Curtis Freeman is the owner and president of Fairbanks-based Avalon Development Corporation. He may be contacted via phone at 907-457-5159; email at avalon@avalonalaska.com; or online at avalonalaska.com.
ollowing a year when metal prices were both up and down—sometimes dramatically; when international trade squabbles spooked investors to both enter and exit the metals markets; and when mining companies started the year cautiously bullish but ended it cautious bearish, those involved in Alaska mineral exploration, development, and production are once again asking themselves: “Where did we succeed, where did we fail, and where do we go from here?” As is always the case, high quality projects get funded and get the attention they need. But in a trend that we see both worldwide and at the Alaska level, early-stage projects, those that could become deposits and mines, are getting a smaller and smaller piece of the funding pie. Both demand for and production of metals continue to increase as advancing economies around the world demand more metals for more of what modern society is offering. Even with better recycling systems and smarter technologies, there are more and more consumers asking for metals that are unlikely to be discovered with smaller and smaller exploration budgets. One has to ask: “From where will we get all this metal?”
Teck Resources and partner NANA Regional Corporation announced year-end 2018 and first-half 2019 results from the Red Dog mine. For 2018 the mine produced 583,200 tonnes of zinc in concentrate from ore grading 15.7% with mill recoveries at 83.9%. The mine also produced 98,400 tonnes of lead in concentrate from ore grading 4.4% with mill recoveries of 50.2%. Gross operating profit for 2018 was $864 million, compared with $874 million in 2017. Mill throughput for 2018 was up significantly to 4,429,000 tonnes compared to 4,270,000 tonnes in 2017. For the first half of 2019 the mine produced 268,200 tonnes of zinc in concentrate from ore grading 15.3% with mill recoveries at 84%. The mine also produced 47,900 tonnes of lead in concentrate from ore grading 4.2% with mill recoveries of 54.8%. Gross operating profit for the first half of 2019 was $291 million, compared with $342 million in same period of 2018. Mill throughput for the first half of 2019 was 2,084,000 tonnes compared to 2,025,000 tonnes in same period of 2018. Mine profits have been significantly impacted by the falling price of zinc, partially offset by higher mill throughput and better mill recoveries. Royalty costs for the first half of 2019 were $94 million versus $96 million in the year previous period. Full year 2019 production estimates have been increased to 535,000 to 560,000 tonnes of zinc.
Graphite One Resources announced commencement of an 800 meter drilling program at its Graphite Creek deposit. Drilling efforts will also provide geotechnical information for open-pit mine design and to determine ground conditions in proposed infrastructure sites. The company also shipped 12,000 pounds of raw graphitic material to its US-based industrial partner for processing into advanced graphite materials. The pilot program is expected to produce data for the company’s Preliminary Feasibility Study, due for completion in early 2020, that will outline mining, processing, and production of graphite products. At a 5% cut-off grade, the deposit contains 10.95 million tonnes of measured and indicated resources averaging 7.8% carbon as graphite, plus 91.89 million tonnes of inferred resource averaging 8% carbon as graphite.
NovaGold Resources released its year-end 2018 and first-half 2019 financial results and project updates for its flagship Donlin Gold project, owned 50% with Barrick Gold. The project is on land owned by mineral estate owner Calista Corporation and surface estate owner The Kuskokwim Corporation. In the last year the partners received numerous permits from state and federal agencies, including a permit from the Alaska Department of Natural Resources Division of Mining, Land, and Water, which issued preliminary land use decisions for the project’s transportation corridor, including the access road and related material sites, airstrip, and upriver Jungjuk Port. In addition, the Alaska Department of Natural Resources Division of Oil and Gas, State Pipeline Coordinator’s Section issued a preliminary decision to authorize the sections of the pipeline proposed for state lands. Geotechnical field work was conducted this summer to support the Alaska Department of Natural Resources’ approval of the Alaska Dam Safety certificates for the tailings storage facility and water retention dams. This work consisted of drilling and field testing with installation of monitoring instruments, a pumping test program at the tailings storage facility, excavation of test pits, geophysical surveys, and laboratory testing. This work will help advance the engineering from feasibility level to the final construction packages. The partners also signed a wetlands mitigation agreement on approximately 2,800 acres of wetlands that could be impacted. Such impacts must either be reclaimed or replaced, so an agreement was signed with the Alaska Mental Health Trust Authority to protect some of the Trust’s wetlands in the Cook Inlet area. Donlin also signed an agreement with Tyonek Native Corporation for a conservation easement on 4,000 acres of land and it plans to sign another agreement with the Great Land Trust to purchase nine credits, the equivalent of nine acres, to protect 4.5 acres of wetlands in the Mat-Su Borough. The company indicated that cost estimates for the project for 2019 remain unchanged at $26 million.
Northern Dynasty Minerals reported that the US Environmental Protection Agency (EPA) has taken action to withdraw a Proposed Determination affecting the Pebble copper-molybdenum-gold project initiated in 2014. The EPA had attempted an unprecedented pre-emptive veto of the project before it received the required regulatory review under NEPA and Section 404(c) of the Clean Water Act. Vacating this proposed determination has removed any cloud lingering over the Environmental Impact Statement (EIS) and federal permitting process for the project which have been advancing since early 2019 under NEPA. Lead agency US Army Corps of Engineers published a timeline that indicates it expects to finalize the Pebble Project EIS in early 2020 and issue a final Record of Decision by the middle of 2020. According to the EIS now under review, the project would include development of the open pit mine, with associated infrastructure to include a 270-megawatt power generating plant. A 188-mile natural gas pipeline from the Kenai Peninsula across Cook Inlet to the mine site is proposed as the energy source for the mine. The transportation corridor includes mine and port access roads, an 18-mile crossing of Iliamna Lake, and an Amakdedori Port facility on the western shore of Cook Inlet. The full document can be found at pebbleprojecteis.com.
In mid-2019 Constantine Metal Resources finalized its lease agreement with Cook Inlet Region, Inc. on the 20,942 acre Johnson Tract project. Shortly afterwards, Constantine spun the Johnson Tract out into a new public company, HighGold Mining, which then closed $7.65 million in financing and initiated a planned eight- to ten-hole, 2,000 meter diamond drill program at the project. These new data along with historic drilling data will be used to generate the first industry compliant mineral resource for the project. Additional work planned on the project includes geologic mapping, prospecting, and soil and rock sampling at other prospect areas. The prospect hosts a gold-silver-zinc-copper-lead deposit where historic discovery drilling reported 102.6 meters grading 10.94 grams per ton (gpt) gold, 8.01% zinc, 0.75% copper, 2.13% lead, and 8.5 gpt silver, including 50 meters grading 20 gpt gold, 9.4% zinc, 1% copper, 2.8% lead, and 12.7 gpt silver. The discovery was followed by near-continuous exploration over a thirteen-year period, including identification of other prospects over a 12 kilometer strike length.
Kinross Gold announced year-end 2018 and second half 2019 results from the Fort Knox mine near Fairbanks. For 2018, the mine produced 255,569 ounces of gold at a cost of $837 per ounce versus 381,115 ounces of gold at a cost of $628 per ounce in 2017. Average mill grade for the year ranged from 0.42 to 0.44 gpt gold. Mill recoveries ranged from 81% to 83%. Average heap leach grades for 2018 were 0.19 gpt gold. The full-year production decreased year-over-year largely due to a decrease in grades and tonnes of ore milled and placed on the heap leach pads. At year-end 2018, proven and probable reserves were 267,573,000 tonnes grading 0.40 gpt gold (3,036,000 ounces), while measured and indicated resources were 155,679,000 tonnes grading 0.40 gpt gold (1,797,000 ounces). Inferred mineral resources were 88,652,000 tonnes grading 0.30 gpt gold (808,000 ounces). During the first half of 2019, the mine produced 93,677 ounces of gold at costs of $910 and $1,023 per ounce in the first and second quarters, respectively. Average mill grade ranged from 0.59 to 0.72 gpt gold. Mill recoveries ranged from 81% to 84%. Average heap leach grades for the first half of 2019 ranged from 0.20 to 0.22 gpt gold. On the development front, the Gilmore project is progressing on schedule and on budget, with initial ore now expected later in 2019. Construction of the new heap leach pad is well advanced; dewatering for the Gilmore pit expansion is proceeding according to plan; and stripping for the initial Gilmore pushback is on schedule. The project is expected to extend mine life to 2030 at a low capital cost, generate an internal rate of return of 17% at a $1,200 per ounce gold price, and increase life-of-mine production by approximately 1.5 million gold equivalent ounces.
Northern Star Resources had a very busy year since acquiring the Pogo gold mine in the second half of 2018. For the second half of 2018 the mine produced 104,580 ounces of gold at an average mine grade of 9.6 gpt gold. All-in sustaining cost of production was $1,130 per ounce. The mine processed 399,816 tonnes of ore with recoveries averaging 89%. During the first quarter of 2019 the mine produced 39,750 ounces of gold at all-in sustaining production costs of $1,468 per ounce. The operation mined 171,820 tonnes of ore grading 7.2 gpt gold. The mill processed 190,868 tonnes grading 6.2 gpt gold with a recovery of 89%. For the second quarter, gold mined for the quarter was up 27% to 50,566 ounces. All-in sustaining cost of production was down 18% to $1,207 per ounce. Expansion of activities at the mine included a 13% increase in development meters and a 250% increase in stoping tonnes, which now account for 33% of mill feed, versus 11% in the previous quarter. The company indicated that it was spending approximately $21 million per month to upgrade mine output and expected to spend about $18 million per month in the second half of 2019. In mid-2019 the company commenced a $30 million mill expansion plan, increasing throughput from 1 million to 1.3 million tonnes per year. The company also announced an updated mineral resource for the mine, the largest in the operation’s history. At a cut-off grade of 3.8 gpt gold, total resources included 19,328,000 tonnes grading 9.6 gpt gold containing 5,949,000 ounces of gold. This resource includes a maiden resource at the Central Vein deposit of 0.5 million ounces grading 7.9 gpt gold and a maiden resource at the Hill 4021 deposit of 0.5 million ounces grading 8.2 gpt gold. Fueling all of these mine and mill upgrades was a robust year of impressive exploration results in and around the existing resource. Drilling on the Goodpaster prospect followed up the discovery hole, which returned 4 meters grading 64.5 gpt gold with more recent results including 5.2 meters grading 15.7 gpt gold. Drilling has expanded mineralization over a strike distance of 2.3 kilometers to a depth of 500 meters, and mineralization remains open to expansion. At the Central Zone, significant intercepts included 1.5 meters grading 48.6 gpt gold, 1.3 meters at 33.2 gpt gold, and 5 meters at 13.9 gpt gold. Drilling has significantly extended the known extent of the South Pogo veins with drill results including 8.7 meters grading 17.5 gpt gold and 6.7 meters grading 28.6 gpt gold. Similar expansion was seen at the X-vein/North Zone area with drill results including 4 meters grading 40.7 gpt gold and 7.8 meters grading 18 gpt gold. Drilling in the Fun Zone returned 4.9 meters grading 14.8 gpt gold, 11.8 meters grading 16.9 gpt gold, and 2.4 meters grading 19.8 gpt gold.
Tectonic Metals plans to transition from a private to a public company with proceeds directed toward project exploration in Alaska including the Tibbs in the Goodpaster District, Seventymile in the Seventymile District, and Northway in the southern Fortymile District. The Seventymile and Northway projects are on mineral lands owned by Doyon, with Northway Natives Inc. owning surface lands at Northway. At Northway, the Area 6 target hosts a 1,200-meter-long soil anomaly that has returned samples with up to 597 parts per million copper and 253 parts per billion gold. Anomalous copper and gold is coincident with induced polarization (IP) and magnetic anomalies that moved this prospect to the drill stage. At Area 7, an 800-meter-long gold-in-soil anomaly returned up to 2.12 gpt gold. Area 7 also has a coincident geophysical anomaly covering a 3,000 by 5,000 meter area that will guide drilling. At Seventymile the company is testing a high grade shear-zone hosted model focused on the Flanders and Flume prospects using top of bedrock soil sampling and rotary air blast drilling to explore favorable lithologic contacts. The Tibbs prospect hosts high angle, high grade gold-quartz veins similar to Pogo’s North zone veins; however, no low-angle veins similar to those being mined at Pogo have been identified and no exploration was done to focus on such low angle veins. Historic drilling at Grey Lead intersected high angle Pogo-style veins that returned 5.7 meters of 19.14 gpt gold, 5.3 meters of 15.76 gpt gold, 4.26 meters of 6.13 gpt gold, and 2 meters of 16.42 gpt gold. About 300 meters east of Grey Lead, Tectonic conducted trenching at the Connector zone that encountered 6 meters of 8.1 gpt gold and 13 meters of 1.5 gpt gold. Rock samples collected directly on strike of the trenches contained 32.3 and 17.4 gpt gold, bringing the strike length of the Grey Lead vein system to 1,000 meters. Other targets of interest include the low-angle shear-hosted Johnson Saddle prospect that returned 8 meters grading 1.7 gpt gold and the intrusive-hosted Michigan prospect where surface samples have returned grades up to 900 gpt gold.
Elsewhere in the Goodpaster District, Millrock Resources acquired several large blocks of ground after an equity investment by Alaska newcomer EMX Royalty Corporation. The staking brought Millrock’s claim holdings in the Goodpaster district to more than 163,000 acres. Claims were staked along the northwest trending Pogo trend as well as the less explored northeast trending Shaw Creek trend. At the eastern end of the Pogo trend, the company staked the historic Scott, Boundary, and Cal Surf prospects, which returned elevated gold, arsenic, and bismuth in surface samples related to northeast and northwest-oriented high-angle faults. Drilling conducted on the Boundary and Cal Surf prospects by previous operators intersected gold-bearing intervals. On the Shaw Creek trend, the newly staked claims cover stream sediment, soil, and rock samples containing elevated gold, arsenic, and bismuth anomalies that appear to be associated with intrusive rocks near splays off the Shaw Creek fault. These claims cover the historic Eagle prospect and adjoin Gold Reserve’s LMS prospect, the only other prospect in the district with an industry-compliant resource.
Freegold Ventures has entered into an agreement with a wholly owned subsidiary of South32 whereby South32 has the option to earn a 70% interest in the Shorty Creek copper-molybdenum-gold project near Livengood. The $2.3 million 2019 exploration budget includes induced polarization, surface geochemical surveys, and a planned 2,000 meters of core drilling aimed at further expanding the mineralization at Hill 1835 and further testing of the Hill 1710 target area. To date, twelve widely spaced holes with average hole depths of 500 meters have been drilled at the Hill 1835 target, all of which intersected significant and consistent copper, gold, silver, and tungsten mineralization.
International Tower Hill Mines’ Phase 12 metallurgical program began at its Livengood gold project. This work is part of a $3.7 million 2019 budget and will build on the metallurgical studies undertaken in 2018 to continue to define and refine the project flowsheet. Approximately 2,000 kilograms of samples will be processed in 2019 to evaluate optimum grind size and to determine whether different recovery parameters should be applied to different areas of the orebody.
Prompted by encouraging results from its Preliminary Economic Assessment (PEA), Contango ORE announced that joint venture partner Royal Gold retained Scotia Capital to conduct a joint process for the direct or indirect sale of the partner’s Peak gold-silver-copper project. The company also indicated they felt there was significant exploration potential outside the Main Peak and North Peak resource areas. The partners also approved a $6.9 million 2019 budget which included surface recon geochemistry, induced polarization geophysical coverage over new and existing exploration targets, permitting activities on the Main Peak and North Peak resource areas, and up to 5,000 meters of new drilling on both porphyry and skarn type exploration prospects. The exploration holes on the East Peak prospect have been interpreted as an extension of the previously identified Main Peak resource. This prospect is based on new induced polarization geophysical data acquired in the early stages of the 2019 exploration program. The company also reported surface sampling and mapping was carried out at the Hona prospect where rock outcrop geochemistry has returned gold values greater than 1 gram per tonne over an area 2.5 kilometers long. Drilling at Hona was in progress in late September.
White Rock Minerals announced that Australia-based Sandfire Resources NL has exercised its option to enter into a joint venture agreement with White Rock on its 117,000 acre Red Mountain volcanogenic massive sulfide project in the eastern Bonnifield District. The partners’ $5.63 million 2019 program included a 500-square-kilometer airborne electromagnetics, a space-borne spectral analysis, analysis of public-sector and company derived whole rock lithogeochemical data, detailed on-ground geological reconnaissance, soil geochemical sampling, detailed controlled-source audiomagnetotellurics, and audiomagnetotellurics ground geophysics surveys and follow-up diamond core drilling. To date in 2019, scout drilling has been conducted west of the West Tundra Flats deposit, on strike and down dip of the Hunter prospect, at Platypus, Megan’s, Stingray, Mantaray, Arete, Smog South, Dry Creek, and Sheep-Rogers. All of these holes provided important stratigraphic information but failed to intersect significant mineralization associated with the target horizons. The drill rig has now returned for additional drilling at Dry Creek. Reconnaissance geological mapping and sampling of historic volcanogenic massive sulfide occurrences has also been completed with the Cirque prospect, originally discovered in 1976. Historic sampling reported massive sulfide float blocks up to two meters thick with average grades of 5.6% zinc, 1.7% lead, 49 gpt silver, and 0.5% copper. Two low-conductance anomalies were identified by a fixed loop electromagnetic survey in 2019 with the depth to the top of the larger, northern anomaly modeled at 150 meters.
New Age Metals provided an update on exploration efforts at its Genesis copper-nickel-platinum group element project. The first-ever application of ASTER and LANDSAT8 imagery over Sheep Hill massif shows a consistent correlation between a distinctive strong iron oxide alteration signature and the geological and geophysical trace of the previously discovered platinum group metals-copper-nickel (PGM-Cu-Ni) sulfide mineralization hosted by a dunite-lherzolite unit. ASTER and LANDSAT8 imagery revealed at least two other sub-parallel alteration zones adjacent to and east of the known PGM-Cu-Ni mineralization at Sheep Hill. Combining ASTER and LANDSAT8 results with airborne magnetics and resistivity data indicate the total length of the stratabound PGM-Cu-Ni mineralization on Sheep Hill is at least 2,000 meters and open under alluvial cover in both strike directions. At the adjacent Bernard Mt. massif, ASTER and LANDSAT8 results combined with airborne magnetics and resistivity data indicate a well constrained northeast trending band of iron oxide alteration, conductivity, and magnetics extending for at least 2,250 meters along the south flank of Bernard Mt. The stratigraphic position, ASTER and LANDSAT8 alteration, and airborne magnetic and resistivity signatures are identical to those at Sheep Hill. There has been no drilling at Sheep Hill or Bernard Mt.
PolarX entered into a joint venture on its Alaska Range project with Alaska newcomer Lundin Mining Corporation. The agreement covers the Stellar claims but does not include PolarX’s 100% owned Zackly skarn deposit. The partners then approved a $3.02 million 2019 exploration budget that includes induced polarization ground geophysics at the Saturn copper-gold porphyry target. At Saturn, induced polarization surveys indicate the highest chargeability occurs on the outer flanks of the central magnetic high associated with Saturn, surrounding a zone of elevated chargeability associated with the magnetic high. The geophysical data also show zones of decreased resistivity above the chargeability highs, possibly indicating the presence of clay-minerals associated with argillic alteration or weathering. Additional induced polarization surveys are in progress and further drilling is planned pending integration of geophysical data with existing geology, geochemistry, and geophysics. Three-dimensional inversion modelling of the magnetic data has highlighted that the Saturn anomaly represents a steeply south plunging, upward flaring cylinder. The magnetic body is approximately 2 by 1 kilometers in areal extent and is covered by 10 to 15 meters of post-mineral gravels and is therefore blind to surface geochemistry.
In parallel with the drilling at Saturn, PolarX announced continued drilling to define additional near-surface, high-grade copper-gold mineralization at the Zackly skarn. Zackly lies within the Alaska Range project but, along with the Caribou Dome deposit, is specifically excluded from the Lundin Mining farm-in agreement. PolarX planned to start resource extension drilling at Zackly during August. This work will build on 2018 drilling where drilling results included 16.7 meters grading 1.2% copper and 0.5 gpt gold from 261.4 meters depth. The mineralization trend identified in historical drilling and in aeromagnetic data suggests mineralization is fault offset to the north but continues to the west of the fault into areas that have not been drilled to date.
Nova Minerals announced an initial inferred resource at the Oxide Korbel deposit on its Estelle gold project. Using a cut-off grade of 0.18 gpt gold, inferred resources include 181,291,950 tonnes grading 0.43 gpt gold containing 2,500,538 ounces of gold. The resource was based on three diamond core holes and eighteen reverse circulation drill holes in two resource blocks that are thought to be fault offset from each other. The two blocks measure 700 by 200 meters in plan projected to a vertical depth of about 585 meters in Block A and 500 by 500 meters in plan to a depth of 280 meters in Block B. The entire block model is constrained and enveloped by a more extensive induced polarization chargeability anomaly. The alteration is characterized by a quartz-sericite-pyrite assemblage with minor to trace amounts of biotite, kaolinite, and potassium feldspar. Sulfide mineralization occurs as blebs within millimeter-scale sheeted quartz vein arrays, sulfide coatings on joint and fracture surfaces, sulfide blebs within hydrothermally altered quartz-carbonate infillings, and finely disseminated sulfides in bleached altered intrusive rock. The company also reported that diamond drill hole SE12-008, completed in 2012, was re-sampled by the company as part of its 2019 field program. This drill hole is located at the RPM prospect, approximately 25 kilometers south of the Oxide Korbel deposit. Re-assay results from SE12-008 returned 177.39 meters grading 0.79 gpt gold between 4.27 and 180.78 meters depth, including 120.4 meters grading 1.02 gpt gold between 26 and 146.4 meters depth and 50.17 meters grading 1.76 gpt gold between 75.19 and 125.36 meters depth. Additional work is planned at RPM prospect in 2020.
Trilogy Metals and funding partner South32 announced initial drilling results for its $9.2 million Bornite copper-cobalt deposit and the Sunshine volcanogenic massive sulfide prospect at their Upper Kobuk Mineral project, a business relationship owned and controlled by Trilogy and NANA Regional Corporation. For 2019, exploration drilling included ten holes (7,610 meters) drilled at Bornite, eleven holes drilled at Arctic (2,405 meters), and six holes (1,357 meters) drilled at the Sunshine prospect. The partners completed district-wide VTEM and ZTEM airborne electromagnetic surveys as the first step in its $2 million district-scale exploration program for 2019. The surveys were flown on 200 and 400 meter line spacings over both the Cosmos Hills and the entire 100-kilometer-long Ambler volcanogenic massive sulfide belt. Results from the VTEM and ZTEM surveys indicated numerous electromagnetic anomalies that either expand or lie outside previously identified massive sulfide prospects. Based on the VTEM airborne geophysical survey and historical drilling, drilling targeted the Sunshine prospect, located 13 kilometers from the Arctic deposit. At a cutoff grade of 1.5% copper equivalent, the four previously known and one newly discovered zones at Sunshine returned significant copper mineralization from hole SC19-019, the only assay results currently available. Significant intercepts including 9.1 meters grading 3.02% copper, 1.42% zinc, 0.27% lead, 0.14 gpt gold, and 24.65 gpt silver and 7.88 meters grading 2.23% copper, 5.62% zinc, 1.1% lead, 0.18 gpt gold, and 46.95 gpt silver. Additional assay results from Sunshine are pending. Preliminary drill results from the Bornite deposit include both infill and step out drilling from four holes. At a cutoff grade of 0.5% copper, significant drill results include hole RC19-257 which intersected three mineralized intervals including 3.7 meters averaging 1.32% copper, 4.4 meters averaging 2.6% copper, and 56.1 meters averaging 1.81% copper. Hole RC19-261 intercepted 35 meters averaging 1.98% copper, 16 meters averaging 2.02% copper, 54.1 meters averaging 1.11% copper, and 29 meters averaging 1.47% copper. Additional assay results from Bornite are pending. The partners also announced metallurgical work on nine Bornite samples produced average copper concentrate grades of 27.6%. Cobalt was recoverable in a pyrite concentrate with concentrate grades ranging from 0.07% to 0.45%. An updated mineral resource at Bornite, at 0.5% copper cut-off grade, included indicated in-pit resources of 40.5 million tonnes grading 1.02% copper while inferred resources include in-pit resources of 84.1 million tonnes grading 0.95% copper. Underground resources, at a 1.5% cut-off grade, are 57.8 million tonnes grading 2.89% copper. For cobalt, inferred resources, at a 0.5% copper cut-off grade, include in-pit resources of 124.6 million tonnes grading 0.017% cobalt and underground resources, at a 1.5% copper cut-off grade, of 57.8 million tonnes grading 0.025% cobalt.
Trilogy Metals and funding partner South32 also announced work at the Arctic volcanogenic massive sulfide deposit at their Upper Kobuk Mineral project, a business relationship owned and controlled by Trilogy and NANA. The $7 million engineering and environmental program included two drill rigs focusing engineering and environmental studies to prepare a National Instrument 43-101 compliant Feasibility Study. The partners expect to complete the feasibility study in the first half of 2020.
Goldrich Mining Company announced the dissolution of Goldrich NyacAU Placer, a 50/50 joint venture between Goldrich and NyacAU that was formed to mine the various placer gold deposits that occur throughout Goldrich’s 23,000 acre Chandalar gold project in the southern Brooks Range. The joint venture was dissolved because Goldrich NyacAu Placer failed to meet the minimum production requirements as established by the partners. Goldrich is in the process of developing a new mine plan for the Chandalar project. As previously announced, Chandalar mine production for 2018 was 20,900 ounces of raw placer gold, which is approximately equivalent to 17,100 ounces of fine gold. Over the course of the partnership, from 2015 through 2018, production totaled 50,500 ounces of raw placer gold, which is approximately equivalent to 41,500 ounces of fine gold.
Hecla Mining Company announced year-end 2018 production and resources and first-half 2019 production and exploration results at its Greens Creek mine. The total cash cost per ounce of silver produced for the year was $5.58 per ounce versus $5.76 per ounce in 2017. The average grade of ore mined during the year was 12.16 ounces per ton (opt) silver, down slightly from the average grade of 12.88 opt in the year previous. For the year, the mine produced 7,953,003 ounces of silver, 51,593 ounces of gold, 18,960 tons of lead, and 55,350 tons of zinc. Lower annual silver production, when compared to 2017, was due to the expected lower grades. It operated at an average of 2,316 tons per day in 2018, a mine record for throughput. The mine also announced updated reserves and resources, including proven and probable reserves of 9,277,000 tons grading 11.5 opt silver, 0.09 opt gold, 2.8% lead, and 7.6% zinc. Measured and indicated resources are 7,467,000 tons grading 13 opt silver, 0.1 opt gold, 3.1% lead, and 8.2% zinc. Inferred resources are 2,470,000 tons grading 14.6 opt silver, 0.09 opt gold, 3% lead, and 7.3% zinc. At current production rates, the company estimates mine life at about eleven years. I know we are not supposed to add up all the ounces in all categories, but I will save you the trouble of ignoring this dictum and tell you that total silver resources at the mine are just over 240 million ounces. And this is after production of more than 228 million ounces of silver through the end of 2018. For the first half of 2019 the mine produced 4,605,017 ounces of silver and 27,585 ounces of gold, both significant increases compared to 2018 first half production levels. The mine also produced 9,410 tons of lead and 27,585 tons of zinc. Average grades mined include 13.91 opt silver, 0.095 opt gold, 2.79% lead, and 7.07% zinc. The mill operated at an average of 2,312 tons per day in the first half of 2019. Cash cost of production was $1.46 per ounce of silver compared to negative $4.22 per ounce in the year previous period. Forecast 2019 production from the mine was increased to 9 million ounces of silver and 52,000 ounces of gold.
Coeur Mining reported year-end 2018 production and resources and first-half 2019 production and exploration results at its Kensington mine. For 2018, the mine produced 105,570 ounces of gold during the year versus 115,094 in the year previous. This decrease was offset by higher grade production from the Jualin deposit. For 2018 the operation milled 641,058 tons of ore grading 0.18 opt gold with a gold recovery of 92.3%. Adjusted cash cost for the year was $1,050 per ounce. Year-end 2018 reserves and resources at Kensington included proven and probable resources of 2,586,000 tons grading 0.213 opt gold containing 552,000 ounces of gold, measured and indicated resources of 2,681,000 tons grading 0.250 opt gold containing 671,000 ounces of gold, and inferred resources of 710,000 tons grading 0.227 opt gold containing 161,000 ounces of gold. Again, breaking the rules so you don’t have to, Kensington has produced 920,192 ounces of gold since start-up in 2010, bringing total production plus current resources to 2,274,192 ounces. During the first quarter of 2019 the mill processed 164,332 tons of ore, a slight increase over the 158,706 tons of ore produced in the year previous period. The mine produced 29,973 ounces of gold grading 0.20 opt gold with an average recovery of 90.2%. The adjusted cash cost was $990 per ounce, 17% above the year previous period. Cost increases were driven by higher mining and employee-related costs. The high-grade Jualin deposit reached commercial production in late 2018, shifting underground efforts from resource development to full production, allowing for longhole stope production at Jualin in future quarters. The Jualin deposit contributed about 10% of the gold during the quarter. For the second quarter of 2019 the mill processed 160,510 tons of ore, a slight decrease over the 168,751 tons of ore processed in the year previous period. The mine produced 34,049 ounces of gold grading 0.23 opt gold with an average recovery of 93%. Gold production during the second quarter increased 14% compared to the prior quarter and year-over-year gold production increased 33%. Average gold grade was approximately 15% higher quarter-over-quarter and 44% higher year-over-year driven by additional ore feed from the higher grade Jualin deposit. The Jualin deposit contributed about 17% of the gold during the quarter and is expected to contribute 20% of the mine’s total production for 2019. The company indicated that it expects full-year 2019 production from the mine at 117,000 to 130,000 ounces of gold.
Constantine Metals Resources announced a PEA on the Palmer polymetallic project, a joint venture between Constantine and Dowa Metals & Mining. The PEA generated a $354 million pre-tax net present value at 7% discount rate and a $266 million after-tax net present value at 7% discount rate. The project generates a 24% pre-tax internal rate of return on investment and 21% post-tax internal rate of return. Cost estimates are based on mining 12.48 million tonnes at a diluted head grade of 4.24% zinc, 0.81% copper, 49.6 gpt silver, 0.33 gpt gold, and 22.6% barite (barium sulfate). Life of mine recovered metal production is estimated at 1.068 billion pounds of zinc, 196 million pounds of copper, 18 million ounces of silver, 91 thousand ounces of gold, and 2.89 million tonnes of barite. Zinc cash cost including sustaining capital came in at $0.11 per pound net of by-product credit. More recently the company received approval of its underground exploration plan of operations from the Alaska Mental Health Trust Lands Office, the Alaska Department of Natural Resources, and the Alaska Department of Environmental Conservation. The plan calls for excavation of approximately 2,000 meters of underground ramp to provide a drill platform for exploration and to provide access to gather additional geotechnical and hydrological data; completion of 30,000 meters of underground exploration drilling; placement on the surface of waste rock from underground excavation; construction and operation of sediment settling ponds and land application disposal system for the discharge of underground seepage waters; and construction of other facilities necessary for the underground excavation and drill programs. On the exploration front, drill targets for 2019 include the AG Zone deposit, an airborne geophysical EM target located down-dip of RW Zone in the Palmer deposit, and new targets in the HG-CAP-Waterfall Syncline Complex. At the RW zone, drill hole CMR19-140 was designed to test the open down-dip and down-plunge extension of the RW West Zone and intersected massive baritic sulfide mineralization. The new intercept returned 4.6 meters grading 0.52% copper, 4.64% zinc, 27.7 gpt silver, 0.20 gpt gold, and 43.7% barium sulfate. This interval represents a 335 meter step-out of the mineralized zone. The partners also announced the first resource estimate at the AG zone. Using a 5% zinc equivalent cut-off, the new inferred resource at AG only came in at 4,256,000 tonnes grading 4.64% zinc, 0.12% copper, 0.96% lead, 119.5 gpt silver, 0.53 gpt gold, and 34.8% barite, equal to 9.04% zinc-equivalent grade. Using the new AG zone resources, combined total indicated resources at Palmer now stand at 4,677,000 tonnes grading 5.23% zinc, 1.49% copper, nil lead, 30.8 gpt silver, 0.30 gpt gold, and 23.9% barite, equal to 10.21% zinc-equivalent grade, and total inferred resources of 9,594,000 tonnes grading 4.95% zinc, 0.59% copper, 0.43% lead, 69.3 gpt silver, 0.39 gpt gold, and 27.7% barite, equal to 9.87% zinc-equivalent grade.
Grande Portage Resources commenced its summer field program at its 100% controlled Herbert gold project. The program includes trenching and channel sampling on numerous locations on the Deep Trench Vein and other locations on the Main Vein. Trenching on the Deep Trench Vein is being conducted near the central portion of the vein and near the eastern limit of past successful drilling that focused on an outcrop where chip sampling of the vein assayed 14.1 gpt gold. Another location for trenching has been chosen near the eastern end of the vein where it has split into two strands. The north strand was intersected by DDH 10B-1 and returned 0.52 meters of 9.40 gpt gold and crops out just west of the drill station. To date, prospecting, mapping, and drilling have tested less than 1,000 meters of the 4,600 meter gold trend. The LiDAR survey clearly extends the prospective structures for at least another 1,400 meters to the southeast and 400 meters to the northwest. These new structures will be prospected, mapped, and sampled to advance them toward the drill stage. Current resources at the project include indicated resource of 606,000 ounces at an average grade of 10.03 gpt gold and inferred resource of 252,000 ounces at an average grade of 14.15 gpt gold.
Zarembo Minerals Company announced additional results from 2018 efforts at its Frenchie volcanogenic massive sulfide prospect. The Frenchie prospect is hosted in the same Triassic Hyd Group volcanic rocks as Hecla Mining’s Greens Creek mine on Admiralty Island. Previous drilling by the company at the Frenchie prospect intersected 15 feet of massive sulfide mineralization starting at 21 feet depth that returned intervals of 1 to 7 feet grading 0.39% to 1.575% copper, 0.05% to 0.23% lead, 1.54% to 2.76% zinc, 0.65 gpt to 2.02 gpt gold, and 8.6 gpt to 21.5 gpt silver. Both copper-lead-zinc-silver-gold massive sulfide-rich mineralization and “white” barite-rich sulfide mineralization occur on the prospect. Recent sampling indicates massive sulfides at Frenchie exhibit significant gold enrichment and suggest that past sampling likely underestimated gold values on the prospect. Limited drilling and airborne geophysics over Zarembo Island suggests the prospective Hyd Group rocks are mineralized over an area measuring at least 20-kilometers-long by up to 6-kilometers-wide. Hyd Group rocks are covered by younger rocks to the northeast and southwest, suggesting the actual extent of prospective stratigraphy is significantly larger than what is mapped at surface. Two and three-dimensional interpretation of airborne magnetics and resistivity suggests conductive rocks similar to massive sulfide and barite-sulfide mineralization outcropping in the Frenchie area are widespread well outside areas tested by past drilling.