15 rio tinto revisits banks island - petroleum news
TRANSCRIPT
MILLROCK RESOURCES INC.
Field technicians Chance St George, Dale Patrickand Andrew Forward investigate the Revelationgold property, one of several early-stage prospectsgenerated by Millrock Resources Inc. in Alaska’sKahiltna Terrane. See page 9.
A special supplement to Petroleum NewsWEEK OF
June 26, 2011
A special supplement to Petroleum News
3 US bills tackle critical minerals Lawmakers push legislation to support domestic mining of vital elements
14 Yukon exploration to top C$260M Gold’s allure draws virtual Who’s Who list of explorers to territory
15 Rio Tinto revisits Banks Island Diavik co-owner quietly seeks diamonds in Canada’s expansive high Arctic
By SHANE LASLEYMining News
As the United States scrambles to fillthe rare earth elements supply
shortage caused by China’s export restric-tions on these technologically importantmetals, Sen. Lisa Murkowski, R-Alaska,and Rep. Doug Lamborn, R-Colorado,each have introduced legislation onCapitol Hill that seeks to revitalizedomestic production of the minerals mostcritical to maintaining military securityand a robust economy.
“It is critical that we have a nationalpolicy, and we are behind the power-curve. We have countries like China thatsometimes have monopolies on rare earthmetals or other critical and strategic min-erals,” Lamborn told Mining News dur-ing a June 3 interview. “We need to havein place an assessment and inventory ofwhat our national assets are, so that, at aminimum, we can use that up-to-date andvital information to formulate the nextsteps going forward.”
Though China’s restrictions on globalREE supply is what prompted lawmakersto consider the need for a national policyon critical minerals, the bills introducedby Murkowski and Lamborn seek toestablish a national course of action, notonly for rare earth elements but all min-erals vital to the nation’s well-being.
“That is one reason why my bill is socomprehensive and covers a number ofthings beyond just the rare earths, as
important as thoseare,” the Coloradosenator explained.“Some (minerals)may move in and outof those categories.Copper for instance;you would think it isa wide-spread sub-stance, and in someways it is, but if theindustrialization of India and China takeshold even more in the future then currentdeposits may get consumed, and some-thing we thought was common all of asudden becomes critical.”
In its “Mineral CommoditySummaries 2011,” the U.S. GeologicalSurvey reported that in 2010 the U.S.imported more than 50 percent of its con-sumption of 43 minerals and 100 percentof 18 minerals, continuing a 30-yeartrend of growing reliance on foreignsources of these commodities.
“Minerals are a fundamental compo-nent to the U.S. economy. Final products,such as cars and houses, produced bymajor U.S. industries using mineral mate-rials made up about 13 percent (morethan $2.1 trillion) of the 2010 grossdomestic product,” the agency wrote inJanuary.
Inclusive bill draws bipartisan supportTwo of the primary objectives of the
critical minerals legislation Murkowskiintroduced to the Senate on May 26 is to
direct the U.S.Geological Surveyto compile a list ofany and all mineralsvital to the U.S. andestablish a compre-hensive set of poli-cies that ensure thenation is able tomeet its own miner-al needs.
Introducing S. 1113, Murkowskiwrote, “Minerals shape our daily lives,our standard of living, and our ability toprosper. We rely on minerals for every-thing from the smallest computer chips tothe tallest skyscrapers, and yet the UnitedStates somehow lacks clear policies toensure an affordable and abundantdomestic supply. The ‘Critical MineralsPolicy Act’ will help solve that problemby modernizing our policies for produc-tion, processing, environmental protec-tion, manufacturing and recycling.Through this act, we will ensure moreopportunities for domestic jobs, techno-logical innovation, increased nationalsecurity and greater competitiveness.”
S. 1113 includes provisions related to:• Designations – creates a process for
designating minerals as critical basedupon a review of potential supply restric-tions and the importance of their use.
• Policy – articulates a statement ofpolicy regarding presidential leadershipon the critical minerals supply chain.
• Resource assessment – seeks anupdated assessment of critical mineralresources located in the United States, incoordination with state geologic surveys.
• Permitting – establishes workinggroup to review permitting, quantifydelays, assess environmental protectionsand recommend improvements.
• Manufacturing – facilitates memo-randa of agreement between states andthe federal government on coordinatedpermitting for manufacturing facilities.
• Recycling and alternatives – author-izes research to promote the efficient useand recycling of critical minerals as wellas alternatives to them.
• Analysis and forecasting – buildsupon existing capabilities to providemore forward-looking analyses of criticalmineral supply chain trends.
• Education and workforce – providesworkforce assessments, curriculumdevelopment, worker training and associ-ated grant authorizations.
• International cooperation – reaffirmsinteragency coordination to share criticalmineral information and practices viadiplomatic channels.
“It’s my hope that a transparent andinclusive process – designed to gatherfeedback from stakeholders even prior tothe bill’s introduction – will lead to acommon-sense bill that draws broad,bipartisan support,” Murkowski said.
3NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
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.
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� U N I T E D S T A T E S
Critical minerals bills land in CongressMurkowski, Lamborn introduce legislation aimed at bolstering domestic mining of elements most vital to the U.S. economy, security
SEN. LISA MURKOWSKI REP. DOUG LAMBORN
see MINERAL BILLS page 4
4NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JUNE 26, 2011
The Republican senator, who came out on top ofrivals as a write-in candidate during the 2010 generalelection, drew support to her legislation from both sidesof the aisle, with Democrats making up eight of thebill’s 17 original co-sponsors.
“Our dependence on foreign sources for critical min-erals is unacceptable. The bipartisan ‘Critical MineralsPolicy Act’ ensures the Americancritical mineral supply is stableand affordable to support next-generation manufacturing,” saidSen. Kay Hagan, D-NorthCarolina. “The legislationincludes my Powering America’sLithium Production Act, whichincreases domestic productionof advanced lithium products thatwill power the cars and smart gridof the future. With gas prices skyhigh, it’s more vital than ever to support clean energyresearch and development.”
For nearly half a century, starting in the early 1950s,the world’s primary source of lithium was NorthCarolina, much of it from a mine in the town of KingsMountain.
REEs on lawmakers’ mindsRecognizing the potential impact of China’s sharp
restriction on exports of REEs on the economy andnational security of the United States, Murkowski wasamong the first lawmakers to warn of the nation’sdependence on foreign sources of minerals.
“Rare earth metals again provide a good example ofwhat’s at stake. China currently accounts for 97 percentof global production of these incredibly important met-als and last month set off a wave of anxiety amongclean energy developers by announcing its intention todecrease export quotas for the eighth time in as manyyears,” she said. “By cutting rare earth exports, China isseeking to ensure the manufacture of clean technologieswithin its own borders. But the implications for energysecurity and job creation inAmerica are also apparent.”
Since Murkowski’s notice tofellow senators, China hasincreased limits on its exports ofthese metals.
The shortage of supply hascaused the price of dysprosium –considered one of the world’s mostcritical strategic metals for mili-tary, high technology and cleanenergy applications – to skyrocketto a staggering US$1,490 per kilogram from aboutUS$117/kg when Murkowski addressed fellow law-makers late in 2009.
While S. 1113 seeks to establish policy for all criti-cal minerals, worries over current supply shortages ofREEs continue to weigh on the minds of many of theco-sponsors of the legislation.
Sen. Dean Heller, R-Nevada, said, “Some of thelargest concentrations of rare earth minerals are in the
United States, but instead of developing our ownresources, we are increasingly becoming more depend-ent on foreign countries. Our nation needs a policy thatsupports mineral development, not one that discouragesit.”
“These elements have become increasingly impor-tant as global demand has soared. Our ability to buildfighter engines, missile guidance systems and spacesatellites will be jeopardized in the coming years if wedon’t encourage entrepreneurship and innovation,” saidSen. Claire McCaskill, D-Missouri. “China’s chokeholdon world markets diminishes our national security andthreatens our economy.”
Accessing federal landsH.R. 2011, the legislation introduced by Lamborn,
requires the Secretary of the Interior to conduct anassessment of the nation’s capability to meet currentand future demands for the minerals critical to U.S.manufacturing competitiveness and economic andnational security in a time ofexpanding resource nationalism.
“We don’t know which federallands are open for mineral devel-opment. We also lack a decentassessment of the permitting time-lines for projects on federal lands,associated litigation, and hurdlesto domestic development,”Lamborn, who is chairman of theHouse Subcommittee on Energyand Mineral Resources, explained. “The NationalStrategic and Critical Minerals Policy Act of 2011 willincrease our understanding of our national mineralneeds and identify the barriers to meeting those needs.This way America can domestically produce theresources needed to produce energy, defend our nation,build our infrastructure, create jobs, secure our manu-facturing base, and keep our economy healthy.”
To ensure the U.S. maintains an adequate and stablesupply of minerals during a time of increasing resourcenationalism driven largely by the needs of the burgeon-ing economies of India and China, H.R. 2011 directsthe federal government to:
• Facilitate the availability, development, and pro-duction of domestic mineral resources to meet nationalneeds, including the demands of the manufacturingindustry;
• Promote and encourage the development of eco-nomically sound and stable domestic mining, minerals,metals, and processing industries;
• Establish an assessment capability for identifyingthe mineral demands, supply, and needs of the U.S.;and,
• Minimize duplication, needless paperwork, anddelays in the administration of federal and state lawsand regulations, and issuance of permits and authoriza-tions necessary to explore, develop, and produce min-erals and construct and operate mineral-related facili-ties.
Lifting barricadesLamborn told Mining News that one of the primary
aims of H.R. 2011 is to address roadblocks to bringing
Alaska DNR CommissionerSullivan delivers criticalminerals message to D.C.
Alaska Department of Natural ResourcesCommissioner Dan Sullivan June 3 informed U.S.lawmakers of Alaska’s strategic mineral endowmentand the role the Far North state can play in assistingthe nation in overcoming its critical mineral chal-lenges.
Sullivan’s testimony was delivered to the U.S.House Energy and Mineral ResourcesSubcommittee hearing onH.R. 2011, the “NationalStrategic and Critical MineralsPolicy Act,” sponsored byRep. Doug Lamborn, R-Colorado; and H.R. 1314, the“Resource Assessment of RareEarths Act of 2011,” spon-sored by Rep. Henry “Hank”Johnson.
“We are eager to share withthe U.S. Congress and theObama Administration thatAlaska has the potential todeliver domestic sources ofstrategic minerals to thenation,” CommissionerSullivan informed the law-makers. “More specifically,we want to demonstrate to thiscommittee and the rest of yourcolleagues in Congress thevital role Alaska can play in enhancing America’slong-term security, expanding American employ-ment, and growing the economy by deliveringdomestically produced and processed strategic min-erals to the U.S. marketplace.”
National mineral storehouseIn his statement to the House subcommittee,
Sullivan touted the untapped mineral potential ofAlaska.
“In 2010, the value of Alaska’s total mineral oreexports was US$1.3 billion, with exports to China,Japan, Canada, Korea and Spain. Over US$200million was spent by companies exploring inAlaska,” he said.
Sullivan told the lawmakers that the state’s cur-rent production levels are only “the tip of the ice-berg” when compared to speculation of the state’sun-mined mineral wealth.
According to Sullivan, Alaska is estimated to bea storehouse with:
• 17 percent of the world’s coal, ranking it as thesecond-largest coal jurisdiction on earth;
• 6 percent of the world’s copper, ranking it third;• 2 percent of the world’s lead, ranking it sixth;• 3 percent of the world’s gold, ranking it sev-
enth;
continued from page 3
MINERAL BILLS
SEN. KAY HAGAN
SEN. CLAIRE MCCASKILL
SEN. DEAN HELLER
see MINERAL BILLS page 5
DAN SULLIVAN
GOV. SEAN PARNELL
see SULLIVAN MESSAGE page 5
SHA
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LASL
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PA
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domestic mining projects into produc-tion.
One such barricade is minerals locatedon federal lands off-limits to explorationor development. Lamborn’s bill alsorequires the Interior Secretary to work inconjunction with the USGS to assess themineral potential of all federal land underthe jurisdiction of the Bureau of LandManagement and Forest Service and cat-egorize “all such lands that have beenwithdrawn, segregated, or otherwiserestricted from mineral exploration anddevelopment.”
In addition to gaining a better under-standing of the mineral potential of feder-al lands, the bill proposes to investigateways to streamline the permitting processin the United States.
“It is also important that we look atpermitting problems and issues,”Lamborn told Mining News.
He said shortening the seven- to 10-year average it takes to permit a mine inthe United States would provide multiplebenefits to the domestic mining sector.
“No. 1, it produces jobs faster,” heexplained. “Because our economy needsjobs and mining jobs are some of the bestin the country.”
The Colorado senator said the abilityto bring mining projects online quickerby having a more efficient permittingprocess also would reduce the nation’svulnerability to foreign supply restric-tions and encourage investment indomestic mineral projects.
“Mineral prices go in cycles,” heexplained. “It is difficult for investors –when there is a seven- to 10-year windowthat they have to deal with – to commit to
the investments needed for new miningprojects, or expanded projects of currentoperations.”
S. 1113 also calls for federal agenciesto assess “the impact of litigation on pro-cessing or issuing mineral explorationand mine permits, identification of thestatutes the litigation was brought under,and the cost to the agency or the FederalGovernment, including for payments ofattorney fees.”
Contending that the current judicialsystem in the U.S. is unfairly weighed infavor of organizations that utilize litiga-tion to oppose development projects,many mining industry leaders have calledfor legislation that would strike a betterbalance.
“Litigation is something that needs tobe streamlined and dealt with in such away – by Congress and hopefully by thisAdministration – to strike a better bal-ance, Lamborn explained. “There arelegal issues that citizens are entitled tobring to court, but it should not be donefor the purpose of simply delaying proj-ects.”
Lamborn hopes the changes proposedin his legislation will create a more robustinvestment climate and help spur growthin domestic mining projects.
“It creates so much more uncertaintywhen you deal in longer cycles becauseyou have to predict what the price of thatcommodity will be and investors may getcold feet about committing that far aheadand so the project never gets off theground,” he said.
Due to the importance of having a crit-ical minerals policy in place, the con-gressman also foresees the federal agen-cies involved adjusting quickly to provi-sions of the bill.
“There is usually bureaucratic inertiawhen you change an agency’s priorities.
But, we expect, given the serious natureof this issue, that the agencies shouldadapt to the requirements of Congress,should this become law, and that theywould act accordingly.”
Bills in committeeBoth the House and Senate versions of
the critical mineral legislation have beenreferred to their respected resource com-mittees.
H.R. 2011 is in the HouseSubcommittee on Energy and MineralResources, which Lamborn chairs, and ahearing was held June 3.
Lamborn said a vote on his legislation
could be held in the House Committee onNatural Resources by the end of June.
“I hope, and I expect, this to be on afast track,” he said.
S. 1113 is in the Senate Committee onEnergy and Natural Resources, of whichMurkowski is the ranking member. Thislegislation was heard by the subcommit-tee on energy June 9.
“I have heard good things about her(Murkowski’s) legislation, and I would behonored to work with her on a House ver-sion of her bill and visa-versa,” Lambornsaid. “I am hopeful that we can makeprogress together – I would be honored todo so.”�
5NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
• 3 percent of the world’s zinc, ranking it eighth • 2 percent of the world’s silver, ranking it eighth; and,• More than 150 REE occurrences.“Alaska is by far the most under-explored U.S. state
for mineral deposits and is considered highly prospectivewith regard to strategic and critical minerals needed fordomestic use,” the DNR leader informed the Congress.“Our vast land base is thought to contain at least 70known areas with documented potential to host REEdeposits and over 40 million acres of high mineral poten-tial lands.”
Aligned objectivesThe DNR commissioner said many of the provisions
of H.R. 2011 and H.R. 1314 are in line with goals ofAlaska Gov. Sean Parnell, including an assessment ofREEs and other critical minerals on federal lands.
Parnell has appropriated funds for a comprehensivethree-year project to determine the potential of REEdeposits on state lands.
In a February letter, the Alaska governor urgedPresident Obama to consider directing the U.S.
Geological Survey to conduct a similar inventory andgeological field work project on federal lands in the FarNorth state.
Parnell also prompted for better coordination in thefederal permitting process, an issue considered byLamborn’s legislation.
“The federal mine permitting system in the UnitedStates ranks as the least efficient or timely of 25 miningcountries, with an average time frame of seven to 10years to deliver a permit,” Parnell said. “This comparesto Australia where permits are often issued in one to twoyears. In order to ensure an effective NationalEnvironmental Policy Act process, high ranking man-agers from federal agencies with decision makingauthority (particularly from the EPA) need to coordinateearly and often with each other, permit applicants andstate agencies.”
Sullivan suggested to lawmakers during his June 3testimony that federal agencies consider adopting a reg-
ulatory system similar to the one used in Alaska.“The State of Alaska has developed a coordinated
permitting system that has evolved and worked well overthe last 20 years,” the DNR commissioner explained.“Our system ensures that all state agencies are workingwell together throughout the lengthy and complex per-mitting processes for all large resource developmentprojects in the state. The federal agencies have no analo-gous system. We therefore recommend that the federalagencies adopt a coordination model similar toAlaska’s.”
“A strong federal coordinator would not only ensurethat the federal agencies are working well together dur-ing permitting, but would help establish an experiencedpermitting team within the federal agencies,” he added.
A particularly egregious example of federal permit-ting delays is the Kensington Gold Mine in SoutheastAlaska, which took almost 20 years to permit. The Stateof Alaska successfully intervened in litigation to helpsecure the necessary permits for this mine.
In addition to throwing his support behind the criticalmineral and REE bills being considered by the House,Sullivan said the Parnell Administration also endorses S.1113, the “Critical Minerals Policy Act,” introduced tothe Senate by Alaska Senior Senator Lisa Murkowski.
—SHANE LASLEY
continued from page 4
MINERAL BILLS
continued from page 4
SULLIVAN MESSAGESullivan told the lawmakers that the state’s
current production levels are only “the tip ofthe iceberg” when compared to speculation of
the state’s un-mined mineral wealth.
By CURT FREEMANFor Mining News
T he last month has seen a massivetransition in Alaska from planning
to execution, from getting ready to go tothe field to boots on the outcrop anddrills in the ground. Each year the hustleand bustle of the Alaska summer explo-ration season subsumes virtually every-thing else (except the Stanley Cup) asfield programs launch around the state.This year has been no different with basemetal programs in the Brooks Range,gold programs in Interior Alaska and theSeward Peninsula, nickel-copper-plat-inum group element programs in theAlaska Range, rare earth element projectsin Southeast Alaska and copper porphyryprojects in the Alaska Range and on theAlaska Peninsula. People, drills, helicop-ters and time are all in high demand andshort supply. In short, pretty much a nor-mal Alaska summer!
Western AlaskaZAZU METALS CORP. announced
commencement of its 2011 explorationprogram at its Lik deposit. The programincludes exploration drilling on the LikNorth deposit, infill drilling on LikSouth, geotechnical investigations toexamine rock and soil conditions forimproving pit design and mining method,planning for plant design and construc-tion, waste dump and tailing disposaldesign, access road route to refinement
and costing, acquisition of a fresh sampleof mineralized material for further metal-lurgical testing, environmental baselinestudies, port site design, and acid rockdrainage characterization studies.
FIRE RIVER GOLD CORP.announced results obtained from addi-tional underground drilling at the NixonFork project. Significant new interceptsin the 3300 zone included hole N11U-038 with 17.56 grams per metric ton goldover 4.18 meters, hole N11U-041 with28.92 g/t gold over 3.14 meters and holeN11U-052 with 107.13 g/t gold and36.26 g/t silver over 8.42 meters. Drillingcontinues with two drills.
FREEGOLD VENTURES LTD.announced the commencement of explo-ration on its Vinasale gold project under
option from Doyon Ltd. An inducedpolarization geophysical survey and a5,000-meter diamond drilling programare aimed at both upgrading and expand-ing the current 1.33-million-ounceresource. Drilling is planned for theCentral zone, where current resources areconcentrated, and the sparsely drilledNortheast zone where mineralizationsuch as 21.5 meters grading 2.85 gramsof gold per tonne have been encountered.
INVENIO RESOURCES CORP.announced that it plans to investigatebulk-tonnage and high-grade gold targetsduring is upcoming 2011 exploration pro-gram at its Ganes Creek project. Thisincluded lower grade bulk tonnage goldmineralization that is composed ofquartz-arsenopyrite veinlets and micron-to-millimeter scale disseminations hostedin porphyritic rhyolite sills and dikes (thePzs Ridge prospect) and high grade goldin quartz-native gold veins, locally withcoarse visible gold, found within post-intrusive structures that cut altered anddeformed bi-modal sill and dike swarms(Independence mine). A new intrusive sillswarm and high-grade vein system wasdiscovered by trenching along SouthPotosi Ridge within the Lower BenchRegion. Two chip samples from stock-work veins hosted within altered intru-sives and shear-veins hosted in late-east-west, clay altered shear zones producedassays of 13.95 grams of gold per tonneand 14.15 grams of gold per tonne.Details of the planned exploration pro-gram were not released.
FULL METAL MINERALS LTD.announced that JV partnerANTOFAGASTA MINERALS has com-menced its 2011 drill program at thePyramid copper-gold-molybdenum por-phyry located in Southwest Alaska. Theproperty is under option from ALEUTCORP. The companies are planning aPhase I drill program totaling 5,000meters, with additional drilling based onresults.
FULL METAL MINERALS LTD.announced that it has entered into aLetter Agreement with REDSTAR GOLDCORP. whereby Redstar can earn a 60percent interest in Full Metal’s Unga andPopov epithermal gold targets near SandPoint. Redstar can earn a 60 percentinterest by completing US$5 million inexploration expenditures by Aug. 1, 2015,making cash payments totaling $300,000
by Aug. 1, 2014, and issuing 1,000,000shares by August 1, 2014. Redstar has theoption of earning an additional 25 per-cent interest by producing a bankable fea-sibility study and issuing an additional 1million shares to Full Metal. Redstar willissue an additional 1 million shares onthe commencement of commercial pro-duction. The project hosts more thaneight gold showings including the Aguilavein system. The Aguila system isapproximately 6 kilometers (4 miles)along strike from the Shumagin vein andhas been traced through trenching anddrilling for over two kilometers. The sys-tem is comprised of at least of three sub-parallel near vertical veins. Initial drillingin the early 1980s returned grades up to113 g/t gold over 0.4 meters and 12.0 g/tgold over 2.74 meters. The project alsohosts the Centennial deposit, a bulk ton-nage target containing an estimated 4.9million metric tons grading 1.4 g/t gold(200,000 ounces of gold) within 50meters of surface. Trenching and geo-physics indicates the zone remains opento expansion. Details of the plannedexploration program were not released.
ADVANCED EXPLORATIONS INC.announced that it has commenced an air-borne magnetic survey of its Iron Sandsproject near Port Heiden. The purpose ofthe 1,322 line-kilometer airborne magnet-ic survey is to better define the size,shape and distribution of the magnetite-bearing sands both onshore and in theoffshore area. The iron sands project iscomprised of a placer deposit that isattractive primarily for its magnetite con-tent. The deposit area is composed of anactive beach and offshore area as well aspaleobeach and terraces. A compositesands sample taken during an initial sitevisit returned a value of 8.23 percent fer-rous iron.
Interior AlaskaFREEGOLD VENTURES LTD.
announced initial drilling results from its700,000-ounce Dolphin deposit on itsGolden Summit project. Significant inter-vals include hole GSDC1101 which inter-sected 49.7 meters grading 0.66 g/t gold,hole GSDC1103 which intersected 54.9meters grading 0.82 g/t gold, holeGSDC1104 which intersected 60.5meters grading 0.73 g/t gold and hole
6NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
� A L A S K A
Exploration season shifts into high gearExplorers rush to plant boots on the outcrop and drills in the ground in search for base metals, gold, copper and REEs statewide
TheauthorThe author
Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMANJune 20. 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 [email protected] and his web site iswww.avalonalaska.com.
see FREEMAN page 7
GSDC1106 which intersected 452 metersgrading 0.68 g/t gold including 166.4meters grading 0.81 g/t gold. Followingcompletion of the current 7,000-meterdrilling program, the company will under-take property wide geophysical and geo-chemical surveys.
In a rare news release, SUMITOMOMETAL MINING CO. announced that ithad encountered significant gold, silverand antimony at their jointly held MonteCristo project in the Richardson District.Gold values ranging from 0.6 to 29.2 g/tgold were reported. Additional drilling isplanned.
FREEGOLD VENTURES LTD.announced plans to conduct drilling at itsRob project in the Goodpaster District.The program will involve mapping, sam-pling, and a diamond drill program toexpand upon previously intersected high-grade zones and to test other strong geo-chemical anomalies over bulk-tonnagetargets which have not been evaluated todate. Initial targets include the MichiganZone where grab samples returned valuesup to 988 g/t gold. Previous prospectingin the Michigan area identified a largestock-work vein system over a 3,500 x2,500 foot area. Other target areas includethe Blue Lead area where sampling of thevein zone returned values of up to 856 g/tgold. Drilling at the Grey Lead Zone in2007/2008 returned several high gradeintercepts including 17.5 feet grading15.8 g/t and 18.7 feet grading 19.14 g/tgold and 11 feet grading 43.10 g/t gold.One of the new targets to be tested is theHilltop Prospect which is located 600 feetsoutheast of the Grey Lead and wheregrab sampling returned values of 18.7 g/tgold with elevated levels of bismuth andtellurium similar to that seen in the GreyLead vein. Historical sampling in thisarea returned values of up to 101 gramsof gold per tonne.
INTERNATIONAL TOWER HILLMINES LTD. announced final drillingresults from its winter program at t theirLivengood project. Significant resultsfrom the core include hole MK-RC-480CT which intercepted 92.3 metersgrading 1.57 g/t gold, hole MK-RC-500CT which intercepted 49.9 metersgrading 1.35 g/t gold, hole MK-11-08which intercepted 29.3 meters grading
1.64 g/t gold, hole MK-11-116 whichintercepted 92.9 meters grading 1.62 g/tgold and an additional 65.4 meters grad-ing 1.02 g/t gold, hole MK-RC-518 whichintercepted 39.6 meters grading 1.68 g/tgold. This drilling confirmed two highergrade near-vertical structural zones thatappear to continue to depth but whichappear to be truncated up-dip. Additionalexploration is planned fro these two high-er grade zones.
CORVUS GOLD announced that jointventure partner FIRST STARRESOURCES INC. has received initialexploration drilling results from its LMSgold project in the Goodpaster District.Previously unsampled core from holeLM-10-39 intersected 6.9 meters grading11.7 g/t gold and 13.8 g/t silver, whilenew drilling in hole LM-11-40 returned21.2 meters grading 5.8 g/t gold and 12.6g/t silver, including 16.9 meters grading21.4 g/t gold and 33.5 g/t silver. Duringthe coming months First Star intends todrill 5,000 meters of oriented diamondcore to assess the existing Camp Zone inan effort to expand the gold-bearinggraphitic quartzite breccias and to drill anortheast-striking structural corridorwithin the lower gneiss zone that isknown to contain high-grade gold miner-alization.
TRI-VALLEY CORP.’s subsidiary,SELECT RESOURCES CORP.,announced that it has entered letter ofintent with Alaska newcomer US GOLDCORP. on the former’s Richardson goldproject. Under terms of the deal US Gold
can earn a 60 percent interest upon com-pletion of US$5 million in explorationexpenditures and 30,000 feet of coredrilling during the term of the DefinitiveAgreement. The parties have agreed thatUS Gold may terminate its option aftercompleting US$2.2 million in explorationexpenditures and performing 15,000 feetof core drilling during the first two yearsof the agreement. Should US Gold electto terminate the agreement, Select willretain its 100 percent interest in the proj-ect. Select will also receive US$200,000upon execution and additionalUS$100,000 payment on each of the nextthree anniversary dates of the agreement.Welcome to Alaska US Gold Corp.!
CONTANGO ORE INC. announcedthat airborne magnetic and electromag-netic geophysical surveys were completedin May on its Tetlin Reservation proper-ties near Tok. Airborne data is beingprocessed and will be used to guidedrilling and exploration program whichrecently began.
FULL METAL MINERALS LTD. andGEORGETOWN CAPITAL CORP.announced the commencement of thedrilling at the Tanacross copper-gold-molybdenum porphyry project nearChicken. The 2011 field programincludes 1,000 meters of core drilling infour holes, regional geological surfacemapping, and geological sampling.Tanacross is located within a belt ofCretaceous-age porphyry copper-goldsystems spanning eastern Alaska and theYukon.
UCORE RARE METALS INC.announced acquisition of its RayMountains rare earth element prospect.The Company has conducted initial geo-chemical analyses of field-concentratedheavy mineral samples from the 11,400acre property. The initial assay resultsindicate mineral concentrates containing5 percent to more than 30 percent com-bined valuable metals, with a total rareearth element content ranging from 1-8percent. The samples additionally showhigh heavy rare earth element content,generally ranging between 20 percent and30 percent of total rare earth elements,and high content of the strategic metaldysprosium which ranged from 2-5 per-cent of the total rare-earth-element con-tent. Multiple mineralized stream systemsand fluvial basins occur across an 80kilometer-wide section of the RayMountains. Various government surveysduring the 1970s and 1980s concludedthat significant tin and rare earth elementplacer deposits are present in thedrainages of the Kanuti, Kilolitna andRay Rivers. The rare metal placers of theRay Mountains contain REE as monaziteand xenotime, tin as cassiterite, tungstenas wolframite, and zirconium as zircon.Minor amounts of niobium and tantalumalso have been identified. Additionalwork is planned for later in 2011.
Alaska RangeCORVUS GOLD INC. and OCEAN
PARK VENTURES CORP. announced thecommencement of their 2011 explorationwork program the Chisna gold project inthe Chistochina District. Detailed soilsampling, geological mapping and struc-tural analysis on anomalous areas isunder way on the Golden Range andGrubstake prospect where drilling isplanned later in 2011. The Golden Rangetarget is defined by over 300 rock and
7NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
continued from page 6
FREEMAN
see FREEMAN page 8
soil samples taken across a 9 by 2 kilo-meter area with a high gold value of 50.4grams of gold per tonne. The SouthwestGrubstake target is defined by a mineral-ized trend with a mapped strike in excessof 600 meters. A total of 19 rock samplestaken from in-place boulder trains andoutcrop returned an average of 7.38 g/tgold, 8.82 g/t silver, 0.91 percent lead and0.16 percent zinc.
PURE NICKEL INC. and partnerITOCHU CORP. announced that drillingcommenced on its Man project in earlyJune. The focus of exploration in 2011 isthe Alpha Complex where platinum group
element mineralization was discoveredduring the 2010 season. Several targetson the Rainy Complex, in the Northernregion of the property have also beenidentified. The Rainy targets are based onstrong geophysical anomalies and geo-chemistry analysis (rock, stream and sedi-ment analysis). The 2011 budget isapproximately US$4.8 million.
ALIX RESOURCES CORP. announcedthe commencement of exploration at itsGolden Zone gold-silver-copper propertyin the Valdez Creek Mining District. Thecompany anticipates drilling 2,500 metersor more on the property this summer withUS$1.5 million currently budgeted. Adeep (approximately 500 meter) hole isintended to test the area beneath theBreccia Pipe from which the gold-copper
deposit is presumably sourced. Severalother drill holes will target a number ofsmaller but potentially higher grade tar-gets that might add exploitable resourcesto the property and at least two prospec-tively large tonnage porphyry copper tar-gets. The company will also be conduct-ing geologic mapping and soil and streamsediment sampling programs. A prelimi-nary economic assessment study on theexisting resource is planned for the winterof 2011-2012.
CARIBOU COPPER RESOURCESannounced the commencement of drillingat its Caribou Dome property in theValdez Creek District. The 2,000 footdrill program is designed to test the east-ern extension of the “East Snow Gulch”zone where 2010 trenching yielded seven
meters grading 4.03 percent copper. MILLROCK RESOURCES INC.
announced expansion of the Estelle goldproperty under option to Teck AmericanInc. The expansion covers ground thathosts historic drill core and surface chipsample values, including a drill intersec-tion of 3.0 g/t gold over 29.6 meters and achip sample grading 18.0 g/t gold over9.9 meters. Millrock plans to drill a holenear this location as part of the 2011exploration program budgeted atUS$3.455 million.
KISKA METALS CORP. announcedfinal winter drilling results and com-mencement of its summer drilling pro-gram on its Whistler project. Initial drillholes at Raintree West will step out to thenorth, west and south of this new por-phyry discovery. A second drill rig willcontribute to the Raintree West program,as well as other high priority targetsincluding Raintree North. Two additionalrigs will be dedicated to expanding theIsland Mountain deposit where the dis-covery of a new porphyry gold-coppersystem was made in 2009 and expandedin 2010. A fifth rig will continue with thehighly successful shallow grid drillingprogram in the Whistler Orbit. In total,Kiska plans to complete in excess of31,000 meters of drilling at the WhistlerProject in 2011. Final drilling resultsfrom its winter program included 80meters grading 0.14 percent copper, 0.31g/t gold and 1.1 g/t silver per tonne fromthe Raintree North prospect.Mineralization was intersected from thebedrock\overburden interface and is asso-ciated with moderate to strong high tem-perature potassic alteration of Whistler-type diorite porphyry.
Northern AlaskaANDOVER VENTURES INC.
announced that exploration has begun atits Sun volcanogenic massive sulfidedeposit in the Ambler District.Approximately 2,000 to 2,500 meters ofdrilling are anticipated during the US$1million 2011 program. The focus of theprogram will be to further extend theMain Sun deposit to the northeast towardsthe Picnic Creek area and also to thesoutheast and to test the Southwest SUNarea.
Goldrich Mining Co. announced com-pletion of a US$2 million private place-ment that allows commencement of theirdiamond core drilling program it itsChandalar project in the Brooks Range.Details relating to its 2011 program werenot released. �
8NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
PuttingPeople First
kinross.com
In life, you get back what you put in.That’s the story behind Chelly’s fourteen years on the Fort Knox mine team.
Born and raised in Fairbanks, Chelly started as a warehouse technician and, thanks to her own hard work and support from supervisors and co-workers, she is now the human resource manager and a member of the mine’s senior management team. She has also gone back to school to get her bachelor’s degree while continuing to work at the mine.
Today, Chelly is part of same internal process that helped her, by helping fellow employees grow and succeed in their work at the mine.
Chelly modestly credits the supportive environment at Fort Knox with helping her secure new opportunities during her career here.
We think she deserved all the help she got from us.
continued from page 7
FREEMAN
� G U E S T C O L U M N
We need a holiday from the RegulatocracyFederal regulators need to suspend operations until the Great Recession is over and the investor community returns to the table
By J. P. TANGENFor Mining News
Once upon a time, I was actuallyawarded a degree in political science.
Assuming that “science” describes repro-ducible results, it now appears that “politi-cal science” is the quintessential oxymoron.This explains why I know so many thingsthat I just don’t understand.
For instance, the Alaska MinersAssociation has a bunch of committees tomonitor developments in everything fromgetting along with other users of publiclands to monitoring developments inindustrial minerals. Two of the committees,one dealing with oversight of state legisla-tion and the other dealing with oversight of
federal agencies, are especially high pro-file. The latter area of concentration, espe-cially, dominates a large amount of the
association’s time.Most recently, there has been a height-
ened level of activity on the federal over-sight front. Administrative initiatives thataffect mining in Alaska and require analy-sis and comment have been crossing theAMA’s desk incessantly since the early1990s, generally at the rate of about one aweek, Now, however, they seem to comeover the transom almost once a day.
What is curious about this is that collat-erally, it appears that that country is bleed-ing to death. The Great Recession lingerson. National rates of unemployment hoverin the 9 percent range; and those numbersallegedly mask much higher numbers ofout-of-work people. Many commentatorswish out loud that the private sector would
start hiring up again, and express the hopethat small businesses will lead the countryout of the doldrums.
Somehow the dots cannot be connectedby our leaders. Private business, especiallysmall business, requires capital investment.Capital investment requires an expectationof return. The rate of return is balancedagainst the perceived risk. Risk is calculat-ed by assessing stability. Stability isskewed by, among many other things, reg-ulatory consistency. If the people whomake the rules keep changing the rules,there is no predictability. Therefore, pru-dence dictates that investors wait for anoth-er day.
Of course, individual risk assessment is
Mining & thelaw
The author,J.P. Tangen hasbeen practicingmining law in J.P. TANGENAlaska since 1975. He can be reached [email protected] 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
9NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
Alaska Frontier Constructors is the team to call for your next mining project. We have the right equipment, the skilled personnel, and unsurpassed expertise working on Alaska’s largest resource development projects. With a proven track record and a demonstrated ability to operate safely and on budget, you can rely on AFC for your next big job.
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subjective, so the decisions of different investors will varydepending on circumstances; but, where as in the currentenvironment the collective judgment unequivocally is towithhold investment because the regulatory risk is off thecharts, it seems fundamental to slow, not increase, the rateof change.
The applicable cliché, ironically inapplicable to mining,is that when one finds oneself in a hole, he should stopdigging. Nonetheless, the message to the regulatory agen-cies should be loud and quite clear: “Knock it off.” Let us
catch our breath. The current administration must be per-suaded to embrace a moratorium on new regulations,including those in the pipeline, for at least two years. Twoyears of equipoise would allow capitalists to stick theirheads out of their shells far enough to prime the economicpump.
Assuming for the sake of conversation that the incum-bents do not have a socialistic agenda, it is unequivocallyclear that the commitment at high levels in Washington isto exploit bureaucratic discretion well beyond the scope oflegislative intent. Legislation implies deliberation anddeliberation is excruciatingly slow. Often during the leg-islative process a pending bill becomes the vehicle forachieving unanticipated objectives. Democracy is a messy
process. Administrative initiatives are much more efficient.An agency dumps its plan into the Federal Register, holdsthe odd public hearing, fends off a few objections, andstarts sending out the enforcers.
Although the seeds of our American Regulatocracywere planted a generation ago, they really didn’t take rootuntil recently. It used to be that the stern hand of govern-ment was merely an obstacle and not a barrier. In recentyears, however, government has emerged as a stifling road-block with palpable consequences. The nexus between reg-ulatory excess and capitalistic reticence may not be welldefined in the popular media, but at an intuitive level, it isunmistakable. On the other hand, as I say, I don’t pretendto understand everything I know. �
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Project generation pays off for juniorMillrock expects $13M in partner-funded exploration on 2011 programs; Teck funds aggressive $3.5M program at Estelle property
By SHANE LASLEYMining News
The mineral project generator model ispaying dividends for Millrock
Resources Inc. The junior anticipates explo-ration on its Alaska gold properties to topUS$10 million in 2011, with more thanUS$9 million to be funded by project part-ners.
Millrock has attracted senior minersTeck Resources Ltd. and Kinross GoldCorp. to some of the Alaska gold projects ithas generated. Additionally, junior explor-ers Crescent Resources Corp., BrixtonMetals Corp. and Ryan Gold Corp. alsohave forged deals on Millrock propertiesacross the state.
“We have at least a dozen projects in thestate, about half of them are presentlyoptioned off to mining companies and jun-ior mining companies,” Millrock Presidentand CEO Greg Beischer told Mining News.
In addition to exploration on its Alaskaproperties, Millrock said project partnersVale Exploration Canada Inc. and InmetMining Corp. will spend a combinedUS$3.1 million on its Arizona porphyrycopper-gold projects.
With this level of partner-funded explo-ration, and a modest inflow of cash frommanagement fees and option payments,Millrock does not anticipate a need to spendabout C$4 million in its bank account as itsexploration team seeks to generate addition-al mineral prospects across Alaska.
“We have just over C$4 million in thebank now, and we are not really spendingany of our own money to advanceMillrock’s active exploration projects at thispoint – we are essentially cash-flow-neu-tral,” Beischer explained.
On top of not needing to go to the mar-kets to raise financing, the project genera-tor’s bankroll will likely grow as much ofabout C$4 million in outstanding Millrockwarrants are exercised.
“Right now most of those warrants are inthe money, so it is reasonable to expect that
most of those warrants will get exercisedsometime soon,” Beischer said.
Teck steps up at EstelleEstelle, Millrock’s flagship gold proper-
ty, is slated to have the largest explorationprogram this year. Teck American Inc., asubsidiary Teck Resources Ltd., has budget-ed US$3.46 to investigate this KahiltnaTerrane property in 2011.
Though Teck had two years to reach thislevel of spending at Estelle, located 105miles, or 170 kilometers, northwest of
Anchorage, the major has opted to acceler-ate its initial earn-in. Exploration this year,in addition to a geophysical survey carriedout on the project late in 2010, will fulfillthe Vancouver B.C.-based major’s US$3.6million work commitment, gaining it a 55percent interest in the gold project. Byspending an additional US$5 million onexploration and making cash payments toMillrock of US$400,000, the diversifiedmajor can boost its stake in Estelle to 65percent.
“We have held off on drilling for twoyears to carry out a comprehensive, system-atic, surface exploration program to selectthe best possible, well-defined drill targets,”Beischer said. “This budgetary level givesthe project a great chance at early success.”
Beischer told Mining News that mobi-lization to the Estelle property began inmid-June, and the company anticipates a2,150-meter drill program to begin July 1.
“We were really pleased when Teckstepped up to the plate with what I considerto be a very substantial budget for a first-pass drilling program,” Beischer said.
In addition to accelerating the explo-ration program at Estelle, Teck hasincreased its ownership of Millrock.Originally taking an equity position in thejunior through a private placement in May2009, the Vancouver B.C.-based majordecided to exercise all of the 1,363,636Millrock warrants it held at a price of C53
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Field technician Bill Billmeier, left, and geologist Ryan Campbell, right, collect chip samplesfrom the Oxide Ridge prospect at Millrock Resources Inc.’s Estelle gold property. Two samplestaken here returned 1.6 and 1.8 grams per metric ton gold each, over a traverse of 3 meters.
10NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JUNE 26, 2011
cent, providing the junior with proceeds of C$722,727. The warrants were exercisable for two years at a price of
C53 cents in the first year and C63 cents in the second year.Including its newly purchased equity, Teck owns 2,727,272shares of Millrock, or 3.9 percent, of the currently issuedand outstanding shares of the junior.
“I think it was a real vote of confidence when they exer-cised these warrants early, we really appreciate it,” theMillrock CEO told Mining News. “We would rather notdilute our existing shareholders if we can help it, and thismove by Teck helps avoid that. They doubled the size oftheir ownership of our company, and we are glad to havethem as shareholders. “
In June, Millrock announced it had expanded the Estelleclaims to include, among other things, a prospect investi-gated by a Teck-predecessor, Cominco, more than 20 yearsago. These claims, leased from Anchorage-based On-lineExploration Services Inc. earlier this year encompass apotential extension of the mineralization at the Shoeshineprospect. Millrock also staked various claims surroundingEstelle based on reconnaissance exploration funded byAltius Resources Inc.
“The addition of the new claims increases the chances ofMillrock making a significant gold discovery at Estelle,”Beischer said.
Cominco, now a part of Teck Resources, first discoveredgold on the newly leased claims in the late 1980s.Highlights from the work done by the major include 49.5meters of surface chip samples grading 1.2 grams per met-ric ton gold and 9.9 meters averaging 18.1 g/t gold. Drillingby the Teck predecessor also cut 29.6 meters averaging 3 g/tgold on the small claim block north of Estelle Mountain.
The core from this historical work has been stowed in alibrary in Eagle River, a few minutes drive from Anchorage,providing Millrock geologists an opportunity to study thehistorical intersections.
“Everytime I hear about budget cuts for the core libraryI get irritated because you can find ore-bodies with therocks that are sitting inside that building,” said Beischer.
The Millrock CEO told Mining News that examinationof the core revealed substantial zones of lower grade goldmineralization present between the structurally controlledzones of veining sampled by Cominco 22 years ago. Atmodern cut-off grades, these intervening sections add up tomineable resources.
Millrock plans to sink at least one hole near this histori-cal discovery during the 2011 field season.
First drilling at EstelleThis year’s exploration program will provide for the first
drilling at Estelle since Millrock picked up the expansiveproperty from International Tower Hill Mines Ltd. in 2008.
The project generator said geologic features and exten-sive surface geochemical anomalies at Estelle – whichbelongs to a belt of porphyry deposits that stretches fromSouthwest Alaska along the Alaska Range and into YukonTerritory – indicate the potential for large, bulk-minable,intrusive-related or porphyry-style gold deposits.
Four main zones of large-scale anomalous gold andpathfinder element geochemistry – Shoeshine, OxideRidge, RPM and Stoney – have so far been identified acrossthe 24,600-hectare (60,790 acres), land package.
Shoeshine and Oxide Ridge have been the primary focus
of past exploration by Millrock and are expected to receivethe bulk of this year’s drilling. Both prospects were identi-fied by sampling the broken rocks collected at the base ofsteep slopes characteristic of this region of the AlaskaRange. Testing this talus helped company geologist dial inon the source of the gold-bearing rocks collected in the rub-ble that had eroded from the bedrock.
At Shoeshine, talus sampling conducted in 2009 out-lined a 300- by 1,000-meter anomalous zone. The averagegrade of 49 samples taken from the rubble field in is 0.585g/t gold. One sample of porphyry rock cut by sheeted quartzveinlets was reported to return assays of 13.13 g/t gold.Numerous talus samples with grades in the 3 g/t to 5 g/trange also were collected.
Sampling at Oxide Ridge outlined a similar zone meas-uring 200 meters by 300 meters. The average grade of 24talus fines samples taken here in 2008 is 2.32 g/t gold.
By 2010 Millrock geologists had narrowed down thebedrock source of the gold mineralization found in the talusat Shoeshine and Oxide Ridge.
SH-2010-042, a chip sample traverse at the Shoeshineprospect, located in the southern portion of the Estelle claimblock, averaged 9.1 g/t gold over a width of 27 meters. Fourother samples from Shoeshine returned assays between 1.1and 5.9 g/t gold.
At Oxide Ridge – a prospect about 12 miles, or 20 kilo-meters, north of Shoeshine – two samples returned 1.6 and1.8 g/t gold, each over a traverse of three meters.
Millrock said Oxide North, a new mineralized zone withdisseminated arsenopyrite and tourmaline, turned up anom-alous gold values in talus fines sampling. This zone is locat-ed about 1.6 miles, or 2.5 kilometers, north of the OxideRidge showing.
The Stoney prospect is a 4,000-meter-by-60-meter mas-sive sulfide vein with intermittent areas of high-grade gold.
Beischer told Mining News that the veining at Stoney,
coupled with geophysical indicators, signal to Millrockgeologists that porphyry mineralization may be lurkingnearby. While an alluring target, Stoney will likely not bedrilled in 2011.
“We really feel the best potential is at Oxide Ridge andShoeshine. We actually may not get around to drillingStoney, Beischer explained.
RPM, a new gold-zone discovered by Millrock geolo-gists in 2010, also probably won’t see drilling this year. Thisnew gold prospect has the distinction of being hosted inhornfels sediments and intrusive rock, as opposed to thestrictly intrusion-related mineralization found at OxideRidge, Shoeshine and Stoney.
While RPM and Stoney may not see drilling in 2011,these prospects as well as much of the rest of the enormousEstelle property will likely be scoured by Millrock geolo-gists as they continue to seek new targets for future pro-grams.
“At Estelle, we could continue to do surface surveysprobably for a couple of field-seasons yet, and keep refin-ing and finding more drill targets,” said Beischer.
For now the project generator is excited about finallygetting to drill its flagship gold property in Alaska.
“We have some excellent targets, so it is time to get downto it,” the Millrock leader told Mining News.
Kinross drills HumbleKinross, another major that has teamed up with Millrock
to explore Alaska, is currently estimated to spend aroundUS$1.5 million on exploration at the newly acquiredHumble property in Southwest Alaska and anotherUS$400,000 at the Council gold project on the SewardPeninsula.
At Humble, the partners have carried out soil samplingand induced polarization geophysical surveys in preparationfor a eight-hole, shallow drill program anticipated to start inmid-August.
“It is just the very first phase, but it is pretty excitingwhen you think about what could be there,” Beischer said.
Humble, formerly known as the Kemuk prospect, wasoriginally explored by Humble Oil Co. for its iron potential,due to its extremely strong magnetic signature.
Samples from drilling conducted by Humble Oil in thelate 1950s has provided Millrock geologists with a peek atwhat lies below the surface at Humble.
“What we know of the geology, it is really reminiscent ofthe Pebble deposit. We have got a strong geochemicalanomaly. We have got ZTEM geophysical anomalies thatare coincident with the geochem, and we know by the littlebit of drilling that was done by the Humble Oil Companyback in the 1950s that the right kind of rocks are downthere,” Beischer told Mining News.
In 2010, Kinross and Millrock struck a deal in which themajor has the option to earn a 60 percent interest in an areaof interest, which includes the Humble claim group, inreturn for spending US$4 million in exploration expendi-tures by the end of 2013, paying the project generatorUS$200,000 and reimbursing the junior for staking theclaims. Kinross has the option to increase its ownership ofthe copper-gold prospect by incurring an additional US$6million in exploration expenditures by the end of 2016.
Millrock is currently managing exploration at Humble, aduty Kinross may elect to take over at any time.
Millrock and Kinross have decided not to drill theCouncil gold property near Nome this year. Instead, the
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MILLROCK
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In mid-May, Millrock Resources Inc. and project partnerCrescent Resources Corp. began drilling at the Uncle Samgold property in Interior Alaska. The initial focus of the 2,100-meter program will be at Lone Tree and Wolf, two prospectspreviously investigated by Kennecott Exploration.
partners in the project are stepping back toconduct additional surface work in prepara-tion for a drill program in 2012.
“We are really going to figure out thestructure, so we are doing structural map-ping, more geochemistry and high-resolu-tion magnetic (surveys) and we will getready to drill next year,” Beischer explained.
Similarly, Ryan Gold Corp. has budget-ed C$600,000 for additional reconnaissancework at the Bluff gold property located afew miles southwest of Council.
Uncle Sam gets its shareDrills have been turning at the Uncle
Sam gold property in Interior Alaska sinceearly March. Kicking off the early-seasonexploration with an auger drilling programdesigned to pull soil samples from the hori-zon beneath windblown overburden in areasthat had not been tested by previous opera-tors and to confirm previous sampling insome areas.
Crescent Resources, which optionedUncle Sam from Millrock late in 2010,reported that the auger drilling was success-ful in extending the zones of anomalousgold mineralization at the Lone Tree andChristmas prospects at the gold projectlocated about 45 miles, or 75 kilometers,southeast of Fairbanks.
A total of 2,100 meters of core drilling isplanned in the program which is budgetedat US$2.2 million. Concurrently with thedrilling program, surface exploration workwill be done to develop additional drillingtargets.
Beischer explained that traditional sur-face geochemistry does not work well in thevalleys at Uncle Sam due to a thick blanketof frozen wind-blown silt typical of muchof Interior Alaska. For this reason, in addi-tion to the auger program and traditionalgeochemistry, Crescent and Millrock haveopted to carry out geophysical surveys torefine targets below the overburden.
Drilling will initially focus on the LoneTree and Wolf gold prospects.
At Lone Tree, drilling will target a gold-in-soil anomaly that measures about 4,000meters in length and up to 1,000 meterswide. The 2011 drilling is designed toexpand on areas of gold mineralization out-lined by previous operators as well as thework conducted earlier in the year. USC-011, drilled by Kennecott Exploration in2001, cut 19.22 meters averaging 2.03grams per metric ton gold. USC-013,another Kennecott hole, intersected sixmeters averaging 1.79 g/t gold and 14meters averaging 1.65 g/t gold.
At Wolf, drilling will target anothergold-in-soil-anomaly measuring over 2,000meters in length and 1,000 meters in width.Hole USRC-22, also drilled by Kennecott,intersected 4.45 g/t gold over 15.54 metersat this prospect. Crescent said this area hasnot been fully tested and the 2011 drill pro-gram will focus on confirming previousresults and expanding the area of knownmineralization.
Upcoming Kahiltna projectsMillrock has generated additional gold
and copper prospects in the KahiltnaTerrane, including Cristo claims, a largegroup of claims east of Estelle beyondKiska Metals Corp.’s Whistler gold-copperproperty.
This land package is anchored by MonteCristo, a large tonnage intrusive-relatedgold deposit or gold-rich porphyryprospect, and the St. Eugene prospect,which hosts a copper-gold-molybdenumporphyry system initially discovered in the1970s.
Over the course of the 2009 and 2010field seasons, Millrock geologists collected
80 rock samples and 213 soil samples at theCristo claims. This prospecting turned upgold-copper mineralization at St. Eugeneand gold-only mineralization at MonteCristo.
Millrock says mineralization at the St.Eugene prospect occurs in three separatezones hosted by hornfels adjacent to a dior-ite intrusion. Rock and soil samples haveoutlined a 700-meter-long zone with rock
samples up to 1 percent copper and 2.1grams per metric ton gold.
At Monte Cristo, rock samples withgrades up to 4.2 g/t gold and talus finessamples returning assays up to 3 g/t goldMillrock geologists have outlined mineral-ized zones on two ridges about 300 metersapart. The glacial debris area between thesezones has yet to be tested.
In October Brixton and Millrock ham-
mered out a final option agreement on theCristo claims. Brixton can earn a 100 per-cent interest in the property by spendingUS$5 million on exploration, payingMillrock US$330,000 and issuing thatcompany 2 million Brixton shares, plus 2million purchase warrants with an exerciseprice of C$1 per share.
According to the Brixton Metals web-site, the company plans to continue the mapand soil and rock sampling carried out byMillrock as well as conduct airborne geo-physics and complete 2,000 meters ofdrilling at St. Eugene in 2011.
Revelation, another Kahiltna Terraneproperty generated by Millrock in 2009, isa 5,760-acre pluton-hosted gold target thatis positioned about 30 miles, or 48 kilome-ters, west of Millrock’s Estelle property andabout 3 miles, or 4.8 kilometers, northwestof International Tower Hill Mines’ Terragold property.
Beischer told Mining News thatMillrock geologists will continue to investi-gate Revelation and other projects the com-pany has generated in the Kahiltna Terrane.
“We have staked quite a number ofclaim blocks in the general area. We will beadvancing all of those, includingRevelation, and we are open to findingpartners for these projects,” he added. �
11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JUNE 26, 2011
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The Oxide Ridge prospect (the prominent oxide-stained ridge near the center of the photo)and the Shoeshine prospect about 15 miles (25 kilometers) to the south at the Estelle Projectwill be primary targets of drilling conducted in 2011 by project partners Millrock ResourcesInc. and Teck Resources Ltd.
By SHANE LASLEYMining News
DENVER – China may be poor in nat-ural resources, but the country has
enough cash to source its burgeoning needfor minerals from foreign lands.
This was the message that MamadouBarry, senior mining specialist in theSustainable Energy Department of theWorld Bank brought to participants in theMining Americas Summit 2011 held hereJune 13-14.
“China is a country of superlatives. InFebruary China overtook Japan to becomethe second-largest economy in the world,and they are on there way to probably over-take the United States in the next 10 to 20years, so that requires a lot of mineral con-sumption,” the global mining analyst toldthe Summit audience June 13.
Barry, who has been involved withWorld Bank Group operations in the min-ing, oil, and gas sectors since 1993, citedcopper as a prime example of the Far Eastcountry’s mushrooming need for naturalresources. He explained that China’s rapidgrowth has catapulted it to the position oftop global consumer of the red metal.
“An important share of those naturalresources comes from abroad,” he said.
The World Bank mining analyst said avery small portion of the global distributionof mineral resources such as copper andiron ore are found inside China’s borders,and the reserves that are found there are ofpoor quality. What the Far East nation doeshave going for it, according to Barry, is it “is
sitting on a pile ofcash.”
In April, Chinatopped US$3 trillionin cash reserves.
“That is a lot ofcash to go around andbuy deposits every-where they want toaround the world,” hesaid. “China can bedefined as a resource-poor country – it isresource-poor and cash-rich.”
Barry, who earned a Ph.D. in mineraleconomics from the Colorado School ofMines, told the summit-goers that Chinaprefers to do business with countries on theopposite end of the spectrum –resource-richand cash-poor – as it looks to meet its grow-ing domestic demand for minerals.
Pocket governmentsWhile China looks for opportunities to
invest in mineral projects in developedcountries such as Canada and Australia,Barry said the cash-rich country is often-times confronted with anti-Chinese senti-ment and regulatory hurdles that it canbypass by dealing with the riskier frontiernations.
“They go to Zambia, or Zimbabwe orDRC (Democratic Republic of Congo),” hesaid. “We are talking about countries (that)western companies are not comfortabledealing with.”
Utilizing its enormous surplus of cash,China can manage the governments of thesenations that are desperately short on funds.
“They put huge amounts of money onthe table; put in infrastructure and addressgovernment needs,” Barry said.
The US$3.7 billion bid made byChina Metallurgical Group Corp. andJiangxi Copper Co. in 2007 to gain accessto Aynak, Afghanistan’s largest known cop-per deposit, is an example of the moneyChinese companies are willing to bring tothe table.
With the governments “in their pocket”,the World Bank analyst said Chinese com-panies need not worry about interferencefrom the ruling regimes while mining indeveloping nations; their primary concernsare protecting investments made in frontiernations from wars, civil disturbances andterrorism.
Foothold in CanadaThough China finds it more comfortable
to work with cash-strapped nations in itssearch to fill its resources needs, the grow-ing nation is willing to go anywhere oppor-tunities exist.
“The Chinese are also following the nat-ural resource endowment,” Barry said.“Almost 75 percent of their resource invest-ment is in Canada, Africa and Australia.That is because they need copper and ironore most of the time and these countriesoffer this type of investment.”
Chinese mining firms, which haveestablished a stronghold in Africa throughacquisitions, are just beginning to gain foot-ing in Canada. The purchase of a large zinc-lead project in eastern Yukon Territoryexemplifies this buyout strategy.
Jinduicheng Molybdenum Group andNorthwest Nonferrous InternationalInvestment Co., two private Chinese com-panies, purchased a 100 percent interest inYukon Zinc Corp. in 2008, thereby acquir-ing the Wolverine Project and other mineralassets in the Finlayson District of southernYukon Territory.
Yukon Zinc began producing copper,lead and zinc concentrates at Wolverine inthe latter half of 2010.
To gain access to deposits in developedcountries, Chinese firms also have found itadvantageous to forge partnerships withmining companies already doing businessin the jurisdictions where the neededresources are located.
One such example is a rare 50-50 jointventure between Yunnan Chihong Zinc andGermanium Co. and Vancouver B.C.-basedSelwyn Resources Ltd., forming SelwynChihong Mining Ltd. The objective of theChinese-Canadian partnership is to developthe massive Selwyn Project as the world’snext major zinc-lead mine, and YunnanChihong plowed C$100 million in the part-nership to fund a bankable feasibility, whichis expected to be completed in the secondquarter of 2012.
“Chinese companies need westernexperience, and so they need these types ofpartnerships,” Barry explained.
Mining companies from the Far Eastcountry are also listing on the stockexchanges of Canada, Australia and theUnited States.
“They (China’s government officials)are encouraging Chinese companies to playthe game, the same way western companieshave done in terms of raising capital. Theburden of raising capital now is fallingsquarely on the Chinese government andChinese state-owned enterprises,” Barrysaid.
TMX Group Head of BusinessDevelopment Global Mining OrleeWertheim affirmed, “In terms of what weare seeing at TSX (Toronto StockExchange), we actually are seeing a lot ofChinese companies listing on our venturemarket. I believe, in total on bothexchanges, 7 percent of our market is whatwe consider Chinese mining companies.”
One such example is Silvercorp MetalsInc., which trades on both the New York andToronto stock exchanges.
Silvercorp is the largest primary silverproducer in China through the operation offour silver-lead-zinc mines at the YingMining Camp in the Henan Province. It isalso exploring the Silvertip silver-lead-zincproject in northern British Columbia.Applying an aggressive business plan it hasexported from China, this Chinese-Canadian enterprise is working toward con-struction of a 200-metric-ton-per-day mineto develop the Silvertip’s high-grade silver-lead-zinc resource.
“The approach is to get into productionas fast as possible, build relationships withgovernments and the regulatory communityand grow the mine over time,” said PaulWojdak, former geologist for the NorthwestRegion of British Columbia’s Ministry ofEnergy, Mines and Petroleum Resources.
Barry said he expects to see moreChinese companies listing on the exchangesof developed nations such as Canada,Australia and the United States in order toraise money and explore these mineral-richjurisdictions.
12NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
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China goes global to meet mineral needsWorld Bank mining analyst says Far East nation has a pile of cash to meet the prolific mineral needs of its burgeoning economy
MAMADOU BARRY
see CHINA’S NEEDS page 13
SHA
NE
LASL
EY
By ROSE RAGSDALEFor Mining News
With a mining boom in full swing inYukon Territory, government offi-
cials can be proud of having created anattractive business climate, one that isbringing hordes of excited miners andinvestors to the territory, with seemingly noend in sight.
But a group of industry leaders recentlysubmitted a report to the Government ofYukon, warning that storm clouds are gath-ering that could extinguish mining’s brightforecast in the territory.
In order for the industry to continue tomake significant contributions to the eco-nomic well-being of Yukon and its citizensand to make increased contributions in thefuture, it will need a competitive, appropri-ate and balanced regulatory and fiscalregime, the Yukon Minerals AdvisoryBoard told the government in a report sub-mitted this spring.
“Over the last several years, Yukon hasmade significant progress toward providinga balanced but pro-mining, pro-businessinvestment climate, through such initiativesas the changes to the Miners’ Lien Act andthe Quartz Mining Act, as well as fundingof the Yukon Mine Training Association,”the board wrote in its 2010 annual report.“However, significant challenges remain.”
The 10-member advisory board was cre-ated by an order-in-council in 1999, pur-suant to Yukon’s Economic DevelopmentAct, to advise the Minister of Energy, Minesand Resources on mineral developmentmatters. It was chaired until recently by sen-ior executive of Capstone Mining Corp.,which owns the Minto copper-gold-silvermine – the territory’s longest producingmine currently in operation. Among theother nine board members are top execu-tives of other Yukon mining and servicecompanies, including silver-lead-zinc pro-ducer Alexco Resource Corp.
Regulatory alarms in 2010The advisory board cited five issues as
the most pressing concerns facing the min-ing industry in Yukon, saying they requirethe most urgent attention.
“They will be familiar to the Yukon gov-ernment, as they have been highlighted inYMAB reports from 2008 and 2009,” theboard wrote. “However, developments in2010 have created even greater urgency,especially for (three of the issues). Withoutimmediate attention, these critical concernsthreaten to constrain the sustainability andgrowth of the Yukon mining industry, erodeYukon’s investment attractiveness anddiminish the territory’s overall economicwell-being,” the board wrote.
“After many years of low rankings,Yukon has finally begun to make progressin respect of regulatory attractiveness.However, several key issues threaten toundermine these positive developments andrepresent a significant step backwards inrespect of regulatory certainty and time-lines. This has the potential to result ininvestment dollars simply going elsewhere,to the detriment of Yukon, its economy andits citizens,” the board wrote.
The most significant issue facing theindustry, according to the advisory board, isthe ongoing concern of regulatory uncer-tainty, especially following the Yukon WaterBoard’s decision in 2010 regarding WesternCopper Corp.’s application for a water uselicense for the Carmacks Copper Project.
“These concerns require urgent actionby the Yukon government and Minister ofEMR, in order to avoid serious damage toYukon’s investment attractiveness and killoff the nascent resurgence of mining activi-ty in Yukon,” the board wrote.
Pointing out that it did not discuss themerits of the Carmacks Copper project, theboard said its concerns center on “the newelement of regulatory uncertainty” createdby the Water Board’s rejection of a projectthat was recommended by the YukonEnvironmental and Socio-economicAssessment Board and supported in the
government’s decision document.The (Water Board) decision rejects a
number of matters which were reviewedand accepted by YESAB and then adoptedby (the government) in its decision docu-ment, according to the advisory board. Inaddition, a number of items in the WaterBoard decision are in conflict with theYESAB assessment and (the government’s)decision document, it added.
“This situation demonstrates that the(Water Board) and YESAB processes arenot harmonized or coordinated, and in factappear to be at odds with one another,” theadvisory board observed.
For example, if (the Water Board) issuesrecommendations that conflict with those ofYESAB and the government decision doc-ument, then the project is, in effect,stymied. The proponent may have to beginagain by resubmitting an amended projectproposal to YESAB and the government,which may result in a different outcomethan that anticipated by the Water Board, asYESAB could disagree with the WaterBoard’s conclusions.
The advisory board said its concern is
that a company could end up in an ongoingloop of making changes to its project pro-posal and submitting these amended pro-posals to YESAB and the Water Boardagain and again.
“This issue is particularly concerninggiven that the Carmacks Copper project wasthe first mine project to go through theYESAA Executive Committee process, andthe process did not appear to work as antic-ipated,” the board wrote. “These develop-ments create additional significant uncer-tainty for the mining industry in regard tohow the regulatory system in Yukon willwork. This uncertainty also has the potentialto affect the climate for investment in othersectors of the Yukon economy, which alsoare subject to both YESAB and (the WaterBoard) processes.
“Perception is key – mining investorsand shareholders are watching closely asthis situation plays out and have alreadybegun to express concerns about theirinvestments in Yukon,” the board noted.
Better coordination neededThe industry leaders also wrote that
while Western Copper’s request for a judi-cial review will perhaps clarify some of theconcerns raised by the various parties, itshould not be left to the courts to decidesuch matters.
“The (Yukon government) needs to workwith (the Water Board), YESAB and itsown departments to coordinate and harmo-
13NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JUNE 26, 2011
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Chinese companies are also entering therealm of grassroots minerals exploration, anendeavor that poses risks not encounteredby these firms when “buying” projectsdirectly from governments.
But, according to Barry, the Chineseunderstand that opportunities go hand-in-
hand with risks. “There is a term in Chinese called weiji
– a term that means risk also means oppor-tunity,” said the World Bank mining spe-cialist. “They don’t look too much at therisk – they see the opportunity to secure nat-ural resources because for them, it is anational security issue. They want tobecome a developed country in the nextdecade or so; whatever it takes to do so, theyare willing to do that.” �
continued from page 12
CHINA’S NEEDS
� Y U K O N T E R R I T O R Y
Regulatory thorns threaten mining bubbleFailure of project review process in 2010 fades rosy outlook in northern jurisdiction despite recent influx of mineral explorers
see REGULATORY THORNS page 14
“After many years of low rankings, Yukon has finally begun to makeprogress in respect of regulatory attractiveness. However, several key
issues threaten to undermine these positive developments and representa significant step backwards in respect of regulatory certainty and
timelines. This has the potential to result in investment dollars simplygoing elsewhere, to the detriment of Yukon, its economy and its
citizens.” –Yukon Minerals Advisory Board, 2010 Annual Report
nize the assessment and regulatory process-es to provide greater clarity and certainty,”the board added.
Among its specific recommendations,the board advised the Yukon government toclarify the role and jurisdiction of WaterBoard and YESAB, work with the twoorganizations to harmonize their processes,and investigate the concept of a processcharter. In addition, YESAB and the WaterBoard should work to meet increasingdemand from industry by adding staff,improving staff experience and stability, and
YESAB should implement standard mitiga-tive measures and best mining practices tosimplify reviews. Further, defined timeframes should be established for adequacyreview processes by regulators and asses-sors,” the board wrote.
It also predicted that the outcome of thejudicial review and the government’s effortsto coordinate and harmonize the regulatoryprocess will have an important effect onwhether mining companies continue toinvest in Yukon.
“Continued uncertainty has the potentialto damage Yukon’s investment attractive-ness and industry’s ability to raise funds andthereby create economic activity and
employment in Yukon,” the advisory boardobserved. “The heightened regulatoryuncertainty threatens to undo the good workdone by (the Yukon government) to developan effective regulatory system and promoteits benefits across Canada and internation-ally. It also has the potential to underminethe government’s credibility and Yukon’spositive rankings in surveys such as the oneissued annually by the Fraser Institute.
“In YMAB’s view, it is essential that theYukon government demonstrate that it isaware of these concerns and that it is work-ing to address them quickly to provide cer-tainty and clarity in the assessment and reg-ulatory processes,” the board concluded.
Four other urgent issuesAmong other concerns for the mining
industry:Access to land, especially in relation to
land-use planning and the RecommendedPeel Watershed Regional Land Use Plan,is the Advisory Board’s second-most seri-ous concern. The board recommended that(the government) reject or significantlyvary the (Peel Watershed recommenda-tions) to deal with the numerous signifi-cant concerns with the plan. In addition,(the government) should re-examine andconfirm the mandate, direction and limita-tions for land-use planning commissionsgenerally in Yukon. Finally, (the govern-ment) should suspend assessment workand fee requirements for existing claimholders within the Peel Watershed until themineral staking moratorium is lifted.“YMAB strongly believes that it is essen-tial to improve the attractiveness of miningto local First Nations and communities byachieving an improved resource revenue-sharing arrangement in Yukon. YMABencourages (the Yukon government) tonegotiate with the federal government toachieve a more equitable resource rev-enue-sharing arrangement for Yukon FirstNations and the territorial government,and to ensure that direct net benefitsremain in the local and regional communi-ty. In addition, (the Yukon government)should seek industry input and advice,” the
board added.Unless Yukon’s limited access to energy
is significantly improved, it will becomean increasing impediment to resourcedevelopment. YMAB recommends that(the Yukon government) seek a long-termsolution by pursuing the interconnectionof the Yukon power grid to Alaska andB.C., as well as taking steps to develop theEagle Plains Gas Field and construct gas-fired power plants in one or more Yukonlocations. In addition, YMAB recom-mends that policies for independent powerproduction and net metering be imple-mented expeditiously to allow for growthand flexibility in Yukon’s energy capacity.
Further, (the Yukon government) needsto ensure that it appropriately supportsinfrastructure necessary for resourcedevelopment, including resource accessroads and access to ports.
The lack of a local skilled work force is,and will increasingly become, a signifi-cant constraint on mining development inYukon. “YMAB recommends that meas-ures be taken to attract skilled workers toYukon and to build skills and capacity inthose already residing here. These meas-ures include working with the City ofWhitehorse to encourage the provision ofmore lots and homes in Whitehorse at rea-sonable prices and working with local edu-cational and training organizations toshare information, coordinate activitiesand increase opportunities for mining-related education and training,” the boardwrote.
The advisory board noted that otherongoing concerns, which have been high-lighted in reports for the past two years,were not repeated in the 2010 report butstill need to be resolved.
When asked about the AdvisoryBoard’s 2010 report and recommenda-tions, a Government of Yukon spokesmantold Mining News that an official responseto the report is still being finalized.
“At this point, we can say that we werepleased with the YMAB report, as always,and plan to address the recommendationswithin,” said spokesman Jesse DeVost. �
14NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
� Y U K O N T E R R I T O R Y
Miners push exploration to new heightsA score of newcomers, mostly gold seekers, chase prospects in territory’s hot spots as warmer weather ushers in 2011 field season
continued from page 13
REGULATORY THORNS
By ROSE RAGSDALEFor Mining News
A nother busy summer field season is getting underwayin Yukon Territory, and government officials are pro-
jecting record numbers of mining companies flocking to theNorthwest Canada jurisdiction and spending unprecedentedsums on mineral exploration programs scattered across thesouthern two-thirds of the territory.
Based on the industry’s spending intentions in February,Natural Resources Canada projected C$39.3 million wouldbe spent in 2011 by the majors on exploration and depositappraisal activities in Yukon Territory, while junior miningcompanies were expected to invest at total of C$217 millionon comparable activities.
By June, the spending projection had increased slightly,according to the Yukon Geological Survey. Spending by allmineral explorers is expected to jump 63 percent to at leastC$260 million this year from the territory’s previous record
of C$160 million set in 2010.Some 80 companies have submitted plans to explore min-
eral properties, up about 14 percent from the 70 explorers thatchased Yukon prospects in 2010, according to the YukonGeological Survey. Of this number, 96 percent are juniors,according to YGS economic geologist Lara Lewis.
In 2010, the industry mounted 150 exploration projects,and that number is expected to climb significantly this sea-son.
“The number of companies working in Yukon isn’t reallyfinal because some companies from last year dropped theiroptions and are no longer working in Yukon, and othershaven’t announced work programs,” Lewis told MiningNews.
Second gold rush?Of the minerals being sought in 2011, explorers are show-
see YUKON EXPLORATION page 18
RO
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Multiple drills turn in close proximity on a summer day in2010 at the Selwyn Project, a giant lead-zinc property thatstraddles the border of Yukon Territory and NorthwestTerritories in the Selwyn Basin, which is highly prospectiveof sedimentary exhalative mineral deposits.
By ROSE RAGSDALEFor Mining News
R io Tinto Exploration Canada Inc., 60 percent ownerand operator of the Diavik Diamond Mine in
Northwest Territories is quietly looking for more diamonddeposits in Canada’s high Arctic.
Though the company declined to confirm a start datefor its 2011 exploration program or discuss its plans, offi-cials of Indian and Northern Affairs Canada, ParksCanada, Environment Canada and other affected federalregulators signed off this spring on a new land use permitfor proposed work to be carried out between March andOctober 2011 and potentially in 2012.
High mineral potentialThe Arctic Archipelago includes a land area of 780,000
square kilometers (nearly 301,160 square miles), coveringmuch of the Northwest Territories and Nunavut. It con-tains three of the 10 largest islands in the world (Baffin,Victoria, and Ellesmere) plus 22 others of appreciablesize.
The Canadian Arctic Islands contain many areas thathave a high mineral potential. Five geological assemblagesare recognized: crystalline Archean to Paleoproterozoicbasement; Mesoproterozoic sedimentary basins and vol-canic rocks; Lower Paleozoic passive to convergent mar-gin sedimentary rocks, Upper Paleozoic to Mesozoic riftbasin sediments and volcanic rocks; and Tertiary passivemargin sediments.
This vast area, however, is expensive to explore forminerals and to develop mines. Exploration has been ham-pered by its remoteness, difficult logistics, short summer,high costs of transportation and drilling, and a lack oflocal prospectors and infrastructure. In addition, largeareas are mapped in insufficient detail, and there is a lackof digitally available topography, bedrock and surficialmapping, airborne geophysics, and hyperspectral surveys.
The feasibility of developing a deposit is also lessenedby the high costs of fuel, drilling, aircraft, and labor, alongwith the short shipping season and environmental sensi-tivities. These factors likely outweigh the gaps in geo-science knowledge in continuing to limit mineral explo-ration, according to Natural Resources Canada.
The Arctic Islands do, however, present some opportu-nities, including a higher probability than in southernCanada of a new, near-surface discovery because it ispoorly explored; the lack of vegetation allows rapidassessment of areas using hyperspectral surveys; base andprecious metal exploration can likely piggy-back onexploration for high-value commodities, such as dia-monds, oil, and gas.
There are several key geoscience gaps that couldencourage future exploration, including airborne potentialfield geophysics; geological mapping of poorly knownareas such as Victoria Island and southern-centralEllesmere; prospecting, geochemical and alteration stud-ies and detailed mapping of specific targets such as theSverdrup basin volcanics, Somerset-Brodeur-north Baffincopper trend, Victoria Island copper, and sandstone- host-ed uranium; and continuing digital compilation of infor-mation to enable topography, bedrock, and surficial map-ping, as well as comprehensive assessment files.
To date, only two mines have been put into productionin the Arctic Islands: the Paleozoic Mississippi Valley-type carbonate-hosted zinc-lead Polaris Mine on LittleCornwallis Island and the Proterozoic MVT carbonate-hosted zinc-lead Nanisivik Mine on northern BaffinIsland. There is high mineral exploration potential aroundthese past producers, as well as around known showings ofProterozoic-hosted redbed copper on Victoria Island andPaleozoic-hosted polymetallic (zinc-lead-silver-gold)veins on northern Ellesmere Island.
Considerable potential also exists for as-yet-unfoundzinc-lead SEDEX deposits in the Proterozoic on northernBaffin Island and in the Paleozoic on Melville, Bathurst,and Ellesmere islands; sediment-hosted uranium in theProterozoic of northern Baffin Island, in the Paleozoic ofMelville Island and in the Mesozoic and Tertiary of Banksand Prince Patrick islands; and Noril’sk-style nickel-cop-per-platinum group element deposits in the Proterozoic ofVictoria Island and in the Mesozoic on Axel HeibergIsland.
History of diamond explorationThe Banks Island Project is located on the northeast tip
of Banks Island on lands designated under the CommunityConservation plans of Sachs Harbour, NT. It consists of125 mineral claims and about 32 prospecting permits(pending application approvals). The land parcels totalsome 1,479,943 acres just to the east of Aulavik NationalPark, which is centered on Banks Island. The project’ssouthern boundary is in line with Johnson Point and thenorthern boundary of the special designated land identi-fied as 619E (Caribou calving region).
Rio Tinto completed a small exploration program onthe mineral claims and pending prospecting permits appli-cation area between July 5 and Sept. 19, 2010. The pro-gram was designed as a first-pass screening process toassess the area’s potential for diamond bearing kimberliteoccurrences. Work included a 35,900 line-kilometer hori-zontal gravimetric airborne geophysical survey, a regionalstream sediment sampling program to collect 20-liters ofmaterial for heavy mineral analysis, and a staking programcomprising 125 mineral claims.
The major is not the first mining to explore BanksIsland for diamonds. Diamonds North Resources Ltd. andMajescor Resources Inc. in a 50-50 partnership exploreda 1.1 million-acre parcel, also known as the Banks Islandproject, located on the northeast corner of the island aboutfive years ago.
Sampling programs recovered kimberlite indicatorminerals with compelling mineral chemistry similar to theEkati and Diavik diamond mines to the south. A geophys-ical survey over only 10 percent of the project area identi-fied 65 targets, including a 12- to 14-hectare (30-35 acre)target.
Diamonds North purchased Majescor’s 50 interest inthe project in 2007, but subsequently allowed its 100 per-cent interest in the project to lapse after a lack of furtherexploration success.
A second year of explorationRio Tinto told INAC earlier this year that its 2011 pro-
gram would include continued regional stream sedimentsurface sampling over the area of pending permits andclaims. An airborne geophysical survey, about half the sizeof the 2010 survey, would be flown on the “pending”northern permit blocks. This would complete the aero-magnetic coverage of the area. A small reverse circulationdrill rig would be mobilized to site to test a few high-pri-ority targets identified from the 2010 airborne magneticsurvey. A camp would be constructed at Johnson Point to
provide safe logistical support and efficiency to the 2011and ongoing exploration activities.
Rio Tinto said that having infrastructure local to thearea will minimize air traffic across Banks Island fromSachs Harbour, reducing safety risks to passengers onboard and minimizing impact to local species of thegreater island.
The 2011 crews would operate from a camp located atJohnson Point, about 80-100 kilometers from the center ofthe planned exploration activities. Rio Tinto said it wouldhire contractors to assist with the construction and main-tenance of the camp.
Construction was planned to begin by early June, andthe camp would be designed to accommodate roughly 20-25 people. Rio Tinto said it would open the camp as soonas practical, which would depend on flowing water or asource for drinking water to accommodate the camp.
The explorer’s results from 2011 would provide goodindications of whether the 2012 program would be bigger.Pending positive results from the 2011 exploration pro-gram, the company said the 2012 program, and followingprograms, would involve two diamond drill rigs to assessthe potential of the property. This would necessitate anincrease in the camp capacity to 25-35 people. The drillrigs would operate 24 hours a day and the camp would beexpanded to accommodate extra crew, including addition-al cooks, geologists and camp support.
The major estimated that the amount of fuel and num-ber of flights into the property would increase by about 30percent in the 2012 program, which could start in Marchand finish in October.
The company said it would likely make some arrange-ments to expand the camp late in the 2011 field season sothat the 2012 program could start as soon as practical.
Possible satellite camp Some of the drill targets selected from the 2010 and
2011 airborne geophysical surveys may be situated underfrozen lakes, which would require drilling on lake ice inearly April or late March. In this situation,
Rio Tinto said it may need to set up a small camp (10people) with good drinking water in proximity to thedrilling.
This camp would be necessary only if the JohnsonPoint water source was frozen. There are some lakes southof the survey area large enough to be able to accommodatesuch a camp.
Part of the 2011 program could involve investigating
15NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JUNE 26, 2011
� N O R T H W E S T T E R R I T O R I E S
Rio Tinto seeks diamonds in high Arctic Explorer would brave vast region’s many challenges to return to Banks Island for second season and potentially a third in 2012
see HIGH ARCTIC DIAMONDS page 17
GEO
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Alaska Earth SciencesAnchorage, AK 99515Contact: Bill Ellis, Rob Retherford, ownersPhone: (907) 522-4664 • Fax: (907) 349-3557E-mail: [email protected] full service exploration group that applies earth sci-ences for the mining and petroleum industries provid-ing prospect generation, evaluation and valuation,
exploration concepts, project management, geographicinformation systems and data management. We alsoprovide camp support and logistics, geologic, geochem-ical and geophysical surveys.
Alaska Frontier ConstructorsP.O. Box 224889Anchorage, AK 99522-4889Contact: John Ellsworth, PresidentPhone: (907) 562-5303 • Fax: (907) 562-5309Email: [email protected] heavy civil construction company specializing inArctic and remote site development with the experi-ence, equipment and personnel to safely and efficientlycomplete your project.
Alaska Interstate Construction (AIC)301 W. Northern Lights Blvd., Suite 600Anchorage, AK 99503Contact: Fred HargravePhone: (907) 562-2792 • Fax: (907) 562-4179Email: [email protected]: www.aicllc.comAIC provides cost-effective solutions to resource devel-opment industries. We provide innovative ideas tomeet each requirement through the provision of best-in-class people and equipment coupled with exception-al performance..
Alaska Steel Co.1200 W. DowlingAnchorage, AK 99518Contact: Joe Pavlas, outside sales managerPhone: (907) 561-1188Toll free: (800) 770-0969 (AK only)Fax: (907) 561-2935E-mail: [email protected] Fairbanks Office:2800 South CushmanContact: Dan Socha, branch mgr.Phone: (907) 456-2719 • Fax: (907) 451-0449Kenai Office:205 Trading Bay Rd.Contact: Will Bolz, branch mgr.Phone: (907) 283-3880 • Fax: (907) 283-3759Rebar Division1200 W. DowlingAnchorage, AK 99518Contact: Mike Galyon, rebar mgr.Phone: (907) 561-1188 • Fax: (907) 562-7518Full-line steel, aluminum, and rebar distributor.Complete processing capabilities, statewide service.Specializing in low temperature steel and wear plate.
Alaska Telecom6623 Brayton Dr.Anchorage, AK 99507Contact: Kevin Gray or Martin StewartPhone: (907) 344-1223Fax: (907) 344-1612E-mail: [email protected] or [email protected]: www.alaskatelecom.comProviding telecommunications support to oil explo-ration and production companies and contractors.Satellite communications, voice, data, microwave,VHF/UHF radio, engineering and installation.
AmerCable Inc.350 Bailey RoadEl Dorado, Arkansas 71730Contact: Russ Van Wyck, senior sales rep/AlaskaPhone: (713) 305-3315 Fax: (870) 862-8659E-mail: [email protected] site: www.amercable.comAmerCable’s Tiger ©Brand mining cables are designedfor Alaska’s harshest operating environments.Surface/open pit or underground, we have a miningcable productivity solution for you.
Arctic FoundationsAnchorage, AK 99518-1667Contact: Ed YarmakPhone: (907) 562-2741 • Fax: (907) 562-0153Email: [email protected]: www.arcticfoundations.comSoil stabilization – frozen barrier and frozen core damsto control hazardous waste and water movement.Foundations – maintain permafrost for durable high
capacity foundations.
Austin Powder CompanyP.O. Box 8236Ketchikan, AK 99901Contact: Tony Barajas, alaska managerPhone: (907) 225-8236 • Fax: (907) 225-8237E-mail: [email protected] site: www.austinpowder.comIn business since 1833, Austin Powder providesstatewide prepackaged and onsite manufactured explo-sives and drilling supplies with a commitment to safetyand unmatched customer service.
Calista Corp.301 Calista Court, Suite AAnchorage, AK 99518Phone: (907) 279-5516 • Fax: (907) 272-5060Web site: www.calistacorp.com
Chiulista Services Inc.6613 Brayton Dr., Ste. CContact: Joe Obrochta, presidentContact: Monique Henriksen, VPPhone: (907) 278-2208 Fax: (907) 677-7261Email: [email protected] 100 percent Alaska Native owned and operatedcatering company at the Donlin Creek Prospect andwith North Slope experience, catering and housekeep-ing to your tastes, not ours; providing operations andcamp maintenance.
Construction Machinery5400 Homer Dr.Anchorage, AK 99518Contact: Ron Allen, Sales ManagerPhone: (907) 563-3822 • Fax: (907) 563-1381Email: [email protected] • Web site: www.cmiak.comOther Offices: Fairbanks officePhone: 907-455-9600 • Fax: 907-455-9700Juneau officePhone: 907-780-4030 • Fax: 907-780-4800Ketchican officePhone: 907-247-2228 • Fax: 907-247-2228Wasilla OfficePhone: 907-376-7991 • Fax: 907-376-7971
Fairweather, LLC9525 King St. Anchorage, AK 99515Contact: Jenna Kroll, medical administrationPhone: 907 346-3247 Fax: 907 349-1920 Email: [email protected]: www.fariweather.comFairweather, LLC is an Alaska-based company providinga multifaceted program of support services for the min-ing industry specializing in paramedic and physicianassistant staffed remote medical services, weather fore-casting, airport equipment, bear guards and expediting.
GCI Industrial TelecomAnchorage:800 East Dimond Boulevard, Suite 3-565Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528Toll free: (877) 411-1484Web site: www.GCI-IndustrialTelecom.comRick Hansen, [email protected] Johnson, Account [email protected]:Aurora Hotel #205Deadhorse, Alaska 99734Phone: (907) 771-1090Mike Stanford, Senior Manager North [email protected]:8588 Katy Freeway, Suite 245Houston, Texas 77024Phone: (713) 589-4456Hillary McIntosh, Account [email protected] innovative solutions to the most complexcommunication issues facing industrialclientele. We deliver competitive services, reputable
Companies involved in Alaska andnorthwestern Canada’s mining industry
D I R E C T O R Y
see next page
camp facilities, as a contingency, for a winter program.It would require a lake large enough to land a Twin Otteron skis to provide access and transport materials in earlyspring. A suitable strip to land a Twin Otter on tundratires would be another alternative.
Oil and gas exploration in the area may have usedsuch a strip on Banks Island. This would be a betteroption for year-round access near the center of the oper-ations.
If the results are not so positive in 2011, Rio Tintosaid it will conduct a similar or smaller drill program in2012, including ground geophysics, follow-up samplingand prospecting in 2012. The camp size would stay thesame. Fuel and aviation activities would be similar to the2011 program.
Summer timetableDepending on whether the geophysical targets are on
land or ice, Rio Tinto said it would start as soon as prac-tical, in late March or late May, respectively.
“Having a suitable camp built in 2011 allows the fol-lowing programs to commence as soon as there is flow-ing water to accommodate the camp and the strip atJohnson Point is safe for aircrafts to land. Hence, the …
exploration activities could commence in early May,” thecompany said in its filings.
Project manager Lauren Anonby told Mining NewsJune 17 that she was not at liberty to confirm a start datefor the 2011 program at the Banks Island Project, but shewould ask a Rio Tinto spokesman to respond to thenewspaper’s inquiries. No one responded by press time.
The major’s proposed program timetable for the 2011field season called for camp construction May 15 to June16 and possible additional construction activities July16-30; ground geophysics June 16-30 and airborne geo-physics July 20 to Aug. 20 that with success could beextended until late August. Stream sediment samplingwas scheduled from July 21 to Aug. 8 with possibleextension to Aug. 20.
The explorer planned to carry out diamond and/orreverse circulation drilling from June 16 to July 20 thatcould be extended until Aug. 20. Intermittent prospect-ing was scheduled throughout the program from June 16to Aug. 30
The company also told regulators that the 2012 andfollowing seasons would operate from the same campwith activities likely to commence in late May to earlyJune and finish in late September, and the size of thecamp would be expanded if the results from the 2011program are encouraging.
Otherwise, subsequent field programs would be thesame or smaller and the activities would commence from
late May to September.In response to a number of questions and concerns
voiced by federal and local parties in the permittingprocess, Rio Tinto outlined numerous steps it would taketo minimize or mitigate the project’s impact on the sen-sitive Arctic environment. These include logistical inno-vations such as installing a combined wind tur-bine/photovoltaic system to provide electrical service tothe camp and significantly reduce the need for diesel-generated electricity. A 20 kVA diesel generator will beinstalled to supply electricity during times of peak load.
The company said the system will reduce the associ-ated risks of transporting fuel to the camp site by fixed-wing aircraft. Activities associated with aircrafts andhandling fuel is considered one of the highest risk activ-ities on the Banks Island Project. Arctic weather condi-tions can change dramatically within this region furtheradding to the risk.
As part of the 2011 airborne geophysical program,Rio Tinto also sought permission to construct small tem-porary chain link fence barriers to protect geophysicalbase station instruments from Musk ox herds in theregion.
The company said previous mineral explorers havereported trampled and broken equipment reputably byMuskoxen. Given that survey data collection is dramati-
17NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JUNE 26, 2011
expertise and safely operate under themost severe working conditions for the oil, gasand natural resource industries. GCI-your bestchoice for full life cycle, expert, proven, industrialcommunications.
Gold Canyon Mining1075 S. Idaho Road, Ste. 104Apache Junction, AZ 85119Contact: David FortnerPhone: (480) 302-4790Fax: (480) 671-5368Website: www.gcmining.comSpecializing in mine site development, contract mining,and final mine closure. With a solid reputation for pro-ficiency, productivity and safety, ready to take on bothyour large and small projects.
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 extremeweather.
Judy Patrick PhotographyAnchorage, AK 99501Contact: Judy PatrickPhone: (907) 258-4704 • Fax: (907) 258-4706Email: [email protected]: JudyPatrickPhotography.comCreative images for the resource development industry.
Last Frontier Air Ventures39901 N. Glenn Hwy. Sutton, AK 99674Contact: Dave King, ownerPhone: (907) 745-5701Fax: (907) 745-5711E-mail: [email protected] 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, crew trans-port, 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: [email protected] combined scope of the Lynden companies includestruckload and less-than-truckload highway connections,scheduled barges, intermodal bulk chemical hauls,scheduled and chartered air freighters, domestic andinternational air forwarding and international sea for-warding services.
MRO SalesAnchorage, AK 99518Contact: Don PowellPhone: (907) 248-8808 • Fax: (907) 248-8878
Email: [email protected]: www.mrosalesinc.comMRO Sales offers products and services that can helpsolve the time problem on hard to find items.
Northern Air Cargo3900 W. International Airport Rd. Anchorage, AK 99502Contact: Mark Liland, acct. mgr. Anch./Prudhoe BayPhone: (907) 249-5149 • Fax: (907) 249-5194Email: [email protected] • Website: www.nac.aeroServing the aviation needs of rural Alaska for almost50 years, NAC is the states largest all cargo carriermoving nearly 100 million pounds of cargo on sched-uled flights to 17 of Alaska’s busiest airports. NAC’sfleet of DC-6, B-727, and ATR-42 aircraft are availablefor charters to remote sites and flag stops to 44 addi-tional communities.
Oxford Assaying & Refining Corp. 3406 Arctic Blvd Anchorage, AK 99503Contact: Gene Pool, manager
Phone: (907) 561-5237 Fax: (907) 563-8547E-mail: [email protected] have offered full service assaying & refining serviceto Alaska’s gold miners for over 28 years. We also buysell and trade gold silver & platinum.
Pacific Rim Geological ConsultingFairbanks, AK 99708Contact: Thomas Bundtzen, presidentPhone: (907) 458-8951Fax: (907) 458-8511Email: [email protected] mapping, metallic minerals exploration andindustrial minerals analysis or assessment.
PND Engineers Inc.1506 W. 36th Ave. Anchorage, AK 99503Phone: (907) 561-1011Fax: (907) 563-4220Website: www.pndengineers.comFull-service engineering firm providing civil, structural,and geotechnical engineering, including mining sup-port, resource development, permitting, marine andcoastal engineering, transportation engineering,hydrology, site remediation, and project management.
TTT Environmental LLC 4201 “B” St.Anchorage, AK 99503Contact: Tom Tompkins, general managerPhone: 907-770-9041 • Fax: 907-770-9046Email: [email protected]: www.tttenviro.comAlaska’s preferred source for instrument rentals, sales,service and supplies. We supply equipment for air mon-itoring, water sampling, field screening, PPE and more.
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: [email protected] site: www.taigaventures.comRemote site logistics firm specializing in turnkeyportable shelter camps – all seasons.
URS Corp.700 G Street, Suite 500Anchorage, AK 99501Contact: Joe Hegna, Alaska Vice President/AlaskaOperations ManagerPhone: (907) 562-3366Fax: (907) 562-1297E-mail: [email protected]: 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; construc-tion and construction management; operations andmaintenance; and decommissioning and closure serv-ices.
Advertiser Index3M AlaskaAir LiquideAlaska Analytical LaboratoryAlaska DreamsAlaska Earth Sciences . . . . . . . . . . . . . . . . . . . . . . . 18Alaska Frontier Constructors . . . . . . . . . . . . . . . . . . 9Alaska Interstate Construction (AIC). . . . . . . . . . . 12Alaska Steel Co.Alaska TelecomAmerCable Inc.Arctic FoundationsAustin Powder Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . 5Calista Corp.Chiulista Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Constantine Metal ResourcesConstruction Machinery . . . . . . . . . . . . . . . . . . . . . 20Everts Air CargoFairbanks Gold Mining/Fort Knox Gold Mine . . . . 8Fairweather LLCGCI Industrial TelecomGold Canyon MiningJackovich Industrial & Construction Supply. . . . . 10Judy Patrick PhotographyKiska Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Last Frontier Air Ventures . . . . . . . . . . . . . . . . . . . 13Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2MRO SalesNature Conservancy, TheNorthern Air CargoOxford Assaying & Refining Corp. . . . . . . . . . . . . . 6Pacific Rim Geological Consulting. . . . . . . . . . . . . 14PND Engineers Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 6Salt+Light Creative . . . . . . . . . . . . . . . . . . . . . . . . . . 7Taiga Ventures/PacWest Drilling Supply . . . . . . . . 7URS Corp.Usibelli Coal Mine . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
continued from page 15
HIGH ARCTIC DIAMONDS
see HIGH ARCTIC DIAMONDS page 18
18NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
cally improved with base stations situatedwithin the survey area, rather than severalhundred kilometers away, Rio Tintointends to erect temporary, 5-feet-by-5-feet-by-5-feet barriers at two locationswithin the 2011 survey area in hopes ofboth mitigating potential interaction theherds and protecting the Musk ox and thesensitive instruments.
The survey would be flown on thenorthern permits.
Local hireDuring the 2010 program, Rio Tinto
said the project provided direct wages andrevenue to residents and businesses inSachs Harbour and Inuvik. Sachs Harbour(pop. 2,700), is one of several communitieswithin the Inuvialuit Settlement Regionwhere Banks Island is located. ThoughInuvik (pop. 3,400), is located outside thesettlement region, a number of local busi-nesses are based there.
The explorer said it contributedC$183,000 of the 2010 Banks Island budg-et toward direct and indirect revenue to the
people and businesses of the local areabetween July 5 and Sept 19, 2010, contract-ing for a variety of services, includingtransportation, shipping, expediting, gro-ceries, bulk aviation fuel, gasoline fortrucks, Internet access and services andaccommodations, truck and office rental.
Seven local employees were hired assubcontractors to assist as wildlife monitorson the airborne geophysical survey, to helpwith the operation of the camp and to assiston the stream sediment sampling program.
Overall, 17 percent of the program’stotal 6,777 contractor-hours were repre-sented by local Inuvialuit hires.
Rio Tinto also noted that the entire pro-gram was completed without a singlehealth incident or personal injury.
The company said it will try to consultand work with local businesses and hirelocal staff whenever possible, and its budg-et for the 2011 program would be similar tothe 2010 budget.
The 2011 program requires services andemployment to assist with the construction,maintenance and operation of the camp andassociated exploration activities. Jobdescriptions and skill development oppor-tunities will be made available to new andreturning employees, Rio Tinto added. �
ing a decided preference for gold, up to 69percent of all exploration targets in theYukon from 58 percent in 2010.Percentages last year of silver (10 percent),copper (10 percent), and nickel-PGE-molybdenum (5 percent) targets decreasedto 8 percent, 7 percent and 1 percent,respectively. The number of lead-zinc proj-ects remained unchanged at 15 percent.
Industry analysts are calling the influx ofgold seekers a second rush, one they saycould provide investors with some reward-ing mining plays.
More firms are raising capital to expandsummer drilling programs in the Yukon,said Marc Sontrop, a portfolio manager forDalton Strategic Partnership’s MelchiorC$69 million natural resources fund, whichis overweight precious metals.
Sontrop told Reuters that interest in theYukon had picked up because of discoveriesin the last three years by the likes ofUnderworld Resources Inc., Kaminak GoldCorp. and Atac Resources Ltd. He said sen-ior gold mining companies are becomingincreasingly involved in the region, pointingto Kinross Gold Corp. buying Underworldin 2010.
The staking of new quartz claims in theYukon in 2011 also tells a compelling story.Claims in good standing as of May 1, 2011in the Yukon totaled 209,068, more thandouble the 95,590 claims in good standing ayear earlier. Some 34,002 new claims werestaked and recorded in the Yukon during thefirst four months of 2011 and that compareswith 8,902 claims staked during the sameJanuary-April period of 2010. As the weath-er improved, another 18,738 Yukon claims
were staked in May. Lewis said the majority of the projects
planned for 2011 lie within close proximityto the recent White Gold, Coffee and RacklaBelt discoveries. However, a significantnumber of the programs underway orplanned for this year are occurring else-where in the Dawson Range, in theFinlayson and Whitehorse mining districtsand near MacMillan Pass and in SoutheastYukon.
Everybody and his brotherNew faces in the Yukon this year could
fill out a chapter in Who’s Who in juniormining, including several well-knownprospectors such as Adrian Fleming, wholed Underworld Resources when it made theWhite Gold discovery in 2008, and ChuckFipke, whose tenacious prospecting is cred-ited with sparking Canada’s diamond min-ing boom in the 1990s.
Fleming has a new company, SmashMinerals Corp., which will explore itsWhiskey Gold Property in the White Golddistrict. With no previous ground explo-ration on the property, Smash Mineralsintends to complete an extensive C$4.3 mil-lion inaugural program that will consist of ahelicopter-borne magnetics survey, ridgesampling, grid soil sampling, geologicalmapping and prospecting, plus trenchingand drilling.
Fipke and Stewart Blusson discoveredthe Ekati diamond deposit in NorthwestTerritories and are now minority owners ofthe Ekati diamond mine. Fipke is chairmanof Cantex Mine Development Corp., a jun-ior that aims to explore the Car and Linproperties in the southeast Rackla Belt.“They will be using his patented heavy min-eral technologies to analyze samplesfrom the properties,” Lewis said.
Among other newcomers to the Yukon:Aben Resources Ltd., which optioned
from Eagle Plains Resources Ltd. the RudeCreek South gold, copper and molybdenumproperty north of Dawson, Yukon; RustySprings silver-lead-zinc property in theDawson Range and several other propertiesin a possible extension of the Rackla Belt in
MacMillan Pass;Bearing Resources intends to explore
properties located near Golden PredatorCorp.’s Clear Creek gold project andNorthern Tiger’s 3Ace gold project inSoutheast Yukon, which drew considerableattention in 2010 after reporting impressivegold assays in grab samples and subsequentdrilling (Bearing holds a 100 percent inter-est in the Flume property, of which a 75 per-cent interest is currently optioned to RyanGold Corp.);
Caribou Copper Resources, whichagreed to earn in to options held by AlixResources Corp on five Yukon propertiesowned by Strategic Metals, including theHartless Joe and Byng gold-silver proper-ties northeast of Whitehorse (The Corkyand Meloy copper-gold properties withpotential for molybdenum and the Vaultgold property are all located northwest ofHaines Junction.);
Hawkeye Gold & Diamond Inc., whichhas agreed to acquire a 100 percent interestin each of the Dart, Mint and Top propertiesfrom the YES Exploration Syndicate Inc.(The properties host gold-associatedyounger volcanics within the CarmacksCaldera and are located in the Aishihik Lakearea northwest of Whitehorse);
Mill City Gold Corp., which recentlyoptioned the Mount Hinton Property in theKeno Hill mining district from RockhavenResources Ltd., also plans to explore theTombstone Gold Project near Dawson.
Gold World Resources, which optionedthe Mount Anderson Property, a volcanics-associated gold-silver, polymetallic proper-ty similar to the former producing Skookumgold mine, according to Lewis;
Great Bear Resources, which optioned a75 percent interest the Ike Selwyn BasinGold Project from Argus Metals in theHyland district near Atac Resources’ Carlin-type gold discovery in eastern Yukon;
Kestrel Gold, which is exploring theKing Solomon Dome Property in the WhiteGold mining district south of Dawson afteroptioning it from longtime Yukon prospec-tor Bernie Kreft;
Ontario explorer White Pine Resources,which optioned the Money and Tender
properties in the Dawson Range from cele-brated prospector Shawn Ryan;
Commander Resources Ltd., which isexploring the Glenmorangie (Hyland area)and Yukon Olympic (Dempster highway)properties;
Colorado Resources Ltd., which stakedthe Oro Property within the possible exten-sion of the Rackla Belt near MacMillanPass and recently agreed to purchase threeProperties – Sol, Nid and Bach –located inthe Macmillan Pass area, a fourth property– Al – located in the Aishihik Lake areanorthwest of Whitehorse;
Constantine Metals Resources Ltd. andCarlin Gold Corp. joint venture, which wasformed in 2010 specifically to target andexplore for Carlin-type gold deposits in theYukon’s Selwyn Basin, recently staked1,097 additional claims in five areasprospective for Carlin-type mineralizationin the Mayo Mining District, east centralYukon; and,
Wolverine Minerals Corp., whichoptioned 21 properties from StrategicMetals, including some in the FinlaysonLake area and others in the Dawson Range.
“There are other new companies thathave optioned or staked properties, but theyhave not announced work programs yet,”Lewis said. For example, Tajiri Resourcesoptioned the Inca Property.
In addition, numerous acquisitions andname changes this year has transformed thelandscape. “For example, UniversalUranium is now Expedition Mining.Copper Ridge is now Redtail Resources.Hinterland Resources is changing its nameto Stakeholder Gold. New Pacific Metals (acompany with major ownership by aChinese silver producer) acquired TagishLake Gold Corp., but the operation is beingrun by Tagish Gold as a subsidiary,” Lewisexplained.
She said NovaGold Resources’ purchaseof Copper Canyon Resources gives it own-ership of the Kiwi gold property off theNorth Canol Road in central-eastern Yukon,which the company plans to drill this year.
Also, Pacific Coast Nickel now ownsthe Wellgreen and Burwash Ni-PGE prop-erties, she added. �
continued from page 17
HIGH ARCTIC DIAMONDS
continued from page 14
YUKON EXPLORATION
Golden Predator Corp. scales the heights in 2010 to drill a gold target on a mountain ridge at the Antimony Project in central Yukon Territory.
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19NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JUNE 26, 2011
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� B R I T I S H C O L U M B I A
Eagle Plains spin-out of ‘geos’ pays offTerraLogic emerges as capable independent mineral exploration and geologic consulting services firm for Northwest Canada explorers
By ROSE RAGSDALEFor Mining News
More junior mining companies are turning to theexperts to lead their exploration programs, hoping to
hit the ground running and substantially shorten the timerequired between identifying a likely prospect and targetingcommercial quantities of minerals on that property.
The strategy is not only helping the industry to controlcosts, it is also enabling some explorers with accomplishedtechnical teams to preserve this expertise during tough eco-nomic times.
TerraLogic Exploration Services Inc. is one such com-pany. Launched as a fully independent mineral explorationand geologic consulting services firm in 2008, it is makingits mark in the industry as with ‘soup-to-nuts’ mineralexploration services.
The Cranbrook, B.C.-based firm is actually a subsidiaryof Eagle Plains Resources Ltd., an aggressive mineralexploration project generator. Formerly known as BootlegExploration, TerraLogic served Eagle Plains and its projectpartners in western and northern Canada for the first 16years of its existence. Past clients include Teck ResourcesLtd., BP, Northern Freegold Resources Ltd., CopperCanyon Resources Ltd., and Zimtu Capital Corp. in addi-tion to its parent company.
Since 1992, the consultant has amassed considerableexperience exploring mineral prospects in northwesternCanada that its parent, Eagle Plains, acquired and farmedout to partners, company spokesman Mike Labach toldMining News June 21.
“We had taken the risk of acquisition of these projects,particularly when mining in British Columbia was a swearword. Everybody else was leaving for Guiana or someplace,and it was an opportunity to get a lot of ground with rela-tively little competition,” he explained.
But in 2008 when investment in mining explorationnosedived, Eagle Plains suddenly found itself fighting forsurvival and looking for a way to save its consulting arm.
“The entire strategy was designed to keep our technicalteam intact when the market downturn happened,” Labachsaid. “We asked ourselves, ‘What are we going to do to sur-vive?’ Our option deals were falling off the table, and wehad very (few) prospects for exploration.”
By allowing Bootleg to “morph” into an independentcompany, Labach said Eagle Plains envisioned expandingTerraLogic and making the services of its geoscientistsavailable to other companies and other projects.
“They always were available but primarily, internally,” hesaid. “In 2008, no one knew what would happen. Thingswere looking bad, and we saw this as a way to keep our teamtogether. Mining is a cyclical business, and this is way toreduce the amplitude of those waves.”
Consulting ‘win-win’Eagle Plains not only survived, it has thrived. With about
50 projects in its portfolio, it has “reloaded” many of itsoption deals, so that it currently has about 20 project part-
ners, Labach said.By farming out the projects to other companies, Eagle
Plains not only mitigates its own risk, it also engagesTerraLogic as a contractor. This is designed to be a win-win,with the project partner gaining access to a professionalteam with valuable expertise and experience and EaglePlains enjoying the benefits of someone paying forTerraLogic’s services without the potential perception of aconflict of interest.
Aben Resources Ltd., for example, hired TerraLogic tooversee all aspects of its 2011 exploration and drilling pro-grams in Yukon Territory and Northwest Territories, includ-ing some projects it optioned from Eagle Plains. The junioralso expanded the base and precious metal projects, whichare in various stages of development, by staking additionalclaims in the Yukon and securing more exploration permitsin Northwest Territories.
Through TerraLogic, the junior also arranged for fieldcrews, support staff, camps, supplies, helicopters and drillrigs to conduct the exploration programs planned for thisyear. With an estimated C$5 million budget, the work wasexpected to commence in early June, depending on the rate
of snow melt.
Full range of servicesTerraLogic provides geologic services, exploration tech-
nology and project support and management. It employs12-16 professionals year-round and has ramped up to about25-35 geoscientists for the 2011 summer field season,according to Labach.
The firm touts the quality of its services, including itscustom Geographic Information Systems, which canstreamline the collection, storage, analysis and display ofgeologic data quickly and accurately when integrated intoan exploration program.
TerraLogic said it also has invested significant resourcesin research and development related to XRF technology andhas integrated it into its custom GIS database.
“Through training, field testing and rigorous QA/QCprocedures, we have become proficient in the application ofportable XRF in a multitude of geologic and logistical set-tings,” the company said on its website.
The firm also said it has newly integrated its portableXRF (X-Ray Florescence) units into its custom GIS.
“These analytical tools can be used in geochemical sur-veys to rapidly identify anomalies for specific ore andpathfinder elements. Not only can anomalies be identifiedimmediately, they also can be further delineated andassessed during the same program. XRF units also canassist in recognizing finely disseminated mineralizationand unknown minerals,” TerraLogic added. �
A TerraLogic Explorations Services Inc. geologist collectsfield data using XRF Technology
TerraLogic Exploration Services conducts a regional geo-chemical survey and mapping program at the Arc Project inthe Selwyn Basin of Northwest Territories.
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“The entire strategy was designed to keep ourtechnical team intact when the market
downturn happened. We asked ourselves,‘What are we going to do to survive?’ Our
option deals were falling off the table, and wehad very (few) prospects for exploration.”
–Mike Labach, spokesman, Eagle Plains Resources Ltd.
20NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JUNE 26, 2011
IN ALASKA IN YOUR CORNERIN THE WORLD
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