north of 60 mining - for Petroleum News
Transcription
north of 60 mining - for Petroleum News
6 Junior blazes road to production Chieftain eyes 2015 mill startup at Tulsequah; secures initial US$60M 10 Golden Range of targets at Chisna Ocean Park grabs 126.5 g/t gold, 17.7% copper at Green Zone discovery 12 Streamlined junior bets on Casino Western targets 2017 production at giant copper-gold deposit in Yukon Crews working for Connors Drilling battle minus 40F temperatures to carry out a winter drill program at Freegold Ventures Ltd.’s Golden Summit property near Kinross Gold Corp.’s Fort Knox Mine in Interior Alaska. While this rig was turning at the property’s Christina zone Jan. 17, a second drill was being readied for building a resource in the area of the historic Cleary Hill Mine. Page 2 SHANE LASLEY PHOTO A special supplement to Petroleum News WEEK OF January 22, 2012 2 NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JANUARY 22, 2012 PETROLEUM NEWS G • WEEK OF JANUARY 22, 2012 3 NORTH OF 60 MINING A L A S K A Freegold gets jump on 2012 exploration By SHANE LASLEY FREEGOLD VENTURES LTD. Despite minus 40F temperatures, junior works to add to 1.3-million-ounce resource at Golden Summit; upgrade also imminent at Vinasale Golden Summit Exploration Areas Mining News W hile most companies exploring the mineral potential of Alaska and other Far North locales have stacked their drills, winterized camps and are poring over data from their 2011 programs in preparation for the upcoming exploration season, Freegold Ventures Ltd. continues its field program with drills turning at its Golden Summit project in the heart of Interior Alaska. “We just resumed drilling this week with one rig and expect to add the second one early next week,” Freegold Ventures President and CEO Kristina Walcott told Mining News Jan. 14. Though the mercury has retreated to around 40 degrees below zero at Golden Summit, this project has the distinct advantage of being located alongside a paved highway some 40 kilometers (25 miles) north of Fairbanks. With grid power, vehicle access and cell phone service, it is possible to overcome the challenges of exploration in one of the coldest regions of Alaska. “Winter drilling is possible because of the excellent infrastructure in place,” Walcott explained. This early start on 2012 exploration follows 15,000 meters of drilling that the Vancouver-based junior carried out on its three Alaska gold properties in 2011 – an effort that is resulting in updated resource estimates on the junior’s two most advanced projects, Golden Summit and Vinasale, and the first drilling completed on its Rob prop- Goose Creek Too Much Gold Two Areas of Current Drilling Christina Dolphin 43101 Resource 6 5 km erty in four years. Building on the success of the 2011 exploration programs, Freegold plans to top 25,000 meters of drilling on its three Alaska gold properties in 2012. 1.3M ounce resource Located a short 8 kilometers (5 miles) north of Kinross Gold Corp.’s Fort Knox gold mine, Freegold’s Golden Summit property blankets 80 known gold occurrences, including three high-grade, pastproducing gold operations. Combined, these historical mines – Cleary Hill, Hi Yu and American Eagle – turned out more than 450,000 ounces of gold from ore that averaged about 1.6 ounces per short ton gold. Although remnants of these high-grade vein systems remain, Freegold’s exploration at Golden Summit is focused on outlining large bulk tonnage targets more akin to the Fort Knox Mine to the south or Kinross’ True North Mine about 3.5 kilometers (two miles) to the west. The 2011 drill program at Golden Summit was carried out in two stages. Phase 1 – carried out from March to August – focused on increasing the near-surface gold resource at the Dolphin Zone. Phase 2 – which began in August and has continued into 2012 – will further expand Dolphin as well as investigate Cleary Hill and other targets across the property. Highlights from the 6,328 meters of drilling completed during the phase 1 drilling include: • GSDC-11-29 cut 172.4 meters averaging 0.82 grams per metric ton gold, starting at 71 meters; • GSDC-11-32 cut 452 meters averaging 0.68 g/t gold, starting at surface; • GSDC-11-38 cut 207 meters of 1 g/t gold, starting at 2.6 meters, and includes 74 meters averaging 2.3 g/t gold; • GSDC-11-43 cut 200.5 meters averaging 0.85 g/t gold, starting at surface; and • GSDC-11-47 cut 516.2 meters averaging 0.53 g/t gold, starting at surface, including 1.03 g/t gold over the lower 149.2 meters of the hole. Freegold said holes 32 and 47 bottomed out mineralization, indicating the depth potential of the Dolphin zone. In mid-December the company produced an updated mineral resource for the Dolphin zone. At a 0.35 cut-off, Dolphin contains an NI 43-101-compliant indicated resource of 14.84 million metric tons averaging 0.66 g/t for 316,000 oz gold. Additionally, Dolphin has an inferred resource of 50.46 million metric tons averaging 0.61 g/t for 991,000 oz gold. Golden Summit phase-2 Freegold started the phase-2 drill program at Golden Summit by investigating the Cleary Hill Mine prospect where 15 holes were completed by early November. Walcott said around 5,000 meters of the phase-2 program was completed before the company took a short hiatus at the end of see FREEGOLD page 4 Contact North of 60 Mining News: Publisher: Shane Lasley • e-mail: [email protected] Phone: 907.229.6289 • Fax: 907.522.9583 North of 60 Mining News is a monthly supplement of the weekly newspaper, Petroleum News. It will be published in the fourth or fifth week of every month. Exploring & Developing The Vast Resources of Alaska We’re an industry leader with the experience and technical expertise currently exploring for mineral deposits worldwide. Our primary focus is exploring and advancing the 100% ownership of the Whistler Property, Alaska. We pride ourselves on building strong relationships with the people, community and the environmental stewards. We look forward to a long working relationship in Alaska. Contact: Drew Martel, Manager Investor Relations (P) 604-669-6660 email:[email protected] Shane Lasley PUBLISHER & NEWS EDITOR ADDRESS Rose Ragsdale EDITOR-IN-CHIEF (contractor) P.O. Box 231647 Anchorage, AK 99523-1647 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 Allen Baker CONTRIBUTING WRITER Judy Patrick Photography CONTRACT PHOTOGRAPHER Forrest Crane CONTRACT PHOTOGRAPHER Tom Kearney ADVERTISING DESIGN MANAGER Mapmakers Alaska CARTOGRAPHY Dee Cashman CIRCULATION REPRESENTATIVE NEWS 907.229.6289 [email protected] CIRCULATION 907.522.9469 [email protected] ADVERTISING Susan Crane • 907.770.5592 [email protected] Bonnie Yonker • 425.483.9705 [email protected] FAX FOR ALL DEPARTMENTS 907.522.9583 Several of the individuals listed above are independent contractors 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 at www.PetroleumNews.com. The price in the U.S. is $78 per year, which includes online 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 the mining supplement and online access to past stories, for $49 per year. 4 NORTH OF 60 MINING continued from page 3 FREEGOLD 2011. The Cleary Hill Mine area has been the focus of past exploration at Golden Summit — including trenching, extensive rotary air blast drilling and some 6,400 meters of reverse circulation and core drilling. Past results of drilling at Cleary Hill prospect include: • CHD9704 cut 55.2 meters averaging 1.95 g/t gold; • CHD0301 cut 124.5 meters averaging 1.02 g/t gold; and • CHD001 cut 61 meters averaging 1.87 g/t gold, including 14.3 meters averaging 6.4 g/t gold. Incorporating its 2011/2012 drilling Freegold hopes to develop an inaugural NI 43-101-compliant resource for the Cleary Hill Mine area. Originally slated to be a 10,000-meter program, Walcott told Mining News that Freegold anticipates phase-2 to top 20,000 meters by the end of 2012. Freegold also plans to return to the Dolphin zone during the phase-2 program. The deep mineralization intersected in holes 32 and 47 will be among the targets of the early 2012 program. In addition to expand- ing the resource at depth, this drilling also will help upgrade some of the nearly 1 million ounces of gold in the inferred resource to the higher confident indicated category. “We will be completing some additional infill drilling as well as expansion drilling – both of these, we expect, will upgrade the resource at Dolphin,” Walcott said. Goose Creek — where historical drilling intersected 48 meters averaging 4 g/t gold and 56 meters of 29 g/t silver — is another prospect Freegold hopes to explore in 2012. No drilling has been completed there since 1998. Vinasale resource imminent The Vinasale gold project — found on the northern end of the Kuskokwim Gold Belt of Southwest Alaska about 26 kilometers (16 miles) south of McGrath — was another key target of Freegold’s 2011 exploration season. An NI 43-101 resource calculated in March outlines an inferred resource at Vinasale of 37.3 million metric tons averaging 1.11 g/t gold at a cut-off of 0.5 g/t. With it sights set on upgrading this 1.33million-ounce gold resource hosted in the property’s Central zone, Freegold completed 3,502 meters of drilling in 2011. Highlights from the 12 holes drilled last year include: PETROLEUM NEWS • VM11-08 cut 66.8 meters averaging 1.06 g/t gold starting at 2.4 meters and 68.3 meters averaging 0.75 g/t gold from a depth of 113.7 meters; • VM11-09 cut 115.8 meters averaging 1.48 g/t gold; • VM11-12 cut 57.5 meters averaging 3.94 g/t gold starting at 11.1 meters and 34.7 meters averaging 2.01 g/t gold from a depth of 141.1 meters; and • VM11-13 cut 67.1 meters averaging 0.95 g/t gold (including 15.8 meters averaging 3.03 g/t gold) starting at 4.3 meters and 45.4 meters averaging 2.44 g/t gold from a depth of 131.7 meters. All four of the best holes of the 2011 drill program at Vinasale were drilled in the southern portion of the Central zone, indication the potential for expansion of the deposit to the south and at depth. In a Jan. 14 email, Walcott told Mining News that Freegold anticipates delivery of an updated resource estimate for Vinasale within a month. Though the Central zone remains open to expansion, Freegold’s 2012 drill program at Vinasale will focus on a larger prospective area about 1,200 meters to the northeast. An induced polarization survey conducted during the 2011 exploration season outlined a significant geophysical anomaly in • WEEK OF JANUARY 22, 2012 the North East zone, and the limited drilling that has been completed there has cut mineralization of similar character to the Central zone. Walcott told Mining News that Freegold plans to return to the Central zone in due course, but the primary focus of a planned 10,000-meter program at Vinasale in 2012 will be to build a gold resource at the North East zone. Return to Rob Freegold also conducted a small exploration program at its 19,000-acre Rob gold project located 20 miles (32 kilometers) east of Sumitomo Metal Mining Co., Ltd.’s Pogo gold mine. The program involved a 909-meter diamond drill program to expand upon previously intersected high-grade zones and to test other strong geochemical anomalies over bulk-tonnage targets. All three holes drilled at Rob in 2011 targeted Michigan, a prospect that has produced grab samples with assay values up to 971 g/t gold. Previous prospecting in the Michigan area identified a large stockwork vein system. Other future target areas at the Rob property include the Blue Lead area where sampling of the vein zone returned values of up to 871 g/t gold. Drilling at the Grey Lead zone in 2007/2008 returned several highgrade intercepts including 5.3 meters grading 15.8 g/t; 5.7 meters grading 19.2 g/t; and 3.4 meters grading 43.2 g/t gold. Grab samples from the Hilltop prospect returned values of18.7 g/t gold with elevated levels of bismuth and tellurium similar to that seen in the Grey Lead vein about 183 meters to the northwest. Historical sampling in this area returned values of up to 101 g/t gold. Walcott said the 2012 exploration program at Rob will hinge on the pending assay results from the drilling conducted at the Michigan prospect. G PETROLEUM NEWS G • B R I T I S H WEEK OF JANUARY 22, 2012 5 NORTH OF 60 MINING C O L U M B I A Tulsequah targets 2015 production start Coming to agreement with Taku First Nations on road to Atlin, Chieftain sells gold/silver to secure first US$60M for construction By SHANE LASLEY Mining News O ne year after going public, Chieftain Metals Inc. is blazing a trail through roadblocks that impeded past efforts to reopen the historical Tulsequah Chief Mine, a precious metals-rich volcanogenic massive sulfide project on British Columbia’s western border about 65 kilometers (40 miles) northeast of Alaska’s capital city of Juneau. A C$20 million initial public offering that closed in December 2010 provided Chieftain with the funds needed to put the project back on the path to production, an objective the Toronto-based mining company believes it can achieve by 2015. The brief timeline from IPO to production is due to the fact that major permits for constructing and operating the Tulsequah Chief project are already in place. These permits were granted to former project owner, Redfern Resources Ltd., and its parent company, Redcorp Ventures Ltd., before the mining firms filed for bankruptcy in 2009. “The company itself was created for the purpose of purchasing this property from the receiver that was holding it as a result of Redfern and Redcorp going into bankruptcy,” Chieftain Metals COO Keith Boyle explained during a Jan. 7 teleconference with a Juneau-area task force formed to monitor developments at the upstream mine. In September, Chieftain announced it has engaged Wardrop Engineering to complete a new feasibility study for the Tulsequah project. Updating a similar assessment completed in 2007 for former Tulsequah owner, Redfern Resources Ltd., the revised feasibility will include recalculated capital costs and updated mineral reserves based on the 31,000 meters of drilling carried out in 2011. The 2012 study also will blueprint a road to deliver concentrates produced at Tulsequah to market, a sticking point in Redfern’s efforts to revive the historical mine. The 2012 feasibility study — expected to be published in the first quarter of 2012 — will form the basis for construction of the Tulsequah Chief project, which is scheduled to begin later in the year. Treating ARD One of Chieftain Metals’ first tasks as owner of Tulsequah Chief is to stop the acidic metal-laden water that has been seeping from the historical mine shafts for more Anticipating the need to raise C$350 million to get Tulsequah Chief into production, Chieftain Metals cut a deal with Royal Gold Inc. in December to sell a portion of gold and silver produced at the future mine in exchange for up to US$60 million in up-front cash. than 50 years. This legacy acid rock drainage — which was reaching the Tulsequah River, a tributary of the Taku River that flows into the Lynn Canal near Juneau — has been a concern for First Nations, regulators and others in both British Columbia and Alaska. “One of the items we completed was the construction and subsequent commissioning of an interim water treatment plant and it is treating the effluent from the historic Tulsequah Chief Mine that produced ore in the 1950s,” Boyle informed the Juneaubased Taku River task force on Jan. 7. The Chieftain Metals CEO told the watchdog group that the permanent solution to the acid rock drainage is not the continued treatment of the metal-laden water flowing from the historical adits but to backfill the legacy mines. He said the company plans to backfill the sulfide-rich chasms with tailings and waste rock from Chieftain’s planned operations. “We are going to develop the mine that we are proposing and with the waste that we are going to mine from this operation, we are going to fill those old stopes and stop the water from turning acidic,” the COO explained. The third and final stage will be the closure and reclamation of the Tulsequah Chief Mine after Chieftain has completed its mining, returning the site to a state that resembles the landscape before Cominco began mining the deposit in the 1950s. “The mine is there, it is a springboard to do something really good and to leave something really good after the mine is shut down,” Boyle said. The plan to use large hoverbarges to transport materials to the mine and ore to markets proved to be too logistically challenging to be practical and ran into opposition from Juneau-area Alaskans worried about what affect the prototype transportation system would have on the Taku River and its salmon. Citing difficulties with getting supplies to the site with conventional barges in 2011, Boyle reassured the Taku River task force. “It has become very clear to us that barging up the river is not an option, both for the construction of the site and then the subsequent production,” the Chieftain Metals CEO expounded. Speaking frankly, Boyle told the group that Chieftain’s initial decision not to use hover-barges had more to do with finance than conservation. “It had nothing to do with the salmon runs – it had everything to do with sitting in front of the bankers and saying ‘we want to build a mine,’” he said. “They looked at us and said ‘if you think you are doing it with hover-barges we are not giving you money.’” Once in production, about 148,600 metric tons of concentrates would be shipped from the mine annually. Boyle said that even under the best of conditions a fleet of five 200-ton barges traveling the Taku River could only get about half the product to markets. With a consensus that the river route is not practical, Chieftain Metals met with the Taku River Tlingit First Nations to if a route through their traditional territory to Atlin could be found. The talks resulted in a new alignment that both avoids the caribou and moose hunting areas important to the Taku River Tlingit and reduces the amount of new road to be constructed to around 30 kilometers (19 miles). “We reduced the amount of road from about 160 (99 miles) to about 130 kilometers (80 miles) but as well we avoided, reduced and addressed all of the concerns the First Nations stated with respect to the previous permitted route,” Boyle explained. Chieftain has the Special Use Permit for the original route and is preparing an amendment application for the less contentious alignment. “We recently submitted the environmental assessment amendment application and that will be followed, in probably a month or so, with Special Use Permit amendment application,” Boyle explained during the Jan. 7 presentation. Chieftain anticipates gaining the necessary approvals to begin construction by the end of July and plans to have crews blazing the road from the Atlin and Tulsequah ends shortly thereafter. The road is scheduled for completion by see TULSEQUAH page 6 Road to Atlin In order to realize something good from Tulsequah, Chieftain needs to get the metals to market, a dilemma that plagued Redfern. The former Tulsequah developer originally wanted to build a road from the VMS project 155 kilometers (96 miles) north to the British Columbia road system at the mining town of Atlin. When that route hit a roadblock with local First Nations, Redfern tried to engineer an innovative system of navigating the Taku River. #4.+.'12'4#6'5#%41556*'0+6'&6#6'5#0�#&#$7617441165 #4'2.#06'&(+4/.;+0.#5-#h#0&6*#659*;9'4'56410)5722146'45 1(4'52105+$.'4'5174%'&'8'.12/'06T #4&914-#0&#&'&+%#6+1061)419+0)1741+.#0&)#5X/+0+0)X(+5*+0) #0&%105647%6+10+0&7564+'5*#5$''0#66*'%14'1(#4.+.'5$75+0'55 /1&'.5+0%'+0%'26+10X'0574+0)6*'5'+0&7564+'5#4'$#%-'&$;# HOW DO YOU GET MORE OUT OF YOUR MINE? JUST ASK GOLDER. 64#052146#6+10%1/2#0;6*#6#224'%+#6'5 #..174)4'#656#6'*#5611(('4T 51.76+105(+0&'4T Complex geology, extreme weather and remote locations are challenges enough. Add to that, social, environmental and regulatory issues and you can appreciate why mining is a challenge. For over 50 years and working within six continents, Golder has developed unique expertise in open-pit and underground mining, delivering sound solutions that maximize value and minimize risk. Engineering Earth’s Development, Preserving Earth’s Integrity. Canada 1 800 414 8314 North America 1 800 275 3281 Anchorage, Alaska 1 907 344 6001 [email protected] www.golder.com 999T%#4.+.'T$+<.ETLNNTHKLTELIG 6 PETROLEUM NEWS NORTH OF 60 MINING continued from page 5 TULSEQUAH the end of 2013 and, once established, the new access will be used to haul in the bulk of the material needed to complete the mill construction. “Following the road construction we will complete the mill and mine development and our tailings; and we should be commissioning sometime in 2015,” Boyle said. First US$60 million Anticipating the need to raise C$350 million to get Tulsequah Chief into production, Chieftain Metals cut a deal with Royal Gold Inc. in December to sell a portion of gold and silver produced at the future mine in exchange for up to US$60 million in upfront cash. Upon closing the deal, Royal Gold has agreed to pay Chieftain an initial US$10 million. The Denver-based royalty company will pay the remaining US$50 million as certain milestones are met during the development of the project. In return for providing the cash, Royal Gold has the right to buy 12.5 percent of payable gold produced at a future Tulsequah Chief Mine for US$450 per ounce for the first 48,000 ounces delivered, decreasing to 7.5 percent thereafter at US$500 per ounce. The royalty company will also have the opportunity to buy 22.5 percent of payable silver at US$5 per ounce up to 2,775,000 ounces, decreasing to 9.75 percent thereafter at US$7.50/ounce. Chieftain Metals President and CEO Victor Wyprysky said, “We are pleased to “Following the road construction, we will complete the mill and mine development and our tailings; and we should be commissioning sometime in 2015.” —Chieftain Metals COO Keith Boyle enter into this transaction with Royal Gold on the first anniversary of our IPO. Royal Gold’s commitment to the company highlights the value of the Tulsequah Chief deposit. This financing does not dilute shareholders and increases the project NAV. The purchase amount, achieved by monetization of a portion of our precious metals demonstrates the value inherent in the project. This transaction is an important first component in the project financing for the Tulsequah Chief development as we plan for mine construction commencement in 2012.” Payable metals Gold and silver are expected to make up about 46 percent of the net revenues from Tulsequah Chief, with the balance of the proceeds coming from base metals produced from the VMS deposit. Put into production as imagined in a preliminary economic assessment released by Chieftain Metals in June, a mine at Tulsequah would produce 45,000 ounces of payable gold and 1.4 million ounces of payable silver per year; or some 387,000 payable ounces of gold and 12.5 payable ounces of silver over the life of the mine. The PEA — prepared by SRK Consulting (Canada) Inc. — outlined the potential for 69,400 gold-equivalent ounces • Due Diligence Mineral Title Examination • Land Status Research • Digital Land Status Maps David S. Manzer, Landman Tel: (907) 563-8882 Fax: (907) 563-8883 [email protected] 5381 Tudor Top Circle Anchorage, AK 99507-1631 of production annually at a total cash cost (net of base metal byproduct credits) of negative US$365 per gold-equivalent ounce, based on 2,000 metric tons per day over a nine-year mine life. Zinc, at 29 percent, represents the largest single payable metal at the Tulsequah deposit — copper makes up 22 percent and lead contributes 3 percent. The PEA utilized a 2007 feasibility study as its technical basis and includes the indicated and inferred resources before the 2011 drill program. The Tulsequah Chief deposit is currently estimated to have an indicated resource of 6 million metric tons grading 1.42 percent copper, 6.44 percent zinc, 1.23 percent lead, 2.63-grams-per-metric-ton gold and 96 g/t silver. In addition, the deposit contains an inferred resource of 1.1 million metric tons grading 0.94 percent copper, 5 percent zinc, 0.93 percent lead, 1.63 g/t gold and 72 g/t silver. Big Bull, a deposit about 8 kilometers (5 miles) southeast of Tulsequah, contains a smaller resource. “There is excellent potential to discover new deposits to the southeast of the Tulsequah Chief deposit within rhyolite stretching between it and the Big Bull deposit, located 8 kilometers to the south,” SRK wrote in the report. Preparing for construction A 31,181-meter drill program that Chieftain wrapped up at the Tulsequah Chief property in September is expected to add tonnage to the mineral resources. The 82-hole program included 22,654 meters of drilling in and around the Tulsequah Chief deposit and 8,527 meters drilled at Big Bull. At Tulsequah, 50 underground holes were drilled to upgrade the resource and evaluate portions of the historical reserves left behind when Cominco Ltd. shutdown operations in 1957. Chieftain said these historical reserves are not included in the 2011 resource estimate. Highlights from the holes aimed at upgrading the 2011 resource include: • TCU11155 cut 8 meters averaging 4.98 g/t gold 143.6 g/t silver, 18.64 percent zinc, 0.27 percent copper and 2.09 percent lead; • TCU111156 cut 2.6 meters averaging 23.01 g/t gold, 472.27 g/t silver, 24.23 percent zinc, 4.09 percent copper and 5.07 percent lead; • WEEK OF JANUARY 22, 2012 • TCU11164 cut 13.9 meters averaging 4.51 g/t gold, 133.13 g/t silver, 6.28 percent zinc, 1.16 percent copper and 1.3 percent lead; • TCU11165 cut 18.1 meters averaging 3.07 g/t gold, 100.52 g/t silver, 9.48 percent zinc, 1.47 percent copper and 2.86 percent lead; and • TCU11176 cut 6.8 meters averaging 2.13 g/t gold, 72.85 g/t silver, 4.47 percent zinc, 1.33 percent copper and 0.67 percent zinc. Highlights from the holes aimed at confirming the 1957 reserve include: • TCU11190 cut 11 meters averaging 1.05 g/t gold, 55.88 g/t silver,6.05 percent zinc, 2.08 percent copper and 0.79 percent lead; • TCU11191 cut 29.1 meters averaging 0.68 g/t gold, 37.32 g/t silver, 11.89 percent zinc, 1.31 percent copper and 2.48 percent lead; • TCU11194 cut 9.8 meters averaging 1.95 g/t gold, 157.21 g/t silver, 16.09 percent zinc, 1.88 percent copper and 2.02 percent lead; • TCU11195 cut 17.7 meters averaging 1.99 g/t gold, 305.38 g/t silver, 16.02 percent zinc, 5.01 percent copper and 0.85 percent lead; and • TCU11200 cut 5.3 meters averaging 1.38 g/t gold, 200.39 g/t silver, 5.54 percent zinc, 1.88 percent copper and 1.08 percent lead. Based on the 2011 drilling, Chieftain is having the historical zones located in the upper portion of Tulsequah deposit re-modeled in hope of incorporating them into the new resource calculation due to be released with the 2012 feasibility study. On surface, 10 holes totaling 4,002 meters targeted shallower portions of the Tulsequah Chief and potential extensions of the deposit. Chieftain has yet to release assay results from the 22 holes drilled at the Big Bull deposit. Throughout the winter crews at Tulsequah will be working toward two goals; containment of potential acid generating materials and preparing the plant site for grading and foundation construction, which will begin in the summer. “I am pleased with the team’s ability to execute with speed, accuracy and efficiency. The winter work program will put us ahead of schedule so we can hit the ground running with full mine construction in the spring,” said Wyprysky. G PETROLEUM NEWS G • WEEK OF JANUARY 22, 2012 7 NORTH OF 60 MINING C O L U M N Miners see grade as king now, always Despite dire-sounding market signal and significant declines among other metals, gold price turned in strong performance in 2011 By CURT FREEMAN For Mining News A fter an extremely busy, productive year, the final weeks of 2011 and the first few weeks of the New Year were remarkably quiet for Alaska’s mining industry. But not to worry, it appears to be just a pause, while everyone catches their breath before heading into what promises to be another eventful year. While reading the plentiful (and sometimes bizarre) end of year reviews and forecasts, I came upon one that surprised me. In a Dec. 30 news release, Reuters noted that gold prices had formed the dreaded “death cross,” where the 20-day moving average gold price dips below the 200-day moving average gold price. The event signals a long-term decline in the gold price and suggests that further price erosion is coming in the near future. The event signals a general trend to sell rather than accumulate gold, for a myriad of reasons. To make its point, Reuters pointed out that the last time this occurred was in August 2008 when gold prices tickled the US$1,000 per ounce mark before deteriorating to US$680 per ounce after the worldwide economic crash of September 2008. To be fair, gold turned in a 10.1 percent gain for 2011, a rate of return bested only by U.S. and German 10-year treasury notes and Brent crude oil. To be even more fair, other metals did not do so well, with silver returns declining by 10.2 percent (worse than Italian 10-year bonds, ouch!) while copper headed farther south, dropping a whopping 21.3 percent for the year. And then there were the rare earth metals, whose prices have plummeted 25-50 percent since their stratospheric levels at the start of the year. So what does this mean to the mining industry in Alaska? Same thing it has always meant: the higher the grade of the ore, the better the chances of reaching and staying in production. Put another way, grade is king (and likely always will be)! Western Alaska FIRE RIVER GOLD CORP. announced revised resource estimates at the Nixon Fork mine. Using a 10-gramsper-metric-ton gold cutoff, indicated resources now stand at 129,060 metric tons grading 24.9 g/t gold (103,438 ounces) and inferred resources are 53,980 metric tons grading 28.0 g/t gold (48,545 ounces). The resources were calculated using 24,800 meters of drilling conducted in 2010 and 2011. Resources were expanded in the 3,000, 3300 and 3550 zones. The resources do not include 6,200 ounces recovered from The author The author Curt Freeman, CPG #6901, is a well-known geologist who lives in Fairbanks. He prepared this column CURT FREEMAN Jan. 16. Freeman can be reached by mail at P.O. Box 80268, Fairbanks, AK 99708. His work phone number at Avalon Development is (907) 457-5159 and his fax is (907) 455-8069. His email is [email protected] and his website is www.avalonalaska.com. 11,300 metric tons grading 17.1 g/t gold since mine start-up on July 4, 2011. Interior Alaska MILLROCK RESOURCES INC. announced modifications to its option agreement with CRESCENT RESOURCES CORP. on the Uncle Sam gold project in the Goodpaster District. Instead of issuing 18 percent of its issued and outstanding shares by the first anniversary of the option agreement, Crescent is now required to issue 1.5 million shares by the first anniversary of the option agreement and 2.6 million shares by the earlier of the second anniversary of the option agreement or the date upon which Crescent elects to exercise the option. In addition, Millrock has been granted the right to participate in any future equity financing of Crescent to maintain the same equity interest it holds in Crescent immediately prior to such equity financing. Crescent spent about US$2.3 million on the project in 2011 conducting soil sampling and 1,950 meters of diamond drilling. ENDURANCE GOLD CORP. announced that it acquired an option from a private vendor to earn 100 percent interest in the Elephant Mountain property in the Rampart-Eureka-Hot Springs mining district. The property was explored for gold by PLACER DOME and NORTH STAR EXPLORATION which reported a goldarsenic soil geochemical anomaly over an intrusive body that extends for at least 6,000 feet and up to 1,500 feet wide, with peak values in soil samples up to 1,540 parts per billion gold. Significant drill results from Placer Dome’s work include 0.015 ounces per ton gold over 326 feet. In the drill holes, gold mineralization is associated with arsenopyrite and native gold in quartz vein stockworks in a silicified and sericite altered intrusive. The intrusive host is a Cretaceous-aged diorite to granite pluton that intrudes quartzite, siltstone and shale. Under the terms of the letter agreement, Endurance can earn 100 percent interest in the Elephant Mountain property by completing a total of US$200,000 in exploration expenditures, making cash payments of US$200,000 and delivering 400,000 Endurance common shares by Dec. 31, 2017. The option is subject to a 2 percent net smelter royalty and Endurance can purchase half of the royalty at any time. Alaska Range CORVUS GOLD and joint venture partner OCEAN PARK VENTURES CORP. announced the discovery of the Jolly Green zone, a new high-grade gold-silver-copper discovery at its Golden Range prospect on its Chisna project in the Slana District. The Jolly Green zone is characterized by widespread copper staining of sheared, quartz-arsenopyrite veined quartz diorite host rocks. Gold values ranged from 1 to 126.5 g/t gold and were accompanied by silver values ranging from 25.7-198grams-per-metric-ton silver and 0.4-17.7 percent copper. Preliminary mapping in 2011 extended the strike of mineralization for 300 meters with mineralization open along strike. Additional work is planned for 2012 prior to drill testing. The company also released results from other exploration work, including the Corazon target bedrock trench CZ-TR01 which encountered 7.5 meters of 3.3 g/t gold and 4.6 g/t silver, the Matador target drill hole GR-11-08, which encountered 2.7 meters grading 681 g/t silver, and the City target drill hole GR11-01 which returned 0.7 meters of 6.2 g/t gold and 6.7 g/t silver. ALIX RESOURCES CORP. announced results from the remaining drill holes completed in 2011 at Golden Zone gold-silver-copper property in the Valdez Creek District. Low grade gold mineralization was encountered in three holes completed at the GAS prospect and four holes completed at the Long Creek prospect. One hole was completed at the BLT zone prospect and encountered three intervals of elevated gold mineralization, including 4 meters grading 0.77 g/t gold, 4.5 g/t silver and 0.03 percent copper, 27.7 meters grading 0.23 g/t gold, 0.93 g/t silver and 0.03 percent copper, and 4.8 meters grading 0.18 g/t gold, 0.52 g/t silver and 0.02 percent copper. The company also announced that stream sediment sampling identified anomalous gold, silver, bismuth, copper lead and antimony in the undrilled Long Creek South and Geoff’s Anomaly prospects. PURE NICKEL INC. announced results from its 2011 exploration program at the MAN project, Alaska. The property is currently under a joint venture agreement with ITOCHU CORP., which has invested about US$17 million in exploration expenditures and vested a 30 percent interest. The 2011 work program completed 2580 meters of drilling in 11 holes a total of 151 line kilometers of detail ground magnetometer surveys, and 6.9 line kilometers of ground electromagnetic surveys. The majority of exploration work completed in 2011 focused on the Alpha mafic-ultramafic complex where the potential for “reef-” style platinum group element mineralization was encountered in previous drilling. The mineralization was associated with a distinctive gabbro/pyroxenite sequence interpreted as discrete layers in the complex. During the 2011 program, three holes targeting the potential reef successfully intersected the correct lithological sequence, but assay results did not confirm the presence of economic concentrations of platinum group elements. In addition, drilling was conducted on the Tres Equis massive sulfide prospect and hole PNI-058 intersected 0.21percent copper and 0.65 percent nickel over 0.91 meters. The partners also tested the Rainy complex for the first time and hole ER-11-02 encountered disseminated sulfides at several depths, with anomalous platinum group element values of up to 650 parts per billion over 2.52 meters. BRIXTON METALS CORP. announced that it had terminated its option with MILLROCK RESOURCES INC. on the Kahilt project in the Kahiltna District. Millrock retains 100 percent interest in the project. Results from the 2011 program conducted by Brixton were not released. Southeast Alaska UCORE RARE METALS announced results of reconnaissance sampling on its see FREEMAN page 8 1972-2012 40 8 NORTH OF 60 MINING G C O L U M N Mining critics call for reform – again America’s modern hardrock mining industry is safe, environmentally sound; repeal of General Mining Law of 1872 is unlikely By J. P. TANGEN For Mining News I continued from page 7 FREEMAN Ray Mountains alluvial rare earths elements and tin property holdings in central Alaska. Potentially economic grade concentrations of these metals were identified in the upper Kilolitna River, the Ray River and No Name Creek. Each of these drainages returned a threshold of at least 0.15 kilograms per cubic meter of rare earths elements and/or tin, along with byproduct concentrations of tungsten, zirconium, niobium, and tantalum. Locally samples contain up to 1 kilogram per cubic meter each of tin and rare earth elements in the extensive floodplain of the Ray River. Mineralized sediments from No Name Creek and the Caribou Heights prospects contain up to 9 kilograms of tin per cubic meter. Samples consisted of heavy mineral concentrates composed primarily of ilmenite with cassiterite, monazite with lesser xenotime, zircon, wolframite (ferberite endmember), and trace amounts of allanite, scheelite, and yttrofluorite. The concentrates contain up to 50 percent tin, up to 10 percent total rare earth elements and 0.01-1.0 percent tungsten, tantalum and niobium. The heavy rare earth elements make up 15-25 percent of the total rare earth element component, except for samples from No Name Creek which delivered up to 60 percent heavy rare earth elements in the total rare earth component. G t is axiomatic that the price of liberty is eternal vigilance, and we who stand watch over America’s mining industry know all too well that there is little the Detractors would rather do than to shut down this and all other basic manufacturing sectors. Witness a recent op-ed in the New York Times wherein Alaska’s very own Carol Ann Woody advocated doing away with the General Mining Law of 1872 because, among other reasons, the Kensington Mine was allowed to go forward. Now I have not personally made the acquaintance of Ms. Woody, and I am sure her mother or someone loves her, but from my vantage point, using Kensington as a justification for condemning the General Mining Law is, at a minimum, disingenuous. The Supreme Court of the United States found that the disposal of tailings in Lower Slate Lake was permissible under the Clean Water Act. The legal system worked. Yet Ms. Woody wants to tear down the law; and, unsurprisingly, the “Old Gray Lady,” America’s newspaper of record, saw fit to give her print space. Every recent decade has seen the barbarians lay siege at the gates of this venerable fountain of wealth, without success. It seems that no matter how the justifications are cast, the critics of mining continue to believe it to be their god-given duty to deprive our nation (and our state) of the ability to liberate valuable mineral products from the public lands. The arguments are trite and unconvincing. Mining, especially mining for the locatable minerals covered by the General Mining Law, is environmentally sound and provides safe and well-paying jobs for nearby communities with the concomitant associated multiplier. Mining doesn’t pollute, lives are rarely lost or even placed at risk, reclamation is comprehensive with no footprint left behind, and regulatory oversight is exhaustive. The shop-worn arguments against modern hard-rock mining simply do not make the case. From a public policy point of view, Mining & the law The author, J.P. Tangen has been practicing mining law in J.P. TANGEN Alaska since 1975. He can be reached at [email protected] or visit his Web site at www.jptangen.com. His opinions do not necessarily reflect those of the publishers of Mining News and Petroleum News. repeal would accomplish little and risks great harm. America’s institutions are globally unique. Among those institutions is the General Mining Law. Elsewhere, minerals in the ground belong to the sovereign, but in America, they belong to the finder. The deposits, vast and tiny, of gold and silver and lead and copper that have been developed over the past century and a half in the United States have made it possible to plumb and power the nation’s cities and towns, from Key West to Kotzebue. The iPads and Priuses, so integral to our modern lifestyle, would not be possible without the metals derived by our nation’s modern mining industry. Environmentalism, as a social movement, runs on tracks of domestically produced metal. One would think that mining would be among the last things that social activists would be keen on suppressing. How would the message get out but for computers and telephones? How would the rallies occur but for cars, bikes, buses and trains? How would protest signs and leaflets be made without ink, paint, printers and tacks? Virtually all of us use unbounded quantities of metals every day and many of those metals are derived from America’s mines. More to the point, however, many of those products were developed because of the availability of cheap metal in the United States as the result of the national policy to recover mined metals from the forests and public domain. see TANGEN page 9 A HIGH-GRADE OPPORTUNITY IN ALASKA Heatherdale Resources Ltd. is advancing two volcanogenic massive sulphide (VMS) properties in Alaska – the advanced-stage, high-grade Niblack Project on Prince of Wales Island and the Delta Project near Tok. For more information, visit us at www.heatherdaleresources.com 15th Floor - 1040 W. Georgia Street Vancouver, BC, Canada V6E 4H1 +1.604.684.6365 1.800.667.2114 PETROLEUM NEWS G B O O K • WEEK OF JANUARY 22, 2012 9 NORTH OF 60 MINING R E V I E W If fighter pilots can do it, so can you By ROSE RAGSDALE For Mining News A fter seeing the movie “Top Gun” some years ago, I’ve often wondered what the U.S. military could be thinking to turn over $30 million fighter jets, not to mention world peace in many cases, to the dubious discretion of testosterone-laden young men. “The Debrief Imperative,” is a new management manual written by a former fighter pilot and his business partner. Subtitled “Fighter Pilots and The Secret Tool That Is Transforming Businesses The World Over,” the book was written by best-selling author James D. Murphy and William M. Duke. In a quick read – only 99 pages, plus 20 pages of glossary, index and other add-ons – the book provides valuable insight into the methods behind the military’s peculiar form of madness. “Through the early 1970s the military fighter pilot community struggled to improve its combat effectiveness in the sky. It wasn’t until we discovered the power of effective debriefing that we cracked the code and started executing nearly flawlessly,” said Murphy in a statement announcing publication of the book. “As former fighter pilots, our job is to help businesses execute their missions, so, we refined the debrief process and began to teach it continued from page 8 TANGEN The campaign to change the General Mining Law once again will probably gain some traction over the next several years. The Carol Ann Woodys of the world will not be stifled, nor should they be. Mining in America, however, is here to stay. New metal deposits in Alaska will continue to be found and explored and brought into production. New jobs in remote areas will continue to be created, new schools and churches will be built, and new infrastructure will be required. Alaska is lucky to have vast lands owned by Native regional corporations and the State available for mining in addition to extensive federal land, but the culture and skills of miners are not dictated by whether the land is privately or publicly held. The brave men and women, who “moil for gold” and other metals, will continue to provide. The Detractors may take their best shot, but after three unsuccessful attempts over the past 30 years to unseat this great American institution, they perhaps would be wise to redirect their fire. G SUPPORT SERVICES EXPERIENCE EXCEPTIONAL CONTRACT PERFORMANCE Fuels management Facility support Remote site maintenance, catering, personnel and administrative services chiulista.com A PROUD SUBSIDIARY OF C A L I S TA C O R P O R AT I O N + calistacorp.com + to corporate America. The improvements that we’ve seen have been incredible.” Murphy also wrote “Business is Combat” and “Flawless Execution,” and is considered an expert in organizational execution. Through his business, Afterburner Inc., he has taught the techniques that he learned as a 20-something fighter pilot to executives in the world’s top corporations. Duke is the director of learning and development at Afterburner, Inc. and also currently serves as a senior human resources officer for the U.S. Navy Reserve. “We have been fortunate to share the method with more than a million professionals, which can work in the boardroom, the emergency room, or the battlefield. This method is tried and true to its roots from SEAL Team SIX to the cockpit of the F-22. We need to share this important process with as many people as we can,” he said. At the same time, “Debrief ” provides compelling ideas and advice on how to successfully guide a team, an organization, or even a mining operation through a veritable thicket of pitfalls and missteps to not only learn from its mistakes but also to thrive in an see DEBRIEF IMPERATIVE page 10 COU RTE SY OF FAS TPE NCI L, INC . Tidy management manual offers insights into the world of ‘Top Gun’ military training, while providing concrete business guidance “The Debrief Imperative offers concrete guida nce on how individuals , teams, and organizatio ns can learn from their mistakes.” -Donald Sull, Professor of Management Pract ice London Business Schoo l The Secret Tool that is Transforming Businesses the World Over James D. Murphy William M. Duke 10 G PETROLEUM NEWS NORTH OF 60 MINING • WEEK OF JANUARY 22, 2012 A L A S K A Junior turns up Golden Range of targets Ocean Park geologists find 126.5 g/t gold, 17.7 percent copper and 681 g/t silver across a 12-km trend at Chisna in eastern Alaska OCEAN PARK VENTURES CORP. By SHANE LASLEY Mining News O cean Park Venture Corp.’s 2011 exploration at the Chisna project in eastern Alaska has revealed Golden Range, a district-scale iron-carbonate zone rich in gold, copper and silver. Grab samples from this iron-carbonate zone that has now been traced for more than 12 kilometers (7.5 miles) have returned assays as high as 126.5 grams per metric ton gold and 17.7 percent copper; and one drill intercept averaging 681 g/t silver over 2.7 meters. Optioning the Chisna property from Corvus Gold Inc. (International Tower Hill Mines Ltd.) late in 2009, Ocean Park launched a C$6.2 million exploration program in 2010 focused on Grubstake, a porphyry copper-gold target located on the southeast end of the Chisna land. “The drilling (at Grubstake) was not of strong immediate interest. There were locally good gold-mineralized structures that cut that porphyry system, but it wasn’t the type of target that we felt we wanted to put more drilling into at the moment,” Ocean Park Vice President of Exploration Chris Taylor told Mining News. Although the 5,000-meter drill program carried out in 2010 failed to tap the economically viable mineralization targeted, a reconnaissance team led by Ocean Park geologist Nadia Caira turned up a number of other promising targets across the 914-square-kilometer (353square-mile) property. The most intriguing of these was Golden Range. “We like what we see at the Golden Range so much that my preference is to keep the drills focused there,” Taylor see GOLDEN RANGE page 11 continued from page 9 DEBRIEF IMPERATIVE environment of continuous improvement. “Every manager understands that organizational learning is critical for success in today’s volatile markets. But few know how to squeeze insight and improvement out of experience,” said Donald Sull, Professor of Management Practice, London Business School. While many of the underlying concepts of “Debrief ” can be found in numerous weightier organizational management texts, this little book gets to the heart of the matter without getting bogged down in theory or jargon. “The Debrief Imperative” was published by FastPencil Marketplace in print and digital formats and was expected to be available in major bookstores and online retailers by New Year’s 2012. It is also available in paperback in FastPencil’s Marketplace for $14.95 – as well as ebook format for $9.99: http://www.fastpencil.com/publications/20 18-THE-DEBRIEF-IMPERATIVE G 29 Cu 63.55 World-class project. World-class science. Pebble is a world-class copper deposit and one of North America’s most significant copper discoveries. Since 2001, more than 500 independent scientists and technicians have conducted one of the most extensive environmental studies program in Alaska. The Pebble Partnership is committed to responsible resource development in Southwest Alaska — recognizing that a world-class project requires world-class science. ww w. p eb b l ep ar t nershi p.com PETROLEUM NEWS • WEEK OF JANUARY 22, 2012 NORTH OF 60 MINING OCEAN PARK VENTURES CORP. continued from page 10 GOLDEN RANGE explained in September. “This year we plan to demonstrate that we have a very interesting, very significant gold-bearing system present on that target.” Notch, the gold-bearing system of which Taylor spoke, was one of four goldsilver prospects that Ocean Park targeted with its 2,800-meter late season drill program. Testing Notch In early November the junior released the first round of drill and trench results from its 2011 exploration program at Golden Range. Six drill holes and four surface trenches were completed at the Notch target to test a 50-meter-thick shear zone that has been mapped for 1,000 meters along strike and remains open to the west. “The combination of the drilling and trenching at Notch was the main focus of the work we did this year,” Taylor told Mining News Jan. 17. This structural zone was targeted as two similar but separate areas, Notch East and Notch West, divided by a talus slope with no bedrock exposure. • Hole GR-11-09, drilled at East Notch, cut 6.8 meters averaging 4.49 grams per metric ton gold within a 15.8meter intercept that averages 3.19 g/t gold and 1.93 g/t silver; • GR-11-015, also drilled at East Notch, cut 5.1 meters averaging 4.57 g/t gold within a 16.9-meter intercept grading 1.99 g/t gold; and • GR-11-13 returned 44.9 meters of 0.34 g/t gold and 0.68 g/t silver. GR-1114 returned 0.4 g/t gold over 37.5 meters. Ocean Park said surface trench results are of similar tenor to drill intercepts. • Trench EN-TR-01, dug at East Notch, revealed 47 meters averaging 1.01 g/t gold and 1.27 g/t silver. • Trench EN-TR-03, also at East Notch, revealed 5 meters of 13.21 g/t gold and 6.09 g/t silver within an 11-meter intercept averaging 6.48 g/t gold and 3.2 g/t silver. Combined, the drill and trench results suggest good continuity of mineralization from surface to more than 250 meters down dip. Higher grade gold mineralization is concentrated in more strongly altered intervals within the regional shear zone. Ocean Park Ventures Corp. geologists have traced Golden Range – an iron-carbonate zone rich in gold, copper and silver – for more than 12 kilometers (7.5 miles) along strike. Grab samples taken from the Green Zone during late season prospecting returned assays of 126.5 g/t gold and 17.7 percent copper. The results of the 2011 exploration indicate the two zones are both part of the same gold-mineralized structure that stretches for at least 1,000 meters along strike. Notch will be a target of definition drilling when Ocean Park returns to the property in 2012. Green Zone While Notch is an exciting target for the upcoming drill season, the Green zone may be the most exciting discovery of the 2011 exploration program at Golden Range. Earning its name from the extensive copper staining that led geologists to the prospect, the Green zone was a late season discovery. “When we finished off the work for the season we started working in what would be the current northwest extent of the Golden Range and we found this really high-grade copper-silver-gold mineralization sitting there,” Taylor explained. Highlights from the Green zone sampling program include: • H271989 averaged 126.5 g/t gold, 129 g/t silver and 0.4 percent copper; • H262393 averaged 28.2 g/t gold, 198 g/t silver and 5.1 percent copper; and • H262397 averaged 3 g/t gold, 144 g/t silver and 17.7 percent copper. Of the 29 grab samples collected from this high-grade gold-silver-copper discovery, 16 returned assays topping 1 g/t gold; 90 percent returned assays of more than 0.1 percent copper; and most also contain high-grade silver. While some of the geologists that worked at the Green zone believe it has porphyry association, Taylor is reserving judgment until the zone is more thoroughly investigated. Defined by strong copper-iron gossans, geologists were able to map the Green zone for about 300 meters along strike before winter weather ended the 2012 exploration. Ocean Park said it plans to continue the mapping and geochemical testing of this high-grade copper-gold-silver prospect in advance of a drill program slated for 2012. More targets City, Matador and Corazon were three additional Golden Range prospects Ocean Park investigated with trenching and drilling in 2011. The company said the veined quartz-arsenopyrite mineralization found in these zones is consistent to what it encountered at Notch. Highlights from these Golden Range zones include: • Hole GR-11-08, drilled at Matador, encountered 2.7 meters grading 681 g/t 11 silver; • Trench CZ-TR-01, excavated at Corazon, cut 7.5 meters averaging 3.3 g/t gold and 4.6 g/t silver; and • Hole GR-11-01, drilled at City, returned 0.7 meters of 6.2 g/t gold and 6.7 g/t silver. “The 2011 exploration results from the Golden Range target area have highlighted a new and significant district scale gold discovery with numerous high-grade gold and silver targets which have returned encouraging results. In addition, the continuity and intensity of the surface soil and rock mineralization at Golden Range is very encouraging for the presence of a major precious metal deposit,” Corvus CEO Jeff Pontius commented on Ocean Park’s 2011 discoveries. “The continued porphyry association for mineralization in the belt, such as the recent Jolly Green discovery, continues to offer significant potential for new copper-gold discoveries as well. We at Corvus look forward to our partner’s further work on this exciting new Alaskan gold discovery.” Ocean Park can earn an initial 51 percent interest in Chisna from Corvus by spending US$20 million on exploration by 2015. It can increase its stake in the expansive property to 70 percent by completing a positive feasibility study within 5 years of the initial earn-in. Though final numbers are still being calculated, Ocean Park spent around US$3.5 million on 2011 exploration at Chisna. Combined with its 2010 work, the junior has spent about US$9.7 million, or about half its initial earn-in. The Ocean Park Board of Directors have yet to outline the size and scope of the 2012 program, but Taylor, who does not sit on the board, believes the upcoming program will focus on expanding Notch and investigating the exciting copper-silver-gold discovery made at Notch. “Because we have this high-grade polymetallic mineralization at the Green Zone, I believe the board will see that as a highly attractive target, and they will want to follow up on that and the drilling we did at Notch, those were very nice preliminary results,” Taylor said. “If I had to anticipate what we are going to be doing next year (2012 season), I would say it’s going to be followup drilling on the Notch and the Green zone – the other targets probably as time permits,” the exploration VP added. G ENGINEERING PROVIDING A WIDE RANGE OF PROFESSIONAL ENGINEERING SERVICES Civil engineering services IT services Precision Measurement Equipment Laboratories (PMELs) yulista.com/y-tech A PROUD SUBSIDIARY OF C A L I S TA C O R P O R AT I O N + calistacorp.com + 12 G PETROLEUM NEWS NORTH OF 60 MINING Y U K O N • WEEK OF JANUARY 22, 2012 T E R R I T O R Y Giant mine development looms on horizon Retooled junior turns sharpened focus on next steps in bringing the Casino copper-gold-molybdenum-silver deposit into production WESTERN COPPER AND GOLD CORP. By ROSE RAGSDALE For Mining News I n the shadow of two new producing mines and startup of a gold mine on the near-horizon, a mega-mine project is quietly taking shape in a remote area of central Yukon Territory. The sprawling Casino property, where Western Copper and Gold Corp. has spent the past five years aggressively exploring and defining a huge copper-gold-molybdenum-silver resource, is proving to be an attractive venture that could transform the territory’s mining industry, delivering within the next few years 1,800 construction jobs over four years and up to 600 mine jobs for at least 23 years. The Vancouver-based junior is hoping to put finishing touches on its development plans in 2012 and bring the Casino Project before Yukon regulators for permitting. “We’re pushing toward completing a feasibility study and getting our permitting application in to YESAB by the end of 2012 or at least by early 2013,” Western President and COO Paul West-Sells told Mining News Jan. 12. YESAB, or Yukon Environmental and Socio-economic Assessment Board, is the regulatory body that oversees the environmental and socio-economic assessment process for mine projects under Yukon’s laws. The permit application would be the first step in Yukon’s environmental assessment process, which, if all goes well, is expected to require two years to complete. Clarified focus The 1-billion-metric-ton Casino copper-gold-molybdenum-silver deposit blankets several hills in central Yukon Territory just east of the White Gold mining district where gold exploration has intensified in recent years. The deposit also may have an additional substantial resource at depth that could more than double the project’s current estimated 23-year mine life. Western’s new sense of purpose may be a product of its decision in August to split its assets into three separate companies, spinning out the nearby Carmacks Copper Project and the Redstone Project in Northwest Territories into Copper North Mining Corp., and several assets in southern British Columbia into NorthIsle Copper and Gold Inc., while retaining and intensifying its focus on the Casino Project. “This spin-out arrangement should work to better define the value of the excellent portfolio of assets we have in Western Copper (Corp.),” Dale Corman, the company’s chairman and CEO, said when he announced the spin-out agreement Aug. 19. “And after the spin-out, with Casino as the sole asset in the company, we believe that a name change to ‘Western Copper and Gold’ better reflects the significant amount of gold contained in Casino and the high percentage that gold contributes to the project’s revenue.” Big mine potential The Casino project is indeed big. As currently envisioned, it will be the largest mine in Yukon Territory and one of the largest of its kind in Canada when it achieves full production. It is also considered one of a handful of large copper-gold deposits in the world. “It’s an astounding asset that the Yukon has, and we’re really excited about bringing it to production,” said West-Sells. Yet Casino also has been described as being a “baby Pebble,” a moniker that reflects the similarity of its mineralization to that of the mammoth Pebble copper-goldmolybdenum project located in Southwest Alaska. Pebble currently boasts at least 11 billion metric tons of measured, indicated and inferred resources, containing 80.2 billion pounds of copper, 107.4 million ounces of gold and 5.6 billion pounds of molybdenum, along with commercially significant amounts of silver, rhenium and palladium. Casino, on the other hand, hosts about 1 billion metric tons of proven and probable reserves within some 2.7 billion metric tons of mineable material that contains roughly 10 billion pounds of copper, 18 million ounces of gold, 500 million pounds of molybdenum and 61 million ounces of silver, according to West-Sells. At a mill rate of 90,000 metric tons per day, the mine would produce average annual output of 252,000 metric tons of coppergold-silver concentrate and 10,000 metric tons of molybdenum concentrate, along with gold doré from about 44 million metric tons of ore. Altogether, Casino is expected to produce about 500,000 ounces of gold annually. Yet there may be even more value in the project. “We’re actually currently working toward an engineering study that looks at deeper material that couldn’t be included in the prefeasibility study,” West-Sells said. Engineers believe this deep resource could more than double Casino’s mine life, extending it to 50 years from the 23 years currently outlined in the prefeasibility study. Feasibility study under way Western formally initiated a bankable see CASINO PROPERTY page 13 PETROLEUM NEWS • WEEK OF JANUARY 22, 2012 continued from page 12 CASINO PROPERTY feasibility study for the Casino project Jan. 16 by announcing that M3 Engineering & Technology Corp. of Tucson, Ariz., will perform the work. M3 is the same firm that updated a 2008 prefeasibility study for the project in May 2011. The feasibility study will rely on the updated findings, but it will further update and better define costs outlined in the prefeasibility study, which forecasts that the Casino project will have an after-tax, 8 percent discounted net present value of C$963 million and an after-tax internal rate of return of 16.2 percent at conservative long-term commodity prices. The feasibility study also will incorporate an option for obtaining a supply of liquefied natural gas from Fort Nelson, B.C., to power the mine project and results of new metallurgical testing that is currently under way. The feasibility study will cost an estimated C$5 million. “Western’s plan is to progressively de-risk the Casino project, and this will continue with the feasibility study, expected to be complete in 2012,” Corman said in announcing the start of the feasibility study. A comprehensive geotechnical field program to support the feasibility study was completed by Knight Piesold over the past summer. The program included geotechnical site investigations for the mine site facilities (plant site, tailings management facility, and heap leach facility), open pit, air strip and access road. About 3,300 meters of drilling, some 180 test pits, and a geophysics program were carried out as part of the work. A metallurgical test program got under way at the beginning of November at G&T Metallurgical under the direction of International Metallurgical and Environmental Inc. and FLSmidth, Inc. It is on track to be completed during the first quarter of 2012. The goal of the metallurgical program is to provide engineering data to support preparation of the feasibility study, optimize the process design, and reduce the project capital and operating costs. LNG supply advantages One of the major feasibility study focus areas is defining a liquefied natural gas supply for the Casino project. Western has partnered with Yukon Energy Corp., Yukon’s crown energy utility, to evaluate alternative strategies to supply LNG to the Yukon and the Casino project. Berger-ABAM and Breamar-Wavespec, have been engaged as lead consultants to evaluate LNG supply chain options. The study has established that the best-value supply chain alternative is to construct a fit-for-purpose LNG liquefaction facility in the vicinity of Fort Nelson, B.C., and to truck LNG to the Yukon from this facility. The estimated cost of LNG delivered to Casino, as determined by the recent study, is consistent with the cost of fuel used as the basis for the pre-feasibility study. The proposed mine project includes a power island consisting of two gas turbine generators complete with heat recovery boilers and a single steam-driven generator, and internal combustion engine-driven generators for a total NORTH OF 60 MINING installed generation capacity of 149 megawatts. LNG will be imported to the site and gasified to provide natural gas to fuel the power generation plant. In the event that an Alaska-Canada natural gas pipeline is constructed, the project may elect to connect to this pipeline to supply natural gas directly for power generation. West-Sells said importing LNG to Casino for power will cost about 11 cents per kilowatt-hour, and that compares favorably with a cost of 20-30 cents/kwh to use diesel to generate power. LNG is also “a low-carbon option” that fits well with the recent “groundswell” of LNG development activities in western Canada,” he observed, after noting that new LNG facilities have been built recently, or are being developed in Kitimat, B.C., and Calgary. West-Sells said providing energy for big projects in the North has always been a challenge, but potential gas suppliers can assess providing an LNG supply for both Yukon Energy and the Casino project together, which should improve the economics by combining the two loads. Western and Yukon Energy recently held encouraging, exploratory discussions with potential natural gas and LNG providers, including several large gas suppliers in northeastern British Columbia. Western received four formal expressions of interest, West-Sells said. The opportunity to out-source the supply of LNG will continue to be explored through the first quarter of 2012, and Western expects to include a cost estimate for the LNG supply based on a proposal from one of the four companies in the feasibility study. Consulting the First Nations Western is also stepping up the engagement process with the three First Nations in Yukon likely to be most affected by the Casino Project. They are the Selkirk First Nation, which holds as traditional territory the 13,124 hectares (32,249 acres) where Casino’s 705 full and partial active claims are situated. The Minto copper-gold mine is also located in Selkirk traditional territory. The Tr’ondëk Hwëch’in First Nation holds traditional territory directly to the north of the Casino property, and the Little Salmon River First Nation, holds traditional territory to the southwest across which Western is building a 120-kilometer (74.5 miles) all-weather service road to connect the project to the existing Freegold Road. Among other functions, the road will be used to truck concentrate to the Port of Skagway in Alaska where it will be loaded onto oceangoing carriers for transport to refining facilities. Western has retained Knight Piesold Ltd. to lead the final preparation of an application to YESAB, and Knight Piesold will direct the team of consultants that have worked with the project since 2008, collecting baseline environmental data and developing the project description, closure plans, and other key information that will form the basis of the YESAB application. Though the exploration company has been working with the First Nations since 2008, especially with the Selkirk First Nation, West-Sells said Western intends to intensify its activities in 2012 in preparation for the per- 13 mitting process by listening to the concerns of the First Nations and addressing those concerns. He said this process will likely include the drafting of impact and benefits agreements with the three First Nations. “We see 2012 as a bigger year for this process,” he said. Ambitious mine design The Casino Project is designed to become an open-pit mine and concentrator complex with sulphide ore facilities capable of processing 120,000 dry metric tons per day or 43.8 million dry metric tons per year. About 859 million metric tons of ore will be mined and processed through the concentrator directly in the first 20 years, after which an additional 117 million metric tons of lower grade material will be reclaimed from stockpile and milled during the last four years of the mine’s current 23year life for a total of 975.8 million metric tons of reserves processed through the concentrator over the life of the mine. Ore grade to the sulphide process plant is estimated to average 0.202 percent copper, 0.238 grams per metric ton gold, 0.0229 percent molybdenum, and 1.73 g/t silver. Ore to be milled will be transported from the mine to a primary crusher by off-highway haulage trucks. Mineral concentrates of copper and molybdenum will be produced by conventional flotation technology. The gold and silver will report in the copper concentrate and will be recovered in the smelting process resulting in credits to Western. Gold contained in the sulphide fraction of the flotation tailings will be recovered by leaching and CIL processing. In addition to the concentrator, there will be a separate carbon column operation for oxide ore. Oxide ore will be trucked from the mine to a run-of-mine heap leaching facility, from which gold and silver bullion (doré) produced will be produced and shipped by truck to metal refineries. The design basis for oxide ore processing is 25,000 t/d. About 81.6 million metric tons of ore (reserves) will be mined during the seven years of the heap leach project. The overall oxide ore grade is estimated to average 0.370 g/t of gold, 2.55 g/t of silver, and 0.041 percent copper. Copper will be recovered, as a precipitate, by the SART process to control the quality of the leach solution. This precipitate will be shipped to smelters with concentrate from the sulphide processing. Tailings deposition will begin with two high-capacity tailings thickeners with gravity flow to a sand plant at a tailings management facility. The tailings will be cycloned and the coarse fraction used for dam construction. A starter dam will be constructed from borrowed material, mine overburden, and material from site development. The prefeasibility study assumes fresh water will be sourced from wells and segregated fresh water impounded in the tailings facility. In addition to the service road, Western intends to build a new airstrip for the mine to accommodate appropriately sized aircraft. The existing airstrip will be razed in preparation for grading for process facilities. Western hopes to complete the permitting process in 2015 and has targeted heap-leach gold production in 2017 and mill production by 2019. G CONSTRUCTION A New Era in Remote Site Access OUR CUSTOMER SERVICE AND EQUIPMENT NEVER FALL SHORT OF SUPERB Rental and sales of new and used construction equipment Equipment repairs, parts and service In business since 1945 yukoneq.com Safe, Professional, Experienced & Ready to Fly HUDKHOLFRSWHUVFRP A PROUD SUBSIDIARY OF C A L I S TA C O R P O R AT I O N + calistacorp.com + 14 G NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JANUARY 22, 2012 A L A S K A Port interests more potential users Strategic location, Minto’s success attracts new shipper, inspires other mine developers to include Skagway in their future plans WESTERN COPPER AND GOLD CORP. By ROSE RAGSDALE For Mining News O ne byproduct of the recent revival of the mining industry in Yukon Territory is the ongoing success of the rehabilitated Skagway Ore Terminal at Alaska’s Port of Skagway. Originally built in 1968 to accommodate ore shipments form Yukon’s Faro lead-zinc mine, the terminal closed in 1997 after the Faro Mine ceased operations due to unfavorable market conditions. Purchased by the Alaska Industrial Development and Export Authority from White Pass Railway in 1993, the terminal, after substantial renovation, resumed shipping ore concentrates from the Yukon in October 2007, specifically from the Minto copper-gold-silver mine developed by Capstone Mining Corp. (formerly Sherwood Copper Corp.) AIDEA’s board of directors approved negotiation of an amendment to the user agreement with Capstone’s subsidiary, Minto Explorations Ltd., to provide additional storage capacity in October 2008. The building extension (14,000 square feet) was substantially complete mid-December 2008. AIDEA financed the Minto/Capstone upgrades for a total of US$14 million to be reimbursed by tenant fees over a seven-year period. Capstone pre-paid the outstanding balance of $8.5 million (plus a pre-payment fee) in December 2010. In 2008, the first full year of loading concentrates from the mine, Minto shipped 28,690 dry metric tons of ore concentrate This a conceptual rendering of the Skagway Ore Terminal after it is expanded to accommodate shipments of concentrate from the huge Casino copper-gold-molybdenum-silver project once it begins production, currently anticipated in 2019. The proposed mine would produce average annual output of 252,000 metric tons of copper-gold-silver concentrate and 10,000 metric tons of molybdenum concentrate, along with gold-silver doré from about 44 million metric tons of ore. via oceangoing barges through the terminal. Since then, the Minto mine has continued to flourish, using about 40 percent of the terminal’s storage capacity and 25 percent of the terminal’s concrete pad. In 2011 the mine shipped 46,215 dry metric tons of ore concentrate (average of 36.4 percent copper, 132 grams per metric ton silver and 12.4 g/t gold) through Skagway. A second shipper In the fall of 2010, Alexco Resource Corp.’s new Bellekeno silver-lead-zinc mine came online in central Yukon. This relatively modest mining operation resulted in barge shipments of its output — lead-silver and zinc-silver — concentrates through the Skagway terminal to Seattle where they are trucked to a smelter in Trail, B.C. Planned yearly production at Bellekeno is 12,000 metric tons of lead-silver concentrate (average of 6,200 g/t silver and 70 percent lead) and 8,400 metric tons of zinc-silver concentrate (average of 480 g/t silver and 55 percent zinc). The company planned to ship 2.0 to 2.8 million ounces of silver per year. In December 2010, Alexco entered into lead and zinc concentrate off-take agreements with Glencore Ltd., Stamford, a branch of a wholly-owned subsidiary of Swiss-based Glencore International AG. Over the initial two-year term of the offtake agreements, roughly 42,800 metric tons of concentrate (27,300 metric tons of lead and 15, 500 metric tons of zinc concentrate) are to be shipped from Bellekeno for smelter treatment and refining. Big plans for Skagway While impressive, the port traffic from Minto and Bellekeno pales in comparison to what potentially lies ahead for the Southeast Alaska port. Over the years, the Government of Yukon and potential mining clients in Yukon Territory and northern British Columbia have kept in close communication with AIDEA and Skagway officials about the status and availability of the ore terminal. As mine development plans have coalesced, so have opportunities for additional shipping traffic at the port. AIDEA is currently working with Selwyn Chihong Mining Ltd. on developing a plan for the expansion of the terminal. The Selwyn-Chihong joint venture is working to develop the Selwyn Project, one of the world’s largest lead-zinc deposits, into a huge lead-zinc mining operation. Key milestones for the project, which is located in the Yukon’s Selwyn Basin astride the western border of Northwest Territories, include completion of a bankable feasibility study mid-summer 2011; successful mine construction starting mid-summer 2011; and a mid-2012 production decision and startup see SKAGWAY PORT page 15 PETROLEUM NEWS G • WEEK OF JANUARY 22, 2012 NORTH OF 60 MINING 15 A L A S K A Tower Hill eyes Livengood Bench placers Recently acquired land includes some 355,000 ounces of alluvial gold that has eroded from Money Knob; placer mining PEA under way INTERNATIONAL TOWER HILL MINES LTD. By SHANE LASLEY Mining News I nternational Tower Hill Mines Ltd. has pushed back the publication of a prefeasibility study for its Livengood gold project to sometime later this year. While the PFS has been delayed by about six months, the company says it is still on track to begin recovering gold from the Interior Alaska project in 2018 … maybe earlier. Tower Hill said that while the bulk of engineering studies have been completed, a review of the preliminary economic assessment revealed some areas of the metallurgical flow sheet that could be optimized. “The publication date of the Livengood prefeasibility study is being extended to allow for the completion of additional laboratory testing and optimization work suggested by myself as well as ITH and third party metallurgists, that will enable us to move the project forward as rapidly and cost efficiently as possible to create wealth for our shareholders and jobs for a generation of Alaskans,“ Tower Hill President and CEO James Komadina explained. “I strongly believe that shareholders expect and deserve the best from this team, and the decision to extend the publication date ensures that we will put our finest work forward,” Komadina said during a Dec. 22 message to Tower Hill shareholders. Tower Hill Government and Community Relations Manager Rick Solie told Mining News that the PFS is being completed to a level typically reserved for feasibility studies. The completion of the Livengood feasibility study and the start of project permitting are scheduled for mid-2013. With about three years slated for permitting and two years for construction, Tower Hill anticipates firing up the mill in 2018. Meanwhile, the company is looking into the viability of mining nearly half a million ounces of placer gold that the enormous Money Knob deposit has shed over time. Expanded lands The first indication that engineers may need more time to design a mine at Livengood came when Tower Hill released a batch of 92 drill results in early November. While the results continued to confirm the robustness of the 20-million-ounce gold Looking southeast, the 20-million-ounce Money Knob deposit rises prominently beyond International Tower Hill Mines Ltd.’s Livengood camp. The Livengood Bench – an alluvial deposit said to contain some 355,000 ounces of placer gold – is adjacent to the north side of Money Knob. deposit, condemnation holes turned up significant gold in areas that Tower Hill had been considering for infrastructure. MK-10-97, a condemnation hole drilled more than 2,000 meters southeast of the Money Knob deposit cut 4.82 g/t gold over 1.57 meters and favorable host rocks. Tower Hill management had long envisioned an area to the northeast of the deposit as an ideal location for the mill and other mine infrastructure. The company had thought the deposit was closed off in this direction but the November assay results indicate that is not the case. Holes MK-11-119 (1.68 meters at 5.72 g/t gold), MK-11-120 (1.22 meters at 5 g/t gold) and MK-123 (9.77 meters at 0.83 g/t gold) intersected mineralized dikes over a broad area north and east of the deposit indicating further mineralization potential. Assay results for four additional holes in this area are pending. Tower Hill said that if further exploration is warranted in this area, it has already identified an alternative mill location. In mid-December, Tower Hill reported that it had spent US$24.5 million to expand its land position at Livengood and to purchase land it held under lease. The company said the additional property provides alternative locations for site facilities. Tower Hill paid US$13.5 million in cash for the newly acquired land. The company also agreed to pay the vendors an additional US$23,148 for every dollar that the average gold price exceeds US$720 per troy ounce. For example; if gold averaged US$1,720 per ounce over the next five continued from page 14 SKAGWAY PORT as early as 2015. Current plans propose developing two large underground mines at Selwyn that would feed a central concentrator at a rate of 8,000 metric tons per day with average annual output tentatively projected at about 255,000 metric tons of zinc and 65,000 metric tons of lead. By comparison, that is roughly half the annual output of the giant Red Dog Mine in northwest Alaska. Other key elements of the Selwyn project likely will include building a dedicated hydroelectric facility and an 18-centimeter diameter buried pipeline for transporting concentrate to either the Robert Campbell Highway or North Canol Road where concentrates would be dewatered in a facility before being shipped onward by truck to a concentrate shipping facility, potentially at the Port of Skagway. Several stages of expansion are anticipated as the project evolves and additional zones are developed as either open pit or underground mines. AIDEA spent 2011 working on expansion plans to accommodate Selwyn at the port. The plans included obtaining bonding authorization from Alaska lawmakers years, this contingent payment would be about US$23.15 million. The remaining US$11 million of the land purchase was to buy claims outright that the company held under a lease agreement. Tower Hill, which paid for the properties and associated rights with cash it had in the bank, said it still has sufficient working capital to meet its budget requirements through 2012. Livengood Bench Not only does the newly acquired acreage provide Tower Hill with extra room to situate its facilities but the property includes the Livengood Bench, an alluvial deposit estimated to contain 12.8 million cubic yards of gravel with around 355,000 ounces of gold. “The land transactions completed last week near the Livengood project not only improved our access to infrastructure and site facility locations but also gave us access to near surface placer gold deposits, portions of which were previously mined in a much lower gold price environment,” Komadina informed shareholders Dec. 19. “This gives the company an opportunity to look into placer gold extraction that could generate positive cash flows in the nearterm while permitting activities are underway for the large-scale Livengood mine.“ The historical Livengood Bench gold resource is based on 2,370 drill holes. Tower Hill is currently investigating this resource and plans to produce a preliminary economic assessment for placer mining in the and addressing areas of concern, including lease extension, dock access and tariffs and dredging at the port. HB 119 authorized AIDEA to bond up to US$65 million for the purpose of expanding the Skagway terminal. It is anticipated that a portion of these funds will be used to double the size of the existing Concentrate Storage Building and to provide a new ship loader. The new ship loader will double the loading capacity, minimize dust emissions, and will be retractable. The retractable design will allow cruise ships to use the ore dock when ore ships aren’t being loaded. Another mega-shipper AIDEA is also talking with Western Copper and Gold Corp. about its plans to truck copper-gold-silver and molybdenum concentrates the 560 kilometers (347 miles) from the Casino Project in central Yukon to the Port of Skagway when that project begins production in 2019. With the completion of a 132-kilometer (120 mile) Casino access road, the project will have an all-weather access route through Carmacks to Whitehorse and on to the Port of Skagway. Western President and COO Paul West-Sells told first half of 2012. “While we are still in the early days, and there are no guarantees, we have received the necessary data to begin a full-scale investigation into the potential economics of the project. Towards this objective, we will be engaging an Alaska firm to complete a preliminary economic assessment on placer mining in the first quarter of 2012. The implications of early production are significant and we will do everything possible to analyze these opportunities,” Komadina said in announcing the acquisition. Leadership shift In order to evaluate the viability of nearterm gold production from the placers that have eroded from the enormous Money Knob deposit, Tower Hill has shifted the responsibilities of its management team in Alaska. Karl Hanneman — whose résumé includes mining a portion of the Livengood Bench Placers in the 1990s — has relinquished his title of Livengood project manager to serve as Livengood placer manager. Tom Irwin — who joined Tower Hill as Livengood construction manager in March 2011 — has stepped up to fill the void left by Hanneman. In his new position as Alaska general manager, Irwin is responsible for the management and technical direction of permitting and development of the Livengood project. “Tom’s new role with the company is in recognition of the tremendous Alaska mining and permitting experience he brings to our team and the significant contributions he has been making to the company since his appointment last year,” Komadina said. We are also grateful to Karl Hanneman for his contributions to date and, given his intimate knowledge and experience with placer operations in the Livengood district, we are excited to have him oversee our investigations on this matter.” Irwin brings a vast amount of experience to his new job. For the six years leading up to going to work for Tower Hill he served as the commissioner of the Alaska Department of Natural Resources. Prior to that he spent seven years working at Kinross Gold Corp.’s Fort Knox gold mine about 100 see LIVENGOOD STUDY page 17 Mining News recently that the company plans to ship concentrate produced at Casino through the Skagway Ore Terminal. In a prefeasibility study released in May 2011, Western cited the port’s existing facilities to store and load-out concentrates as well as its facilities to receive bulk commodity shipments, fuels and connection to the Alaska Marine Highway as significant advantages. “The Port of Skagway is developing plans to expand these facilities to better serve the expanding mining activity in the Yukon and Alaska,” the company said. AIDEA has participated with the Municipality of Skagway on applications for federal grants, though the grant applications, so far, have been unsuccessful. AIDEA, along with representatives from White Pass, the municipality and the Yukon Ministry of Economic Development, visited U.S. Rep. Don Young, R-Alaska, last summer to brief him about the project. In addition, the Alaska Department of Labor and governor’s office have been engaged in talks with Yukon and Skagway leaders, economic development organizations, and the private sector about training and supplementing the mining labor force. G Companies involved in Alaska and northwestern Canada’s mining industry Mining Companies Fairbanks Gold Mining/Fort Knox Gold Mine Fairbanks, AK 99707 Contact: Lorna Shaw, community affairs director Phone: (907) 488-4653 • Fax: (907) 490-2250 Email: [email protected] • Web site: www.kinross.com Located 25 miles northeast of Fairbanks, Fort Knox is Alaska’s largest operating gold mine, producing 340,000 ounces of gold in 2004. Kiska Metals Suite 575 – 510 Burrard St. Vancouver, BC, Canada V6C 3A8 Contact: Jason Weber: President and CEO or Drew Martel: Investor Relations Phone: (604) 669-6660 Fax: (604) 669-0898 Email: [email protected] Website: www.kiskametals.com Gold and Copper projects in Alaska, Yukon, BC, Australia and Mexico. Preferred partner of senior mining firms. Usibelli Coal Mine Fairbanks, AK 99701 Contact: Bill Brophy, vp cust. relations Phone: (907) 452-2625 • Fax: (907) 451-6543 Email: [email protected] • Web site: www.usibelli.com Other Office P. O. Box 1000 • Healy, AK 99743 Phone: (907) 683-2226 Usibelli Coal Mine is headquartered in Healy, Alaska and has 200 million tons of proven coal reserves. Usibelli produced one million tons of sub-bituminous coal this year. Service, Supply & Equipment Air Liquide Anchorage, AK 99518 Contact: Brian Benson Phone: (907) 273-9762 • Fax: (907) 561-8364 Email: [email protected] Air Liquide sells, rents, and is the warranty station for Lincoln, Miller, Milwaukee, Victor and most other welding equipment and tool manufacturers. Alaska Analytical Laboratory 1956 Richardson Highway North Pole, AK 99705 Phone: (907) 488-1266 • Fax: (907) 488-077 E-mail: [email protected] Environmental analytical soil testing for GRO, DRO, RRO, and UTEX. Field screening and phase 1 and 2 site assessments also available. Alaska Earth Sciences Anchorage, AK 99515 Contact: Bill Ellis, Rob Retherford, owners Phone: (907) 522-4664 • Fax: (907) 349-3557 E-mail: [email protected] A full service exploration group that applies earth sciences for the mining and petroleum industries providing prospect generation, evaluation and valuation, exploration concepts, project management, geographic information systems and data management. We also provide camp support and logistics, geologic, geochemical and geophysical surveys. Alaska Frontier Constructors P.O. Box 224889 Anchorage, AK 99522-4889 Contact: John Ellsworth, President Phone: (907) 562-5303 • Fax: (907) 562-5309 Email: [email protected] Alaskan heavy civil construction company specializing in Arctic and remote site development with the experience, equipment and personnel to safely and efficiently complete your project. Alaska Interstate Construction (AIC) 301 W. Northern Lights Blvd., Suite 600 Anchorage, AK 99503 Contact: Fred Hargrave Phone: (907) 562-2792 • Fax: (907) 562-4179 Email: [email protected] Website: www.aicllc.com AIC provides cost-effective solutions to resource development industries. We provide innovative ideas to meet each requirement through the provision of bestin-class people and equipment coupled with exceptional performance.. Alaska Steel Co. 1200 W. Dowling Anchorage, AK 99518 Contact: Joe Pavlas, outside sales manager Phone: (907) 561-1188 Toll free: (800) 770-0969 (AK only) Fax: (907) 561-2935 E-mail: [email protected] Fairbanks Office: 2800 South Cushman Contact: Dan Socha, branch mgr. Phone: (907) 456-2719 • Fax: (907) 451-0449 Kenai Office: 205 Trading Bay Rd. Contact: Will Bolz, branch mgr. Phone: (907) 283-3880 • Fax: (907) 283-3759 Rebar Division 1200 W. Dowling Anchorage, AK 99518 Contact: Mike Galyon, rebar mgr. Phone: (907) 561-1188 • Fax: (907) 562-7518 Full-line steel, aluminum, and rebar distributor. Complete processing capabilities, statewide service. Specializing in low temperature steel and wear plate. Alaska Telecom 6623 Brayton Dr. Anchorage, AK 99507 Contact: Kevin Gray or Martin Stewart Phone: (907) 344-1223 Fax: (907) 344-1612 E-mail: [email protected] or [email protected] Website: www.alaskatelecom.com Providing telecommunications support to oil exploration and production companies and contractors. Satellite communications, voice, data, microwave, VHF/UHF radio, engineering and installation. Arctic Foundations Anchorage, AK 99518-1667 Contact: Ed Yarmak Phone: (907) 562-2741 • Fax: (907) 562-0153 Email: [email protected] Website: www.arcticfoundations.com Soil stabilization – frozen barrier and frozen core dams to control hazardous waste and water movement. Foundations – maintain permafrost for durable high capacity foundations. Austin Powder Company P.O. Box 8236 Ketchikan, AK 99901 Contact: Tony Barajas, alaska manager Phone: (907) 225-8236 • Fax: (907) 225-8237 E-mail: [email protected] Web site: www.austinpowder.com In business since 1833, Austin Powder provides statewide prepackaged and onsite manufactured explosives and drilling supplies with a commitment to safety and unmatched customer service. Calista Corp. 301 Calista Court, Suite A Anchorage, AK 99518 Phone: (907) 279-5516 • Fax: (907) 272-5060 Web site: www.calistacorp.com D I R E C T O R Y Chiulista Services Inc. 6613 Brayton Dr., Ste. C Contact: Joe Obrochta, president Contact: Monique Henriksen, VP Phone: (907) 278-2208 Fax: (907) 677-7261 Email: [email protected] The 100 percent Alaska Native owned and operated catering company at the Donlin Creek Prospect and with North Slope experience, catering and housekeeping to your tastes, not ours; providing operations and camp maintenance. Construction Machinery 5400 Homer Dr. Anchorage, AK 99518 Contact: Ron Allen, Sales Manager Phone: (907) 563-3822 • Fax: (907) 563-1381 Email: [email protected] • Web site: www.cmiak.com Other Offices: Fairbanks office Phone: 907-455-9600 • Fax: 907-455-9700 Juneau office Phone: 907-780-4030 • Fax: 907-780-4800 Ketchican office Phone: 907-247-2228 • Fax: 907-247-2228 Wasilla Office Phone: 907-376-7991 • Fax: 907-376-7971 ERA Helicopter 6160 Carl Brady Drive Anchorage, AK 99502 Contact: David Sell, Business Development Alaska Phone: (907) 550-8607 Fax: (907) 550-8608 E-mail: [email protected] Website: www.erahelicopters.com Helicopter charters, flight-seeing tours, aerial photography, oil and gas support, mineral exploration, construction, seismic remote site work, internal and external load, heli-hiking and sled-dog adventures. GCI Industrial Telecom Anchorage: 800 East Dimond Boulevard, Suite 3-565 Anchorage, AK 99515 Phone: (907) 868-0400 Fax: (907) 868-9528 Toll free: (877) 411-1484 Web site: www.GCI-IndustrialTelecom.com Rick Hansen, Director [email protected] Mark Johnson, Account Manager [email protected] Deadhorse: Aurora Hotel #205 Deadhorse, Alaska 99734 Phone: (907) 771-1090 Mike Stanford, Senior Manager North Slope [email protected] Houston: 8588 Katy Freeway, Suite 245 Houston, Texas 77024 Phone: (713) 589-4456 Hillary McIntosh, Account Representative [email protected] Provides innovative solutions to the most complex communication issues facing industrial clientele. We deliver competitive services, reputable expertise and safely operate under the most severe working conditions for the oil, gas and natural resource industries. GCI-your best choice for full life cycle, expert, proven, industrial communications. General Refining Corp. 59 Madison Ave. Hempstead, NY 11550 Contact: Dave Greenfield, Ellen Han see next page PETROLEUM NEWS • WEEK OF JANUARY 22, 2012 continued from page 16 LIVENGOOD STUDY kilometers (60 miles) southeast of Livengood. Irwin served as operations manager during the start-up and early operations at Fort Knox, transitioning to the role of general manager from 1999 to 2001. From 2001 to 2003, he was the vice president, business development for Fairbanks Gold Mining Inc., a subsidiary of Kinross Gold, responsible for new project permitting, business development and governmental and public relations in Alaska. Hanneman — who holds a bachelor of science (honors) degree in mining engineering from the University of Alaska and spent 12 years playing a senior role in Teck Resources Ltd’s project development and permitting in Alaska — will continue to lend his expertise to the overall development of the Livengood project. “Tom and Karl’s combined expertise and experience will be invaluable to us in advancing the Livengood project towards development into a major new gold mine in North America,” Komadina said. Every opportunity While placer mining may provide an initial cash-flow for Tower Hill and afford the company an opportunity to get a jump on site preparation at Livengood, the junior’s primary goal remains beginning to mine the 20-million- Phone: (516)538-4747 Website: www.generalrefining.com Gold Canyon Mining 1075 S. Idaho Road, Ste. 104 Apache Junction, AZ 85119 Contact: David Fortner Phone: (480) 302-4790 Fax: (480) 671-5368 Website: www.gcmining.com Specializing in mine site development, contract mining, and final mine closure. With a solid reputation for proficiency, productivity and safety, ready to take on both your large and small projects. Jackovich Industrial & Construction Supply Fairbanks, AK 99707 Contact: Buz Jackovich Phone: (907) 456-4414 • Fax: (907) 452-4846 Anchorage office Phone: (907) 277-1406 • Fax: (907) 258-1700 24- hour emergency service. With 30 years of experience, we’re experts on arctic conditions and extreme weather. Judy Patrick Photography Anchorage, AK 99501 Contact: Judy Patrick Phone: (907) 258-4704 • Fax: (907) 258-4706 Email: [email protected] Website: JudyPatrickPhotography.com Creative images for the resource development industry. Last Frontier Air Ventures 39901 N. Glenn Hwy. Sutton, AK 99674 Contact: Dave King, owner Phone: (907) 745-5701 Fax: (907) 745-5711 E-mail: [email protected] Anchorage Base (907) 272-8300 Web site: www.LFAV.com Helicopter support statewide for mineral exploration, survey research and development, slung cargo, video/film projects, telecom support, tours, crew transport, heli skiing. Short and long term contracts. Lynden Alaska Marine Lines • Alaska Railbelt Marine Alaska West Express • Lynden Air Cargo Lynden Air Freight • Lynden International Lynden Logistics • Lynden Transport Anchorage, AK 99502 Contact: Jeanine St. John Phone: (907) 245-1544 • Fax: (907) 245-1744 Email: [email protected] The combined scope of the Lynden companies includes truckload and less-than-truckload highway connections, scheduled barges, intermodal bulk chemical hauls, scheduled and chartered air freighters, domestic and international air forwarding and international sea forwarding services. NORTH OF 60 MINING ounce Money Knob hardrock gold deposit. A preliminary economic assessment released by Tower Hill in August envisions a 91,000-metric-ton-per-day mill churning out more than half-a-million ounce of gold annually for more than two decades. Though engineers and metallurgists are refining the details of the operation, indications are the size and scope of the operation to be detailed in the prefeasibility study will be similar to that outlined in the PEA. Using a cut-off of 0.22 grams of gold per metric ton, which is seen as an economic cut-off for the operation, Tower Hill currently envisions the Money Knob deposit containing a measured and indicated resource of 933 million metric tons averaging 0.55 grams per metric ton gold (16.5 million ounces) plus an inferred resource of 257 million metric tons averaging 0.50 g/t gold (4.1 million ounces). At a cut-off grade of 0.5 g/t gold, which has typically been reported for Money Knob, the deposit contains a measured and indicated resource of 394 million metric tons of ore averaging 0.83 g/t gold (10.5 million ounces); and an inferred resource of 102 million metric tons of ore averaging 0.79 g/t gold (2.6 million ounces). As summarized in the August PEA, Livengood would produce 12.9 million ounces of gold over 23 years. This 562,000-ounce-per-year average is expected to be significantly higher at the onset of operations due to sourcing initial ore from the higher grade heart of Money Knob’s Core Advertiser Index Air Liquide Alaska Analytical Laboratory. . . . . . . . . . . . . . . . . . 6 Alaska Dreams Alaska Earth Sciences . . . . . . . . . . . . . . . . . . . . . . . 10 Alaska Frontier Constructors . . . . . . . . . . . . . . . . . 18 Alaska Interstate Construction (AIC) Alaska Steel Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Arctic Foundations Austin Powder Co. . . . . . . . . . . . . . . . . . . . . . . . . . 12 Calista Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,11,13 Chiulista Services Constantine Metal Resources Construction Machinery . . . . . . . . . . . . . . . . . . . . . 20 Everts Air Cargo Fairbanks Gold Mining/Fort Knox Gold Mine GCI Industrial Telecom General Refining Corp. 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With initial feedstock coming from higher grade regions of the deposit, annual production over the first five years is anticipated to be significantly higher, with yeartwo projected to top 740,000 ounces. “Our findings so far have shown that Livengood can potentially produce an average of 664,000 ounces of gold in its first five years at a cash cost of US$557 per ounce, making it one of the largest new gold development projects in North America,” Komadina informed investors. The PEA estimates initial capital costs of building a mine of this scale at Livengood will run about US$1.6 billion and another US$585 million or so of sustaining capital will be needed over the current 23-year mine life. “We remain confident of the Livengood project viability given its significant gold resource, exceptional infrastructure access and location in one of the best mining jurisdictions in the world,” the Tower Hill CEO said. Whether it is mining the 20 million ounces of gold outlined so far at Money Knob deposit or recovering the placer aurum that has eroded from this enormous lode, Tower Hill is investigating every prospect presented by the Livengood property. “Given the robust gold price environment for the foreseeable future, we are actively looking at any and all opportunities to ensure the successful development of the Livengood gold project into one of North America’s newest — and largest — gold mines,” Komadina added. G Pacific Rim Geological Consulting Fairbanks, AK 99708 Contact: Thomas Bundtzen, president Phone: (907) 458-8951 Fax: (907) 458-8511 Email: [email protected] Geologic mapping, metallic minerals exploration and industrial minerals analysis or assessment. PND Engineers Inc. 1506 W. 36th Ave. Anchorage, AK 99503 Phone: (907) 561-1011 Fax: (907) 563-4220 Website: www.pndengineers.com Full-service engineering firm providing civil, structural, and geotechnical engineering, including mining support, resource development, permitting, marine and coastal engineering, transportation engineering, hydrology, site remediation, and project management. TTT Environmental LLC 4201 “B” St. Anchorage, AK 99503 Contact: Tom Tompkins, general manager Phone: 907-770-9041 • Fax: 907-770-9046 Email: [email protected] Website: www.tttenviro.com Alaska’s preferred source for instrument rentals, sales, service and supplies. We supply equipment for air monitoring, water sampling, field screening, PPE and more. Taiga Ventures 2700 S. Cushman Fairbanks, AK 99701 Mike Tolbert - president Phone: 907-452-6631 • Fax: 907-451-8632 Other offices: Airport Business Park 2000 W. International Airport Rd, #D-2 Anchorage, AK 99502 Phone: 907-245-3123 Email: [email protected] Web site: www.taigaventures.com Remote site logistics firm specializing in turnkey portable shelter camps – all seasons. URS Corp. 700 G Street, Suite 500 Anchorage, AK 99501 Contact: Joe Hegna, Alaska Vice President/Alaska Operations Manager Phone: (907) 562-3366 Fax: (907) 562-1297 E-mail: [email protected] Website: www.urscorp.com Provide engineering, construction and technical services with capabilities to support all stages of project life cycle. We offer a full range of program management; planning, design and engineering; construction and construction management; operations and maintenance; and decommissioning and closure services. 18 PETROLEUM NEWS NORTH OF 60 MINING G Y U K O N • WEEK OF JANUARY 22, 2012 T E R R I T O R Y College could leverage assets in center Administrator: Opportunities abound to improve operating conditions for mining industry, First Nations, government and residents By ROSE RAGSDALE For Mining News Y ukon Territory is poised to take its largely successful campaign to attract and encourage a robust mining industry to the next level by developing a new center for mineral research and mine training in the North. Yukon College, the territory’s focal point for higher education and training, is conducting a yearlong study of the feasibility of establishing a Centre for Northern Innovation in Mining. The proposed center would offer accredited programing in mining and related technology and conduct, in collaboration with industry partners and other institutions, applied research projects designed to help increase the competitiveness of Yukon’s mining industry. The first phase of the two-phase feasibility study announced Sept. Karen Barnes, Ph.D., 30 involved information-gathering president, Yukon and consultation with the territorial College and First Nation governments, nongovernmental organizations, communities and industry. Data collected offered a comprehensive portrait of the mining and exploration industry both in the territory and on the global stage and revealed how the industry is integrated into the social and economic fabric of the Yukon. The value of mineral production in the territory has soared to nearly C$500 million in 2011 from just C$46 million in 2006, and is expected to grow to C$1 billion in 2013 when the Wolverine Mine achieves commercial production and to climb even higher in 2014 when the Eagle gold project is expected to begin operations. Mineral exploration spending in the Yukon more than tripled between 2005 and 2010, climbing to C$160 million from C$45 million five years earlier, and was expected to nearly double again in 2011, soaring to C$300 million and generating employment for more than 1,000 people. Average disposable income in Yukon Territory also increased to C$43,000 per household in 2011 from C$23,000 in 2006, while the average yearly mining wage climbed to C$77,000 during the same period. The second phase of the study, which is to be completed this spring, is considering findings from the first phase and providing an advisory committee with anticipated benefits of the center, a business plan and a financial analysis. Yukon Economic Development Minister Steve We know you have that same need, and this center can be a place where that is coordinated and centralized. We know the Centre for Innovation in Mining can help industry engage with communities – a place where we can find and plan solutions, a place where we can promote new activities in the community and engage in consultations and most especially, where we can celebrate the partnerships that exist.” —Karen Barnes, Ph.D., president, Yukon College Nordick said the center could provide an opportunity for industry, government and research partners to work together on enhanced innovation and mining-related technology projects. Part of the solution Yukon College President Karen Barnes, Ph.D., said the institution intends “to be a part of the solution” by providing education and training geared toward meeting the need for a skilled labor force capable of filling jobs created in the territory’s growing mining industry. Barnes told an audience of miners at the Yuko Geoscience Forum in Whitehorse recently that the college provides 40 programs in skilled trades, technology and applied careers as well as bachelor and master’s degrees to a student body comprised of 1,300 full-time and 3,500 part-time students, along with just-in-time training to 4,000 individuals, many of whom currently work in the mining industry. “This past year, we opened a new School of Mining, Trades and Technology, which delivered two programs in Mayo, (Yukon), with the Na-cho Nyak Dun First Nation, the Yukon Chamber of Mines and Yukon Mine Training Associations, and we immediately put 54 students into the field last spring,” Barnes said. “Last week, we announced over C$1 million in funding to start a new geological technology program.” Barnes said the college also consolidated all of its research efforts in Whitehorse with the help of federal government funding. “We know there is a need in the mining industry for locally conducted research,” she said. “Two areas we’re currently focusing on are cold climate technology and alternative energy. We believe that both are significant, and we believe that having a center in Whitehorse, connected to our research center at the college will provide a destination for scholarship and research that is directly related to mining.” Barnes said the college currently has a world renowned researcher from Quebec in residence who is working on permafrost research on Beaver Creek Highway, and another noted researcher working with Norwestel on providing alternative energy to replace the use of diesel at the company’s transmission stations. “We’re also trying to leverage almost C$1 million in funding to create a new research chair,” she said. “We’d like that research chair to be in mining.” Leveraging assets Yukon College has campuses in 11 communities throughout the territory, from Old Crow to Watson Lake to Haines Junction. In each of its facilities, the college offers videoconferencing throughout the territory and local instructors who can provide and coordinate training programs for the mining industry, Barnes said. The college also owns a mobile training unit and has online facilities at each of its campuses. “Last year, we had 1,700-plus students taking training on our rural campuses, and that infrastructure is going to allow us to push training not only throughout the Yukon but also throughout the North and throughout Canada, if necessary,” said Barnes. “Finally, one of the benefits of working with the college and in creating this center is that we already have an established presence in all of our communities. We work closely with our communities on many levels, both in training and community engagement. We are there to listen to what their needs are. We try to work with them closely in meeting those needs. “We know you have that same need, and this center can be a place where that is coordinated and centralized. We know the Centre for Innovation in Mining can help industry engage with communities — a place where we can find and plan solutions, a place where we can promote new activities in the community and engage in consultations and most especially, where we can celebrate the partnerships that exist,” Barnes explained. Over the next few months, key stakeholder groups will be working together to prepare a “model” that the college hopes to present to the mining industry in the fall of 2012, she told the industry audience. “We know that in eastern Canada there are a number of training facilities in Val d’Or, (Quebec), and Kirkland Lake, Haileybury and Sudbury, (Ontario). There is nothing like that in Western Canada, and it’s time that we had something to support your industry, and we really think it should be here in the Yukon,” Barnes concluded. G Ready for Anything Alaska Frontier Constructors is the team to call for your next mining project. We have the right equipment, the skilled personnel, and unsurpassed expertise working on Alaska’s largest resource development projects. With a proven track record and a demonstrated ability to operate safely and on budget, you can rely on AFC for your next big job. Ready for tomorrow. Today. 6751 S. Airpark Place Anchorage, Alaska 99502 | (907) 562-5303 | akfrontier.com PETROLEUM NEWS • G T E R R I T O R Y Y U K O N WEEK OF JANUARY 22, 2012 NORTH OF 60 MINING 19 Mine output nears C$500 million in value Producer panel outlines recent achievements and future challenges in growing sector of northern jurisdiction’s mineral industry SHANE LASLEY By ROSE RAGSDALE For Mining News T he value of mineral production in Yukon Territory is expected to soar in 2013 to more than C$1 billion when the third of three producing mines hits its stride with commercial output of about 1,700 metric tons per day. The territory, meanwhile, is enjoying the economic benefits of having three high-paying and big spending mines in operation. In 2011 the value of mineral production at Capstone Mining Corp.’s high-grade Minto copper-gold-silver mine, Alexco Resource Corp.’s Bellekeno silver-lead-zinc mine and Yukon Zinc Corp.’s Wolverine silver-rich volcano massive sulphide mine totaled nearly C$500 million. The three mines spent a total of C$233 million on operating expenses, including C$58 million on payroll. Some 745 workers – 260 at Minto, 173 at Bellekeno and 312 at Wolverine – earned an average annual wage of C$77,000. Some 43 percent of this highly paid crew resided in the Yukon, including 149 members of the territory’s First Nations. The mines also invested C$33 million in capital expenditures, bringing to C$266 million their total 2011 spending on goods and services, including 30-40 percent spent locally. Clair Derome, a mining industry consultant and outgoing-president of the Yukon Chamber of Mines, presented this statistical snapshot of the Yukon’s young, but growing, mineral production sector to an audience attending the Yukon Geoscience Forum in Whitehorse in November. “In addition, the mines are well spread out in the Yukon, so the industry spreads the benefits all over,” Derome said before introducing the members of a discussion panel that included representatives of the three mines. Minto, the largest and oldest of Yukon Territory’s currently operating mines, produced 37.1 million pounds of copper, 196,098 ounces of silver and 18,439 ounces of gold in 2011. “In fact, in the near future, we will put out a (request for proposals) for a contractor to develop an underground operation with an eye to taking underground production in house within 18 months of startup,” Roche told the forum participants. Other challenges facing Minto include meeting ongoing regulatory requirements of a more stringent water management plan developed since 2009 and continuing successful collaboration with the Selkirk First Nation, which holds as traditional territory the land where the mine is located. Ambitious growth ahead Alexco’s Bellekeno Mine, situated in the historic Keno Hills silver district of east-central Yukon, began production in January 2011 with one of the highest silver grades in the world. It is also the only primary silver producer in Canada. In 2011, the mine produced 2.2 million ounces of silver along with substantial quantities of lead and zinc at roughly 250 t/d. Alexco, which initially acquired the historic Keno Hills claims through a reclamation project with the Canadian government, soon recognized the considerable mineral potential that remained in numerous small abandoned mines in the district. Brad Thrall, Alexco’s executive vice president and chief operating officer, told the forum that the company focused it exploration on the eastern end of the district and identified a sizable new zone of mineable silver in 2007. “We were able to move Bellekeno from discovery to production in three years, but we had a lot of support to do it,” Thrall said. Alexco recently initiated the permitting process for two more high-grade silver deposits in the district, Onek and Lucky Queen. “Sometime in 2012, we will have three mines in production and up to 5 million ounces silver in annual (output) in the next three to four years,” he said. A long future in Yukon Minto, the largest and oldest of the Yukon’s currently operating mines, is located in west-central Yukon Territory. It produced 37.1 million pounds of copper, 196,098 ounces of silver and 18,439 ounces of gold in 2011 from average mill feed of 3,600 metric tons per day. Since startup in October 2007, the mine has produced more than 187 million pounds of copper and is still going strong. Colleen Roche, Capstone’s manager of sustainability and environment affairs at Minto, said the mine has considerable expansion potential and new ore deposits are being developed that will take the mine’s life beyond 2020. Currently implementing Phase 5 of development at the Minto North and Ridgetop deposits, Capstone also has undertaken a prefeasibility study for Phase 6 to be completed in early 2012 for development of the Copper North and Wildfire deposits. “We’re seeing an obvious trend in production, and that’s why we envision a long future in the Yukon,” Roche said. Though Minto currently is an open-pit operation, Capstone intends to begin underground mining there in 2012 in the Area 2 deposit. Ramping up production After spending much of the past two years addressing significant operating and safety challenges, Chineseowned Yukon Zinc is advancing the Wolverine Mine located in the Finlayson District of southeastern Yukon toward commercial production, according to Don Strickland, mine general manager. Wolverine produces three products — lead, zinc and copper concentrates, with silver as a byproduct that currently accounts for 40 percent of its revenue. The concentrates are shipped to Asian smelters through the Port of Stewart. “Right now, we’re in the early stages of ramping up production, at 500-600 t/d,” Strickland told the forum audience in November. “The mill (is designed to process) 1,700 t/d, and we expect to achieve commercial production in early 2012,” he said. “And we expect to be a fully developed underground mine in 2013.” Strickland also said Yukon Zinc enjoys a great working relationship with the Kaska First Nation, which has traditional rights within the Wolverine area. Hurdles yet to clear All three mine representatives cited containing costs as a significant ongoing challenge. Strickland noted that energy costs at Wolverine, which generates its own power with diesel, is relatively high at 33-36 cents per kilowatthour when compared with the Yukon average of 11 cents/kwh. “We’re working to reduce energy consumption at Wolverine,” he said, citing the use of waste heat and more efficient lighting as steps the miner has taken. Derome said a number of mining companies are investigating the option of generating power with liquefied natural gas because LNG can be delivered directly to a mine site. They are also considering using a 60/40 LNGdiesel blend to help cut energy costs, she added. Mark Ayranto, vice president — Yukon for Victoria Gold Corp., said his company hopes to hook up to Yukon’s electrical grid to get power when it begins gold production at the Eagle Project on the Dublin Gulch Property in central Yukon. The project also enjoys good road access and an exemplary relationship with the Nacho Nyak Dun First Nation. Ayranto said Victoria is well on its way to completing permitting for the Eagle project in 2012 and has earmarked C$350 million in initial construction capital over two years, along with average annual operating expenses of C$80 million. Victoria has targeted 2014 for startup of a heap leach operation expected to produce 170,000 ounces of gold annually for at least a decade. With more than 300 permanent jobs to offer at Eagle, Ayranto said a big challenge for Victoria will be finding skilled workers in the Yukon and elsewhere. “If we are going to attract people to the North, we need good housing and schools that attract families,” he added. G We were there at the beginning. With 43 years of experience, we’re experts on arctic conditions and extreme weather! Solutions for Petroleum, Mining, Construction, & Timber Industries using top quality products. 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