interpreted frommagnetic data and surface mapping.

Through soil and rock sampling,Comstock expanded a known soil anomalyto an area 2,500 meters by 1,400 meters asdefined by values ranging from greaterthan 10 parts-per-billion gold up to 514ppb gold. Trench sampling in 2012returned 88 meters of 0.33 g/t gold (asreported Dec.11, 2012). The highest rockgrab sample result from 2013 returned1.51 g/t gold. The mineralization at theShadow Zone is hosted in felsic intrusiveand augen gniess rocks. The zone andstructures display similar characteristics tothe VG Zone.

But the VG zone, by comparison, islocated within an east-west soil anomalythat measures 3,500 meters by 4,000meters and includes additional targetsalong structure yet to be tested, includingone about 600 meters farther to the east,according to McBean.

He said the QV property also appears tohost a large granite intrusive body andboth the Shadow and Stewart zones seemto be situated along the intrusive body,which disrupts a system of gold mineral-ization.

The QV property also has maiden tar-gets over multiple parallel structures thatsuggest potential for added discoveries.

“Working closely with our Yukon-basedconsultants, we are continuing to recog-nize new targets at QV through the use ofboth conventional and innovative tech-nologies and techniques,” McBean said.

Comstock is exploring a number ofother soil anomalies and areas of intereston the QV property, including the Tetratarget and the Eastern and Western exten-sions.

Airborne magnetic surveys define VGZone-style breaks, which are covered bysoil sampling surveys. If the soil samplesshow elevated levels of “pathfinder ele-ments” such as antimony, molybdenum,mercury, silver and arsenic then the anom-alous sites are either trenched using a Can-Dig mini-back hoe (manufactured forfarmers) or tested with a lightweight pneu-matic sampling drill called a Geoprobe.Samples of bedrock are collected for assay,but initially they are analyzed by a semi-quantitative XRF technique. If these rocksamples are anomalous then the samplingis tightened-up until a mineralized struc-ture is found.

While the Geoprobe technique is “ver-satile and relatively inexpensive,” McBeansaid he, “personally, still prefers trenchingbecause it helps a geologist to actually see

the structure.We haven’t done any trenching in 2013,

but now we have some follow-up spotsfrom 2013 work where I’m recommendingwe go in and trench next season,” headded.

At the same time, an airborne photo-graphic topography survey is flown usinga drone aircraft or high-definition inducedpolarization geophysical surveys are done.

The junior also benefits from the depthof Tintina Gold Belt/White Gold districtexperience of its technical advisors andconsultants, which include Shawn Ryan,former Underworld Resources Presidentand CEO Adrian Fleming, formerUnderworld Resources vice president ofexploration Rob McLeod, who is currentvice president of exploration at Full MetalsMinerals and Revolution Resources andCEO. McLeod is credited with identifyingthe potential of the White Gold Propertyand leading the discovery team for theGolden Saddle Zone.

Other Yukon propertiesWhile the outlook for the QV project is

particularly promising, Comstock alsoinvested some energy in exploring otherYukon properties in 2013.

One parcel is the Kermode Property, aclaim block located about 12 kilometers(7.4 miles) due south of QV and GoldenSaddle and west-northwest of ThistleCreek.

“We did a bit of soil sampling in Mayand got a soil anomaly,” McBean said.

Comstock also mounted a 2013 workprogram on its Walhalla Project locatedroughly 50 kilometers (31 miles) to thesoutheast of QV. In 2012, the junioroptioned from Seafield Explorations Ltd.a 75 percent interest in Seafield’s jointventure with Volcanic Minerals Ltd. forthe exploration and development of theWalhalla Property, named for a placercreek that intersects the better-knownScrogge Creek on the property.

Walhalla, also located in the WhiteGold district immediately east of and con-tiguous with Pacific Ridge ExplorationLtd.’s Mariposa Project, consists of 1,988quartz claims covering about 41,800hectares (103,288 acres) some 120 kilo-meters (75 miles) southeast of DawsonCity.

The Walhalla project is consideredprospective for discovery of several typesof mineralization, with gold the primarycommodity of interest. Previous work onthe property identified strong anomalousgold zones in soils as well as anomalouspathfinder elements such as arsenic andbarium. About 1,014 ridge-and-spur sam-ples were taken in the western, north-east-ern, and south-eastern parts of the proper-ty, and significant gold-in-soil anomalieswere identified in all areas. Of particularinterest, a 3.41 g/t gold-in-soil anomaly inridge-and-spur sampling that was followedup by 366 grid soil samples that returned avalue of 6.26 g/t gold – one of the top 10samples taken historically in the entireWhite Gold district.

Comstock’s 2013 work program on theWalhalla project included rock and soilsampling. Soil geochemistry at Walhallareturned values ranging up to 17 ppb gold,306 parts-per-million copper, and 1,687ppm nickel, while Rock geochemistryresults have returned gold values rangingup to 294 ppb gold, 121 ppm copper, and451 ppm nickel.

“Walhalla has a nice soil anomaly,”McBean said. “We did a regional probe,rock sampling and more regional soil sam-pling. The results are worth following upon.”

Comstock said it will plan additionalgrid-soil sampling and trenching for the2014 work season. �

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While Pretium Resources Inc. con-tinues to explore for gold at its

Brucejack Project in northern BritishColumbia, a disagreement between thejunior’s two technical consultants,Snowden Mining Industry Consultants ofPerth, AU and Toronto-based StrathconaMineral Services Ltd. and the resignationof Strathcona in early October has igniteda firestorm of controversy over the valid-ity of the gold resource reported for theproject’s Valley of the Kings zone in2012, and sparked a flurry of class-actionlawsuits against the company.

At least eight law firms specializing inshareholder rights cases filed suit in lateOctober, accusing Pretium of misleadingits investors in violation of U.S. andCanadian securities laws. Specifically,the complaints allege that Pretium failedto disclose that it had not acquired credi-ble evidence demonstrating the quantityor quality of gold resource and reserveestimates at its Brucejack gold project innorthwestern British Columbia.

Brucejack is part of a largely unex-plored land package of more than103,000 hectares (254,518 acres) locatedabout 65 kilometers (40 miles) north ofStewart in northwestern BritishColumbia. The focus of the project is theValley of the Kings Zone, where Pretiumhas uncovered many extreme-grade goldintersections within a low-grade goldquartz stockwork system.

Pretium said this is an unusual style ofgold mineralization, but the extremegrade hits have been encountered consis-tently, and the “hit rate” has improvedsince 2009, demonstrating that the com-pany is identifying the high grade areas.

Bulk sample woesUntil this fall, exploration and devel-

opment of a gold project at Brucejackappeared to be moving forward smoothlyfor Pretium.

The company completed a feasibilitystudy in June that envisioned constructionof a 2,700 metric ton per day bulk miningoperation with total production of 7.1million ounces with average annual pro-duction ranging from 425,700 oz (first 10years) to 321,500 oz over 22 years life ofmine.

Pretium estimated the Valley of theKings contained probable miner-al reserves of 6.6 million ounces of goldand 5.3 million oz of silver (15.1 millionmetric tons grading 13.6 grams-per-met-ric-ton gold and 11 g/t silver), whileanother area of mineralization on theBrucejack property, the West Zone, hostsproven and probable miner-al reserves of about 700,000 ounces ofgold and 30.0 million oz of silver (3.8million metric tons grading 5.8 g/t goldand 243 g/t silver).

The company also raised more thanC$27 million in two private placements inSeptember, bringing to about C$34 mil-lion its total working capital.

But problems began to surface whenPretium undertook a 10,000-metric-tonbulk sample program designed to validatethe block model used to estimate the min-eral resource for the Valley of the Kingsin November 2012.

“We wanted to generate as much dataas possible within the constraint of a leg-

islated limit of a 10,000-metric-ton exca-vation,” Pretium officials said in aNovember 2013 presentation.

But Strathcona and Snowden differ onhow (and when) to use the bulk programdata to reconcile the Valley of the KingsNovember 2012 Mineral Resource esti-mate. The consultant also critiqued thebasis for the 2012 mineral resource esti-mate, and raised questions aboutPretium’s disclosure of the concerns tothe public.

Strathcona, which is credited withfamously exposing Bre-X as a scam in1996, is known for its careful approach toestimating mineral resources andreserves.

In its resignation letter, Strathconasaid, “There are no valid gold mineralresources for the [Valley of the Kings]zone, and without mineral resources therecan be no mineral reserves, and withoutmineral reserves there can be no basis fora feasibility study,” Strathcona said.

The firm also said Pretium’s “state-ments included in all recent press releas-es about probable mineral reserves andfuture gold production [from the Valley ofthe Kings zone] over a 22-year mine lifeare erroneous and misleading.”

When it withdrew, Strathcona advisedPretium that it had previously assertedsimilar views critiquing the Snowden

resource model for the Valley of theKings, accompanied with “recommenda-tions” for public disclosure of the prelim-inary bulk sample data supporting theirconclusions. At one point, these asser-tions, conclusions and “recommenda-tions” were made on the basis of about 20percent of the underground drillingresults, no assay results from the sampletower and no results from production.According to Strathcona, the proper wayto evaluate the bulk sample from Valleyof the Kings is to take a small amount ofmaterial (a “sample tower”) for analysis.

Snowden, however, stands by the 2012estimate, and believes that because it wasa bulk mining estimate, the most accurateway to validate it is to produce gold fromthe entire bulk sample excavation,Pretium said.

Snowden also expressed concerns thatStrathcona’s sample tower approachmight not be valid for use in the bulksample program at the Valley of theKings, given the high-nugget coarse goldenvironment and stockwork nature of themineralization.

In early October, Pretium reported thatprocessing of the bulk sample had com-menced at a custom mill located inMontana, and six days later reported thatStrathcona had withdrawn from the pro-gram, after raising questions about the

validity of the November 2012 mineralresource estimate. Processing of the bulksample, however, was proceeding asplanned.

The amount of gold produced from theentire 10,000-metric-ton bulk sample willbe used to reconcile the Valley of theKings November 2012 mineral resourceestimate, prepared by Snowden.

Pretium said it anticipates that a totalof about 4,000 ounces of gold would beproduced from the material excavated forthe bulk sample program, but two weekslater, preliminary mill results from theprocessing of the 2,167 metric tons ofbulk sample material contained in a426585E cross-cut, recovered 281 ouncesgold – 94 oz in gravity concentrate, 174oz in flotation concentrate and 13 oz intailings – along with a total of 532 oz sil-ver.

Proof in final mill resultsPretium and Snowden maintain that

the mineral resource data and subsequentreports are valid. “We are disappointed byStrathcona’s decision to withdraw prema-turely from the bulk sample program,”said Pretium CEO Robert Quartermain.

Preliminary figures from processingthe 426585E cross-cut showed there was94 percent more gold produced from the

� B R I T I S H C O L U M B I A

Law firms eye feeding frenzy at PretiumDeparture of Toronto mineral resources consultant ignites controversy; raises questions about junior’s work at B.C. gold project

see PRETIUM CONTROVERSY page 19

PRET

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By SHANE LASLEY Mining News

The Alaska Miners Association’s annual conventionmarks the changing of seasons for junior exploration

companies with mineral projects in Alaska. As a blanket ofsnow hides outcropping rocks and the water needed fordrilling crystalizes, geologists who have spent the long sum-mer days investigating the vast mineral endowment acrossthe Far North trade in their hammers, backpacks and hikingboots for suits, ties and PowerPoint presentations that showoff the achievements of their latest field programs.

While the 2013 exploration programs across Alaskawere not without their successes, the fanfare of explorationresults heralding the changing of seasons was notably lessrobust than typically seen at the beginning of the juniorfundraising season – an upshot of the lack of capital avail-able to mining and mineral exploration companies world-wide.

“The exploration expenditures aredown worldwide by about 30 percentand for junior explorers about 40 to50 percent; and some of those budg-ets are just to keep the lights on, theyare not actually doing much,”NovaCopper Inc. President and CEORick Van Nieuwenhuyse pointed outduring a keynote speech at the 2013AMA convention.

While money is undeniably tightacross the sector, a number of juniorexplorers could afford to pay the electric bill and mountmultimillion-dollar exploration programs on promisingmetals projects across Alaska. Several of these programswere featured at the November gathering in Anchorage, thefirst mining convention of North America’s 2013/14fundraising season.

Tetlin grabs attention A recently discovered skarn rich in gold and copper pro-

vided a distinctive tone to the results being trumpeted fromContango ORE Inc.’s Tetlin project located about six miles(10 kilometers) southeast of the crossroads town of Tok,Alaska.

While raising funds was tough for most mineral explo-ration companies coming into the 2013 field season,Contango ORE closed a US$14.1 million financing inMarch.

With its coffers full, the company invested roughlyUS$10 million on a 2013 exploration program aimed atestablishing a maiden indicated resource at Peak, a zone ofhigh-grade gold and copper mineralization located in thenortheastern part of the 675,000-acre (273,163 hectares)Tetlin property.

While geochemistry and intermittent drill results overthe previous four seasons of exploration at Tetlin have whis-pered hints of the property’s potential, a series of drill inter-cepts with grades topping 16 grams per metric ton gold and1 percent copper over 40-plus meters grabbed the rapt atten-tion of the attendees of the AMA convention.

Highlights from the first 34 holes include: •TET13062 cut 64.8 meters averaging 13.1 g/t gold, 21

g/t silver and 0.48 percent copper; •TET13063 cut 40.5 meters averaging 16.6 g/t gold, 36.1

g/t silver and 0.73 percent copper; •TET13082 cut 87.6 meters averaging 4.03 g/t gold, 19.3

g/t silver and 0.30 percent copper; •TET13085 cut 45 meters averaging 2.74 g/t gold, 69.5

g/t silver and 1.40 percent copper; and •TET13088 cut 138 meters averaging 3.62 g/t gold, 11.4

g/t silver and 0.11 percent copper. All told, 69 holes (14,625 meters) drilled into Peak dur-

ing 2013 traced a 500-meter-long dumbbell-shaped zone ofskarn mineralization, with the southeast end being morecopper-rich and the northwest side showing the higher goldvalues.

“I can’t wait to release the rest of these drill results,”Tetlin Project Geologist Chris Van Treeck told the audienceduring a Nov. 7 presentation on the exciting project.

The wait was not long. On Nov. 13 Contango OREreleased the final results, highlights include:

•TET13098 cut 84.4 meters averaging 4.99 g/t gold, 16.7g/t silver and 0.167 percent copper;



•TET13110 cut 96.9 meters averaging 9.06 g/t gold, 4.3g/t silver and 0.093 percent copper; and

•TET13117 cut 134.8 meters averaging 4.85 g/t gold, 2.9g/t silver and 0.084 percent copper.

Contango ORE CEO Brad Juneau said, “Our drillingresults clearly add a material amount of gold resources tothe Peak Zone.”

Contango ORE said an independently prepared resourcethat includes the 87 drill holes (17,949 meters) completed atPeak over the past two seasons is expected to be release byDecember, at which time the Texas-based explorer willevaluate its options with regard to further exploration, jointventure, potential sale, or other strategic initiatives.

The company said it has fulfilled its capital work com-mitments at Tetlin for the next several years, so it can holdits claims or leases on the expansive property with minimalcapital expenditures.

Contango ORE expects to go into 2014 with more US$3million in the bank, no debt, and an overhead of roughlyUS$600,000 per year.

Grade is king at Bornite High-grade copper provided a distinctive tone to the

Arctic and Bornite deposits at NovaCopper’s Upper KobukMineral Projects in Northwest Alaska.

“Grade is king, and in a world where most new depositsare about half-a-percent copper, the grades at Arctic andBornite really stand out,” Van Nieuwenhuyse touted duringhis address at the AMA convention.

Arctic, a volcanogenic massive sulfide deposit, has apotentially open-pit-minable indicated resource of 23.85million metric tons averaging 3.26 percent (1.71 billionpounds) copper, 4.45 percent (2.34 billion lbs.) zinc, 0.76percent (400 million lbs.) lead, 0.71 grams per metric ton(550,000 ounces) gold, and 53.2 g/t (40.8 million ounces)silver. Additionally, Arctic has an inferred resource of 3.63million metric tons averaging 3.22 percent (239 millionlbs.) copper, 3.84 percent (285 million lbs.) zinc, 0.58 per-cent (43.2 million lbs.) lead, 0.59 g/t (60,000 ounces) gold.

The roughly C$16-million exploration program com-pleted by NovaCopper in 2013, though, focused on Bornite,a project situated about 16 miles (26 kilometers) southwestof Arctic that hosts two known carbonate replacementdeposits rich in copper.

Ruby Creek is a near-surface zone at Bornite that hostsan indicated resource of 6.8 million metric tons averaging1.19 percent (179 million lbs) copper and an inferredresource of 47.7 million metric tons averaging 0.84 percent(883 million lbs) copper.

South Reef, a richer but deeper zone, has an inferredresource of 43.1 million metric tons averaging 2.54 percent(2.4 billion lbs) copper.

This year, NovaCopper completed an 8,142-meter drillprogram focused on expanding and upgrading theseresources.

One of the key achievements of this drill program waslinking Lower Reef, a deep high-grade horizon at RubyCreek, to the equally high-grade South Reef zone.

“This year we have had good success at extending andconnecting those two deposits,” Upper Kobuk MineralProjects Manager Andy West informed the AMA crowd onNov. 7.

Four holes targeting this connection have outlined whatappears to be a 100-meter-thick zone of continuous high-grade copper mineralization that arcs in a 1,000-meter-longhorseshoe between Lower Reef and Ruby Creek.NovaCopper has released the results on two of these holes:

•RC13-220, drilled to the north of the South Reef zone,intersected two mineralized intervals. These two intervals,encountered over 131.3 meters of drilling starting at a depthof 809.1 meters, totaled 126 meters of mineralization witha weighted average grade of 1.59 percent copper and com-prised of: 45.6 meters averaging 1.07 percent copper; and80.4 meters averaging 1.89 percent copper.

•RC13-224, drilled the north of the Ruby Creek zone,intersected two mineralized intervals. These two intervals,encountered of 241.3 meters of drilling starting at a depthof 513.3 meters, totaled 236 meters of mineralization witha weighted average grade of 1.9 percent copper and com-

prised of: 229.4 meters at a grade of 1.73 percent copper;and 6.6 meters at a grade of 7.70 percent copper.

Drilling at Ruby Creek in 2013, which cut multiple lay-ers of roughly 1 percent copper, continues to expand anddemonstrate continuity of this potentially open-pittable cop-per zone. Highlights from the first 10 holes include:

•RC13-221 intersected five mineralized intervals, start-ing at 138.9 meters and ending at 367.7 meters (228.8-meter interval), for a combined 123.8-meter compositeinterval with a weighted average grade of 1.23 percent cop-per and comprised of: 10.0 meters at a grade of 0.85 percentcopper; 12.5 meters at a grade of 0.98 percent copper; 25.8meters at a grade of 1.18 percent copper; 16.8 meters at agrade of 1.13 percent copper; and 58.8 meters at a grade of1.39 percent copper.

•RC13-219 intersected 42.5 meter with a weighted aver-age grade of 1.44 percent copper, starting at 425.9 meters.RC13-218 intersected three mineralized intervals, startingat 29.5 meters and ending at 340.2 meters (310.7-meterinterval), for a combined 73.8-meter composite intervalwith a weighted average grade of 1.2 percent copper andcomprised of: 14.1 meters at a grade of 0.84 percent copper;23.5 meters at a grade of 0.94 percent copper; and 36.2meters at a grade of 1.51 percent copper.

•RC13-217 intersected four mineralized intervals, start-ing at 159.2 meters and ending at 293.3 meters (134.1-meter interval), for a combined 63.3-meter composite inter-val with a weighted average grade of 0.99 percent copperand comprised of: 18.8 meters at a grade of 1.23 percentcopper; 8.6 meters at a grade of 1.08 percent copper; 5.2meters at a grade of 0.59 percent copper; and 30.8 meters ata grade of 0.9 percent copper. A cut-off grade of 0.5 percentcopper was used to calculate the above results.

•As NovaCopper continues to expand the zones of high-grade copper at Bornite, the company is working on aprefeasibility for the Arctic volcanogenic massive sulfideproject some 16 miles (26 kilometers) to the northeast.

NovaCopper, which had US$8.2 million in working cap-ital at the end of August, will need to raise additional fundsto keep the pace it has set at the Upper Kobuk MineralProject over the past two seasons.

“We have got to raise some money but that is anotherstory,” Van Nieuwenhuyse told the AMA crowd.

Japanese smelter funds Palmer With traditional sources of venture capital available to

junior exploration companies being scare, ConstantineMetal Resources Ltd. found a more reliable source of fundsto continue the exploration of its Palmer volcanogenic mas-sive sulfide project in 2013.

Early in 2013 Constantine finalized a US$22 millionoption and joint venture agreement with Dowa Metals &Mining Co., Ltd, which owns the largest zinc refinery inJapan. To earn a 49 percent stake in Palmer, Dowa hasagreed to invest US$20.75 million on exploration at theVMS project and pay Constantine US$1.25 million in cashover a four-year span.

“This is huge for the project and for Constantine,”Constantine Vice President of Exploration Darwin Greenexplained during a Nov.7 presentation.

In addition to a cash infusion during tight financial mar-kets, Dowa brings 130 years of experience in the miningand smelting of VMS ores to its newly forged partnership atPalmer.

Dowa, in turn, gains a foothold in a potential source ofmetals concentrates that is located 35 road-miles (60 kilo-meters) from the Pacific Rim deep-sea port at Haines.

Dowa budgeted US$2.5 million for a 2013 explorationprogram that targeted Glacier Creek, which hosts an NI 43-101-compliant 4.75 million metric ton inferred resourceestimate grading 1.84 percent copper, 4.57 percent zinc,0.28 grams per metric ton gold and 29 g/t silver.

Including the 10 holes drilled this year, 20 holes (7,667meters) have been drilled into Glacier Creek since thisresource was calculated.

Five zones of mineralization have been discovered todate at Glacier Creek – RW East, RW West, and South Wallzones 1, 2 and 3.

Drilling focused on expanding the South Wall and RWzones, CMR13-49, a South Wall Zone I step-out hole, inter-sected 24.7 meters of 2.02 percent copper, 8.47 percentzinc, 31.7 g/t silver and 0.51 g/t gold. This massive sulfide

� A L A S K A

AMA sets tenor of fundraising season High grades, largest field programs set Tetlin and Bornite grab the spotlight; Japanese investments advance Palmer, Man in 2013

see AMA RECAP page 15

RICK VANNIEUWENHUYSE

intersection is located approximately 30meters up-dip of CMR10-40, which inter-sected 20.8 meters of 1.03 percent copperand 5.01 percent zinc (reported in 2010).Both these intersections are outside the lim-its of the pre-2010 resource estimate.

Precious metal-rich RW Zone oxidemineralization was intersected in CMR13-50, including 37.5 meters of 123.2 g/t silverand 0.62 g/t gold. The intersection includesa partially un-oxidized subinterval of 13.7meters grading 0.51 percent copper, 4.97percent zinc, 1.61 percent lead, 134.3 g/t sil-ver and 0.71 g/t gold. Highly successfulexpansion program with significant miner-alization intersected in seven of ten holes,including five high-grade intersections 20meters or greater in width.

Dowa, which began mining and smeltingVMS ore in the 1880s, has refined the sci-ence of separating the precious and basemetals common to these complex deposits.

Metallurgical testing of Palmer VMSmineralized material was carried out bySGS Canada in Vancouver under the obser-vation and direction of metallurgists fromDowa this year.

This metallurgical work was completedon a composite of 212 assay sample rejectsfrom past drilling that is a blend of all majorore-types within the South Wall resourcearea, with a head grade assay of 1.56 per-cent copper, 6.47 percent zinc, 28.5 gramsper metric ton silver and 0.19 g/t gold.

Highlights from the locked cycle flota-tion tests include: an average copper recov-ery of 89.6 percent to a copper concentratecontaining 25.5 percent copper; averagezinc recovery of 84.9 percent to a zinc con-centrate containing 59.1 percent zinc; com-bined total silver and gold recovery to cop-per and zinc concentrates of 89.7 percentand 75 percent respectively; and 73.7 per-cent of the silver and 61.5 percent of thegold report to the copper concentrate.

Of particular importance to Dowa, whichundoubtedly sees concentrates from Palmeras a potential feedstock for its zinc smeltersin Japan, is the quality of the zinc concen-trates. The locked cycle tests are of verygood quality, with low impurities and nopotential penalty or problematic elements.

Dowa has a balance of US$18.25 mil-lion, or an average of roughly US$6.1 mil-lion annually for the next three years, toearn a 49 percent stake in Palmer.

Eureka discovered, Itochu lost Thanks to its own partnership with a

Japanese corporation, Pure Nickel Inc. hasdialed in on a distinct zone of nickel-plat-inum group element-gold-copper mineral-ization across a the central portion of theMan property that stretches along the south-ern slopes of the Alaska Range, roughly 250miles (400 kilometers) southeast ofAnchorage.

Itochu Corp., Pure Nickel’s partner atMan, has invested roughly US$23.6 millionon exploration at the project since 2008,earning the Tokyo-based company a 30 per-cent interest in this property that blanketssome 181.5-square-mile (470 square kilo-meters) of the Wrangellia Terrane.

This work led to the discovery of theEureka zone, a subset of the 21-mile- (33kilometers) long Alpha mafic-ultramaficcomplex that stretches across the centralportion of the Man property.

Eureka was first recognized in 2010 drillholes PNI-10-35 and PNI-10-36. Hole 35cut 32 meters averaging 0.169 g/t platinum-palladium-gold, 0.1 percent copper and 0.23percent nickel. Hole 36 cut 165.5 metersaveraging 0.272 g/t platinum-palladium-gold, 0.13 percent copper and 0.28 percentnickel. A 2012 drill hole, PNI-12-063 con-firmed the continuity of the mineralization

with an 80.95-meter interval averaging0.315 g/t platinum-palladium-gold, 0.17percent copper and 0.25 percent nickel.

Pure Nickel said that a review of pastdrilling on the property shows that all drillholes intersecting the Eureka zone stratigra-phy have encountered disseminated sulfidemineralization with strikingly similargrades along seven kilometers (4.5 miles) inthe central part of the Alpha Complex. Toconfirm this find, Itochu agreed to investUS$3.5 million in 2013 to complete a2,991-meter drill program primarily target-ing the Eureka, as well as prospecting andmapping work in various parts of the prop-erty.

Six of the seven holes that targetedEureka cut the broad zone of nickel-PGE-gold-copper mineralization being sought,with one hole being abandoned in a faultzone.

Highlights from the drilling include: •205.2 meters averaging 0.34 percent

nickel-equivalent (19 parts per billion gold,61 ppb platinum, 122 ppb palladium, 0.09percent copper and 0.24 percent nickel) inhole PNI-13-069;

•162.6 meters averaging 0.29 percentnickel-equivalent (13 ppb gold, 49 ppb plat-inum, 104 ppb palladium, 0.08 percent cop-

per and 0.2 percent nickel) in hole PNI-13-072;

•130.5 meters averaging 0.30 percentnickel-equivalent (16 ppb gold, 52 ppb plat-inum, 118 ppb palladium, 0.07 percent cop-per and 0.22 percent nickel) in hole PNI-13-073; and

•253.9 meters averaging 0.27 percentnickel-equivalent (11 ppb gold, 38 ppb plat-inum, 91 ppb palladium, 0.06 percent cop-per and 0.2 percent nickel) in hole PNI-13-074.

Pure Nickel said the results of the 2013drilling confirm the presence of what is nowinterpreted as a continuous zone of mag-matic sulfide mineralization containing ele-vated concentrations of nickel, copper, gold,platinum and palladium. The mineralizationalso includes minor silver and cobalt.

Pure Nickel President and CEO DaveMcPherson said. “The results of our 2013drilling program confirmed our interpreta-tions regarding the scale and continuity ofthe Eureka zone.”

Drilling and mapping have now tracedEureka for 15 kilometers (9.3 miles) andPure Nickel believes, given the Alpha com-plex as a whole stretches for more than 30kilometers (18.6 miles), it is likely that addi-tional work could extend the zone to world-

class proportions. “We feel that we have made a significant

discovery on the Man property, and webelieve the zone has the potential to developinto a very large deposit. We look forward to2014 when we hope to start the resourcedelineation process,” McPherson added.

Pure Nickel estimates that a 6,000-10,000-meter drill program will produce aninitial NI 43-101-compliant resource for theEureka zone.

First though, Pure Nickel must find anew partner.

Itochu, which did not see the PGE-potential it was seeking in the nickel-domi-nated Eureka zone, has decided to withdrawfrom the Man project.

“We end up owning 100 percent of thisproject that has enormous potential,”McPherson explained during a Nov. 18 con-ference call announcing the withdrawal ofItochu. “We need to start marketing this toother potential partners who have an interestin big-big-scale (nickel-dominated) proj-ects.”

Any potential partner will be interestedin seeing the results of the initial metallurgi-cal work to test the nickel recoveries in theEureka zone, which are expected to becompleted early in 2014. �



AMA RECAP

http://www.miningnewsnorth.com/

Mining Companies

Kinross Fort Knox/Fairbanks Gold Mining Inc.Fairbanks, AK 99707Contact: Anna Atchison, Manager, Community and Government RelationsPhone: (907) 490-2218 Fax: (907) 490-2290E-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.

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

Alaska Air Cargo • Horizon Air CargoP.O. Box 68900 SEAFZSeattle, WA 98168Contact: Joe Sprague, Vice President of CargoPhone: (206) 392-2705 or 800-2ALASKA

Fax: (206) 392-2641E-mail: [email protected]: www.alaskacargo.comAward winning cargo services to more places, moreoften, with more lift to, from, and within the stateof Alaska.

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 earthsciences for the mining and petroleum industries pro-viding prospect generation, evaluation and valua-tion, exploration concepts, project management,geographic information systems and data manage-ment. 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 specializing

in Arctic and remote site development with theexperience, equipment and personnel to safely andefficiently complete your project.

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 coredams to control hazardous waste and water move-

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.


ment. Foundations – maintain permafrost for durablehigh capacity foundations.

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 manufacturedexplosives and drilling supplies with a commitmentto safety and unmatched customer service.

Calista Corp.301 Calista Court, Suite AAnchorage, AK 99518Phone: (907) 279-5516 • Fax: (907) 272-5060Web site: www.calistacorp.com

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 pho-tography, oil and gas support, mineral exploration,construction, seismic remote site work, internal andexternal load, heli-hiking and sled-dog adventures.

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 solutionsto the most complex communication issues facingindustrial clientele. We deliver competitive services,reputable expertise and safely operate under themost severe working conditions for the oil, gas andnatural resource industries. GCI-your best choice forfull life cycle, expert, proven, industrial communica-tions.

Global Equipment Services Inc. 3820 Schact St. Fairbanks, AK 99701Contact: Jeff Dahl, General ManagerPhone (425) 531-1854Email: [email protected]: www.GESequipment.comGlobal Equipment Services Inc. purchases, sells andrents high quality heavy equipment worldwide witha strong emphasis on high quality work readyCaterpillar Track type tractors.

HDR Alaska Inc. 2525 C St., Ste 305Anchorage, AK 99503Contact: Jaci Mellott, Marketing CoordinatorPhone: (907) 644-2091Fax: (907) 644-2022Email: [email protected]: www.hdrinc.comHDR Alaska provides engineering, environmental,planning, and consultation services for mining andmineral exploration clients. Services include: biologicalstudies; cultural resources; project permitting; NEPA;stakeholder outreach; agency consultation; and envi-ronmental, civil, transportation, energy, and heavystructural engineering.

Jackovich Industrial & Construction SupplyFairbanks, AK 99707Contact: Buz Jackovich

Phone: (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 indus-try.

Keller Williams Commercial101 West Benson, Ste. 503Contact: Stewart Smith, Associate BrokerAnchorage, AK 99503Phone: (907) 865-6505Cell: (907) 727-8686Email: [email protected]: Ryan Mae Lucas, AssociateCell: (907) 360-7135Email: [email protected]: www.stusell.com;www.AKMiningClaims.comMining Claims to buy, sell, or lease, call the Alaskaprofessionals. We provide real estate brokerage serv-ice to the mining industry, with over 35 years of com-mercial experience. Call for a list of our featuredproperties.

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, crewtransport, 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 companiesincludes truckload and less-than-truckload highwayconnections, scheduled barges, intermodal bulk

chemical hauls, scheduled and chartered airfreighters, domestic and international air forwardingand international sea forwarding services.

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 almost50 years, NAC is the states largest all cargo carriermoving nearly 100 million pounds of cargo on sched-uled flights to 17 of Alaska’s busiest airports. NAC’sfleet of DC-6, B-727, and ATR-42 aircraft are availablefor charters to remote sites and flag stops to 44 addi-tional communities.

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.

Pebble Partnership3201 C St., Suite 604Anchorage, AK 99503Phone: 907-339-2600www.pebblepartnership.com

PND Engineers Inc.1506 W. 36th Ave. Anchorage, AK 99503Phone: (907) 561-1011Fax: (907) 563-4220Website: www.pndengineers.comFull-service engineering firm providing civil, structur-al, and geotechnical engineering, including miningsupport, resource development, permitting, marineand coastal engineering, transportation engineering,hydrology, site remediation, and project manage-ment.

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 forair monitoring, water sampling, field screening, PPEand 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,and Safety Consultants. Total Safety provides Service,Rental, or Sales of Safe Breathing Air, Gas Detection,and Technical 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 serv-ices with capabilities to support all stages of projectlife cycle. We offer a full range of program manage-ment; planning, design and engineering; constructionand construction management; operations and main-tenance; and decommissioning and closure services.

Advertiser IndexAlaska Airlines CargoAlaska Analytical Laboratory. . . . . . . . . . . . . . . . . . 3Alaska DreamsAlaska Earth SciencesAlaska Frontier ConstructorsAlaska Steel Co.Arctic FoundationsAustin Powder Co.Calista Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Constantine Metal ResourcesConstruction Machinery . . . . . . . . . . . . . . . . . . . . . 20Fairbanks Gold Mining/Fort Knox Gold Mine . . . . 9GCI Industrial Telecom . . . . . . . . . . . . . . . . . . . . . . 11Global Equipment ServicesGreer Tank Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6IFR Workwear Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 10Jackovich Industrial & Construction SupplyJudy Patrick Photography . . . . . . . . . . . . . . . . . . . . 5Keller Williams CommercialLast Frontier Air Ventures. . . . . . . . . . . . . . . . . . . . . 6Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Nature Conservancy, The . . . . . . . . . . . . . . . . . . . . 19Northern Air CargoPacific Rim Geological Consulting . . . . . . . . . . . . . . 6Pebble Partnership . . . . . . . . . . . . . . . . . . . . . . . . . 12PND Engineers Inc.Salt+Light CreativeSourdough Express Inc.Taiga Ventures/PacWest Drilling Supply . . . . . . . . 7Total SafetyURS Corp.Usibelli Coal Mine




In the wake of the departure of its formeroption partner, De Beers Canada Inc.,

Peregrine Diamonds Ltd. has reported dis-covery during the 2013 summer explorationprogram of three new kimberlite bodies atthe Chidliak diamond project located 120kilometers (75 miles) northeast of Iqaliut,the capital of Nunavut.

Discovered in 2008, the Chidliak Projectcovers 7,480 square kilometers (2,888square miles) on South Baffin Island.Peregrine acquired 100 percent ownershipof the project in February 2012, buying outthe 51 percent participating interest inChidliak held by former partner BHPBilliton Ltd.

The three kimberlites, together withthree finds reported Sept. 9, bring the num-ber of kimberlites discovered at Chidliak in2013 to six and the total kimberlites identi-fied on the property to 67. Seven kimber-lites (CH-1, CH-6, CH-7, CH-28, CH-31,CH-44 and CH-45) on the Chidliak proper-ty, so far, are considered potentially eco-nomic for diamonds.

The three new kimberlite discoverieshave been numbered CH-65 through CH-67. At CH-65, abundant kimberlite floatwas found associated with a linear geo-physical anomaly that represents a kimber-lite dyke. At CH-66, abundant kimberlitefloat was found associated with a circularmagnetic high anomaly with an estimatedsurface expression of 0.5 hectares (1.24acres) as determined by ground geophysics.

At CH-67, abundant kimberlite float wasfound associated with a circular magnetichigh anomaly with an estimated surfaceexpression of one hectare (2.47 acres) asdetermined by ground and airborne geo-physics.

In addition to the six kimberlites discov-ered in 2013, prospecting crews discoveredkimberlite dykes associated with fourknown kimberlite pipes: CH-2, CH-5, CH-9 and CH-21. A kimberlite dyke is a sheetof rock that formed in a crack in a pre-exist-ing rock body.

During the summer program, prospect-ing crews also discovered seven new occur-rences of kimberlite float (pebbles, cobblesand boulders) for which a definite kimber-

lite pipe or dyke source has yet to be con-firmed.

In previous programs, Peregrine has dis-covered 12 localities with unexplained kim-berlite float. At each kimberlite float locali-ty, pieces of kimberlite were found by fieldcrews that were evaluating priority kimber-lite-type geophysical anomalies and/orunexplained kimberlite indicator mineralanomalies. At one float locality named AreaB, located about 15 kilometers (nine miles)east of the CH-6 kimberlite, kimberliteboulders and cobbles with abundant kim-berlite indicator minerals were found overan area measuring roughly 1,000 meters by600 meters. Finding a source or sources forthe Area B kimberlite float and other impor-

tant unexplained float occurrences on theproject will be a high priority in futureexploration programs.

Ground gravity and ground electromag-netic (Max-Min) orientation surveys com-pleted over select kimberlites proved effec-tive at defining the kimberlite bodies.Peregrine geologists plan to use these twogeophysical methods in tandem to comple-ment ground magnetic surveys that havebeen completed in priority areas with unex-plained kimberlite float and KIM anom-alies, such as Area B. They also will con-sider conducting an airborne gravity surveyif modeling of the existing gravity data sug-gests it could be successful in identifyingnew kimberlites in priority areas.

De Beers opts out of projectDe Beers informed Peregrine in October

that it declined to exercise its right to enterinto an earn-in and joint venture agreementwith the junior on the Chidliak diamondproject. The agreement, first announcedSept. 5, 2012, provided for the companiesto explore and develop the Chidliak dia-mond project on a 50.1 percent De Beers /49.9 percent Peregrine ownership basis. Italso required certain ongoing work andfunding commitments by De Beers that thecompany said will be completed as agreed.

“Chidliak has benefited greatly from DeBeers’ involvement over the last year, andwe are cognizant of their reasons not to pro-ceed, given the challenging mining marketour industry is currently experiencing. Ourteam looks forward to advancing Chidliakon a 100 percent ownership basis, and weare fast-tracking the processing of the CH-6 kimberlite bulk sample collected thisspring with initial diamond content and val-uation results anticipated in January 2014.,”said Peregrine CEO Eric Friedland.

Peregrine and De Beers agreed to meetduring the first week of November to com-plete the handover of all technical and otherdata as required by terms of the 2012 optionagreement. The data was to include thefinal results from the 2013 field program,operated by De Beers, including the totalnumber of new kimberlite occurrences thatwere discovered, final geophysical data,kimberlite geologic models, all surficialand structural mapping data and interpreta-tions.

Importantly, all new kimberlite targetsthat have been defined by De Beers will beprovided to Peregrine, the company said.

Bulk sample processedPeregrine also reported that the 508-wet-

metric tons kimberlite sample collectedfrom the CH-6 kimberlite at Chidliak earlyin the season has now been processed to aheavy mineral concentrate by dense mediaseparation.

One of a few companies to start winterexploration in the Far North in 2013,Peregrine commenced a 200-metric-tonbulk sample program Jan. 28 as part of aC$5 million work plan for the year that wasto be funded by De Beers.

Peregrine more than doubled the size ofthe CH-6 bulk sample objective of 200 met-ric tons, collecting a total of 508 wet metrictons of kimberlite. The junior reasoned thatthe increased size of the bulk sample wasexpected to deliver a larger parcel of roughdiamonds which will provide higher confi-dence in future diamond valuations.

Diamond recovery from about 1.1 tons

� N U N A V U T

Junior reports new finds at ChidliakDe Beers discovers three more kimberlites before opting out of potential JV; Peregrine completes processing of CH-6 bulk sample

RESOURCES FOR LIFE

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see PEREGRINE FINDS page 19

Peregrine Diamonds Ltd. collected these diamonds in a 14.11-metric-ton mini-bulk samplefrom the CH6 kimberlite in 2010 at the Chidliak Project in Nunavut. The largest stone (shownhere) is 0.99 carats.

http://www.amebc.ca/roundup

of concentrate derived from about 262 wetmetric tons of kimberlite is underway at theSaskatchewan Research Council facility inSaskatoon, Sask. The diamond graderesults from this portion of the bulk sampleare expected by mid-December. An inde-pendent valuation of the resulting diamondparcel will be completed in early 2014.

The DMS concentrate, weighing some850 kilograms, from the remainder of theoriginal 508-wet-metric-ton bulk sample isnow in secure storage at the SRC, and dia-mond recovery from this concentrate isscheduled to commence in the first quarterof 2014.

The cost of processing the first 250 met-ric tons or so of bulk sample material anddiamond recovery work at the SRC fromthe resulting concentrate will be paid for byDe Beers as previously agreed. This workwas budgeted at about C$3 million.

De Beers also funded the 2013 fieldoperation, which was budgeted at C$2 mil-lion and included a comprehensive desktopmining study, kimberlite pipe characteriza-tion studies, ground geophysics, and newtarget generation work.

De Beers also agreed to process theremaining roughly 250 metric tons of theCH-6 bulk sample to concentrate, and thiswork was paid for by Peregrine at DeBeers’ actual cost to process.

A 14.11-metric-ton mini-bulk sample ofdrill core acquired from the CH-6 kimber-lite in 2010 returned a grade of 2.84 caratsper metric ton diamonds. If that grade isconfirmed with further testing, CH-6would be one of the highest grade kimber-lite pipes in the world.

Future workPeregrine said detailed information

regarding plans for its 2014 field season atChidliak will be provided in the first quar-ter of 2014, after it receives all of the CH-6diamond valuations and conducts a thor-ough evaluation of all exploration data gen-erated on the project in 2013 along withinformation from pre-2013 programs.

Friedland also said the results from CH-6 and new exploration and conceptual min-ing data generated by De Beers will beutilized to formulate optimum explorationand sampling programs for 2014 and2015. �


Flint Hills Resources AlaskaJenner & Block LLPKoniag Inc.Northern Economics Inc.Pacific Star EnergyStoel Rives LLPTrident Seafoods CorporationUdelhoven Oilfield System Services Inc.

Lead Corporate Partners ($25,000 & above)Alaska Airlines & Horizon Air. . Alaska Journal of CommerceBP . ConocoPhillips Alaska, Inc. . Petroleum News

Corporate PartnersABR Inc.Alaska Business MonthlyAlaska Journal of CommerceAlaska Rubber & Supply Inc.Alaska Wildland AdventuresBear Track InnBooz Allen HamiltonBristol Bay Native Corporation

Calista CorporationCarlile Transportation Systems Inc.CIRIClark James Mishler PhotographyCONAM Construction CompanyCopper Whale InnDenali National Park Wilderness Centers Ltd.Fairweather LLC

Thank You

The mission of The Nature Conservancy is to conserve the lands and waters on which all life depends.

715 L Street . Suite 100 . Anchorage, AK 99501 . [email protected] . 907-276-3133 . nature.org/alaska

Corporate Council on the Environment

The Nature Conservancy is proud to collaborate with a wide range of partners to ensure Alaska’s lands and waters continue to support abundant

salmon and wildlife populations. We thank these corporations for sharing our vision of a healthy and productive Alaska for many generations to come.

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mill than was estimated from the sampletower results for the same material, thecompany said.

“We are satisfied with the results of theinitial bulk sample processing, and areconfident that the results from the millwill provide the conclusive outcome thatour investors expect. The undergrounddrilling and associated development todate has demonstrated that the Valley ofthe Kings deposit contains significanthigh-grade gold mineralization,” saidQuartermain.

The final mill results for the bulk sam-ple will be available after all testwork hadbeen completed in late November or earlyDecember, the company added.

Strathcona was responsible for thesample tower operations at the BrucejackProject and withdrew from the Programon October 8, 2013.

“Snowden has advised us that the truetest of the resource estimate will onlycome from the reconciliation resultsbetween the ultimate grade of the bulksample (as defined by produced metal

and metal accounting) and the grade ofthe resource estimate for the same vol-ume,” Quartermain added.

Pretium’s shares fell at least 30 percentafter Strathcona resigned and shareholderrights law firms in New York andVancouver began circling the scene ofwhat they believe will become substantiallitigious carnage. The lawyers are current-ly issuing calls for Pretium shareholdersto join their class-action lawsuits.

In addition to charging Pretium withmaking false and misleading statements,some of the complaints also allege thatthe company and a major shareholder soldmore than C$580 million of Pretiumsecurities at artificially inflated prices afew days before Strathcona resigned andits concerns about the Brucejack goldproject became public.

Extensive 2013 drillingPretium reported program drilling con-

sisting of 16,789 meters in 201 holes andconfirmed the projection of high-gradegold mineralized domains. This drillingrepresents about 10 percent of the174,000 meters of total drilling in about 2percent of the total resource volume, the

company said.Program drilling concluded in

September with final assays released inOctober.

A highlight of work in the third quarterwas the discovery in July of the Cleopatravein, which was first encountered whileexcavating the 6258015N east drill driftin an area of projected extreme grademineralization by the November 2012Valley of the Kings Mineral Resourceestimate. Cleopatra intersects the6258015N drill drift at the 426630Ecross-section and trends to the south-westwhere it intersects the 426615E cross-cutand then trends south along section426615E. After the discovery ofCleopatra, additional drilling was com-pleted, along with the excavation of a driftand raises on the vein. The Cleopatra veinhas been defined for 85 meters alongstrike, 50 meters above and 50 metersbelow the 1345 level and remains open inall directions.

More than 22,000 meters of under-ground exploration drilling and 5,771meters of surface exploration drillingwere undertaken in the Valley of theKings in addition to the program drilling.To Oct. 30, a total of 61 intersections

grading over 1,000 g/t gold have beenintersected in the Valley of the Kings pro-jected mineralized domains, for a rate ofone every 550 meters of drilling in 2013.Recent underground exploration drillingis in an area of limited, wide-space sur-face drilling and demonstrates the contin-ued potential to outline high-grade miner-alization in the Valley of the Kings, par-ticularly along the projection of Domain20 to the east.

Assay results will continue to bereported as they are received for under-ground and surface exploration drilling inthe Valley of the Kings, which is expectedto conclude in early November.

Pretium said it anticipates updating itsmineral resource estimate for the Valleyof the Kings based on the 16,789 metersof underground program drilling, addi-tional underground and surface explo-ration drilling, knowledge gained fromaccessing the Valley of the Kings under-ground and mill results from processingthe bulk sample material. The updatedmineral resource estimate for the Valleyof the Kings, which will include a localmodel of the bulk sample area, is expect-ed by year’s end. �


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