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Mining News: As winter rolls in, so do field results Survey reveals top 10 mining risks have shifted sharply in recent years; the big three in 2008 failed to even make the cut in 2017 Curt Freeman Special to Mining News
As the first snows of the coming winter began to fall at high elevations across Alaska, results of summer programs likewise began to trickle in from far-flung areas of the state.
Meanwhile, second- and third-quarter production data began to show up and mining industry analysts released a series of reports covering a wide range of industry-wide trends.
For example, SNL Metals and Mining Research released information on how long it takes to move a new discovery to production. Data varies widely, ranging from less than five years to greater than 30 years but generally averaging 10 to 20 years.
Underground mines averaged four years longer to get into production and, on average, there did not seem to be a significant difference between permitting a large throughput mine versus a smaller throughput mine.
In another recent report from EY, a review revisited the top 10 risks to mining development. According to this survey, the top risk currently is “Cash Optimization,” followed by “Capital Access” and then “Productivity”.
A comparison with the same survey from 2015 shows that today’s highest risk category was not even in the top 10 risks for 2015. Looking back to the financial crash year of 2008, the top three highest risks were “Skills Shortages, Industry Consolidation” and “Infrastructure Access,” none of which made the top 10 highest risks for the 2017 survey.
As might be expected, the top 10 perceived risks vary by commodity but not as much as you might think. For many metals – gold, silver, the platinum group elements, copper, and nickel – price and currency volatility are the biggest perceived risks - nothing new or surprising there.
But what was surprising: the top perceived risk for lead-zinc was “Switch to Growth” followed by “Pipeline Shrinkage”, a one-two punch that suggests these two metals will enjoy the recent strong prices for some time to come.
Western Alaska Solitario Zinc Corp. announced that is has initiated metallurgical testing to determine the potential to recover silver at its recently acquired Lik zinc-lead project in Alaska. The current lead-zine resource averages about 50 grams of silver per metric ton. However, metallurgical testing to date has focused on maximizing recovery of zinc and lead with virtually no work conducted on silver recovery. In the 2014 preliminary economic assessment conducted on the project, the economic model assumed less than 5 percent silver recovery in the combined zinc and lead concentrates combined. With about 29.1 million ounces of silver in the indicated resource category, and another 6.5 million oz. in the inferred resource category, there is potential for a significant benefit to project economics if silver recoveries can be improved. Testing is underway on this analysis with results expected in late 2017.
Redstar Gold Corp. announced the approval of a 3,750-meter fall drilling program to follow up on encouraging drilling from recently completed geophysical and geochemical surveys and a 12-hole, 2,287-meter drilling program at its Unga gold-silver project near Sand Point. Drilling intersected the targeted Shumagin-style breccia structure in 10 out of 12 drill holes, including visible gold-bearing stockwork encountered in two holes. Significant drill results include hole 17SH032, which intersected 1.0 meters grading 2.12 g/t gold and 27 g/t silver, hole 17SH033, which intersected 0.7 meters grading 5.69 g/t gold and 30 g/t silver and hole 17SH034, which intersected 2.2 meters grading 9.9 g/t gold and 29.3 g/t silver. Mineralization has now been traced over 1,350 meters of strike along the Shumagin gold zone and remains open to expansion. The Shumagin gold zone is one of more than 14 gold-silver-bearing structures totaling close to 35 line-kilometers of combined strike length. The fall drill program will target the expansion of the main Shumagin gold zone at depth and along strike to the northeast towards and below the historic Bunker Hill gold zone. The company is also reviewing other drill targets that may be tested during the fall program, including the Rising Sun prospect on the nine-kilometers-plus-long Apollo-Sitka gold trend.
Interior Alaska Endurance Gold Corp. reported the results of geochemical sampling completed on its newly acquired South Fork, Trout and Wolverine prospects, part of its Elephant project in the Rampart-Eureka-Manley Hot Springs district. At the South Fork target, an east-west striking mineralized structure returned values up to 6.60 g/t gold, corroborating previous sampling that assayed up to 11.98 g/t gold. Mineralization within the structure is related to oxidized sulfides associated with intermittent quartz veining, vein stockwork, and quartz-healed breccia hosted in hornfels altered clastic sediments. These samples also contained anomalous lead (up to 1.940 percent), arsenic (>1 percent), bismuth (up to 21.6 parts per million and silver (up to 10.25 g/t silver). Follow-up work included collection of 132 soil samples and 102 additional rock samples over a 1,000-meter by 300-meter target area. At the Trout prospect, additional rock and soil sampling was completed to follow up previous grab-sample results, which returned up to 9.64 g/t gold. Mineralization occurs in a northeast-southwest trending shear zone hosted within a syenomonzonite intrusive plug. Limited follow-up prospecting and rock sampling at the Wolverine prospect confirmed the presence of visible gold in a quartz vein hosted by felsic plutonic rocks. Additional follow-up work is planned and additional assays at the South Fork, Trout and Wolverine prospects.
Contango ORE Inc. reported additional drilling results from its Phase II drilling program at the Peak gold project (formerly Tetlin project), a joint venture with a subsidiary of operator Royal Gold Inc. Significant results from the West Peak Extension zone included hole 17379, which intercepted 8.1 meters with a grade of 5.22 g/t gold starting at 103 meters and an additional 29 meters grading 2.53 g/t gold from 117 meters. The new mineralization is open up-dip to the southwest, down-dip to the southeast as well as along strike on the undrilled north side of the Main Peak deposit. The companies also announced results from 48-hour cyanide leach bottle roll metallurgical testing on samples from the North Peak zone. Results showed that gold recoveries from 19 composites in the samples ranged from 90.4 percent to 99.6 percent and averaged 97.5 percent. Only three of the 19 composites were lower than 93 percent gold extraction. The majority of the composites (15 of 19) demonstrated gold leaching was primarily complete within 24 hours. Average silver extraction was 65 percent (low of 26 percent; high of 92 percent) with silver grades ranging from 2.0 g/t to 147 g/t silver. Three new holes also were drilled for metallurgical purposes in the Main Peak zone and will be submitted for 48-hour cyanide leach bottle roll testing similar to the previously described North Peak composites. As expected, these holes intercepted significant grade-thickness intervals, including hole 17393, which cut 18.38 meters grading 3.22 g/t gold starting at 2.1 meters, and 43.84 meters grading 6.93 g/t gold, starting at 27.9 meters and 23.13 meters grading 12.56 g/t gold, starting at 111.8 meters, hole 17395 which intercepted 140.86 meters grading 13.27 g/t gold, starting at 78.5 meters, and hole 17397, which intercepted 24.42 meters grading 12.42 g/t gold starting at 23.47 meters and 65.77 meters grading 20.14 g/t gold starting at 99.4 meters. The company also reported its first surface recon results from the Noah prospect, several kilometers southwest of the resource area. Results include multiple gold-bearing samples in streams draining the Hona prospect, and visible gold in pan concentrate samples from elsewhere on the Noah block. Assay results from this work are pending. A phase 3 drilling program has been approved for September-October. This drilling will further explore the West Peak Extension and drill additional holes on two other prospects. The budget for phase 3 is roughly US$1.5 million bringing spending for the calendar year 2017 to about US$11.8 million. Phase 3 spending is expected to bring Royal Gold’s cumulative spending very close to the $30 million aggregate contribution that would result in that company owning 40 percent of the joint venture, with Contango owning the remaining 60 percent.
Alaska Range PolarX Ltd. (formerly Coventry Resources) announced the start of drilling on the Stellar copper-gold project in the central Alaska Range. Diamond drilling with two rigs is underway at the high-grade Zackly copper-gold deposit to complete 3,000 meters of core drilling in 25 holes. One rig will complete about 1,400 meters of core drilling in 12 holes to evaluate the eastern and western extensions of the Main Skarn already identified in previous induced polarization surveys. The second rig is conducting confirmation drilling of about 1,600 meters in 12 holes within the historically drilled Main Skarn resource to verify grade-thickness intervals and allow an industry-compliant resource estimate to be completed. Historic resources at Zackly stand at 1.5 million metric tons, grading 2.9 percent copper and 4.51 g/t gold. The twinned holes also will provide structural details and material for use in metallurgical test‐work programs to evaluate current processing options for Zackly skarn mineralization. In addition, the company indicated that baseline environmental work also has been commissioned and will include ground- and surface-water monitoring and wetlands determination studies.Northern Alaska Trilogy Metals Inc. and funding partner South32 Limited announced initial high-grade copper results from this summer’s exploration diamond drilling program at the Bornite deposit at its Upper Kobuk Mineral project, a business relationship owned and controlled by Trilogy and NANA Regional Corporation Inc. Results from the first three holes are available comprising 3,083 meters of the in-progress 10,000-meter drill campaign. Significant results include hole RC17-234, which intersected three mineralized intervals totaling 83.8 meters averaging 1.10 percent copper, hole RC17-235W intersected two mineralized intervals totaling 33 meters averaging 0.90 percent copper and hole RC17-236 intersected two mineralized intervals totaling 116.4 meters averaging 1.06 percent copper. These three holes offset mineralization to the north and east from previously drilled hole RC13-224, which intersected 236 meters of 1.9 percent copper. The company also reported significant cobalt mineralization occurring as the mineral carrollite and associated with one or more stages of pyrite – particularly in the higher grade copper zones with bornite and chalcocite. More geochemical and metallurgical work is planned to determine the distribution and metallurgical characteristics of cobalt. Bornite mineralization has not been traced over a 1,500- by 2,500-meter area and remains open to the northeast. Grade – thickness maps have revealed a previously unrecognized northwest orientation and recently completed gravity surveys have shown promising results. The company indicated that an additional six holes will be completed during the 2017 field program.
Goldrich Mining Co. reported production figures for Goldrich NyacAU Placer LLC through the end of July for its Chandalar placer gold mine in the Brooks Range. Gold production through July was about 7,262 oz. of alluvial gold, equivalent to roughly 6,050 oz. of fine gold. Production for the same period in 2016 was about 5,565 oz. of alluvial gold, equivalent to roughly 4,484 oz. of fine gold. Subject to weather, gold production at Chandalar should continue through mid-September.
Southeast Alaska Hecla Mining Co. reported updated production results for the second quarter 2017 and updated annual production estimates at its Greens Creek mine. The mine’s second- quarter production of 1,932,047 oz. of silver was significantly less than the second quarter of 2016 production of 2,117,084 oz. Gold production was 12,704 ounces versus 11,528 ounces in the same period in 2016. Operating costs decreased significantly to $1.86 per ounce of silver versus $5.38 per ounce of silver in the year-previous period. The average grade of ore mined during the quarter was 12.11 ounces of silver per ton, down from the average grade of 13.25 ounces per ton that was mined in the second quarter of 2016. During the second quarter the mine also produced 4,420 tons of lead and 12,966 tons of zinc. The mill processed 210,788 tons of ore during the quarter, up from 203,388 tons milled in the year-previous period. Decreased silver production resulted from lower average grades and higher mill throughput, which averaged 2,316 tons per day in the second quarter. On the exploration front, drilling of the East Ore Zone compares favorably to previously modeled resource estimates at higher elevations that may expand the current resource model. Recent intersections include 26.7 ounces of silver per ton, 0.10 ounces of gold per ton, 10.0 percent zinc, and 5.4 percent lead over 5.6 feet and 29.7 ounces of silver per ton, 0.07 ounces of gold per ton, 1.8 percent zinc, and 1.0 percent lead over 5.4 feet. At the West Zone significant intervals include 643.5 ounces of silver per ton, 1.8 ounces of gold per ton, 14.9 percent zinc, and 7.8 percent lead over 4.8 feet and 31.7 ounces of silver per ton, 0.21 ounces of gold per ton, 13.6 percent zinc, and 6.5 percent lead over 4.6 feet. Recent assay results from the 9A Zone include 27.5 ounces of silver per ton, 0.03 ounces of gold per ton, 15.8 percent zinc, and 7.9 percent lead over 8.2 feet and 10.4 ounces of silver per ton, 0.04 ounces of gold per ton, 11.3 percent zinc, and 2.2 percent lead over 45.0 feet. Drilling of the Deep Southwest Zone identified mineralization that extends north of previous mining in the zone and down to the upper limb of the NWW. Recent assay results include 47.2 ounces of silver per ton, 0.22 ounces of gold per ton, 4.3 percent zinc, and 2.0 percent lead over 7.9 feet.
Grande Portage Resources Ltd. announced that it has drilled 2,870 meters of a planned 3,700 meters of core drilling at its Herbert project, a mesothermal vein gold deposit near Juneau. The majority of these holes were designed to expand the strike length of the Goat vein, currently the northernmost drilled vein and to also intercept the Main vein. Drilling and surface sampling have extended the Goat vein strike to at least 700 meters and it has been intercepted in drilling to a depth of at least 200 meters. One of the new Goat vein outcrops consists of about four feet of quartz outcrop with disseminated arsenopyrite, pyrite, galena and sphalerite and visible gold. Hanging wall alteration of the quartz diorite host rock reaches at least six feet thick and the footwall contact zone is covered by gravel. Representative grab samples over a four-foot width of the exposed Goat vein at this location 231 g/t gold and 49.8 g/t silver. Assays from drilling completed to date are pending however, hole 17U-1 intersected over 10 meters of mineralized structure of the Deep Trench vein over 400 meters below surface and 17U-2 intersected nearly 15 meters of mineralized structure of the Main vein 300 meters below the surface outcrop.
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