Mining News ebook: Petroleum News 121403 · cost,” Baker told financiers at the Bank of America...

SHANE LASLEY PHOTO

Crews drill the gold-rich Island Mountain prospect atKiska Metal Corp.’s 111,000-acre Whistler copper-goldproperty in the southwestern Alaska Range. Whistler isone of several projects being explored this year in theKahiltna Terrane, formed millions of years ago when anarc of islands known as Wrangellia thrust up from theocean floor and collided with the mainland of NorthAmerica. Page 8

A special supplement to Petroleum NewsWEEK OF

June 27, 2010

A special supplement to Petroleum News

4 Kaminak discovers Supremo goldDrill results indicate junior’s Yukon property may host large gold system

10 Red Dog development excites NANA Aqqaluk promises to fuel NW Alaska economic engine for another 20 years

13 Chinese tie up base metal projectsState-owned companies look to Canada to secure future supply of metals

http://www.miningnewsnorth.com/

2NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JUNE 27, 2010

http://www.lynden.com/

By SHANE LASLEYMining News

Undaunted, undeterred and poised forgrowth is the message Hecla Mining

Co. brought to its shareholders at the com-pany’s annual meeting in May. This mantrareflects the silver miner’s perseverance inovercoming the financial challenges it facedafter spending US$750 million in April2008 to buy Rio Tinto’s 70.27 percent stakein Greens Creek Mine in Southeast Alaska,an acquisition that has catapulted it to theNo. 1 silver producer in the United States.

“It was difficult in ‘08 and certainly thefirst part of ‘09; and our financial chal-lenges at Hecla were not insignificant, wehad a lot of short-term debt,” Hecla VicePresident Corporate Development DonPoirier explained to Mining News. “Westayed very focused on cutting costs, opti-mizing output and getting the job done.”

“We faced some very challenging times;we came through them. We are not pretend-ing it didn’t happen, or that it’s over,” headded.

Surviving the tumultuous financial mar-kets and low metals prices of the latter halfof 2008 and the first half of 2009, Hecla hasrepaid the US$380 million it borrowed tobecome sole owner of Greens Creek andpositioned itself to take advantage ofimproved metals markets.

“We set a course in early 2009 to opti-mize our operations and eliminate our debt.We have accomplished that. Our two U.S.operations generated strong cash flowallowing full payment of the remaining por-tion of our term debt nearly one year aheadof the required schedule,” Hecla MiningCompany President and CEO Phillips S.Baker, Jr. said.

Greens Creek drives successThe acquisition, which almost proved to

be Hecla’s undoing, is the source of unpar-alleled success for the longtime silver com-pany.

“Hecla’s success in 2009 stems in largepart from the Greens Creek acquisitionmade in 2008, which nearly doubled Hecla’ssilver reserves and metals production. Theacquisition, the most significant in our his-tory, upgraded our assets and providedHecla with the benefits that come fromoperating on a larger scale,” Baker toldshareholders.

The increased operations resulted inrecord-setting base metal production for theIdaho-based miner in the first quarter of2010. In addition to the 2.5 million ouncesof silver produced by Hecla during the quar-ter, the company’s output of 12,181 tons oflead set a new quarterly record, and the22,212 tons of zinc produced was the sec-ond-highest in company history.

“This quarter’s performance is furtherevidence of the strength of Hecla’s minesand people. I am confident that Hecla willcontinue to be the lowest cost silver produc-er and the largest U.S. producer,” Bakersaid.

The byproduct metals and the gold pro-duced paid for production costs and addedUS$3.03 to every ounce of silver producedin the quarter. With silver fetching an aver-age of US$16.92 an ounce, Hecla enjoyed amargin of US$19.58 per ounce of silver pro-duced in the quarter.

“At no time in our history have we hadassets that have generated as much produc-tion, as much margin (and) had as low acost,” Baker told financiers at the Bank ofAmerica Merrill Lynch 2010 Global Metals& Mining Conference in May.

Greens Creek drove this historically highproduction and margins. First quarter pro-duction at the Southeast Alaska silver minewas 1.6 million ounces of silver at an aver-age cash cost of negative US$6.47 perounce of silver after byproduct credits, or amargin of US$23.39 per ounce of silver pro-duced.

Hecla has increased throughput at themill at Greens Creek to counter lower silvergrades being mined.

Baker explained, “Mining and millingoperations at Greens Creek have madesteady gains over the past five quarters.Since 2008, we have successfully increasedmill throughput by approximately 10 per-cent, reducing operating costs significantly,and we still have excess mill capacity forpotential increases in the future.”

Poised for growthWith its loans paid off, cash in the bank

and strong results from both its operations,Hecla has boosted its exploration budget atits properties in Alaska, Idaho, Coloradoand Mexico.

The company plans to spend US$17.8million on exploration in 2010, almost dou-ble what it spent in 2009.

“We’re excited about targets on all of ourproperties this year and have had some

promising early results with undergrounddrill testing at Greens Creek and LuckyFriday to date,” Baker said.

About US$5 million of the explorationbudget will be spent at Greens Creek.

Underground drilling at Greens Creek in2010 has focused on refining and expandingthe resource in the Northwest Zone andextending resources in the 200 South, 5250South, and Deep 200 South.

Hecla said encouraging results have beenseen in this year’s initial drill tests with a1.3-meter intersection grading 37.6 ouncesof silver per ton in the 5250 zone, and a 4.3-meter interval of massive sulfide along thesouthwestern extent of the 200 South Zonethat further extends the resource.

The company is developing an explo-ration drift called the 1147 to provide a stag-ing platform for expanding the 5250 Southand 200 South ore zones to the south.

“Completion of the 1147 drift extensionfarther south will provide an excellent plat-form to drill additional southern extensionsof the high-grade deep 200 South and 5250South ore bodies later in the year,” saidHecla Vice President of Exploration DeanMcDonald.

The Northeast contact, which is relatedto the same sequence of rocks as the orebodies currently being mined, is a priorityexploration target at Greens Creek. Thoughore grade mineralization has yet to be dis-covered in this prospective zone, under-ground drilling has intersected promisingquantities of sulfide mineralization alongthis newly defined mine contact near thecurrent development.

Hecla has both underground and surfacedrills seeking production grade ore in thisnew area.

Drilling along the southern extent of thisregion at depth indicates that better mineral-ization lies above the tested sections, andthis shallower region is a priority for thisyear’s surface drill program.

At Lucky Friday, two underground drillscontinue to test the potential to expand theresource area outwards to the east with oneprogram evaluating the interval between the

3NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JUNE 27, 2010

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 CHIEF FINANCIAL OFFICER

Susan Crane ADVERTISING DIRECTOR

Heather Yates BOOKKEEPER

Bonnie Yonker ALASKA /NATIONAL REPRESENTATIVE

Clint Lasley GM & CIRCULATION DIRECTOR

Marti Reeve SPECIAL PUBLICATIONS DIRECTOR

Steven Merritt PRODUCTION DIRECTOR

Curt Freeman COLUMNIST

Sarah Hurst CONTRIBUTING WRITER

Allen Baker CONTRIBUTING WRITER

Judy Patrick Photography CONTRACT PHOTOGRAPHER

Forrest Crane CONTRACT PHOTOGRAPHER

Tom Kearney ADVERTISING DESIGN MANAGER

Mapmakers Alaska CARTOGRAPHY

Amy Spittler MARKETING CONSULTANT

Dee Cashman CIRCULATION REPRESENTATIVE

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

NEWS [email protected]

CIRCULATION 907.522.9469 [email protected]

ADVERTISING Susan Crane • [email protected]

Bonnie Yonker • [email protected]

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 $78 per year, which includesonline access to past stories and early access to Petroleum News every week.(Canada/Mexico subscriptions are $165.95; overseas subscriptions are $200)

Or, just purchase the online edition of Petroleum News, which also includes themining supplement and online access to past stories, for $49 per year.

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Contact North of 60 Mining News:Publisher: Shane Lasley

e-mail: [email protected]: 907.229.6289 • Fax: 907.522.9583

� A L A S K A

Hecla climbs to top U.S. silver producerGreens Creek purchase reinforces historical strength of 119-year-old silver miner as it pursues continued growth via exploration

see HECLA page 5

An aerial view of boat-loading facilities at Hecla Mining Co.’s Greens Creek silver mine near Juneau.

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� Y U K O N T E R R I T O R Y

Junior traces evidence of new gold campKaminak Gold reports new discoveries near White Gold Project, mounts aggressive hunt for more mineralization at Coffee Project

By ROSE RAGSDALEFor Mining News

Evidence is mounting to support Kaminak GoldCorp.’s suspicion that its Coffee Project located in

the White District of Yukon Territory is part of anemerging gold district with sizable gold deposits scat-tered over the wooded region.

Kaminak reported assay results May 26 from thefirst two holes drilled this spring that “confirms thepotential of the Coffee property to host large golddeposits,” according to Kaminak President and CEO,Rob Carpenter.

The holes, drilled in the Supremo zone, returnedindications of significant gold mineralization, andongoing drilling since has yielded assays showing addi-tional signs of gold.

Hole CFD-001 intersected 17.07 grams per metricgold over 15.5 meters from 15 meters core depth andhole CFD-002 ended in mineralization and yielded fivesignificant gold-bearing intersections. They included3.95 g/t gold over 11.95 meters (starting at 18.7meters); 4.89 g/t gold over 5 meters (starting at 72meters); 2.11 g/t gold over 14.0 meters (starting at 124meters); 4.31 g/t gold over 2.75 meters (starting at145.25 meters); and 2.96 g/t gold over 4.1 meters (start-ing at 169.65 meters to end of hole).

Drill holes 1 and 2 were drilled to the east from thesame setup and were designed to test the depth extentof high-grade gold-in-rock results obtained byKaminak in 2009 along the Trench 3 (T3) trend. HoleCFD-001 was drilled at a minus-50 degree angle andhole CFD-002 was drilled at a minus-70 degree angle.Both holes intersected extensively oxidized, limonitic,clay- and silica-altered augen gneiss host rocks display-ing complex multi-phase hydrothermal breccia (frag-mental) textures in addition to quartz vein stockworks,minor pyrite and rare arsenopyrite.

Hole CFD-001 intercepted a single, thick interval ofgold, hosted primarily in silicified breccia units andminor nonbrecciated silica-altered gneiss. Hole CFD-002, however, ended in mineralization and intersectedseveral zones over a greater length than the hole CFD-001 intercept. Unlike the single, wide gold-bearinghydrothermal breccia zone in hole CFD-001, mineral-ization in hole CFD-002 is mainly hosted in broadzones of quartz veining and silica-flooding withrestricted breccia zones. The mineralized intervals fromhole CFD-002 were calculated using a 1g/t gold gradeenvelope. They are separated by weakly anomalousintervals. If these intervening low-grade segments areincluded in the grade/interval calculations, then thehole CFD-002 intercept also can be considered to grade1.26 g/t gold over 60.32 meters (starting 18 metersfrom the surface) with a second zone of 1.15 g/t goldover 51.32 meters (starting at a depth of 122.43meters).

Similar to White Gold depositsThe Supremo zone is located about 20 kilometers, or

12.4 miles, to the south of White Gold’s Golden Saddledeposit.

Carpenter told mining analysts, investors andreporters in a teleconference May 27 that the CoffeeProject appears to host rocks and trace element signa-tures similar to those found in the Golden Saddle depositat Underworld Resources Inc.’s White Gold Project.(Kinross Gold Corp. recently purchased Underworld.)

A little over a year ago, Kaminak optioned the claimswhere the Coffee Project is located from Dawson City-based Ryanwood Exploration Inc., after owner ShawnRyan identified several gold anomalies on the property.Ryan also optioned the White Gold claims to UnderwoodResources in 2007.

Ryan has said he believes the Coffee claims could hostas much or even more gold than the White Gold Project.

Gold in the cores of the two drill holes at Supremoalso appear to be uniformly distributed with no visiblegold, much like the mineralization in the Golden Saddledeposit, Carpenter said.

“We only have the results of two holes, so it’s earlydays. But if gold districts occur, they occur in more thanone camp,” he observed.

Just under two weeks later, Kaminak reported encour-aging drill results from the first holes completed this sea-son at the Latte zone located about 1 kilometer south ofthe Supremo zone.

Positive assays from LatteLatte and Supremo are hosted in separate structural

corridors and are both open along trend and to depth. Kaminak said it drilled seven holes at the Latte zone

over a 400-meter length. Highlights of assays from two ofthe holes include: CFD-006, which intersected 1.08 g/tgold over 83.93 meters (from 28.07 meters core depth);and CFD-007, which intersected 1.12 g/t gold over 55meters (from 33 meters core length) and a second zone of1.24 g/t gold over 8 meters (from 101 meters corelength).

“Latte represents our second major gold discovery onthe Coffee property this spring and confirms that ourexploration strategy of drilling underneath high qualitygold-in-soil anomalies is working,” Carpenter said in aJune 7 statement. “Moreover, the Coffee property is hostto at least eight such soil trends, and we will continue tomethodically drill test each of these targets as well asexpand the Supremo and Latte zones along trend and atdepth.”

A few days later, Kaminak reported assay results fromstep-out holes drilled on the discovered Latte andSupremo zones. Highlights of these results include Lattestep-out hole CFD-008, which intercepted 51 metersgrading 1.32 grams per metric gold starting at 7 meterscore depth. It extends strike length of strongly oxidizedmineralization at Latte for an additional 100 meters to theeast. At the Supremo zone, step-out holes extended thestrike length of oxidized mineralization for an additional50 meters to the north with hole CFD-003, which inter-sected 3.26 g/t gold over 17.35 meters starting at 37meters core depth and hole CFD-004, yielding 2.47 g/tgold over 20 meters starting at 50 meters core depth.

Drilling is ongoing with samples being processed atthe assay laboratory from step-out holes 50 meters to thenorth at Supremo and initial holes in the Latte zone locat-ed 1 kilometer, or five-eighths of 1 mile, south ofSupremo. Carpenter said 150 meters of trenching to thesouth of holes CFD-001 and CFD-002 also came backwith more than 2 g/t gold.

“We believe these are very significant results, he said.

More targets to exploreThe Supremo and Latte zones are two of eight very

large gold anomalies that Kaminak has targeted on the 43-kilometer-, or 27-mile-, long Coffee property. The claimsalso host peripheral anomalies that have high potential forother gold discoveries, Carpenter said.

Kaminak’s drill strategy will continue to focus on dis-covering near-surface gold mineralization and extendingthe strike length of high-grade and shallow gold mineral-ization.

“These first holes show intense alteration and mineral-ization over wide intervals indicative of a large gold-richhydrothermal system,” he said.

New geological mapping and trenching completed atSupremo in 2010 indicate that mineralization at Trench 3is hosted in a north-south trending linear struc-ture/alteration zone that extends for at least 200 metersand is open in both directions along trend, as well as todepth. Measurements from oriented core from both holesNo. 1 and No. 2 also indicate that gneissic banding is shal-lowly dipping to the west and that mineralized veins occurat high angle to the gneissic fabric, suggesting “near-ver-tical” dipping gold zones.

Kaminak said more drilling on this section will berequired in order to correlate rock units and mineralizedzones from hole No. 1 and No. 2 and also to determine the

A geologist examines a trench dug in search of gold miner-alization on the Coffee Project, a few miles fromUnderworld Resources Inc.’s White Gold discovery.

see KAMINAK GOLD page 5

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6,100- and 6,800-foot levels of the mine,and the other is testing significantly belowthe 7,000-foot level of the mine.

“There is a very significant reserve andresource of silver at depth below existinginfrastructure,” Poirier explained.

To reach this high-grade mineralization,Hecla plans to dig a shaft from the 4,900-foot level down to nearly 8,000 feet belowthe surface.

The company estimates the deep devel-

opment could boost annual silver produc-tion at Lucky Friday by as much as 5 millionounces, nearly a 60 percent increase overrecent years.

The 3,000-foot shaft is expected to costbetween US$150 million and US$200 mil-lion and take about five years to complete.

In addition to near-mine exploration,Hecla is investigating district-scale targets inthe vicinity of both of its operating mines.The silver miner also has two drills turningat its San Juan joint venture property inColorado and is continuing a systematic dis-trict-scale drill program at its more than300-square-mile, or 777-square-kilometer,

San Sebastian project in Mexico.

Cautiously optimisticWhile Hecla can let out a collective sigh

of relief that it has overcome the challengesit faced following the purchase of GreensCreek, the company recognizes that globalmarkets are still on shaky ground.

“Volatility will likely persist in a marketthat is managing record amounts of U.S.government and consumer debt. I believethe Western world may be several yearsaway from a full recovery and recognize thatour business, while much healthier todaythan in 2008, still faces challenges — and

needs to continually adapt and find furtherefficiencies,” Baker told shareholders.

“While I’m highly optimistic about thedirection of Hecla and precious metals overthe next few years, I won’t discount theevents around us. I know that we standready to meet every challenge we mayface,” he added. �

5NORTH OF 60 MINING


true width of these zones. Part of Kaminak’s confidence in the

assay results stems from the nature of theregion’s geology. “This part of the worldhas never been glaciated, which means soilsamples are very representative of thebedrock below,” Carpenter said. “Anddespite the discoveries, this is still a veryunderexplored part of the world.”

He also noted that soil samples havebeen taken from only about 7 percent ofthe entire Coffee Project.

Drilling, meanwhile, is ongoing on theCoffee claims, including more holes at theSupremo and Latte zones and additionalcores from the Double Double. Moreassay results are pending. �

continued from page 4

KAMINAK GOLD


HECLA

� G U E S T C O L U M N

Summertime, and the miners are busyExplorers, old and new, scour length, breadth of Alaska for gold, silver, copper, nickel, lead, zinc, platinum, and palladium

By CURT FREEMANFor Mining News

As the long-awaited summer solsticecomes and goes, Alaska’s mining

industry is deep in the midst of its summerexploration, development and productionprograms. Mineral exploration programsare under way from far Southeast Alaska tothe Brooks Range, from eastern InteriorAlaska to the Seward Peninsula. The com-modities being explored for, developed andmined are equally diverse and include gold,silver, copper, nickel, lead, zinc, platinumand palladium. Two new exploration com-panies have entered the hunt in Alaska inthe last month and the sound to bootsthumping tires can be heard all acrossAlaska as new acquisitions are beingreviewed and new business arrangementscompleted.

Western AlaskaTINTINAGOLD RESOURCES INC.

said it has commenced drilling on itsKugruk copper-iron project on the SewardPeninsula. The company plans a 4,000-meter drilling program this year focused ontesting several multi-kilometric scale cop-per-iron mineralized zones on the project.The property contains highly magneticzones along an intrusive-metasedimentcontact extending for a length of at least 15kilometers. One of the targets, the Billikenprospect, is a 3-kilometer-, or 1.86-mile-,long highly magnetic zone which alsoshows high gravity, low resistivity and highinduced polarization geophysical responseswhere a number of shallow drill holes werecompleted during the mid-1970s. Otherlarge zones with low resistivity and highinduced polarization geophysical responsesare present at the South Kugruk and

Knowles Creek targets. Local copper-in-soil anomalies over the intrusive centers, acopper-iron enriched skarn contact zonebetween the intrusive and metasedimentsand a halo of silver-lead-zinc and goldplacer prospects suggest the presence of alarge scale, zoned intrusive-driven mineralsystem.

FIRE RIVER GOLD CORP. announcedadditional results from previously unre-leased drilling at its Nixon Fork gold proj-ect near McGrath. Significant resultsinclude 15.52 ounces of gold per ton over9.8 feet in hole N07U061; 0.68 ozs/t goldover 40.3 feet in hole N07U046; 0.55 ozs/tgold over 16.4 feet in hole N07U021; 2.21ozs/t gold over 22 feet in hole N07U049;0.79 ozs/t gold over 78.7 feet in holeN07U053; 0.92 ozs/t gold over 37.1 feet inhole N07U055; 2.95 ozs/t gold over 14.8feet in hole N07U056; and 1.95 ozs/t goldover 20.7 feet in hole N07U059. The com-pany provided an update regarding theprogress of work on the PreliminaryEconomic Assessment for the tailings

reprocessing option at the project. Threealternatives are being evaluated: 1) use anexisting thickener after the CIL process torecycle cyanide solution and therebydecreasing the cyanide destruct circuitoperating cost; 2) installation of a new fil-ter to further increase cyanide recycle andreduce cyanide destruction requirementsand associated costs; and 3) assess the ben-efits of installing a Merrill Crowe systemfor gold recovery with shipment of goldbars rather than loaded carbon off site.Work is expected to be completed in thefall. The company also announced that a12,000-meter diamond drill program is slat-ed to begin in late June. Drilling will ini-tially focus on surface targets, particularlylateral or down plunge extensions of knownmineralized zones. These targets includethe Whalen, North Star, Mystery, SouthernCross, and J5A zones. Following the sur-face drilling program, underground drillingwill begin within the Crystal decline.

Interior AlaskaTERYL RESOURCES CORP. and joint-

venture partner KINROSS GOLD CORP. isconducting a 16,000-foot drilling programat their Gil gold project near Fairbanks. The2010 drilling program is planned for11,000 feet of reverse circulation drillingand 5,000 feet of core drilling. Drilling in2010 will further delineate the strike exten-sion of gold-bearing zones in the Main Gil,North Gil and Sourdough Ridge deposits.In addition to drilling, fieldwork involvingmapping, soil and rock sampling, andmobile metal ion geochemical samplingwill be performed.

INTERNATIONAL TOWER HILLMINES LTD. announced a resource updateon its Livengood gold project. The newresource incorporates 420 diamond and

reverse circulation holes totaling 121,212meters. At the 0.3 grams per metric ton cut-off, indicated resources now stand at 15.7million ounces of gold in 788.9 millionmetric tons grading 0.62 g/t gold, whileinferred resources now total 4M ouncesgold in 229.1Mt grading 0.55 g/t gold. All-in that’s 19.7M ounces of gold, a 1.2Mounce increase over previous resource esti-mates. The company also announced finaldrill hole results from its winter 2010 drillprogram. Results include hole MK-RC-0351, which returned 54.86 meters at 0.91g/t gold; and hole MK-10-51, whichreturned 6.59 meters at 1.02 g/t gold. TowerHill reported additional results of columnleaching and flotation tests. Flotation testsindicate that an average 89 percent of thegold reported to the float concentrate, whilecolumn leach tests confirmed earlier resultsand indicate that average cyanide leachingrecovery ranges from 34 percent to 63 per-cent and averages 57 percent. Combinedcarbon-in-leach plus gravity recoveriesstand at 75 percent, while combined gravityplus flotation and leach recoveries stand at74 percent

Alaska newcomer PRECIOUS METALSEXPLORATION CORP. has acquired anoption to explore Alix Resources’ MoneyRock project in the Goodpaster District.Under the option agreement, PreciousMetals Exploration can acquire 60 percentof the company’s interest in the property bypaying Alix $50,000 upon signing, plus$100,000 after a 60-day due diligence peri-od and incurring $500,000 in work expen-ditures over a three-year period.Additionally, Alix will receive four install-ments of 250,000 shares of the public vehi-cle that PRECIOUS METALSEXPLORATION intends to form to con-

TheauthorThe author

Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMANJune 21. 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 web site iswww.avalonalaska.com.

see FREEMAN page 6

http://www.pndengineers.com/

http://www.aes.alaska.com

clude the transaction. A soil and streamsediment sampling is scheduled to beginearly in the third quarter of 2010. Welcometo Alaska Precious Metals ExplorationCorporation!

FULL METAL MINERALS LTD. report-ed that drilling has commenced at itsFortymile polymetallic project nearChicken. The company intends to complete5,000 meters of drilling using two core rigstargeting high-grade carbonate replace-ment-style sulfide deposits. The companywill perform step-out drilling at the high-grade LWM deposit, as well as scoutdrilling on new silver-enriched prospects onthe property, including the Falcon prospectwhere a new silver-rich structure was dis-covered during 2009. Mineralization hasbeen traced along the Falcon structure for800 meters and select grab samples fromFalcon returned 2,370, 1,355, 918, 583 and264 grams of silver per metric ton, respec-tively.

Alaska RangeKISKA METALS CORP. said a 5,000-

meter drilling program has begun at itsWhistler copper-gold project. Three holeswill test targets at Island Mountain. Onehole, a 50-meter offset of the discoveryhole, will test this zone with a deeper holein order to get an intersection through thefull width of the mineralization. A secondhole will be collared 800 meters to thesoutheast of the 2009 discovery and willtest a similarly mineralized stockwork zone,which may represent the southern strikeextent of the same mineralized system. Athird hole will further test the Cirque Zone,1.7 kilometers to the north of the discoveryhole. Drilling in 2009 at the Cirque Zonetargeted a broad zone disseminated chal-copyrite mineralization in association with

a biotite-altered monzonite porphyry. Inaddition two holes will test targets at theRound Mountain area, 10 kilometers northof the Whistler resource area.

Kiska Metals Corp. also announced thatit had acquired a 100 percent interest in theCopper Joe copper-gold-molybdenum por-phyry prospect located 50 kilometers south-west of the company's Whistler project.Kiska can earn a 100 percent interest in theproperty from KENNECOTTEXPLORATION CO. by incurring a total of$5.0 million in exploration expenditures byDecember 31, 2015 including a commit-ment to $170,000 in exploration byDecember 31, 2011. Kiska also will payKennecott a one-time cash payment of $10million upon completion of a positive 43-101 compliant pre-feasibility study.Kennecott staked mining claims in 2006after reconnaissance work at the headwatersof the Styx River located distal porphyry-style alteration in monzodiorite porphyries.A followup traverse discovered angularboulders containing copper mineralization

that were traced to a small creek bed expo-sure. The mineralized showing exhibitspotassic alteration with quartz-magnetitestockwork veins which contain disseminat-ed chalcopyrite. Potassic alteration occursover a 3-kilometer-by-1- kilometer, or 1.86-mile-by-0.62-mile, area with moderate tointense phyllic alteration extending a fur-ther 2.5 kilometers, or about 1.5 miles, out-ward. Most of the target area is covered bya thin veneer of glacial till. Kennecott com-pleted 70.4 line-kilometers of ground mag-netics, which highlighted an open-endedmagnetic high feature measuring 1 kilome-ter by 1.9 kilometers, or 0.62 miles by 1.1miles, trending northeast from the mineral-ized showing. Kennecott collected 28 rocksamples yielding peak values of 0.73 per-cent copper, 0.415 g/t gold, 7.9 g/t silverand 0.125 percent molybdenum. Theprospect has never been drilled.

PURE NICKEL INC. said drilling isunderway on its MAN nickel-copper-plat-inum group element project in the AlaskaRange. The company and its partner,ITOCHU CORP., will spend $7.5 millionon the project in 2010. An 8,000-meter drillprogram will employ two fly drills; the firstdrill has already begun work on the Betacomplex and the second was to begin onthe Alpha complex in mid-June.

Northern AlaskaGOLDRICH MINING CO. announced

that preparations for commercial gold pro-duction, as well as a 20,000-foot coredrilling program are under way at itsChandalar property in the Brooks Range.The placer gold mining operation is fullypermitted and commercial gold productionwas expected to start the third week inJune. Currently, mine infrastructure on theproperty is being upgraded, some newcamp facilities are being put in place, andgold recovery plant modifications are beingmade. Production will begin with the goldrecovery plant that was constructed andtested last year. A second, larger gold recov-ery plant is expected to be operationalsometime in August. Goldrich expects toproduce 5,000-7,000 ounces of gold thisyear, with the first dore to be poured inearly July. As the project matures over thenext couple of summers, the productionlevel is anticipated to reach 30,000 ouncesof gold per year. The exploration drillingprogram will evaluate a stratabound lodegold target estimated to be 5 miles longnear the center of the company’s property.

Southeast AlaskaCONSTANTINE METAL RESOURCES

LTD. reported the start of its 2010 explo-ration program at its Palmer copper-zinc-gold-silver rich volcanogenic massive sul-fide project near Haines. The 2010 explo-ration program will use two drill rigs andcalls for 7,500 meters of drilling in about20 holes. Drilling during this phase is

focused on expanding the deposit, whichconsists of several zones that are open toexpansion. In addition to drilling, the 2010program will include both surface anddown-hole electromagnetic geophysicalsurveys. Surface-based electromagnetic sur-veys work will total approximately 40 line-kilometers and cover areas immediatelyalong trend from the currently defineddeposit and several other well mineralizedprospects known to occur on the property.

COPPER RIDGE EXPLORATIONSINC. announced that a 1,500-meter drillprogram has commenced at its Duke Islandcopper-nickel-platinum-palladium propertynear Ketchikan. The planned drill holes willtarget high-grade massive to semimassivesulfide mineralization within the MarquisZone of this ultramafic intrusive complex.The drill targets have been defined by inter-pretations based on geological mapping,historical drill results and three-dimensionalmodeling of a variety of geophysical sur-veys including magnetics, electromagnetics,induced polarization, magnetotellurics andgravity. Nine of 11 core holes drilled at theSouth Rim of the Marquis prospect inter-cepted from 6-90 meters of semimassive tomassive sulfide containing highly anom-alous values for copper (10 to 12,500 partsper million), nickel (27 to 4,694 ppm), plat-inum (less than 5 to 680 parts per billion),and palladium (less than 5 to 548 ppb) andestablished a north dip to the upper contactof sulfide mineralization. Modeling of elec-tromagnetic and natural source audio-fre-quency magnetotellurics survey resultsdefines an eastern plunge and a wine-glassshaped conduit below the covered conduc-tive anomaly at the Marquis prospect, remi-niscent of other high grade magmatic sul-fide deposits. The current drill program willfocus on the area of joint-venture partnerQUATERRA RESOURCES INC.’S best drillresults, near the strongest geophysical tar-gets but will extend the tests to greaterdepth.

QUATERRA RESOURCES INC. said itsigned an option agreement with Alaskanewcomer GRANDE PORTAGERESOURCES LTD. whereby GrandePortage may earn up to a 65 percent inter-est in the Herbert Glacier gold projectlocated 20 miles north of Juneau by spend-ing $1.25 million in two stages. GrandPortage may earn a 51 percent interest inthe property by spending $750,000 on orbefore June 15, 2011, and has the option toearn an additional 14 percent interest byspending $500,000 on or before June 15,2012. The Herbert Glacier property lieswithin the 100-mile-long Juneau gold belt.Much of the area now known to be miner-alized on the project was only recentlyexposed as glacial ice receded. The proper-ty hosts six main composite vein-faultstructures that contain ribbon quartz-sul-fide veins. The structures strike east-westand dip steeply, mostly to the north. Onlyone of the six known vein systems wasdrilled in 1986 and 1988. Sampling in2007 by Quaterra showed that all six struc-tures locally have high-grade gold-quartzmineralization. Grande Portage will beginwork this summer with a 4,000-foot coredrilling program planned. Welcome toAlaska Grande Portage Resources Ltd.!

NIBLACK MINERALDEVELOPMENT INC. and joint venturepartner Heatherdale Resources Ltd.announced that Heatherdale has met its ini-tial $5 million project investment commit-ment before the first anniversary date ofthe agreement with Niblack and will con-tinue to fund exploration activities to rapid-ly advance the Niblack massive sulfidedeposit on Prince of Wales Island.Currently two underground diamond drillrigs are working to delineate the copper-gold-silver-zinc mineral body at theLookout Zone, one of six known vol-canogenic massive sulfide deposits withinthe project. �

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FREEMAN

http://www.gcmining.com/

7NORTH OF 60 MINING


judypatrickphotography.com

On Location

From drill rigs to underground mines to road construction, Judy Patrick has photographed major projects all over Alaska and around the globe.

Judy is prepared for any situation with specialized equipment to be sure she comes back with your best shot. No matter the time, the place or the season.

Wherever.Whenever.Whatever.

� G U E S T C O L U M N

Hope springs eternal after PBS storiesColumnist: Will our blind CAVE men and CAVE women one day see that careful resource development is reasonable, appropriate?

By J. P. TANGENFor Mining News

I have to admit it. Sometimes, I secretlyhang with a few liberal friends.

Perhaps I harbor a masochistic tendency,or maybe it is just an intuitive compulsionto embrace the notion that one shouldkeep his friends close and his enemieseven closer.

In any case, I find that many left-lean-ers are bright and well educated, which tome constitutes the best argument againsta free public education. After all, if whatthey get out of four years of undergradu-ate school is that electricity comes out ofa hole in the wall, then inferentially, edu-cation isn’t all that it is cracked up to be.

On the other hand, sometimes – notoften, but sometimes – there is a crack inthe edifice of know-it-all-ism throughwhich shines a tiny sliver of light. Mostrecently, quite by accident, I was watch-ing the PBS NewsHour. Shockingly, theyhad two stories – one immediately fol-lowing the other – dealing with the tril-lion-dollar mineral potential ofAfghanistan and the exploration effortsfor rare earths in northern Canada. In andof themselves, those were not profoundannouncements; however, the discussionswere fairly extensive in each case, andmore to the point, they were almost sup-portive of well-managed mining opera-tions with the reasonable expectation that– get this – we shall need these minedmaterials to support out contemporary

lifestyles. Clearly, this is not the custom-ary fare of the men and women who gen-erally support Citizens Against VirtuallyEverything (“the CAVE people.”)

Part of the spin in the Afghanistanstory, of course, was that the People’sRepublic of China has already cut a dealwith the Afghanis to build a railroad toone of the deposits for the purpose ofmining the product and shipping it to —of all places — China, where a new eraof quasi-capitalism is manifesting itself,and the people are successfully demand-ing consumer goods. Somehow, the sub-liminal nexus of mining and manufactur-ing had crept into the story, perhapsunwittingly. For those who find the fore-going incredible, cross-my-heart, you cansee the story on line athttp://www.pbs.org/newshour/bb/asia/jan-june10/afghanistan_06-14.html .

The second story, as surprising as the

first, relates to the program by AvalonRare Metals, Inc. to explore a rare earthsproperty in the Northwest Territories.This report had only one or two pokes atthe domestic mining industry. MountainPass mine in 1996 was accused of leaksassociated with the piping of contaminat-ed wastewater into a dry lake bed in theMojave Desert. The owner of the proper-ty paid the fines and settled the claims,and a new owner is attempting to bringthe property back into production. Youcan see this story athttp://www.pbs.org/newshour/bb/business/jan-june10/metals_06-14.html if you areso inclined.

Of course, neither the facts covered bythese stories, nor the relevance they bearto life in the 21st century are news. TheAfghani deposits have been known fordecades and the utility of rare earths tomodern electronics, especially when itcomes to color video displays and mag-nets used in computer drives and windturbines, among many other applications,has been rolled out for public consump-tion repeatedly over the past severalyears.

The remarkable thing is where the sto-ries were carried. Will they sway CAVEmen and women? Will they finally optfor the metal-dependent “Kumbaya”green future they purport to embrace?Will they acquiesce in condemningAfghanis to literal serfdom under to cor-rupt Afghani overlords and their Chinesecounterparts?

Just as one never knows the true valueof a mine until the last ounce of ore isprocessed, we can never know the truevalue of a brief story on the NewsHour.Perhaps someone at one of our leadinguniversities will wake up one morningand announce in no uncertain terms thatmining in America is a good thing.Mining can be done in a safe and envi-ronmentally sound manner everywherejust as it is done here in Alaska.

The imaginary case for adverseimpacts on streams and other “waters ofthe United States” is ridiculous. Pebbleshould be allowed to go through the per-mitting process. Coal from Chuitna andnorth of the Brooks Range should bemined. Many other deposits andresources throughout the state that poseneither a risk to human health or to theenvironment should be developed – notimmediately, but over time. Hopefully,the blind will one day see, and the ideathat careful resource development is rea-sonable and appropriate will gain sometraction.

Notably, the Gulf of Mexico oil leak iscapturing the attention of the workingpress. Ironically, the fallout is landing onthe heads of the company and the coun-try for their confused mismanagement ofthe response. The commentators have notfailed to notice that a lack of oil onshoreand shallow water oil reserves is not thereason for drilling a mile under the

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.

see TANGEN page 9

http://www.judypatrickphotography.com/


F rom the enormous Pebble copper-gold-molybdenumproject to grassroots gold and copper discoveries, the

Kahiltna Terrane of Southwest Alaska is becoming a hotdestination for mining companies seeking the mineralwealth of this rugged and underexplored region.

The Kahiltna assemblage was formed when an arc ofislands known as Wrangellia thrust up the ocean floor as itcollided with North America. This bulldozed seabed creat-ed much of the spectacular mountains of the Alaska Range,including Denali, North America’s loftiest peak.

Geologists have discovered that the more than 400-mile-, or 650-kilometer-, long section of Alaska has at leasttwice been infused with copper and gold mineralizationsince it was pushed up from the ocean floor some 100 mil-lion years ago.

“There are great indications of mineralization all aroundthis Kahiltna Terrane, and I think an area play could reallybreak out here,” Millrock President and CEO GregBeischer told Mining News.

Although no staking rush has broken out yet in the high-ly prospective area, geologists plan to expand knowndeposits and seek new prospects on at least 10 properties inthe region during the 2010 exploration season.

Drilling continues at PebblePebble, one of the largest concentrations of copper and

gold on the planet, is one of several known porphyry cop-per-gold deposits found in the Kahiltna Terrane.

The Pebble Partnership — a 50-50 joint venturebetween Anglo American plc and Northern DynastyMinerals Ltd. — has launched its 2010 drill campaign toexpand the more than 107 million ounces of gold, 80 bil-lion pounds of copper and 5.6 billion pounds of molybde-num resources estimated to exist in world-class deposit.

This massive amount of copper, gold and molybdenumwas deposited at Pebble around 90 million years ago, thesame time period as geologists believe much of the gold-rich mineralization was injected into Alaska’s easternInterior.

Bordering the Pebble property to the south and west isPebble South, another large copper-gold-molybdenum landpackage being explored by Full Metal Minerals Corp.

The Vancouver B.C.-based junior believes Pebble-stylemineralization trends to the southwest from the PebblePartnership’s massive deposit onto its property.Geochemical and geophysical surveys have delineated 11promising prospects on the property.

The junior plans to return to the property in 2010 witha drill program funded by a joint venture partner, accord-ing to the company’s website.

Multiple porphyrys at WhistlerKiska Metal Corp.’s Whistler project is another promis-

ing Kahiltna Terrane property that was infused with copperand gold at about the same time as Pebble, which lies about180 miles, or about 290 kilometers, to the southwest.

The 111,000-acre, or 449-square-kilometer, Whistlerproperty hosts multiple prospective porphyry gold-coppertargets, the most advanced of which is the 5.75-gold-equiv-lent-ounce Whistler deposit.

An NI 43-101resource calculated in 2008 outlined anindicated resource of 30 million metric tons grading 0.87grams per metric ton gold, 2.46 g/t silver and 0.24 percentcopper, or 1.31 million gold equivalent ounces. In addition,the Whistler Zone contains an inferred resource of 134 mil-lion tons grading 0.64 g/t gold, 2.18 g/t silver and 0.20 per-cent copper, or 4.44 million gold equivalent ounces.

Since Rimfire Minerals Corp. and GeoinformaticsExploration Inc. merged to form Kiska Metals in 2009, thenew company has completed no further drilling atWhistler. Instead, Kiska has investigated the larger poten-tial of the property.

Late last year, Kiska crews blanked the Whistler corri-dor — a 162-square-kilometer, or 62.5-square-mile, regionin the northern half of the property that hosts the Whistler

zone — with a 3-D induced-polarization survey. Thisgeophysical work providedKiska geologists with aclearer picture of what lieshidden under the glacialgravels that cover most ofthis region.

Using the IP signatureassociated with the resourcein the Whistler zone as aguide, Kiska has definedmore than 25 distinct newtargets with a similar geo-physical signature. Ten ofthese targets, all of compara-ble scale and geophysicalresponse to that associatedwith the Whistler deposit arebeing tested in the currentdrill program.

“We are extremelypleased to have made addi-tional porphyry discoveries

at Whistler. This firmly supports our exploration conceptthat the Whistler Project is host to several individual gold-copper porphyry systems of which the Whistler resource isbut one example,” said Kiska President and CEO JasonWeber.

The company has been investigating these prospectiveporphyry targets with a reconnaissance drilling. This 18-hole program, expected to be completed in June, will trig-ger a decision by Rio Tinto subsidiary Kennecott

Exploration Inc. as to whether it wants to exercise or waiveits back-in rights on the property.

Five holes of this program will investigate IslandMountain, another target on the Whistler, about 23 kilome-ters, or 14 miles to the south of the Whistler deposit.

IM-09-001, the Island Mountain discovery hole drilledlate in 2009, cut two distinct mineralized zones. The upper150 meters — which averaged 1.06 g/t gold equivalent(0.72 g/t gold, 2.37 g/t silver and 0.16 percent copper) —is similar to the mineralization found at the Whistlerdeposit. The mineralization in the lower 106.9 meters of thehole — which averaged 1.32 g/t gold-equivalent (1.22 g/tgold 0.69 g/t silver and .05 percent copper) — more close-ly resembles the gold-dominant mineralization beinginvestigated about 2 kilometers, or 1.2 miles, to the south-east at the Shoeshine Zone on Millrock Resources Inc.’sEstelle property.

The Island Mountain discovery hole bottomed out inmineralization and Kiska plans to test the full extent of thelower gold-rich mineralization with the drilling currentlyunder way.

Once the Kennecott trigger program is complete, Kiskaplans to round out its 2010 season with an additional 5,000meters of drilling at the Whistler deposit and the IslandMountain prospect.

“We wish to expand the existing Whistler resource andcollect material for metallurgical studies. Also, we willconduct systematic step-out drilling from the discoveryhole at Island Mountain to start to define this new gold tar-get,” Weber said.

Kiska optioned a second Kahiltna Terrane propertyfrom Kennecott in May. The copper-gold-molybdenumporphyry prospect, Copper Joe, is a 50 kilometers, or 31miles, south-southwest of Whistler.

“Our option to acquire Copper Joe is a good, strategicfit with our plans to further the development of our flag-ship Whistler Property and gives us yet another porphyrycopper-gold target in the belt. The target was only recentlydiscovered by Kennecott and has yet to be tested bydrilling,” Weber said.

Since Kennecott staked the Copper Joe property in2006, it has completed 70.4 line-kilometers of groundmagnetic survey, which revealed a northeast trending min-eralized showing. Kennecott collected 28 rock samplesyielding peak values of 0.73 percent copper, 0.415 g/t gold,7.9 g/t silver and 0.125 percent molybdenum.

Kiska plans to complete an IP survey this summer aspart of its investigation of the prospect.

Millrock’s four Kahiltna prospectsTo the west of Whistler is Millrock’s Estelle property.

� A L A S K A

Explorers descend on Kahiltna Terrane Geologists scour this rugged, mineral-rich, but underexplored Alaska region known to produce huge porphyry copper-gold deposits

8NORTH OF 60 MINING


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Crews drill the Island Mountain prospect at Kiska Metal Corp.’s 111,000-acre Whistler copper-gold property in early June.The Island Mountain discovery hole drilled late in 2009 cut two distinct mineralized zones. The upper 150 meters averaged1.06 g/t gold equivalent (0.72 g/t gold, 2.37 g/t silver and 0.16 percent copper), while the lower 106.9 meters of the holeaveraged 1.32 g/t gold-equivalent (1.22 g/t gold 0.69 g/t silver and .05 percent copper).

Millrock Resources Inc. Vice President of Exploration Phil St. George studies the rocks at thecompany’s 32,511-acre Estelle gold property. In 2009 Millrock geologists scoured theKahiltna Terrane, staking three additional porphyry and intrusion-related gold occurrencesin the mineral-rich region surrounding Estelle.

Though the two projects are adjacent, geol-ogists believe Estelle was mineralizedabout 20 million to 25 million years laterthan its neighbor.

Estelle belongs to a belt of porphyrydeposits that stretches from SouthwestAlaska along the Alaska Range and intoYukon Territory. It dates from about thetime that Donlin Creek was being formed,65 million to 70 million years ago.

Millrock Vice President of ExplorationPhil St. George explained: “There is aseries of 65 million-year-old gold occur-rences through the Alaska Range, includ-ing the Estelle deposit we are working on.”

Millrock does not plan to drill the goldproject this year; instead its geologists willscour the 32,511-acre, or 132-square-kilo-meter, property with the goal of identifyingtargets for an aggressive drill program in2011.

“The Shoeshine and Oxide Ridgeanomalies will certainly be a focus of thisyear’s program; we will flesh those out andprepare ourselves to drill the best possibletargets there,” Millrock President and CEOGreg Beischer told Mining News.

“A big part of the rest of the programthere will be to further prospect the rest ofthe 35-kilometer-long claim block. I thinkif we spend half a summer here, doingsome good boot-and-hammer prospecting,geochemical work and interpretation of thedata, we are going to come up with a lotmore drilling targets,” he added.

The majority of the funding for the2010 exploration at Estelle comes from anearly May agreement with Teck ResourcesLtd. In order to mitigate its risks, and stillhave the option to own an interest in thispromising gold prospect, the diversifiedglobal miner bought 1,363,636 units ofMillrock at C44 cents per unit, a 25 percentpremium over the going price of thejunior’s shares.

Estelle is not the only project Millrockis investigating in the Kahiltna Terrane. In2009 Millrock crews explored the mineral-rich region northwest of Anchorage, stak-ing three additional porphyry and intru-sion-related gold occurrences.

Millrock’s investigation of the KahiltnaTerrane was funded through a strategicalliance struck with Altius Minerals, aproject generator and royalty businessbased in Newfoundland-Labrador.

“Our grassroots exploration alliancewith Altius has been very effective thus farin identifying some exciting new gold andcopper-gold prospects in Alaska,” Beischersaid.

To the east of Whistler and Estelle is theMonte Cristo gold prospect and the St.Eugene copper-gold property.

St. Eugene hosts a copper-gold-molyb-denum porphyry system initially discov-

ered in the 1970s. Millrock’s target atMonte Cristo is a large tonnage intrusive-related gold deposit or gold-rich porphyry.Millrock was drawn to the property bycolor anomalies caused by iron stainingand carbonate alteration.

Revelation, the third Kahiltna Terraneproperty staked by Millrock in 2009, is a5,760-acre pluton-hosted gold target ispositioned about 30 miles, or 48 kilome-ters, west of Millrock’s Estelle propertyand about 3 miles, or 4.8 kilometers, north-west of International Tower Hill Mines’Terra gold property.

Equipped with maps and other propri-etary information acquired from GeraldBooth, Millrock geologists immediatelydiscovered a 600-meter-long soil anomalyon the property where they retrieved 10samples returning values ranging between95 parts per billion and 1,200 ppb gold.

While most of Millrock’s work hasfocused on gold and copper, the projectgenerator is keeping its eye open for otheroccurrences in the prospective geology ofthe Kahiltna Terrrane.

Beischer said all of the Kahiltna Terraneproperties that Millrock staked last yearare available for option in this emergingarea gold play.

“They are available at any time; we

expect though, to have to put some moremoney in the ground before we convincesomeone to put some serious money in theground,” he said.

The company is conducting furtherinvestigations of these projects in 2010.

More than porphyryThough the Kahiltna assemblage is best

known for its porphyry and other intrusiverelated copper and gold projects, the regionalso is highly prospective for other stylesof mineralization.

“All over the Kahiltna Terrane keepyour mind open to any style of mineraliza-tion — it could be VMS (volcanic massivesulfide), a skarn or a great big vein,”Beischer advised.

The Kemuk iron-titanium property,located about 100 miles, or 160 kilometers,west of the Pebble project, is one such proj-ect.

The U.S. Geological Survey estimatedreserves on the project at 2.2 billion tonsgrading 15 percent to 17 percent iron and 2percent to 3 percent titanium. The deposit,hosted in magnetite-bearing ultramaficrocks, also is prospective for platinumgroup elements.

International Tower Hill’s Terra high-grade gold project - located 3 miles, or 4.8

kilometers, southeast of Millrock’sRevelation property - is a prime exampleof the bonanza-grade gold vein potential ofthe region.

Terra is centered on an 8-kilometer-, or5-mile-, long trend of high-grade veinoccurrences which have returned numer-ous surface rock samples and drill inter-sections in excess of 50 g/t gold.

The bulk of Tower Hill’s drilling hasfocused on only a 400-meter-long sectionof the Ben’s Vein, the source of the proper-ties resource of 428,000 metric tons at anaverage grade of 12.20 g/t gold (168,000contained ounces) and 23.11 g/t silver(318,000 contained ounces) at a cutoff of5.0 g/t gold.

Terra was optioned to American MiningCorp. a Nevada-based private mining com-pany. The gold at Terra occurs as coarsenative gold and can be recovered by sim-ple gravity methods, and sources tellMining News that American Miningplans to complete a small-scale gravitybulk-sample of the ore from the Ben’svein in late summer of this year.

Other new and exciting prospects aresure to be discovered as the glaciersrecede and geologists continue to combthe promising geology of the rugged andunderexplored Kahiltna Terrane. �

9NORTH OF 60 MINING


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ocean. Instead, it is the unwilling-ness of state and federal govern-ments to foster oil recovery frommore proximate shallow locations oronshore where we would havegreater capability to contain a spill.Wouldn’t it be nice to imagine afuture where CAVE men and CAVEwomen could join hands with thosewho actually produce something inthe sure and certain knowledge thatthe resources which originate on ourown soil well serves us all.

I must be drinking Kool-Aid. �


TANGEN


KAHILTNA

http://www.miningnewsnorth.com/

� A L A S K A

Excitement about Aqqaluk mounts at NANA Inupiat shareholders look forward to 20 more years of economic benefits from the next zinc-lead deposit to be mined at Red Dog


The Inupiat people of NorthwestAlaska breathed a sigh of relief when

Teck Resources Ltd. decided to moveahead with development of the Aqqalukdeposit at the Red Dog Mine. The 51.6million metric tons of high-grade ore inthe deposit that lies next door to the maindeposit will extend the life of the world-class zinc-lead-silver mine, and continueto provide economic benefits for 12,000NANA Regional Corp. shareholders foranother 20 years.

“We are excited to move forward withthis next phase at Red Dog Mine,” saidMarie N. Greene, NANA Regional Corp.president and CEO. “NANA and Teckhave worked very hard to ensure that thesocial, cultural, environmental and eco-nomic benefits of Red Dog will remain inplace for our people and our region.”

The future of the zinc mine came intoquestion when two environmental lawfirms — Trustees for Alaska and Centeron Race, Poverty and the Environment —appealed the water discharge permit thatwas issued for the Aqqaluk developmentby the U.S. Environment ProtectionAgency.

Representing a handful of residentsfrom the local villages of Kivalina andPoint Hope, the environmental groupsargued that certain provisions of theNPDES, which is the primary water dis-charge permit for the huge zinc-lead mine,do not comply with the Clean Water Act.

“We are very disappointed in thoseappeals, as we believe the EPA wentthrough extensive analysis, sought exten-sive regional and public involvement, andissued a permit with new discharge limits

that protect the environment and allow themine to comply with permit limits,”NANA Regional Corp. Chairman DonaldSheldon told shareholders.

If development of Aqqaluk did notbegin by May, then Red Dog would haverun out of ore before the new deposit wasready to be mined, which would haveforced Teck to shut down operations for atleast a year.

“I want to let you know that anyappeals that could halt the development ofthe Aqqaluk deposit are a direct threat tothe economic, cultural, social and environ-mental benefits that our region receivesfrom owning the Red Dog Mine,” Sheldonsaid.

After taking into consideration therepercussions of shuttering the mine, Teckdecided to move ahead with the develop-ment of Aqqaluk, though conditions of theappeal have not been completely resolved.

“Our discussions with EPA have beenconstructive, and after carefully consider-ing the environment, our employees andlocal communities we are proceeding withAqqaluk,” said Mike Agg, Teck seniorvice president, zinc.

Billion-dollar corporationNANA, which owns the zinc-rich land

on which Red Dog is situated, has built aglobal enterprise boasting 2009 revenuesof nearly US$1.3 billion. The high-gradezinc mine has been a key contributor toNANA’s success.

“If we lose Red Dog and the income itproduces, we will be hit by some realfinancial hardships,” NANA DevelopmentCorp. President Helvi Sandvik told share-holders in her annual report.


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The Red Dog Mine is located in the Delong Mountain Range on land owned by NANARegional Corp. Operated by Teck Alaska, Red Dog is an important economic engine forNorthwest Alaska. The mine’s new Aqqaluk Deposit, which is adjacent to the Main Deposit,will add 20 years to Red Dog’s mine life.

Noorvik, the first community to be counted in the 2010 U.S. Census, experienced about 18percent growth in its population during the past 20 years, a period when many rural Alaskahamlets felt sharp decreases in residency due to the high cost of living and lack of econom-ic opportunities.

http://www.kiskametals.com/


As development of the long-awaitedNorthwest Transmission Line

moves toward construction startup thisfall, stakeholders in the C$404 millionventure are making deals aimed at maxi-mizing economic and environmental ben-efits of the project.

British Columbia’s Ministry of Energy,Mines and Petroleum Resources releaseddetails May 28 of agreements betweenBC Hydro, British ColumbiaTransmission Corp., Coast MountainHydro L.P., a wholly owned subsidiary ofAltaGas Income Trust Ltd. and theTahltan Nation that will help to createjobs, provide clean and renewable elec-tricity to B.C.’s northwestern region, andspur completion of the line.

The 287-kilovolt publicly-ownedtransmission line will extend 335 kilome-ters, or 208 miles, along the Highway 37corridor from Skeena Substation (nearTerrace, B.C.) to Bob Quinn Lake. It willprovide an interconnection point forpower generation projects, supply elec-tricity to support industrial developmentsin the area and reduce greenhouse gasemissions by enabling B.C. communitiesnow relying on diesel to generate electric-ity to connect to the grid.

An application for an environmentalassessment certificate for the line wasaccepted by the B.C. EnvironmentalAssessment Office on April 14.

As one of his final actions as B.C.Minister of Energy, Mines and PetroleumResources, Peace River South MLA BlairLekstrom announced the agreements.

“These agreements will open up theNorthwest by providing access to some ofthe up to 2,000 megawatts of clean ener-gy potential that has been identified in theregion and will reduce greenhouse gasemissions. They are part of our long-termvision for clean, renewable, low-costenergy for all British Columbians,” saidLekstrom, who was succeeded as ministerJune 11 by Kootenay East MLA BillBennett.

The agreements, which will supportconstruction of the new transmission line,include:

A C$180 million umbrella agreementbetween AltaGas and BCTC for the con-struction and development of the trans-mission line (BCTC will operate the

line.); An electricity purchase agreement

between BC Hydro and AltaGas for theForrest Kerr hydropower project near BobQuinn Lake; and

An impact-benefit agreement betweenAltaGas and the Tahltan Nation for theForrest Kerr project.

The project also includes C$130 mil-lion in funding through the Governmentof Canada’s Green Infrastructure Fund.Estimated ratepayer contributions to theproject will total C$94 million, which isexpected to be offset by payments byfuture renewable energy projects and/ormine developments.

New NW hydro projectAltaGas plans to generate electricity at

the 195-megawatt Forrest Kerr project,which it acquired in 2008. Located 1,000kilometers, or 620 miles, north ofVancouver, the project is designed to cap-ture energy produced by the natural flowand elevation drop of the Iskut River andits tributaries and deliver power to thegrid at Bob Quinn Lake via the NorthwestTransmission Line.

Altagas aims to redirect a portion ofthe flow of the Iskut River through a tun-nel to an underground powerhouse con-taining turbines to generate electricity.The run-of-river nature of the projectensures continual movement of water andmaterials downstream of the proposedtailrace discharge, minimizing any poten-tial effects on aquatic resources in thearea. Further, because of the undergroundnature of the Forrest Kerr generation site,it has a relatively small surface footprint,that also will minimize impacts to terres-trial ecosystems. Electricity generated atForrest Kerr will be delivered to theNorthwest Transmission Line at BobQuinn Lake via a 37-kilometer, 23-mile,287 kV transmission line.

AltaGas acquired Forrest Kerr in 2008.The project is located within the TahltanFirst Nation traditional territory andAltaGas said it will continue to workclosely with the Tahltan to advance theproject to commercial operation.

The Forrest Kerr project is part ofB.C.’s plan to achieve energy self-suffi-ciency by 2016, as well as help meet itsclean energy needs in an environmentallyand socially responsible manner by off-

11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JUNE 27, 2010

When Fort Knox Gold Mine was looking for an environmental professional to fill a crucial job at the mine, we didn’t have far to look.

A UAF grad who studied geography and geology, Kindra has long had a passion for the environment.

Kindra already had a few years experience, but found her dream job at Fort Knox where she monitors the mine’s compliance with complex environmental rules. She enjoys being part of the Fort Knox team, and has found the career path she sought without having to leave home.

Hiring qualified Fairbanks residents makes our job at Fort Knox easier, too. Kindra is among the 500 mine employees who call Fairbanks home.

kinross.com

Our PeopleOur Community

� B R I T I S H C O L U M B I A

NW power line inches toward constructionB.C. groups finalize deals to create jobs, reduce greenhouse gases with new infrastructure for underdeveloped region of province

see NTL PROJECT page 23

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http://www.3M.com/

Under the operating agreementbetween Teck and the NANA, the AlaskaNative regional corporation receives annu-al royalty payments. A total of US$471million in royalties has been paid toNANA since the agreement was signed in1982, and due to provisions of the AlaskaNative Claims Settlement Act, 60 percentof the royalties are shared with the 12other Alaska Native regional corporations.

Teck paid off its capital and operatingcosts at Red Dog in 2007, which triggeredan increase in NANA’s royalties to 25 per-cent of net profits from the zinc mine.NANA’s interest is bumped up by 5 per-cent every five years.

The increased royalty and strong metalprices has helped bolster NANA’s incomefrom Red Dog in recent years. From 2005to 2009, it received US$373 million inroyalty payments.

In addition to royalties, NANA bene-fits from creating service companies tosupport Red Dog. Moreover, some 300-plus shareholders work at the mine

“We must remember that Red Dogdelivers more than just royalties to NANA.Several NANA companies deliver servic-es to support the mine’s operation. Incomeearned by these companies is important.But, perhaps the most difficult challengewould be the jobs at Red Dog that wouldbe lost if operations shut down. As weknow, we don’t have many other alterna-tive employment opportunities in ourregion,” Sandvik said.

Shareholders fill Red Dog jobsNearly 58 percent of the 550 full-time

jobs at Red Dog are filled by NANAshareholders, many of whom have workedtheir way up to high-level positions at themine. In addition to employees workingdirectly for Teck, two NANA companies— NANA-Lynden, a joint venture thatprovides trucking, and NANAManagement, which provides housekeep-ing for the mine — supply additional jobsfor residents of the region.

Teck, NANA-Lynden and NANAManagement paid US$26 million inwages to some 310 shareholders in 2009,or on average of US$85,000 each. Muchof these wages go home to the residents ofthe 11 villages spread out across the38,000-square-mile NANA region.

The Inupiat people that live in theregion still depend largely on a subsis-tence lifestyle and have found that the RedDog Mine enhances their traditional ways.In addition to providing money needed tobuy equipment needed to hunt and fish,

the extended periods of free time and flex-ible leave policy of the mine allowemployees to participate in the annual sub-sistence cycle.

“With its rotational work schedule andclose proximity to our villages, Red Dogallows our people to bring home a familysupporting paycheck and to continue tolive their subsistence lifestyle. We aregrateful for this, and we are blessed to livein such a resource-rich area of Alaskawhere we can responsibly develop ourresources and protect and enjoy our sub-sistence way of life,” Sheldon said.

Not only does working at Red Dogallow residents of the NANA region timeto take part in subsistence hunting andfishing, they also are able to play an activerole in assuring that the mine protects theenvironment they treasure.

“We take care to manage the water atRed Dog Mine for our people,” said HerbAdams, mill shift supervisor and NANAshareholder from Kotzebue. “I know thatI’m protecting our subsistence resourcesfor my family and friends.”

Adams, who has worked at the zincmine for 13 years, said his 21-year-old sonTony recently joined the Red Dog crew.

NoorvikVisiting the NANA village of Noorvik

one begins to get a sense of what another20 years of mining at Red Dog Minemeans to the NANA shareholders ofNorthwest Alaska.

Noorvik, the first community to becounted in the 2010 U.S. Census, hasexperienced a growth of about 18 percentin its population during the past 20 years,a period when many rural Alaska commu-nities have seen sharp drops in residencydue to high costs and lack of economicopportunities.

While a handful of the residents workin local jobs and others work at Red Dog,subsistence hunting, fishing and gatheringis the economic base for the some 600Inupiat residents of Northwest Alaska vil-lage, located about 45 miles, or 72 kilo-meters, southeast of Kotzebue.

A fish camp across the Kobuk Riverfrom Noorvik was bustling with activityas three generations of Inupiats worktogether. The youngest of the children runand play amidst their older siblings whoare helping to clean and prepare the day’s

haul of pike to be dried and stored. Donning a Red Dog sweatshirt, Edith

Pungalik, the matriarch elder of the camp,is a gracious hostess who invites herguests to share the bounty of dried fishand muktuk, a traditional staple consistingof the skin and outer fat layer of whales.As she deftly slices the vitamin-C-richwhale skin with her ulu, a curved bladeknife, she explains the significance ofpassing traditional Inupiat values andtechniques down to the younger genera-tions.

Her husband, Thomas, speaks to theimportance of both traditional and moderntools as he talks about subsistence tech-niques with his guests. He explains that acut off caribou antler is the best tool forpuncturing a hole in fish to string themtogether to dry. He also speaks to theimportance of having the economic meansto buy the nets, boats, snowmachines andfuel the people of the region use to huntand fish.

A strong regional economy has meantthat these Noorvik residents continue tohunt and fish on the lands that have sus-tained their people for more than 10,000years.

Economic engine in NW AlaskaThe residents of the NANA region also

benefit from the Northwest ArcticBorough, which covers the entire NANAregion. Tunds the borough receives fromthe mine has provided bonds to build fivenew schools and upgrade several others.

The borough has received aboutUS$88.5 million in payments since RedDog went into production in 1989.

“Red Dog Mine is an economic enginefor our region and for Alaska,” saidNorthwest Arctic Borough Mayor MarthaWhiting. “The mine is the borough’slargest private contributor. Since 2007,we’ve received more than US$25 millionfrom Red Dog’s payment-in-lieu-of-taxes.This money helps us fund important bor-ough-wide education, public service andinfrastructure programs.”

The economic benefits of theNorthwest Alaska zinc mine also are feltstatewide. From 1990-2008, Red Dog pro-vided US$1.3 billion in benefits, includ-ing wages to shareholders, joint venturecontracts, payments in lieu of taxes anddirect royalty payments to NANA. In 2009alone, the mine provided US$116 millionin federal and states taxes and investedUS$217 million in the local and stateeconomy through the purchase of goodsand services from Alaska suppliers.

With the development of the Aqqalukdeposit, Red Dog promises to be an eco-nomic engine in Northwest Alaska for atleast another 20 years. �

12NORTH OF 60 MINING



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shareholders Anna Lee, from Shungnak,Alaska, and Marissa Atrouk, from Kiana,Alaska, plant willow trees on a reconstructedhillside as part of the reclamation program atthe Red Dog Mine. At right, NANA share-holder Edith Pungalik slices “muktuk,” orwhale skin and fat, at a fish camp across theKobuk River from the village of Noorvik.

http://www.jackovich.com/


Chinese companies are doing their homework andinvesting in base metals projects in northern and

western Canada to take advantage of rising prices and tosecure a future supply of the minerals for their operationsback home.

First on the scene were private Chinese companies,Jinduicheng Molybdenum Group and NorthwestNonferrous International Investment Co. In the summerof 2008, they purchased a 100 percent interest in YukonZinc Corp., which owns the Wolverine Project and othermineral assets in the Finlayson District of southernYukon Territory.

Then a year ago, ChinaMinmetals Corp., one of world’slargest metals traders and No. 412on the Fortune Global 500 in 2008,jumped at an opportunity to goupstream into the project side ofmining by purchasing the mineralassets of Australia-based OzMinerals Ltd.

Today, the state-owned Chinesecompany’s new subsidiary,Minerals Metals Group, is one of the world’s top fiveproducers of zinc and substantial amounts of copper,lead, gold and silver. Most of the producing assets arelocated in Australia or Asia, including a mine inQueensland, Australia, that is one of the world’s largestzinc producers after Alaska’s Red Dog Mine.

MMG also is systematically exploring mineral assetsin Canada, including 2,000 square kilometers of grantedtenements that surround the High Lake and Izok Lakeprojects in Nunavut, targeting copper, zinc-lead andnickel mineralization in aggressive 2010 explorationprograms.

High Lake has an NI 43-101-compliant resource cal-culated in June 2008 that includes measured and indicat-ed resources totaling 17.2 million metric tons grading3.36 percent zinc, 2.25 percent copper, 0.31 percent lead,70 g/t silver and 0.95 g/t gold, along with a 40,000-met-ric-ton inferred resource grading 2.38 percent zinc, 0.49percent copper, 0.44 percent lead, 122 g/t silver and 0.21g/t gold. An NI 43-101-compliant resource calculated inJune 2008 for Izok Lake has estimated measured andindicated resources totaling 14.4 Mt grading 12.94 per-cent zinc, 2.51 percent copper, 1.28 percent lead and 71g/t silver, along with a 369,000-metric-ton inferredresource grading 6.40 percent zinc, 3.79 percent copper,

0.27 percent lead and 54 g/t silver. MMG also is exploring early stage nickel-copper

projects through joint ventures in Nunavut, Ontario andMinnesota.

In December, Yunnan Chihong Zinc and GermaniumCo. agreed to join Selwyn ResourcesLtd. in a rare 50-50 joint venture todevelop the Selwyn Project in YukonTerritory as the world’s next major zinc-lead mine. Yunnan Chihong agreed toadvance the partnership C$100 millionto fund the Selwyn venture to bankablefeasibility.

Strategic investments in Canada“What a difference 12 months

makes. When we think back a year agotoday, we were in the middle of a globalfinancial crisis. Base metals prices weredown between 50 and 70 percent, and Ithink most people would have said wewere in for a long, hard recession,”MMG Canada President MartinMacFarlane, told a mining industryaudience in Nunavut recently.

He said Oz Minerals was trying to refinance its loansin early 2009 with little success. Equity markets wereclosed and the only opportunity available to the compa-ny was to sell some of its assets.

“China Minmetals came along with a bid for thewhole company and was able to buy all of the company,including Canadian assets, with the exception of onemine in Australia,” MacFarlane said.

“China Minmetals saw an opportunity to go upstreaminto the project side of mining, and that’s why they decid-ed to buy Minerals Metals Group or MMG,” he said.“Today, things look much brighter. Base metals haverecovered most of their drop in prices, and things aregoing on in the equity markets. People are raising moneyagain.”

Aggressive exploration in NunavutDespite its bold acquisition, China Minmetals eased

into its new role as a Canadian explorer, confining itsefforts during the economic downturn in 2009 to smallerprograms at High Lake and Izok Lake.

Using only 30 days of geophysics, mapping andprospecting focused on High Lake East in 2009, MMGgeologists developed new exploration targets for 2010.

They also reviewed all data previously collected aboutIzok Lake and developed new interpretations and 2010drill targets at depth and along strike. This work ledMMG to shift the focus of its Canadian exploration thisyear to the Izok Lake Project.

“Why we are excited by Izok Lake? It is probably thehighest grade, undeveloped zinc resource left in the

ground in the world,” MacFarlane said. “Our previousstudies show it will probably sustain an 11-year mine lifewith annual output of 140,000 metric tons of zinc,30,000 metric tons of copper and 13,000 metric tonslead. That’s right up there with the global best.

“Importantly, the mining is very straightforward. It isa very shallow deposit amenable to open-pit mining with


AIC has built a solid reputation by taking an impossible idea and making it an accomplished reality. With more than 20 years of experience, we specialize in providing innovative concepts and technical solutions to our global clients.

AIC has been an integral part of every major mine developed in Alaska for nearly a quarter of a century, providing construction services in the mining industry throughout Alaska and Russia. We have the expertise, equipment and

skilled personnel to tackle the challenging needs of the mining industry – wherever it may take us.

M O V I N G T H E E A R T H

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� N U N A V U T

Chinese snap up base metals projectsZinc-rich properties in Nunavut offer huge state-owned metals trader potential for ample and reliable future minerals supply

MARTIN MACFARLANE

see NUNAVUT BASE METALS page 15

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� Y U K O N T E R R I T O R Y

Base metals bringChinese to CanadaZinc-rich properties in Yukon Territory attract timely investmentsfrom three companies seeking safe, plentiful supply of minerals


Chinese investors are finding a lot tolike in Canada, especially two base

metals projects in the eastern part ofYukon Territory.

Jinduicheng Molybdenum Group andNorthwest Nonferrous InternationalInvestment Co., two private Chinese com-panies, purchased a 100 percent interestin Yukon Zinc Corp. in 2008, acquiringthe Wolverine Project and other mineralassets in the Finlayson District of south-ern Yukon Territory.

Two years later, Yukon Zinc is ready tostart up an underground mining operationat Wolverine that is expected to begin pro-duction of copper, lead and zinc concen-trates this summer.

Selwyn Resources Ltd., meanwhile,reported an end to its search for a strate-gic partner in December when YunnanChihong Zinc and Germanium Co.agreed to enter a rare 50-50 joint ventureto develop the massive Selwyn Project asthe world’s next major zinc-lead mine andC$100 million in the partnership to fundthe Selwyn venture to bankable feasibili-ty.

Selwyn President and CEO HarlanMeade said a major turning point for themega-zinc-lead project he is developingin the Howard’s Pass area of easternYukon came when Yunnan Chihongdecided to invest C$100 million in theproject.

“It’s one of the first major investmentsby the Chinese in Canada,” said Meade,

who also was instrumental in the sale ofYukon Zinc Corp. to its new Chineseowners.

In a recent interview with Canada’sBusiness Television, Meade said Chinahad been a major exporter of zinc forquite a while, but the country changed itsstrategy two years ago.

“China has begun importing zinc,” hesaid. “And some companies are movingupstream to ensure that they have long-term supply for their smelters. Chinaalready represents almost 40 percent ofthe smelting production in the world.They are going to have to compete witheveryone else to get zinc, and the simplething is to own the mine resources.”

The strategy is paying off. Zinc andlead have been major performers in themarkets for the past 18 months, but thereare few projects in the developmentpipeline after many, many years of

see YUKON INVESTMENT page 15

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“China has begun importing zinc.And some companies are moving

upstream to ensure that they havelong-term supply for their

smelters. China already representsalmost 40 percent of the smeltingproduction in the world. They are

going to have to compete witheveryone else to get zinc, and thesimple thing is to own the mine

resources.” –Harlan Meade, president andCEO of Selwyn Resources Ltd.

http://www.AmerCable.com/


demand for the mineral being underesti-mated, Meade said.

“I expect a bull market in base metals,and it’s just getting started,” he added.

Jason Dunning, vice president ofexploration at Selwyn Resources, said thegap between expected demand and supplyfor zinc and lead is so huge that theSelwyn Project is one of the few projectsthat can truly meet world demand.

“Only two zinc mines are being built inthe world, one is Yukon Zinc’s Wolverineand one is in Mexico,” he said. “A couple(of projects) are just entering the develop-ment pipeline, and none is currently inbankable feasibility studies.”

Wolverine headed to productionLocated 180 kilometers, or 112 miles,

southeast of Ross River, the WolverineProject covers 107-square-kilometers, or26,440 acres, with a zinc-rich volcanicmassive sulphide deposit estimated tocontain measured and indicated resourcestotaling 4.46 million metric tons, grading12.14 percent zinc, 354.8 grams per met-ric ton silver, 1.16 percent copper, 1.69 g/tgold and 1.58 percent lead.

Yukon Zinc estimates that it will spendabout C$207 million in capital costs todevelop a mine at Wolverine with at least9 1/2 years of production.

The company is currently in the finallap of its race to commission an under-ground mine for the project. Already, aQuartz Mining License and a Type “A”Water License have been issued forWolverine. This involved comprehensiveconsultation with the area’s First Nations.The water license allows development oftailings structures and other water-relatedinfrastructure.

In May, the company submitted its milloperating plan to Government of Yukonofficials and received word that its recla-mation and closure and financial securityplans have been approved.

Yukon Zinc based its operating plan onan annual design mill feed treatment rateof 620,500 metric tons or 1,700 metrictons per day. The company envisions aninitial average daily milling rate of 1,400t/d with production increasing to 1,700 t/dby December.

Concentrates produced at Wolverinewill be trucked via a newly built 26-kilo-meter, or 16-mile, access road to theRobert Campbell Highway and then souththrough Watson Lake, B.C., to the StewartBulk Terminal in Stewart, BC. There, theconcentrates will be loaded onto ocean

freighters and shipped to smelters in Asia.

Zinc-lead project on fast trackSelwyn Resources is preparing to take

the Selwyn Project to the next stage ofdevelopment with the help of Chihong’sC$100 million investment. The Chinesecompany recently informed the Vancouver,B.C.-based junior that it expects to receiveall required regulatory approvals to closethe transaction by August. Selwyn, mean-while, has raised additional funds to coveroperating expenses for which Chihong hasagreed to reimburse the junior.

The Selwyn Project is situated in theHoward’s Pass District on Yukon’s moun-tainous border with Northwest Territories.Since 2005, Selwyn Resources, formerlyPacifica Resources Ltd., has spent morethan C$60 million to advance the project tothe pre-feasibility stage. The expendituresdefined the Selwyn Project as one of thelargest undeveloped zinc and lead depositsin the world. It has seen partial delineationof 13 zones of mineralization over a strikelength of at least 38 kilometers, or about 24miles. A new mineral resource for Selwynincludes 154.35 Mt grading 5.35 percentzinc and 1.86 percent lead in indicatedresources, and 234.15 Mt grading 4.54 per-cent zinc and 1.41 percent lead of inferredresources.

In addition to the indicated and inferredresources, the Selwyn property has anoth-er 245-255 Mt of mineral potential with anestimated grade of 4-5 percent zinc, and1-2 percent lead.

New JV operator for SelwynMeade said having Chihong as a part-

ner has opened up new opportunities forSelwyn.

“People said this project was too bigfor us,” he said.

Dire predictions included Selwyn hav-ing to dilute its shareholders’ equity con-siderably to keep the project alive. “Allthat changed with Chihong’s investment,”he said.

A new company will be established,owned equally by Selwyn and Chihong,to act as operator and carry out the pro-grams of the new joint venture. It will bemanaged by a board of directors withequal representation from both Selwynand Chihong.

Meanwhile, recent metallurgical testsreinforced earlier indications of positivemetal recovery and concentrate qualitypotential for the project, Selwyn toldinvestors June 14. In particular, the high-grade nature of the Selwyn zinc concen-trates and their low iron content areattractive to zinc smelters.

Based on the test results, 85 percent ofthe zinc at Selwyn is recoverable to a 55percent zinc concentrate with low ironcontent under operating conditions; and69 percent of the lead to a concentrategrading 60 percent. No secondary metalsor minor elements of the zinc or lead con-centrates are expected to attract smelterpenalties, with the possible exception ofa modest silica penalty in the zinc con-centrates. The concentrates also containmeasurable quantities of potentially valu-able minor metals such as gallium, ger-manium and cadmium, but the grades areexpected to be variable and no smelterpayment is anticipated at this point in

time, the junior said.In early June, Selwyn Resources said

it reopened its camp on the property andexpected to start geotechnical and explo-ration drilling shortly. The geotechnicaldrilling will confirm conditions for pre-ferred tailings facility sites and is part ofextensive additional engineering workrequired to complete a project report forsubmission to the Yukon Environmentaland Socioeconomic Assessment Board.

Exploration drilling will start this yearwith infill drilling of the XY CentralDeposit to upgrade inferred mineralresources to the indicated category foruse in a bankable feasibility study beingprepared by Wardrop Engineering. Laterin the program, additional infill andexploratory drilling will be undertakenon the Don Deposit and its extensions.The drilling aims to confirm a mineralresource adequate to support the miningof 5,000 metric tons per day from XYCentral deposit and 3,000 t/d from theDon deposit as a base case for the feasi-bility study.

The Yukon Water Board is currentlyreviewing Selwyn’s application for aType B Water License, which is requiredto undertake initial underground develop-ment and test mining in the XY Centraldeposit.

Fast track to developmentOver the next 18 months, Meade said

the new Selwyn JV will complete thedetailed drilling and predevelopmentwork needed for a bankable feasibilitystudy and move well into the permittingprocess.

“This sets up the partners to be able togo to Chinese banks and secure debtfinancing and come up with equity por-tion needed to complete development ofthe project,” Meade said. “The indica-tions are for a strong market when thetime comes to get additional equityfinancing in 18 months. That’s the key forfinancing a big project like this – tim-ing.”

A mine at Selwyn is estimated torequire $800 million – $1 billion in capi-tal and take 2 years to build.

“Basically, we’re on a timeline ofcompleting construction and commis-sioning the mill in late 2013 and 2014,”Meade said recently. “We’re feeling con-fident in the outlook. We set the founda-tion, got the relationships and got themoney. Now we will just do what every-body said wasn’t possible – fulfill ourdream of not only finding but actuallybuilding and owning a piece of one ofthe world’s largest zinc deposits.” �

a 3-1 strip ratio. The ore is very coarse-grained, which means the concentrate willbe relatively easy to process to get goodrecoveries,” MacFarlane said.

The deposit also promises exceptional-ly high recoveries with minor penalties.

MMG intends to spend C$7 million toexplore both properties in 2010, primarilywith drill testing of extensions of the Izokdeposit at depth and along strike thisspring and summer, drill testing of HighLake East targets identified in 2009,prospecting for more targets at High LakeEast and exploring the region for anotherIzok-caliber target.

To enhance the project’s financialreturn, MMG also will continue to studychallenges to developing the Izok proper-ty, including the lack of a road and port forthe remote project, which is located innorthwestern Nunavut 300 kilometers, or

186 miles, inland near Kugluktuk. Theproject also must contend with the Arcticregion’s 100-day shipping window.

MMG said it will focus on expandingthe resource at Izok Lake until it can sup-port 20 years of mining. Other ideas up forconsideration include dusting off theBathurst Inlet Port and Road proposalshelved a few years ago; minimizing theimpact of arctic conditions by operating amine exclusively during the summermonths and processing Izok ore at thenearby defunct Lupin Gold Mine, whichMMG also owns.

“It means we’re going to have to builda road and port, which adds substantiallyto operating costs,” MacFarlane said.“These are significant financial issues. Wethink we can address them and makemoney. We did a prefeasibility study in2008 and found the costs were such thatwe couldn’t justify a move forward. In2009, we re-evaluated, (completing ascoping study in December). We short-ened the proposed road by 80 kilometers,

or 50 miles, and looked at operating themine only during the summer months. Wealso looked at ways to use the old Lupingold mine, currently on care and mainte-nance.”

The proposals, developed after MMGchanged ownership, potentially could cutcapital costs for developing Izok by about25 percent to C$900 million. It also couldincrease operating costs by nearly 19 per-cent to C$114 million.

“The savings are not entirely lost inincreased operating costs,” MacFarlanesaid.

The changes would boost net presentvalue of the project to C$348 million fromC$22 million and the internal rate ofreturn to 15.4 percent from 8.7 percent.These projections are based on the follow-ing metals prices: zinc at US$1.00/lb; cop-per fetching US$2.20/lb; lead selling forUS50 cents per lb; and silver gettingUS$11 per ounce; and an exchange rate ofone Canadian dollar equaling US85 cents.

A mine at Izok Lake would generate

380 construction jobs and 400-500 perma-nent jobs, according to MMG estimates.

MMG’s board approved a budget ofC$4 million to complete a new prefeasi-bility study in 2010, incorporating thenew ideas, including a more detailed roaddesign, a mill location trade-off study(Izok vs. Lupin), revised site layouts atIzok and Lupin and capital cost and oper-ating cost updates.

MacFarlane said MMG also will spendanother C$1.3 million in 2010 to verifythe remaining gold resource and explo-ration potential of Lupin and on addition-al water discharge and site maintenance atthe old mine property. In 2009, MMG dis-charged water from retention and sewageponds at Lupin to lower storage levels andbegan a general program of site mainte-nance to prevent deterioration.

If the new development concept forIzok proves to be cost effective, the proj-ect could begin shipments of base metalsand silver ore in 2017, according toMMG. �


NUNAVUT BASE METALS


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Selwyn Resources Ltd. plans additional exploratory drilling at the Don Deposit on its SelwynProject in eastern Yukon Territory. The explorer wants to confirm a mineral resource ade-quate to support mining 3,000 metric tons per day of zinc- and lead-rich ore. Here, Selwyn’sexploration camp is located near the Don Deposit.


Full Metal Minerals Ltd. currently hastwo drills turning at its Fortymile

property in eastern Alaska near the YukonTerritory border and a drill program slat-ed for August at its recently acquiredGrizzly Butte copper-gold property inAlaska’s Wrangellia Terrane.

In addition to drilling these coreassets, the Vancouver B.C.-based junioranticipates partner-funded exploration atseveral of its other properties spanningthe state.

“It is our objective to get pretty muchall of our properties, except for GrizzlyButte and Fortymile, optioned off thisyear. So we are looking at bringing a cou-ple more major companies and one or twojuniors on to some of our other proper-ties,” Full Metal Vice President ofExploration Rob McLeod told MiningNews June 21.

Return to FortymileAfter taking a year hiatus from drilling

its Fortymile property, Full Metal hasreturned to the silver-rich zinc-lead-cop-per property.

The 5,000-meter program, which hasbeen focused on expanding the LWMdeposit since drilling began in May, willsoon be investigating silver-richprospects discovered by geological inves-tigations of the property in 2009.

The LWM deposit, a high-grade zinc-lead-silver carbonate replacement stylesystem, has been Full Metal’s primaryexploration target at Fortymile since thejunior signed a lease agreement withAlaska Native regional corporation,Doyon Ltd., on the large land package in2006.

The following year the junior inter-sected 44.6 meters with an average gradeof 15.7 percent zinc, 5.3 percent lead and76 grams per metric ton silver in holeLWM07-04.

The 13,343 meters of drilling complet-ed at LWM has outlined a zone of contin-uous mineralization extending 700 meters

along strike and 300 meters down dip.Previous drilling on the northeast side ofmineralization was hindered by frozenoverburden; however, a larger drill hasbeen deployed to test this potential expan-sion area.

“We have been drilling since mid-May,and we are continuing to step-out atLWM. Right now, we are doing somemetallurgical test work, and then we aregoing to be testing a bunch of our region-al targets,” McLeod told Mining News.

Falcon — a silver-rich prospect dis-covered by Full Metal geologists whileexploring the Fortymile property last year— is another high-priority target for thisyear’s drill program.

Geologists collected 52 rock samplesfrom Falcon — which is situated abouthalfway between Eva and LWM — thataveraged 115.8 g/t silver along with sig-

nificant copper, zinc and lead credits. FullMetal plans to complete reconnaissancedrilling at this prospect as well as the sil-ver-rich Eva and West Eva prospects.

New copper-gold porphyryFull Metal also will have drills turning

at its recently acquired Grizzly-Butteprospect. Signing a deal with Rio Tintosubsidiary Kennecott Exploration Co. inApril, the junior kicked off an exploration

program at the copper-gold property inmid-June.

While geologists are busy mappingand gathering soil and rock samples,Zonge Engineering is flying overheadconducting a resistivity-induced polariza-tion survey. A five-hole diamond drill-program will follow the geophysicalwork.

“We are starting off with extendingthe existing soil-grid and doing some IPgeophysics with the intent to start drillingin early August,” McLeod explained. “Itisn’t very well exposed so geophysics isgoing to be key for targeting.”

Exploration of the area in the 1970srevealed the potential for a large copper-gold porphyry system. Kennecott locatedclaims over the prospect in 1998 and fol-lowed up on the historical work with itsown reconnaissance soil and rock sam-pling in 1999.

The geochemical work revealed goldanomalies around the western outcrop-ping extent of the intrusive complex.Copper in soil anomalies are more close-ly associated with the central portion ofthe intrusive complex and extend to thesouth across the Grizzly Fault into sedi-ments.

Full Metal said several strong copperand gold in rock anomalies occur ingreenstones more than 1,700 meters awayfrom the anomalous soil zones creating a1,450-acre prospective area that spanstwo drainages, suggesting the source ofthe anomalies covers a large area.

“It looks like quite a sizeable system; aone-square-mile geochemical anomalywith some good grades on surface,”McLeod said.

To earn full ownership of GrizzlyButte Full Metal must spend C$5 millionon exploration over six years, includingC$180,000 this year. Full Metal will payKennecott a one-time cash payment ofC$10 million upon completion of a feasi-bility study and pay a NSR royalty of 2percent from any production from theproperty.

Full Metal added to the 97 State of



� A L A S K A

Full Metal chases prospects, partnersJunior aims to aggressively explore two core projects, while others tackle more precious, base metal properties spanning the state

see FULL METAL page 23

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The junior’s Pebble Southproperty, which borders the

Northern Dynasty Ltd.-AngloAmerican plc Pebble property to

the south and west, is oneproperty Full Metal has indicated

could be joint-ventured soon.


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Corporate Council on the EnvironmentCorporate Council on the Environment

Corporate Partners

ABR, Inc.Accent Alaska.com-Ken Graham AgencyAlaska Airlines & Horizon AirAlaska Business MonthlyAlaska Communications Systems (ACS) Alaska Journal of Commerce/Alaska Oil & Gas ReporterAlaska Railroad CorporationAlaska Rubber & Supply, Inc.Alaska Steel CompanyAlaska Wildland AdventuresAlyeska Pipeline Service CompanyAmerican Marine CorporationArctic Slope Regional CorporationArctic Wire Rope and Supply AT&T Alascom

Bristol Bay Native CorporationCalista CorporationChevron North American Exploration & ProductionCIRIClark James Mishler PhotographyCONAM Construction CompanyConstruction Machinery Industrial, LLCDenali National Park Wilderness Centers, Ltd.Emerald Alaska, Inc.Exxon Mobil Corporation Fairweather Exploration & Production Services, Inc.Foss Maritime CompanyHolland America Lines Westours, Inc.Information InsightsKim Heacox PhotographyLGL Alaska Research Associates, Inc.Lynden, Inc.

McKinnon & Associates, LLCMondragon PhotographyNorthern Air Maintenance Services, Inc.Oasis Environmental, Inc.ODS AlaskaOlgoonik CorporationNANA Regional CorporationPacific Star Energy, LLCPeak Oilfield Service CompanyPetroleum NewsRainbow King Lodge, Inc.Shell Exploration and Production CompanySourdough Express, Inc.Stoel Rives, LLPUdelhoven Oilfield System Services, Inc.Wells Fargo Bank Alaska, N.A.XTO Energy, Inc.

The Nature Conservancy in Alaska715 L Street . Anchorage, AK 99501 . [email protected] . 907-276-3133 . nature.org/alaska

2009 Chairperson Margie Brown, President and CEO, CIRI Join UsLead Corporate Partners ($25,000 & above)

BP Exploration (Alaska) Inc. . ConocoPhillips Alaska, Inc. . URS Corporation

Working for people and nature in Alaska

http://www.nature.org/alaska

Mining Companies

Fairbanks Gold Mining/Fort Knox Gold MineFairbanks, AK 99707Contact: Lorna Shaw, community affairs directorPhone: (907) 488-4653 • Fax: (907) 490-2250Email: [email protected] • Web site: www.kinross.comLocated 25 miles northeast of Fairbanks, Fort Knox isAlaska’s largest operating gold mine, producing340,000 ounces of gold in 2004.

Kiska MetalsSuite 1350, 650 West Georgia St.Vancouver, BC V6B 4N9 CanadaContact: Jason WeberPhone: (604) 669-6660Fax: (604) 669-0898Email: [email protected]: www.kiskametals.comGold and copper projects in Alaska, Yukon, BC,Australia and Mexico. Preferred partner of seniormining firms.

Usibelli Coal MineFairbanks, AK 99701Contact: Bill Brophy, vp cust. relationsPhone: (907) 452-2625 • Fax: (907) 451-6543Email: [email protected] • Web site: www.usibelli.comOther OfficeP. O. Box 1000 • Healy, AK 99743Phone: (907) 683-2226Usibelli Coal Mine is headquartered in Healy, Alaskaand has 200 million tons of proven coal reserves.Usibelli produced one million tons of sub-bituminouscoal this year.

Service, Supply & Equipment

3M Alaska11151 Calaska CircleAnchorage, AK 99515Contact: Paul Sander, managerPhone: (907) 522-5200 • Fax: (907) 522-1645

Email: [email protected]: www.3m.comServing Alaska for over 34 years, 3M Alaska offers totalsolutions from the wellhead to the retail pump with abroad range of products and services – designed toimprove safety, productivity and profitability.

Air LiquideAnchorage, AK 99518Contact: Brian BensonPhone: (907) 273-9762 • Fax: (907) 561-8364Email: [email protected] Liquide sells, rents, and is the warranty station forLincoln, Miller, Milwaukee, Victor and most other weld-ing equipment and tool manufacturers.

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 and Rob Retherford, ownersPhone: (907) 522-4664 • Fax: (907) 349-3557E-mail: [email protected] full service exploration group that applies earth sci-ences for the mining and petroleum industries provid-ing prospect generation, evaluation and valuation,exploration concepts, project management, geographicinformation systems and data management. We alsoprovide camp support and logistics, geologic, geochem-ical and geophysical surveys.

Alaska Frontier ConstructorsP.O. Box 224889Anchorage, AK 99522-4889Contact: John Ellsworth, PresidentPhone: (907) 562-5303 • Fax: (907) 562-5309Email: [email protected]

Alaskan heavy civil construction company specializing inArctic and remote site development with the experi-ence, equipment and personnel to safely and efficientlycomplete your project.

Alaska Interstate Construction601 W. 5th Avenue, Suite 400Anchorage, AK 99501Contact: David GonzalezPhone: (907) 562-2792 • Fax: (907) 562-4179E-mail: [email protected] site: www.aicllc.comAIC provides cost-effective solutions to resourcedevelopment industries. We provide innovative ideasto meet each requirement through the provision ofbest-in-class people and equipment coupled withexceptional performance.

Alaska Steel Co.1200 W. DowlingAnchorage, AK 99518Contact: Joe Pavlas, outside sales managerPhone: (907) 561-1188Toll free: (800) 770-0969 (AK only)Fax: (907) 561-2935E-mail: [email protected] Fairbanks Office:2800 South CushmanContact: Dan Socha, branch mgr.Phone: (907) 456-2719 • Fax: (907) 451-0449Kenai Office:205 Trading Bay Rd.Contact: Will Bolz, branch mgr.Phone: (907) 283-3880 • Fax: (907) 283-3759Rebar Division1200 W. DowlingAnchorage, AK 99518Contact: Mike Galyon, rebar mgr.Phone: (907) 561-1188 • Fax: (907) 562-7518Full-line steel, aluminum, and rebar distributor.Complete processing capabilities, statewide service.Specializing in low temperature steel and wear plate.

Companies involved in Alaska andnorthwestern Canada’s mining industry

D I R E C T O R Y

see next page

The Red Dog mine in northwest Alaska.


Alaska Telecom6623 Brayton Dr.Anchorage, AK 99507Contact: Kevin Gray or Martin StewartPhone: (907) 344-1223Fax: (907) 344-1612E-mail: [email protected] or [email protected]: www.alaskatelecom.comProviding telecommunications support to oil explo-ration and production companies and contractors.Satellite communications, voice, data, microwave,VHF/UHF radio, engineering and installation.

AmerCable Inc.350 Bailey RoadEl Dorado, Arkansas 71730Contact: Russ Van Wyck, senior sales rep/AlaskaPhone: (713) 305-3315 Fax: (870) 862-8659E-mail: [email protected] site: www.amercable.comAmerCable’s Tiger ©Brand mining cables aredesigned for Alaska’s harshest operating environ-ments. Surface/open pit or underground, we have amining cable productivity solution for you.

Arctic FoundationsAnchorage, AK 99518-1667Contact: Ed YarmakPhone: (907) 562-2741 • Fax: (907) 562-0153Email: [email protected]: www.arcticfoundations.comSoil stabilization – frozen barrier and frozen core damsto control hazardous waste and water movement.Foundations – maintain permafrost for durable highcapacity foundations.

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

Chiulista Services6613 Brayton Dr., Ste. CAnchorage, AK 99507Contact: Joe Obrochta, presidentContact: Monique Henriksen, VPPhone: (907) 278-2208 • Fax: (907) 677-7261E-mail: [email protected] 100 percent Alaska Native owned and operatedcatering company on the North Slope, catering andhousekeeping to your tastes, not ours.

Construction Machinery5400 Homer Dr.Anchorage, AK 99518Contact: Ron Allen, Sales ManagerPhone: (907) 563-3822 • Fax: (907) 563-1381Email: [email protected] • Web site: www.cmiak.comOther Offices: Fairbanks officePhone: 907-455-9600 • Fax: 907-455-9700Juneau officePhone: 907-780-4030 • Fax: 907-780-4800Ketchican officePhone: 907-247-2228 • Fax: 907-247-2228Wasilla OfficePhone: 907-376-7991 • Fax: 907-376-7971

Fairweather, LLC9525 King St. Anchorage, AK 99515Contact: Jenna Kroll, medical administrationPhone: 907 346-3247 Fax: 907 349-1920 Email: [email protected]: www.fariweather.comFairweather, LLC is an Alaska-based company provid-ing a multifaceted program of support services forthe mining industry specializing in paramedic andphysician assistant staffed remote medical services,weather forecasting, airport equipment, bear guardsand expediting.

GCI Industrial TelecomAnchorage:800 East Dimond Boulevard, Suite 3-565Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528Toll free: (877) 411-1484

Web site: www.GCI-IndustrialTelecom.comRick Hansen, [email protected] Johnson, Account [email protected]:Aurora Hotel #205Deadhorse, Alaska 99734Phone: (907) 771-1090Mike Stanford, Senior Manager North [email protected]:8588 Katy Freeway, Suite 245Houston, Texas 77024Phone: (713) 589-4456Hillary McIntosh, Account [email protected] innovative solutions to the most complexcommunication issues facing industrialclientele. We deliver competitive services, reputableexpertise and safely operate under themost severe working conditions for the oil, gasand natural resource industries. GCI-your bestchoice for full life cycle, expert, proven, industrialcommunications.

Gold Canyon Mining1075 S. Idaho Road, Ste. 104Apache Junction, AZ 85119Contact: David FortnerPhone: (480) 302-4790Fax: (480) 671-5368Website: www.gcmining.comSpecializing in mine site development, contract min-ing, and final mine closure. With a solid reputationfor proficiency, productivity and safety, ready to takeon both your large and small projects.

Jackovich Industrial & Construction SupplyFairbanks, AK 99707Contact: Buz JackovichPhone: (907) 456-4414 • Fax: (907) 452-4846Anchorage officePhone: (907) 277-1406 • Fax: (907) 258-170024- hour emergency service. With 30 years of experi-ence, we’re experts on arctic conditions and extremeweather.

Judy Patrick PhotographyAnchorage, AK 99501Contact: Judy PatrickPhone: (907) 258-4704 • Fax: (907) 258-4706Email: [email protected]: JudyPatrickPhotography.comCreative images for the resource development industry.

Last Frontier Air Ventures39901 N. Glenn Hwy.

Sutton, AK 99674Contact: Dave King, ownerPhone: (907) 745-5701Fax: (907) 745-5711E-mail: [email protected] Base (907) 272-8300Web site: www.LFAV.comHelicopter support statewide for mineral exploration,survey research and development, slung cargo,video/film projects, telecom support, tours, 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 companies includestruckload and less-than-truckload highway connections,scheduled barges, intermodal bulk chemical hauls,scheduled and chartered air freighters, domestic andinternational air forwarding and international sea for-warding services.

MRO SalesAnchorage, AK 99518Contact: Don PowellPhone: (907) 248-8808 • Fax: (907) 248-8878Email: [email protected]: www.mrosalesinc.comMRO Sales offers products and services that can helpsolve the time problem on hard to find items.

Northern Air Cargo3900 W. International Airport Rd. Anchorage, AK 99502Contact: Mark Liland, acct. mgr. Anch./Prudhoe BayPhone: (907) 249-5149 • Fax: (907) 249-5194Email: [email protected] • Website: www.nac.aeroServing the aviation needs of rural Alaska for 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.

Oxford Assaying & Refining Corp. 3406 Arctic Blvd Anchorage, AK 99503Contact: Gene Pool, managerPhone: (907) 561-5237 Fax: (907) 563-8547E-mail: [email protected] have offered full service assaying & refining serv-ice to Alaska’s gold miners for over 28 years. We alsobuy sell and trade gold silver & platinum.

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.

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.

URS Corp.560 E. 34th St., Suite 100Anchorage, AK 99503Contact: Jon Isaacs, Alaska vice presidentPhone: (907) 562-3366 • Fax: (907) 562-1297E-mail: [email protected]: www.urscorp.comURS Corporation provides comprehensive integratedservices to the petroleum industry, including NEPA per-mitting support and regulatory compliance, engineer-ing design and construction management, field studies,environmental monitoring and contaminated sitecleanup.

Advertiser Index3M Alaska. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Air LiquideAlaska Analytical Laboratory. . . . . . . . . . . . . . . . . 20Alaska DreamsAlaska Earth Sciences . . . . . . . . . . . . . . . . . . . . . . . . 5Alaska Frontier ConstructorsAlaska Interstate Construction (AIC). . . . . . . . . . . 13Alaska Steel Co.Alaska TelecomAmerCable Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Arctic FoundationsAustin Powder Co.Calista Corp.Chiulista Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Construction Machinery . . . . . . . . . . . . . . . . . . . . . 24Fairbanks Gold Mining/Fort Knox Gold Mine. . . 11Fairweather LLCGCI Industrial TelecomGold Canyon MiningJackovich Industrial & Construction Supply. . . . . 12Judy Patrick Photography . . . . . . . . . . . . . . . . . . . . 7Kiska Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Last Frontier Air Ventures. . . . . . . . . . . . . . . . . . . . . 3Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2MRO SalesNature Conservancy, The . . . . . . . . . . . . . . . . . . . . 17Northern Air CargoOxford Assaying & Refining Corp. . . . . . . . . . . . . 10Pacific Rim Geological Consulting. . . . . . . . . . . . . 20PND Engineers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Salt+Light CreativeTaiga Ventures/PacWest Drilling Supply . . . . . . . 22URSUsibelli Coal Mine


Corvus Gold Inc., a Vancouver B.C.-based junior company being formed

to explore International Tower Hill Ltd.’searly stage properties, will initially holdfour projects in Alaska and the NorthBullfrog project in Nevada.

Under the terms of the proposed trans-action, Tower Hill will retain all assetsrelating to the Livengood gold project inAlaska and about C$41 million in workingcapital. Corvus will get the five propertiesand about C$3 million in cash.

The spin-out proposal to be presented toshareholders at a special meeting in Julywould result in each Tower Hill sharehold-er receiving one new Tower Hill commonshare and one-half of a Corvus commonshare in exchange for each Tower Hill com-mon share held.

“The management and board of direc-tors of ITH believe that the proposed spin-out is an excellent opportunity for share-holders to fully maximize the value of theirholdings,” said Tower Hill President andCEO Jeff Pontius.

Pontius will retain his position as presi-dent and CEO of Tower Hill, and also willserve as CEO and chairman of Corvus.Russell Myers, currently vice president ofexploration for Tower Hill, will become thenew company’s president. Additional direc-tors and senior management of Corvus areexpected to be appointed in the near future.

The five gold and copper-gold proper-ties are currently held by Tower Hill sub-sidiary Raven Gold Alaska, and once thenew publically-traded company is formedthe assets will move into Corvus, which isLatin for Raven.

“The prospectus for Corvus Gold willinclude Terra, Chisna, LMS, West Pogoand North Bullfrog,” Myers told MiningNews.

Corvus’ Alaska projects have more thanC$8 million in partner-funded explorationslated for 2010, giving the junior a jump onits objective of becoming a nonoperatorgold producer with significant carriedinterests and royalty exposure. Corvus alsoplans to expand its portfolio by seeking outand acquiring new prospects.

Big budget at ChisnaThe exploration work at the 163,460-

acre, or 661.5-square-kilometer, Chisnaproject is targeting large copper-gold por-phyry systems in the Wrangellia Terrane of

eastern Interior Alaska.Ocean Park Ventures Corp. has commit-

ted to spending US$6.2 million in explo-ration at Chisna in 2010 as part of itsoption to earn a 51 percent stake in the cop-per-gold prospect by contributing a total ofUS$20 million in exploration expenditures,making staged payments and issuingshares over five years. Ocean Park canincrease its stake to 70 percent by produc-ing a bankable feasibility study that delin-eates a mining project on the Chisna prop-erty with annual production of at least300,000 gold-equivalent ounces. Raven,and then Corvus, will be the operator of thejoint venture for the first two years.

The 2010 exploration at the porphyrycopper-gold prospect began with an air-borne geophysical survey that was com-pleted in mid-June. Raven will follow upwith a ground induced polarization surveyand drill program expected to start in earlyJuly.

The first two targets of this year’s drillprogram will be the 2,000-acre Ahtell alka-

line porphyry copper-gold system and thelarge 10,000-acre POW system.

Earlier this year, Raven augmented its87,940 acres, or 356 square kilometers, ofState of Alaska claims at Chisna by acquir-ing 75,520 acres, or about 306 square kilo-meters, of additional prospective lands sur-rounding the Ahtell discovery from AhtnaNative Corp. The agreement with theAlaska Native regional corporation foreastern Alaska includes an exclusive rightto explore and an option to lease the prop-erty.

Myers said now that Raven has anagreement with Ahtna, the company canfinish the exploration work on the Ahtelldiscovery made by Tower Hill.

“We will do a 3-D IP survey; that, plusthe geochemical and geology, will be usedto target the first drill holes at Ahtell. Thenwe will go up and drill a couple of holes onthe POW property,” he said.

A number of other targets have beendefined that will be followed up on withinthis 40-mile-, or 65-kilometer-, long belt of

gold and copper mineralization. The com-pany also is considering drilling some ofthese other targets depending on the resultsof the induced polarization surveys cur-rently under way.

“As soon as the guys finish at Ahtell,then we will move over and start doing IPon other potential targets,” Myers said.

Production potential at TerraThe Terra project is centered on a 5-

mile-, or 8-kilometer-, long trend of high-grade gold vein occurrences which havereturned numerous surface rock samplesand drill intersection in excess of 50 g/tgold.

This property, located in the southwest-ern part of the Alaska Range, has beenoptioned to Nevada-based AmericanMining Corp., a privately held miningcompany that can earn an initial 51 percentinterest in Terra by spending U$6 millionon exploration over three years, including$1 million in 2010, and making cash pay-ments of US$300,000 and issuing 750,000common shares over the same three-yearperiod.

Corvus also will receive a sliding scalenet smelter royalty of between 0.5 percentand 5 percent, depending upon the gold



� A L A S K A

Tower Hill aims to spin out new explorerCorvus Gold, led by exploration VP at Livengood, will tackle 2010 exploration in Alaska, Nevada after shareholders vote in July

Corvus’ Alaska projects have morethan C$8 million in partner-funded exploration slated for

2010, giving the junior a jump onits objective of becoming a non-

operator gold producer withsignificant carried interests androyalty exposure. Corvus also

plans to expand its portfolio byseeking out and acquiring new

prospects.

see CORVUS GOLD page 21

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EYAbove, a geologist inspects an outcrop atthe LMS gold property located about 25miles, or 40 kilometers, north of SumitomoMetal Mining’s Pogo Mine. At right, RussMyers, vice president of exploration forInternational Tower Hill Mines Ltd., logschip samples at the company’s multimillion-ounce Livengood gold project north ofFairbanks. Myers will become president ofCorvus Gold Inc., once shareholdersapprove spinning out Tower Hill’s otherassets into the new company.

http://www.alaska-analytical.com/

http://www.pacrimgeol.com/

price, on all precious metal productionfrom the property and a 1 percent NSR roy-alty on all base metal production. The roy-alty to Corvus is in addition to the currentroyalty payable to the underlying lessor.

Drilling by Tower Hill in 2006 and 2007defined an estimated inferred resource of428,000 metric tons averaging 12.20 g/tgold, or 168,000 contained ounces, and23.11 g/t silver, or 318,000 containedounces, at a cutoff of 5.0 g/t gold. In addi-tion to the Ben’s Vein, which hosts theresource, drilling at two other vein struc-tures confirm the potential for significantresource additions on the property.

According to Tower Hill, the gold atTerra occurs as coarse native gold and canbe recovered by simple gravity methods,facilitating potentially rapid developmentof a small mining project.

American Mining is reportedly planningto conduct a bulk sample of the Ben’s Veinin August, utilizing a small crusher andgravity separator. However, Mining Newswas unable to verify the report by presstime.

Pogo-style projectsThe two other Alaska properties going

into the Corvus prospectus, West Pogo andLMS, have been joint ventured to First StarResources Inc. Both properties lie in thevicinity of Sumitomo Metal Mining Co.Ltd.’s Pogo Gold Mine, a high-grade under-ground producer east of Fairbanks. WestPogo lies 2.8 miles, or 4.5 kilometers, westof Pogo, and is situated along its westernproperty boundary. LMS can be foundabout 25 miles, or 40 kilometers, to thenorth.

First Star President and CEO BillWishart said, “Acquisition of this gold proj-ect marks the return of First Star to its min-ing roots. Our intention is to form a goldexploration and development companyaround these projects. In the comingweeks, we will be building our technicalstaff and preparing for an active season ofdrilling.”

LMS is believed to be an intrusion-relat-ed vein system, with similarities to the golddeposit at Pogo. The property shows poten-tial as both a high-grade, Pogo-style targetand as a lower grade bulk-tonnageprospect.

“At LMS there is some phenomenallyhigh-grade mineralization, and we justhaven’t quite figured how the structureswork that control it … at the Camp zoneinside of the schists there are these, what Ithink were originally cherty sediments, andthose cherty sediments get broken up indeveloped breccias that carry the lowergrade, bulk-tonnage mineralization,”Myers explained.

“At LMS we have some pretty goodstructural ideas, but we (InternationalTower Hill) discovered Livengood. If ithadn’t been for Livengood we would havebeen working LMS the whole time,” headded.

Under the terms of the agreement, FirstStar has the ability to earn an initial 55 per-cent interest, and a second option to earnthe remaining 45 percent interest. To earnthe initial 55 percent interest, theVancouver, B.C.-based junior must payRaven/Corvus US$280,000 and spendUS$3.5 million on exploration of the prop-erty. To acquire the remaining 55 percent,First Star must fund the project through toan advanced exploration stage by spendingan additional US$3 million by the end of2015, or by producing a NI 43-101-compli-ant inferred resource of 2 million ounces ofgold using a 0.3 g/t cutoff grade, whichev-er costs less. A net smelter returns royaltyof 3 percent or 4 percent on gold-silver and

1 percent on all other products will bepayable to Corvus, which can be reducedby 1 percent by paying Corvus US$3 mil-lion.

The West Pogo prospect represents ahigh-grade intrusion-related vein systemgold target. The West Pogo claim blockconsists of 96 State of Alaska miningclaims covering about 4,670 acres.

Myers said exploration by Tower Hillhas encountered Pogo-style mineralizationas well as other high-grade gold withoutthe geochemical signatures of the ore beingmined by its neighbor.

First Star has the ability to earn a 100percent interest in West Pogo. To earn theinitial 55 percent the Vancouver B.C.-basedjunior must pay US$250,000 and expendUS$2.8 million on exploration. To acquirethe remaining 45 percent interest, the com-pany must fund the project through to anadvanced exploration stage by spending anadditional US$2 million by the end of2015, or by producing a NI43-101 compli-ant inferred resource of one million ouncesof gold using a 0.3 g/t cutoff grade. Theproperty also has a royalty agreement withterms identical to that at LMS.

First Star intends to conduct a drillingprogram on both the LMS and WP goldprospects in 2010.

The way forwardCorvus intends to hold sole ownership

of its North Bullfrog gold project, which islocated about 9 miles, or 14 kilometers,north of Barrick Gold Corp.’s multimillion-ounce Bullfrog gold mine in Nevada.

North Bullfrog hosts an indicatedresource of 2.02Mt grading of 0.88 g/t goldand 0.45 g/t silver and an inferred resourceof 0.95 Mt grading 0.78 g/t gold and 0.36g/t silver, both at a cutoff grade of 0.5 g/tgold.

Corvus currently plans to spend aboutC$1 million to complete 10,000 meters ofdrilling in the fall.

“We are trying to develop another low-grade, at-surface, heap-leachable resource,”Myers explained.

The future Corvus president said thecompany will be actively searching for newpromising properties to add to the compa-

ny’s portfolio.“The way forward for Corvus is finding

good prospects, joint venturing them or dis-covering them ourselves. And we are veryactively evaluating projects in Alaska,Nevada and other places to see if we canfind the right upscale potential,” Myers

said.“I like geology,” he added. “The most

fun for me is taking something, makingsense of it and turning it into somethingthat looks like you could turn into amine.” �



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The Terra project is centered on a 5- mile-, or 8-kilometer-, long trend of high-grade gold vein occurrences, which have returned numeroussurface rock samples and a drill intersection exceeding 50 grams per metric ton gold. This property, located in the southwestern part ofthe Alaska Range, has been optioned to privately held American Mining Corp. of Nevada.

http://www.greeningofoil.com/


International Tower Hill Mines Ltd. istaking long strides in advancing its

13.3-million-ounce Livengood gold proj-ect toward becoming a world-class mine.

While an aggressive drill programcontinues to expand the Money Knobdeposit, the company is completing met-allurgical, geotechnical and baseline stud-ies. This work, which will be needed tomove the project into permitting anddevelopment, also lowers the risk of theInterior Alaska goldproject, makingTower Hill a moreattractive acquisitiontarget.

In order to focusits attention onLivengood, TowerHill is moving itsearlier stage explo-ration assets intoCorvus Gold Inc., anew company that will be under the direc-tion of Tower Hill’s Vice President ofExploration Russell Myers, who played akey role in the rapid resource expansionat Livengood.

Tower Hill has filled the void createdby the departure of Myers with KarlHanneman, a longtime Alaskan withexperience in both mine building and per-mitting in the state.

“The proposed spin-out enables ITH’sexpanding mine development team tofully focus on moving the Livengoodproject towards a potential production

decision,” said Tower Hill President andCEO Jeff Pontius.

Mine building teamAt the beginning of the year

International Tower Hill began assem-bling the operational team needed to con-struct and operate a major mining projectat Livengood by hiring Carl Brechtel asits chief operating officer.

Brechtel, who spent the past 12 yearsworking for AngloGold Ashanti Ltd. invarious mining project development rolesaround the globe, brings mine develop-ment and operational team buildingexpertise to the Livengood project.

Hanneman, who holds a mining engi-neering degree from the University ofAlaska Fairbanks, joined Tower Hill inMay as the Livengood project manager.

From 1998 to 2004 he served as Teck’sAlaska Regional Manager during theexploration, development, and permittingof the Pogo Gold Mine. In a more recentrole as director of corporate affairs forTeck, he was the senior corporate repre-sentative in Alaska, providing strategicguidance on governmental, regulatory,permitting and community issues relatedto the Red Dog Mine.

Hanneman’s vast Alaska-based min-ing experience will be valuable as thecompany moves the project toward per-mitting.

Pontius said, “The addition of KarlHanneman to the ITH management teamstrengthens the company’s ability to movethe Livengood project forward towards aproduction decision. Karl’s strong con-nection to the Alaska community, and hisdemonstrated success and wealth of expe-rience in Alaska, will be extremely valu-

able to us in developing what we antici-pate will be Alaska’s next major goldmine.”

Another million ouncesIncorporating 10,000 meters of drilling

completed during the winter drill pro-gram, Tower Hill now boasts a 13.3 mil-lion ounce gold resource at Livengood. Inaddition to boosting the gold content by amillion ounces, nearly 20 percent of theresource was upgraded from inferred tothe higher confidence indicated category.

Using a cut-off grade of 0.5 grams ofgold per ton, the Money Knob deposit isnow estimated to contain an indicatedresource of 408.6 million metric tons at anaverage grade of 0.83 g/t for 9.3 millionounces of gold and an inferred resource of94.4 million metric tons at 0.79 g/t for anadditional 1.4 million ounces of gold.This marks a 17 percent increase in thehigher confidence indicated category aswell as an increase in the grade.

“We are highly encouraged by the lat-est resource update, which includesresults of the winter drill program atLivengood,” Tower Hill President andCEO Jeff Pontius said. “The latestresource data, as well as infill resultsbetween the Sunshine and Core zones, areexpected to have a positive impact on ourongoing mine design work. Our new com-bined mill-heap leach concept shouldbenefit from the higher grades in this newresource estimate as we aggressively workto advance the project down the produc-tion path.”

At a 0.7 g/t gold cutoff, which the com-pany envisions as a milling cut-off gradeat Livengood, the indicated resource atLivengood is 6.9 million ounces of gold,

an increase of almost 19 percent from theprevious estimated resource and the aver-age grade has improved 9 percent to 1.07g/t gold.

At a 0.3 g/t gold cut-off grade — aboutthe average grade used for the heap leachdescribed in the Livengood preliminaryeconomic assessment — the indicatedresource is 15.7 million ounces of gold atan average grade of 0.62 g/t gold, with anadditional inferred resource of 4 millionounces of gold at an average of 0.55 g/tgold.

The June 2010 in-situ updatedresource estimate will form the basis ofthe company’s combined mill-heap leachpreliminary economic assessment, antici-pated for release in third quarter of thisyear.

Propertywide investigationWith five rigs churning at Livengood,

Tower Hill plans to complete 45,000meters of drilling during the summer pro-gram that began June 1. This explorationwill focus on expanding the resource,improving confidence in the high-gradeareas of the Money Knob deposit, andgathering data for metallurgical, hydro-logical and geotechnical studies.

“We are doing a substantial amount ofinfill drilling, which will continue toimprove our confidence in the resource,”Hanneman told Mining News June 16.

The company also plans to begininvestigating the district-scale potentialacross International Tower Hill’s 35,000-acre land package at Livengood. Untestedgeochemical anomalies to the northeast ofthe Money Knob deposit will be one tar-get of this propertywide investigation.

“We are also going to do someexploratory drilling on other geochemicaland geological targets in the district,”Hanneman said. “We haven’t done thatpreviously.”

A major soil survey is also planned tocover the northeast extension of the min-eralized trend with the objective of delin-eating drill targets for exploration in thelate fall and winter.

Down the production pathWhile Tower Hill continues to expand

the resource at Livengood, the companycontinues to collect the metallurgicalinformation needed for the full-scale pre-feasibility and mine development studycurrently under way, as well as the envi-ronmental data needed to begin permit-ting the multimillion ounce gold project.

Tower Hill began collecting baselinedata at Livengood in 2008 and this workwill be in full swing this year.

“We are doing the full suite of envi-

� A L A S K A

Alaska gold project swells to 13.3M ounces Tower Hill spins out exploration properties, adds to operations team as it studies building world-class mine at Livengood



KARL HANNEMAN

see LIVENGOOD page 23

SHA

NE

LASL

EY

The 13.3-million-ounce gold resource reported June 16 by International Tower Hill Mines Ltd.incorporates 10,000 meters of drilling completed at the Livengood Project during explo-ration last winter.

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http://www.constantinemetals.com/


setting the use of electricity generatedfrom fossil fuels.

“The Forrest Kerr project representsan important evolution in AltaGas’power business as we continue to buildlong-term, contracted, generationassets,” said AltaGas Chairman andCEO David Cornhill. “This project willprovide the people of British Columbiawith clean and reliable power from asignificant water resource. For ourinvestors, this announcement comes atan important time in history as govern-ments move to reduce emissions whilebuilding for the future.”

Spur for new jobs, miningA 180-day application review period

for the Northwest Transmission Line isunder way, and public meetings havebeen held in the project area.

Construction of the NorthwestTransmission Line is expected to createabout 280 jobs, once the project winsnecessary environmental assessmentand regulatory approvals and accom-modates the interests of affected FirstNations.

The B.C. government has promotedthe project as the first step in reinvigo-rating the regional economy ofNorthwest B.C. It is expected to pro-vide significant direct economic stimu-lus to the region. It also will leveragean investment of more than C$700 mil-lion in Alta Gas’ clean energy projectthat is expected to lead to creation of

400 jobs. B.C. officials said investment and

jobs in the region will increase withanticipated new industrial develop-ment.

British Columbia’s new CleanEnergy Act, currently before theprovincial Legislature, sets the founda-tion for a new future of electricity self-sufficiency, job creation and reducedgreenhouse gas emissions, powered byunprecedented investments in clean,renewable energy across the province,Lekstrom added.

The Association for MineralExploration British Columbia, a min-ing industry group, applauded news ofthe agreements, reiterating its longtimesupport for construction of theNorthwest Transmission Line. TheAME BC said the power conduit willlead to critical economic developmentin a region of the province which cur-rently has an unemployment rateexceeding 11 percent.

“The transmission line will provideup to 10,700 jobs from 11 potentialmine projects, which will reverse thedecline of employment in this region.With regard to the environment, theline will have a small physical footprintand will provide the first step in a greenenergy corridor leading from Alaska toBritish Columbia, and possibly Yukon(Territory). Importantly, it will reducereliance on fossil fuel use and willlower emissions. The net environmen-tal benefits of the power line will out-weigh the localized impacts, which canbe mitigated,” the AME BC said in astatement June 4. �

ronmental work; which includes fisheries,water quality, cultural resources, wet-lands, wildlife and air quality,” Hannemanexplained.

The company continues to be encour-aged by the metallurgical results.Approximately 60 percent of the depositis variably oxidized and is included in thecompany’s initial heap leach miningstudy. Recent test work indicates signifi-cantly higher recoveries from milling in

all ore types by utilizing a gravity circuitfollowed by carbon-in-leach processing.Testing indicates a gravity- flotationrecovery system could further enhancethe economics at Livengood.

Bretchel said, “We are now focusing onoptimizing key components of the goldrecovery system and the proposed pro-duction plan to continue to improve theoverall economic performance of the proj-ect. With our recent development teamadditions and continued encouragingtechnical results, ITH is rapidly advanc-ing Livengood towards it next step alongthe production path.” �


NTL PROJECT


LIVENGOOD

Alaska mining claims it picked up fromKennecott by staking an additional 220claims over the prospect.

Partner advances Lucky ShotHarmony Gold Corp., Full Metal’s

joint venture partner at the Lucky Shotproject about 145 kilometers, or 90 miles,north of Anchorage, is targeting reopeningthe historic high-grade gold mine.

With all infrastructures in place,Harmony intends to be in productionwithin the next 13 months. Once in opera-tion, the mine is expected produce 250metric tons per day and run year-round.

Harmony Gold estimates it will takenearly US$15 million in capital to begincommercial production at Lucky Shot.Nearly US$9 million will be spent ondriving a development ramp to high-gradegold ore in the Coleman Zone.

The highest grade gold intercepts ofmore than 30,000 meters drilled by FullMetal at Lucky Shot have been at thiswesternmost zone of the Lucky ShotShear. These intercepts include hole C05-09 over 3.1 meters grading 62.2 grams permetric ton gold, hole C05-12 over 4.0meters grading 219.1 g/t gold and holeC06-16 over 4.6 meters grading 51.5 g/tgold.

In order to tighten up the block modelin preparation for driving the developmentramp to Coleman, a 26-hole drill programwas completed by Full Metal in Novemberof last year.

Once Harmony Gold drifts back to theColeman zone, it plans to extract a12,000-metric-ton bulk sample, which itwill run through an existing gravity recov-ery circuit at the property.

Harmony Gold estimates recovering 19grams of gold per metric ton. Operatingthe plant at 95 percent capacity, the com-pany foresees producing 44,000 ounces ofgold per year. Using these figures andUS$1,000 per ounce gold, Lucky Shotwould generate about US$44 million ayear, roughly half of which would gotoward operating costs, and the other halfwould be operating profit.

New deals soonFull Metal anticipates having option

agreements signed in the coming weekson it Pebble South property and on two of

its Alaska Peninsula properties; indica-tions are that other agreements are in theworks.

The junior’s Pebble South property,which borders the Northern Dynasty Ltd.-Anglo American plc Pebble property tothe south and west, is one property FullMetal has indicated could be joint-ven-tured soon.

The company believes Pebble-stylemineralization trends to the southwestfrom the Pebble Partnership’s massivedeposit onto its property. Geochemicaland geophysical surveys have delineated11 promising prospects on the property.

The Pyramid copper-molybdenum por-phyry and Unga-Popov epithermal goldproject are two others that show promisefor partnerships. These two properties arepart of 1.4 million acres of prospectiveNative-owned lands being explored byFull Metal on the Alaska Peninsula.

The Pyramid copper-molybdenum por-phyry deposit hosts 125 million tons ofcopper mineralization grading 0.403 per-cent copper and 0.025 percent molybde-num near-surface. More recent explo-ration by Battle Mountain Gold in the late1980s identified associated gold valuesthat have greatly improved the potential atPyramid.

Unga-Popov — which lies on an islandabout 20 miles, or 32 kilometers, south ofPyramid — hosts two historical resources;Apollo with 280,000 metric tons averag-ing 27.7 g/t gold and 92.6 g/t silver andCentennial, which has about 6 millionmetric tons at 1.5 g/t, or 290,000 ouncesof gold.

Full Metal told Mining News that it isin the process of acquiring new explo-ration projects and is continuing to seekout grassroots prospects through thestrategic alliance it forged with KinrossGold Corp.

When asked if Full Metal was activelyseeking new Kinross strategic allianceprospects, McLeod said, “We are, but Ican’t say where we are working or whatwe are targeting.” �


FULL METALHarmony Gold Corp., Full Metal’sjoint venture partner at the LuckyShot project about 145 kilometers,or 90 miles, north of Anchorage,is targeting reopening the historic

high-grade gold mine.

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