PHOTO BY CHRIS AREND / COURTESY OF NANA REGIONAL CORP.

Operated by Teck Resources Ltd. and situated on Northwest Alaska landsowned by NANA Regional Corp., the Red Dog Mine produced 551,300 metrictons of zinc during 2013, accounting for roughly 4 percent of the global supply.This exceptionally high-grade operation and a number of exploration and earlydevelopment zinc projects in Alaska and Canada’s North are set to benefit fromanticipated zinc prices being driven up by falling global supply. Page 8.

A special supplement to Petroleum NewsWEEK OF

May 25, 2014

3 WestMountain acquires Terra Mine Buying out Corvus, owner eyes higher output at high-grade gold project

11 Pebble moves into litigation phase Partnership sues EPA, watchdog investigates alleged misconduct of agency

13 Nunavut draws mining investment Exploration spending tops $270M; eight projects in development pipeline

2NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF MAY 25, 2014

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By SHANE LASLEYMining News

WestMountain Gold Inc. has gainedfull ownership of the Terra project

and now has its sights set on recovering3,000 to 5,000 ounces of gold from thishigh-grade property over the coming sum-mer season.

“I am pleased to announce that we nowhave 100 percent ownership of the Terramine project. With this milestone accom-plished, WMTN (WestMountain Gold) isnow focused on raising operating capital tocontinue gold production at our high-gradegold mine in Alaska,” WestMountain GoldPresident and CEO Greg Schifrin toldpotential investors May 5.

West Mountain, which entered a jointventure with Corvus Gold on the projectlate in 2010, had previously earned a 51percent interest in the property. InFebruary, the aspiring gold producerbought the 49 percent balance for US$1.8million in cash and 200,000 WestMountainshares.

Over the past three years,WestMountain has been setting up andtesting a two-ton-per-hour mill and gravitycircuit to recover gold from the high-gradeveins at this property located some 130miles (210 kilometers) northwest ofAnchorage.

Funding this activity in tight equitymarkets has put WestMountain Gold’s bal-ance sheet in the red, but the Idaho-basedcompany is hoping to raise US$8 millionto help balance the books and provide thecapital needed to meet the company’s goalof producing at least 150 ounces of goldper week during the 2014 field season atTerra.

“The construction and build up duringthe 2013 season has positioned the compa-ny to phase right into production withplans underway to open the mine and millin April 2014,” Schifrin said earlier.

Achieving goalsDuring 2013, WestMountain spent

roughly US$2.2 million at the Terra projectin 2013, of which US$1.6 million went tocapital expenditures and US$600,000 toexploration.

One of the primary objectives of thisinvestment was to upgrade the mill to aprocessing rate of one-to-two tons perhour; including the addition of a goldshaker table for free gold recovery, flota-

tion cells and new mill buildings. Upon completion of the upgrades,

WestMountain tested the plant with 75tons of material mined from the Ben andFish veins. During this second test run ofthe mill, the company recovered 300ounces, or about four ounces per ton, gold.This adds to the 75 ounces of gold recov-ered from a 23-ton bulk-sample processedin 2012.

“We are excited to have the continuityof gold doré production from our success-ful bulk sample tests and the associatedcash flow that demonstrated the high-grade production potential of the Ben Veinand new efforts at the Fish Vein. Weachieved all of our goals for 2013, includ-ing the year’s highlight of producing golddoré from successful bulk sample tests ofthe Ben Vein and Fish Vein in the shortsummer season,” said Schifrin.

Roughly 65 tons of the bulk sample wasmined from three benches at Ben Vein,measuring 30 feet (9.1 meters) of verticalheight and 90 feet (27.4 meters) alongstrike.

According to a technical report pub-lished in February 2013, the Ben Vein hasan indicated resource of 428,000 metric

tons averaging 12.2 grams per metric ton(168,000 ounces) gold and 23.1 g/t(318,000 ounces) silver. Geologic model-ing of the drilled portion of Ben shows the

high-grade vein is open-ended to the northand at depth.

The balance of the bulk sample was

l A L A S K A

WestMountain buys high-grade Terra goldAfter purchasing 49 percent interest from Corvus, company seeks funds to meet goal of producing at least 3,000 ounces in 2014

3NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF MAY 25, 2014

North of 60 Mining News is a monthly supplement of the weeklynewspaper, Petroleum News. It will be published in the fourth orfifth week of every month.

Shane Lasley PUBLISHER & NEWS EDITOR

Rose Ragsdale EDITOR-IN-CHIEF (contractor)

Mary Mack CEO & GENERAL MANAGER

Susan Crane ADVERTISING DIRECTOR

Heather Yates BOOKKEEPER & CIRCULATION MANAGER

Bonnie Yonker AK / INTERNATIONAL ADVERTISING

Marti Reeve SPECIAL PUBLICATIONS DIRECTOR

Steven Merritt PRODUCTION DIRECTOR

Curt Freeman COLUMNIST

J.P. Tangen COLUMNIST

Judy Patrick Photography CONTRACT PHOTOGRAPHER

Forrest Crane CONTRACT PHOTOGRAPHER

Tom Kearney ADVERTISING DESIGN MANAGER

Renee Garbutt ADVERTISING ASSISTANT

Mapmakers Alaska CARTOGRAPHY

ADDRESSP.O. Box 231647Anchorage, AK 99523-1647

NEWS 907.229.6289publisher@miningnewsnorth.com

CIRCULATION 907.522.9469 circulation@petroleumnews.com

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FAX FOR ALL DEPARTMENTS907.522.9583

NORTH OF 60 MINING NEWS is a monthly supplement of Petroleum News,a weekly newspaper. To subscribe to Petroleum News and receive the monthly

mining supplement, call (907) 522-9469 or sign-up online atwww.PetroleumNews.com. The price in the U.S. is $98 per year, which includesonline access to past stories and early access to Petroleum News every week.(Canada/Mexico subscriptions are $185.95; overseas subscriptions are $220)Or, just purchase the online edition of Petroleum News, which also includesthe mining supplement and online access to past stories, for $69 per year.

Several of the individualslisted above are

independent contractors

Contact North of 60 Mining News:Publisher: Shane Lasley • e-mail: publisher@MiningNewsNorth.com

Phone: 907.229.6289 • Fax: 907.522.9583

see TERRA GOLD page 4

WES

TMO

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NC

.

During 2013, WestMountain Gold invested roughly US$600,000 on exploration at the Terra gold project. This effort included a drill programfocused primarily on expanding the Ben Vein, the first of the high-grade gold zones being mined by the company.

4NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF MAY 25, 2014

Building a Sustainable Alaska

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STGINCORPORATED.COMa proud subsidiary of

sourced from the Fish Vein, which is situ-ated 4,900 feet (1,500 meters) northeast ofthe Ben Vein. Though there has yet to be aresource calculated for Fish, five holesdrilled there in 2005 and 2012 returningassay intercepts of more than 128 g/t goldin quartz veins.

WestMountain also improved site infra-structure with the 80 percent completionof a 5,000-foot (1,500 meters) runway forlarger aircraft that allows air transportationof equipment, fuel and supplies and a four-mile (6.5 kilometers) haulage road con-necting the mill to the Ben Vein mine site.

“We accomplished all of the importantinfrastructure construction as well aspreparation of the new underground portalsite, optimally located below the main BenVein shoots, to be ready for the plannedadit or tunnel development in 2014 for pro-posed bulk test production of an estimated2,000 tons in the 2014 summer season,”Schifrin said during a January update.

Seeking fundsWestMountain estimates it will cost

US$3 million-US$3.5 million to continuethe infrastructure projects started last year,while producing at least 3,000 ounces ofgold at Terra during the 2014 summer sea-son.

To fund this next stage of developmentof the high-grade gold mine, the companyoffered a private placement of up to US$8million. For every dollar invested,WestMountain says US50 cents will beequity and US50 cents will be debt. Thedebt will be repaid from gold productionin 2015 and 2016 yielding 15 percentinterest, 5 percent in cash and 10 percentin stock. The company said it will collat-

eralize the debt with the 49 percent inter-est in the mine acquired from CorvusGold.

To provide incentive for investors,WestMountain has priced the equity por-tion below market value. Each shareoffered under the financing is priced atUS80 cents with 125 percent warrant cov-erage at US25 cents, providing a net equi-ty price of US49.5 cents per share uponexecution of warrants by the investor.

“Based on our present understanding,this effort will be the last significant capi-tal raise needed to operate and producegold at current levels,” Schifrin toldpotential investors.

The proceeds will be used for purchas-ing needed equipment; completion of therunway; improving the haul road betweenthe Ben Vein and the mill; undergrounddevelopment at the Ben Vein; and operat-ing capital needed to meet the company’sgoal of recovering at least 150 ounces ofgold per week from mid-May throughmid-October.

If successful at the current gold price,the company could realize US$3.75 mil-lion to US$6.5 million in gold sales fromits small but high-grade gold mine inSouthwest Alaska.

WestMountain also plans to continue toexpand and confirm the resource throughdrilling as well as continue exploration ofthe other outcropping veins and potentialbulk tonnage gold targets at Terra. l

continued from page 3

TERRA GOLD“Based on our present

understanding, this effort will bethe last significant capital raiseneeded to operate and produce

gold at current levels.” —Greg Schifrin, president and CEO,

WestMountain Gold Inc.

By CURT FREEMANFor Mining News

At the recent Prospectorss andDevelopers Association of Canada

meeting in Toronto, Dr. RichardSchodde, managing director of MinExConsulting, presented some key factorswhich affect the time span between amineral discovery and start-up of com-mercial mining.

The study reviewed about 3,500 non-ferrous metal deposits discoveredbetween 1950 and 2013. Dr. Schodde’sfindings suggest that only 45 percent ofall discoveries made since 1950 haveturned into mines. The rate is highest forlead-zinc deposits (58 percent) followedby gold at 51 percent conversion rate.The rate for copper deposits has been 39percent. Not surprisingly, larger depositshave better conversion rates. For alldeposits that were developed, there wasan average delay of 12.4 years betweendiscovery and mine start-up. The delay isgetting longer over time. The delayvaries from 10.0 years for gold to 17.1years for copper. One somewhat surpris-ing finding was that the delay period wasnot significantly affected by the size ofthe deposit or the depth of cover.Projects discovered in low risk countries(United States, Canada, Australia, Chile)are 30-40 percent quicker to developthan discoveries in higher risk politicaljurisdictions. Over the past two years thedevelopment pipeline for copper depositshas been put on hold. The main factorscausing these delays are cost over-runs(23 percent), poor economics (21 per-cent), a general lack of supporting infra-structure (15 percent) and social issues(15 percent). Dr. Schodde found that aproject may take several economiccycles, sometimes spanning more thanone decade, to reach production. Interms of creating value for the explorerand its shareholders, it is critical to reachproduction during the project’s first eco-nomic wave. He concluded by statingthat the next generation of mines will befound under progressively deeper coverin more remote or difficult to accessareas in higher risk countries. Thesedeposits will likely face more challeng-ing social and infrastructure issues.

Western AlaskaTECK RESOURCES LTD. and partner

NANA, INC. announced first-quarter2014 results from its Red Dog mine. Inthe 1st quarter the mine produced152,000 metric tons of zinc in concen-trate, up significantly from the 128,000metric tons produced in the year-previ-ous period. Zinc ore grade decreasedslightly to 16.0 percent while mill recov-eries were up slightly at 83.6 percent.The mine also produced 29,400 metrictons of lead in concentrate. Lead oregrade increased slightly to 4.0 percent,while mill recoveries increased to 68.2percent. The mine posted a US$88 mil-lion operating profit for the quarter, upsignificantly from the US$71 millionprofit in the year previous period.Royalty costs nearly doubled to US$32million versus US$14 million in the firstquarter of 2013. Mill throughputincreased to 1.077 million metric tonsversus 873,000 metric tons in the yearprevious period.

GRAPHITE ONE RESOURCES INC.announced results from a second series

of mineral beneficiation tests on itsGraphite Creek deposit. Tests using aleaching process yielded results exceed-ing 99.9 percent carbon from a roughconcentrate produced from floatationwhich had an initial 92 percent carbonhead grade. The company hopes to takeadvantage of a growing graphite marketin North America, a market expected togrow significantly in the next five years.The company also announced that it hadraise US$1.3 million through exercise ofwarrants. The company plans to usethese funds for future exploration as wellas to advance ongoing metallurgicalstudies.

The news wires have been hummingever since the WASHINGTON TIMESreported that internalENVIRONMENTAL PROTECTIONAGENCY memos dating back to at least2008 were urging a never-beforeattempted pre-emptive veto ofNORTHERN DYNASTY MINERALSLTD.’S right to develop its Pebble proj-ect. The EPA did not announce their ill-conceived review of the Bristol Baywatershed until 2011. TheWASHINGTON POST reported that,despite EPA’s claim that the Bristol Baywatershed study was prompted byrequests from Alaska tribal entities,internal EPA memos that long pre-datethe study showed that “EPA officials hadregular contacts with potential opponentsof the mining project, coordinating activ-ities with environmentalists and evencoaching local tribes on how they couldstrengthen their case opposing the proj-ect.” In a written response, PebblePartnership CEO TOM COLLIER said,“The actions EPA is contemplating todaygo well beyond Pebble. It is a precedentthat will be leveraged by environmentalactivist groups and will have a chillingeffect on future investment and job cre-ation throughout the country.” A fewdays ago the WALL STREET JOURNALvoiced its condemnation of the EPA

comportment by saying, “A basic preceptof American democracy is that petition-ers before their government receive a fulland fair hearing. The ObamaEnvironmental Protection Agency is inurgent need of that remedial civics les-son.” Both state and federal officialshave demanded an investigation intoEPA’s apparent skullduggery so we havenot heard the last of this issue.

REDSTAR GOLD CORP. announcedit had arranged a non-brokered privateplacement of up to 55.13 million units ata price of US6 cents per unit to raisegross proceeds of US$3.31 million.Proceeds from the placement will beused to advance the company’s Ungagold project and for general workingcapital.

Interior AlaskaKINROSS GOLD announced first

quarter 2014 results from their FortKnox mine. The mine produced 83,588oz at a cash cost of US$570/oz versus93,252 oz at a cash cost of US$558 inthe year previous period. The mine’s pro-duction declined compared with firstquarter 2013 performance primarily dueto lower grades. The company expectshigher production costs over the nextthree quarters as the operation enters aphase of the mine that has more operat-ing waste. The mill treated 3.3 millionmetric tons of ore grading 0.66 gramsper metric ton gold with a mill recoveryof 84 percent. The heap leach saw addi-tions of 2.79 million tons of ore grading0.27 g/t gold.

CONTANGO ORE INC. announcedfavorable preliminary metallurgicalresults from the Peak zone at the approx-imately 750,000-plus-acre Tetlin gold-copper-silver project near Tok, Alaska.SRK CONSULTING of Anchorage,Alaska, was retained to develop andoversee this first-ever metallurgical test-ing at Peak zone and SGSMETALLURGICAL OPERATIONS ofVancouver, British Columbia conductedthe laboratory tests. Preliminary metal-lurgical tests were conducted on drill

core samples from the Peak zone and theresults indicate that both gold and sul-fide minerals respond to standard gravityand froth flotation treatment and thatgold is not refractory in nature. Thecompany selected three broad types ofmineralization, including a high goldsample (150 g/t gold), a high-grade cop-per sample (5.87 percent copper) and amixed-grade sample (23.2 g/t gold, 45.4g/t silver and 1.29 percent copper). Two-kilogram charges of each sample weresubject to grinding, gravity separationand rougher flotation of the gravity tails.The -10 mesh (<2000 microns) materialwas ground to a target grind time in arod mill, and then processed through agravity concentrator (Knelson machine).The concentrate was upgraded with aMozley table and the combined Knelsonand Mozley tails (gravity tails) becamerougher flotation feed. The gravity con-centrate was assayed for gold and silver.In addition to the above, a mineralogicalexamination was performed with X-Raydiffraction, Quantitative Evaluation byScanning Electron Microscope, opticalmicroscopy and chemical analysis todetermine the overall mineral assem-blage present in the samples, identify thegold and silver-bearing minerals presentand complete a mass balance of micro-scopic gold and silver. Results of thiswork indicate that all samples achievedconsistently high metallurgical recoveryacross the primary grind sizes thatranged from 49 to 115 microns. The pro-portion of contained gold recovered bygravity methods ranged from 8 percentto 30 percent with the lowest gravityrecovery in the highest copper bearingsample with progressively higher per-centages of gold in the gravity concen-trate as gold grade increased. Primarysulfides identified in the analysis werepyrrhotite and chalcopyrite with lesseramounts of arsenopyrite, silver-bearingmineral and sphalerite. Abundant visiblegold was observed in the two highergrade gold-bearing samples.

l C O L U M N

Factors affect span between find, mineStudy: Of 3,500 nonferrous metal deposits discovered between 1950 and 2013, lead-zinc deposits showed highest conversion rate

5NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF MAY 25, 2014

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TheauthorThe author

Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMANMay 19. Freeman can be reached bymail at P.O. Box 80268, Fairbanks, AK99708. His work phone number atAvalon Development is (907) 457-5159and his fax is (907) 455-8069. His emailis avalon@alaska.net and his website iswww.avalonalaska.com.

see FREEMAN page 6

BLUE MOOSE EXPLORATIONannounced that during 2014 it plans tore-open drill pads and up to 4,500 feet ofold trenches at the Goodrich porphyrycopper-gold prospect at its BME projectin the Ladue Mining District. In addi-tion, at the Honks prospect the companyplans to excavate 1,200 feet of newexploration trench approximately 650feet north or, and parallel to, an 800foot-long trench excavated in 2010.

Alaska RangePURE NICKEL INC. announced

results for a nickel deportment studycompleted for the Eureka Zone occur-rence at its MAN nickel-copper-platinumgroup element project. The results indi-cate that the 73.5 percent of the nickel inthe Eureka Zone mineralization is hostedby potentially recoverable nickel-ironsulfides (63 percent) and nickel-ironalloys (12.3 percent). Only 20 percent ofthe nickel is unrecoverable in silicatemineral hosts, primarily olivine and ser-pentine. The 126.6-meter long compositesample was collected from hole PNI-13-069 and averaged 30 parts-per-billiongold, 50 ppb platinum, 150 ppb palladi-um, 0.28 percent nickel, 0.12 percentcopper and 0.5 g/t silver. The EurekaZone has been identified over a 15-kilo-meter (nine miles) long strike length andremains open to expansion. The central5.7- kilometer (three miles) long portionof the zone has a weighted average thick-ness of 203 meters and a weighted aver-age grade of 0.23 percent nickel, 0.08percent copper, 0.02 percent cobalt, 170ppb gold + platinum + palladium and0.51 g/t silver.

SOUTHERN SUN MINERALSannounced that it is formulating plansfor its Galleon volcanogenic massive sul-fide project in the Bonnifield District.The project hosts four separate massivesulfide prospects that have been identi-fied by geologic mapping, soil and rocksampling, ground geophysics and limitedcore drilling. Mineralization on the prop-erty is characterized by high lead-zincvalues and locally high copper values.However, the project is unique in the dis-trict because of the presence of extreme-ly high silver-gold-arsenic-antimony val-ues, and locally very high bismuth val-

ues. Known prospects on the propertyinclude the Galleon, Porcupine, Sixty-seven and Lynx prospects, all of whichare situated on the northern portion ofthe property. The company is formulat-ing plans for a program consisting ofpower auger soil sampling, rock sam-pling, detailed mapping, and a complexresistivity-induced polarization geophysi-cal survey.

Northern AlaskaGOLDRICH MINING CO. and partner

NYACAU, LLC provided an update on its50/50 placer gold mining joint ventureon the Chandalar project in the BrooksRange. The company completed haulageof equipment and supplies over the 90-mile winter trail. The primary piece ofequipment delivered to the mine site wasa feeder for and expanded wash plant, tobe completed in stages through 2016.The upgrade will take the plant capacityfrom 125 loose cubic yards per hour to600 yards per hour. Once finished, pro-cessing facilities will consist of a pri-mary feeder system with multiple gravelscreens and gold recovery tables and anexpanded settling pond system for addi-tional water management. The expandedplant is expected to be substantially com-pleted in 2014. Long lead-time equip-ment will be available in the later part of2014 and will be mobilized to the projectduring the 2015 winter trail. The partnersindicated that they will focus on plantconstruction in this year and do notintend to mine new gravels in 2014. All-in development costs incurred to the endof 2013 total about US$13.7 million andthe forecasted investment for 2014 isestimated to be about US$4.5 million.The company also reported that petrolog-ical studies conducted on drill core fromlode prospects at Chandalar have helpedrefined the orogenic gold model whichhas been used to guide past exploration.This work indicated that all of the sam-

ples examined contain numerous acces-sory minerals commonly associatedmagma or late stage magmatic fluids.These minerals include monazite, thoriteand xenotime. Some of the accessoryminerals co-precipitated with gold sug-gesting that radiometric surveys mayhelp define gold-bearing targets withinthe project area.

Southeast AlaskaHECLA MINING announced first

quarter 2014 production results from theGreens Creek mine on Admiralty Island.The cash cost, after by-product credits,per silver ounce declined to US$1.58 inthe first quarter of 2014 from US$5.02 inthe first quarter of 2013. Mining andmilling costs per ton were both down sig-nificantly in the first quarter compared tothe same period in 2013. Power and treat-ment costs were lower than in the firstquarter of 2013. Power costs were lowerdue to the availability of hydroelectricpower. Lower power costs are the largestfactor in a reduction of mining andmilling costs per ton by 7 percent and 27percent, respectively, in the first quartercompared to the same period in 2013.Because treatment costs include the valueof silver retained by the smelters, firstquarter treatment costs were lower as aresult of lower silver prices. The averagegrade of ore mined during the quarterwas 12.44 ounces per ton of silver, downslightly from the average grade of 12.74oz/t that was mined in the first quarter of2013. During the first quarter the mineproduced 1,787,137 ounces of silver,15,009 oz of gold, 4,825 tons of lead and15,041 tons of zinc. The mill operated atan average of 2,252 tpd for the quarterand processed 202,715 tons of ore duringthe quarter. On the exploration front, def-inition and exploration drilling from twodrills continues to enhance the potentialof Deep 200 South, a mineralizationtrend that extends over 3,000 feet alongstrike and over 1,000 feet of dip. Drillingof Deep 200 South has defined threestacked folds of high-grade mineraliza-tion that represent up to 600 feet ofdown-dip continuity. Drilling of the upperfold or bench mineralization had some ofthe widest and highest-grade intercepts inrecent history at the mine. This drillingconfirms the resource model and showsthe upper limb of the bench fold extendsabout 100 feet east beyond the currentmodel. Significant drill intersections

include 27.3 ounces of silver per ton,0.46 ounces of gold per ton, 13.7 percentzinc, and 6.7 percent lead over 28.2 feetand 52.1 oz/t silver, 0.40 oz/t gold, 14.8percent zinc, and 7.5 percent lead over4.9 feet. Mineralization remains open tothe south.

COEUR D’ALENE MINES announcedupdated first quarter 2014 productionresults from its Kensington gold mine.The mine’s quarterly free cash flow ofUS$9.2 million was its highest in threeyears. The mill processed 159,697 tons,or nearly 1,800 tons per day, a significantincrease over previous quarters. The mineproduced 25,428 ounces of gold grading0.17 ounces of gold per ton with an aver-age recovery of 94.5 percent. All-in sus-taining cost of production was US$1,005per ounce compared to US$667 perounce cost in the year previous period,due to lower gold grades and productionlevels. Kensington’s exploration effortsincluded four drill rigs and rang in atabout US$1 million for the quarter. Themine is expected to produce 150,000 to112,000 oz of gold in 2014.

HEATHERDALE RESOURCES LTD.announced both houses of the Alaska leg-islature have passed a bill authorizing theALASKA INDUSTRIALDEVELOPMENT AND EXPORTAUTHORITY to provide up to $125 mil-lion in financing for infrastructure andconstruction costs at the Niblack projecton Prince of Wales Island. The Niblackprovision of the bill authorizes AlaskaIndustrial Development and ExportAuthority to issue bonds to finance theconstruction of key infrastructure for theproject up to US$125 million, including amineral processing mill and dock, load-ing and associated infrastructure facilitiesat the Gravina Island Industrial Complexnear Ketchikan, and other facilities at theproject site on Prince of Wales Island.The bill next goes to the AlaskaGovernor’s office for formal signing. Thepassage of the bill does not commitAlaska Industrial Development andExport Authority or the State of Alaska toany action. Alaska IndustrialDevelopment and Export Authority muststill go through its conventional projectevaluation and due diligence processprior to authorizing infrastructure financ-ing for the project.

PURE NICKEL INC. announced that ithas commenced exploration activity onits 100 percent owned Salt Chuck copper-gold-silver-palladium project near ThorneBay on Prince of Wales Island. Phase 1of the work program will consist of about1,000 meters of diamond drilling in 8-10holes. The program is designed to test thecontinuity of high-grade gold-coppermineralization encountered in drill holeNPH-12-04 which intersected 29.1 g/tgold, 14.1 g/t silver and 0.79 percent cop-per over 2.58 meters. The phase 1 drillprogram is expected to establish the trendof the mineralization such that subse-quent drill programs can be designedwith maximum efficiency. In addition todrilling, a soil sampling work programwill be undertaken to provide moredetailed infill soil data to help guidePhase 2 drilling. Phase 2 work program,pending results from Phase 2 and addi-tional permits, will test for mineralizationbeneath a series of coherent, linear tocurvilinear gold anomalies in soil sam-ples that stretch from the discovery holeto the southeast and south. These anom-alies are interpreted to reflect gold-cop-per mineralization similar to that inter-sected in drill hole NPH-12-04. Theamplitude of the anomalies to the southand east, however, are significantly high-er than those found in the vicinity of thediscovery hole. l

6NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF MAY 25, 2014

continued from page 5

FREEMANProjects discovered in low risk

countries (United States, Canada,Australia and Chile) are 30-40percent quicker to develop than

discoveries in higher risk politicaljurisdictions. Over the past two

years the development pipeline forcopper deposits has been put on

hold. —Curt Freeman, columnist

7NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF MAY 25, 2014

l C O L U M N

U.S. mining industry suffers bum rapThough mining in America hit its stride with the California Gold Rush, it has faced significant regulation only since the ’70s

By J. P. TANGENSpecial to Mining News

I have often mused about why the min-ing industry is held in such disdain in

the United States today. It wasn’t alwaysthat way. When I was a child, the miningindustry was the subject of song andsaga, and before that, there was the daywhen the incessant stamp mills of mineslike the A.J. in Juneau were the sound ofa full lunch pail. People respected hardwork and knew intuitively that basicindustries were from whence our rawmaterials evolved into consumer goodsthat made the American lifestyle possi-ble.

Over the past several decades, mininghas inexorably taken it on the chin for allkinds of reasons, some of which weremore just than others. At one time,mines, especially coal mines were thesource of danger and risk. Those whowent underground were exposed to earthmovement and cave-in as well as ventila-tion and air-quality issues. Althoughsuch events still occur today, they arerare events in the United States andreceive major headlines when they occur.

Historically, mining took a great leapforward when gold was found inCalifornia in 1848; however, mining hadbeen taking place around the world forthousands of years, and even in theAmericas, rudimentary mining was com-monplace before the arrival of Europeansettlers.

Between 1848 and 1866, in the unset-tled American West, thousands of hope-ful adventurers sought their fortunes, andfrequently were very successful. Withoutestablished civil law in place, the earlyminers turned to the Mexican model ofestablishing local camp rules, soon tobecome mining districts.Conventionally, the purpose of the min-ing district was to set down guidelinesfor the location of claims and to main-tain a record of those locations.Sometimes, the rules also dealt with dis-pute resolution and even criminal mis-conduct.

In 1866, the first federal mining lawwas enacted, followed six years later bythe Mining Law of 1872 which becamethe cornerstone of mining on the federalpublic domain. The following year, thepublic domain was nearly doubled in

size by the purchase of Alaska fromRussia; but it took another 25 years forminers to turn their attention to the min-eral potential of the frozen North.

The logical breakdown of the historyof mining in the United States is quitestark. Before 1848, mining occurred, butwas of little significance nationally. Thegold rushes to California and later toAlaska were incredibly exciting andbrought great wealth to many peopleand, more to the point, provided ournation with the resources, accessible tofew other people in the world, to emergeas a productive giant. Observers whofail to give due credit to the role thatmining on public lands played duringthis period, haven’t considered the evi-dence.

After the turn of the TwentiethCentury, America went to war, not justonce or twice, but many times, and thosewars were paid for, to a certain extent,by the wealth that came from the mineson public lands, not to mention the gunsand armor that were pounded out of theiron and nickel recovered from thosemines.

When President Nixon allowed theprice of gold to float on the world mar-ket, a new resurgence of opportunityemerged for miners; however, Nixon alsosigned into law other measures whichdampened the exploration ardor. TheNational Environmental Policy Act,Clean Water Act and to a lesser extentthe Clean Air Act all imposed signifi-

cant burdens on domestic mining. Laterthe Federal Land Planning andManagement Act also invoked regulatoryburdens on the industry.

In the case of FLPMA, the impactwas sufficient in Alaska to induce mostminers to seek their fortunes on stateland rather than on federal land, eventhough the federal government still con-trolled two-thirds of the state after theselection process was completed.

Mining is expensive and sometimesrisky to the miner’s purse and health aswell as the environment; althoughbureaucratic regulations have solvedmost of the latter concerns. Whatremains an issue is the public’s attitudetoward mining.

The first 50 years of America’s histo-ry saw little mining, and the second 50years saw boom and bust times, whilethe third half century saw great, butunregulated, prosperity due to thedemands on the industry at a time whenpeople were far more concerned withtheir ability to feed their families thanwith their own health and safety or withthe quality of the environment.

It is only during the most recentdecades that America has turned itsattention to the fallout from the historicpractice of externalizing developmentcosts. Ironically, the mining industry, asa whole, has aggressively sought to com-ply with the new, technology-forcing,

Mining & thelaw

The author,J.P. Tangen hasbeen practicingmining law in J.P. TANGENAlaska since 1975. He can be reached atjpt@jptangen.com or visit his Web site atwww.jptangen.com. His opinions do notnecessarily reflect those of the publishersof Mining News and Petroleum News.

see TANGEN page 9

By SHANE LASLEYMining News

The languishing price of zinc has pro-vided little incentive for investors to

embrace companies seeking to exploreand develop the next generation of minesthat produce this essential metal.However, an expected 1.5 million metrictons of supply being lost to mine closuresby 2016 is beginning to galvanize the zincsector.

“In the case of zinc, this is a metalthat's been unloved for a long time. As aresult there has been very little investmentput into the industry. Due to this, therehave been very few discoveries of newzinc deposits in the last couple of decades.Now we are running into the situationwhere mines that have been in operationfor decades are finally starting to run outof reserves, and we haven't found anythingto replace them, so we are potentiallygoing to see the zinc market going into adeficit in terms of metal available on themarket. So I think zinc is the one that’ spoised for some of the best upside,” AdamLow, a metals and mining analyst withRaymond James & Associates, Inc., saidduring a recent interview with The WallStreet Transcript.

Falling stockpiles and rising zinc pricesis welcome news for owners of the RedDog Mine and a number of explorationand early development zinc projects inAlaska and Canada’s North.

Decades of Red DogWhile several pillars of global zinc

supply are shuttering operations, one ofthe largest, the Red Dog Mine, has plentyof high-grade reserves to last until 2025and a number of prospects that will likelyextend the mine decades further into the21st Century.

This Northwest Alaska operation,which currently supplies more than fourpercent of the world’s zinc needs, pro-duced 551,300 metric tons (1.215 billionpounds) of the galvanizing metal during2013.

Teck Resources Ltd., which owns andoperates the Red Dog Mine, pays a 30 per-cent net proceeds royalty to NANARegional Corp., a Native corporation rep-resenting the Iñupiat of Northwest Alaska.Despite flagging zinc prices, this royaltypayment was US$120 million in 2013.NANA’s royalty increases five percentevery five years and its next rise is due atthe end of 2017.

At the end of 2013, Red Dog had 45.4million metric tons of ore in reserve aver-aging 15.8 percent (6.05 million metrictons) zinc, 4.1 percent (1.86 million met-ric tons) lead and 72.6 grams per metricton (106 million ounces) silver.

Additionally, the property has 7.5 mil-lion metric tons of indicated resourcesaveraging 25.7 percent zinc for 1.93 mil-lion metric tons 6.9 percent lead and 137g/t silver.

Teck is also finding high-grade zinc onthe Noatak property, a large block of stateof Alaska mining claims immediatelywest and north of the NANA-owned landswhere the Red Dog Mine is located.

Anarraaq-Aktigiruq, situated roughlyeight miles (13 kilometers) northwest ofthe current operations, is among the high-quality targets Teck is pursuing on theNoatak claims. Teck discovered thedeposit in 1999, subsequently establishingan inferred resource of about 19 milliontons grading 15.8 percent zinc, 4.8 percentlead, and 2.1 oz/t silver. Highlights fromdrilling at Anarraqq include 23 metersaveraging 18.1 percent zinc and 5.9 per-cent lead; and 9.3 meters averaging 25.9percent zinc and 2.9 percent lead.

Teck said exploration programs willcontinue in these regions during 2014.

Though Red Dog has ample reservesand prospects to expand the operation,Teck does not have current plans to signif-icantly increase the mine’s output to fillthe anticipated zinc supply deficit. Thecompany says a required port expansionand short shipping season complicatesexpansion of the Northwest Alaska opera-tion.

“At a certain concentrate level, the portbecomes the limiting constraint at RedDog,” Teck Senior Vice President of ZincRob Scott explained to investors during anApr. 22 conference call.

Teck leaders said expansion of theNorthwest Alaska mine would requiremore capital and a longer lead time thanratcheting up operations at its already per-mitted Pend Oreille Mine in northeasternWashington State. This underground

mine, which has the capacity to produceabout 44,000 metric tons of zinc in con-centrate per year, is expected to take aboutseven months to ready for operations anda further five months to ramp up to fullproduction.

Though Teck is not enlarging the millat Red Dog, the company is working tomaximize throughput. During 2013, arecord 3.85 million metric of ore wasprocessed at the mine and further increas-es are continuing into 2014.

During the first quarter, zinc produc-tion at Red Dog rose 19 percent comparedto the first three months of last year. Teckattributes the increased production to theprocessing of softer ores, which substan-tially boosted the tons milled during theperiod. The uptick was partially offset bylower zinc ore grades.

Teck anticipates it will producebetween 500,000 and 525,000 metric tonsof zinc at Red Dog in 2014.

More NW Alaska zincRed Dog is not the only zinc opportu-

nity in Northwest Alaska – Teck and ZazuMetals’ Lik deposit is in the advancedstages of exploration and MillrockResources has staked an expansive blockof claims in Northwest Alaska that isprospective for large-scale zinc-lead-sil-ver deposits.

Zazu, which has long considered Lik asa potential mine to help fill the expectedzinc shortage, has been gradually advanc-ing the project towards a production deci-sion.

“A consolidation in the zinc industry isdefinitely under way,” Zazu Metals CEOGil Atzmon foretold in 2011. “Zazu’s goalis to have the Lik deposit in operation intime to deliver into this supply deficit.”

Located roughly 14 miles (22 kilome-ters) northwest of Red Dog, Lik stands tobenefit from the Delong MountainTransportation System, a state-ownedhaul road and concentrate-shipping portthat links Red Dog to world markets.

Under a 2010 agreement that wasrenewed in 2013, Alaska Industrial

Development and Export Authority,owner of the transportation system, isevaluating the possibility of financing a20-mile (32 kilometers) spur road linkingLik to the existing road and upgrading theport facilities to handle additional trafficcreated from Lik’s development.

Port site modifications would includean additional concentrate storage build-ing, fuel storage, a camp extension,upgraded generation capacity, an expand-ed shallow water dock, and modificationsto the existing ship loader, or if necessary,a new ship loader.

Lik is divided into two deposits sepa-rated by a fault – the near-surface LikSouth and the deeper Lik North. LikSouth has an indicated resource of 18.74million metric tons grading 8.08 percentzinc, 2.62 percent lead and 52.8 grams-per-metric-ton silver; plus an inferredresource of 1.23 million metric tons grad-ing 6.80 percent zinc, 2.12 percent leadand 35 g/t silver. Lik North contains anadditional inferred resource of 5.18 mil-lion metric tons grading 9.65 percent zinc,3.25 percent lead and 51 g/t silver.

Earlier this year, JDS Energy andMining Inc. updated a preliminary eco-nomic assessment for Lik South.

As modeled, a 5,500 metric-ton-per-day mill processing ore from an open pitmine at Lik South would produce 234,000dry metric tons of zinc concentrate and55,800 dry metric tons of lead concentrateper year.

Over a nine-year mine-life, roughly17.1 million metric tons of ore at an aver-age grade of 7.7 percent zinc, 2.6 percentlead and 47 grams per metric tons silver isanticipated to be milled from the LikSouth open pit.

The PEA estimates a total capital costof C$352 million including a 20 percentcontingency for a 2 million metric-ton-per-year mine and mill with an initialnine-year mine life. Using a zinc price ofUS92 cents per pound, the study estimatesa post-tax internal rate of return of 9.7percent and a post-tax net present value (8

l A L A S K A & N O R T H W E S T C A N A D A

Outlook galvanizes northern zinc sectorLooming zinc deficit is spurring renewed love for projects in Alaska’s Red Dog District, western Canada’s zinc-rich Selwyn Basin

8NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF MAY 25, 2014

see ZINC SECTOR page 9

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Each summer, some 500,000 metric tons of zinc from the Red Dog Mine is loaded onto ships at the Delong Mountain Transportation Systemport on the Chukchi Sea in Northwest Alaska. To significantly increase zinc output at Red Dog, an expansion of the port would be required.

percent discount) of C$25 million. Bumping the zinc price to US$1.00 per

pound, the post-tax IRR climbs to 13.4percent and NPV (8 percent discount)jumps to C$148 million for mining LikSouth.

Teck currently holds a 50 percent jointventure in Lik, though Zazu has the rightto increase its stake to 80 percent byspending US$25 million on the project by2018.

Spurred by growing interest in zinc,Millrock has staked Lisburne, a grassrootszinc prospect some 85 miles (140 kilome-ters) northwest of Red Dog.

“We have seen an increasing interest inzinc from mining and smelting compa-nies. We can see the potential for zincshortages and price increases in the medi-um to long term and therefore have decid-ed to act on this conceptual target,” saidMillrock President and CEO GregBeischer.

Situated on the coast of the ChukchiSea some 12 miles (20 kilometers) southof Cape Lisburne, the 13,100-acre (5,300hectares) Lisburne property blankets aregion dominated by carbonate rocks ofthe Mississippian Lisburne Formation, thesame formation where the sediment host-ed zinc mineralization typically occurs inthe Red Dog district.

Millrock Chief Exploration OfficerPhil St. George said, “Red Dog is truly aworld-class zinc mine. We feel there isexcellent potential to discover similardeposits on our claim block. Our claimshave strong zinc and barium anomalies inareas that are underlain by Red Dog time-equivalent stratigraphy. Our geologistshave extensive geologic knowledge of theRed Dog region rocks and are familiarwith the most effective exploration tech-niques for the deposit type. Our localexperience will allow for efficient explo-ration and will hopefully lead to discoveryof any zinc-lead-silver deposits that mayexist in this area.”

Typical to its project generator businessmodel, Millrock is seeking a partner toadvance this prospective zinc discovery.

“We will be looking for a strategic part-ner to advance the project to the drillingstage,” Beischer said upon announcing theaddition of Lisburne to Millrock’s portfo-lio.

Prairie Creek readyCanadian Zinc Corp. has permits in

hand and the majority of the requiredinfrastructure in place to put the PrairieCreek Mine into production, positioningthis project to stream some 76 millionpounds of zinc, along with 90 millionpounds of lead and 2.2 million ounces ofsilver, per year into global markets.

Located in the South MackenzieMountains of western NorthwestTerritories – about midway betweenWhitehorse, Yukon, and Yellowknife,NWT – Prairie Creek contains a mineralreserve of 5.2 million metric tons averag-ing 9.4 percent zinc, 9.5 percent lead and151 grams per metric ton silver. This isenough ore for an 11-year mine-life.

In addition, the partially developedzinc project hosts an inferred resource of6.2 million metric tons averaging 14.5 per-cent zinc, 11.5 percent lead, 0.57 percentcopper and 229 g/t silver.

Canadian Zinc’s primary objective is tobring the Prairie Creek zinc-lead-silvermine into production at the earliest oppor-tunity.

The company already has a 1,000-met-ric-ton-per-day mill, five kilometers (threemiles) of underground workings, under-ground equipment, a heavy and light dutysurface fleet, three drill rigs and a 1,000-meter airstrip at the advanced stage proj-ect.

Canadian Zinc is currently undertakingan optimization study. The company hashired Tetra Tech to assist with basic engi-neering and procurement services associ-ated with optimizing Prairie Creek. AMCConsultants has been engaged to under-take a geotechnical study of the under-ground mine plan with a view to reducingthe initial development, shortening thedevelopment schedule and optimizingmine operating costs.

The studies are scheduled to be com-pleted by mid-2014 and, dependent on theprogress of financing strategies concur-rently being executed, Canadian Zinc

plans to begin ordering long lead timeitems; building the access road; preparingthe mine site and completing other startupactivities on site.

The company, meanwhile, is evaluatingstrategies for raising funds necessary tocomplete development of the PrairieCreek Mine. In May 2013, the companyraised US$10 million through the sale of aroyalty to Sandstorm and grantedSandstorm a right of first refusal on anyfuture royalty or stream financing for thePrairie Creek project. Under the agree-ment, Canadian Zinc can repurchase theroyalty if it enters into a metal streamfinancing under which Sandstorm willprovide an upfront deposit of not less thanUS$90 million to be used to finance partof the capital cost to develop the PrairieCreek Mine.

Ambitious Selwyn planRoughly 375 kilometers (230 miles)

west of Prairie Creek, a southern China-based mining and smelting company isadvancing Selwyn, one of the world’slargest undeveloped zinc deposits, towardsproduction.

After spending several years provingthe potential of this enormous zinc projectin eastern Yukon Territory, junior minerSelwyn Resources Ltd. attracted YunnanChihong Zinc & Germanium Co. Ltd.,which invested C$100 million to earn a 50percent interest in the project. Three yearslater Selwyn Chihong Mining Ltd., aCanadian subsidiary of Yunnan ChihongZinc & Germanium, bought the other halfof the project from Selwyn Resources forC$50 million in cash.

According to a 2012 calculation, theSelwyn project has an indicated resourceof 185.57 million metric tons averaging5.2 percent (21.26 billion pounds) zincand 1.79 percent (7.3 billion lbs.) lead, andan inferred resource of 237.86 millionmetric tons averaging 4.47 percent (23.45

billion lbs.) zinc and 1.38 percent (7.22billion lbs.) lead.

With the goal of putting a mine intoproduction in 2020, Selwyn Chihong hasbudgeted C$56 million to advance theenormous zinc project in 2014.

Though earlier studies considered anunderground mine, Selwyn Chihongbelieves a larger scale open-pit mine witha 25,000-metric-ton-per-day mill might bea better fit for the enormous eastern Yukonzinc project.

With the goal of gaining the geologicalinformation needed to support this moreambitious zinc mine, the Chinese miningcompany plans to invest some C$22 mil-lion of its 2014 budget in a 55,000-meterdrill program that targets seven of the 15known mineralized zones at Selwyn.

Another C$13 million will be spent onupgrading the Howard’s Pass Road, anaccess road that links the Selwyn projectto Yukon Territory’s contiguous road sys-tem.

Selwyn Chihong Mining also mustidentify a port for transporting the zincconcentrates to overseas smelters. Anychosen port site, either in SoutheastAlaska or British Columbia, would needto be expanded to handle the anticipatedzinc and lead concentrates produced atSelwyn.

The company is also considering itsfuel options with an eye on sourcing liq-uefied natural gas.

All of this year’s work will support abankable feasibility study due to be com-pleted around the middle of 2015.

Yukon zinc supplementYukon has two established but belea-

guered volcanogenic massive sulfidemines that would benefit from a supple-ment of higher zinc prices. Yukon ZincCorp.’s Wolverine Mine produces zinc

9NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF MAY 25, 2014

On arriving in Fairbanks, Julie and her family found a welcoming and friendly community. Their five children immersed themselves in school, scouting and youth sports, while Julie and her husband took up active volunteer roles. The family “was born to be Alaskan” she says now.

Coming from a family of engineers, problem solving skills were in Julie’s DNA. From her first Fort Knox job in mine planning, Julie knew she’d found a collaborative work environment that gave her the flexibility to handle her active family life. Her current job as the mine’s Continuous Improvement Manager offers her leadership opportunities, access to new technologies and the chance to work with a dedicated team. “It’s a perfect fit,” Julie says.

Harnessing Julie’s energy and enthusiasm has helped Fort Knox find ways to improve operations. She makes good things happen.

Our People Our Community

kinross.com

standards, but has received little creditfor doing so.

The upshot of this transformation hasbeen the creation of a healthy, safe andenvironmentally sound sector that, in theUnited States at least, goes unrecognizedfor its progress. In no small part, thatlack of recognition is due to the failureof the industry itself to make the pointthat it is a positive contributor to themodern world.

On May 9, the Alaska MinersAssociation celebrated Alaska MiningDay, acknowledging the role that miningoccupies in our state. Presumably, thiswill be the first of many celebrations ofour industry, and presumably it will bethe first of many steps that miners inAlaska and across the nation will take toshine a bright light on the positiveaccomplishments and contributionswhich mining has made to the history ofour nation. l

continued from page 7

TANGEN

continued from page 8

ZINC SECTOR

see ZINC SECTOR page 10

By SHANE LASLEYMining News

Z inc is at a supply-demand tipping point that hasminers and investors looking to cash in on an immi-

nent shortage of this essential metal which has been inoversupply for nearly a decade.

“We believe the outlook for zinc is the most favorableof the base metals. With recent and expected closures ofa number of zinc mines, we believe that approximately1.5 million metric tons of current zinc mine productionwill be closed by the end of 2016 in a 13 million (tpa)market,” Teck Resources Ltd., owner of the Red DogMine in Northwest Alaska, reported in its first-quarter2014 update.

Adam Low, a metals and mining analyst withRaymond James & Associates, Inc. agrees.

“In terms of metals that I think stand a very goodchance of doing well this year, I would rank zinc at thetop of that list, and it's because of what's going on thesupply side of the equation,” the analyst told Wall StreetTranscripts during a recent interview.

The 2013 closures of the Brunswick and Perseverancemines in Canada have removed 315,000 metric tons of

annual zinc production off the supply side of the scales.These events seem to have tipped the balance enoughthat consumers are dipping into vast stockpiles that havebuilt up in recent years.

Teck said combined zinc metal inventories at theLondon Metals Exchange and Shanghai FuturesExchange have fallen by 122,700 metric tons, or 8 per-cent, so far this year.

Zinc stockpiled at LME warehouses, which peakedabove 1.2 million tons at the beginning of 2013, hassince steadily declined and now sits at 750,000 tons.

As a result, zinc, which sold for about US82 cents perpound on the LME this time last year, is currently fetch-ing around US95 cents, reflecting more than a 15 percentincrease.

Stefan Ioannou, mining analyst at HaywoodSecurities said this is only the beginning.

“Currently, the zinc price is languishing with the restof the base metals. However, with zinc, it’s not really a2014 story. The excitement is looking forward to 2015and beyond, in the wake of an anticipated supply deficit,”he told The Wall Street Transcript May 1.

The scheduled mid-2015 closure of the Century Minein Australia will take another 515,000 metric tons of

annual zinc production off the supply side of the equa-tion; and the anticipated 2016 shuttering of the LisheenMine in Ireland will cut the yearly supplies by another165,000 metric tons.

On the demand side, Teck said auto production isdriving strong zinc demand in the United States, Chinaand Japan.

During an April presentation at the 2014 NunavutMining Symposium, Scotiabank Vice President,Economics Patricia Mohr said China’s passenger car andcross-over utility sales jumped by 23.6 percent in 2013,surpassing U.S. sales last year, and should advance by12.5 percent in 2014.

Increased construction in Europe is also expected tobolster demand of the galvanizing metal.

Scotiabank’s outlook is for zinc prices to averageUS$95 cents/lb. in 2014 and US$1.25/lb. in 2015.

Mohr predicts zinc prices could climb as high asUS$1.50 per pound in 2016-17, significantly higher thanthe US87-cent-per-pound average selling price for themetal in 2013.

Slightly more bullish, Haywood Securities’ Ioannousees the essential metal selling for more than US$1.50per ounce by 2016. l

l A L A S K A , N O R T H W E S T C A N A D A

Miners, investors eye higher zinc priceMine closures expected to drive metal above US$1.50/lb. by 2016; buyers already dipping into stockpiles that have kept prices low

along with healthy portions of silver, cop-per, gold and lead. Alexco ResourceCorp.’s Bellekeno Mine, on the other hand,is primarily a silver producer that benefitsfrom a substantial dose of zinc as a by-product of the VMS mineralization foundthere.

Yukon Zinc, which has had difficultiesmaintaining the 1,700-metric-ton-per-daydesigned capacity since firing up the millat Wolverine in 2010, reduced its opera-tions at the silver-rich VMS mine to 60percent output in early July. The companybegan ramping up to 75 percent capacity,around 1,200 tpd, in October.

“This production increase is based onmany factors including positive minegrades and mill recoveries, successfulimplementation of cost efficiencies, aswell as a more stable silver metal price,”explained Yukon Zinc President and CEOJing You Lu.

Reaffirming its commitment to operat-

ing safely and responsibly, Yukon Zincsaid it plans on sustaining the 75 percentoutput level until the economics atWolverine or within the metal marketschange.

Weak silver prices convinced Alexco toshut down milling at its Bellekeno silver-zinc-lead mine for this past winter. In mid-May, the company announced that it isworking towards a potential restart at thehigh-grade mine in the historic Keno HillsMining District.

Alexco President and Chief OperatingOfficer Clynt Nauman said, “Our focusduring the first quarter and at the presenttime is on working through the critical fac-tors that will result in a ‘go’ decision onrestarting production at our Keno Hillproperty in the Yukon. We don’t quite haveall the components in place yet, but clear-ly a major factor in lowering our costs willbe to develop additional throughput vol-ume for the mill. Our newest discovery –the Flame & Moth deposit – will be key toaccomplishing this goal.”

Flame & Moth has an indicated

resource of 1.38 million metric tons aver-aging 516 g/t silver, 5.7 percent zinc and1.7 percent lead.

During the abbreviated 2013 opera-tions, the Bellekeno Mine produced 1.4million ounces of silver, 10.3 millionpounds of lead and 3.4 million pounds ofzinc.

Teck-Korea Zinc revisit CirqueThe Kechika Trough of northern

British Columbia – a southerly extensionof the belt of rocks that hosts the Selwyn,Bellekeno and Wolverine projects – ishome to a number of zinc-rich depositsthat hold the potential to supply futureglobal zinc needs.

For around two decades a 50-50 jointventure between Teck and Korea ZincCo. has been investigating zinc prospectsin both the Selwyn Basin and KechikaTrough.

In 2013, the zinc seeking partners cuta deal with Canada Zinc Metals Corp. toexplore the Pie, Yuen and Cirque Eastproperties in northern British Columbia.

Under the agreement, Teck and KoreaZinc could earn up to a 70 percent inter-est in the properties by investing C$8.5million in them by 2019.

With a 2014 budget that will top theC$500,00 first year minimum, the jointventure partners plan to complete target-ed geological mapping, selective rockand soil sampling on high priority tar-gets, core re-logging and sampling fromhistorical Pie and Yuen drill core, andpotentially geophysical surveys.

Additionally, Teck bought 1.25 millionunits of Canada Zinc (each unit consistsof one share and one purchase warrant)for C$500,000.

The Pie, Cirque East and Yuen proper-ties lie adjacent to Teck and Korea Zinc’sCirque project.

Mineable reserves at Cirque arereported to total 22.1 million metric tonsgrading 9.4 percent (4.6 billion pounds)zinc, 2.8 percent (1.4 billion) lead and 60g/t (42.6 million ounces) silver.

In its exploration and mining summa-ry, the British Columbia Ministry ofEnergy and Mines reports that Teck re-established the camp at Cirque anddrilled deep targets at the property during2013.

For 2014, Canada Zinc will focus itsown exploration on Cardiac Creekdeposit of its Akie property, locatedimmediately southeast of the propertiesoptioned to Teck and Korea Zinc.

“Results from the 2013 drilling onCardiac Creek represent expansion of theknown mineralization. We believe target-ed drilling this season on the deposit willalso further increase the dimensions andlevel of confidence in the resource whichwill ultimately assist in planning subse-quent stages of exploration and potentialdevelopments at Akie,” Canada ZincPresident and CEO Peeyush Varshneysaid during a May 12 announcement.

Cardiac Creek hosts an indicatedresource of 12.7 million metric tons grad-ing 8.4 percent (2.4 billion pounds) zinc,1.7 percent (472 million pounds) leadand 13.7 g/t (5.6 million ounces) silver(at a 5 percent zinc cut-off grade) and aninferred resource of 16.3 million metrictons grading 7.4 percent (2.6 billionpounds) zinc, 1.3 percent (482 millionpounds) lead and 11.6 g/t (6.1 millionounces) silver. l

10NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF MAY 25, 2014

continued from page 9

ZINC SECTOR

By SHANE LASLEYMining News

The U.S. Environmental ProtectionAgency is drawing fire from lawmak-

ers, business groups, project developersand the state of Alaska over its handling ofthe Bristol Bay Assessment and associatedattempt to prevent the Pebble Mine projectfrom getting the opportunity to have a fairhearing under established permitting regu-lations in the United States.

Mounting pressure from various partieshas persuaded the EPA Office of InspectorGeneral to launch an investigation of theagency’s alleged misconduct while com-pleting “An Assessment of PotentialMining Impacts on Salmon Ecosystems ofBristol Bay, Alaska,” more widely referredto as the Bristol Bay Assessment.

EPA claims that results of this studyjustify a review process under Section404(c) of the federal Clean Water Act thatmay result in banning the permits neededto build a mine at the enormous Pebblecopper-gold-molybdenum deposit in theBristol Bay Region of Southwest Alaska.

“Extensive existing data, includinginformation that was collected as part ofEPA’s three-year scientific assessment,provided ample reasons for EPA to believethat a mine of the size and scope of thePebble Mine would have significant andirreversible negative impacts on the BristolBay Watershed and its salmon-bearingwaters,” EPA Administrator GinaMcCarthy told reporters during a briefingthat announced the 404(c) review process.

The Pebble Partnership, State of Alaskaand U.S. House Oversight andGovernment Reform Committee haveturned up evidence that at least some indi-viduals within EPA were advocating for apre-emptive Section 404(c) ban of permitsfor Pebble as early as 2008 and suggeststhat the Bristol Bay Assessment may havebeen carried out in a manner to supportthat goal.

One such bit of evidence is a 2010internal EPA worksheet that lists the prosand cons of a proactive 404(c) ban ofPebble versus letting the project go intopermitting. This discussion matrix lists“never been done before in the history ofthe CWA;” “immediate political back-lash;” and “litigation” as downsides tovetoing permits.

These anticipated complications of the404(c) review are coming to fruition.Aside from drawing fire from a group ofpredominantly Republican U.S. lawmak-ers, EPA’s unprecedented attempt to shutthe doors on Pebble before its would-bedevelopers have even submitted permitapplications has landed the regulatoryagency in court.

On May 21, the Pebble Partnershipfiled suit in the U.S. District Court forAlaska, seeking an injunction to stop EPA’sprocess to pre-emptively veto the PebbleProject.

Explaining the decision to take EPA tocourt, Pebble Partnership CEO TomCollier explained: “Simply put, EPA hasrepeatedly ignored detailed comments thatwe, the State of Alaska and others havemade about this massive federal overreachand continues to advance an unprecedent-ed pre-emptive regulatory action againstthe Pebble Project that vastly exceeds itsClean Water Act authority.”

The company says the outcome of thisfight to allow Pebble to have a fair hearingin the permitting process will determine

the breadth of EPA’s already vast powers.EPA discussed this potential expansion

of its regulatory reach in the 2010 discus-sion matrix on blocking Pebble, saying aproactive veto of Pebble permits would“serve as a model of proactive watershedplanning” in the United States and listingthis assertion in the pro column of the dia-logue document.

“If EPA ultimately vetoes Pebble beforea development plan is proposed or evaluat-ed through the comprehensive federal andstate permitting processes, the precedentestablished will have significant long-term effects on business investment in thisstate and throughout the country,” Colliersaid.

“While Pebble must defend itself, thisprecedent-setting overreach is of greatconcern to the entire development commu-nity. There are some 60,000 404(c) per-mits sought under the CWA every year inthe United States, representing hundredsof billions of dollars in project investmentand impacting hundreds of thousands of

jobs,” he added.

Cease and desistIn separate responses to EPA’s 404(c)

review, the state of Alaska and PebblePartnership called on the EPA to back awayfrom its attempt to proactively quash keypermits needed to develop Pebble andallow the world-class copper project to beevaluated under the rigors of the NationalEnvironmental Policy Act and a plethora ofother relevant federal and state permittingprocesses established to allow resourcedevelopment while protecting the environ-ment.

“It is time to stop the madness. NEPA isamong the most admired and emulatedenvironmental protection and regulatoryprocess in the world. EPA should standdown, and let that process work forPebble,” Collier said.

Pebble Partnership asserts that EPA’sattempt to proactively stop Pebble is anunprecedented overreach based on a flawedassessment with a predetermined outcomethat aims to expand its own regulatoryreach, while denying Alaska and other reg-ulatory agencies the opportunity to havetheir voices heard.

“What is absolutely clear is that EPA’sintent to undertake pre-emptive actionunder Section 404(c) to restrict develop-ment of the Pebble Project goes wellbeyond its statutory authority as estab-lished by Congress, and would have theeffect of undermining the legitimate regu-

latory authority of the State of Alaska andthe U.S. Army Corps of Engineers,” Colliersaid in a statement announcing PebblePartnership’s response to the EPA action.

The State of Alaska, which owns theland where the massive Pebble copper-gold-molybdenum project is located, char-acterized the EPA’s assessment as “prema-ture, speculative, without precedent, illegalin terms of both process and substance, andunnecessary.”

In answer to EPA’s initiation of the CWA404(c) process, Alaska Attorney GeneralMichael Geraghty said the state, PebblePartnership and U.S. Army Corps ofEngineers are in the unenviable position ofcompounding speculation by further spec-ulating on the hypothetical mining scenarioin the environmental agency’s Bristol BayAssessment.

Alaska’s top attorney said there is norisk to the environment in allowing thePebble Partnership to have permit applica-tions reviewed under NEPA, the CleanWater Act, and other relevant federal andstate statutes.

“Until those reviews occur, it is not pos-sible to know, much less recommend, cor-rective action that would negate unaccept-able adverse effects that EPA may nowanticipate. Until then, the Section 404(c)review process is premature.”

In the most concise of the responses toEPA, the U.S. Army Corps of Engineers

l A L A S K A

Watchdog, court eyes alleged misconduct EPA Inspector General will probe legality of ‘Bristol Bay Assessment;’ developer files suit to overturn pre-emptive veto of Pebble

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11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF MAY 25, 2014

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see EPA WATCHDOG page 12

12NORTH OF 60 MINING

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said it “has not received a permit applica-tion for this project, and is therefore unableto evaluate the impacts of potential dis-charges associated with the Pebbledeposit.”

The State of Alaska agrees that a scien-tifically valid review of the potentialimpacts of Pebble can only be carried outonce a mine plan is available to judge in thecontext of pertinent regulations.

“Until then, EPA should refrain fromattempting to exercise its Section 404(c)authority in the absence of a Section 404permit application, and allow the Corps andthe State to exercise their regulatory rightsand responsibilities in the event applica-tions for a mining project are ever submit-ted,” Geraghty concluded.

The Pebble Partnership questions theaccuracy and legitimacy of the Bristol BayAssessment, which serves as the basis ofEPA’s potential proactive ban of key Pebblepermits.

“Despite three years of study, EPA hasnot quantified any impact of any of itsspeculative mine scenarios on any fisheryin Bristol Bay. On that basis alone, EPAsimply has not demonstrated that mineraldevelopment at Pebble will necessarilycause an unacceptable adverse effect on theregion’s fisheries, and so does not have theregulatory authority to veto future develop-ment,” said Collier.

The company argues that a tangiblemine plan submitted for NEPA reviewwould outline an accurate layout of facili-ties, discharges and mitigation measures –providing a scientific basis for discussingthe impacts of developing a mine at Pebble.

“We are calling on the EPA to suspendits Section 404(c) process, to wait for the

submission of a proposed developmentplan for Pebble and to participate fully inthe NEPA permitting process. Not only willthis result in a more comprehensive, trans-parent, inclusive and definitive projectreview, EPA will retain its authority to vetothe Pebble Project in future if it fails todemonstrate it will adequately protectregional fisheries,” said Collier.

Watchdog begins investigationTrout Unlimited, a cold water fisheries

conservation organization that has been atthe forefront of the anti-Pebble movement,characterizes the Pebble Partnership’sresponse to EPA as dishonest rhetoric.

“The EPA initiated the 404(c) process inthe face of overwhelming and peer-reviewed scientific evidence – evidencebased on PLP’s own plans and documents—and in response to a request for action fromAlaskans faced with a very real threat totheir jobs, livelihoods and salmon-basedculture,” said Tim Bristol, director of TroutUnlimited’s Alaska program. “The EPA hasthe legal, policy and scientific backing toprotect Bristol Bay and its economy fromthe Pebble Mine. The agency should workto complete the 404(c) process as quickly aspossible and apply much needed CleanWater Act Protections to the headwaters ofBristol Bay.”

Evidence is emerging that TroutUnlimited and other anti-Pebble advocatesworked behind the scenes to help EPA craftthe Bristol Bay Assessment and prepare forthe 404(c) process.

In a July 2010 email to EPA AquaticResources Manager Michael Szerlog,Shoren Brown, Bristol Bay campaign direc-tor, Trout Unlimited wrote, “There are somenegative rumors circulating within the tribesand other interest groups working on Pebbleabout the upcoming EPA trip to Alaska. Iam happy to help out and circulate the cor-

rect information for you to these stakehold-ers if you would like. Quite frankly – I amworried that some people may go public anddamage TU’s (Trout Unlimited) ongoingefforts and the productive relationships thathave been established to date.”

This is an excerpt from some 300 pagesof documents that the Pebble Partnershipobtained through a Freedom of InformationAct request that demonstrates an apparenthand-in-hand relationship between anti-Pebble advocates and EPA staffers during aperiod leading up to and during the BristolBay Assessment.

“While the documents we’ve received todate through Freedom of Information Act(FOIA) requests are sparse and heavilyredacted, they paint the picture of an agencylaunching a watershed assessment to justifya pre-determined outcome,” said NorthernDynasty Minerals Ltd. President and CEORon Thiessen.

The Pebble Partnership, currently ownedsolely by Northern Dynasty, turned theseFOIA documents over to the EPA InspectorGeneral as evidence of EPA wrongdoing inits handling of the Bristol Bay Assessment.

In response to the Pebble Partnership,State of Alaska and members of the U.S.Congress, the EPA watchdog said it will“begin preliminary research to determinewhether EPA adhered to laws, regulations,policies and procedures in developing itsassessment of potential mining impacts inthe Bristol Bay region.”

“We are thankful that the IG’s office hasinitiated this action, and hopeful that EPA’sfailure to conduct an objective, transparentand defensible scientific investigation willultimately come to light,” said Thiessen.

Lawsuit filedWhile grateful that the watchdog is prob-

ing the legality of EPA’s Bristol BayAssessment, the Pebble developer is still

taking the federal environmental agency tocourt.

“Litigation is necessary in order to getthe agency’s attention and bring somerational perspective back to the U.S. permit-ting process. While we would prefer toavoid this lawsuit, we are fully prepared todefend ourselves against the precedent-set-ting, unlawful actions of this agency,”Collier explained.

In its complaint, the Pebble Partnershipasserts that, in the absence of a permit appli-cation, EPA’s action exceeds its authorityunder the CWA and is contrary to theAlaska Statehood Act, the Cook InletExchange legislation, and other federallaws.

“We are urging EPA to immediately stopits pre-emptive action against Pebble andthe State of Alaska,” pressed the PebbleCEO.

The Pebble Partnership points out that apre-emptive veto does nothing to safeguardthe environment, as no site developmentwould occur unless permits are issued at theend of the NEPA process.

“Our legal action does not in any wayseek to diminish EPA’s legitimate role underthe CWA, or its right to participate as a reg-ulatory agency within the Clean Water Actpermitting process—including a compre-hensive review under the NationalEnvironmental Policy Act,” Collierexplained.

“The correct, legal, and defensible wayforward is for EPA to suspend its pre-emp-tive 404(c) process and allow us the fullopportunity to have our project reviewed byfederal and state regulatory agencies,including EPA, under NEPA. Until thathappens we must defend ourselves againstactions by EPA that are contrary to the law.Unless EPA suspends its action, these mat-ters must now be resolved by the court sys-tem,” he added. l

continued from page 11

EPA WATCHDOG

By ROSE RAGSDALEFor Mining News

All exploration in the Kitikmeot regionof Nunavut in 2013 was carried out in

search of gold and base metals. Mid-tierand major companies conducted most ofthe work, with mineral exploration anddeposit appraisal expenditures totaling anestimated C$121 million in the northern ter-ritory’s westernmost region.

MMG Resources Inc. continued work atits Izok Corridor and Hood zinc-copperprojects. The Izok Corridor project includesthe High Lake and Izok Lake volcanogenicmassive sulfide deposits. Exploration onthe Izok Corridor primarily focused onregional target identification. MMG sub-mitted a project description in 2012 to theNunavut Impact Review Board to initiatethe environmental review and permittingprocess for the project. The proposed planincludes a mine and mill at Izok Lake, amine at High Lake, and a port at Grays Bayon the Coronation Gulf from which miner-al concentrates would be shipped seasonal-ly, all connected by a 325-kilometer (202miles) all-weather road. Following the sub-mission, MMG requested a halt to thereview process for the Izok Corridor projectto examine options to improve the project’seconomic viability. The company originallyplanned to submit a revised project descrip-tion to the NIRB in late 2013, but has sinceindicated this submission will take place inlate 2014 at the earliest.

The design options could include theaddition of the Hood deposits to the pro-ject’s NI 43-101-compliant resources.MMG had planned to submit the revisedproject description to Review Board byDecember 2013, but has now indicated thata status update will be provided in thefourth quarter of 2014. This revised projectdescription will include consideration ofalternative engineering options and will beprovided after the completion of the 2014exploration program which is intended toidentify more mineral resources within theIzok Corridor.

The High Lake deposits are locatedwithin the High Lake greenstone belt in thenorthern part of the Slave Province. Threemain mineralized zones, AB, D, and West,

have been identified on the property fromwhich an indicated mineral resource of 17.2million metric tons grading 3.35 percentzinc, 2.25 percent copper, 0.31 percent lead,70 grams-per-metric-ton silver, and 0.95 g/tgold is estimated. Both open-pit and under-ground mines are contemplated on the HighLake property, with an estimated mine life(as per the project description submitted toNunavut regulators in 2012) of 12 years.

The last published resource for the Izokdeposits estimates indicated resources of14.4 million metric tons grading 12.9 per-cent zinc, 2.5 percent copper, 1.3 percentlead and 70.5 g/t silver, and 0.95 g/t goldand inferred resources of 369,000 metrictons grading 6.4 percent zinc, 3.8 percentcopper, 0.3 percent lead, and 39 g/t silver.The 2012 project description suggested amine life of 11 years for the deposits, butone of the design alternatives being consid-ered would shorten that to five to sevenyears.

Much of the work completed on the IzokCorridor project in 2013 was focused onengineering studies to assess design alterna-tives. The exploration program concentrat-ed on regional target identification alongthe proposed road route.

Work completed included geologicalmapping, prospecting, and ground and air-borne geophysical surveys. No results fromthis program have been released.

Progress at Hackett RiverThe Hackett River silver-zinc project is

owned by Glencore Xstrata plc, a companyformed in May 2013 from a merger ofGlencore International plc and Xstrata plc.In 2013, the company completed more than38,000 meters of diamond drilling focusedon identifying extensions of known depositsand testing geophysical and geochemicaltargets for new discoveries.

The Hackett River project includes threemain silver-rich zinc deposits: Main Zone,

Boot, and East Cleaver, as well as the JoZone satellite deposit. All of these depositsare located within a 2 kilometers by 5 kilo-meters area, and occur as tabular semi-mas-sive to massive lenses of sulphide mineral-ization at, or near, the contact betweenunderlying felsic volcanics and overlyingpelitic sediments.

Hackett River is considered one of thelargest undeveloped VMS deposits inCanada, and possibly the world. An updatedNI 43-101 resource estimate was released inMay 2013 that includes 25 million metrictons of indicated resources at averagegrades of 4.2 percent zinc, 0.6 percent lead,0.5 percent copper, 130 grams per metricton silver and 0.3 g/t gold, and 57 millionmetric tons of inferred resources grading3.0 percent zinc, 0.5 percent lead, 0.4 per-cent copper, 100 g/t silver and 0.2 g/t gold.Compared to the previous resource estimate

By ROSE RAGSDALEFor Mining News

L ed by a few key projects, mineral exploration activ-ity held its own in Nunavut in 2013, despite a tough

funding environment and stiff competition from otherattractive mining jurisdictions around the world.

Although the Far North territory has only one operat-ing mine, at least eight mineral projects are currentlyhurtling through development and the permitting processon their way to production. Of these, two projects – onegold and one iron – have project certificates, and sixprojects are advancing through the environmental assess-ment process.

Mineral exploration activity, meanwhile, is fairlyrobust, particularly in Nunavut’s westernmost KitikmeotRegions where companies continue to seek diamondsand a variety precious and base metals.

Nunavut attracted a total of C$270.2 million in explo-ration and deposit appraisal expenditures in 2013, well

above its 16-year average of C$220 million and fourth-highest amount among all the Canadian provinces andterritories, according to Natural Resources Canada esti-mates.

Junior and senior mining companies, in a roughly 40-60 split, chased a variety of minerals in 32 projects inNunavut. In 12 projects, explorers, including SabinaGold & Silver Corp. and Glencore Xstrata, spentC$157.2 million seeking gold across Nunavut. In anoth-er seven projects, companies pursued zinc, copper, leadand silver, spending about C$81.3 million. Uraniumexplorers, meanwhile spent C$17.9 million at four proj-ects, and companies chase diamonds with a total outlayof $9.0 million at three projects. A few explorers alsosought iron deposits in five programs, spending aboutC$4.8 million in total, while one company chased coal.

In 2014, exploration and deposit appraisal spendingin Nunavut is projected to decrease substantially, plum-meting to C$166.5 million in total with correspondingdeclines in every sector, except uranium where expendi-

tures are expected to jump to C$22.6 million.In a 2013 exploration overview prepared by the

Mineral Resources Division at Aboriginal Affairs andNorthern Development Canada’s Nunavut RegionalOffice, regional geologists summarized mineral explo-ration, deposit appraisal, development and related activ-ities throughout 2013 and predicted that the territory’sactive gold exploration projects in 2014 will includeBack River, Hope Bay, Itchen Lake and Wishbone in theKitikmeot region and Kiyuk, Pistol Bay and Meliadine inthe Kivalliq Region. Diamond exploration is underway atthe Luxx and Mel projects in the Kivalliq and Qikiqtaniregions, respectively, and the Chidliak project in theQikiqtani Region. Active base metal projects includedHackett River, Hood and the Izok Corridor in theKitikmeot region; Atlas-1 in the Kivalliq region; andStorm/Seal and West Melville in the Qikiqtani region.Uranium projects also include Kiggavik and Angilak inthe Kivalliq region, and exploration potential also existsfor rare earth elements and platinum group elements. l

l N U N A V U T

Overview showcases exploration activityMajors, juniors advance gold, base metals projects in Kitikmeot Region in 2013; follow up in 2014 despite ongoing funding drought

l N U N A V U T

Big projects advance in Kitikmeot regionExplorers report 2013 progress, follow-up plans in 2014 for Izok Corridor, Hackett River, Back River, Hope Bay and other projects

13NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF MAY 25, 2014

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released December 2011, this represents a34 percent increase.

About C$33 million was spent exploringHackett River and Wishbone in 2013. Thediamond drill program included 114 drillholes totaling 38,536 meters. Most holeswere targeted at extending known deposits,and testing geochemical and geophysicaltargets for new discoveries. A geotechnicaldrilling program was also completed at theknown deposits in support of a pre-feasibil-ity study.

Glencore has indicated that submissionof a draft environmental impact statement tothe Nunavut Impact Review Board, previ-ously planned for 2013, will be deferreduntil a PFS is completed.

The Wishbone property spans the 115kilometers (71 miles) length of the HackettRiver greenstone belt, alternatively referredto as the Wishbone greenstone belt, and iscomprised of 238 mineral claims with acombined area of almost 200,000 hectares(494,200 acres).

The property also encloses the MuskVMS deposit, discovered by NorandaMining and Exploration Inc. in 1979, andowned by Glencore. Exploration onWishbone in 2013 was limited to electro-magnetic and gravity airborne geophysicalsurveys to expand the geophysical coverageof the property and to generate targets tofollow up in future programs.

More gold at Back RiverGlencore has been working with Sabina

Gold & Silver Corp., operator of the neigh-boring Back River gold project, to acquirepermits for the Bathurst Inlet Port and Roadproject, which would support shippinginfrastructure for both the Hackett River andBack River projects. The company plannedto submit a draft EIS for the project toNunavut regulators in 2013, but the resultsof a geotechnical drilling program at theproposed port site suggest that the founda-tion material at that site is not adequate. Assuch, the DEIS will be deferred until furthergeotechnical drilling has been completed toassess the foundation material at an alter-nate port site.

Glencore also partnered with Sabina toadvance the Bathurst Inlet Port and Road,which proposes to construct a road to con-nect the two projects and a port at BathurstInlet.

Sabina continued aggressively advanc-ing its Back River project in 2013. Anupdated resource estimate was published inFebruary 2013, a substantial drilling pro-gram was carried out, and a preliminary fea-sibility study was completed for Back Riverin October. The company has initiated a fea-sibility study, and is expected to submit adraft Environmental Impact Statement toNunavut regulators in early 2014.

The Back River gold project comprisessix properties, including Bath, Boot,Boulder, and Del, and is located in thenortheastern corner of the Slave structuralprovince.

The project is currently focused on theother two properties, George and Goose.Both properties host multiple deposits ofbanded iron formation-hosted gold mineral-ization.

The 2013 program at Back River had abudget of $70 million and included 82,000meters of diamond drilling, engineering andenvironmental studies, and infrastructurework. Much of this work was designed tosupport the PFS, released October 2013,and the subsequent feasibility study, as wellas the DEIS which the company plans tosubmit in the first quarter of 2014.

The Goose property includes the GooseMain, Llama and Umwelt deposits each ofwhich have a NI 43-101-compliantresource, as well as a number of earlierstage targets, including the Boomerang,Camp, Echo, Goose Neck, Goose Hook,Goose Tail, Resurgence, and Wing zones.

Some exploration drilling in 2013 target-ed Echo, a mineralized zone discovered in2009, as well as the Boomerang and Wingzones.

Drilling at the Llama deposit in 2013was focused on converting existingresources to the measured and indicated cat-egories within the proposed pit shell. Thirty-three drill-holes were completed for thispurpose, with best results of 19.86 g/t goldover a 16.65-meter interval from hole13GSE292, and 11.56 g/t gold over 32.40meters from 13GSE285B. Additionalresource conversion drilling to upgradefrom the inferred to indicated resource cate-gories was targeted at the portions of theLlama deposit that are proposed to beextracted via underground mining.

Sabina released an updated NI 43-101resource for Back River in February 2013that incorporates results of the 2012 drilling.The estimate consists of measured and indi-cated resources of 24.2 million metric tonsgrading 6.0 g/t gold, as well as inferredresources of 7.7 million metric tons grading7.8 g/t gold, for more than 6.5 million totalcontained ounces. The positive PFSreceived by the company in October 2013only incorporates a fraction of that resource,as it does not consider inferred resources.The PFS outlines an operation which wouldprocess 5,000 metric-tons-of-ore-per-day,for an average production of 287,000ounces-per-year gold. This would continueover a mine life of more than eight years, fora total production of 2.4 million oz gold.The base price of gold used in the study wasUS$1,350 per ounce, with scenarios atUS$100 and US$200 above and below thebase price also being considered. The PFSproposes mining from six open pits (GooseMain, Llama, Umwelt, Locale 1, Locale 2and Lone Cow Pond North), with mostunderground mining occurring at Umwelt.

Sabina reported an updated mineralresource estimate for the Back River projectin March based on results from drilling in2013 and geologic modeling on all deposits.This new estimate consists of a measuredmineral resource of 10.4 million metric tonsgrading 5.2 g/t for more than 1.76 millioncontained oz gold, an indicated mineralresource of 17.9 million metric tons grading6.1 g/t for nearly 3.54 million contained

ounces gold and an inferred mineralresource of 8.2 million metric tons grading7.3 g/t for a contained 1.93 million oz gold.

In 2014, Sabina planned to conduct aC$19 million exploration program thatincludes 8,600 meters of drilling, engineer-ing for the feasibility study, environmentaland permitting activities, other developmentstudies and property holding costs.Including corporate general and administra-tive and other project--elated costs, theannual budget for 2014 is expected to beabout C$24 million.

Sabina April 28 reported finalizing twoimportant agreements with the KitikmeotInuit Association, including one that formsa development trust fund with an objectiveof contributing funding towards short andlong term KIA development projects andinitiatives including training and educationas well as infrastructure projects that willserve to support sustainable economicdevelopment in the Kitikmeot region.

Under terms of the other pact, a capacityfunding agreement, Sabina will fund theKIA based on an agreed work plan andbudget for the environmental assessmentand permitting processes at Back River.Funding will occur over an estimated periodof three years ending in 2016, which is theanticipated completion of the project’s per-mitting process.

The KIA is the surface title holder of104,278 square kilometers (40,251 squaremiles) of Inuit -owned lands in theKitikmeot Region, including the majority ofthe lands which comprise the Back RiverGold Project. The KIA represents the inter-ests of Inuit beneficiaries in the regionunder the Nunavut Land Claims Act and isa participant in the environmental assess-ment process of Back River.

Charlie Evalik, president of the KIA,acknowledged Sabina for its support ofKIA’s ambitions to create opportunities forthe beneficiaries of the region. “The KIA iscommitted to principles of economic sus-tainability and environmental stewardshipin respect of Back River. We view theseagreements as important steps to establish-ing a cooperative long-term relationshipwhich is aligned with these principles.Sabina is a welcome participant in thisprocess.”

Gold exploration at Hackett RiverSabina’s Wishbone Gold project occu-

pies the southeastern portion of theWishbone greenstone belt that also hosts theHackett River deposits. The company soldthe Hackett River project and a substantialportion of Wishbone to Glencore Xstrata(formerly Xstrata Zinc Canada) in 2011,retaining those claims viewed as prospec-tive for BIF-hosted gold, analogous to theprimary host rocks at the Back River proj-ect. Sabina also acquired additional claimsto bring the property to its current size ofapproximately 79,000 hectares (195,209acres).

Multiple gold prospects have been iden-tified on the property over the last severalyears, including Rocky, Bullwinkle, Lucky7, Haunaco, Tauntaun, Malley, Dark Side,and Hawaii.

In 2012, 33 holes were drilled for a totalof 7,479 meters on the Lucky 7, Tauntaun,Rocky, and Haunaco prospects. A variety ofsurface exploration work including groundgeophysical surveys, geological mapping,prospecting and soil sampling also was car-ried out at the Dark Side, Lucky 7, Malley,

Hawaii, Hawaii South, and Haunacoprospects; anomalous gold values werereturned from samples collected at DarkSide, the Hawaii prospects, Malley andTauntaun.

A reconnaissance surface explorationprogram was carried out on three blocks ofclaims within the property in 2013, andincluded prospecting and 1:10,000 scalegeological mapping. Program objectiveswere to confirm the presence of BIF on theclaims, and sample any BIF if found, as wellas to map and characterize historically iden-tified volcanic rocks. A total of 58 sampleswere collected in 2013, some

Further mapping and follow-up of goldanomalies is planned for 2014.

Subhed: Hope Bay bounds forwardTMAC Resources Inc. acquired the

Hope Bay gold project in March 2013 fromNewmont Mining Corp., which had put theproject into care and maintenance status justa year earlier.

The project occupies most of the 80 kilo-meters long and seven to 20 kilometerswide Hope Bay greenstone belt, and islocated within the Bathurst structural blockof the northeast Slave Structural Province.

The Hope Bay belt includes three majortarget areas. From north to south, they arethe Doris deposits, the Madrid trend, and theBoston deposit.

With the completion of the project acqui-sition, TMAC inherited more than C$800million worth of exploration data, develop-ment, and infrastructure from previousoperators.

This total includes underground devel-opment at both Doris and Boston.

In 2013, TMAC re-opened the Doriscamp in April, initiated a drill program inJune, and activated a variety of environmen-tal monitoring studies. The company alsonegotiated renewal of the commercial leasefor the site from the Kitikmeot InuitAssociation, and renewal of the Type Awater license from the Nunavut WaterBoard.

A total of 29,622 meters of diamonddrilling was completed in 63 holes. Thefocus of work in the first half of the seasonwas on “greenfields” exploration targets,which had little or no drilling completed inthe past. In the latter half of the program,when limited daylight and increasinglyinclement weather made helicopter-sup-ported drill moves difficult, the focus shift-ed to expanding the resource at the Dorisdeposits. A sealift program also re-suppliedthe Doris camp and returned equipment tosite that had been in storage.

In November, TMAC reported comple-tion of a preliminary economic assessmentand an updated NI 43-101 resource estimatefor the Hope Bay project.

The preliminary economic assessmentincludes sequential development of theDoris, Madrid and Boston deposits, withrelatively low start-up capital costs due tothe infrastructure already in place. Theseoperations would have a combined mine lifeof 10 years, and produce an average of224,000 oz of gold per year. The estimateincludes 8.2 million metric tons of meas-ured and indicated resources grading 10.56g/t gold as well as 5.1 million metric tons ofinferred resources at an average grade of10.94 g/t gold, for more than 4.5 milliontotal contained ounces of gold.

In terms of permitting, TMAC signed afive-year renewal of the commercial leasefor Doris North with the Kitikmeot InuitAssociation, and received approval for a 10-

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KITIKMEOT REGION

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year renewal of its Type A Water License forthat deposit. Combined with the DorisNorth project certificate already in place, allnecessary permits are secured to allow min-ing and milling to start at that deposit. Thiswork could begin as early as the fourthquarter of 2015.

The company May 1 reported raisingC$78 million in equity financing to furtheradvance the Hope Bay project.

Net proceeds of the offering will be usedto fund TMAC’s 2014 program includingexploration, engineering, environmentalpermitting and compliance, a pre-feasibilitystudy and for working capital and generalcorporate purposes. Coincident with theclosing of the financing, the companyrepaid a C$15 million convertible loan, plusinterest owed to Newmont, which wasscheduled to mature on Dec. 31, 2014. Thefinancing, along with current funds, afterthe loan repayment, leaves about C$72 mil-lion in the company’s treasury.

TMAC Executive Chairman TerryMacGibbon said the financing “clearlydemonstrates the strong endorsement byinvestors of the quality of Hope Bay and thestrength of the company’s managementteam and its operating philosophy.

Pending 2014 results, TMAC plans toconduct a pre-feasibility study by early2015, which, when completed, will allowthe company to consider equity and debtproject-financing options.

“With new funds on hand, no debt, andthe support of two strong, strategic share-holders in Newmont and Resource CapitalFund, the company looks forward with greatconfidence to realizing its goal of develop-ing Canada’s next gold district at HopeBay,” said TMAC CEO Catherine Farrow.“Since acquiring the property in March2013, the Kitikmeot Inuit Association andTMAC have worked together to establish amutually beneficial relationship on which toadvance Hope Bay in the best interest of allstakeholders. We are very fortunate in hav-ing regulatory approvals in place that allowus to put Doris North into production andother permits that allow undergroundadvanced exploration including bulk sam-pling at Boston and surface explorationdrilling at Doris, Madrid and Boston,” shesaid.

TMAC officials hope to significantly de-risk the Hope Bay project by carrying out anextensive surface drill program designed toupgrade mineral resource classifications,add to the global gold resource, re-open theexisting Doris underground infrastructure,advance engineering and planning for themine environments and the processingplant, advance the environmental permittingprocess for Madrid and Hope Bay as awhole, and conduct a pre-feasibility study.

“A large portion of the approved 2014plan and budget will consist of surfacedrilling to upgrade the mineral resourceestimates to higher classifications and toadd to our global gold resource,” Farrowsaid in a May 13.

Much of the work will be conducted atDoris and Madrid, initially from ice-basedplatforms on lakes while conditions permitand then from land-based platforms untilthe drilling is terminated at the end ofOctober.

Farrow said drilling began April 30 atMadrid South with four diamond drill rigsthat were left onsite over the winter. Twodeeper capacity rigs were airlifted to HopeBay on May 6 and both have initiateddrilling on Doris targets. The six diamonddrill rigs are expected to complete a total of57,000 meters as part of a planned totalexpenditure of C$28 million and averageall-in cost per meter drilled of about C$408per meter, including helicopter transporta-

tion, assaying, etc., as well as camp and cor-porate-related allocations. The intersectionsof high-grade gold mineralization at depthover mineable widths in the later part of the2013 drilling program at both Doris andMadrid South confirmed the high potentialfor the discovery of additional mineralresources at Hope Bay, she added.

Work, meanwhile, is underway to re-open the Doris portal and ramp to facilitatefuture underground mapping, undergrounddrilling and mine design. In addition, workhas begun on environmental permitting ofthe Madrid and Boston trends for advancedexploration, engineering and project execu-tion planning and will continue throughout2014.

Strategic alliance at Itchen LakeThe Itchen Lake gold project, which

straddles the Nunavut-NWT border, isbeing explored under a strategic alliancebetween Transition Metals Corp., newlymerged with HTX Minerals Corp., andNunavut Resources Corp. In the past, theproperty has received considerable explo-ration interest, with about 80 drill holescompleted on the property between 1963and 1995, and 74 gold occurrences definedover a 40-kilometer strike-length of banded

iron formation-hosted mineralization.Before the Transition-HTX merger, HTXcompleted two sampling programs in 2012on known occurrences to verify historicsampling results. A total of 102 sampleswere collected from nine showings. Thebest results were returned from showingR61 which is 200 meters long and up to 4.2meters wide. Nine samples collected in2012 had assays between 0.09 g/t gold and59.00 g/t gold, as compared to 13 historicsamples with assays between 2.4 and 42.9g/t gold. The company also undertook acompilation of historic exploration data forthe property.

Nunavut Resources provided aboutC$1.0 million in funding to Transition in2013 for an exploration program thatincluded an 800 line-kilometers airborneelectromagnetic and magnetic geophysicalsurvey over the property. More than 60 con-ductivity anomalies were identified, withsome located along the same trends asknown gold occurrences.

Reconnaissance surface exploration,including prospecting, 1:10,000 scale geo-logical mapping and sampling was complet-ed on the property in August, and results areintended to help with drill targeting. TheTransition Metals-Nunavut Resources

strategic alliance also initiated a remote pre-dictive mapping research project that willincorporate Earth observation data, geo-physical data, and geochemical surveys andother geoscience information to producepredictive maps. These maps will aid in tar-geting for future field activities.

Inactive projects in 2013Other mineral projects in the Kitikmeot

region did not see significant activity in2013. These include MMG Resources Inc.’sowns the Gondor copper-lead-zinc deposit,located southeast of Izok Lake; the Hammerproject operated by Stornoway DiamondCorp., and is named for the Hammer kim-berlite discovered in 2009; Shear DiamondsLtd.’s past-producing Jericho diamondmine, which closed indefinitely inSeptember 2012; Adamera Minerals Corp.(formerly Diamond North Resources Ltd.’s)Amaruk diamond, gold and nickel potentialproject, and the neighboring Halkett Inletgold project; the Oro (Hope Bay) gold proj-ect owned by North Arrow Minerals Inc.and located adjacent to TMAC Resources’Hope Bay project; and Hornby Bay MineralExploration Ltd.’s Coppermine uranium

15NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF MAY 25, 2014

Flint Hills Resources AlaskaJenner & Block LLPKoniag Inc.Northern Economics Inc.Pacific Star EnergyStoel Rives LLPTrident Seafoods CorporationUdelhoven Oilfield System Services Inc.

Lead Corporate Partners ($25,000 & above)Alaska Airlines & Horizon Air . Alaska Journal of CommerceBP . ConocoPhillips Alaska Inc. . Petroleum News

Corporate Partners

ABR Inc.Alaska Business MonthlyAlaska Journal of CommerceAlaska Rubber & Supply Inc.Alaska Wildland AdventuresBear Track InnBooz Allen HamiltonBristol Bay Native Corporation

Calista CorporationCarlile Transportation Systems Inc.CIRIClark James Mishler PhotographyCONAM Construction CompanyCopper Whale InnDenali National Park Wilderness Centers Ltd.Fairweather LLC

Thank You

715 L Street . Suite 100 . Anchorage, AK 99501 . alaska@tnc.org . 907-276-3133 . nature.org/alaska

Corporate Council on the Environment

The mission of The Nature Conservancy is to conserve the lands and waters on which all life depends.

The Nature Conservancy is proud to collaborate with a wide range of partners to ensure Alaska’s lands and waters continue to support abundant

salmon and wildlife populations. We thank these corporations for sharing our vision of a healthy and productive Alaska for many generations to come.

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continued from page 14

KITIKMEOT REGION

see KITIKMEOT REGION page 19

Mining Companies

Kinross Fort Knox/Fairbanks Gold Mining Inc.Fairbanks, AK 99707Contact: Anna Atchison, Manager, Community and Government RelationsPhone: (907) 490-2218 Fax: (907) 490-2290E-mail: anna.atchison@kinross.comWebsite: www.kinross.comLocated 25 miles northeast of Fairbanks, Fort Knox isAlaska’s largest producing gold mine; during 2011,Fort Knox achieved 5 million ounces of gold pro-duced, a modern record in Alaska mining.

Usibelli Coal MineFairbanks, AK 99701Contact: Bill Brophy, VP Customer RelationsPhone: (907) 452-2625 • Fax: (907) 451-6543Email: info@usibelli.comWebsite: www.usibelli.comOther Office

PO Box 1000Healy, AK 99743Phone: (907) 683-2226Usibelli Coal Mine is headquartered in Healy, Alaskaand has 700 million tons of coal reserves. UCM pro-duces an average of 2 million tons of sub-bituminouscoal each year.

Service, Supply & Equipment

Alaska Air Cargo • Horizon Air CargoP.O. Box 68900 SEAFZSeattle, WA 98168Contact: Joe Sprague, Vice President of CargoPhone: (206) 392-2705 or 800-2ALASKAFax: (206) 392-2641E-mail: joe.sprague@alaskaair.comWebsite: www.alaskacargo.comAward winning cargo services to more places, moreoften, with more lift to, from, and within the state ofAlaska.

Alaska Analytical Laboratory1956 Richardson HighwayNorth Pole, AK 99705Phone: (907) 488-1266 • Fax: (907) 488-077E-mail: jlovejoy@mappatestlab.comEnvironmental analytical soil testing for GRO, DRO,RRO, and UTEX. Field screening and phase 1 and 2site assessments also available.

Alaska Steel Co.6180 Electron DriveAnchorage, AK 99518Contact: Joe Pavlas, outside sales managerPhone: (907) 561-1188Toll free: (800) 770-0969 (AK only)Fax: (907) 561-2935E-mail: j.pavlas@alaskasteel.com Full-line steel and aluminum distributor. Completeprocessing capabilities, statewide service. Specializingin low temperature steel and wear plate.

Companies involved in Alaska andnorthwestern Canada’s mining industry

D I R E C T O R Y

The Red Dog mine in northwest Alaska.

17NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF MAY 25, 2014

Austin Powder CompanyP.O. Box 8236Ketchikan, AK 99901Contact: Tony Barajas, Alaska managerPhone: (907) 225-8236 • Fax: (907) 225-8237E-mail: tony.barajas@austinpowder.comWeb site: www.austinpowder.comIn business since 1833, Austin Powder providesstatewide prepackaged and onsite manufacturedexplosives and drilling supplies with a commitment tosafety and unmatched customer service.

Calista Corp.301 Calista Court, Suite AAnchorage, AK 99518Phone: (907) 279-5516 • Fax: (907) 272-5060Web site: www.calistacorp.com

Construction Machinery Industrial, LLC5400 Homer DriveAnchorage, AK 99518Contact: Robert Fairbanks, Sales ManagerPhone: (907) 563-3822Fax: (907) 563-1381Email: r.fairbanks@cmiak.comWebsite: www.cmiak.com

Delta P Pump & EquipmentPO Box 771452Eagle River, AK 99577Contact: Sue Ahrens, OwnerPhone: (907) 694-7583Fax: (907) 694-7584E-mail: deltappump@alaska.comWebsite: www.deltappump.comDelta P Pumps and Equipment is a full line distribu-tor for pumps, pump parts, and related equipment.We also handle system design, complete fabrication,installation assistance, and some repairs. Delta PPump and Equipment is a woman owned Alaskanbusiness established in 2000.

GCI Industrial TelecomAnchorage:11260 Old Seward Highway Ste. 105Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528Toll free: (877) 411-1484Web site: www.GCI-IndustrialTelecom.comRick Hansen, DirectorRichard.Hansen@gci.comMark Johnson, Business Development ManagerMark.Johnson@gci.comDeadhorse:Aurora Hotel #205Deadhorse, Alaska 99734Phone: (907) 771-1090Mike Stanford, Senior Manager North SlopeMike.Stanford@gci.comHouston, Texas:8588 Katy Freeway, Suite 226Houston, Texas 77024Phone: (713) 589-4456Hillary McIntosh, Account RepresentativeHillary.Mcintosh@gci.comGCI Industrial Telecom provides innovative solutionsto the most complex communication issues facingindustrial clientele. We deliver competitive services,reputable expertise and safely operate under themost severe working conditions for the oil, gas andnatural resource industries. GCI-your best choice forfull life cycle, expert, proven, industrial communica-tions.

HDR Alaska Inc. 2525 C St., Ste 305Anchorage, AK 99503Contact: Jaci Mellott, Marketing CoordinatorPhone: (907) 644-2091Fax: (907) 644-2022Email: Jaci.Mellott@hdrinc.comWebsite: www.hdrinc.comHDR Alaska provides engineering, environmental, plan-ning, and consultation services for mining and mineralexploration clients. Services include: biological studies;cultural resources; project permitting; NEPA; stakehold-er outreach; agency consultation; and environmental,civil, transportation, energy, and heavy structural engi-neering.

Jackovich Industrial & Construction SupplyFairbanks, AK 99707Contact: Buz JackovichPhone: (907) 456-4414 • Fax: (907) 452-4846Anchorage officePhone: (907) 277-1406 • Fax: (907) 258-170024- hour emergency service. With 30 years of experi-ence, we’re experts on arctic conditions and extreme

weather.

Judy Patrick Photography511 W. 41st Ave, Suite 101Anchorage, AK 99503Contact: Judy PatrickPhone: (907) 258-4704Fax: (907) 258-4706E-mail: jpp@mtaonline.netWebsite: www.judypatrickphotography.comCreative images for the resource development industry.

Keller Williams Commercial101 West Benson, Ste. 503Contact: Stewart Smith, Associate BrokerAnchorage, AK 99503Phone: (907) 865-6505Cell: (907) 727-8686Email: stewart@stusell.comContact: Mollie Smith, Commercial AssociateCell: (907) 229-1384Email: mollie@stusell.comWeb site: www.stusell.com;www.AKMiningClaims.comMining Claims to buy, sell, or lease, call the Alaskaprofessionals. We provide real estate brokerage serv-ice to the mining industry, with over 35 years of com-mercial experience. Call for a list of our featuredproperties.

Last Frontier Air Ventures39901 N. Glenn Hwy. Sutton, AK 99674Contact: Dave King, ownerPhone: (907) 745-5701Fax: (907) 745-5711E-mail: helicopter@LFAV.comAnchorage Base (907) 272-8300Web site: www.LFAV.comHelicopter support statewide for mineral exploration,survey research and development, slung cargo,video/film projects, telecom support, tours, crewtransport, heli skiing. Short and long term contracts.

LyndenAlaska Marine Lines • Alaska Railbelt MarineAlaska West Express • Lynden Air CargoLynden Air Freight • Lynden InternationalLynden Logistics • Lynden TransportAnchorage, AK 99502Contact: Jeanine St. JohnPhone: (907) 245-1544 • Fax: (907) 245-1744Email: custsvc@lynden.comThe combined scope of the Lynden companiesincludes truckload and less-than-truckload highwayconnections, scheduled barges, intermodal bulkchemical hauls, scheduled and chartered airfreighters, domestic and international air forwarding

and international sea forwarding services.

Northern Air Cargo3900 W. International Airport Rd. Anchorage, AK 99502Contact: Mark Liland, acct. mgr. Anch./Prudhoe BayPhone: (907) 249-5149 • Fax: (907) 249-5194Email: mliland@nac.aero • Website: www.nac.aeroServing the aviation needs of rural Alaska for almost 50years, NAC is the states largest all cargo carrier movingnearly 100 million pounds of cargo on scheduled flightsto 17 of Alaska’s busiest airports. NAC’s fleet of DC-6,B-727, and ATR-42 aircraft are available for charters toremote sites and flag stops to 44 additional communi-ties.

Pacific Rim Geological ConsultingFairbanks, AK 99708Contact: Thomas Bundtzen, presidentPhone: (907) 458-8951Fax: (907) 458-8511Email: bundtzen@mosquitonet.comGeologic mapping, metallic minerals exploration andindustrial minerals analysis or assessment.

Pebble Partnership3201 C St., Suite 604Anchorage, AK 99503Phone: 907-339-2600www.pebblepartnership.com

PND Engineers Inc.1506 W. 36th Ave. Anchorage, AK 99503Phone: (907) 561-1011Fax: (907) 563-4220Website: www.pndengineers.comFull-service engineering firm providing civil, structur-al, and geotechnical engineering, including miningsupport, resource development, permitting, marineand coastal engineering, transportation engineering,hydrology, site remediation, and project manage-ment.

TTT Environmental LLC 4201 “B” St.Anchorage, AK 99503Contact: Tom Tompkins, general managerPhone: 907-770-9041 • Fax: 907-770-9046Email: info@tttenviro.comWebsite: www.tttenviro.comAlaska’s preferred source for instrument rentals, sales,service and supplies. We supply equipment for airmonitoring, water sampling, field screening, PPE andmore.

Taiga Ventures2700 S. CushmanFairbanks, AK 99701Mike Tolbert - presidentPhone: 907-452-6631 • Fax: 907-451-8632Other offices:Airport Business Park2000 W. International Airport Rd, #D-2Anchorage, AK 99502Phone: 907-245-3123Email: mike@taigaventures.comWeb site: www.taigaventures.comRemote site logistics firm specializing in turnkeyportable shelter camps – all seasons.

Total Safety U.S. Inc.209 E. 51st Ave.Anchorage, AK 99503Contact: Tyler Zollinger, District Manager.Phone: (907) 743-9871Fax: (907) 743-9872E-mail: tyler.zollinger@totalsafety.comWebsite: www.totalsafety.comA full service safety company specializing in RemoteMedical Services, H2S Services, Industrial Hygiene, andSafety Consultants. Total Safety provides Service,Rental, or Sales of Safe Breathing Air, Gas Detection,and Technical Safety Equipment.

URS Corp.700 G Street, Suite 500Anchorage, AK 99501Contact: Joe Hegna, Alaska Vice President/AlaskaOperations ManagerPhone: (907) 562-3366 • Fax: (907) 562-1297E-mail: joe_hegna@urscorp.comWebsite: www.urscorp.comProvide engineering, construction and technical serv-ices with capabilities to support all stages of projectlife cycle. We offer a full range of program manage-ment; planning, design and engineering; constructionand construction management; operations and main-tenance; and decommissioning and closure services.

Advertiser IndexAlaska Airlines Cargo

Alaska Analytical Laboratory

Alaska Dreams

Alaska Steel Co.

Austin Powder Co.

Calista Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Constantine Metal Resources

Construction Machinery . . . . . . . . . . . . . . . . . . . . . 20

Delta P Pump . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Fairbanks Gold Mining/Fort Knox Gold Mine . . . . 9

GCI Industrial Telecom . . . . . . . . . . . . . . . . . . . . . . 10

Greer Tank Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

IFR Workwear Inc.

Judy Patrick Photography . . . . . . . . . . . . . . . . . . . . 7

Keller Williams Commercial

Last Frontier Air Ventures. . . . . . . . . . . . . . . . . . . . . 5

Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Nature Conservancy, The . . . . . . . . . . . . . . . . . . . . 15

Northern Air Cargo

Pacific Rim Geological Consulting . . . . . . . . . . . . . . 8

Pebble Partnership

PND Engineers Inc.

Salt+Light Creative

Sourdough Express Inc.

Taiga Ventures/PacWest Drilling Supply . . . . . . . 13

Total Safety

URS Corp.

Usibelli Coal Mine . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

By ROSE RAGSDALEFor Mining News

K ivalliq, located northwest of Hudson Bay and shar-ing a border with the Northwest Territories and

Manitoba, is the heart of Nunavut's gold country. Thiscentral region of the territory is also the home ofNunavut's sole operating mine, Meadowbank.

The region’s diverse geology hosts a number of miner-al occurrences and deposits, particularly gold, uranium,nickel, platinum group elements, base metals, rare earthelements, and diamonds. In 2013, exploration activity inthe Kivalliq Region primarily involved gold and uranium,but at reduced levels when compared to the previous threeyears. Exploration companies generally use Rankin Inletand Baker Lake as staging points for their activities. Thehamlets of Arviat, Chesterfield Inlet, Coral Harbour,Repulse Bay, and Whale Cove also benefit from explo-ration activities as the need for supplies and servicesgrows. An estimated C$115 million was spent on miner-al exploration and deposit appraisal in the region in 2013,and an additional $68 million was spent on the develop-ment of mine infrastructure, including an all-weatherroad from Rankin to the Meliadine gold project.

Agnico-Eagle advances gold projectsIn April 2013, the hallmark one millionth ounce of

gold was poured at the Meadowbank Mine, which isowned by Agnico Eagle Mines Ltd. The mine reportedannual record production of 430,613 ounces of gold and1.8 million ounces of open-pit reserves for the year. Nowin its fourth year of production, Meadowbank is an openpit operation consisting of the Portage, Goose Island andVault deposits. Goose Island and Portage deposits and theentire infrastructure are on Crown mining leases, where-as the Vault deposit is within Nunavut Tunngavik Inc.’smineral production leases. The entire Meadowbank prop-erty consists of 66,933 hectares (165,391 acres). Themine is the company’s largest gold producer and current-ly employs a work force of about 790 people. Explorationexpenditures in 2013 were modest at about C$4 millionwhereas planned capital spending for mine developmentwas C$39 million. The current mine-life of Meadowbankhas been extended marginally, in part due to the opti-mization of the mine plan at Vault, and is now forecast tooperate into 2018.

Agnico Eagle also owns the Meliadine project, whichcovers 55,892 hectares (138,109 acres) of Crown mineralclaims 50,334 hectares (124,375 acres), Crown mineralleases 931 hectares (2,301 acres) and NTI Inuit-ownedlands exploration agreements 4,827 hectares (11,928acres). About C$80 million in total expenditures wasplanned in 2013 for Meliadine; this total was estimatedafter a C$10 million cost-saving measure announced byAgnico Eagle in July. Three quarters of this budget wasallocated for road construction, ramp development, campoperations and other project support costs. The remainingexploration budget of C$20 million was devoted to an

extensive drilling program which completed 79,959meters by August. The program consisted of 26,887meters of systematic resource conversion drilling from anetwork of 152 holes, 47,687 meters of explorationdrilling from 156 holes at Tiriganiaq, Wesmeg/Normeg, Fzone, Pump and Discovery, and 29 holes at other explo-ration targets which provided 5,385 meters of core. TheTiriganiaq deposit is currently defined as three kilometersin length and considered to be open to the west. TheWesmeg and Normeg deposits appear to be connected toeach other for a strike length of five kilometers, andremain open to the east, west and at depth. New drillingrevealed that the Wesmeg portion has similar high-gradeore shoots plunging to the east that characterize theNormeg and Tiriganiaq deposits. Favorable results fromdeep drilling at the Pump, F Zone and Discovery depositshave added expansion potential at depth.

During the summer of 2013, AEM completed the 23-kilometer (14 miles), all-weather access road connectingthe community of Rankin Inlet to the property. Thisrequired the construction of three bridges, including oneacross the Meliadine River. The road will significantlyreduce supply transportation costs for exploration anddevelopment activities at the established camp thataccommodates up to 200 people. A permanent cover wasinstalled and completed in the third quarter over the por-tal entrance to the underground ramp. Plans in fourthquarter include re-opening the underground workings andconstructing a 150-200 meters extension onto the existingdecline.

Meliadine is currently in the permitting phase for thedevelopment of a mine. Activities in 2014 will focus onfurther exploration drilling on the property and extensionof the underground exploration ramp from which deepexploration and conversion drilling of the Tiriganiaq andWesmeg/Normeg zones will occur.

Although proposed expenditures for 2014 werereduced to C$45 million from $80 million, Agnicoannounced intentions for continued efforts to advance theproject over the next few years. This work could lead tothe initial start-up of a mine in 2018, pending the out-come of the environmental review and regulatoryprocesses. If Meliadine goes into production, it may sur-pass Meadowbank Mine as Agnico Eagle’s largest goldproducer.

Progress at other gold projectsThe Kiyuk gold project is located in the southwestern

Kivalliq region, and covers about 61,935 hectares(153,041 acres) of Crown land. The property includesseveral prospects: Rusty, Gold Point, Cobalt, Amundsen,North Snake, Bancroft, Rasmussen, and Anderson. In2013, Prosperity Goldfields Corp. ran a winter drill pro-gram, with a total of 4,427 meters drilled in 20 holes.Notable results from the drilling include 35.9 meters of4.95 g/t gold from the Rusty zone, which remains open tothe east-southeast and at depth. The company followed upon the drilling results in the summer of 2013 with a short

l N U N A V U T

Gold leads activity in central NunavutRegion could host territory’s first uranium mine; explorers seek commercial deposits of volcanogenic massive sulphides, diamonds

18NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF MAY 25, 2014

15th Floor - 1040 W. Georgia Street Vancouver, BC, Canada V6E 4H1

+1.604.684.6365 1.800.667.2114

The Niblack Project is an initiative of Heatherdale Resources Ltd. to develop an underground copper, gold, zinc and silver mine

on Prince of Wales Island in southeast Alaska.

For more information, visit us at www.heatherdaleresources.com

A HIGH-GRADE OPPORTUNITY IN ALASKA

see CENTRAL NUNAVUT page 19

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Agnico Eagle Mines' Meliadine gold project in the Kivalliq region of Nunavut is currently in the permitting phase for the devel-opment of a mine. Ongoing exploration and development, including a C$45 million work program planned for 2014, could leadto the initial start-up of a mine in 2018, pending the outcome of the environmental review and regulatory processes.

19NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF MAY 25, 2014

field program focused on re-logging of thepreviously drilled core to determine whichof the several hydrothermal vein systemson the property hosts the gold mineraliza-tion. This re-logging work determined thatthe semi-massive sulphides and mag-netite-rich breccia host the highest goldgrades found to date. The company alsocompleted legal surveying at three of itsclaims to start the process to convert theclaims to leases.

Northquest Ltd. more than doubled itsmineral tenure in 2013 over the Pistol Bayproperty, which now covers 90 kilometers(56 miles) of a two-kilometer (1.24 miles)-wide corridor of the Rankin-Ennadaigreenstone belt. The Pistol Bay projectconsists of 104 mineral claims totaling86,150 hectares (212,877 acres) owned byNorthquest.

In the spring of 2013, the companycompleted construction of an all-seasoncamp to support ongoing gold explorationwork, now in its third consecutive year.The 2013 exploration program consistedof C$5 million in planned expenditures,including ground geophysics, geologicalfield work, and diamond drilling.

Two previously-flown airborne geo-physical surveys were used to guide fol-low-up ground surveys, done in 2013, forthe purpose of determining the location offuture diamond drilling. A 30.6 line-kilo-meters ground EM survey was completedat the Bazooka target and a 21.7 and 16.3line-kilometer induced polarization/resis-tivity grid survey, were executed for theSako and Vickers targets, respectively.

Systematic mapping and prospectingwas carried out across the length of theproject area to follow-up on gold-bearingsamples and to identify new occurrences.Nine target areas, Barrett, Colt, CZ,Defender, Kimber, Purdey, Sako Grid,Tikka, and Webley, returned assay resultsfrom grab samples with anomalous goldvalues as high as 87.2 g/t. Highlights fromthe 2013 exploration program include sev-eral new gold occurrences discoveredalong the 90 kilometers (56 miles) lengthof the property.

Substantial uranium activityKivalliq Energy Corp. released an

updated NI 43-101-compliant resourceupdate for the Angilak Property in early2013 comprising the Main, Western andEastern Extension, J4, and Ray zones ofthe Lac 50 Trend deposit. The Angilakproject comprises one IOL subsurfaceparcel (RI-30) surrounded by 139 Crownmineral claims, with a total combined areaof 137,702 hectares (340,262 acres).Exploration on the project is focusedalong the Lac 50 Trend, situated at thenorthern margin of the Angikuni sub-basin of the Baker Lake Basin. Uraniummineralization occurs as fracture-con-trolled pitchblende with sulphides chieflyhosted in graphitic, chloritic tuffaceousmetasediments of the Baker Lake Group.

Using a cut-off grade of 0.2 percentU3O8 and including results from diamonddrilling in 2012, the company added 60percent to its previous resource estimate.The inferred uranium resource has beenrevised to 2.83 million metric tons, grad-ing 0.69 percent U3O8 for a total of 43.3million pounds of uranium. Using thesame uranium cut-off grade, the combineddeposit has the potential to be a poly-metallic producer with inferred mineralresources of 1.88 million ounces of silver,10.4 million pounds of molybdenum, and15.6 million pounds of copper.

An exploration budget of C$4.8 mil-lion was allocated to the Angilak project

for 2013. Compared to previous years, thecompany completed a modest 14-holedrilling program with 2,101 meters of dia-mond drilling, bringing the total drilled onthe property since 2008 to 89,530 meters.The exploratory drilling led to the discov-ery of a new prospective area, the J1 zonelocated between the Eastern Extensionand J4 zones. Seven holes intersected theJ1 EM conductor, and four drill holes test-ed the ML conductor. Mineralizationoccurs in association with carbonate veinshosted in sheared and hematized sulphide-bearing graphitic tuffs within a thickersequence of basalt and gabbro. Assayresults from the most significant intersec-tion at J1 yielded 1.06 percent U3O8 and0.28 percent copper over a true width of0.3 meters at a vertical depth of about 60meters (13-J1-002).

In addition to new drilling, 984 line-kilometers of geophysical surveying, geo-logical mapping, prospecting, and envi-ronmental studies were completed on theproperty. Geochemical analyses of 1,538soil samples returned anomalous uranium-in-soil values from 387 of those samples.

Some of the anomalous samples werecollected 600 meters from previous drillholes with known mineralization near theBlaze, Spark, Pulse and ML zones. A largeanomalous zone measuring 500 meterswide by 2,600 meters long at the Hot tar-get area yielded 2,880 parts per billionuranium, the highest value returned todate for uranium in-soil in the Lac 50Trend. The resulting anomalous zones,combined with their spatial association toEM conductors, will help to prioritizefuture drill targets. Independent metallur-gical tests carried out on the Lac 50 Trenddeposits during the past year yieldedencouraging preliminary results.

In October 2013, the company furtherexpanded its interest in the Kivalliq regionby entering into an agreement with PacificRidge Exploration Ltd. to acquire 100 per-cent ownership of the mineral rights(excluding diamonds) on the Baker BasinUranium property. This agreementincludes results from proprietary explo-ration work, with a value of $7.1 million,previously completed on the claims. The95-claim property covering 93,993hectares (232,257 acres) lies 60 kilome-ters (37 miles) south of the community ofBaker Lake. Multiple structurally con-trolled targets were discovered fromexploration drilling around Bisset Lake byPacific Ridge in 2006 and 2007.

The most advanced uranium project inthe Kivalliq regions is Areva ResourcesCanada’s Kiggavik project. Following upon its C$8.7 million exploration programin 2012 in which 11,858 meters of dia-mond drilling was completed at itsKiggavik project west of Baker Lake,Areva Canada continued work atNunavut’s most advanced uranium proj-ect. The company drilled 10,593 meters ofdrilling in 39 holes in 2013, and complet-ed 463 line-kilometers of ground geo-physics on 10 grid areas to further outlinedeposit resources, extend areas of knownmineralization, and test geophysical tar-gets. Environmental baseline studies andwildlife monitoring are ongoing in theproject area. Project expenditures orresults for 2013 have not been released bythe company.

Areva also received a technical reviewin 2013 from the Nunavut Impact ReviewBoard of its draft environmental impactstatement and responded to comments. Ifthe proposed C$2.1 billion project isapproved, construction could begin in2017 and production could start in 2020from three open pits developed in succes-sion and would require a work force of upto 600 people during the estimated 14-year life of the project. Areva is currently

preparing a final EIS, expected bySeptember.

The 122,713-hectare (303,224 acres)Aberdeen and 112,623-hectare (278,271acres) Turqavik properties located in theThelon Basin are owned by Cameco Corp.In 2012, the company relocated and con-structed a new exploration camp and fueltank farm on the south shore of AberdeenLake to support long-term activities on theadvancing projects.

Several prospective targets in this partof the basin have been outlined withground EM and gravity surveys since2006 and many have been subsequentlytested by diamond drilling. Previouslyunreported exploration activities carriedout in 2012 included 33 diamond drillholes which totaled 9,564 meters atTatiggaq, Qavvik, Ayra, Sandbould, Judge,Sissons and Mammoth uranium targets.Veins and fracture-hosted ore zones con-tain disseminated to massive pitchblendealong distinct oxidation-reduction bound-aries over wide intervals at depths between80 meters and 180 meters. Noteworthyresults from Tatiggaq returned grades of0.43 percent U3O8 over a length of 54.2meters (TUR-052B); 0.93 percent U3O8over 9.0 meters (TUR-056); and 1.17 per-cent U3O8 over 6.1 meters. Uranium min-eralization at Tatiggaq yielded some of thehighest grades in the area of up to 24 per-cent U3O8 in narrow 10-30 centimetersintercepts from drill core.

The company reduced greenfieldsexploration for 2013 and focused on sur-veying 66 Turqavik claims for conversionto mineral leases. Field-based geologicalresearch projects were carried out, aimedat a structural investigation and geochem-istry study of the Qavvik-Tatiggaq Trend,and other studies on the local Quaternarygeology.

Interest in VMS, diamonds projectsThe ATLAS project consists of 13

claims totaling 10,113 hectares (24,989acres) hosting two stratiform zinc, silver,and copper-bearing volcanogenic massivesulphide exploration targets; ATLAS-1 andZAC (20 kilometers or 12.4 miles) north-east of ATLAS-1). ATLAS-1 is manifestedas a 1.5 km-long continuous magnetic, elec-tromagnetic (EM), and gravity signaturewith exposures of massive sulphides occur-ring over a distance of 500 meters.

Encouraging results reported from thelimited exploration work in 2012 promptedan exploration program in 2013.

The drilling program in 2013 at the ZACoccurrence consisted of five drill holes,totaling 1,306 meters. The aim was to fur-ther explore the occurrence at depth andalong strike, to evaluate the economicpotential of the target, and to test associatedgeophysical anomalies. Results confirmedthe presence of a VMS setting at ZAC, with110 m of disseminated and stringer sul-phides, including chalcopyrite in one hole(ZAC-13-05) and 4.8 meters of massive sul-phides in another drill hole (ZAC-13-01).Assay results are pending.

The company plans to follow up in 2014with further drilling to evaluate the extent ofthe mineralization at ATLAS-1 and to testthe Silty Lake geophysical anomaly identi-

fied in an EM survey.North Arrow Minerals Inc. acquired the

Luxx project in August 2013. The projectarea covers about 40,400 hectares (99,828acres) and consists of three prospecting per-mits. The project is part of an option agree-ment with Anglo Celtic Exploration Ltd.,along with the Mel diamond project in theQikiqtani region.

The Luxx property is located about 20kilometers (12.4 miles) from the knownChurchill kimberlite occurrences nearChesterfield Inlet. North Arrow Minerals isinvestigating unexplained trains of kimber-lite indicator minerals (garnet and ilmenite)identified from hundreds of till sampleresults published in assessment report data.The company conducted an airborne mag-netic survey of the property and completeda till sampling program near prospective tar-get areas to better define the types of indi-cator minerals. Results of indicator mineralanalyses and aeromagnetic survey data willbe used to prioritize areas for follow-upwork in 2014.

In April 2013, North Arrow MineralsInc. acquired the right to earn an 80 percentinterest in the Qilalugaq diamond propertysituated north of Repulse Bay fromStornoway Diamond Corp. North ArrowMinerals needs to collect a mini-bulk sam-ple (minimum 1,000 metric tons) from the12.5 hectare (31 acres) Q1-4 kimberlitecomplex to obtain an improved diamondvaluation. The company is in the planningstages for collecting the bulk sample in2014.

Bitterroot Resources Ltd. planned to fol-low up on encouraging 2011 and 2013exploration results at the Windy Gold proj-ect adjacent to the north and west ofProsperity’s Kiyuk project in 2013 with asurface exploration program of prospecting,mapping, and geochemical sampling for2013, but the program did not take place.

Other projects in the Kivalliq region thatsaw little or no activity in 2013 include AuraSilver Resources Inc.’s Greyhound LakeProperty near Baker Lake; StarfieldResources Inc.’s nickel-copper-cobalt-plat-inum-palladium VMS occurrence atFerguson Lake, which the junior attemptedto sell in 2013 to Canadian North Resourcesand Development Corp. after Starfield filedfor protection of its assets under Part 3 ofCanada’s Bankruptcy and Insolvency Act;the Nanuq and Nanuq North diamond proj-ects investigated by Peregrine DiamondsLtd., the latter in a joint venture agreementwith Bluestone Resources Inc.; AdameraMinerals Corp. (formerly Uranium NorthResources Corp.’) gold prospect at MalleryLake southwest of Baker Lake, its Esker,Angikuni gold and Nowyak properties inthe Yathkyed greenstone belt west of Arviatand its Amer Lake uranium property ;Anconia Resources Corp.’s RB gold proper-ty northwest of Whale Cove; Uru MetalsLtd.’s Nueltin Lake gold-uranium projectnear the Manitoba border; NexGen EnergyLtd.’s Thelon Basin uranium project, for-merly owned by Mega Uranium Ltd.;Forum Uranium Corp.’s North Thelonproject; Cache Exploration Inc.’s NunavutRare Earth project; and Ridgemont IronOre Corp’s. Maguse River iron projectnorth of Arviat. l

continued from page 18

CENTRAL NUNAVUT

project. Some new projects, however, may see

activity in 2014. These include TundraCopper Corp., which aggressively stakedmore than 70,000 acres covering severalshowings within a 2,500-square-kilome-ter (965 square miles) area in the

Coppermine District in 2013 in search ofhigh-grade copper mineralization.Historical data from these showings indi-cate that extremely rich copper gradesexist and that the area possesses the fer-tile geological environment required tohost major copper deposits. The group ofgeologists and prospectors, who foundedthe junior visited the property in August,say they plan to carry out a substantialexploration program in 2014. l

continued from page 15

KITIKMEOT REGION

20 NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF MAY 25, 2014

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