NANA makes gold strike; work continues amid price slump

Things aren’t great for Alaska’s miners right now, but despite the extended downturn in metals prices some explorers are pressing ahead.

NANA Regional Corp., which conducted its own exploration, announced what it termed a “significant” new gold discovery on state lands on the eastern Seward Peninsula.

However, the overall number of new “grassroots” exploration projects is sharply down this year compared with previous years, and the suppliers and contractors who support explorers are feeling the effects.

There was some good news for NANA, however. The corporation conducted a small program of six holes drilled totaling 3,100 feet. There were good results in the mineralization tested. One hole showed grades of 20.5 grams per ton, or gpt, of gold; 92 gpt of silver; 1.79 percent zinc and 2.63 percent lead. There was also thin, high-grade interval of 175 gpt gold and 470 gpt silver.

Lance Miller, NANA’s vice president for natural resources, said the mineral values are encouraging.

“With this summer’s drilling we have identified the lode source for the placer gold found in the northern Seward Peninsula area,” he said.

Information from the drilling combined with geologic and soil sampling by NANA over several previous seasons have identified a belt of mineralization along a 40-mile trend, he said.

The Kotzebue-based Alaska Native regional corporation is also involved in another exploration project, this one in the Ambler Mining District in the upper Kobuk River area in an alliance with NovaCopper Resources, an exploration company.

NovaCopper has made significant high-value copper discoveries at the Arctic deposit in the area, where it holds mining claims. NANA owns lands in the region including at Bornite, another known copper discovery. The two companies are working together on exploration on both prospects, which NANA having an option to buy into Arctic and NovaCopper an option to buy into Bornite.

In 2015, NovaCopper drilled 14 test holes at Arctic, extracting 3,056 meters of core in a $5.5 million program. The objective was to test the continuity of high-grade ore zones identified at Arctic, the company said in a press release.

To date, NovaCopper and its predecessor company, NovaGold, have drilled 43 core holes in addition to 92 holes drilled by the previous owner, Kennecott. Indicated resources (measured by drilling) are estimated at 23.8 million tonnes and an additional 3.4 million tonnes of inferred, or estimated, resources.

In the indicated resource category the metal values were measured at 3.26 percent copper; 0.71 gpt of gold; 53.2 gpt of silver; 0.76 percent lead and 4.45 percent zinc.

NovaCopper also announced in July that it was beginning work on the pre-feasibility study of the Arctic deposit, an important step in the development program. Work on that is expected to take two to three years.

Other mines progressing

Exploration aside, there are a number of projects where discoveries have been made that are gradually working their way through the web of regulatory approvals. The big Donlin Gold mine in the mid-Kuskokwim River region, for example, may publish its long-awaited draft environmental impact statement by the end of 2015.

Assuming regulatory hurdles are cleared, Barrick Gold and NovaGold Resources, the developers, must still make a decision to develop the mine. That is of real interest to Calista Corp., the Alaska Native regional corporation that owns mineral rights, and The Kuskokwim Corp., owned by local village corporations, which holds the surface lands. It was exploration by Calista’s geologists that led to the gold discovery although there had long been placer mining in the area.

Another project in an advanced stage of development planning is International Tower Hills’ Livengood gold project north of Fairbanks. The gold resource is large and well-defined, but a construction decision will likely require an upturn in gold prices.

The company is meanwhile working on ways to reduce costs. Early cost studies showed the project, as designed, would not be viable at current gold prices.

“We’re still in the optimization stage, working to bring capital and operating costs down to where the project would be viable at lower prices,” said ITH spokesman Rick Soley.

Meanwhile, environmental baseline monitoring and some other work continues at the mine site as well as metallurgical analyses at other locations, he said.

If it is developed, Livengood would be a surface mine mining low-grade ore similar to Fort Knox, a producing mine also near Fairbanks, but larger. It would likely employ over 400 in operation, Soley said.

Two Southeast mines in advanced stages of exploration and development planning include Bokan Mountain, a rare earths project, and Niblack, a multi-metals discovery. More ore reserves were discovered at Bokan Mountain this year and Niblack continues to work on a plan to process is ore in nearby Ketchikan, which would be an important economic boost for that community.

Heatherdale Resources Ltd. is developing Niblack. Bokan is being developed by Ucore Rare Metals Inc. In 2014 the company added 1.04 million tons of ore to its resource base through deeper exploration drilling at the prospect. The company previously reported 4.88 million tons of resources.

The large Pebble project near Iliamna is in a holding pattern. The company, Pebble Partnership, is in litigation against the U.S. Environmental Protection Agency over the agency’s attempt to preempt large mines in the Bristol Bay region. Improper procedures by EPA are being contested. If the lawsuit is won, or if a settlement is reached, Pebble may be allowed to apply to state and regulatory agencies for its permits. That would allow for a mine development plan to be made available to the public.

Operating mines

Meanwhile, the state’s operating mines are doing well.

Near Juneau, the Greens Creek Mine, operated by Hecla Mining Co., is projected to produce 7.3 million ounces of silver, down somewhat from 7.8 million ounces in 2014. The mine holds substantial silver, gold and lead reserves and resources.

An aggressive, three-rig drilling program was conducted in 2015, budgeted at $5.8 million. Over the last 11 years drilling efforts have replaced or added to resources at the mine.

North of Juneau, at Berner’s Bay, the Kensington Mine continues at a steady production rate. Ore production totaled 165,198 tons in the third quarter of 2015 with 28,688 ounces of gold produced, compared with 145,097 tons of ore mine in third quarter 2014 and 30,773 ounces of gold produced.

Kensington is operated by Coeur Alaska Inc.

At the large Fort Knox surface mine near Fairbanks, Kinross Gold Corp. is on target to produce about the same amount of gold as in 2014, which was 379,064 ounces. The company is adding equipment, commissioning four new 793F haul trucks and completing a booster pump station in the mine process facilities.

Coal production will be down in 2015 at the Usibelli mine at Healy, the state’s only producing coalmine, because of reductions in exports. Usibelli Mine Inc. will produce about 1.2 million tons of coal this year, down from almost two million tons per year a few years ago when export markets were stronger.

Demand from Usibelli’s core Alaska markets, six Interior Alaska coal-fueled power plants, will hold steady or even increase somewhat when Golden Valley Electric Assoc.’s new Healy 2 power plant becomes fully operational in 2016.

11/24/2016 - 3:27pm