t’s almost spring in the Last Frontier, which means across the state winter-based activities are winding down and exploration, drilling, and construction plans that require warm summer months are ramping up. Below Alaska Business has compiled 2019 updates and 2020 plans for Alaska’s operating metal mines, as well as a few future projects currently working on exploration or permitting.
In February Kinross published an update on its development projects, exploration program, and estimated mineral reserves and resources. Kinross owns and operates Fort Knox, an open pit gold mine in the Fairbanks mining district. According to the update, during 2019 a total of 7,300 meters of drilling was completed that mostly focused on the western crest of the pit. “The results were encouraging and resulted in the addition of 229 gold koz [thousand ounces] in measured and indicated resources,” the company states. For 2019, proven and probable reserves at Fort Knox are 2,910 gold koz, measured and indicated resources are 2,026 gold koz, and inferred resources are 774 gold koz. In 2019, Fort Knox produced 200,253 ounces of gold, a nearly 22 percent drop from 2018. However, it’s expected gold output will increase in 2020, largely due to the Gilmore expansion.
In late 2018 Kinross broke ground on the Gilmore expansion, extending the mine’s life for several years. According to Kinross, “The Fort Knox Gilmore project continues to progress on schedule and on budget, with initial Gilmore ore encountered in Q4 2019 and stacked on the existing Walter Creek heap leach pad. Stripping advanced as planned during the quarter and is expected to continue throughout 2020. Completion of the new Barnes Creek heap leach pad, where 95 percent of Gilmore ore is expected to be stacked, and related pumping and piping infrastructure remains on target for completion in Q4 2020. Procurement for all planned 2020 activities is largely complete and the project is ready to recommence construction activities in the spring.”
Also in 2019, a ground gravity survey was completed from Fort Knox to Gil-Sourdough (located approximately seven miles northeast of the Fort Knox pit), the purpose of which was to understand the geological settings of the area for future exploration work.
Greens Creek silver mine is located eighteen miles southwest of Juneau on Admiralty Island. The underground mine is owned and operated by Hecla. According to Hecla, Greens Creek produced 9.9 million ounces of silver and 56,624 ounces of gold in 2019, a record high for the mine since Hecla wholly acquired and began to operate Greens Creek in 2008. It was also a record-year in terms of production, with the mill operating at an average of 2,318 tons per day in 2019. Over the past thirty years, Greens Creek has produced 235 million ounces of silver, 1.6 million ounces of gold, 3 billion pounds of zinc, and 1 billion pounds of lead. Production for 2020 is anticipated to be 8.9 million to 9.3 million ounces of silver and 46,000 to 48,000 ounces of gold.
Hecla is planning an expansion of the Greens Creek tailings facility and anticipates filing a Notice of Intent for that expansion in the second quarter of 2021. According to the company, there is still “significant exploration potential” at Greens Creek, which has proven and probable reserves of 107.1 million ounces of silver; measured and indicated reserves of 97.4 million ounces of silver, and an inferred resource of 36 million ounces of silver.
Hecla calls Greens Creek its “strongest mine” because of its high production and low cost. The company has continued investing in the mine to maintain the trend of high efficiency, such as a $300,000 project to add variable speed drives in ventilation fans that can save $200,000 annually in electricity costs.
Kensington is an underground gold mine located forty-five miles north of Juneau that is owned and operated by Coeur Alaska, subsidiary of Coeur Mining. In 2019 Kensington produced 127,914 ounces of gold, and according to 2019 data has proven and probable reserves of 366,000 ounces of gold, measured and indicated resources of 762,000 ounces of gold, and inferred resources of 358,000 ounces of gold.
Production estimates for 2020 are 115,000 to 130,000 ounces of gold. According to Coeur, the Jualin deposit is anticipated to account for approximately 20 to 25 percent of production. For 2020, Kensington will account for approximately 36 percent of Coeur’s gold production. The company estimates the mine’s life to be approximately three years.
The Australian Financial Review reported in February that Australian mining company Federation Gold is in talks with Coeur to acquire Kensington, though details are scarce and sources for the information have not been identified.
It’s now been more than a year since Australian mining company Northern Star Resources acquired the Pogo mine from Sumitomo. Since the acquisition, 183,555 ounces of gold have been produced from Pogo.
According to Northern Star in its 2019 Annual Report, “Following completion of the Pogo acquisition in September 2018, underground drilling expanded significantly with a focus on resource definition and conversion across all major ore systems (Liese, South Pogo, Fun Zone, North Zone, and X Vein) in the underground mining areas.
“Surface drilling activity also increased substantially with the discovery of the new Central Veins zone leading to the definition of a maiden resource for the discovery.”
Currently Northern Star is mining approximately 3,300 short tons of ore per day via four access portals to the underground mining block areas: Liese, East Deep, North Zone, South Pogo, and Fun Zone.
According to the company, the mine’s traditional hard rock processing capacity was more than 0.8 million tonnes per year, which Northern Star has increased to 1 million tonnes per year, with plans to increase throughput even further.
As of mid-2019, the estimated resource (the JORC code approximate equivalent to measured and indicated) of Pogo is 5.95 million ounces of gold and the estimated reserve (the JORC code approximate equivalent to proven and probable) is 1.47 million ounces. Of the 5.59 million ounces of gold resource, approximately 3.7 million ounces is inferred.
In February, Pogo Mine produced its 4 millionth ounce of gold. In a Q&A with North of 60 Mining News following the announcement, Northern Star Executive Chairman Bill Beament said, “When you look at the 4 millionth ounce we poured today and we have a 6 million ounce resource, this is one of the highest grade gold mines in the last ten or fifteen years and it is still one of the highest grade resources in the world.”
Red Dog— located approximately 105 miles north of the Arctic Circle near Kotzebue—is one of the world’s largest zinc mines. The open-pit Red Dog mine is situated on NANA lands and is operated by Teck. In 2019 the mine produced 640,000 tonnes of mined zinc and 287,000 tonnes of refined zinc. Projections for 2020 are for 600,000 to 640,000 tonnes of mined zinc and 305,000 to 315,000 tonnes of refined zinc.
According to Teck, “Higher throughput is expected to partially offset lower grades in 2020 as we complete the VIP 2 mill enhancement project and continue the implementation of mill analytics as part of our RACE21 innovation-driven business transformation program.”
In 2020 Teck plans to implement an increased number of tailings and water-related projects “to manage increased precipitation and water levels at the Red Dog mine.” According to the company, “The frequency of extreme weather events has been increasing and these projects are aimed at ensuring that we can continue to optimize the asset and avoid any potential constraints on production in the future.”
NOVAGOLD is excited about the Donlin Gold project, which it is developing with partner Barrick Gold. According to NOVAGOLD’s 2019 Annual Report, “At some point you’re bound to run out of superlatives: exceptional reserve size and production capability, a grade that’s twice the industry average, significant exploration upside, extraordinary leverage to a higher gold price, a location in a favorable jurisdiction, and strong Alaska Native corporation and community partnerships. But it does, in fact, get even better.”
And the company has reason to be excited. The Donlin Gold project is a world-class resource and many significant milestones for developing the mine have been reached. In January the state of Alaska approved a right-of-way lease for the project’s proposed 315-mile gas pipeline. The 14-inch-diameter pipeline would carry natural gas to the proposed 220 megawatt plant that would power the mine; this means fuel would not need to be barged up the Kuskokwim River, which locals were concerned would endanger the region’s main food source should a spill occur.
In the 2019 Annual Report, the company states, “Our track record of achievement was further enhanced… when Donlin Gold received final easements for the access road and fiber optic cable, as well as the receipt of the final land leases, land use permits, and material site authorizations for the proposed transportation facilities on state lands, including the airstrip and upriver Jungjuk Port.”
Earlier this year South32 and Trilogy metals moved forward as joint partners on the Upper Kobuk Mineral Projects (UKMP). Trilogy metals is contributing all its UKMP-associated assets and South32 is contributing $145 million to the joint venture. According to South32 CEO Graham Kerr, “Forming the UKMP joint venture will be another important milestone as we reshape and improve our portfolio by adding high-quality copper and base metals development options.”
The UKMP is in the Ambler Mining district and includes the polymetallic Arctic deposit and the Bornite copper deposit, as well as “a highly prospective regional exploration portfolio.”
According to the companies, in 2020 the joint venture will conduct further exploration drilling at Bornite “and regional activity across the highly prospective Ambler VMS and carbonate hosted copper belts.”
In February HighGold mining reported exploration results from its Johnson Tract gold project. The results were encouraging and come from surface rock sampling at the Difficult Creek prospect conducted in 2019, which had the purpose of testing and extending known prospects, identifying new zones, and developing other drill targets for this year.
HighGold President Darwin Green said in February, “High-grade mineralization at Difficult Creek is similar in character to the main Johnson Tract deposit located 4.5 kilometers [2.8 miles] to the southwest and highlights the potential for multiple deposits on the district-scale land package.” The mineralization is a polymetallic gold deposit of high-grade gold, zinc, and copper, as well as lead and silver.
According to a February investor presentation, the 2020 drill program at the Johnson Tract will start in May/June and is fully funded.
HighGold has a mining lease with CIRI, as the Johnson Tract area is on CIRI lands in Southcentral, west of Cook Inlet.
In February, Millrock President and CEO Greg Beischer said, “Millrock has made some strong advancements through 2019. We believe that 2020 will be a watershed year for the company, and we are particularly excited to begin exploration work in the earnest at the 64North Gold project.”
Drilling was scheduled to begin in March at the Aurora target on the West Pogo Block of the 64North Gold project; Aurora is located 1.6 to 2.2 miles west of the Pogo Mine. “The proximity to a high-grade mine, and proximity to a new high-grade gold deposit discovery [Goodpaster] made by our neighbors just on the other side of our mutual claim boundary, along with strong geological, geochemical, and geophysical anomalies, make the Aurora target highly compelling,” Beischer said. The drilling program consists of four to five holes totaling 2,000 meters at Aurora, a 1.5 kilometer by 4 kilometer zone of low-magnetic rocks adjacent to a late diorite intrusion—a setting that’s very similar to that observed at the Pogo mine.
According to Millrock, a second contingent drilling phase is tentatively scheduled for next month in the vicinity of the Half-Ounce-Gulch prospect. 