Exploration resumes for gold west of Cook Inlet
A new company is restarting exploration at a long-dormant gold prospect on the west side of Cook Inlet.
Newly formed HighGold Mining Inc. started drilling at the Johnson Tract prospect in late August. The Vancouver-based mining junior also announced Sept. 23 that it had started trading on the Canadian TSX Venture Exchange.
HighGold CEO Darwin Green said in a formal statement that the company is starting with approximately 2,000 meters of total drilling in eight to 10 boreholes. The data derived from that work, combined with historic drilling results, will inform the first official resources estimate of the prospect, according to Green. That document is expected to be completed early next year.
The Johnson Tract prospect sits on Cook Inlet Region Inc., or CIRI, in-holdings within the boundaries of Lake Clark National Park and Preserve. Last year CIRI leased 20,900 acres of the property to Vancouver-based Constantine Metal Resources Ltd. for 10 years. Several Southcentral Alaska Native village corporations also own surface rights to land there, while CIRI holds the subsurface mineral rights to those areas.
“CIRI prides itself on projects that deliver economic benefits to our shareholders while respecting and preserving the land,” CIRI CEO Sophie Minich said when the Constantine lease agreement was announced in July 2018. “With Constantine’s excellent reputation for responsible mineral exploration and development activities, we know we have chosen an ideal partner.”
CIRI spokesman Ethan Tyler wrote via email that the Southcentral region Alaska Native corporation prioritizes striking a balance between developing its resources and protecting land for future generations. He added that the Johnson Tract prospect is one of CIRI's numerous land selections with known mineral potential and it has been the company's intent to develop those prospects when the economics make sense.
"HighGold's management team and board of directors are a proven technical team and have a track record as trusted operators with a reputation for safety and quality work," Tyler wrote. "This, combined with CIRI's reputation of excellence and land stewardship, demonstrates CIRI's mindfulness to any public concerns regarding resource development."
HighGold's Green has also been part of Constantine's executive leadership, with a focus on exploration.
The multi-metal Johnson Tract deposit sits about 10 miles from tidewater near Tuxedni Bay, about 125 miles southwest of Anchorage.
HighGold is a spin-out of Constantine, which is also exploring the Palmer copper prospect in the Chilkat River valley north of Haines.
HighGold also took over Constantine’s Munro-Croesus gold project in eastern Ontario.
According to the mining company, the lease with CIRI calls for annual payments of $75,000 for the first five years, doubling to $150,000 per year for the second half of the term. HighGold is also required to invest $10 million into the Johnson Tract prospect over the 10 years, with $7.5 million of that coming in the first six years.
If the decision is made to ultimately build a mine — currently envisioned as an underground operation — CIRI could obtain a 25 percent interest in the project at that time, according to HighGold. The Alaska Native regional corporation would also receive net smelter royalties of 2 percent to 4 percent if a mine is developed.
The exploration company acknowledges Johnson is a relatively small prospect, but one that has the potential for very high grades of ore based on the prior drilling work.
Anaconda mining company drilled 88 holes at Johnson totaling more than 26,800 meters between 1982 and 1995 and a September HighGold investor presentation calls the area a regional opportunity “with multiple underexplored satellite prospects.”
The prior drilling revealed gold resources in excess of 10 grams per metric ton in many areas, as well as high-grade zinc and copper ore, according to HighGold.
If developed, the mine would require an access road to a port, both of which would need to be built. The CIRI leases also come with access easement rights and the site has an airstrip built for the earlier exploration work, according to the company.
Elwood Brehmer can be reached at [email protected].