north of 60 mining - for Petroleum News

Transcription

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
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WEEK OF JANUARY 22, 2012
PETROLEUM NEWS
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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:
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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]
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PUBLISHER & NEWS EDITOR
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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;
1.48 g/t gold;
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
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
•
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
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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.
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6
PETROLEUM NEWS
NORTH OF 60 MINING
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
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;
•
4.51 g/t gold, 133.13 g/t silver, 6.28 percent
lead;
lead; and
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
lead;
lead;
1.95 g/t gold, 157.21 g/t silver, 16.09 percent zinc, 1.88 percent copper and 2.02 percent lead;
1.99 g/t gold, 305.38 g/t silver, 16.02 percent zinc, 5.01 percent copper and 0.85 percent lead; and
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
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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
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
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For more information, visit us at
www.heatherdaleresources.com
15th Floor - 1040 W. Georgia Street
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+1.604.684.6365 1.800.667.2114
PETROLEUM NEWS
G
B O O K
•
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
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
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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
•
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
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
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PETROLEUM NEWS
•
NORTH OF 60 MINING
OCEAN PARK VENTURES CORP.
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
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G
PETROLEUM NEWS
NORTH OF 60 MINING
Y U K O N
•
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
•
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
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PETROLEUM NEWS
•
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
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•
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
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
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
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
Contact: John Ellsworth, President
Phone: (907) 562-5303 • Fax: (907) 562-5309
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
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
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
Contact: Ed Yarmak
Phone: (907) 562-2741 • Fax: (907) 562-0153
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
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
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
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
•
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
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
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
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.
Jackovich Industrial & Construction Supply. . . . . 19
Judy Patrick Photography . . . . . . . . . . . . . . . . . . . 14
Kiska Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Last Frontier Air Ventures. . . . . . . . . . . . . . . . . . . . . 6
Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
MRO Sales
Nature Conservancy, The
Northern Air Cargo
Pacific Rim Geological Consulting . . . . . . . . . . . . . . 6
PND Engineers Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Salt+Light Creative
Taiga Ventures/PacWest Drilling Supply . . . . . . . . 4
URS Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Usibelli Coal Mine
MRO Sales
Anchorage, AK 99518
Contact: Don Powell
Phone: (907) 248-8808 • Fax: (907) 248-8878
Website: www.mrosalesinc.com
MRO Sales offers products and services that can help
solve the time problem on hard to find items.
Northern Air Cargo
3900 W. International Airport Rd.
Anchorage, AK 99502
Contact: Mark Liland, acct. mgr. Anch./Prudhoe Bay
Phone: (907) 249-5149 • Fax: (907) 249-5194
Email: [email protected] • Website: www.nac.aero
Serving the aviation needs of rural Alaska for almost
50 years, NAC is the states largest all cargo carrier
moving nearly 100 million pounds of cargo on scheduled flights to 17 of Alaska’s busiest airports. NAC’s
fleet of DC-6, B-727, and ATR-42 aircraft are available
for charters to remote sites and flag stops to 44 additional communities.
17
zone.
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
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
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
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
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
•
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
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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
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
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20
PETROLEUM NEWS
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