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JUDY PATRICK PHOTOGRAPHY
A steady convoy of trucks delivers ore to the WalterCreek heap leach pad at Kinross Gold Corp.’s Fort Knoxgold mine near Fairbanks. Increased production at thisInterior operation is helping push Alaska gold productionnear a million ounces, a milestone not reached in morethan a century.
A special supplement to Petroleum NewsWEEK OF
January 27, 2013
11 Core cuts high-grade gold-copper Texas explorer exceeds expectations at Tetlin in Alaska’s Eastern Interior
12 First Nation wins key court appeal Yukon Territory open-entry ruling could have implications across Canada
14 Homestake nabs producing partner Agnico-Eagle invests in upside of NW British Columbia gold-silver project
By SHANE LASLEYMining News
Alaska miners are on the cusp of top-ping 1 million ounces of gold pro-
duced, an annual milestone that has notbeen achieved since Gold Rush pioneersrecovered copious amounts of alluvialaurum at the turn of the 20th Century.
“When you think about what a millionounces of production means, it is all themore amazing that it was first accom-plished by placer miners and a few lodeminers, a few shovelfuls at a time, morethan a century ago!” Curt Freeman, awell-known Alaska geologist and presi-dent of Fairbanks-based AvalonDevelopment, reflected.
Unlike the tenacious Gold Rush sour-doughs that topped 1-million ounces in1899 and again in 1906, the roughly 1-million ounces of gold recovered in 2012was largely the product of 21st Centurymachinery.
“It always blows my mind when Ithink of a million-ounce year without thecurrent technology and fleet of equip-ment,” Sumitomo Metal Mining PogoExternal Affairs Manager Lorna Shawwrote. “The miners of yesterday weresome amazing people!”
Alaska’s five hardrock operationsaccount for some 870,000 ounces of thegold produced in Land of the MidnightSun during 2012. The bulk of this aurum,roughly 700,000 ounces, was recoveredfrom Kinross Gold Corp.’s Fort Knox
Mine located about 25 miles (40 kilome-ters) north of Fairbanks and SumitomoMetal Mining’s Pogo operation locatedsome 60 miles (100 kilometers) southeastof Fairbanks. The Kensington, GreensCreek and Nixon Fork operations roundout the hardrock mines that contributedto Alaska’s gold production in 2012.
The hardworking individuals and fam-ilies that make up the Last Frontier’s
modern placer mining community areexpected to add roughly 100,000 ouncesto the 2012 gold production numbers,bringing the total annual production tothe brink of the 1-million-ounce mile-stone.
While it seems likely that 2012 totalswill fall just shy of the seven-digit mark,
increased gold output forecast at FortKnox and Kensington for 2013 will like-ly result in contemporary Alaska minersmatching the feat of their pioneeringforebears.
This million-ounce-milestone couldusher in a new Golden Age for Alaska. Asthe current class of miners challenges themillion-ounce mark, a new generation ofmega-gold deposits is on the horizon.Pebble, Donlin Gold and Livengood –enormous accumulations of gold that aremeasured in the tens of millions ofounces – could propel the Last Frontier tobecome the top gold-producing state inthe United States
“I think it is significant that Alaska isthe No. 2 gold producer in the UnitedStates. It is right behind Nevada andgaining ground. When you get projectslike Donlin Gold into production, it willstart rivaling Nevada,” said NovaCopperPresident and CEO Rick VanNieuwenhuyse.
Pogo reigns supremeThe 2,500-metric-tons-per-day mill at
Pogo churns out around 1,000 ounces perday gold, enough for the high-gradeunderground operation to reign asAlaska’s top aurum producer since 2008,the mine’s first full year of production.
Pogo recovered 389,808 ounces of
� A L A S K A
2013: A golden year for Alaska minersAnnual gold production set to top 1 million ounces, a landmark event that could usher in a new Golden Age for the Far North State
3NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
North of 60 Mining News is a monthly supplement of the weeklynewspaper, Petroleum News. It will be published in the fourth orfifth week of every month.
Shane Lasley PUBLISHER & NEWS EDITOR
Rose Ragsdale EDITOR-IN-CHIEF (contractor)
Mary Mack CHIEF FINANCIAL OFFICER
Susan Crane ADVERTISING DIRECTOR
Heather Yates BOOKKEEPER
Bonnie Yonker AK / INTERNATIONAL ADVERTISING
Clint Lasley GM & CIRCULATION DIRECTOR
Marti Reeve SPECIAL PUBLICATIONS DIRECTOR
Steven Merritt PRODUCTION DIRECTOR
Curt Freeman COLUMNIST
J.P. Tangen COLUMNIST
Allen Baker CONTRIBUTING WRITER
Judy Patrick Photography CONTRACT PHOTOGRAPHER
Forrest Crane CONTRACT PHOTOGRAPHER
Tom Kearney ADVERTISING DESIGN MANAGER
Renee Garbutt ADVERTISING ASSISTANT
Julie Bembry CIRCULATION DEPARTMENT
Mapmakers Alaska CARTOGRAPHY
ADDRESSP.O. Box 231647Anchorage, AK 99523-1647
NEWS [email protected]
CIRCULATION 907.522.9469 [email protected]
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FAX FOR ALL DEPARTMENTS907.522.9583
NORTH OF 60 MINING NEWS is a monthly supplement of Petroleum News,a weekly newspaper. To subscribe to Petroleum News and receive the monthly
mining supplement, call (907) 522-9469 or sign-up online atwww.PetroleumNews.com. The price in the U.S. is $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]
Phone: 907.229.6289 • Fax: 907.522.9583
see GOLDEN YEAR page 4
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Refinery workers at Sumitomo Metal Mining’s Pogo Mine pour the two-millionth ounce ofgold recovered from the high-grade underground operation located some 60 miles (100 kilo-meters) southeast of Fairbanks, Alaska.
gold in 2009, a record that stands to thisday. Gold production at the minedropped to 383,434 ounces and in 2010and 325,708 ounces in 2011.
Sumitomo Metal Mining Pogo LLC –a joint venture between Japanese firmsSumitomo Metal Mining Company (85percent) and Sumitomo Corp. (15 per-cent) to operate Pogo – celebrated thefirst 2 million ounces of gold produced atthe underground operation on July 31,2012.
The first 2 million ounces of gold pro-duced at Pogo were mined from the Liesezone – three flat-lying, parallel quartzveins that carry high-grade gold.
Although Sumitomo continues toexpand Liese, the Tokyo-based miner hasfound new zones of high-grade gold thatare expected to extend the mine life atPogo well beyond 2019, which is whatthe current 2.9 million ounces of goldreserves support.
The gold-rich veins of the Liese zoneend abruptly where they come in contactwith a gold-barren body of diorite to thenortheast.
Two years ago, the Pogo explorationteam set out to see if it could find addi-tional gold mineralization on the oppo-site side of the intrusive body.
Some road-based drilling just north ofthe diorite tapped a zone with quartz-vein structures with grades and thick-nesses similar to those that have provid-ed feedstock for the mill over the past sixyears.
The Pogo geological team nowbelieves that the Liese and East Deepzones are the same ore body that becameseparated when the diorite split the twozones as it intruded along the LieseCreek fault about 95 million years ago,or about 12 million years after the zoneswere mineralized.
Through the end of 2011, Sumitomohad outlined 2 million ounces of indicat-ed and inferred gold resource at EastDeep. The US$4.80-per-ounce discoverycost of this gold is a fraction of theUS$30-US$40 industry average for eachounce of gold found.
This initial resource, according toPogo General Manager Chris Kennedy,could be the tip of the iceberg when itcomes to East Deep. The total extent ofthis zone is unknown and the depositremains open to the west, north andnortheast.
Sumitomo has driven two driftsthrough the some 300 meters of diorite
4NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
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continued from page 3
GOLDEN YEAR
see GOLDEN YEAR page 5
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Although International Tower Hill Mines Ltd. has yet to submit permit applications, the company believes the highway accessible Livengoodproject north of Fairbanks could begin producing more than 500,000 ounces of gold per year by 2019.
that separate Liese from East Deep.These access drives linking the EastDeep zone to the established under-ground workings at Pogo are acceleratingSumitomo’s ability to mill the gold-richore found here.
At the end of 2011, Sumitomo report-ed resources and reserves of 12.32 mil-lion metric tons of ore averaging 12.5 g/tgold for 4.95 million ounces of the pre-cious metal. With East Deep and otherzones near the mill expected to add sig-nificant quantities of high-grade ore tothe resource, it is expected that Pogo willcontinue to contribute 1,000 ounces a dayto Alaska’s gold production for years tocome.
Fort Knox vies for titleFort Knox, which reigned as Alaska’s
top gold producer until being overtakenby Pogo in 2008, is vying to regain thetitle.
Fort Knox General Manager DanSnodgress told the mining communitygathered at the 2012 Alaska MinersAssociation Convention in Novemberthat the open-pit, bulk-tonnage operationnorth of Fairbanks is set to mine gold at arecord-setting pace, all the while bolster-ing Kinross’ bottom line.
“Our priority is generating free cashflow,” he told the crowd. “It is not neces-sarily that we are going to mine 360,000ounces, which is what will happen in2012, or 425,000 ounces, like we believewe will be doing next year (2013) – it isquality versus quantity, and that theme ispermeating through our organizationnow.”
Going into 2012 Fort Knox had 4.3million ounces of gold reserves, slightlymore than when the mine went into oper-ation in 1997. While this gold is lockedup in nearly twice the ore at about half
the grade, Kinross now has the WalterCreek Heap Leach, a facility that caneconomically process the low-gradematerial, while the higher grades reservescan continue to be fed through the mill.
During 2010, the first full year of pro-duction, roughly 83,000 ounces of goldwas recovered from about 14 million tonsof ore stacked on the heap leach pad.With the surety the system works well atits Interior Alaska operation, Kinross hasstepped up the heap leaching operation.In 2012, about 33 million tons of ore isbeing stacked on the heap leach pad, con-tributing a projected 125,000 ounces tothe 2012 gold production at Fort Knox.
To accommodate the additional ore, alarger pumping system and recoverycapacity is being added to the circuit.
“Instead of circulating and processing8,000 (gallons per million), we are nowpumping 16,000. We are increasing ourpregnant solution grade, and we arebuilding a second CIC (carbon-in-col-umn) plant that will be able to take careof all 16,000 gpm,” Snodgress explained.
With the CIC plant scheduled to becompleted in July, Kinross expects FortKnox to shatter the previous record of411,220 ounces of gold recovered fromin 2001, bringing new vitality to theaging mine.
Kensington regroupsAfter enduring a permitting process
measured in decades and culminated in aU.S. Supreme Court ruling in favor of theoperation, Coeur d’Alene Mines’Kensington Mine is Alaska’s third-largestgold producer.
Situated some 45 miles (72 kilome-ters) north of Juneau, the Kensingtongold mine began commercial productionin July 2010. During 2011, the high-grade underground mine produced88,420 ounces of gold at cash operatingcosts of US$1,088 per ounce.
Late in 2011, Coeur cut processing
5NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
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continued from page 4
GOLDEN YEAR
see GOLDEN YEAR page 6
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The copious amounts of alluvial aurum recovered by Gold Rush pioneers, such as this sour-dough, pushed Alaska’s annual gold production above 1 million ounces in 1899 and 1906, afeat yet to be matched by modern miners.
rates in half to provide an opportunity to undertake sev-eral key initiatives aimed at improving the mine’s safetyand production profile. To accomplish this, Coeur com-pleted construction of a backfill plant and related distri-bution system; upgraded several underground and sur-face facilities; and improved the overall safety of theoperation.
The scaled-back production resulted in skyrocketingoperating costs.
During the first three months of 2012, 7,444 ouncesof gold was recovered at Kensington at cash operatingcosts of US$2,709 per ounce. Returning to full-scaleproduction of about 1,500 tpd in April, the SoutheastAlaska operation improved to 21,572 ounces of gold atcash costs of US$1,348 per ounce during the secondquarter. The production profile continues to improve.During the third quarter, Kensington churned out 24,391ounces of gold at US$1,298 per ounce. Fourth quartergold production hit 28,717 ounces; production costswere not available at the time of this report.
All told, Kensington produced 82,125 ounces of goldin 2012. Coeur anticipates the Southeast Alaska minewill continue the production pace set in the fourth quar-ter and churn out 108,000 – 114,000 ounces of gold atUS$900-US$950 per ounce in 2013.
At the end of 2011, Kensington tallied proven andprobable gold reserves totaling 1.3 million ounces, plus587,320 ounces in measured and indicated resources and169,680 ounces in inferred resources.
Gold pays for Greens Creek silverWhile Hecla Mining Co.’s Greens Creek Mine is pri-
marily a silver producer, the roughly 54,000 ounces ofgold recovered from the volcanogenic massive sulfidedeposit was enough to make the Southeast Alaska oper-ation the state’s fourth-largest aurum producer in 2012.In fact, the gold, lead and zinc recovered at the Juneau-area operation largely paid for the mine’s roughly 6 mil-lion ounces of annual silver production.
During the first nine months of 2012, Greens Creekproduced 4.3 million ounces of silver at an average cash
cost of US$2.34 per ounce, net of by-products. So,Hecla was able to bank US$30.93 per ounce from silversold during the first three quarters of 2012.
While the cash generated from Greens Creek is help-ing fortify Hecla’s healthy treasury, the Idaho-basedminer is investing heavily in the Southeast Alaska mineand other silver assets in Idaho, Colorado and Mexico.
“We are rapidly advancing toward our targeted goalof 15 million ounces of company-wide silver productionby 2017. Underpinning this growth is our very strongbalance sheet, with US$232 million in cash and no sig-nificant debt,” Hecla’s President and CEO Phillips S.Baker, Jr. told investors at the end of the third quarter.
At Greens Creek, Hecla spent roughly US$90 millionon improvements and upgrades, the largest investmentin the history of the Southeast Alaska mine. Some of thekey capital expenditures include Deep 200 South accessdevelopment (US$18 million); mining fleet replacementand additions (US$14 million); tailings dam expansion(US$10 million); East Ore access and ventilation reha-bilitation (US$6 million); definition drilling (US$5 mil-lion); and the construction of expanded and upgradedcamp facilities (US$5 million).
Going into 2012, Greens Creek had about 98 millionounces of silver and 742,400 ounces of gold in reserves– enough to ensure the Southeast Alaska mine is a sig-nificant contributor to the state’s gold production forabout another 10 years, and Hecla sees plenty of poten-tial to continue a tradition of replenishing these stores inthe foreseeable future.
Encouraging signs at Nixon ForkFire River Gold Corp.’s Nixon Fork gold mine, the
smallest of Alaska’s hardrock gold producers, is expect-ed to contribute nearly 25,000 ounces to Alaska’s overallaurum production in 2012.
This high-grade operation, situated about 32 miles(50 kilometers) northeast of the gold mining town ofMcGrath in Interior Alaska, has been in and out of pro-duction since high-grade gold was discovered there in1917.
Fire River, the latest company to make a go of it, firedup the 250-tpd mill at Nixon Fork in July 2011. Theoperation got off to a rocky start, and Fire River is con-tinuing to ramp up the operation to its full potential.
Through the first half of 2012 the plant processed oreat a rate of about 86 tpd, but Fire River is reportingimprovements. The company said the plant averaged 126tpd during the final six months of the year and inOctober and in November, the plant enjoyed several200-metric-ton production days.
Fire River is encouraged that the broad zones of high-grade gold mineralization and narrower zones of bonan-za grades encountered during its 2012 underground drillprogram will help improve the production profile atNixon Fork. Hole N12U-057 returned the best inter-cepts, including: 1.5 meters averaging 1,120 g/t gold and3.34 meters averaging 219 g/t gold.
Fire River President and CEO Blane Wilson said,“We continue to encounter encouraging signs throughour surface and underground in-fill drilling programs, aswell as data that could present a more favorable view ofthe orientation of mineralization.”
With operational efficiencies on the rise, Fire River istargeting 40,000 ounces of gold production in 2013, andramping up to a projected 50,000 ounces in 2014.
Placer operators prosperWith gold averaging US$1,669 per ounce in 2012,
Alaska is seeing an upsurge of individuals scouring itsstreams, beaches and the ocean floor for placer gold.
Alaska officials estimate that nearly 79,000 ounces ofalluvial gold was recovered in the state during 2011, andthis haul is expected to swell in 2012.
While small family-owned operations and individualscurrently make up the bulk of placer gold production inAlaska, larger companies and more complex operationsare joining the Last Frontier’s mining community.
Goldrich NyacAU Placer, LLC – a joint venture plac-er mining company owned equally by Goldrich MiningCompany and NyacAU, LLC – is set to mine some10,000 ounces of placer gold annually from the richalluvial gold deposits that blanket the valleys of the vastChandalar land package located some 200 miles (320kilometers) north of Fairbanks.
Goldrich brings the vast placer potential of the22,840-acre (9,243 hectares) Chandalar Mining Districtto the partnership, including a 250,000-ounce drill-test-
6NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
continued from page 5
GOLDEN YEAR
see GOLDEN YEAR page 7
ed alluvial gold deposit on Little SquawCreek and a multitude of undefined gold-rich streams with the potential to increasethe resource several times over.
Nyac, a private mining companyowned by Dr. J. Michael James, anAnchorage-based physician and fourthgeneration Alaskan, is offering more thantwo decades of placer mining experienceand some US$7.2 million in capital to getthe mining venture into production.
James’ Nyac operation on ShamrockCreek in Southwest Alaska is currentlyconsidered among the top placer goldproducers in the state.
With mine construction completed in2012, the Chandalar partners are expect-ing to recover 8,500 ounces of placergold in 2013 and 10,000 ounces in 2014and in years to follow.
While the Goldrich NyacAU partner-ship seeks to recover aurum locked in thefrozen gravels of Alaska’s North, a glob-al-scale venture is exploring a massiveplacer deposit roughly a mile beyond thegolden beaches of Nome.
Placer Marine Mining Inc. – a jointventure that combines the gold miningexpertise of AngloGold Ashanti Ltd. withthe marine mining experience of DeBeers – is investigating the potential ofdredging a vast placer gold deposit lyingbeneath the icy waters of the Bering Sea.
Placer Marine Mining picked up itsNome offshore properties during a leasesale held by the Alaska Department ofNatural Resources in 2011. These tractsstart about a mile (1.6 kilometers) off-shore and run out to about the three-mile(4.8 kilometers) limit of state-owned landand for some 20 miles (32 kilometers)parallel to the shoreline.
While the Nome beaches and near-shore marine gold deposits have beencontinuously worked and reworked formore than a century, the depth of the icywater covering the deposits leased byPlacer Marine Mining has prevented indi-viduals and small-scale operations fromdredging there.
Since the discovery of gold there in1899, the Nome Mining District has pro-duced roughly 5 million ounces of placergold.
Based on historical exploration, it isbelieved that the 16,581 acres of offshoreleases secured by Placer Marine Miningabout a mile beyond the golden beachesof Nome could hold as much gold as hasbeen recovered from the legendary NomeMining District over the past 113 years.
The AngloGold-De Beers partnershipspent some US$6 million during the shortsummer season of 2012 to begin to findout just how much gold lies below on itsportion of the gold-rich placer deposits inthe Bering Sea.
The company believes it will have col-lected the geological and environmentaldata needed to advance the project intopermitting by mid-2014.
If all goes well, Placer Marine Miningplans to begin mining Bering Sea gold bythe 2017 season.
Mega-mines on the horizonThe first of Alaska’s next generation
of mega-mines – Donlin Gold, Livengoodand Pebble – are expected to come onlinearound 2020.
In August, Donlin Gold LLC – a part-nership owned equally by NovaGoldResources Ltd. and Barrick Gold Corp. –initiated the permitting process for its 40-million-ounce Donlin Gold project inwestern Alaska.
Once in production, the 53,500-tpd
mill at Donlin is projected to recover anaverage of 1.1 million ounces of goldannually at a cash-cost of US$585 perounce during its initial 27-year mine-life.
By feeding the mill higher grade ore,the massive project is scheduled to pro-duce 1.5 million ounces of gold annuallyat an average cash-cost of US$409 perounce during the initial five years ofoperation. This increased gold productionduring the onset of operations will helpreduce the payback period for the esti-mated US$6.7 billion of capital costsneeded to build the mine.
It is expected to take about four yearsto gain the 100 or so permits needed to
develop Donlin and, if the partners decideto move ahead with development, con-struction will take about as long.
Although International Tower HillMines Ltd. has not submitted permitapplications yet, the company believesthe highway accessible Livengood proj-ect north of Fairbanks could begin pro-ducing gold at about the same time asDonlin.
According to a preliminary economicassessment completed in 2011, a 91,000-tpd mill at Livengood would crank out12.9 million ounces of gold over 23years.
International Tower Hill President andCEO Donald Ewigleben said the560,000-ounce-per-year operation antici-pated in the PEA is at the low end of var-ious scenarios being contemplated.
A feasibility study expected to becompleted in 2013 is investigating theappropriate size operation for Livengood.
With permitting slated to begin in2014, Tower Hill is targeting 2017 tobegin construction, and hopes to begincommercial gold production atLivengood by 2019.
While best known for its 80.6 billion
pounds of copper, the colossal Pebbledeposit in Southwest Alaska also hosts107.4 million ounces of gold.
The Pebble Partnership – a 50-50 jointventure between Vancouver B.C.-basedNorthern Dynasty Minerals Ltd. andLondon-based Anglo American plc – hasnot published a mine plan for the project.A preliminary assessment prepared forNorthern Dynasty in 2011 gives an indi-cation of the deposit’s gold producingpotential.
In a 45-year base case scenario con-templated in the assessment, Pebble’sannual production is envisioned to be 690million pounds of copper, 667,000ounces of gold, 31,000 pounds of molyb-denum, 27,000 kilograms (58,000pounds) of rhenium and 20,000 ounces ofpalladium.
The Pebble Partnership invested someUS$107 million to advance the project in2012, with the objective of initiating per-mitting in 2013. Conceivably, this wouldput Pebble on track to begin productionas early as 2021 but given the contentiousnature of this project, it will likely takelonger to realize the potential of this mas-sive deposit. �
7NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
Call for Papers “Overcoming Northern Challenges”
Northern Latitudes Mining Reclamation Workshop & Canadian Land Reclamation Association
September 9 – 12, 2013 The Northern Latitudes Mining Reclamation Workshop and the Canadian
Land Reclamation Association invite presentations, papers and posters on the subject of reclamation, remediation and related topics, particularly in
northern / severe locations. Abstracts (up to 500 words) should be submitted by March 31st 2013 to David Polster, [email protected].
Authors of accepted papers, posters or presentations will be notified by April 30th, 2013. Full papers (up to 10 pages) are required for all accepted paper abstracts by June 30th, 2013. Accepted posters and presentations (pdf versions) should be provided to David Polster by August 31, 2013.
Tours for September 12th are currently being organized for the former Faro Mine and the UKHM claims in the Keno Hill Silver District.
More details available at http://www.clra.ca/
Join us in Whitehorse in 2013 for an exciting
conference
continued from page 6
GOLDEN YEAR
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This 744-troy-ounce bar contains the2,000,000th ounce of gold poured at Pogoand is roughly 93.6 percent gold.
By CURT FREEMANFor Mining News
The mining industry just passedthrough one of the quietest year-end
transitions in over a decade. The last monthhas seen few new public announcementsregarding Alaska mineral occurrences butthat relative silence is about to change.
Within a week of completing this sum-mary, the 2013 Cordilleran Roundup min-eral convention will begin in Vancouver,B.C. This annual event is well-attended byindividuals and corporations that are activein Alaska’s mineral industry or looking tobecome active in Alaska’s mineral industry.With the focus of this convention beingAlaska, Yukon Territory and BritishColumbia, it is by far the best internationalexposure Alaska’s mineral industryreceives each year. With upwards of 8,000in attendance, the opportunities to meetprospective new Alaska players are unsur-passed. With the opportunities availablelimited only by one’s imagination, look fora blizzard of news releases, both beforeand during the conference, extolling thevirtues of Alaska mineral projects!
Western AlaskaFIRE RIVER GOLD CORP. announced
additional drilling results at the Nixon Forkgold-copper mine near McGrath. Theresults are derived from 103 undergrounddiamond drill holes totaling 9,781 metersat the Crystal mine area of the project.
Significant results include 3.34 metersgrading 219.13 grams per metric ton gold,89.7 g/t silver and 6.17 percent copper andan additional 9.14 meters grading 9.76 g/tgold, <1.0 g/t silver and 0.02 percent cop-per in drill hole N12U-057, 4.13 metersgrading 29.79 g/t gold, 1.5 g/t silver and0.04 percent copper in drill hole N12U-058 and 3.73 meters grading 32.86 g/tgold, 1.8 g/t silver and 0.06 percent copperin drill hole N12U-069. The primary focusof this work was resource expansion of the3300 ore body.
Alaska RangeKISKA METALS CORP. announced
metallurgical results from its Whistler cop-
per project. Locked cycle flotation tests ontwo composite samples returned averagecopper concentrate grades of 25.4 percentwith recoveries averaging 91.9 percent forcopper and 70.4 percent for gold. Thesetests indicate that the mineralization isamenable to standard froth flotation recov-ery techniques. Results from concentrateanalysis also reveal low concentrations ofdeleterious elements and as a result norelated smelter penalties are anticipated.Recoveries of 91.9 percent for copper and73.1 percent for gold were obtained fromlocked cycle flotation tests on samplesfrom hole WH08-08 (feed grade of 0.11percent copper and 0.43 g/t gold). The testproduced a concentrate grading 24.5 per-cent copper and 79.3 g/t gold. Recoveriesof 91.9 percent were obtained for copperand 67.7 percent for gold were obtainedfrom locked cycle flotation tests of sam-ples from drill hole WH10-19 (feed gradeof 0.22 percent copper and 0.53 g/t gold).This test produced a concentrate grading26.2 percent copper and 46.5 g/t gold.
CORVUS GOLD INC. announced thatthe Company’s joint venture partner andoperator of the Terra project,WESTMOUNTAIN INDEX ADVISORSINC. provided metallurgical results fromits initial production scale bulk sampletests. The results are from a 23-ton surfacebulk sample of the Ben and Fish Creekveins. A total of 75.1 ounces of gold and28.2 ounces of silver were produced usingthe onsite milling and gravity recovery sys-
tem yielding recoveries of 60 percent forgold and 15 percent for silver. The doré barfrom this work assayed 68.683 percentgold and 25.9 percent silver.Approximately 95 percent of the gold andsilver in the concentrate reported to thedoré bars. Westmountain plans to focus ona larger bulk sample next summer, utiliz-ing the full plant capacity, which is approx-imately 50 metric tons per day.
MILLROCK RESOURCES INC.announced today that the strategic partner-ship between the company and VALEEXPLORATION USA INC. has concluded.Through the course of the program, Valeinvested US$1.4 million for research andreconnaissance exploration for porphyrycopper-gold deposits in Alaska. The workled to recommendations for fiveDesignated Projects, one of which, theAUDN project, was accepted by Vale.Under a separate budget Vale fundedUS$700,000 for soil geochemical andZTEM-magnetic airborne geophysical sur-veys at AUDN.
Northern AlaskaGOLDRICH MINING CO. announced
it has sold on-site equipment at itsChandalar gold property for US$900,000to an affiliate of NYACAU LLC. Theequipment will remain at the mine site andwill be leased by GOLDRICH NYACAUPLACER, LLC, a company owned 50/50by Goldrich and NyacAU LLC, for the
8NORTH OF 60 MINING
TheauthorThe author
Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMAN
� C O L U M N
Alaska mining experiences quiet 2012Mineral industry roundup in Vancouver, B.C. offers state sector international exposure and numerous opportunities for rebound
Jan. 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 website iswww.avalonalaska.com.
see FREEMAN page 9
production of gold at Chandalar. The ven-ture expects to begin placer gold produc-tion at the start of the 2013 operating sea-son with this year’s production goal of8,500 ounces. . Continued stripping ofoverburden and stockpiling of placer paygravels is planned to begin in May 2013.Goldrich forecasts that cash productioncosts for 2013 will be less than US$700per ounce of gold.
Southeast AlaskaCOEUR D’ALENE MINES CORP.
announced 2012 summary highlights forits Kensington mine. The mined produced28,717 ounces of gold in the fourth quar-ter, more than double the 4th quarter pro-duction from 2011. For the year the mineproduced 82,125 ounces of gold. While2012 total production was less than the88,420 ounces produced in 2011, the minehas only operated at full capacity since thesecond quarter of 2012 due to a plannedshut-down during which improvements tothe mine and mill were made. The mine’s2013 cash operating costs are expected todecline significantly to US$900 - US$950per gold ounce. The mine is expected toproduce 108,000 to 114,000 ounces ofgold in 2013. Full fourth-quarter and full-year 2012 production and reserve informa-tion is expected to be release in lateFebruary.
ARROWSTAR RESOURCES LTD.announced the staking of an additional 21federal mining claims at its Snettishamiron ore prospect about 30 miles southeastof Juneau. The claims adjoin the presentclaim block to the east and south in an areapotentially extending the magnetic highsindicated during the company’s geophysi-cal surveys conducted earlier in 2012. Thecompany is presently preparing a permitapplication for drilling on the property in2013. Historically, Marcona Corporationannounced a plan in 1970 to spendUS$130 million to place this property intoproduction at the rate of 5 million tons ofiron ore per year. Steep declines in the
price or iron caused the project to bedelayed, and it was subsequently dropped.
UCORE RARE METALS announcedpublication of a Canadian Instrument 43-101 technical report providing details of itsrecently announced Preliminary EconomicAssessment at its Bokan Mountain rareearth project near Ketchikan. The technical
report includes an analysis of proposedmining methodologies, mineral processingfrom mine mouth to market, prospectiveplanning and production timelines, as wellas anticipated capital and operating costs,and expected internal rate or return for theproject. The resource utilized in the PEAomitted the results from the I & L Zone
and did not include drilling results com-pleted in 2011 with the objective ofexpanding the size of the resource andupgrading its status from the Inferred tothe Indicated category. The results of thisdrilling are currently being modeled andthe company expects to release a revisedresource estimate in February. �
9NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
� C O L U M N
Alaska miners reading the tea leavesThough things probably won’t get any better anytime soon, the bright side for the industry is they probably won’t get any worse
By J. P. TANGENFor Mining News
With the re-inauguration of thePresident, Alaska’s miners are being
forced to hunker down and withstand yetanother election cycle wondering what giftsthe federal agencies will bestow upon usnow.
Interior Secretary Salazar is out. Hisreplacement has yet to be identified; how-ever, there is little room to be optimistic.Even under friendly administrations, theselection of Secretary of the Interior hasnot served us well. The environmentalistcommunity undoubtedly has thePresident’s ear at some level, but for themost part, issues hostile to mining havegained very little traction in Washingtonduring the first term, and perhaps we shallbe equally fortunate during the second.
Despite the vast federal domain inAlaska, development of natural resourceson the public front has gotten the treatmenta bastard orphan would expect to receive.Present, possibly necessary, under control,but generally ignored. Occasionally, theNational Park Service causes an adrenaline
spike with regard to a World Heritage Sitefor Beringia or the U.S. Fish and WildlifeService precipitates a question as towhether the re-introduced wood bison willsooner or later become endangered, butgenerally the big conversation aboutInterior agencies, revolves around money,and as long as there are frugal forces inCongress, Interior will probably be pre-cluded from doing too much harm.
The new secretary will have to spend alot more time worrying about how he isgoing to keep the Washington Monument
open than how many new million-dollartoilet facilities he can build in DenaliNational Park.
Agriculture Secretary Vilsack is goingto stay. How he relates to the NationalForest System probably will not change.No successor has been named for ForestService Chief Tom Tidwell, so the Tongassand Chugach National Forests will proba-bly remain so bound up with bureaucraticred tape that it will take divine interventionfor any substantial new mines, even verypromising properties like Bokan Mountainand Herbert Glacier, to ever become work-ing mines.
Likewise, Assistant Secretary of Laborfor Mine Safety and Health Joseph Mainappears to be sticking around. His dracon-ian minions may be expected to continuetheir march on mining.
EPA Administrator Lisa Jackson is out,and a proposed successor has not yet beenidentified; however, it is hard to imaginethat any successor could be worse when itcomes to fanatical anti-development regu-lation.
In brief, the pressure from Washington,at least when it comes to mining in Alaska
will continue to be a negative force. I am reminded that the mining industry
in Alaska is healthy and safe, that the min-eralization found in Canada and theRussian Far East does not stop at our bor-ders, and that the global population contin-ues to be incremented by hordes of newfaces who are envious of the toys and toolsof the 21st Century that are made frommetals and minerals found in abundance inAlaska.
Conceding that the Great CommunityOrganizer probably knows very little aboutthe electricity that comes out of the hole inhis wall, not to mention how it got there, italways seems incredulous to me that thecontemporary recovery of metals and min-erals precipitates such benign neglect andindifference, if not outright oppositionfrom our leaders. Fundamental reason, ifnot informed analysis, should be sufficientto grasp the notion that just as the UnitedStates is emerging as the world leader inthe production of energy mineralsthrough the creative development; so toodo we have the potential to show theworld how modern mining can andshould be conducted. �
continued from page 8
FREEMAN
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.
By DAVID L GANJESpecial to Mining News
A new federally collected royalty (readtax) on hardrock mining has recent-
ly been proposed as a part of Congress’solution to fix the national debt and man-age the mining industry. A bill co-spon-sored by U.S. Rep. Raul M. Grijalva, D-Ariz., would set a 12.5 percent royalty rateon the value of certain hardrock mineralson public lands.
This proposalwould rewrite theoriginal 1872 min-ing law in theUnited States. Theproposed U.S. royal-ties would be amongthe highest of anycountry in theworld.
Mining is todayone of the most regulated and govern-ment-supervised business sectors in theeconomy. Some in Congress see this pro-posed mining royalty or tax as a newsource of “revenue strip mining.”
One congressman stated, “We’ve beenleaving a huge pot of money on thetable.”
The Washington Post also has addedits opinion to the idea. In its recent edito-rial about possible new legislation onhardrock mining, the paper stated, “Evenif the increased revenue is only an extra
billion or two, a stretched federal budgetcould certainly use it now.”
What is missed is the fact that taxesand other fees are currently collected.
All western hard rock mining states,including Alaska, would be affected bythis new legislation. South Dakota, forexample, has a rich history of hardrockmining. The Homestake mine beganoperations in the Black Hills of DakotaTerritory in 1877 after a group ofCalifornia miners purchased miningclaims. These original claims comprisedabout 10 acres. By 1999, the HomestakeMine had grown to more than 8,000acres of patented claims for open cut anddeep mining and was the oldest continu-ally operating gold mine in the world.
When mining operations ended in2002, Homestake was the oldest, largestand deepest mine in the WesternHemisphere, with deep mining reachingmore than 8,000 feet below the surface.By the time the mine closed, it was themost productive gold mine in North
America and had yielded more thanUS$1 billion in gold over the years.
It is indeed easy to figure what thatdoes for a local and regional economy.Mining states, including South Dakota,have longstanding mineral severancetaxes which are enforced on federal andprivate lands.
Adding to the existing framework oftaxes, fees, required environmental com-pliance, as well as regulatory and recla-mation laws imposed on the miningindustry, the proposed law would create anew revenue collection protocol on top ofsix existing categories of costs, fees andtaxes now assessed against the miningindustry. Consider that the government’smost ‘uniform’ way of collecting rev-enues from the mining industry isalready in place – income taxes.
Undermining economic developmentThe new proposed legislation is the
same as proposing a new royalty assess-ment on ranchers’ pre-tax profits fromthe sale of livestock when the cattle arefinished and taken to market. The federalgovernment already charges ranchers arental fee on leased federal lands. It iscalled a grazing fee.
The federal grazing fee, which appliesto federal lands in 16 Western states onpublic lands managed by the Bureau ofLand Management and the U.S. ForestService, is adjusted annually and is cal-culated by using a formula originally setby Congress. A grazing fee is really thecost to ranchers for renting federal land.
Would it be reasonable for the federalgovernment to collect a rental for use offederal lands and also ‘tax’ the rancher apercentage of sale proceeds from therancher’s profits when the cattle go tomarket?
After some consideration, this new‘cattle royalty’ does not appear logical orreasonable. Such a cattle royalty, howev-er, would have the same effect as the newproposed mining royalty. Charge therancher for use of the lands and alsocharge the rancher a portion of the pre-tax profit that he receives from his cattle
sales. After that, assess the rancher forincome taxes. This is a nonsensical butrevenue-positive way of governing.
Mining rules constitute a full pallet ofregulations and are administered at a costto the industry by both federal and stateagencies with broad and encompassingauthority. Compliance with these miningrules is expensive and results in manyfinancial ‘soft costs’ in the form ofmonies given to the government.
The mining industry currently paysfor and complies with six different cate-gories of fees and taxes, including miner-al severance taxes collected by the stateof South Dakota at a rate of US$4 perounce of gross production (plus an addi-tional surtax based upon mineral value),as well as 10 percent of net income and 8percent of royalty value.
These mineral severance taxes havelong been developed by western statesfor the benefit of the local economy.Adding a new federal royalty (read tax)would undermine economic developmentin active western mining states.
In urgent economic times, a hurriedact creating new revenue sources doesnot necessarily result in a long-term cure.The congressmen through their suggestedmining royalty legislation would create anew tax-like device on top of the existingcosts, fees and tax categories nowassessed against a mining operation. Itmay be expedient for Congress tobecome a ‘tax machine’ and establish anew mandatory royalty payment require-ment. But there are always economic andsocial consequences when new revenuesources are adopted.
The mining industry is handsomelyassessed with taxes and administrativecosts. Why now should the bedrock 1872Mining Act be so radically rewritten? Toparaphrase John Milton: For what can anew tax but endless new taxes stillbreed? �
David Ganje is an attorney withGanje Law Offices in Rapid City, S.D.and practices in the areas of commerciallaw and natural resources law.
10NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
F l y i n g i s o u r p a s s i o n , S a f e t y i s o u r m i s s i o n
A New in Remote Site Access
Era
411972-2013
The mining industry ishandsomely assessed with taxesand administrative costs. Whynow should the bedrock 1872
Mining Act be so radicallyrewritten? To paraphrase JohnMilton: For what can a new tax
but endless new taxes still breed?
� G U E S T C O L U M N
Beware effects of federal mining royalty Proposed legislation to rewrite original 1872 mining law could shortchange local, state economies in the name of curbing U.S. debt
DAVID GANJE
By SHANE LASLEYMining News
L acking the fanfare emblematic of anexplorer hot on the trail of a high
tenor gold-copper-silver deposit,Contango Ore Inc. recently posted resultsfrom its Tetlin project that include a 58.5-meter intercept averaging 14.45 gramsper metric ton gold, 0.24 percent copperand 9.1 g/t silver.
While this interval from holeTET1218 underscores the potential ofthis previously undrilled prospect, it isnot alone. Some 20 holes sunk into thenewly discovered Peak zone tapped broadintercepts of high-grade gold and coppermineralization at the Interior Alaska proj-ect.
“The preliminary results of our 2012exploration program at our Tetlin leasesite exceeded our expectations in terms ofgold and copper grade as well as thick-ness,” said Contango Ore President andCEO Brad Juneau.
Despite these better-than-expectedresults from the hole drilled a short 12miles (19 kilometers) southeast of thecrossroads town of Tok, the explorationcompany known as Core is continuing itspractice of tempering investor expecta-tions.
“While we have found outstandingrocks in terms of grade-thickness, we donot believe we have yet identified a com-mercial resource,” Juneau advised.
The cautionary statement from Core’snewly appointed CEO is somewhat morepersuasive than those previously made bychairman, founder and former CEOKenneth Peak.
Upon announcing financing that fund-ed the 2012 exploration program at Tetlin,Peak advised, “I have personally investedUS$4 million in the company’s US$8.8million offering and am obviouslyenthused about our potential for successbut also fully cognizant of the speculativenature of this investment and the likeli-hood that this entire investment may wellbe a ‘dry hole.’ ”
For medical reasons, Peak relin-quished his executive positions with theHouston, Texas-based junior, handing thereins of the Alaska-focused explorationcompany to Juneau.
Juneau, through his privately heldJuneau Exploration, was instrumental insecuring and negotiating the lease of theInterior Alaska copper-gold project withthe Tetlin Village Council, an AlaskaNative Village in Alaska’s EasternInterior, in 2008.
“I am glad that Brad Juneau, thefounder and originator of our explorationactivities in Alaska, has agreed to becomeour president and chief executive officer,”Peak commented on the appointment.“Brad has a successful track record offinding resources and the results of oursuccessful 2012 exploration program inAlaska suggest the company has identi-fied a potentially significant gold-copperoccurrence in an area with no previoussignificant exploration activities.”
Wildcat hole taps PeakThe roughly US$6 million exploration
program carried out at Tetlin in 2012 –designed and supervised by Fairbanks-based geological consulting firm AvalonDevelopment Corp. – included 10,974meters of HQ-size diamond core drilling
in 36 holes at the Chief Danny prospect.This program followed up on clues
provided by exploration orchestrated byAvalon over the previous three seasons,including a maiden 11-hole drill programcarried out at a porphyry prospect knownas Chief Danny in 2011.
Geophysical and geochemical surveysat Chief Danny revealed two interestingareas separated by an east-west trendingfault – a zoned hydrothermal system con-sisting of a gold-copper-iron-enrichedcore covering six square miles (15.5square kilometers) to the south of the riftand a three-square-mile (7.8 square kilo-meters) arsenic-gold zone to the north.
The best holes drilled at Chief Dannyin 2011 sampled a portion of the southernanomaly now referred to as the Discoveryzone.
TET1105, the discovery hole, cut 3.7meters averaging 3.1 grams per metricton gold, 300.2 g/t silver and 0.26 percentcopper. TET1107 – drilled about 100meters north of hole 5 – cut 6.4 metersgrading 7.4 g/t gold, 4.9 g/t silver and0.15 percent copper.
TET1110 – drilled more than 1,000meters north of the discovery hole – cut9.8 meters grading 1.18 g/t gold, 3.1 g/tsilver and 0.04 percent copper.
Encouraged by the results from themaiden drill program, Core revisitedChief Danny in 2012.
The explorer started the program byfollowing up on the encouraging resultsfrom 2011 drilling at the Discovery zone.
Not finding the mineralization it wasseeking in the Discovery zone, Coredrilled a “wildcat” hole some 500 metersto the northeast. This fifth hole of the2012 program, TET1216, cut thick zonesof gold-copper-silver mineralization.Highlights include:
•25.8 meters averaging 7.83 g/t gold,23.5 g/t silver and 0.05 percent copper,from a depth of 20 meters;
•6.7 meters averaging 3.50 g/t gold,15.8 g/t silver and 0.54 percent copper,from a depth of 53.3 meters;
•13.7 meters averaging 2.77 g/t gold,1.4 g/t silver and 0.05 percent copper,from a depth of 64.6 meters; and
•32.6 meters averaging 3.74 g/t gold,2.6 g/t silver and 0.11 percent copper,from a depth of 81.4 meters.
The grades and thicknesses improvedover the next two holes drilled into thenewly discovered Peak zone: TET1217cut 49.1 meters averaging 11.22 g/t gold,21.6 g/t silver and 0.09 percent copper,from a depth of 7.9 meters; and TET1218cut 58.5 meters averaging 14.45 g/t gold,9.1 g/t silver and 0.24 percent copper.
Some US$3.6 million was originallybudgeted for exploration at this porphyrytarget but as Core dialed in on thick zonesof high-grade gold-copper mineraliza-tion, the junior allocated a larger portionof its budget and resources to this
prospect. As a result, TET1236, drilled125 meters west of hole 18, cut strikinglysimilar mineralization. From a depth of155.5 meters, hole 36 cut 48.8 metersaveraging 14.72 g/t gold, 10.1 g/t silverand 0.24 percent copper.
While copper mineralization wasencountered throughout the Peak zone,particularly high-grade intercepts wereencountered in the southeastern portionof the currently defined zone. Highlightsof this drilling include 36.6 meters aver-aging 0.31 g/t gold 71.6 g/t silver and1.11 percent copper from a depth of 118.9meters in hole TET1238; and two thickcopper-rich zones intercepted in holeTET1260 – 32.6 meters averaging 0.06g/t gold, 28.7 g/t silver and 1.34 percentcopper from a depth of 116.4 meters,drilled at the southeastern extent of thecurrently defined Peak zone and 59.1meters averaging 0.02 g/t gold, 8.8 g/t sil-ver and 0.37 g/t copper, from a depth of116.4 meters.
More timeWhile the exciting copper-gold-silver
mineralization at Chief Danny nabbed thebulk of 2012 exploration expenditures, atleast six other promising leads have beenidentified across the roughly 726,000-acre (293,800 hectares) Tetlin project.
Core originally planned to drill four ofthese prospects in 2012 but, due to thehigh-grade copper-gold intercepts discov-ered at the Peak zone, Triple Z was theonly one of these outlying prospects to be
� A L A S K A
Wildcat hole hits high-grade gold-copperTexas-based explorer discovers thick zones topping 14 g/t gold, 1 percent copper at Tetlin in Alaska’s Eastern Interior
11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JANUARY 27, 2013
Fort KnoxFirst things firAt Fort Knox, our priorities are simple. Our people. Our community.Our environment.
Fairbanks Gold Mining Inc.A Kinross company
We invest in our people, so they are trained to do the best job possible.
We support our community with charitable donations, volunteer hours and local purchases.
We adhere to the toughest standards to protect water and air quality. These are our priorities.
Because at Fort Knox, it’s about putting first things first.
“While we have found outstandingrocks in terms of grade-thickness,
we do not believe we have yetidentified a commercial resource.”
—Contango Ore President and CEO BradJuneau
see TETLIN RESULTS page 19
By ROSE RAGSDALEFor Mining News
A recent ruling by the Court of Appealfor Yukon could give an Aboriginal
group in southeastern Yukon Territory abig say in who gets to explore for andmine minerals discovered on its tradition-al lands.
Unless overturned on appeal, the unan-imous decision Dec. 27 by a three-judgepanel comprised of British ColumbiaCourt of Appeal judges, also could affectinteraction between governments andFirst Nations throughout Canada, accord-ing to some observers.
In “Ross River Dena Council v.Government of Yukon,” the Yukon appel-late court ruled that the Government ofYukon’s “open entry” registration systemfor quartz mineral claims is subject to thesame obligation required of the Canadianfederal government to consult with FirstNations.
The Ross River Dena Council is one ofthree Yukon First Nations that have notentered into a final agreement with thegovernments of Yukon and Canadaregarding their claims to Aboriginal titleand rights. A member of the larger KaskaFirst Nation, the Ross River DenaCouncil’s traditional area extends over63,000 square kilometers (24,318 squaremiles), or roughly 13 percent of theYukon.
The other Kaska group, the Liard FirstNation, and the White River First Nationin southwestern Yukon also have notfinalized agreements regarding claims toAboriginal title and rights. Eleven otherYukon First Nations have final agree-ments with both the Yukon governmentand the Crown.
The lawsuit by the Ross River Denachallenges the free entry staking systemin Yukon and the government’s right toregister mining claims without consultingaffected First Nations. Under Yukon’sQuartz Mining act, an individual canacquire mineral rights by physically stak-ing a claim and then recording it with theMining Recorder. Once recorded, a claimgives its owner rights to the mineralswithin its boundaries and the right to con-duct certain exploration activities on theland without further authorization or
12NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
� Y U K O N T E R R I T O R Y
Court ruling: Consult with First NationOrdering greater involvement of Ross River-area Aboriginal group in mineral claims recording process may have wider implications
WHITEHORSE
WatsonLake
DawsonCity
Mayo
Old Crow
HainesJunction
G u l f o f A l a s k a
Ross River
Pelly Crossing
Carmacks
Burwash Landing
CarcrossTeslin
Beaver Creek
Tetlit Gwich'inSecondary Use
Tetlit Gwich'inPrimary Use
Faro
Keno City
Stewart Crossing
Destruction Bay
B e a u f o r t
S e a
HerschelIsland
Elsa
Northwest Territories
British Columbia
Alaska
Inuvik
Fort McPhersonVuntutGwitchin
Tsiigehtchic
KaskaDena
Na-choNyäk Dun
Selkirk
Kluane
Tr'ondëkHwëch'in
TeslinTlingit
Carcross/Tagish
KwanlinDün
Champagne& Aishihik
Lit tle Salmon/
Carmacks
Ta'anKwäch'än
Inuvialuit Settlement Region
TetlitGwich'in
WhiteRiver
Traditional Territories of Yukon First Nations
Map ID: ENV.020.02
0 100 200 300 km
© 2012 Environment Yukon
and Settlement Areas ofInuvialuit and Tetlit Gwich'in
µ YUKON TERRITORYJune 2012
EnvironmentGeomatics
Administrative centres of First Nations are depicted inthe colour of their Traditional Territory.
1:5,500,000Scale
see COURT RULING page 13
notice to the Yukon government.The Ross River Dena argued that the
system allows activities that infringe onits Aboriginal rights and that principlesadhered in a 2004 case, “Haida Nation v.British Columbia (Minister of Forests),”require the Yukon government to consultwith the First Nation before recordingquartz mining claims with the Ross Riverarea.
The Yukon Territory Supreme Courtagreed and ruled in 2011 that the Yukongovernment must give notice to the FirstNation after new mining claims have beenregistered.
The Ross River Dena appealed, assert-ing that consultation must take placebefore mineral claims are recorded andthat consultation requires more than merenotice of new claims.
The Yukon government argued that thegranting of a mineral claim is automaticrather than discretionary when statutoryrequirements are met and thus, there is noduty to consult.
Moreover, mineral exploration activi-ties in the Yukon, in general, are subject toassessment under the YukonEnvironmental and Socio-EconomicAssessment Act. Section 74(2) of this reg-ulation includes a requirement for consul-tation with First Nations. Certain explo-ration activities, however, correspondingto those that fall under Class 1 explo-ration activities are exempted fromassessment, meaning they can take placewithout notice to or consultation with theFirst Nations with claims that may beaffected by them. Class 1 activitiesinclude limited clearing of land, construc-tion of lines, corridors and temporarytrails, the use of explosives and theremoval of subsurface rock and otherspecified activities.
A duty to consultThe Court of Appeal sided with the
plaintiff, noting in its decision that “inorder for the ‘government’ to meet itsobligations it must develop a regime thatprovides for consultation commensuratewith the nature and strength of theAboriginal rights or title claim and withthe extent to which proposed activitiesmay interfere with claimed Aboriginalinterests.
“The duty to consult exists to ensurethat the Crown does not manage itsresources in a manner that ignoresAboriginal claims. It is a mechanism bywhich the claims of First Nation can bereconciled with the Crown’s right to man-age resources. Statutory regimes that donot allow for consultation and fail to anyother equally effective means to acknowl-edge and accommodate Aboriginal claimsare defective and cannot be allowed tosubsist,” wrote the Hon. Justice J.AGroberman.
The appellate court did not specifywhen or how consultation should takeplace, and it allowed that in someinstances, simply giving a First Nationnotice would be sufficient to meet its obli-gation.
However, at least where Class 1 explo-ration activities will have serious or long-lasting adverse effects on claimedAboriginal rights, the government mustbe in a position to engage in consultationwith First Nations before the activities areallowed to take place, the court said.
“The honor of the Crown demands thatit take into account Aboriginal claimsbefore divesting itself of control overland. Far from being an answer to theplaintiff ’s claim in this case, the failure of
the Crown to provide any discretion in therecording of mineral claims under theQuartz Mining Act regime can be said tobe the source of the problem,” Grobermanconcluded.
The appellate court also suspended itsruling for one year to allow the govern-ment time to consider statutory and regu-latory changes to Yukon’s mining regimewhich would provide for appropriate con-sultation.
Kaska reaction to rulingReacting to the court ruling, the Kaska
First Nation Jan. 7 issued a statement inwhich it said the Kaska Nation hasattempted to negotiate modern-day solu-tions to the realities of common lawregarding aboriginal rights and title inCanada with the Yukon government.
“The issue of ‘free entry’ has been onethat the Kaska have been asking YTG tonegotiate with them on. YTG continue torefuse to negotiate, instead choosing apath of confrontation with First Nationson issues such as the Peel (Watershed)and changes to the Yukon Oil and GasAct,” wrote the First Nation.
“… We’ve never been really opposedto mining and mineral development in our
territory. We just want to see things doneproperly in our territory, and we want tobe a big part of the things that are hap-pening. So, the Court of Appeal’s decisionreally puts us in a good position. We feelthat through this decision our concernsabout the existing system will finally beaddressed,” said
Ross River Dena Council Chief BrianLadue.
A Yukon government spokesmandeclined to comment Jan. 16, sayingYukon leaders have been reviewing thecourt’s decision before determining aresponse. Parties have 60 calendar daysfrom Dec. 27 before an appeal could bemade.
Broader implications?The Yukon Chamber of Mines, an
intervener in the case, said it is consider-ing the ramifications of the grounds forappeal of the appellate court decision.
“Recent inaccuracies and misunder-standings in the public have causedunnecessary alarm amongst some indus-try members and with Yukoners,” thechamber said in a recent statement.
“While this ruling does contain sometroubling implications, we are concerned
that some of the complexities of this casehave been misunderstood, and we cautionthose who leap to a broad interpretation,”said Yukon Chamber of Mines PresidentRob McIntyre. “Regardless of the out-come of a possible appeal, it is critical toclarify, for the Yukon public, for ourmembers working in the industry, and forinvestment and economic certainty in theterritory, that this recent ruling onlyapplies to the Traditional Territory of theRoss River Dena Council – the ‘RossRiver area,” McIntyre said.
Kaska leaders disagreed.Chief Liard McMillan of the Liard
First Nation said, “While the Ross RiverDena Council’s case specificallyaddressed a portion of the Kaska tradi-tional territory referred to as the “RossRiver area,” there can be no doubt what-soever that the legal principles expressedby the Court of Appeal will apply to theremainder of the Kaska territory and, aswell, to the traditional territory of the onlyother Yukon First Nation that has notentered into a land claim agreement – theWhite River First Nation.”
Moreover, after reviewing the deci-sion, we are of the view that aspects of the
13NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JANUARY 27, 2013
Cu29
63.55
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Pebble is a world-class copper deposit and one of North America’s most significant copper
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conducted one of the most extensive environmental studies program in Alaska.
The Pebble Partnership is committed to responsible resource development in Southwest
Alaska — recognizing that a world-class project requires world-class science.
www.pebblepartnership.com
continued from page 12
COURT RULING
see COURT RULING page 19
By ROSE RAGSDALEFor Mining News
In today’s difficult financing climate,Homestake Resources Corp. is living
the dream of most junior mining compa-nies. Agnico-Eagle Mines Ltd., anaggressive intermediate gold producer,has signed on to pay the bills at theHomestake Ridge project located innorthwestern British Columbia in a dealwhere the gold producer could spendingup to C$25.3 million and earn up to a 70percent interest in the exploration anddevelopment venture.
Formerly Bravo Gold Corp., the juniorchanges its name to HomestakeResources in April.
Homestake Ridge currently has a 1-million-ounce gold-equivalent resource,but Homestake President Joseph Kizissaid he believes Agnico-Eagle wasattracted to the project because of itspotential to deliver much more.
“They’ve been following us for quite afew years, and I think the grade and rea-sonable logistics for this part of the worldhas caught their attention. But really whatthey are looking at is the district-scalepotential of many more millions ofounces than we’ve found at this time,” hesaid.
Kizis said the types of deposits hiscompany has uncovered on the 2,585-hectare (6,388 acres) Homestake Ridgeproperty “are typically formed as clus-ters.”
“We’ve found two at this time, but latelast year we intersected a parallel struc-
ture that we call the South Reef deposit,”he said.
The junior quickly drilled three holesthat tested a 75-meter strike-length andintersected 3.1 meters averaging 30.8grams per metric ton gold and 3.3 g/t sil-ver within 8.7 meters of 11.3 g/t gold and1.6 g/t silver in drill hole HR11-232.
“What I think brought Agnico-Eagleto the table, maybe sooner than later, isthat we have been drilling offset holesaround that this summer,” Kizis observedin September when the deal was report-ed.
Hecla eyes neighborAdding to Homestake’s strong
prospects, Dolly Varden Silver Corp., ajunior focused on exploration and devel-opment of the neighboring silver-richDolly Varden project, has attracted aC$3.2 million strategic investment fromsilver producer Hecla Mining Co. inexchange for a 19.9 percent equity inter-est in the company.
The Dolly Varden project, which has ahistoric resource of 15 million ounces ofsilver, is located directly southeast andadjacent to the Homestake Ridge proper-ty as well as directly west and abuttingHomestake Resources’ huge Kinskuchproject.
When the deal with Hecla wasannounced in August, Dolly VardenSilver President and CEO Ron Nicholssaid Hecla’s experience at its GreensCreek Mine in Southeast Alaska will beparticularly valuable to the Dolly Vardensilver project because of the similar geo-logical settings of the Greens Creek pre-cious metal -rich VMS deposit and theprecious metal-rich target that has beenidentified on the Dolly Varden property.
“Dolly Varden is pleased to be able toforge such a strong strategic partnershipwith Hecla. The combination bringstogether two accomplished technicalteams that have a wealth of experience inoperating and/or restarting mines in his-torical silver mining camps, as well asexpertise in exploring for and developingprecious metal-rich VMS deposits,”Nichols added.
“It’s basically the same package ofrocks, though with different mineraliza-tion. Dolly Varden is more silver-zinc-lead rich, while Homestake is more cop-per-gold-silver rich,” HomestakePresident Joseph A Kizis Jr. told areporter in September.
A decade of explorationHomestake Resources’ current envi-
able position follows a decade of hardwork. In 2003, the Vancouver, B.C.-basedjunior began exploring HomestakeRidge, which is hosted within EskayCreek-equivalent stratigraphy in BritishColumbia’s historic Kitsault mining dis-trict.
The property is located 32 kilometers(about 20 miles) southeast of Stewart,B.C. at the southern extent of theCambria ice field in one of the largestvolcanic arc terranes in the CanadianCordilleran. It is bounded by Alice Armto the south, the Coast Plutonic Complexto the southwest, the Iskut River to thenorth, and the Skeena fold belt to theeast. Within its boundaries is the “GoldenTriangle”, an area that is host to more
� B R I T I S H C O L U M B I A
Homestake attracts well-funded partnerInvestment opens new vistas for longtime explorer in northwestern British Columbia, while Hecla Mining eyes neighboring project
14NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
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Homestake Ridge Project
Regional Geology
Bravo Gold Corp.
British Columbia, Canada
Figure 7-1
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than 200 mineral occurrences includingthe Eskay Creek, Silbak-Premier andSnip gold mines, as well as the Granduc,Dolly Varden-Torbrit and Anyox mines.The area’s dominant mineral occurrencesare precious metal vein systems, withrelated skarn, porphyry, and massive sul-phide occurrences (Knight andMacdonald, 2010).
To date, the region has produced morethan 7 million oz gold, 220 million oz sil-ver and 3 billion pounds of copper andcurrently boasts NI 43-101-compliantresources/reserves exceeding 65 millionoz gold and 25 billion lbs copper.
With prospecting and mining in thearea dating back to the early 1900s, theHomestake Ridge property comprisestwo areas of historic exploration.
Homestake Resources followed up onlimited modern exploration by severalprevious companies, and optioned theproperty from Teck Cominco – now TeckResources Ltd. – before beginning explo-ration work in 2004.
Since then, the junior has completed251 holes for a total of 70,533 meters inexploration and delineation drilling onthe property and has identified NI 43-101-compliant indicated resources total-ing 191,000 ounces gold and 1.35 millionoz silver, plus 530,000 oz gold and 13.47million oz silver inferred resources at a3.0 g/t gold-equivalent cut-off in two sep-arate deposits.
Discoveries to date include the MainHomestake deposit in 2005 and theHomestake Silver deposits in 2009 aswell as the South Reef deposit in 2011.Multiple exploration targets remain to betested on the property.
Though access to the HomestakeRidge property is by fixed-wing aircraftor helicopter from Prince Rupert, B.C. orStewart, the legacy of mining in the areahas left a network of roads, utilities, rightof ways, and historic camps near theproperty. Moreover, the property is locat-ed only six kilometers (about four miles)from a historic roadway and 32 kilome-ters (20 miles) north-northwest of tide-water at Alice Arm. Onsite power gener-ation facility has been permitted andBritish Columbia’s NorthwestTransmission Line along with severalproposed hydro-development projects inthe area brings additional synergies to theproject.
The junior said early metallurgical labresults indicate that expected recoveriesfrom a combined gravity/flotation pro-cessing plant would be 85-90 percentgold, 80-9090 percent silver, and 85-90percent copper.
Environmental testing indicates initialtailings sample has low potential for acidgeneration and base-line work has beeninitiated.
Homestake also says it has excellentrelations with local First Nations and isinvolved in ongoing engagement andconsultation.
More progress in 2012Homestake completed five drill holes,
totaling 1,248 meters in a C$700,000first round of 2012 drilling at the SouthReef target, which is located about 800meters to the southwest of the MainHomestake deposits.
The company reported 4.0 metersaveraging 11.4 g/t gold and 3.7 g/t silverfrom drill hole HR12-243; and a 2.9-meter interval averaging 5.9 g/t gold and2.0 g/t silver, which includes a 0.5-meterinterval averaging 16.3 g/t gold and 4.6g/t silver from drill hole HR12-240.
Estimated true thicknesses were not cal-culated for the reported intervals due touncertainty in correlating mineral inter-cepts with surface exposures; however, itis likely that the mineralization is sub-vertical.
Homestake also completed anothereight holes in a second round of drillingtotaling 3,495 meters at South Reef thatwas funded by the gold producer to thetune of C$1.8 million.
Agnico-Eagle has an option to spendan additional C$8.5 million by Dec. 31,2014 to earn a 51 percent interest in theHomestake Ridge project and a total ofC$25.3 million by 2016 to earn a 65 per-cent interest in the project. The gold pro-ducer also can arrange 100 percent ofcapital expenditures needed to fund theproject and earn an additional 5 percentfor a total 70 percent working interest.
Agnico-Eagle also purchased 2 mil-lion common shares of HomestakeResources at C35 cents per share for pro-ceeds of C$700,000, which was added tothe junior’s working capital.
Aggessive plans for 2013In 2013, the junior and its new partner
plan to spend C$3.5 million to extend theSouth Reef zone, target new gold up-slope from the Main Homestake depositand possibly extend both the MainHomestake and Homestake Silverdeposits.
Homestake Jan. 17 reported that it hascompleted a transition to the senior min-ing company assuming management ofthe Homestake Ridge project for the2013 exploration season.
The junior also posted drill resultsfrom its second round of drilling at SouthReef in 2012, which tested the structureover a 600-meter strike length, as well asdrill results at three other targets on theproperty. Among drilling highlights: A3.0-meter interval averaging 5.4 g/t gold,3.2 g/t silver and 0.26 percent copper,including 0.8 meters averaging 14.4 g/tgold, 5.4 g/t silver and 0.42 percent cop-per from drill hole HR12-242; and 5.8meters averaging 2.3 g/t gold, 7.4 g/t sil-ver, 0.13 percent copper and 3.0 percentzinc, including 0.6 meters interval aver-aging 12.2 g/t gold , 22.0 g/t silver, 0.5percent copper and 21.9 percent zincfrom hole HR12-248.
The newly reported holes are offsets toholes previously reported from SouthReef during the 2011 and 2012 explo-
ration seasons. Estimated true thicknessof the mineralized intervals is generally70-85 percent of down-hole thickness.
Geological modeling indicates thatdrilling results in 2012 have increased thesize of the high-grade mineralized zoneto some 250 meters along strike and 250meters down dip before ending in, orbeing offset by, a major fault structure.
Mineralization is open along strike tothe northwest, where it projects beyondthe extent of previous drilling in the FoxReef zone. In addition, the modeling hasidentified several prospective targets to
the southeast of the newly defined SouthReef deposit.
Mineralization identified in the SouthReef deposit has not yet been incorporat-ed into Homestake’s most-current miner-al resource estimate for the project. TheSouth Reef deposit occurs along the east-ern margin of a strong induced polariza-tion geophysical anomaly that can betraced through much of the central part ofthe Homestake Ridge property. High-grade gold-quartz veins occur within
15NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JANUARY 27, 2013
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HOMESTAKE
see HOMESTAKE page 17
By SHANE LASLEYMining News
When it comes to multimillion-ounce bulk-tonnage gold
deposits in Alaska, one would be hardpressed to find one more ideally locatedthan Freegold Ventures Ltd.’s GoldenSummit Project.
Situated alongside the paved SteeseHighway some 20 miles (32 kilometers)northeast of Fairbanks, a city of 87,000that embraces its gold mining heritage,the project has direct access to an ablework force, grid power and the full rangeof services needed to operate a low-costdrill program.
“Exploration and development costsin the Fairbanks area are at or belowthose common in the western UnitedStates,” Mark Abrams and Gary Girouxpenned in a December 2012 technicalreport for the Golden Summit property.
Not only is the Fairbanks region anefficient place to explore for and devel-op a deposit, Kinross Gold Corp. hasdemonstrated that a low-cost mine alsocan be operated here.
Fort Knox, located roughly five miles(eight kilometers) southeast of GoldenSummit, is one of Kinross’ most effi-cient operations.
Fort Knox General Manager DanSnodgress told the mining communitygathered at the 2012 Alaska MinersAssociation convention, “Fort Knox isby far the lowest cash-cost (open-pit)producer within the Kinross portfolio.”
The ideal location has enabledFreegold to overcome the extreme cold
of Interior Alaska to successfully operatedrill programs at Golden Summit nearlyyear-round.
“Winter drilling is possible becauseof the excellent infrastructure in place,”
Freegold Ventures President and CEOKristina Walcott told Mining News atthe onset of the 2012 program early lastyear.
The 15,000-meter drill program,launched during temperatures hoveringaround 40 degrees-below zeroFahrenheit, is one such example. Thecarefully orchestrated campaign mergedthe 1.3-million-ounce Dolphin golddeposit with the adjacent Cleary Hillarea, resulting in an explosive 325 per-cent expansion of the resource.
At a 0.35 grams-per-metric-ton goldcut-off grade, the Dolphin-Cleary Hilldeposit at Golden Summit now boasts anindicated resource of 62.62 million met-
ric tons averaging 0.73 g/t gold for 1.46million ounces and an inferred resourceof 191.92 million metric tons averaging0.67 g/t gold for 4.1 million ounces.
The Golden Summit property alsohosts three historical mines – ClearyHill, Hi Yu and American Eagle. Thesehigh-grade gold operations – whichtogether produced more than 450,000ounces of gold from ore that averagedabout 1.5 ounces-per-short-ton gold –are among 80 known gold occurrencesscattered across Freegold’s 12,257-acre(4,960.8 hectares) land package.
An aggressive 20,000-to-25,000-meter drill program currently beingdrafted by Freegold management for2013 will continue to expand andupgrade the six-million-ounce Dolphin-Cleary Hill gold deposit as well as inves-tigate other promising prospects acrossthe Golden Summit property.
6M oz. depositWhen Freegold kicked off its 2012
drill program in early January, the com-pany had already outlined 1.3 millionounces of gold at the Dolphin depositand some 6,400 meters of reverse circu-lation and core drilling completed atCleary Hill indicated this adjacentprospect was of similar size and tenor.
Highlights from this past drilling atCleary Hill include hole CHD9704,which cut 55.2 meters averaging 1.95 g/tgold; hole CHD0301 with 124.5 metersaveraging 1.02 g/t gold; and holeCHD001 with 61 meters averaging 1.87g/t gold, including 14.3 meters averaging6.4 g/t gold.
The 47 holes drilled by Freegold in2012 was a balance of upgrading andexpanding the Dolphin zone, establish-ing a resource at the Cleary Hill area andfilling in the 400-meter gap betweenthese two exploration areas:
•GSCL1201, drilled in the heart of
� A L A S K A
Golden Summit lives up to its nameBoasting Fort Knox as a neighbor, Freegold Ventures’ 6M oz gold project is ideally situated for low-cost exploration, production
16NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
see GOLDEN SUMMIT page 18
SHA
NE
LASL
EY
Golden Summit is situated along the Steese Highway about 20 miles (32 kilometers) north of Fairbanks. This advantageous locale allowsFreegold Ventures to carry out year-round drill programs at Golden Summit, despite the subzero winter temperatures for which this part ofInterior Alaska is known.
broad zones of strongly anomalous goldmineralization (e.g. 75.9 meters averag-ing 0.5 g/t gold in hole HR12-248) asso-ciated with disseminated pyrite andstrongly chloritic host rocks that can betraced for the entire 600 meters of thetested strike-length. Thick intervals ofanomalous silver (e.g. 60.0 meters aver-aging 1.9 g/t silver in HR12-249 and 11.6meters averaging 16.6 g /t silver inHR12-251) mineralization were identi-fied in several holes that tested to the eastof the Vanguard Fault. These intervalsappear to be closely associated with hostrocks and styles of mineralization identi-fied in the Homestake Silver deposits,indicating a potential proximity to addi-tional gold/silver deposits or the exten-sion of the Homestake Silver deposit tothe southeast on the property.
New horizons at KinskuchHomestake, meanwhile, holds an
option to acquire a 100 percent interest inthe 623-square kilometer (240.5 squaremiles) Kinskuch project, located adjacentto, and to the southeast of, the HomestakeRidge project.
“Kinskuch covers about 20 times asmuch ground as Homestake Ridge,” saidKizis. “We’ve barely gotten started atKinskuch. About 60 percent of the prop-erty was covered in 2011 by an airbornegeophysical survey.”
Homestake reported that diamonddrilling along the Illiance River trend onthe Kinskuch property during 2011 wassuccessful in intersecting high-grade sil-ver/lead/zinc VMS mineralization inthree of four holes. In early December,the junior said surface soil and rock-chipsampling along the trend in 2012 extend-ed known mineralization in the trend byan additional 750 meters to a 4.5-kilome-ter (three miles) strike length. In addition,a second sub-parallel trend of elevatedcopper and gold anomalies has beenidentified to the west of the main trend,along a prominent geophysical conduc-tivity anomaly. The geologic setting isbelieved to be similar to the historicDolly Varden VMS mine, the largest his-toric silver producer in the region.
The Illiance River trend is the first ofseveral high-priority areas identified byHomestake in Kinskuch.
“Some of the best VMS deposits in theworld occur within Jurassic-age Hazeltonrocks, and include the past-producingEskay Creek and nearby Dolly Vardendeposits,” said Homestake Vice Presidentof Exploration Rob Macdonald in theDec. 6 statement. “Our drilling demon-strated that (silver-lead-zinc) mineraliza-
tion occurs at very attractive grades, sim-ilar to grades at the Dolly Vardendeposits. Our rock and soil geochemicalresults, combined with our EM geophys-ical data, demonstrate that we have anextensive VMS horizon at Illiance Riverthat could host several significant miner-al deposits. We will initially offset oursuccessful prior drill holes because wefeel there is a very good likelihood ofdeveloping an attractive resource there,but VMS deposits typically form in clus-ters so other deposits probably exist inthis under-explored region.”
High-grade precious and base metalassays were reported in samples fromseveral locations along the mineralizedtrend and extending south of the 2011drilling. Noteworthy samples include:
Massive sulphide float assaying 3,321g/t silver, 1.9 g/t gold, 0.8 percent copper,40.1 percent lead and 22.4 percent zinc(4,341 g/t silver-equivalent) from in thevicinity of previously drill holes HR11-
003 and HR11-004;Strongly elevated silver mineralization
in a series of three select chip samplesranging from 14.5 g/t silver to 61.9g/t sil-ver, located 350 meters to the south of the2011 drilling; and
989 g/t silver, 1.1 percent copper, 0.4percent lead and 20.3 percent zinc (1,621g/t silver-equivalent) assay from chipsampling of outcrop located an addition-al 400 meters to the south.
Homestake said these surface resultsare similar to those from initial 2011sampling where subsequent drilling iden-tified a series of sub-vertical mineralizedVMS horizons along a 500-meter strikelength of the trend. Results from 2011included a 2.8-meter interval averaging318 g/t silver, 0.4 g/t gold, 2.2 percentlead and 6.5 percent zinc (552 g/t silver-equivalent) from drill hole KN11-02; anda 3.9-meter interval averaging 268 g/t sil-ver, 0.2 g/t gold, 1.3 percent lead and 6.5percent zinc (462 g/t silver-equivalent)drill hole KN11-03.
In addition, anomalous copper-goldvalues in rock and soil samples wereidentified west of the silver-lead-zinc
VMS horizons within a large 1.5 kilome-ter by 0.5 kilometer EM geophysicalanomaly, part of the company’s 2011 air-borne geophysical survey. Homestakegeologists believe this mineralizationmay be more analogous to the discoveriesat Homestake Ridge.
Results from the 2012 samplinginclude a select-chip sample of heavilydisseminated sulphides in outcrop grad-ing 6.4 percent copper; a series of select-chip samples along the new trend rangingfrom 0.1 percent copper to 0.5 percentcopper; and a series of anomalous gold(10 to 115 parts per billion) and copper(60 to 277 parts per million) values insoil samples along the trend.
Mineralization along the entire 4.5-kilometer Illiance River trend remainsopen in all directions.
Homestake said it will aggressivelyexplore this trend in 2013.
“We’re pretty enthusiastic about addingounces at Kinskuch with two major min-ing companies trying to produce a mine.It’s a pretty low hurdle to become eco-nomic when there’s a mine and millalready in the district,” Kizis added. �
17NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JANUARY 27, 2013
continued from page 15
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“We’re pretty enthusiastic aboutadding ounces at Kinskuch with
two major mining companiestrying to produce a mine. It’s a
pretty low hurdle to becomeeconomic when there’s a mine and
mill already in the district.”—Joseph A. Kizis, Jr., president and CEO,
Homestake Resources Corp.
the Cleary Hill Mine area, cut 6.24meters near the surface that average 2.93
g/t gold and a deeper intercept of 102.7meters averaging 1.12 g/t gold.
•GSDL1201, drilled in the gapbetween Dolphin and Cleary Hill,returned 314.1 meters averaging 0.69 g/tgold, including 132.7 meters of 1.19 g/t
gold.•GSDL1204, about midway between
Dolphin and Cleary Hill , cut 115.06meters grading 1.08 g/t gold.
•GSDL1207, between Dolphin andCleary Hill about 100 meters north of1204, cut 39.6 meters averaging 1.88 g/tgold, further demonstrating the tenor ofmineralization between Dolphin andCleary Hill.
•GSDL1210, between Dolphin andCleary Hill, cut 20.9 meters grading34.69 g/t gold.
•GSDL1213, about 100 meters east of1204, cut 136.7 meters averaging 1.57g/t gold.
•GSDL1218, testing the depth poten-tial of the Dolphin resource , cut 531.3meters averaging 0.59 g/t gold, including90.5 meters averaging 1.1 g/t gold.
•GSCL1221, drilled in the Cleary Hillarea roughly 150 meters southwest ofGSCL1201, cut 50.43 meters averaging1.46 g/t gold; and
•GSDL 1224, drilled along the north-east side of the original Dolphin deposit,cut 606.2 meters averaging 0.57 g/t gold.
Now merged, the six-million-ounceDolphin-Cleary Hill deposit is a contin-uous northeast trending orebody measur-
ing nearly 1,400 meters long, some 400meters wide and, in places, more than600 meters thick.
Adding ounces in 2013The Dolphin-Cleary Hill deposit lies at
the western end of a series of prospectsthat stretch some four miles (6.5 kilome-ters) along the Golden Summit property.The aggressive 2013 drill campaignplanned by Freegold management willcontinue to expand and upgrade the six-million-ounce deposit, while investigat-ing other promising areas along this trend.
“We will probably look to do another10,000 meters in the Dolphin-Cleary areathat will be both infill and expansiondrilling, and we will do about another10,000 to 15,000 (meters) out in the otherareas,” Walcott told Mining News duringa Jan. 22 interview.
Christina, a 1,500-meter-long sheerzone that has hosted several historicalhigh-grade gold mines, lies immediatelyto the northeast of the Dolphin-ClearyHill deposit. While remnants of high-grade veins may still exist, Freegoldbelieves it to be a bulk-tonnage goldprospect. Holes drilled there in late 2011and early 2012 underscore this potential.Highlights of the results include holeGSDC 11-75, which cut 84.9 meters aver-aging 0.64 g/t gold; GSDC 11-76, with64.7 meters averaging 1.75 g/t gold; andhole CH 12-05, the best hole of the latestassay results from Christina, with 34.7meters of 0.67 g/t gold and 15.7 meters of1.07 g/t gold.
Goose Creek, the next prospective areaeast of Christina, is another targetFreegold wants to test in 2013. Severalholes drilled at this target in the 1990s cutenticing gold and silver mineralizationover significant widths. Those drill resultsinclude hole GCR9701, with 4 g/t goldover 48 meters and 30 g/t silver over 55meters; hole GCR9204, with 1.7 g/t goldover 20 meters and 38 g/t silver over 33meters; and hole GCR 9202, with 0.5 g/tgold over 23 meters and 28 g/t silver over23 meters.
No drilling has been completed atGoose Creek since 1998.
Too Much Gold is the easternmost ofthe prospects Freegold plans to drill in2013. Though this prospect may not holdthe overabundance of gold its name sug-gests, drilling here in 1996 shows itspotential. Those results include holeTMG9606, which cut 15 meters averag-ing 3.8 g/t gold; hole TMG9608 with 38meters averaging 0.9 g/t gold; and holeTMG9611 with 47 meters averaging 0.6g/t gold.
Freegold is studying the historical drillresults along with a comprehensive geo-chemical and geophysical database as itputs the finishing touches on its plan toinvestigate these Golden Summitprospects in 2013.
“We just want to take our time, com-pile the results and look at everything tomake sure we have the best targets,”Walcott explained.
The Freegold CEO anticipates thecompany being ready to kick off the 2013exploration season at Golden Summit inFebruary, a program that surely attract theattention of its gold-producing neighbor. �
18NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
Do You Need To Develop a Mine in a Cold Environment? Ask Golder
Anchorage (907) 344-6001 [email protected] www.golder.com
continued from page 16
GOLDEN SUMMIT“We will probably look to doanother 10,000 meters in the
Dolphin-Cleary area that will beboth infill and expansion drilling,
and we will do about another10,000 to 15,000 (meters) out inthe other areas.” —Freegold Ventures
President and CEO Kristina Walcott
targeted by core drilling.Triple Z, located some 20 miles (32
kilometers) north of Chief Danny, is theonly prospect across the Tetlin land pack-age with historical drilling.Unfortunately, the results of the porphyrycopper exploration completed by CitiesServices Minerals Corp. in the early1970s were never published.
Though the historical exploration mayonly provide limited clues to the potentialof Triple Z, soil and rock sampling byCore yielded values as high as 9.07 g/tgold as well as anomalous copper, arsenicand bismuth.
Supported by airborne magnetic sur-vey data, these geochemical clues encour-aged the explorer to drill 2,015 meters atTriple Z in 2012. Results from these sixholes are pending.
Unlike the geochemical clues thatpiqued Core’s interest at many of theother leads at Tetlin, it was a distinct geo-physical anomaly that promptedContango to investigate Taixtsalda, aprospect about 26 miles (42 kilometers)southeast of Chief Danny.
Geophysical programs conducted inthe 1970s and 2011 have outlined a dis-tinctively round area of magnetic andresistivity highs indicative of a porphyrycopper system.
This geophysical anomaly along withcoincident copper-gold anomalies discov-ered during a soil sampling program car-ried out in May revealed promising drilltargets.
MM, like the Chief Danny prospectsome three miles (five kilometers) to thenortheast, was discovered through panconcentrate sampling. One pan samplecollected in 2009 topped 1 g/t gold andfollow-up panning in 2010 discoveredgold concentrates exceeding 0.1 g/t goldin several of the drainages in the MMprospect area.
A magnetic airborne survey conductedlast year revealed a strong magnetic lowat MM and refined the drill area for theupcoming 900-meter core drill program.To further refine these targets, the compa-ny plans to conduct early season top ofbedrock auger drilling.
The original lease hammered out byJuneau and the Tetlin Village Council in2008 provided Core a 10-year window toinvestigate these prospects spread out
across the 675,000 acres of lands underthe agreement, at which point the Texas-based explorer would have an option torenew the most prospective half of theproperty for another 10 years.
In order to focus on expanding thePeak zone, Core and the Alaska Nativegroup renegotiated these terms, releasingthe Texas-based explorer from the obliga-tion to return half of the leased lands in2018.
“We want to acknowledge the highlevel of cooperation afforded us by theTetlin Village Council, as well the signif-icant contribution made by our laborforce from Tetlin and AvalonDevelopment,” Juneau said.
Taking the lessons learned over thepast four years, Core is shifting its focusfrom wildcat drilling to outlining an eco-nomically viable high tenor gold-copper-
silver deposit in eastern Alaska.“Our challenge now is to determine
the extent of the newly discovered Peakzone-Chief Danny areas, and to try tolocate additional mineralized zones withsimilar mineralization,” Juneauexplained. “We are currently working ona geophysical model that ties the knowndrilling results to all available surfacesamples and geophysical data, in aneffort to improve the success rate of ourdrilling program. Our goal is to identifysufficient mineral resources by the end of2013 to justify initial reviews of econom-ic and engineering parameters on theChief Danny prospect.” �
19NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JANUARY 27, 2013
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Court of Appeal’s decision may wellapply to the Yukon First Nations that havesettled their land claims, and the entireYukon, the Kaska leaders said.
“The court confirmed that Class 1 explo-ration activities may adversely affect theaboriginal rights of the Kaska and, there-fore, the Kaska must be notified, consultedand perhaps accommodated with respect tothose activities before they occur. Preciselythe same argument could be made by thesettled First Nations with respect to theadverse effects of Class 1 exploration activ-ities on their treaty harvesting rights,” theyadded.
The Chamber’s McIntyre said, “Onbehalf of our members, we look forward tocontinuing the constructive dialogue wehave initiated with Kaska Nation leadership,and to ensure that mineral exploration cancontinue undiminished within KaskaNation Traditional Territory. We remainconvinced that whatever the final outcomeof this court action, people living in KaskaTerritory will be able to enjoy the benefits
of a thriving mining industry like otherYukoners.”
On Jan. 7, Kaska Dena Council ChairGeorge Miller also said, “While we areunable to agree with some of the publicstatements made last week by the YukonChamber of Mines, we want to take thisopportunity to confirm that we agree withthe Chamber’s representatives that we needto work towards a common sense approachto meeting the requirements of the Court ofAppeal’s decision, and we look forward toengaging in that process to build upon theexcellent meeting we had with them in
December 2012.”Michael Kokiw, executive director of the
Yukon Chamber of Mines, said the Court ofAppeal’s ruling like will affect all of the“unsettled” First Nations in that many pre-vious negotiations were not done to the“Haida” standard.
Kokiw said the chamber sees its role ashelping to ensure that all parties understandthe implications of the decisions that theymake. “We don’t want to see Yukoners loseout on any future prosperity,” he explained.“Our role is to see that all governments,whether federal, the territory or FirstNations, understand that.
Kokiw said considerable speculation fol-lowed the court’s ruling among industry andcourt observers that the decision may affectall of Canada’s First Nations.
The issue does appear to be topical inother Canadian jurisdictions, especially as itrelates to legislative schemes concerningmining, legal observers say. As recently asNov. 1, 2012, Ontario amended its MiningAct to ensure that affected First Nations areconsulted prior to substantive explorationwork based on litigation in Ontario similarto the Ross River Dena case.
Legal observers say one of the mostsalient aspects of the decision is the court’sconsideration of the responsibility of theLegislature to address the duty to consult“when legislation is introduced” – a cur-rently unresolved issue before the courts.
“The Ross River Dena case provides atimely discussion of this issue given that2013 has started with the high-profile ‘IdleNo More’ campaign by First Nations, ignit-ed by their view that federal environmentallegislation and changes to the Indian Actintroduced in 2012 were done without con-sultation,” members of Vancouver, B.C.-based Blake's Aboriginal Law Group wrotein a Jan. 17 article.
They say it remains to be seen whetherthe Yukon government will follow orexpand on Ontario’s example in a way thatbalances and protects the right of free entryfor mineral tenures.
Further, the appellate court decision illu-minates a grey area in the current case lawby distinguishing between the “necessity”of consultation in relation to the introduc-tion of legislation as opposed to consulta-tion in relation to the implementation oflegislation, the lawyers added. �
continued from page 13
COURT RULING
continued from page 11
TETLIN RESULTS
“The Ross River Dena caseprovides a timely discussion of thisissue given that 2013 has started
with the high-profile ‘Idle NoMore’ campaign by First Nations,ignited by their view that federal
environmental legislation andchanges to the Indian Act
introduced in 2012 were donewithout consultation.”
Blake's Aboriginal Law Group, Vancouver, B.C.
“Our goal is to identify sufficientmineral resources by the end of2013 to justify initial reviews of
economic and engineeringparameters on the Chief Danny
prospect.” —Contango Ore President andCEO Brad Juneau
Mining Companies
Kinross Fort Knox/Fairbanks Gold Mining Inc.Fairbanks, AK 99707Contact: Anna Atchison, Manager, Community and Government RelationsPhone: (907) 490-2218 Fax: (907) 490-2290E-mail: [email protected]: www.kinross.comLocated 25 miles northeast of Fairbanks, Fort Knox isAlaska’s largest producing gold mine; during 2011, FortKnox achieved 5 million ounces of gold produced, amodern record in Alaska mining.
Kiska MetalsSuite 575 – 510 Burrard StreetVancouver, BC, Canada V6C 3A8Contact: Jason Weber: President and CEOContact: Dustin Henderson: Investor RelationsPhone: (604) 669-6660Fax: (604) 669-0898Email: [email protected]: www.kiskametals.comGold and Copper projects in Alaska, BC, and Australia.
Usibelli Coal MineFairbanks, AK 99701Contact: Bill Brophy, VP Customer RelationsPhone: (907) 452-2625Fax: (907) 451-6543Email: [email protected]: www.usibelli.comOther OfficePO Box 1000Healy, AK 99743Phone: (907) 683-2226Usibelli Coal Mine is headquartered in Healy, Alaskaand has 700 million tons of coal reserves. UCM pro-duces an average of 2 million tons of sub-bituminouscoal each year.
Service, Supply & Equipment
Air LiquideAnchorage, AK 99518Contact: Brian BensonPhone: (907) 273-9762 • Fax: (907) 561-8364Email: [email protected] Liquide sells, rents, and is the warranty station forLincoln, Miller, Milwaukee, Victor and most other weld-ing equipment and tool manufacturers.
Alaska Air Cargo • Horizon Air CargoP.O. Box 68900 SEAFZSeattle, WA 98168Contact: Joe Sprague, Vice President of CargoPhone: (206) 392-2705 or 800-2ALASKAFax: (206) 392-2641E-mail: [email protected]: www.alaskacargo.comAward winning cargo services to more places, moreoften, with more lift to, from, and within the state ofAlaska.
Alaska Analytical Laboratory1956 Richardson HighwayNorth Pole, AK 99705Phone: (907) 488-1266 • Fax: (907) 488-077E-mail: [email protected] analytical soil testing for GRO, DRO,RRO, and UTEX. Field screening and phase 1 and 2 siteassessments also available.
Alaska Earth SciencesAnchorage, AK 99515Contact: Bill Ellis, Rob Retherford, ownersPhone: (907) 522-4664 • Fax: (907) 349-3557E-mail: [email protected] full service exploration group that applies earth sci-ences for the mining and petroleum industries provid-ing prospect generation, evaluation and valuation,exploration concepts, project management, 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 or Chris LedgerwoodPhone: (907) 562-5303Fax: (907) 562-5309E-mail: [email protected]: akfrontier.comAlaskan 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 Construction (AIC)301 W. Northern Lights Blvd., Suite 600Anchorage, AK 99503Contact: Fred HargravePhone: (907) 562-2792 • Fax: (907) 562-4179Email: [email protected]: www.aicllc.comAIC provides cost-effective solutions to resource devel-opment industries. We provide innovative ideas tomeet each requirement through the provision of best-in-class people and equipment coupled with exception-al 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) 283-3759
Rebar 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.
Alaska Telecom6623 Brayton Dr.Anchorage, AK 99507Contact: Dan BoonePhone: (907) 344-1223Fax: (907) 344-1612E-mail: [email protected] Website: 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.
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.
Aurora Geosciences3506 MacDonald Dr.Yellowknife, NT Canada X1A 2H1Contact: Corey SegboerPhone: (867) 920-2729Email: [email protected]: www.aurorageosciences.comGeological, geophysical and exploration support services.
Austin Powder CompanyP.O. Box 8236Ketchikan, AK 99901Contact: Tony Barajas, Alaska managerPhone: (907) 225-8236 • Fax: (907) 225-8237E-mail: [email protected] site: www.austinpowder.comIn business since 1833, Austin Powder providesstatewide prepackaged and onsite manufactured explo-sives and drilling supplies with a commitment to safetyand unmatched customer service.
Calista Corp.301 Calista Court, Suite AAnchorage, AK 99518Phone: (907) 279-5516 • Fax: (907) 272-5060Web site: www.calistacorp.com
Chiulista Services Inc.6613 Brayton Dr., Ste. CContact: Joe Obrochta, presidentContact: Monique Henriksen, VP
Companies involved in Alaska andnorthwestern Canada’s mining industry
D I R E C T O R Y
The Red Dog mine in northwest Alaska.
21NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JANUARY 27, 2013
Phone: (907) 278-2208 Fax: (907) 677-7261Email: [email protected] 100 percent Alaska Native owned and operatedcatering company at the Donlin Creek Prospect andwith North Slope experience, catering and housekeep-ing to your tastes, not ours; providing operations andcamp maintenance.
Construction Machinery Industrial, LLC5400 Homer DriveAnchorage, AK 99518Contact: Robert Fairbanks, Sales ManagerPhone: (907) 563-3822Fax: (907) 563-1381Email: [email protected]: www.cmiak.com
ERA Helicopter6160 Carl Brady DriveAnchorage, AK 99502Contact: David Sell, Business Development AlaskaPhone: (907) 550-8607Fax: (907) 550-8608E-mail: [email protected]: www.erahelicopters.comHelicopter charters, flight-seeing tours, aerial photogra-phy, oil and gas support, mineral exploration, construc-tion, seismic remote site work, internal and externalload, heli-hiking and sled-dog adventures.
Everts Air Cargo6111 Lockheed AvenueAnchorage, AK 99502Phone: (907) 249-4317Fax: (907) 248-0458Contact: Paul Abad, Sales ManagerE-mail: [email protected]: www.evertsair.comAn Alaskan owned and operated air carrier that pro-vides scheduled freight service to 12 bush communities& charter service to anywhere in Alaska with suitablerunway conditions. Passenger Charters, HAZMAT, bulkfuel, small package, oversized. Based in Anchorage &Fairbanks.
GCI Industrial TelecomAnchorage:11260 Old Seward Highway Ste. 105Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528Toll free: (877) 411-1484Web site: www.GCI-IndustrialTelecom.comRick Hansen, [email protected] Johnson, Business Development [email protected]:Aurora Hotel #205Deadhorse, Alaska 99734Phone: (907) 771-1090Mike Stanford, Senior Manager North [email protected], Texas:8588 Katy Freeway, Suite 226Houston, Texas 77024Phone: (713) 589-4456Hillary McIntosh, Account [email protected] Industrial Telecom provides innovative solutions tothe most complex communication issues facing industri-al clientele. We deliver competitive services, reputableexpertise and safely operate under the most severeworking conditions for the oil, gas and natural resourceindustries. GCI-your best choice for full life cycle, expert,proven, industrial communications.
HDR Alaska Inc. 2525 C St., Ste 305Anchorage, AK 99503Contact: Jaci Mellott, Marketing CoordinatorPhone: (907) 644-2091Fax: (907) 644-2022Email: [email protected]: www.hdrinc.comHDR Alaska provides engineering, environmental, plan-ning, and consultation services for mining and mineralexploration clients. Services include: biological studies;cultural resources; project permitting; NEPA; stakeholderoutreach; agency consultation; and environmental, civil,transportation, energy, and heavy structural engineering.
Jackovich Industrial & Construction SupplyFairbanks, AK 99707Contact: Buz JackovichPhone: (907) 456-4414 • Fax: (907) 452-4846Anchorage officePhone: (907) 277-1406 • Fax: (907) 258-170024- hour emergency service. With 30 years of experi-ence, we’re experts on arctic conditions and extremeweather.
Judy Patrick Photography511 W. 41st Ave, Suite 101Anchorage, AK 99503Contact: Judy PatrickPhone: (907) 258-4704Fax: (907) 258-4706
E-mail: [email protected]: www.judypatrickphotography.comCreative images for the resource development industry.
Keller Williams Commercial101 West Benson, Ste. 503Contact: Stewart Smith, Associate BrokerAnchorage, AK 99503Phone: (907) 865-6505Cell: (907) 727-8686Email: [email protected]: Ryan Mae Lucas, AssociateCell: (907) 360-7135Email: [email protected]: www.stusell.com; www.AKMiningClaims.comMining Claims to buy, sell, or lease, call the Alaska pro-fessionals. We provide real estate brokerage service tothe mining industry, with over 35 years of commercialexperience. Call for a list of our featured properties.
Last Frontier Air Ventures39901 N. Glenn Hwy. Sutton, AK 99674Contact: Dave King, ownerPhone: (907) 745-5701Fax: (907) 745-5711E-mail: [email protected] Base (907) 272-8300Web site: www.LFAV.comHelicopter support statewide for mineral exploration,survey research and development, slung cargo,video/film projects, telecom support, tours, crew trans-port, heli skiing. Short and long term contracts.
LyndenAlaska Marine Lines • Alaska Railbelt MarineAlaska West Express • Lynden Air CargoLynden Air Freight • Lynden InternationalLynden Logistics • Lynden TransportAnchorage, AK 99502Contact: Jeanine St. JohnPhone: (907) 245-1544 • Fax: (907) 245-1744Email: [email protected] combined scope of the Lynden companies includestruckload and less-than-truckload highway connections,scheduled barges, intermodal bulk chemical hauls,scheduled and chartered air freighters, domestic andinternational air forwarding and international sea for-warding services.
MRO SalesAnchorage, AK 99518Contact: Don PowellPhone: (907) 248-8808 • Fax: (907) 248-8878Email: [email protected]: www.mrosalesinc.com
MRO Sales offers products and services that can helpsolve the time problem on hard to find items.
Northern Air Cargo3900 W. International Airport Rd. Anchorage, AK 99502Contact: Mark Liland, acct. mgr. Anch./Prudhoe BayPhone: (907) 249-5149 • Fax: (907) 249-5194Email: [email protected] • Website: www.nac.aeroServing the aviation needs of rural Alaska for almost 50years, NAC is the states largest all cargo carrier movingnearly 100 million pounds of cargo on scheduled flightsto 17 of Alaska’s busiest airports. NAC’s fleet of DC-6, B-727, and ATR-42 aircraft are available for charters toremote sites and flag stops to 44 additional communities.
Pacific Rim Geological ConsultingFairbanks, AK 99708Contact: Thomas Bundtzen, presidentPhone: (907) 458-8951Fax: (907) 458-8511Email: [email protected] mapping, metallic minerals exploration andindustrial minerals analysis or assessment.
Pebble Partnership3201 C St., Suite 604Anchorage, AK 99503Phone: 907-339-2600www.pebblepartnership.com
PND Engineers Inc.1506 W. 36th Ave. Anchorage, AK 99503Phone: (907) 561-1011Fax: (907) 563-4220Website: www.pndengineers.comFull-service engineering firm providing civil, structural,and geotechnical engineering, including mining sup-port, resource development, permitting, marine andcoastal engineering, transportation engineering,hydrology, site remediation, and project management.
TTT Environmental LLC 4201 “B” St.Anchorage, AK 99503Contact: Tom Tompkins, general managerPhone: 907-770-9041 • Fax: 907-770-9046Email: [email protected]: www.tttenviro.comAlaska’s preferred source for instrument rentals, sales,service and supplies. We supply equipment for air mon-itoring, water sampling, field screening, PPE and more.
Taiga Ventures2700 S. CushmanFairbanks, AK 99701Mike Tolbert - presidentPhone: 907-452-6631 • Fax: 907-451-8632Other offices:Airport Business Park2000 W. International Airport Rd, #D-2Anchorage, AK 99502Phone: 907-245-3123Email: [email protected] site: www.taigaventures.comRemote site logistics firm specializing in turnkeyportable shelter camps – all seasons.
Total Safety U.S. Inc.209 E. 51st Ave.Anchorage, AK 99503Contact: Tyler Zollinger, District Manager.Phone: (907) 743-9871Fax: (907) 743-9872E-mail: [email protected]: www.totalsafety.comA full service safety company specializing in RemoteMedical Services, H2S Services, Industrial Hygiene, andSafety Consultants. Total Safety provides Service, Rental,or Sales of Safe Breathing Air, Gas Detection, andTechnical Safety Equipment.
URS Corp.700 G Street, Suite 500Anchorage, AK 99501Contact: Joe Hegna, Alaska Vice President/AlaskaOperations ManagerPhone: (907) 562-3366 • Fax: (907) 562-1297E-mail: [email protected]: www.urscorp.comProvide engineering, construction and technical serviceswith capabilities to support all stages of project lifecycle. We offer a full range of program management;planning, design and engineering; construction andconstruction management; operations and mainte-nance; and decommissioning and closure services.
Advertiser IndexAir LiquideAlaska Airlines Cargo . . . . . . . . . . . . . . . . . . . . . . . 14Alaska Analytical LaboratoryAlaska DreamsAlaska Earth Sciences . . . . . . . . . . . . . . . . . . . . . . . 17Alaska Frontier Constructors . . . . . . . . . . . . . . . . . . 9Alaska Interstate Construction (AIC)Alaska Steel Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Arctic FoundationsAurora GeosciencesAustin Powder Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . 5Calista Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Chiulista ServicesConstantine Metal ResourcesConstruction Machinery . . . . . . . . . . . . . . . . . . . . . 24Everts Air CargoFairbanks Gold Mining/Fort Knox Gold Mine. . . 11GCI Industrial Telecom . . . . . . . . . . . . . . . . . . . . . . 15General Refining Corp.Greer Tank Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Jackovich Industrial & Construction Supply. . . . . 23Judy Patrick Photography . . . . . . . . . . . . . . . . . . . . 8Keller Williams CommercialLast Frontier Air Ventures . . . . . . . . . . . . . . . . . . . 22Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2MRO SalesNature Conservancy, TheNorthern Air CargoPacific Rim Geological Consulting. . . . . . . . . . . . . 16Pebble Partnership . . . . . . . . . . . . . . . . . . . . . . . . . 13PND Engineers Inc.Salt+Light CreativeSourdough Express Inc.Taiga Ventures/PacWest Drilling Supply . . . . . . . . 4Total SafetyURS Corp.Usibelli Coal Mine . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
By ROSE RAGSDALEFor Mining News
Victoria Gold Corp. appears to be wellon its way to building a mine at the
Eagle Gold Project in central YukonTerritory by 2015, with construction start-up tentatively scheduled for April.
Eagle Gold is the most advanced newproject in the region and is on track tobecome the largest gold mine in Yukonhistory. With estimated employment of350-400 people, the mine also is expectedto make a significant contribution to theterritory’s economy.
Victoria aims to produce 207,000ounces of gold during the first full year ofoperation in 2015, average 212,000 ozgold annually at a cost of US$542/oz dur-ing the first five years and average192,000 oz gold per year at a cost ofUS$614 per oz over the 12-year life of themine.
Based on a positive feasibility study,the company is projecting C$260 millionin annual cash flow over the first fiveyears of production at a gold price ofUS$1,700/oz.
The Eagle Gold deposit hosts probablereserves of 2.3 million oz of gold con-tained in 92 million metric tons of orewith a grade of 0.78 grams per metric tongold, as outlined in a recent NI 43-101-compliant feasibility study of the project.Thanks to substantial growth throughexploration during the past three years,
Eagle Gold’s NI 43-101 mineral resourceis currently estimated at 222 million met-ric tons averaging 0.68 g/t gold, contain-ing 4.9 million ounces of gold in the indi-cated category inclusive of probablereserves, and a further 78 million metrictons averaging 0.60 g/t gold, containing1.5 million ounces of gold in the inferredcategory.
The deposit is located on the 650-
square-kilometer (251 square miles)Dublin Gulch claim block some 85 kilo-meters (53 miles) by road; north-northeastof the village of Mayo within the mineralrich Selwyn Basin of Yukon Territory.
In addition to the Eagle Gold deposit,Dublin Gulch hosts the Mar tungstendeposit and a 21-kilometer- (13 miles)long belt of multi-element mineralizationknown as the Potato Hills Trend. Withinthis belt, Victoria has identified severalnew gold and silver zones with significantmineral potential.
More deposits nearby?In 2012 Victoria focused on moving
the Eagle Gold project towards productionwhile exploring and expanding the miner-al inventory of the entire claim block.
In October, Victoria reported drill andsurface sampling results on the Olive tar-get, one of several areas of significantmineralization centrally located along thePotato Hills Trend. The company complet-ed 11 diamond drill holes for 2,996 metersin a program that targeted extensions of
mineralization identified during previousdrilling programs and reconnaissance sur-face sampling. Assay results have beenreceived for six of the 11 holes and con-tinue to show significant gold grades andintersection widths. These include 6.4meters of 3.12 g/t gold starting at a depthof 124.60 meters in hole DG12-530C and1.43 meters of 8.09 g/t gold starting at87.86 meters within 10.1 meters of 2.56g/t gold starting at 84.03 meters in holeDG12-529C.
Victoria said some of the Olive targetmineralization likely will be amenable toheap leaching and may be accretive to thenear by, proposed Eagle Gold Mine.Metallurgical work on the Olive samplesis ongoing.
“Olive is shaping up to be a meaning-ful complement to the proposed EagleGold Mine, which is set to begin con-struction in 2013 and production in 2015,”said Victoria President and CEO JohnMcConnell.
The Olive target is located 2.5 kilome-ters (1.5 miles) northeast of the EagleGold deposit and is the site of several his-torically exploited high grade sulfideveins.
The Olive area was mined on a smallscale from shallow shafts and adits at theturn of the last century and placer miningin creeks draining the area indicategold bearing host rocks. The Olive veinsystem is located near the top of Olivegulch and consists of gold bearingquartz scorodite arsenopyrite veinmaterial. A 200-meter trench excavatedand sampled in 1991 exposed a zone ofquartz and quartz arsenopyrite veinshosted in the Dublin Gulch granodioritethat averaged 1.2 g/t gold over 97.6meters. Diamond drill hole 91 012C col-lared in the trench intersected 89.9 metersgrading 1.08 g/t gold and drilling byVictoria in 2010 verified the gold miner-alization (DG10 384C: 20.3 metersgrading 1.93 g/t gold (from 18.1 meters to38.4 meters) plus 41.1 meters grading0.96 g/t gold (from 49.1 meters to 90.2meters). Subsequent drilling in 2011 con-tinued to intersect mineralization (22.8meters averaging 0.72 g/t gold; holeDG11 466C). The best results of the2012 surface sampling program include189.5 g/t gold, 64.0 g/t gold and 11.5 g/tgold (all grab samples) from arsenopyriteand scorodite arsenopyrite veins intrench OLTR 09.
The 2012 program adds to the histori-cal work and indicates that the Olive areahas the potential to become Victoria’s nextsignificant resource.
“The Olive and Shamrock targets couldbe two more Eagle-size deposits,” VictoriaSenior Project Geologist Joanna Ettlingertold Mining News during a visit to theEagle Gold Project in August.
“Because we already will have thecrusher and leach pad, it doesn’t need tobe another 6 million ounces to be worthexploiting,” Ettlinger explained.
Building a mineFor 2013, the company plans to narrow
its focus to concentrate exclusively onadvancing Eagle Gold.
Victoria intends to build a convention-al open pit, three-stage crush, in-valleyleach operation with a production rate ofabout 29,500 metric tons per day. Goldextraction will utilize sodium cyanide
� Y U K O N T E R R I T O R Y
Eagle Gold eyes April construction startJunior advances project that could become the largest gold mine in Yukon history as 2012 exploration defines nearby Olive target
907-344-2593
Mining,
Construction
Materials,
and Building
Infrastructure
for 90 years
see EAGLE GOLD page 23
22NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
A core sample collected from a trench on the Olive target located about 2.5 kilometers (1.5miles) northeast of the Eagle Gold deposit on the Dublin Gulch property in central YukonTerritory glints with visible gold.
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heap leaching technology. The Eagle Gold Mine will produce 92
million metric tons of ore and 132 millionmetric tons of waste rock over an 11-yearactive mining phase, plus an additionalyear of gold recovery.
The project has excellent infrastructureincluding year-round road access, com-mercial grid power 25 kilometers (16miles) from site and an airstrip 80 kilome-ters (50 miles) south of the project. Inaddition, the company has constructed a100-person, all-season camp at the EagleGold project site.
A feasibility study, completed in 2012,targets initial production as early as thefourth quarter of 2014 and full productionin 2015. The 20-month construction phaseset to begin this spring will require initialcapital and pre-strip costs estimated atC$430 million.
A major hurdle for Victoria will beraising capital to fund construction of theproposed mine. However, the junior hasmore than a few financial resources onwhich to draw for funds.
The initial CAPEX (including pre-stripping) for the Eagle Gold project isC$399.7 million, while life-of-mine sus-taining capital costs are C$132.9 million,and closure costs (net of salvage value)are C$64.2 million. Based on US$1,325-per-ounce gold, the project has a pretaxnet present value of US$380.8 million (ata 5 percent discount rate), a 24.1 percentinternal rate of return and a payback peri-od of 3.1 years.
Victoria is 55 percent owned by institu-tions and counts senior mining companyKinross Gold Corp. among its majorinvestors.
To raise capital, Victoria has embarkedon a program of selling some of its assets,primarily in Nevada. The junior currentlyhas about C$40 million in working capitaland could raise another $20 million fromproceeds of additional asset sales.
In November, Victoria reported the saleof its Big Springs Property, located inElko County, Nev., for US$6 million toMRG Copper LLC, a U.S. subsidiary ofBig Springs Project Pty Ltd., which isconcurrently being acquired by KimberleyRare Earths Ltd. The deal is expected toclose in February.
“This latest transaction further demon-strates our adherence to two of our coregoals. Namely, to minimize share dilutionby realizing cash through non-core assetsales and to remain focused on the con-struction of the company’s flagship EagleGold Mine,” McConnell said, afterannouncing the sale.
Victoria also plans to borrow C$210million to C$260 million in debt financingfor the Eagle Gold project from a syndi-cate of banks on the strength of the pro-ject’s feasibility study, which was recentlyreviewed and approved by an independentengineering firm.
“We’re fairly confident (the syndicate)will step up with about C$210 million inproject debt financing,” McConnell toldreporters in December.
Alternative sources of financinginclude Victoria’s royalty stream from thecompany’s interests in producing assets,other forms of debt, a joint venture partnerand issuing additional equity.
The Eagle Gold Project is tracking wellthrough the environmental assessmentprocess.
The junior has signed a comprehensivecooperation and benefits agreement withthe local First Nation of the Nacho NyakDun. The Eagle Gold deposit is situatedon land with the traditional territory of theNacho Nyak Dun.
The project is currently being assessedunder the Yukon Environmental andSocio-Economic Assessment Act by theExecutive Committee of the YukonEnvironmental and Socio-EconomicAssessment Board. Additionally, a WaterUse License and Quartz Mining Licenseare required.
In September, Victoria reported thecompletion of the Draft Screening Reportfor the Eagle Gold project by YESAB. Theregulatory body’s delivery of the docu-ment is a significant milestone because itmoves the project closer to finalization ofan environmental assessment that isrequired under Yukon law.
In the screening report, the YESABpanel wrote: “As a result of this assess-ment, the executive committee recom-mends to the decision bodies that theEagle Gold Project be allowed to proceedwithout a review, subject to terms andconditions identified in this report.”
To begin construction, Victoria willneed the Quartz Mining License, whichcan be issued within a matter of days fol-lowing a positive YESAA DecisionDocument, which is expected in Februaryor March.�
23NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JANUARY 27, 2013
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We were there at the beginning.
continued from page 22
EAGLE GOLD
Victoria Gold Corp. President and CEO John McConnell and Senior Project Geologist JoannaEttlinger study the mountainous terrain of the Dublin Gulch Property from atop the EagleGold deposit during a tour in August.
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“As a result of this assessment, theexecutive committee recommends
to the decision bodies that theEagle Gold Project be allowed toproceed without a review, subjectto terms and conditions identifiedin this report.” —Draft Screening Report,
Yukon Environmental Socio-EconomicAssessment Board
24NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 27, 2013
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