mining news ebook: petroleum news 121403

SHANE LASLEY PHOTO

Tourists try their hand at gold panning in the shadows ofthe Pedro Dredge, which recovered about 55,000 ouncesof gold from Chicken Creek between 1959 and 1967. Thisseason Full Metal Minerals Ltd. launched the RollingThunder Project, a claim-staking and exploration initia-tive that seeks the lode source of more than 500,000ounces of placer gold recovered from this historic miningregion near the Alaska-Yukon border. Page 5.

A special supplement to Petroleum NewsWEEK OF

July 25, 2010

A special supplement to Petroleum News

5 Usibelli explores Wishbone HillAlaska miner studies potential of shipping cleaner Palmer-area coal to Japan

15 China chokes global REE supply U.S. scrambles to stimulate domestic production of the high-tech metals

21 Geoscientists map Canada’s ArcticC$100M federal program aims to fill geological knowledge gap in Nunavut

http://www.miningnewsnorth.com/

2NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JULY 25, 2010

http://www.lynden.com/

By SHANE LASLEYMining News

FORTYMILE – The storm cloudsresponsible for the torrential rains

that recently washed away long sectionsof the Taylor Highway are not the onlysource of rumbling in the Fortymileregion of eastern Interior Alaska. FullMetal Minerals Ltd. has launched theRolling Thunder Project here this sum-mer. The staking and exploration initia-tive is targeting the lode source of morethan half a million ounces of placer goldrecovered historically from the streamsdraining the rolling hills of the FortymileMining District.

The discovery of the yellow metal inthe region ignited Interior Alaska’s firstgold rush in 1886, a decade before thestampede to the Klondike a few miles tothe east.

Though Fortymile – like most of theplacer gold producing districts scatteredacross the Tintina Gold Belt – has beeninvestigated by geologists and prospec-tors seeking the source of the alluvialdeposits, an economic lode has yet to bediscovered in this historic placer-produc-ing region.

Full Metal’s website quotesHungarian-born biochemist Szent-Gyorgyi as saying, “Discovery consists ofseeing what everybody has seen andthinking what nobody has thought.”

This adage and the Vancouver B.C.-based junior’s firsthand understanding ofthe geologic controls, geochemistry andtargeting methods successfully applied byUnderworld Resources Inc. at its WhiteGold deposit about 60 miles, or 100 kilo-meters, to the southwest in the YukonTerritory could be keys to unlocking this125-year-old mystery.

“Full Metal and Rolling Thunder is ina unique position for advancing explo-ration in the area. Our relationship withUnderworld Resources has provided theRolling Thunder technical staff withexploration techniques that were success-fully used on the White Gold property,”Rolling Thunder Project Manager ChrisSiron told Mining News.

Underworld connectionsFull Metal’s top executives, Rob

McLeod and Michael Williams, alongwith former Placer Dome explo-ration manager Adrian Fleming formedUnderworld in 2008. In less than twoyears, the seasoned team of geologiststransformed the White Gold prospect intoa major a new gold deposit with a resourceof 1.41 million ounces averaging about 3grams per metric ton gold, which resultedin Kinross Gold Corp. buying the youngjunior and its assets for C$139.2 million.

The White Gold discovery sparked aclaim-staking rush to the Yukon Territory’sDawson Range. The mineral belt – com-monly referred to as the White GoldDistrict – includes porphyry copper andepigenetic gold deposits such as NorthernFreegold Resource Ltd.’s FreegoldMountain, Northern Tiger Resources Inc.’sSonora Gulch, Kaminak Gold Corp.’sCoffee and Kinross’ White Gold.

Without regard to international borders,this swath of Cretaceous-age deposits,prospects and placer gold mines stretchesnorthwest from Capstone Mining Corp.’sMinto copper-gold-silver mine in centralYukon across the border into Alaska.

While more than 30 companies areinvestigating the White Gold District, FullMetal is the only company currently seek-ing similar prospects in the Fortymileregion.

“White Gold has an unusual geologicand geochemical signature as it relates togold mineralization. The Rolling Thunderstaff has recognized White Gold’s uniquegeologic architecture and is taking an anal-ogous approach toward exploration on theAlaska side of the border, although, we’renot exclusively targeting White Gold-styledeposits,” Siron explained. “Rather, theRolling Thunder staff is taking an open-ended approach toward gold exploration.”

Seeking the lodeThe Rolling Thunder claims blanket

around 34,000 hectares, or 84,000 acres,of the hills that rise above some of themost prolific placer gold-bearing streams

in Fortymile, including Chicken Creek,which alone produced more than 100,000ounces of the precious metal.

“We look for recent and historic placermining that occurs in drainages of

prospective targets,” Siron explained. Full Metal geologists are using a pro-

prietary geochemical data set compiled

3NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JULY 25, 2010

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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� A L A S K A

Fortymile resonates with Rolling ThunderEquipped with firsthand knowledge of White Gold geology, Full Metal geologists seek a similar signature just across the border

see ROLLING THUNDER page 4

Rolling Thunder Project Manager Chris Siron inspects a rock outcrop at one of Full Metal’s gold properties in Alaska’s Fortymile District nearthe Yukon Border.

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from historical exploration and their first-hand knowledge of White Gold mineral-ization as they traverse nine blocks ofRolling Thunder claims that stretch fromthe Yukon-Alaska border to the compa-ny’s Fortymile silver-zinc-lead propertyabout 60 miles, or 100 kilometers, to thenorthwest.

Using the alluvial gold deposits to vec-tor their search, Rolling Thunder geolo-gists are seeking rock formations similarto those that are found in and around theWhite Gold mineralization.

“Lithologies similar to Golden Saddleand Arc-Zone – such as amphibolite-grade felsic orthogneiss and metasedi-mentary host rocks; spatially associatedmafic and ultramafic units, which maybehave as fluid seals; areas of favorablestructure such as thrust faults, structuralcorridors and fault intersections; brecciazones, including lode and stockworkquartz veining – are being targeted.”

Applying the Ryan methodLike the White Gold District in the

Yukon, the Fortymile region has not expe-rienced glaciation. The gradual weather-ing and lack of ice flows scouring the sur-face means potential gold-bearing lodesources of the alluvial deposits in thestreams are mostly hidden beneath a layerof sub-Arctic tundra. The best rock expo-sure can be found near the tops of therolling mountains common to the areas.For this reason Full Metal geologists aretraversing the hilltops and ridges as theydo a first-pass sampling and mapping ofthe Rolling Thunder claims.

McLeod, Full Metal’s CEO and vicepresident of exploration, explained thatwhile the exposed weather resistant rocksprovide geological information for map-ping, they are not necessarily the host ofthe gold being sought. Consequently theexplorer is depending on soil sampling, atechnique that was successfully utilizedby Dawson City prospector Shawn Ryanin the discovery of the Golden Saddle andArc zones at the White Gold property.

“Rolling Thunder staff has spokenwith Shawn Ryan directly about samplingprotocols and methodologies used atWhite Gold. These methods are beingemployed at our claims,” Siron explained.

“This reconnaissance sampling andmapping has already identified multipleareas of strong alteration and quartz vein-ing reminiscent of White Gold.”

At the 20X prospect, grab samplesfrom oxidized quartz veins returned 5.5and 4 grams per metric ton gold, with

anomalous molybdenum and otherpathfinder elements similar to the WhiteGold Property. Nine samples collectedfrom the 20X claim-block ranged from0.014 to 5.5 g/t gold and averaged 1.53 g/tgold.

A grab sample from a one meter widequartz vein trending onto Full Metalclaims at the Tweeden prospect graded52.2 g/t gold. Secondary structures splay-ing off of main structure returned assaysbetween 1 and 2 g/t gold within sheetedquartz veins.

According to Siron, early results fromthe soil sampling also are returning prom-ising results.

“Results from a majority of the first-pass reconnaissance soil lines are stillpending, however, encouraging resultshave been received,” the Rolling Thunder

manager said. “White Gold-style geo-chemical signatures are recognized at sev-eral of our claims.”

Rolling Thunder geologists are return-ing to these more prospective areas toconduct more thorough sampling.

“Followup work has begun targetinggeochemical anomalies by means ofinfilling soil sampling and gridded soilsurveys,” Siron explained.

A leg-up in the FortymileFull Metal has been exploring its

LWM silver-zinc-lead deposit in theFortymile region for nearly four years.This experience, along with the rapportthe junior has built with people of thearea, gives the company a leg-up on otherexplorers that may decide to seek outWhite Gold-style mineralization as ittrends into Alaska.

“The Full Metal technical staff has afond geologic knowledge of the FortymileDistrict of Alaska. In addition, we haveestablished relationships with organiza-tions working in the area, including theUSGS (United States Geological Survey).We are also participants in the YukonGold Project, an industry consortiumdeveloped to improve the geologic under-standing of the region and to promote suc-cessful exploration,” Siron explained.

The Yukon Gold Project that Sironreferred to is a two-year study aimed atgaining a better understanding of thegeology and geochemistry of the DawsonRange.

It is being conducted by the MineralDeposit Research Unit, a collaborativeventure between the mining industry andthe University of British Columbia.

The project consists of six modules:• Tectonic and Structural Setting

• Magmatic Evolution & Geochronology• Exploration Geochemistry• Targeting with Placer Gold• Metallogeny and Deposit Studies• Fluid Geochemistry and Ore GenesisFull Metal, as a sponsor of the project,

is privy to the information that it gener-ates and plans to apply the findings at itsRolling Thunder Project on the Alaskaside of the border.

The explorer is also putting together alibrary of placer gold from the Fortymileregion. This collection, which is beingtested for its geochemistry and fineness,will assist the geologists to vector in onthe lode source of gold still being recov-ered from streams in the district.

“The Fortymile is a difficult place toexplore; however, the foundation we’veestablished and our persistence andaggressive approach towards grassrootsexploration has given us a strategic posi-tion in an area that is undoubtedly a fore-front for upcoming exploration by manycompanies,” Siron said.

Storms flood FortymileThe Fortymile District, known for its

hot, dry summers, has experienced unusu-ally wet conditions this summer, whichmade exploration at Rolling Thunder par-ticularly challenging.

The area, which normally receives anaverage of about 10 inches of annual pre-cipitation, was hit by a 3.2-inch downpourover 24 hours starting July 10. This del-uge sent the Fortymile River over itsbanks and it crested at the highest levelsever recorded. The flooding washed outthe Taylor Highway, stranding travelersand miners along the 42-mile-, or 68-kilo-meter-, stretch of road between the com-munity of Chicken and the Alaska-Yukonborder.

During the torrent, Full Metal’sFortymile crews were forced to stay nearits camp located on the historic ChickenCreek about a mile upstream from thecommunity with the same name.However, many of the Rolling Thunderclaims are accessible with all-terrain-vehicles, allowing geologists to continueworking even when helicopter travel isprevented by the uncommonly frequentthunderstorms rolling through theFortymile.

“The weather has been very uncooper-ative. We’ve had some flooding issuesnear camp and we had a day where thefield crews could not go out. But our oper-ation has been running smoothly, consid-ering the circumstances. Access hasn’tbeen too restricted aside from the mainroad, which washed out in several places,”Siron told Mining News July 14. �

continued from page 3

ROLLING THUNDER

Full Metal Minerals Fortymile camp is built on placer mine tailings at Chicken Creek.Historically, more than 100,000 ounces of gold has been recovered from the alluvial gravelsin this drainage.

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Placer gold was discovered at Lost ChickenCreek in 1895. Early mining occurred on agold-rich bench that lies between LostChicken Creek and Chicken Creek. The twocreeks combined have produced more than125,000 ounces of gold.

http://www.chiulista.com/


W ith access granted and exploration permit in hand,Usibelli Coal Mine Inc. has started a drill pro-

gram at its Wishbone Hill property 10 miles northeast ofPalmer, Alaska.

The fourth-generation, family-owned company said theestimated 14 million tons of bituminous coal at WishboneHill can fill an important market need among electric util-ities that are committed to generating cleaner power. Thebituminous coal produces high-heat, yet is ultra-low insulfur.

This summer’s drill program will provide informationneeded to complete a feasibility study in hopes of begin-ning operations in the historic mining area as early as2012.

If Alaska-based Usibelli decides to develop WishboneHill, some 500,000 tons a year of the cleaner-burning coalwill likely be shipped to Japan via newly constructed load-ing facilities at Port MacKenzie on the west side of upperCook Inlet directly across from Anchorage.

Wishbone Hill is expected to pump millions of dollarsannually into the local and state economy.

According to a socioeconomic impact study completedby the Institute of Social and Economic Research, 93potential employees at Wishbone Hill would average earn-ings between US$70,000 to US$90,000 per year. In addi-tion to the US$7.8 million of annual personal income gen-erated from the direct and indirect mining jobs created bythe coal mine, the local borough is expected to collectabout US$440,000 in property taxes and the State ofAlaska is expected to receive US$1.25 million a year inroyalty payments.

Borough leases accessIn June, the Matanuska-Susitna Borough granted

Usibelli Coal Mine a 25-year lease to 60 acres of land thatprovides a transportation link between the Wishbone HillMine and Alaska’s road system.

Borough assembly members weighed economic oppor-tunities that the mine could bring to the borough with con-cerns of local residents about possible negative environ-

mental effects of coal mining and hauling from WishboneHill.

Some residents living near the potential mine siteworry about the effects of coal mining on their propertyvalues and the environment.

“It is my judgment that we will look back, I will lookback, at a future date and know that this was a good deci-sion, for the jobs, the community, the company, for thebetterment of this borough. I believe that to be the case. IfI didn’t believe it would be better, if I didn’t believe that itcould be done correctly, if I didn’t believe that it could bedone without affecting the environment, I wouldn’t do it,”Assemblyman Ron Arvin said.

The assembly added a half-dozen requirements to thelease based on concerns of area residents. These includepaving the 0.6 mile, or 1 kilometer, section of road pass-ing through borough land as soon as commercial haulingof coal begins; covering coal trucks to eliminate coal dust;cleaning truck tires before trucks enter the leased road;and purchasing US$1 million in pollution insurance.

The long-term lease on the key real estate paved theway for Usibelli to complete an exploration trail to themine.

Feasibility beginsWhile Usibelli crews were working on building a road

capable of transporting a drill rig across the newlyacquired land, the Alaska Department of NaturalResources Division of Mining, Land and Water approvedan exploration permit for Wishbone Hill.

Though the new authority allows up to 20 holes to bedrilled at Wishbone Hill, Lorali Carter, the project’sspokeswoman, told Mining News that Usibelli only plansto drill six to eight holes this summer.

Two holes will test areas where the company plans tobuild facilities on the property and the remaining holeswill be used to assess coal quality. The information gainedfrom drilling will be incorporated into a recently initiatedfeasibility study.

“We will get some updated environmental information,including coal quality tests,” Carter said. “The explorationprogram is certainly a major piece of the feasibility study.”

The feasibility study will be based on 6 million tons of

coal reserves identified in Mine Areas 1 and 2. Usibelliplans to excavate 500,000 tons of coal annually for about12 years from these two regions.

In addition to information gained from the drilling, thecompany will take a bulk sample of the coal to update thewashing analysis.

“It’s bituminous coal as opposed to sub-bituminouslike we are mining in Healy, and so we can probably washit to a product close to 12,000 Btu,” Usibelli VicePresident of Business Development Steve Denton toldMining News.

The feasibility study also will include analysis of trans-portation options, updates to project permits and gatheringadditional environmental information.

The environmental data collected this summer willsupplement more than 20 years of baseline studies thathave been conducted at Wishbone Hill.

Denton said Usibelli anticipates completing the feasi-bility study early in 2011 and depending on its results,could begin mining Wishbone Hill coal as early as 2012.

Ship-loading a successJ-Power, a Tokyo-based company that operates 67

power plants with a total output capacity of about 17,000megawatts of electricity, is collaborating with Usibelli onthe feasibility study and is expected to be the purchaser ofcoal mined at Wishbone Hill.

“J-Power has been identified as the most likely pur-chaser of the coal. They have expressed interest in pur-chasing all of the output from Wishbone Hill,” Carter said.“They currently buy coal from Healy. So this coal wouldbe in addition to what they already purchase.”

As part of the feasibility study, the JP Azure, a super-Panamax ship, was loaded with Usibelli Coal at PortMacKenzie in May. Too large to transit the Panama Canal,the vessel, laden with 76,000 tons of coal loaded inSeward, successfully docked at the Matanuska-SusitnaBorough-owned port where another 1,250 tons truckeddown from Healy topped off its load. The massivefreighter transported the coal from the upper Cook Inletfacility to J-Power’s plants in Japan.

“This confirms every effort we’ve been making at Port

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� A L A S K A

Coal miner advances Wishbone HillUsibelli begins feasibility study, targets 2012 production in historic mining area near Palmer; Port MacKenzie coal-loading a success

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The JP Azure, a super-panamax ship and the largest vessel to ever enter the waters of upper Cook Inlet, was successfully loaded with Usibelli coal in May at new facilities at Port MacKenzie.

By CURT FREEMANFor Mining News

Two seminal events related to theAlaska mining industry occurred in

the past month. First, in late June, Coeur d’Alene

Mines Corp. reported the commencementof production at it Kensington gold minenear Juneau. The mine has now joined theranks of large-scale producers here inAlaska but only after lots of years and lotsof dollars, capped by a trip to the U.S.Supreme Court! Hat’s off to Coeur for itscommitment to Alaska and for its desire todo this job right.

Secondly, earlier this month Sen. LisaMurkowski, R-Alaska) introduced theRare Earth Supply-Chain Technology andResource Transformation (RESTART) Actof 2010 in the U.S. Senate. This bill, pre-viously introduced by Colo. Rep. MikeCoffman in the U.S. House ofRepresentatives, would re-establish com-petitive domestic rare earths mineral pro-duction, processing, refining, purification,and metals production industries to sup-port the growth of green job technologyand manufacturing as well as the nation’sdefense industry. Alaska’s Bokan-DotsonRidge Project was singled out by Sen.Murkowski as one of the most advancedrare earth projects in the country, and onethat would greatly benefit from a federalmandate to explore for and developdomestic rare earth element supplies andproduction facilities.

Western AlaskaNOVAGOLD RESOURCES INC.

announced data on second quarter 2010activities at its Donlin Creek project.NovaGold and partner BARRICK GOLDCORP. approved a budget of approximate-ly US$47 million, with US$13.6 millionspent year to date. During the secondquarter, expenditures at the Donlin Creekproject totaled approximately US$8.9 mil-lion. The 2010 work program will com-plete the majority of the environmentaland engineering studies required to reviewthe natural gas pipeline option for theproject. If a decision is made to proceedwith on-site power generation using natu-ral gas, the partners will work with rep-utable engineering firms to revise the

project feasibility study, positioning theproject to file permit applications by theend of 2011.

At its Rock Creek gold project nearNome, NovaGold Resources has budgetedUS$19.1 million for 2010, with US$10.2million spent year to date. During the sec-ond quarter of 2010, expenditures at theRock Creek project totaled approximatelyUS$3.9 million. Work at the property isfocused on water management and com-pleting a detailed review to determinefuture developments at the project.

ZAZU METALS CORP. announced theengagement of JDS ENERGY ANDMINING INC. to assist in the developmentof the company’s Lik deposit. JDS willreview economic parameters of the com-pany’s previously released preliminaryeconomic assessment to refine capital andoperating cost figures.

MILLROCK RESOURCES INC. andjoint venture partner KINROSS GOLDCORP. announced commencement ofdrilling at the Council gold project on theSeward Peninsula. The US$800,000exploration program will include approxi-mately 2,500 meters of reverse circulationdrilling to test for lode gold deposits in theuplands surrounding the historic placerworkings from which 300,000 ounces ofplacer gold have been recovered. The pro-gram is targeting sediment-hosted veindeposits which past exploration has indi-cated are the source for placer golddeposits.

FIRE RIVER GOLD CORP. announced

additional results from previously unre-leased drilling at its Nixon Fork gold proj-ect near McGrath. Significant resultsinclude 4.2 ounces of gold per ton over8.2 feet in hole N07U065 and 3.15 oz/tgold over 9.8 feet in hole N07U063. Thecompany also announced that it hadrecovered 900.5 ounces of gold fromclean-up of the ball mill at the project.This bullion generated US$1,082,507 thatwill be used to fund ongoing explorationefforts.

FREEGOLD VENTURES andWESTERN STANDARD METALS saidmerger discussions between the compa-nies have been terminated and thatWestern Standard has terminated its inter-est in the Vinasale gold project nearMcGrath. Freegold retains 100 percent ofthe property, under lease from DOYONLTD.

LIBERTY STAR URANIUM ANDMETALS CORP. announced that in orderto pay its former lenders, the company hassold 60.7 square kilometers of its BigChunk and Bonanza Hills project acreagein consideration for both US$1 millioncash payment and a US$3 million convert-ible loan from NORTHERN DYNASTYMINERALS LTD. The purchase of theclaims and the loan are interdependent.The loan is secured by the company’s BigChunk and Bonanza Hills properties andaccrues interest at 10 percent per annum.As part of the transaction and subject tocompleting a definitive earn-in option and

6NORTH OF 60 MINING


MacKenzie —the economic studies, theinvestment, the prediction that if we built arail to tidewater and a deep draft dock wewould begin exporting bulk commodities,”said outgoing Matanuska-Susitna BoroughManager John Duffy.

According to the Mat-Su Borough-commissioned ISER report, fees collectedfor shipping Wishbone Hill Coal via PortMacKenzie would total about US$818,440per year.

The day before the big ship arrived, theState of Alaska set aside US$35 million forthe Port MacKenzie Rail Extension, a railline that would link the port to Alaska’sexisting rail system. Another US$750,000

was earmarked for completion of anexpansion of the barge dock.

By linking the port to the rail system,the borough hopes it will be economicallyfeasible to export Healy coal and other nat-ural resources directly to global markets.

“The new Port MacKenzie Rail linewill help make Alaska coal more competi-tive on the world market. Beyond that, therail line will create up to 5,000 Alaska jobsin construction, mining, and support serv-ices,” Duffy said.

In addition to moving Wishbone Hillcoal through the port, Denton said the railextension to MacKenzie could increaseUsibelli’s capacity to ship Healy coal toworld markets.

The company shipped a record803,572 metric tons of coal to buyers inAsia and Chile in 2009. �

TheauthorThe author

Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMANJuly 19. Freeman can be reached by mailat P.O. Box 80268, Fairbanks, AK 99708.His work phone number at AvalonDevelopment is (907) 457-5159 and hisfax is (907) 455-8069. His email is [email protected] and his web site iswww.avalonalaska.com.

� G U E S T C O L U M N

Kensington joins ranks of big producersNew mine will boost Southeast Alaska economy; Murkowski promotes legislation to support mining of strategic rare earth minerals

see FREEMAN page 7


WISHBONE HILL

joint venture agreement, NorthernDynasty can earn a 60 percent interest inthe company’s Big Chunk and BonanzaHills projects by spending C$10 millionon those properties over six years.

KISKA METALS CORP. reportedresults from drilling at the IslandMountain prospect of the Whistler gold-copper property in Alaska. Drill holeIM10-004 was collared approximately 50meters northeast on the same section asthe 2009 Island Mountain Breccia discov-ery hole and intersected two zones of goldmineralization. An upper gold-copper zoneaverages 0.70 grams of gold per metricton, 2.5 g/t silver and 0.16 percent copperover 129.8 meters starting at 31.2 metersdepth and a lower gold-only intersectionaverages 0.78 g/t gold over 151.6 metersstarting at a depth of 231.5 meters. IslandMountain is hosted within a 4.5 kilometerby 3 kilometer area of anomalous gold-copper soil and rock geochemistry and islocated 23 kilometers south of theWhistler deposit. Mineralization in theupper zone is hosted within diorite cracklebreccia and hydrothermal breccia cement-ed by an actinolite-biotite-magnetite-pyrrhotite-chalcopyrite matrix. Highergrade intersections correspond to zoneswhere the breccia matrix comprises agreater proportion of the interval.Mineralization in the lower zone is hostedwithin moderate to strongly albite-biotite-actinolite altered diorite porphyry withvariable 5-20 percent net-texturedpyrrhotite and trace chalcopyrite.Additional drilling is planned for theIsland Mt. and Round Mt. prospects thisyear.

Interior AlaskaTERYL RESOURCES CORP. and joint

venture partner KINROSS GOLD CORP.announced initial drilling results fromtheir 16,000 foot drilling program at theirGil gold project near Fairbanks.Significant results include 50 feet of0.0458 oz/t gold in hole GVR10-551, 30feet of 0.0581 oz/t gold in hole GVR10-551 and 45 feet of 0.0427 oz/t gold in holeGVR10-558. Two drills are currentlyworking to complete 5,000 feet of coreand 11,000 feet of reverse circulationdrilling. Assays for 13 additional holes arepending.

FREEGOLD VENTURES andWESTERN STANDARD METALSannounced that merger discussionsbetween the companies have been termi-nated and that Western Standard has ter-minated its interest in the Golden Summitgold project near Fairbanks. Freegoldretains 100 percent of the property, partsof which are under lease from private landowners.

FULL METAL MINERALS LTD.announced that it has staked nine claimgroups at its Rolling Thunder in theFortymile district. The claim blocks targetthe lode source to significant placer goldproducing areas. The project now covers34,000 hectares spanning a trend over 100kilometers in length. At the 20X prospect,grab samples from oxidized quartz veinsreturned 5.5 g/t gold and 4.0 g/t gold, with

anomalous molybdenum and otherpathfinder elements similar to the recentlydiscovered White Gold deposit in theYukon Territory. Nine samples were col-lected at 20X, ranging from 0.014-5.5 g/tgold, averaging 1.53 g/t gold. At theTweeden prospect, a grab sample from aone meter wide quartz vein returned 52.2g/t gold. Secondary structures splaying offof main structure assayed 1-2 g/t goldwithin sheeted quartz veins. Follow-upwork has commenced on these new targetareas.

Northern AlaskaNOVAGOLD RESOURCES announced

data on second quarter activities at itsAmbler massive sulfide project in theBrooks Range. The company has budgetedUS$1.5 million at Ambler for 2010, with$80,000 spent year to date and expendi-tures of $60,000 during the second quarterof 2010. Work at the property is focusedon initiating the environmental and engi-neering studies necessary to complete apre-feasibility level study to assess projecteconomics.

GOLDRICH MINING CO. announcedthat commercial gold production hadbegun at its Chandalar property in theBrooks Range. The company expects toproduce 5,000-7,000 ounces of gold thisoperating season, which ends with freezeup in late September. The production levelis anticipated to reach 30,000 ounces ofgold per year at full production. Currentoperations were commissioned followingsuccessful test processing in 2009 of some13,800 cubic yards last season that recov-ered about 500 ounces of fine gold.Drilling has shown the deposit containsmore than 10.5 million cubic yards ofmineralized material at an average gradeof 0.02456 ounces gold per cubic yard.

Southeast AlaskaCOEUR D’ALENE MINES reported the

start of production ahead of schedule at itsKensington gold mine north of Juneau.The company anticipates that the minewill produce 50,000 ounces of gold duringthe remainder of 2010 and will averageapproximately 125,000 ounces of goldannually over the mine’s initial 12.5 yearlife. Once in full production, cash costsare expected to average about $490 perounce over the mine’s life. The mine willemploy close to 200 workers during opera-

tions. The company works closely withBERNERS BAY CONSORTIUM, made upof KLUKWAN, INC., KAKE TRIBAL andGOLDBELT Native corporations on jobtraining and supporting local and Nativehire at the mine. Coeur also announcedthat it has entered into a contract withChina NATIONAL GOLD GROUP CORP.,China’s largest gold producer, for the pur-chase and processing of gold concentratesproduced at Kensington. This agreement isthe first of its kind between a state-ownedcorporation of the People’s Republic ofChina and a U.S. precious metals mine.Congratulations Coeur, on a job welldone!

The BEARD CO. said it has selectedNORWEST CORP. to assist the companyin its efforts to develop the Tanis Mesaand Black Sands gold properties nearYakutat. At the Black Sands project, sam-ples have been submitted for magneticseparation of the magnetite and ilmenite

and for gold and silver analysis. Effortsto verify the original assay results for theTanis Mesa property have to date beenunsuccessful so additional sampling isunder way to allow more exhaustive ana-lytical work.

NIBLACK MINERALDEVELOPMENT INC. and joint venturepartner HEATHERDALE RESOURCESLTD. announced additional drilling resultsfrom their Niblack massive sulfidedeposit on Prince of Wales Island.Significant results include 11.1 feet grad-ing 1.08 percent copper, 2.13 g/t gold ,2.38 percent zinc and 57 g/t silver in holeU039, 13.7 feet grading 2.3 percent cop-per, 4.09 g/t gold , 0.94 percent zinc and67 g/t silver in hole U041, 29.5 feet grad-ing 1.06 percent copper, 1.38 g/t gold ,1.17 percent zinc and 28 g/t silver in holeU041, 40 feet grading 1.51 percent cop-per, 2.14 g/t gold , 1.1 percent zinc and 41g/t silver in hole U044 and 14.5 feetgrading 2.07 percent copper, 3.74 g/t gold, 2.15 percent zinc and 83 g/t silver inhole U050. The partners have completed25,000 feet of drilling since initiatingtheir phase 1 work program in the fall of2009 and will now commence a secondphase of drilling designed to complete anaddition 50,000 feet of drilling.

UCORE RARE METALS INC. (former-ly Ucore Uranium) announced that drillinghas commenced at its Bokan-DotsonRidge rare earth element project. TheUS$3 million program will consist of dia-mond drilling with a minimum target of4000 meters of core drilling. Explorationwork will also include extensive groundmapping, surface sampling and mineralog-ical studies, as well as ground geophysicsactivities to assess more than 30 knownrare earth element-bearing prospectswhich have never been drilled. �

7NORTH OF 60 MINING



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8NORTH OF 60 MINING


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Superior court weighs in on Pebble caseDecision on constitutionality of Alaska’s regulations as applied to the huge mining project could affect entire resource industry

By J. P. TANGENFor Mining News

On July 9 Alaska’s Superior Courtentered an order in a case now

pending against the state’s Department ofNatural Resources concerning the propri-ety of a series of multiple land use per-mits and temporary water rights permitsthat had been issued to the PebbleLimited Partnership and its predecessorsin conjunction with the exploration of theso-called Pebble deposit in southwestAlaska. I am counsel of record for anintervenor in this matter; therefore, it ill-behooves me to articulate my customaryincisive opinions.

Generally, the order was responsive tomotions to dismiss the case premised onthe conformance of the statutes and reg-ulations followed by the AlaskaDepartment of Natural Resources to therequirements of the Alaska Constitution.Constitutional challenges come in twoflavors. A statute is either “constitution-al” or not; that is to say, the court iscalled upon to determine whether it is apermissible implementation of the lan-guage and intent of a specific provisionof the state constitution. In the alterna-tive, having found that a statute (or regu-lation) is “constitutional” the court theninquires as to whether is it “constitution-al, as applied.”

In this case, the court found thestatutes and regulations to be constitu-tional; however, it ruled that an eviden-

tiary proceeding will be required todetermine whether they are constitution-al, as applied. Since there have beenpermits issued to the project under thesestatutes and regulations for roughly 20years, the evidentiary burden will besubstantial. Trial is scheduled to beginon December 6.

The court also determined that theintervenors, including the Alaska MinersAssociation, the Council of AlaskaProducers and the ResourceDevelopment Council for Alaska, as wellas others, should be dismissed from thecase because any further inquiry into thematter would be specific to the PebbleProject. AMA, CAP and RDC have filedobjections to their dismissal and havefiled motions asking the court to recon-sider its order.

The implications of this case have thepotential to be far-reaching. Questions

concerning the integrity of the regulatoryprocess reach every mining operation inthe State. By extension, they could reachevery resource development project. Onecould hypothesize that this precedentcould reach every administrative deci-sion. The Court made it clear that thepermits associated with the PebbleProject were of special concern becauseof the unique nature of the project; how-ever, in the absence of unequivocal side-boards, all permittees are at risk. Thelegal phrase for such a concern is“reductio ad absurdum.” Taking the rul-ing to its absurd extreme, would it work?

Our system honors our judiciary. Thecourts are our last safeguard against allmanner of evils. The courts are theimpermeable barrier between order andchaos. Judges, in turn, are called upon toperform some of the most difficult jobs

on the face of the earth, because on adaily basis they must choose among con-testants, making some winners and oth-ers losers. Virtually all of us intuitivelyrecognize the wisdom of the system,although we may be disappointed in spe-cific results. In this case at least, therewill be an opportunity to appeal.

Without presuming to second guesshow the court may choose to rule on thepending applications for reconsideration,it is suggested that to ask a court toreconsider its opinion is analogous toasking a doctor for a second opinion.The doctor says “You are sick,” and yousay, “I would like a second opinionbefore we proceed with the treatment.”The same doctor, in turn, says, “Alright,I still think you are sick.”

Whether the court will persist in itsdetermination that the AMA, CAP andRDC should not be parties in the case isunknown at this time. These entities maystill have the opportunity to file briefs as“amicus,” or friends of the court even ifthey are not parties as the case proceeds.Absent some intervening ruling to thecontrary, the matter will go to trialbefore Christmas. Thereafter, the courtwill determine whether the state hasproperly fulfilled its obligations.

Almost indubitably, the matter willwind up in the Alaska Supreme Courtfor review. The unsuccessful parties inthis matter will have every motivation tochallenge the court’s final decision. Staytuned. There is more to come. �

“The Court made it clear that thepermits associated with the Pebble

Project were of special concernbecause of the unique nature of

the project; however, in theabsence of unequivocal sideboards,

all permittees are at risk. Thelegal phrase for such a concern is‘reductio ad absurdum.’ Takingthe ruling to its absurd extreme,

would it work?” –J.P. Tangen, guest columnist

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.

http://www.judypatrickphotography.com/

By ROSE RAGSDALEFor Mining News

Thompson Creek Metals Co. Inc. andTerrane Metals Corp. said they have

completed a definitive agreement for theDenver-based molybdenum producer topurchase Terrane Metals with cash andstock valued at about C$650 million.

The deal, which won approval of bothThompson Creek and Terrane’s boards ofdirectors, will be proceed under a court-approved plan of arrangement underBritish Columbia law.

Thompson Creek, meanwhile, signedover to Royal Gold Inc. one-quarter oflife-of-mine gold production fromTerrane’s most advanced asset, the MountMilligan Copper Gold Project in centralBritish Columbia.

Located 155 kilometers, or 96 miles,northwest of Prince George, the projectcontains proven and probable reserves of482.4 million metric tons grading 2 per-cent copper and about 0.4 grams per met-ric ton gold for contained metal of 2.1 mil-lion pounds copper and 6 million ouncesof gold. The project also boasts a largermeasured, indicated and inferred copperand gold resource.

Under the terms of the gold streamtransaction, Thompson Creek will receivestaged cash deposits aggregatingUS$311.5 million; US$226.5 million ofwhich will be paid at the closing of thearrangement; and $85 million to be paidduring mine construction. The depositswill be offset against Royal Gold’s pur-chase of gold under the agreement. Untilthe Mount Milligan deposit is completelyreduced, the price for gold will be the pre-vailing market price. For each of the first550,000 ounces of gold delivered to RoyalGold, Thompson Creek will receive cashper ounce equal to the lesser of a cash pro-duction payment of $400 or the prevailingmarket price. To the extent that the pre-vailing market price exceeds $400 perounce, the deposit will be reduced. Foreach ounce of gold delivered thereafter,Thompson Creek will receive the lesser of$450 or the prevailing market price incash, with any excess purchase price usedto reduce the deposit. Once the deposit isreduced to nil, only the cash portion of thepurchase price will be payable.

Strategic acquisition“The acquisition of Terrane fits well in

our strategic growth plan, providing uswith clear production and revenue growth,while diversifying our commodity expo-sure, all in a project with mining andmilling processes, and a regulatory envi-ronment, with which we have consider-able experience,” said Thompson CreekChairman and CEO Kevin Loughrey. “Weare utilizing a portion of cash on our bal-ance sheet and our current cash generatingcapacity from existing operations, whilecapitalizing on financing opportunitiesavailable through the gold stream transac-tion. The upside from our existing assetbase has been retained for our sharehold-ers, while structuring a transaction that webelieve will be highly accretive on a cashflow basis once Mount Milligan is in pro-duction. We believe with our Endakoexpansion, and now the Mount Milliganproject, we have substantially improvedThompson Creek’s growth profile.”

Terrane President and CEO Rob Peasealso praised the proposed acquisition.

“(Thompson Creek’s) financial depth,combined with the Royal Gold transac-tion, provides a clear path to completefunding of Mount Milligan. Combinedwith their proven development and operat-ing capabilities, this transaction has theopportunity to unlock the value of MountMilligan for all shareholders. ThompsonCreek is committed to responsible devel-opment and mining and has an excellenttrack record of working cooperativelywith host governments and communitieswherever they operate, including BritishColumbia,” Pease said.

Good deal for shareholdersTerms of the deal call for shareholders

of Vancouver, B.C.-based Terrane MetalsCorp. to receive C90 cents in cash and alittle more than half a common share ofThompson Creek stock for every Terraneshare. The consideration implies an offervalue of C$1.41 per Terrane share based

on Thompson Creek’s July 14 closingprice on the Toronto Stock Exchange ofC$9.90 per share. It represents a premiumof about 35 percent based on the volumeweighted average trading prices ofThompson Creek and Terrane on the TSXand TSX Venture, respectively, for the 20trading days that ended July 14, and a pre-mium of 21 percent to Terrane’s closingprice of C$1.17 per share on the sameday.

Chuck Jeannes, president and CEO ofGoldcorp Inc., Terrane’s majority share-holder with about 58 percent of thejunior’s outstanding equity, said the dealputs “meaningful cash” in the pockets ofTerrane shareholders, while providing anopportunity to participate in the futuresuccess of Mount Milligan through a com-bined, diversified, high growth base met-als producer.”

Terrane’s board of directors determinedthat the proposal is fair to its shareholders

and in the best interests of the companyThe transaction also drew unanimously

approved from Thompson Creek’s boardbased on, among other things, an oral fair-ness opinion from RBC Capital Markets.

Among benefits to Thompson Creekshareholders:

Mount Milligan, a construction-readygrowth project, offers diversificationbeyond Thompson Creek’s current assetbase of primary molybdenum depositswith the pro forma production profile pro-viding for strong contributions from eachof molybdenum, copper, and gold subse-quent to the startup of Mount Milligan,which is expected in 2013;

The gold stream transaction with RoyalGold should allow shareholders to imme-diately capture value from gold produc-tion while providing funds for mine con-struction, retaining full leverage to basemetal production and maintaining signifi-

9NORTH OF 60 MINING


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Thompson Creek agrees to buy B.C. juniorSavvy moly producer moves to diversify metals output and assets; capitalizes on high gold prices to fund Mount Milligan development

see THOMPSON CREEK page 10



cant gold by-product credits;The combined business should have the

ability to finance its strong combinedproject pipeline without equity dilution,which would generate significant produc-tion growth by 2013 when the Endakoexpansion and Mount Milligan projectsare expected to be completed; and

Going forward, Thompson Creekshould have avenues for future explorationand growth with a broader suite of earlierstage projects, including Mount Emmons,Davidson and Berg that can be prioritizedoptimally for development and value cre-ation.

Terrane shareholders, meanwhile, willbenefit from participation in a well-fund-ed, diversified base metals producer,including ongoing exposure to MountMilligan, through the share component ofthe offer; access to Thompson Creek’sproven development and constructionexpertise, and significantly greater finan-cial resources to build and operate MountMilligan; and an attractive premium with ameaningful cash component.

Terrane also has highly qualified andexperienced management, and many ofthese professionals are expected to beretained by Thompson Creek.

Mount Milligan plans Upon closing, Thompson Creek will

assume full ownership of MountMilligan, which located about 150 kilo-meters, or 93 miles, northeast of itsEndako Mine.

Mount Milligan is being developed asa conventional truck-shovel open pit minewith a 60,000-metric-tons-per-day copper

flotation process plant with tailings stor-age facility, plant ancillary facilities, 92-kilometer, or 57-mile, power transmissionline and a 600-person construction camp.Average annual production over its 22-year estimated mine life is expected to be81 million pounds of copper and 194,000ounces of gold. The project is expected toprovide about 400 direct permanent jobsand significant long-term economic bene-fits for the region.

Thompson Creek said it intends tofund the remaining Mount Milligan con-

struction costs over the next 2 1/2 years orso with a combination of pro forma com-bined cash balances, as adjusted for theApril 16 Terrane equity offering of aboutUS$178 million, the US$311.5 million ofproceeds from its proposed gold streamtransaction with Royal Gold, up toUS$250 million of debt finance in theform of equipment financing and a poten-tial bank credit facility, internal cash gen-eration, and potential warrant proceedsincluding Thompson Creek’s existingwarrants due in 2011 (potential proceedsof C$220 million) as well as the Terranewarrants due in 2011 and 2012 that willremain outstanding (potential net pro-ceeds of about C$27 million).In June Terrane initiated the first phase ofconstruction with a road contract andentered into a letter of intent with AMECAmericas Ltd. and Fluor Canada Ltd. toprovide engineering, procurement andconstruction management services.Purchase orders have been made for longlead time items for the process plant andpower supply equipment. Terrane said thefirst six years of the 22-year mine planwere designed to accelerate the extractionof near-surface and higher-grade goldreserves with production forecast to aver-age 262,100 ounces per year at a cashcost, net of a copper credit, of negativeUS$8 per ounce.

The first phase of a 30-month con-struction program is already under way.Current development timelines are target-ing commissioning of the mine and mill

complex in 2013.

Other valuable assetsIn addition to Mount Milligan,

Terrane has a number of other earlierstage mineral projects, the most substan-tial of which is the Berg copper-molyb-denum-silver deposit, located in BritishColumbia about 150 kilometers, or 93miles, southwest of Endako, and a simi-lar distance from Thompson Creek’sDavidson project. Berg is a porphyrydeposit with a current defined measuredresource of 53.3Mt at 0.48 percent cop-per, 0.03048 percent moly and 4.5 gramsper metric ton silver and indicatedresource of 452.7Mt at 0.2848 percentcopper, 0.03848 percent moly and 3.7 g/tsilver for a total measured and indicatedresource of 506.0Mt at 0.3048 percentcopper, 0.03748 percent moly and 3.8 g/tsilver totaling 3.3 billion pounds of con-tained copper, 412M pounds of con-tained molybdenum and 61.4M ouncesof contained silver. The mineralresources were calculated at 0.3048 per-cent copper equivalent cut-off grade.

Other Terrane assets include an inter-est in the Howard’s Pass Joint Venturewhich retains rights to option, net profitinterest and net smelter return paymentsfrom Selwyn Resources Ltd.’s huge zinc,lead and silver deposit in YukonTerritory. Terrane also is a minority jointventure partner with LaurentianGoldfields in the Maze Lake gold proj-ect in Nunavut. �

• New power line (92 km)

( power @ 4 5 cents/kwh)( power @ 4.5 cents/kwh)

• Road upgrade needs (26 km)

• Rolling landscape

• Skilled local work force

• High unemployment rate

• Supportive communitiespp

• Two routes to rail access

• Two routes to tidewater

5Mt. Milligan

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Though most of the gold fever sweeping northernCanada these days is focused on Yukon Territory’s

White Gold district to the west and near Agnico-EagleMines Ltd.’s new Meadowbank Mine to the east inNunavut, a growing number of explorers are trekking tothe territory in between.

Mining companies are returning to the NorthwestTerritories as gold prices set records, including a recenthigh of US$1,260 per ounce. But most of these explor-ers are targeting known deposits or previously identifiedmineralization rather than searching out new discover-ies.

“The price of gold has brought people back, especial-ly in the Yellowknife area,” said Ryan Silke, land accessanalyst for the Nwt & Nunavut Chamber of Mines inYellowknife. “It’s proven territory for gold exploration.It’s been picked at, over and over again.”

Most of the gold exploration programs under way inNorthwest Territories this year are on properties withknown mineralization, a lot of which was discovered inthe 1960s, ’70s and ’80s,” Silke told Mining News.“People are poking around, re-identifying resources.”

Advances in mining exploration and developmenttechnology during the past 20-30 years also give explor-ers tools to detect mineralization missed earlier.

“It’s a new era for gold technology. There are newmethods of mining and new recovery techniques,” Silkesaid.

The chamber analyst said this re-examination of oldground is part of a cyclical trend that has happenedbefore. Old deposits get another look when the price ofa commodity “is on the upswing in the markets,” heobserved. “Hopefully, they can make good progress dur-ing this period.”

Silke said the territory’s regulators are currentlyreviewing for permitting at least two projects with poten-tial gold production – Tyhee Development Corp.’sYellowknife Gold Project and Fortune Minerals Ltd.’sNico gold-bismuth-cobalt-copper-nickel project, andone or both of them could begin gold production withinthe next two-three years.

“There isn’t a lot of grassroots exploration going on.The cheapest thing to do is go back and look at olddeposits. The regulatory system here is too uncertain forlooking at new territory,” Silke said.

The one possible exception may be iron oxide coppergold ore deposits, which typically host valuable concen-

11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JULY 25, 2010

� N O R T H W E S T T E R R I T O R I E S

Explorers return to former gold diggingsHigh prices spark miners’ interest in known deposits, old mine sites and previously explored claims with signs of yellow metal

see NORTHWEST TERRITORIES page 12

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12NORTH OF 60 MINING


trations of copper, gold and uranium oresin large quantities. The tremendous size,relatively simple metallurgy and highgrade of these deposits can produceextremely profitable mines.

“A lot of companies are lookingaround for IOCG deposits, and at NorthNonacho Lake, one company has identi-fied something,” Silke said.

Territory’s next gold mine?Tyhee Development Corp. is conduct-

ing the largest exploration and develop-ment program currently under way inNorthwest Territories It is the largestproperty holder in the historicYellowknife Gold camp with 6,625hectares, or 15,481 acres, about 90 kilo-meters, or 56 miles, north of Yellowknife,NWT.

Gold was discovered near Yellowknifein the late 1800s, but miners did not rushto the area in great numbers until the1930s.

Since then, the area has seen spurts ofgold exploration and production, culmi-nating with substantial output from his-toric operations, including the Discovery,Con, Giant and Colomac mines.

Tyhee’s Yellowknife Gold Project con-sists of the Ormsby, Nicholas Lake, Bruceand recently added Clan and GoodwinVad zones. At Ormsby and NicholasLake, Tyhee is considering open pitmines. It is currently working on a feasi-bility study and a developer’s assessmentreport. A NI 43-101-compliant prelimi-nary assessment report was completed inthe third quarter of 2008 that demonstrat-ed robust economics based on 2007resource calculations.

Production estimates from the PA con-sider a 3,000 metric-ton-per-day opera-

tion with production of 165,000 ounces ofgold per year.

Tyhee reported a delay in the feasibili-ty study July 7, saying it needed time toconsider other options identified in pre-liminary planning. The company did notdisclose details, but said options that havenot previously been considered could

have material impact on development ofthe project. The review, which is expectedto take a few weeks, is expected toimprove the project’s economics.

Tyhee also noted that six diamond drillholes have been completed at the ClanLake deposit this summer. Results arepending.

Fortune Minerals Ltd. is another juniorwith gold mineralization that may sooncommence production. Fortune owns theNico deposit 160 kilometers, or 96 miles,northwest of Yellowknife within the39,000-square-kilometer, or15,100 square-mile, Tlicho First Nationterritory near the community of Whati insouthern Northwest Territories. It is cur-rently is undergoing an environmentalassessment to permit a mine and concen-trator. The Nico orebody is best knownfor its cobalt and bismuth mineralization,but it also contains significant quantitiesof copper, nickel and 31 million metrictons averaging 0.91 g/t (907,000 ounces)gold. Nico is being developed as open pitand underground mining operation.

Substantial gold at Damoti LakeMerc International Minerals Inc. is

focused on the high-grade, near-surfaceDamoti Lake gold deposit on Tlicho land,near the community of Wekweeti 200kilometers, or 124 miles, north ofYellowknife.

The Damoti Lake property encom-passes 4,391 hectares, or 10,846 acres, ofland in six mining leases and five miningclaims. Merc holds a 100 percent interestin the lease that hosts the deposit, and an80 percent interest in the remainder; all ofthe leases are subject to a 2 percent netsmelter return royalty.

Merc is working to outline 6 to 10 mil-lion metric tons grading 9-15 g/t goldalong strike, in parallel structures and atdepth, and advance the project towards a3-million-ounce gold resource, making itcomparable to other northern Canadianiron formation hosted goldmines/deposits.

Merc purchased the property inSeptember 2008 from Anaconda MiningInc. for C$250,000 and 1.25 million Merccommon shares.

Merc July 6 reported results on sevenadditional drill holes from a recently com-pleted 10,000- to 12,000-meter winterdrill program for 2010 at the Damoti LakeGold Project. The holes were collaredwithin the eastern limb of the RedMountain syncline, located 125 meterswest of the Horseshoe syncline and itsassociated high-grade gold mineraliza-tion. Drilling highlights include holeD10-416B, which returned 16.12 g/t goldover 8.0 meters, including 60.25 g/t goldover 1.5 meters and 8.50 g/t gold over 4.0meters, including 18.12 g/t gold over 1.5meters; hole D10-418, which returned7.93 g/t gold over 3.00 meters, including12.40 g/t gold over 1.80 meters, and 2.60g/t gold over 16.25 meters, including 6.84g/t gold over 4.25 meters, and 17.90 g/tgold over 1.25 meters. Drill hole D10-416B intersected extensive mineralizationextending from near-surface, returning acomposite grade of 1.64 g/t gold over151.40 meters. These intersections repre-sent the best widths and grades everreported for Red Mountain.

Drilling at Red Mountain wasdesigned to test the continuity of newmineralization discovered by Merc in2009 and to expand these verticallystacked zones to the north and south.

“Given the success in this new north-ern area of the Red Mountain syncline,Merc now awaits with great interest theresults of additional holes that weredrilled further north along the same struc-ture,” said Merc President and CEOMichael Byron.

Since initiating its first drilling pro-gram at Damoti Lake in July 2009, Mercsaid it has repeatedly intersected bothhigh-grade gold mineralization andbroader zones of significant values, allwithin the near-surface environment on


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the property. In June, the junior reportedresults from sectional drilling at the BIFIsland Zone on the Damoti Lake propertythat it said confirmed a strong core ofgold mineralization that conforms to thegeneral plunge of the fold structure in thedeposit.

Exploration at Courageous LakeDrilling is again under way at

Seabridge Gold Inc.’s Courageous Lakegold project in Northwest Territories.

The Courageous Lake project consistsof 27,263 hectares, or 67,366 acres, cov-ering 53 kilometers, or 33 miles, of agreenstone belt that includes the 2-kilo-meter, or 1.24-mile, long FAT depositwhich has estimated measured, indicatedand inferred gold resources, at a 0.83 g/tcutoff, of 6.3 million metric tons averag-ing 2.92 g/t (591 ounces per ton), 53Mtaveraging 2.14 g/t (3,648 oz/t), and93.7Mt averaging 1.98 g/t (5,966 oz/t),respectively.

Seabridge hold a 100 percent interestin the project, subject to a 2 percent NSRon certain portions of the property.Geology of the Courageous Lake Projectis characterized by a series of north tonorthwest trending Archean metavolcanicand metasedimentary rocks that form aportion of the Slave Structural Province.These rocks are within the YellowknifeSupergroup, locally referred to as theCourageous Lake Greenstone Belt.

Seabridge said the main objective ofits 2010 drill program is to upgrade a sub-stantial portion of the existing inferredresource to the measured and indicatedresource categories. The 2010 programalso includes environmental and permit-ting work, metallurgical research andgeotechnical drilling.

“The FAT deposit at Courageous Lakehas been modeled as a large, single pitoperation with a gold grade in the rangeof 2 g/t, which is higher than a number ofother prominent, undeveloped open-pitdeposits in Canada,” said SeabridgePresident and CEO Rudi Fronk.

Gold was first discovered in theCourageous Lake area in 1936. Between1976 and 2006, several mining companiesexplored the property and identified sig-nificant gold resources.

“We suspended on-site work atCourageous Lake in 2006 because thegold price was too low to make FAT eco-nomic, and we had just discovered thehuge Mitchell deposit at KSM (in north-ern British Columbia). As a result, wenow get very little credit for what could

be a very robust project at a gold priceexceeding $1,000 per ounce. We thereforeintend to do the work required to updateour 2008 preliminary assessment by early2011 and complete a preliminary feasibil-ity study in early 2012 to qualifyresources as reserves,” he added.

In March 2008, independent consult-ants concluded that an open-pit miningoperation, with on-site processing, wasthe most suitable development scenariofor the Courageous Lake Project. A basecase scenario was developed proposing a25,000-metric-ton-per-day operation(9.125Mt per year throughput) resultingin a projected 11.6 year mine life withaverage estimated annual production of500,500 ounces of gold at estimated aver-age cash operating costs of US$435 perounce recovered. The base case scenarioused measured, indicated and inferredresources in the mine plan.

At a gold price of US$690 per ounce,the base case cumulative pre-tax net cashflow over the life of the project was esti-mated at US$500 million. At a gold priceof US$800 per ounce, the cumulative pre-tax net cash flow over the life of the proj-

ect was estimated at US$1.13 billion andat US$1,000 gold pre-tax cumulative netcash flow was estimated at US$2.27 bil-lion.

Seabridge said its 2010 program,

which began in June, will include envi-ronmental and permitting work, engineer-ing and metallurgical consulting andgeotechnical, environmental and defini-tion drilling. About 18,000 meters of dia-mond drilling is planned in 40 holes,which will target about one-half of theinferred resource.

Gordon Lake explorationOther early-stage gold projects are get-

ting attention this summer. Triple Dragon Resources Inc. received

encouraging initial exploration of itsMurray Property in south-centralNorthwest Territories. The Murray prop-erty encompasses about 1,005 hectares, or2,480 acres, located 6 kilometers, or 4miles, north-northwest of the former pro-ducing Camlaren Gold Mine. The proper-ty is about 80 kilometers, or 50 miles,northeast of Yellowknife and within a fewkilometers of the winter road to theDiavik and Ekati diamond mines.Gold was first discovered at the Murrayproperty in the 1930s. To date at leastseven areas with significant gold mineral-ization have been identified. The show-ings discovered are predominately tur-bidite-hosted quartz vein deposits.Geologically similar deposits within theBendigo District of Australia have togeth-er produced more than 12 million ouncesof gold. The grades of these types ofdeposits are high and typically vary from5 g/t to more than 30 g/t gold. In the summer of 2008, Triple Dragonconducted geological mapping and sam-pling at the Murray Property. In total, 198rock samples were collected from theproperty and analyzed. The most promis-


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ing result was from a quartz vein samplethat assayed 5.48 ounces per ton gold over0.25 meters.

Triple Dragon is also exploring theMay Property, where gold values exist ina vein beneath Gordon Lake. Eleven dia-mond drill holes totaling 1,309 feet weredrilled by Echo Bay Mines Ltd. to test thisvein in 1981. Four drill holes intersected aquartz vein containing visible gold over astrike length of 65 feet and to a depth of90 feet below the surface of Gordon Lake.Additional drilling was recommended totest the vein; which is open to the southand at depth.

The May mineral lease covers a smallisland in Gordon Lake, 77 kilometers, or

about 48 miles, northeast of Yellowknife,and 5 kilometers, or 3 miles, south-south-west of the Camlaren mine.

In October, Triple Dragon optionedtwo more mineral claims in the GordonLake area known as the Burnt IslandProperty, which encompass the historicBurnt Island Gold Mine and several othergold showings located on the island. TheBurnt Island property, about 230 acres, or94 hectares, is located 8 kilometers, or 5miles, north-northeast of the CamlarenProperty. The property is believed to besimilar to Camlaren and lies less than 2kilometers east of the winter road to thehuge Diavik and Ekati diamond mines.Another historic gold producer, BurntIsland saw limited, sporadic developmentand production, between 1942 and themid-1980s.

Triple Dragon also held the CamlarenProperty, including the past producingCamlaren gold mine, as well as other goldshowings until this spring. Gold produc-tion began at the Camlaren Mine in 1963when more than 11,000 tons of ore wastrucked to the Discovery Mine, located 40kilometers, or 25 miles, to the northwest.Noranda Mines Ltd. contracted theMining Corporation of Canada Ltd. toerect a temporary milling plant on theproperty in 1980. A mine was developedto a depth of 1,000 feet (300 meters) andoperated from 1980 to 1981. During thesetwo periods, the mine reportedly pro-duced a total of more than 35,000 ouncesof gold at an average grade of 0.57 oz/tongold (19.54 g/t) and more than 5,000ounces of silver at an unreported grade.

Triple Dragon sold the Camlaren prop-erty in May to Cats Eye Capital Corp., asmall Vancouver-based junior.

Zimtu Capital Corp. is currently evalu-ating the old Camlaren mine, according tothe NWT & Nunavut Chamber’s June2010 newsletter.

Strategic gold acquisition Trivello Energy Corp. acquired the

historic Tom Gold Mine and relatedclaims in February from Zimtu CapitalCorp. and 877384 Alberta Ltd. for totalconsideration of C$100,000 in cash, and 2million of its newly issued commonshares.

The Tom Gold Mine Project includesfive mineral claims totaling 650 acres, or263 hectares, situated about 10 kilome-ters, or 7 miles, northeast of Yellowknifeand is accessible year round via an all-weather road.

The Tom Mine Property has beenworked since the early 1940s in tandemwith bringing the Ptarmigan Mine, locat-ed about 1.5 kilometers, or 1 mile, to thesouth, into production. Over the years, ithas produced more than 6,000 ounces ofgold.

“The Tom Gold Mine’s historical pro-duction, and the vendor’s credibility in thesector, gave us added comfort that theTom Gold Mine opportunity was the rightopportunity for our gold strategy,” saidTrivello President Arndt Roehlig. “Giventhe volatility still present in the globaleconomy, and suppressed natural gasprices, it was determined that expandingour resource holdings into the gold sectorwas a prudent course of action for ourcompany. Moving forward, we willexpand our gold strategy and continue toreview all options to maximize valuefrom our natural gas assets.”

Surface gold at BullmooseNT Mining Corp. is another junior

tracing new possibilities in old deposits.In June, the company said there may be asmuch as 15,000 tons of gold ore in exist-ing surface piles at the Bullmoose Minesite located 53 miles, or 88 kilometers,east-southeast of Yellowknife. The mineproperty consists of one mineral lease of395 acres, or 160 hectares, and 4 mineralclaims of 4,771 acres, or about 1,932hectares.

Based on engineering reports and sev-eral exploration trips between 2008 and2009, NT Mining said it has increasedrevenue estimates for the mine based onrevised value estimates of ore found insurface piles by crews in the past 2 yearsand higher gold prices. When a previousmilling operation at Bullmoose ceased,the operator left behind about 45,000 tonsof mined gold-bearing ore, one-third ofwhich is stored on the surface where itcan easily be accessed for production, thejunior said. The remainder was storedbelow ground.

The Nevada-based company estimatesthe 30,000 tons below ground has an aver-age ore grade of at least 0.24 ounces perton.

NT Mining said it plans to re-activatethe mine upon completion of necessaryfinancing and start operations atBullmoose this summer.

Historical reports show a potentialreserve of 1 million ounces of gold (RossGrunwald P.Eng., 1984) is possible on themineral lease. With the expanded area offour additional mining claims acquired in2007, NT Mining said that upon comple-tion of an expanded drilling program overthe new claims, and on existing knownvein structures, a potential of 3 millionounces of gold reserve is possible atBullmoose.

IOCG deposit at NonachoREC Minerals Corp. July 7 said it

completed an initial exploration and drillprogram at its North Nonacho Property,which is comprised of two mining claimscovering 60 units in the vicinity ofNonacho Lake, NorthwestTerritories. The company has an option toacquire up to a 100 percent interest in theproperty. The exploration program, whichcost about C$100,000, included groundevaluation, hand stripping and surfacechip sampling in areas of high total mag-netic anomalies identified from a highresolution airborne geophysical surveycompleted over the property in 2008.

In addition to surface exploration, fourshort BQ-type holes (48-millimeter-diam-eter holes) were drilled to test targetedfavorable areas using a JKT 48 Winkie-



When Fort Knox Gold Mine was looking for an environmental professional to fill a crucial job at the mine, we didn’t have far to look.

A UAF grad who studied geography and geology, Kindra has long had a passion for the environment.

Kindra already had a few years experience, but found her dream job at Fort Knox where she monitors the mine’s compliance with complex environmental rules. She enjoys being part of the Fort Knox team, and has found the career path she sought without having to leave home.

Hiring qualified Fairbanks residents makes our job at Fort Knox easier, too. Kindra is among the 500 mine employees who call Fairbanks home.

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China, which mines the majority ofthe global supply of rare earth ele-

ments within its borders, has, over recentyears, increasingly restricted its exports ofthe unique minerals to non-China-basedproduction facilities. This trend has con-tinued with a July announcement that theFar East country intends to slash itsexports of the high-technology metals byan additional 72 percent.

Rare earth minerals are made up of 17elements including terbium, thulium andyttrium. They are widely used in greentechnology such aswind turbines andhybrid cars; high-tech consumer goodslike mobile phonesand iPods; and mili-tary applicationssuch as guided mis-siles, lasers, radarsystems and nightvision equipment.

The United States is nearly 100 percentdependent upon China for imports ofnearly all of these vital materials, and thismonopoly on metals critical to advancedtechnology, green energy and nationaldefense has U.S. lawmakers and businessleaders worried.

“China accounts for 97 percent ofglobal rare earth production and has heldclean energy manufacturing hostage bylimiting exports. As a direct result, we riska future in which wind turbines, solar pan-els, advanced batteries and geothermalsteam turbines are not made in the USA,but somewhere else,” Sen. LisaMurkowski, R-Alaska, warned senatorson Capitol Hill in June.

The United States, which is among theworld’s largest consumers of rare earthmetals for industrial and technology appli-cations, contains an estimated 15 percentof the world’s rare earth reserves, but hasnot had an operating REE mine within itsborders since 2002.

China cracks downThe Ministry of Commerce of the

People’s Republic of China July 8unveiled plans to cap its REE exports forthe second half of 2010 at 7,976 metrictons, a 72 percent decrease from the28,417 metric tons allowed during thesame period a year ago.

The Far East country’s central govern-ment also is planning a unified pricingmechanism for rare earth minerals in fiveprovinces and regions known to be rich inthe rare metals.

China Daily, the country’s nationalEnglish-language newspaper, reportedthat, according to its sources, a unitaryprice based on negotiation will be pub-lished once a month to protect the naturalresources from being depleted and toavoid cut-throat competition among thefive affected areas.

The government also cracked down onillegal mining of REEs and has stoppedissuing new licenses for domestic explo-ration of the metals until July 2011.

Illegal REE mining in southern Chinahas been rampant in recent years.Stopping the unauthorized extraction isexpected to boost the price of the metalsand give the Chinese more control ofglobal markets. The crackdown on unlaw-ful mining of the ionic clays of SouthChina also will help the governmentenforce its environmental regulations.

According to a July 14 Xinhua NewsAgency report, the Chinese governmentarrested seven people on suspicion ofsmuggling 4,196 tons of rare earth metalsand their compounds. Citing customsofficials in southern China, the newsagency said the smuggling ring wasinvolved in the transport of REEs valuedat 109 million yuan, or about US$16 mil-lion.

China looks overseasIn addition to tightening the supply of

REEs flowing from within its borders,China also has attempted to gain afoothold in overseas projects.

“Countries such as China have under-taken a 50-year, or longer, view of the

world and continue to lock down long-term supply arrangements through invest-ments in Africa, Australia and SouthAmerica. That will help China meet itsburgeoning demand for these raw materi-als, but it could leave our nation out in thecold at the very time we need mineralsmost,” Murkowski wrote in a Roll Callreport last October.

In 2009 China Nonferrous MetalsMining Group made a bid to buy a con-trolling interest in Lynas Corp., a juniorexplorer that owns the Mount Weld proj-ect in Western Australia, considered to bethe richest known deposit of rare earthelements in the world.

The state-owned mining companyoffered A$252 million, or US$211.55million, to purchase a 51.66 percentinterest in the Australia-based REEexplorer.

Australia’s Foreign Investment ReviewBoard stepped in, demanding that ChinaNonferrous reduce its stake to less than50 percent and limit its representation onthe Lynas board to less than half. TheBeijing-based miner found the termsunacceptable and walked away from thedeal last September.

In Canada, numerous Asian investorsflocked to the Prospectors andDevelopers Association annual confer-ence in March seeking junior miningcompanies with REE prospects in theirportfolios.

“Lots of investors from Asia came tothe trade show. They all were looking forREEs listed on the companies’ displays,and it was the only the thing that theywere looking for,” one observer toldMining News.

U.S. leaders consultChina has been reducing its REE

exports over the past three years and therumors that the country may furtherrestrict its global supply of the metals thatare important to national security and themanufacture of green technology havebeen swirling among U.S. governmentand business leaders for some time.

Last December the U.S. Department of

Commerce assembled a 25-member panel– made up of representatives of key endusers of rare earth materials such asGeneral Electric and the American WindEnergy Association, as well as interestedgovernment agencies such as theDepartment of Defense and the WhiteHouse – to hold roundtable discussionson the issue.

According to a report released by theRare Earth Material Roundtable, Chinanot only holds a near total monopoly overglobal REE supply but it also controlsaround 80 percent of worldwide denserare earth magnet production.

Members of the focus group expressedconcerns that a surge in demand for theseproducts, coupled with China’s restrictivetrade policies, could put domestic manu-facturers at a disadvantage if timely andcost competitive access to these materialsis not ensured. Some participants indicat-ed that a crisis point could be reached asearly as 2012, a timetable that may beaccelerated by the recent Chinese exportrestrictions.

Murkowski’s “Restart” legislationBased largely on findings of the

roundtable discussions, lawmakers fromboth sides of the aisle on Capitol Hill arepushing legislation to restart the virtuallynonexistent rare earth element miningindustry in the United States.

Sen. Murkowski introduced the RareEarth Supply Technology and ResourcesTransformation Act, or “Restart” Act, inthe Senate in June. Her legislation, whichis a companion to the Restart Act present-


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REEs become rarer on China export cutsThe Far East country chokes global supply of the high-technology metals prompting the U.S. to stimulate domestic production

LISA MURKOWSKI

see RARE EARTH ELEMENTS page 16


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ed to the House by U.S. Rep. MikeCoffman, R-Colorado, in April, is aimedat helping the United States regain itsposition as a leader in the mining and pro-cessing of REEs.

“America’s growing reliance on foreignminerals endangers our efforts to advancecleaner energy,” Murkowski said. “Wehave slowly but surely surrendered thefront end of the clean energy supplychain.”

If enacted into law, the two pieces oflegislation would involve the U.S. depart-ments of Commerce, Energy, State andDefense as well as the offices of the U.S.Trade Representative and Science andTechnology Policy within the ExecutiveOffice of the President.

Among proposals in Coffman’s bill areassessments and implementations of“obtaining loan guarantees to support there-establishment of mining, refining,alloying and manufacturing operations for(rare earth elements) in the United States.”

The legislation introduced byMurkowski proposes assembling a taskforce chaired by the Secretary of Interiorand composed of the secretaries of State,Energy, Defense, Commerce andAgriculture.

The primary objective of the high-ranking panel would be to “monitor andassist federal agencies in expediting thereview and approval of permits or otheractions, as necessary, to accelerate thecompletion of projects that will increaseinvestment in, exploration for, and devel-opment of domestic rare earths.”

“Rather than further restrict mining inthis country, the industry could be creatingAmerican jobs and producing mineralsthat are essential to clean energy technolo-gies. Unless action is taken, we will tradeour current dependence on foreign oil foran equally unsettling dependence on for-eign minerals,” the Alaska senator advisedher colleagues.

Coffman’s bill, H.R. 4866, received theendorsement of 16 co-sponsors and hasbeen referred to the House ArmedServices, Ways and Means and FinancialServices subcommittees. Murkowski’slegislation, Senate Bill 3521 was referredto the Committee on Energy and NaturalResources, of which she is the rankingRepublican.

REEs in AlaskaMurkowski’s version of the Restart Act

comes on the heels of two resolutionspassed by the Alaska Legislature urgingthe U.S. Congress to advance the develop-ment of new rare earth reserves in theUnited States.

In April, the Alaska State House ofRepresentatives unanimously passedResolution 16, which urges the UnitedStates Congress to pass H.R. 4866. Theresolution – sponsored by Rep. CraigJohnson, R-Anchorage, and co-chair ofthe Alaska State House ResourcesCommittee – also throws its supportbehind the expedited permitting and pro-duction of heavy rare earth elementresources at Ucore Uranium Inc.’s BokanMountain project in Southeast Alaska.

“We have known and available rareearths right here in Alaska at BokanMountain,” Johnson said. “Passing‘Restart’ is another way we can providefor domestic energy security and providefor Alaska families, businesses, diversify-ing our economy and strengthening ourmining industry.”

While introducing S.3521 to her col-leagues in the U.S. Senate, Murkowskidirectly addressed Ucore’s Bokan-DotsonRidge project and the value of the heavyrare earth element-rich deposit to theAmerican efforts to become independentof China’ hold on the sector.

“Ucore Uranium is continuing explo-ration of a large rare earth deposit foundnear Bokan Mountain in Alaska, about 37miles from Ketchikan,” Murkowskiexplained. “Ucore’s new Alaska sub-sidiary, Rare Earth One LLC, has beenworking to study the deposit on DotsonRidge at Bokan Mountain since 2007.The U.S. Bureau of Mines more than 20years ago estimated the site contains atleast 374 million pounds of recoverablerare earths, which is more than enough tobreak China’s stranglehold on the marketand protect America’s access to the rareearths that are vital to the production ofcutting-edge technologies in this coun-try.”

Ucore Uranium Inc. recently changedits name to Ucore Rare Metals Inc.

“The name Ucore Rare Metals Inc.reflects the company’s expanding explo-ration focus and, in particular, our workadvancing the Bokan Mountain heavyrare earth element project in Alaska”,Ucore President and CEO Jim McKenziesaid June 28. “As we expect to reach anumber of exploration milestones withrespect to the Bokan property in thecoming 12 months, this is a most appro-priate time to reflect this focus in ourcorporate name.”

Ucore Rare Metals July 15 said itbegan this year’s 4,000-meter drill cam-paign at Bokan Mountain. The C$3 mil-lion program will include extensiveground mapping, surface sampling andmineral characterization initiatives, aswell as ground geophysics activities toassess more than 30 known REE-bearingprospects that have never been drilled.

The Nova Scotia-based explorer alsoretained Collison and Associates forscoping and prefeasibility work on aprospective heavy rare earth mine atBokan, and for the planning of progres-sive underground exploration.

“Considered by many to be the near-est heavy rare earth facility to production

on U.S. soil, our objective for Bokan willbe to transition from the delivery of anNI 43-101-compliant Inferred Resourcethis year to production prefeasibilityimmediately thereafter,” said UcorePresident and CEO Jim McKenzie.“There’s been a strong show of supportfor expedited rare earth production atBokan, from both the State of Alaska andat the Senate level in Washington. Thus,the political response to meeting thissupply crisis head-on has been veryrapid, to say the least, with prospectiveeconomic and permitting measuresdesigned to obtain domestic heavy rareearth production within the U.S. asquickly as possible.” �



REE mining activity heats up in North AmericaUcore Rare Metals Inc.’s heavy REE mineralization at the Bokan Mountain

Project in Southeast Alaska is a complementary source to Molycorp Mineral’s pri-marily light REE-enriched deposit at Mountain Pass in California’s MojaveDesert.

“The Bokan project is increasingly being recognized as one of two criticaldomestic deposits with the potential to allow the United States to become self suf-ficient across the full spectrum of rare earths. Whereas Molycorp’s Mountain Passfacility has an abundance of light rare earths, Bokan provides the alternate pieceof a crucial domestic supply puzzle, with its predominant skew towards the high-ly valuable heavy rare earths,” said Ucore President and CEO Jim McKenzie.

After supplying REEs for about 50 years, mining operations at Mountain Passwere closed in 2002.

Molycorp, the Chevron Mining subsidiary that operated Mountain Pass, wasbought by a group of investors in 2008. The privately-owned company is now inthe process of resuming operations at the southern California mine and plans toproduce about 20,000 metric tons of finished REE products per year from themine by the end of 2012.

The Bear Lodge Project in Wyoming is another promising REE prospect in theUnited States. In May, Rare Element Resources Ltd. reported that the Bull Hilldeposit at Bear Lodge increased by more than 50 percent from 800 million poundsto 1,210 million pounds at a 1.5 percent rare earth oxide cutoff grade.

“The Bear Lodge project is progressing well and the updated resources will beincluded in a scoping study (preliminary economic assessment) scheduled forcompletion this summer. Our 2010 exploration program consisting of a minimumof 30 in-fill and step-out drill holes is expected to further upgrade and expand theresources. We are also excited about advancing the metallurgical understanding ofthe REE mineralization and determining the preliminary economic potential ofthe Bear Lodge project,” said Rare Elements Resources President Don Ranta.

Upsurge of exploration in CanadaREE exploration also is heating up in Canada. The U.S. neighbor is host to

multiple prospects, including Avalon Rare Metals Inc.’s Nechalacho deposit atThor Lake in the Northwest Territories.

According to Avalon, Nechalacho ranks as the second-largest rare earth ele-ments deposit in the world by reported total rare earth oxide and the third-largestcontained niobium deposit in the world. The inferred mineral resources for Basaland Upper, two zones identified on the property, now total 175.93 million metrictons averaging 1.43 percent TREO, or 2.5 million metric ton of contained rareearth oxides.

A prefeasibility study released by Avalon in June envisions an 18-year mine lifeat Nechalacho based on an NI 43-101-compliant probable mineral reserve esti-mate of 12 million metric tons averaging 1.7 percent TREO, 3.16 percent zirconi-um oxide, 0.41 percent niobium oxide and 0.041 percent tantalum oxide. Thiscomes to 204,000 metric tons of TREO, 379,200 metric tons of zirconium oxide,49,200 metric tons of niobium oxide and 4,920 tons of tantalum oxide.

True North Gems last November confirmed the presence of REEs and niobi-um at its True Blue aquamarine property in the Yukon Territory. Grab samples col-lected from the property, located 55 kilometers, or 34 miles, south of Ross River,returned assays of up to 6.02 percent TREO and 2.52 percent Niobium oxide.

In March, True North optioned True Blue to Great Western Minerals Group, aSaskatchewan-based junior company specializing in REE exploration. GreatWestern started REE exploration at the Yukon property in mid-July.

“The purpose of the True Blue exploration program, in which GWMG hascommitted to spend C$1 million in 2010, is to determine the surface dimensionsof the currently known rare earth element mineralization and identify new areasof mineralization in the area encompassed by the True Blue syenite and hostrocks,” said John Pearson, vice-president of exploration for Great Western.

Quest Rare Minerals Ltd. is currently exploring several high-potential projectsin Canada, including the Strange Lake and Misery Lake areas of northeasternQuebec, the Kenora area in Ontario, and the Plaster Rock area in New Brunswick.

Quest has mobilized to begin 15,000-meter drill program at its Strange Lakeproperty. The company also plans to do additional reconnaissance mapping,prospecting and geochemical sampling on the 540-square-kilometer property thatstraddles the border of Quebec and Labrador. A 20-50 metric ton bulk sample willbe collected at the end of the summer for pilot mill studies.

“Our Strange Lake exploration plans are by far the most ambitious that Questhas ever undertaken and exploration personnel have been working diligentlythroughout the winter months to ensure success of the program,” said QuestPresident and CEO Peter Cashin.

—SHANE LASLEY


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Corporate Partners

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Mining Companies

Fairbanks Gold Mining/Fort Knox Gold MineFairbanks, AK 99707Contact: Lorna Shaw, community affairs directorPhone: (907) 488-4653 • Fax: (907) 490-2250Email: [email protected] • Web site: www.kinross.comLocated 25 miles northeast of Fairbanks, Fort Knox isAlaska’s largest operating gold mine, producing340,000 ounces of gold in 2004.

Kiska MetalsSuite 1350, 650 West Georgia St.Vancouver, BC V6B 4N9 CanadaContact: Jason WeberPhone: (604) 669-6660Fax: (604) 669-0898Email: [email protected]: www.kiskametals.comGold and copper projects in Alaska, Yukon, BC,Australia and Mexico. Preferred partner of seniormining firms.

Usibelli Coal MineFairbanks, AK 99701Contact: Bill Brophy, vp cust. relationsPhone: (907) 452-2625 • Fax: (907) 451-6543Email: [email protected] • Web site: www.usibelli.comOther OfficeP. O. Box 1000 • Healy, AK 99743Phone: (907) 683-2226Usibelli Coal Mine is headquartered in Healy, Alaskaand has 200 million tons of proven coal reserves.Usibelli produced one million tons of sub-bituminouscoal this year.

Service, Supply & Equipment

3M Alaska11151 Calaska CircleAnchorage, AK 99515Contact: Paul Sander, managerPhone: (907) 522-5200 • Fax: (907) 522-1645

Email: [email protected]: www.3m.comServing Alaska for over 34 years, 3M Alaska offers totalsolutions from the wellhead to the retail pump with abroad range of products and services – designed toimprove safety, productivity and profitability.

Air LiquideAnchorage, AK 99518Contact: Brian BensonPhone: (907) 273-9762 • Fax: (907) 561-8364Email: [email protected] Liquide sells, rents, and is the warranty station forLincoln, Miller, Milwaukee, Victor and most other weld-ing equipment and tool manufacturers.

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

Alaska Earth SciencesAnchorage, AK 99515Contact: Bill Ellis and 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]

Alaskan 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 Construction601 W. 5th Avenue, Suite 400Anchorage, AK 99501Contact: David GonzalezPhone: (907) 562-2792 • Fax: (907) 562-4179E-mail: [email protected] site: www.aicllc.comAIC provides cost-effective solutions to resourcedevelopment industries. We provide innovative ideasto meet each requirement through the provision ofbest-in-class people and equipment coupled withexceptional 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.

Companies involved in Alaska andnorthwestern Canada’s mining industry

D I R E C T O R Y

see next page

The Red Dog mine in northwest Alaska.


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 aredesigned for Alaska’s harshest operating environ-ments. Surface/open pit or underground, we have amining cable 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 highcapacity 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 manufacturedexplosives and drilling supplies with a commitmentto safety and 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 house-keeping to your tastes, not ours; providing opera-tions and camp 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 provid-ing a multifaceted program of support services forthe mining industry specializing in paramedic andphysician assistant staffed remote medical services,weather forecasting, airport equipment, bear guardsand expediting.

GCI Industrial TelecomAnchorage:800 East Dimond Boulevard, Suite 3-565Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528

Toll 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, reputableexpertise 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 min-ing, and final mine closure. With a solid reputationfor proficiency, productivity and safety, ready to takeon both your 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, crewtransport, heli skiing. Short and long term contracts.

LyndenAlaska Marine Lines • Alaska Railbelt MarineAlaska West Express • Lynden Air CargoLynden Air Freight • Lynden InternationalLynden Logistics • Lynden TransportAnchorage, AK 99502Contact: Jeanine St. JohnPhone: (907) 245-1544 • Fax: (907) 245-1744Email: [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) 248-8878Email: [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, managerPhone: (907) 561-5237 Fax: (907) 563-8547E-mail: [email protected] have offered full service assaying & refining serv-ice to Alaska’s gold miners for over 28 years. We alsobuy sell 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.

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.560 E. 34th St., Suite 100Anchorage, AK 99503Contact: Jon Isaacs, Alaska vice presidentPhone: (907) 562-3366 • Fax: (907) 562-1297E-mail: [email protected]: www.urscorp.comURS Corporation provides comprehensive integratedservices to the petroleum industry, including NEPA per-mitting support and regulatory compliance, engineer-ing design and construction management, field studies,environmental monitoring and contaminated sitecleanup.

Advertiser Index3M AlaskaAir LiquideAlaska Analytical Laboratory. . . . . . . . . . . . . . . . . 10Alaska DreamsAlaska Earth Sciences . . . . . . . . . . . . . . . . . . . . . . . 22Alaska Frontier Constructors . . . . . . . . . . . . . . . . . 23Alaska Interstate Construction (AIC). . . . . . . . . . . 11Alaska Steel Co.Alaska TelecomAmerCable Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Arctic FoundationsAustin Powder Co.Calista Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Chiulista Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Construction Machinery . . . . . . . . . . . . . . . . . . . . . 24Fairbanks Gold Mining/Fort Knox Gold Mine . . . 14Fairweather LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13GCI Industrial TelecomGold Canyon Mining. . . . . . . . . . . . . . . . . . . . . . . . . 7Jackovich Industrial & Construction Supply. . . . . 14Judy Patrick Photography . . . . . . . . . . . . . . . . . . . . 8Kiska Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Last Frontier Air Ventures. . . . . . . . . . . . . . . . . . . . . 3Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2MRO SalesNature Conservancy, The . . . . . . . . . . . . . . . . . . . . 17Northern Air CargoOxford Assaying & Refining Corp. . . . . . . . . . . . . . 6Pacific Rim Geological Consulting . . . . . . . . . . . . . . 7PND Engineers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Salt+Light CreativeTaiga Ventures/PacWest Drilling Supply . . . . . . . 15URSUsibelli Coal Mine

By SHANE LASLEY Mining News

In June 2009, the U.S. Supreme Courthanded down a 6-3 ruling that upheld

a tailings disposal permit forthe Kensington gold mine near Juneau.

Owner Coeur d’Alene Mines Corp.fired up Kensington’s mill June 24, oneyear and two days after the high courtmade its decision.

“The startup of production atKensington represents the culmination ofa communitywide effort by the Juneaucommunity, which has supported theproject from the beginning and who willparticipate in the economic benefitsKensington will provide,” said CoeurPresident and CEO Dennis E. Wheeler.

Coeur expects the underground mineto produce 50,000 ounces of gold duringthe rest of 2010 and about 125,000ounces of gold annually during the opera-tion’s initial 12.5-year mine life. Once infull production, cash costs are expected toaverage about US$490 per ounce.

“Kensington represents Coeur’s thirdnew precious metals mine to commenceproduction in the past three years and willprovide continued, meaningful growth tothe company’s production and cash flow,”Wheeler said.

In addition to bolstering Coeur’s bot-tom line, Kensington is strengthening theeconomy in and around Alaska’s capitalcity.

“Kensington’s opening is the best newsthat our region has had in years. It meansthe employment of hundreds of local menand women in careers that provide year-round, family wage jobs,” State Rep.Cathy Muñoz, R-Juneau, told MiningNews July 14.

Along with providing some US$25million in annual payroll, the Juneau-areamine has spent US$19.3 million on sup-plies and services in the region and isexpected to generate about US$2.5 mil-lion in local tax revenue.

“Alaska now has six large operatingmines providing high quality, skilled,year-round jobs. Given the opportunity,this is only the beginning of what shouldbe a significant diversification ofAlaska’s economy,” said Alaska MinersAssociation Executive Director SteveBorell.

Long road to productionCoeur has been working toward put-

ting Kensington into production since itacquired the high-grade gold project inthe mid-1990s.

After shelving the project when goldprices plummeted at the turn of the centu-ry, the Idaho-based miner acquired per-mits for the project in 2005.Environmental groups quickly challengedthe permits, sparking a legal battle thatultimately was decided by justices of thenation’s highest court.

“Kensington was nearly derailed byenvironmental NGO harassment and law-suits. However, the company and its sup-porters in the community pressed on andwere able to prevail, even going to theU.S. Supreme Court to defend the veryrigorous permitting process,” Borellexplained.

The high court’s ruling, however, wasnot the final chapter in Coeur’s long sagato begin production at Kensington.Shortly after the high court affirmed the

company’s permit to dispose of tailings ina nearby lake, the U.S. EnvironmentalProtection Agency solicited the U.S.Army Corps of Engineers to reconsiderthe tailings permit issued for Kensington.

This unprecedented move by the EPAprompted many of Muñoz’s constituentsto rally to the support of the Juneau-areagold mine.

“Last year, after the Supreme Courtruled in favor of the Kensington, the EPAinterjected its authority into the Corps ofEngineers 404 permit. This action wasunusual, and risked further delays in theopening of the project,” the Juneau repre-sentative explained. “The community ofJuneau came together and rallied in sup-port of the Kensington’s final approval.Many individuals and groups wrote let-ters and the Alaska State Legislaturepassed resolutions urging the cooperationand opening of the mine.”

In August the Corps re-issued thelong-disputed permit, clearing the wayfor Coeur to complete construction need-ed to begin operations at Kensington.

“After nearly 20 years in the permit-ting and development stages, it is won-derful to see Kensington up and running,”Muñoz said. “Kensington is a great proj-ect. The leadership team has worked hardto ensure that the public is informedthroughout all stages of development, andthe project is planned in a way that worksextremely well with the natural environ-ment.”

Juneau’s mining legacyGold mining dates back to Juneau’s

very foundation and the opening of theKensington Mine continues the capitolcity’s 130-year legacy as a gold miningtown.

“Juneau was built on gold production.We have one of the most outstanding trailsystems in the world because of the histo-ry of mining in our area,” Muñozexplained.

In 1880 Auk Chief Kowee, a Tlingitfrom nearby Admiralty Island, ledprospectors Joe Juneau and RichardHarris to the headwaters of the appropri-ately named Gold Creek. The capital city,named Harrisburg before being changedto Juneau, was established near the findlater the same year.

In 1881 operations began atthe Treadwell gold mine located southeastof Juneau. At its peak, Treadwellemployed 2,000 Juneau residents and wasthe largest gold mine in the world.From 1881 to 1922, more than 3 mil-lion troy ounces of gold were extractedfrom the mine.

Gold was discovered on theKensington property around 1895.Between the Jualin and Kensington mines,both now encompassed by Coeur’s proper-ty, 40,513 ounces of gold from 75,208tons of ore was recovered from 1896 to1928.

Over the initial 12-year mine life of thecontemporary Kensington mine, Coeurplans to add 1.5 million ounces to the 7million ounces of lode gold historicallyproduced in the Juneau Mining District.

Good jobsThough Kensington will not rival

Treadwell in shear manpower, the mod-ern-day mine will provide good payingjobs to some 200 full-time employees,most of whom live in Southeast Alaska.

“It is important for young people of acommunity to see opportunities, and the

Kensington is a project that provides mul-tiple career opportunities (such as) directmining, geology, engineering, humanresource management and business,”Muñoz said.

Six of Kensington’s newest employeesare June 18 graduates of the Entry LevelUnderground Miner training program inJuneau, an innovative course that preparesAlaska residents to work in the miningindustry.

Alaska mining companies, in collabo-ration with the Alaska Department ofLabor and Workforce Development’sEmployment Security Division as well asthe University of Alaska’s Mining andPetroleum Training Service developed thecurriculum for the new miner training.

“By partnering with industry, we aredeveloping a premier work-force develop-ment model that will meet employers’needs,” Labor Deputy CommissionerDavid Stone said. “Our goal is to increasethe ability of companies to hire locally andkeep dollars in Alaska, helping raise thestandard of living in our communities.”

Alaskan miners earn an average salaryof US$83,000 a year.

“As somebody who grew up inSoutheast and has seen the ups and downsof our economy, it is very gratifying to seethe hope that is generated by goodemployment; employment that pays bene-fits and provides opportunity for advance-ment,” Muñoz said.

Coeur also works closely with BernersBay Consortium, made up of KlukwanInc., Kake Tribal and Goldbelt Native cor-porations, for on-the-job training and sup-porting local Native hire at Kensington.

“Kensington is an example of the ben-efits that mining can bring to communitiesall across the state. For most of the state,mining provides the very best opportunityfor local jobs and local economic devel-opment. And for some areas it is the onlyviable alternative for family wage jobs,”Borell said. �



� A L A S K A

Kensington opening benefits Coeur, JuneauStartup of production at the underground gold mine is expected to bolster the Idaho miner’s performance, capital city’s economy

Ore leaving the primary crusher speeds by June 18 on its way to the secondary crusher for further milling.

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“Kensington’s opening is the bestnews that our region has had inyears. It means the employment

of hundreds of local men andwomen in careers that provideyear round, family wage jobs.”

–State Rep. Cathy Muñoz, R-Juneau


As we contemplate manned spaceflights to Mars, it may be hard to

believe that there are still vast areas of theearth’s surface that we have yet to explore.

Believe it. The world’s knowledge of the geology

of Canada’s Far North is very limited. To fill this knowledge gap, Canada’s

federal government embarked in 2008 onan aggressive C$100 million, five-yeargeological mapping program known asGeo-mapping for Energy and Minerals, orGEM, that at its halfway mark this summeris beginning to yieldsignificant dividendsin the nation’s mostremote regions.

“The governmentis looking for out-comes that benefitnortherners and allCanadians, such ass o c i o e c o n o m i cdevelopment, jobsand community well-being,” said GEMcoordinator SimonHanmer. “That’sbecause discoveringgeological resourcepotential up north islikely to increase out-side investment in more effective explo-ration and resource development.

GEM studies on uranium, base metals,precious metals, diamonds and rare metalswill span the Arctic, targeting areas of highpotential. While important to all threenorthern territories, acquiring this geolog-ical knowledge is crucial for resourcedevelopment in Nunavut, where evendated information is available for onlyabout a third of the territory.

Most of previous geological mappingof Canada’s north was done in the 1950s,1960s and early 1970s by helicopter.

“This form of mapping was not verydetailed, especially when you consider thata greenstone belt — volcanic rock domi-nated by basalt — that might contain gold

may only be 500 meters wide,” Hanmersaid.

The north is so vast, it is impossible forprivate companies to know where to beginwithout preliminary geological data andmaps.

Natural Resources Canada’s GEM sci-entists, working in collaboration with terri-torial geoscientists, university researchersand others, hope to create a knowledgebase that will help identify oil or gasdeposits, as well as a full suite of minerals,including copper, nickel, iron, zinc, leadgold, silver, platinum, diamonds, uraniumand rare earth elements.

The GEM program plans to cover 22priority areas during the five-year pro-gram, from 2008 to 2013.

New geological mapping is the firststage in the mining industry’s explorationprocess. Estimates show that public geo-mapping programs can result in an initialfive-to-one return in leveraging privatesector investment. That means theGovernment of Canada’s C$100-millioninvestment in GEM could generate up toC$500-million in private sector explo-ration and development.

In Nunavut, recent mapping of twounderexplored areas, the MelvillePeninsula and the southern half of theCumberland Peninsula, have alreadybegun to pay dividends.

The Melville Peninsula, locatedbetween the Nunavut mainland and BaffinIsland, contains rocks that are rangingfrom 1.9 billion to 2.7 billion years old.

Surrounded by areas where major dis-coveries of gold, iron and diamonddeposits have been made, Melville is sig-nificantly under-explored, said DavidCorrigan, a geoscientist on the GEM teamthat is exploring the region.

After the first of three planned fieldseasons of bedrock and surficial mappingin 2009, along with re-analysis of 508 tillsamples collected in 1977 in the north halfof Melville Peninsula and 2,041 lake sedi-ment samples from the southern part of thepeninsula, the geoscientists found evi-dence of more than one sequence ofArchean greenstone belts on MelvillePeninsula similar to those found on Baffin

Island. These rocks are favorable for ironformation-hosted gold, perhaps orogenicgold, magmatic-hosted nickel, cobalt,chromium, platinum group elements, andlocally, hydrothermal copper and silvermineralization. The region was alreadyknown for potential economic deposits of

iron and diamonds. The geoscientists alsofound late-Archean mafic and ultramaficintrusions that have potential for magmat-ic nickel-copper-PGE sulfide mineraliza-tion with gold.


� N U N A V U T

Geo-mapping Far North pays dividendsFederal geoscientists join others in filling huge knowledge gap to encourage private investment in mineral resource development

Just another day on the job in the Multiple Metals - Cumberland Peninsula project for ridge-traversing project participants Mike Young (left) and Carolyn Richer (right), while projectleader Mary Sanborn-Barrie (lower right) studies a bedrock outcrop.

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Mary Sanborn-Barrie shares herinsights into thegeology of thesouthernCumberlandPeninsula of BaffinIsland, Nunavut dur-ing the 2010Nunavut MiningSymposium inIqaluit April 13.

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PEBBLE — Pebble Partnership CEOJohn Shively opened his June 21

presentation to the Anchorage Chamberof Commerce Make it Monday Forumwith the query, “How many people herehave heard of the Pebble Mine Project?”The room resonated with laughter inresponse to Shively’s rhetorical question.

Though everyone at the luncheon, likethe majority of their fellow Alaskans,have been inundated with media cover-age regarding Pebble, not even Shivelyknows what the final plan for the projectwill be.

The US$72.9 million that the PebblePartnership budgeted for environmentalstudies, exploration and engineering in2010 is expected to provide the final bitsof information that engineers need tocomplete a plan for mining copper, goldand molybdenum from the enormousdeposit in Southwest Alaska.

The 20 senior engineers and technicalspecialists from Pebble partners AngloAmerican plc and Northern DynastyMinerals Ltd., working with 58 leadingengineering firms and specialized con-sultants from around the world, are near-ing the completion of an extensive feasi-bility study for the Pebble Project.

“The engineering program underwayat the Pebble Project today, and the com-prehensive environmental and socioeco-nomic studies that have informed thateffort, represent the most exhaustive pre-permitting planning exercise in the histo-ry of U.S. mineral development,”Northern Dynasty President and CEORon Thiessen said.

With this in-depth investigation near-ing completion, the Pebble Partnershiphopes to have a project to present toAlaskans early in 2011.

Time and moneyThe Pebble Partnership, which has

pushed back the proposed date for com-pleting the feasibility study and enteringthe permitting process, has adopted the

axiom “it takes time to do things right.”The adage, it takes money to do things

right, also could be applied to permittingthe world-class copper deposit.The partners will have spent more than

half a billion dollars on the feasibilitystudy before it is complete.

“By the time we apply for develop-ment permits next year, some US$500million will have been invested to ensurewe have designed the best possible proj-ect from a technical, financial, environ-mental and socioeconomic perspective.We fully expect the quality of that workto be reflected in the outcome and effi-ciency of the permitting process,”Thiessen said.

While engineers hammer out the finaldetails of the feasibility study, environ-mental consultants are finishing the com-pilation of the comprehensive baselineinformation collected at Pebble.

“There are two key documents thatstakeholders should anticipate for reviewin advance of permitting,” Shively said.“First is the environmental baseline doc-ument that will compile data and analysisfrom all of the environmental studiesundertaken (during) the past five years.Second is (the Pebble Partnership’s) pre-liminary development plan. Both areessential for advancing the project intopermitting. When the preliminary devel-opment plan is in place, we will share itwith regional stakeholders in advance offiling for permits.”

Baseline tomeMore than US$120 million of the cap-

ital spent at Pebble has been allocated toenvironmental studies. The informationgathered from this work is being accumu-lated into an environmental baseline doc-ument. This 6,000-page tome will be acompilation of the massive amount ofdata collected from the Pebble regionsince 2004.

“This is arguably going to be one ofthe most studied areas in the state ofAlaska. The partnership began intensiveenvironmental studies in 2004.To date wehave invested over US$120 million inthose studies,” Pebble Partnershipspokesman Mike Heatwole said during aJuly 18 tour of the Pebble deposit.

“They cover a wide range of areas butthe focus is primarily on water and fish,”he added.

While Mining News was on site, biol-ogists were in the field conducting a fishcounting study as part of the ongoingenvironmental work in the region.

Heatwole said roughly a third of thisyear’s budget will be spent on environ-mental studies and completion of thebaseline document.

The baseline document is scheduled tobe released by the end of 2010. For thosewho don’t want to thumb through the6,000-page version, a 150-page technicalsummary and 30-some page popularsummary also will be available.

Drilling for barren groundThis year’s geological exploration is

the second key component to completinga mine plan for Pebble.

Two rigs drilling on site this year arenot looking to expand the 80.6 billionpounds of copper, 107.4 million ouncesof gold and 5.6 billion poundsof molybdenum known to exist in themassive deposit. Instead, one rig drillingto the north of the deposit is seekingunmineralized areas suitable for con-structing buildings and other mine facili-ties, while the second rig is investigatinginteresting geophysical features south-west of the deposit area.

“Until the latter part of last year, wehadn’t drilled a hole outside the Pebbledeposit proper – other than geotechnicalor engineering drill holes, which are look-ing at overburden characteristics – since2002,” Pebble Chief Geologist Jim Langtold Mining News.

If the northern drilling successfullymisses mineralization, this informationwill assist engineers in determiningwhere to position the mill and other facil-ities needed to process the ore that wouldbe excavated from the deposit if the proj-ect reaches production.

“This year we are drilling outside ofthe deposit. We are exploring other geo-chemical and geophysical anomalies onthe property in order to see if we over-looked anything; other zones of mineral-



� A L A S K A

In-depth Pebble study nears completionEngineers and consultants are expected to produce project’s baseline document and mine plan for public scrutiny in a few months

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Rig 3, which is drilling to the north of the Pebble deposit, is seeking unmineralized areas suitable for building the infrastructure needed tomine the world-class copper-gold-molybdenum resource.

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ization,” Lang explained. “As part ofthe feasibility process you also have togo out and drill all those areas whereyou are going to put any infrastructure,to make sure you are not building yourprocessing plant on top of the deposit.”

Pebble neighborsAs Pebble wends its way toward fea-

sibility, neighboring prospects are get-ting attention in 2010.

In July, Northern Dynasty acquiredabout 13 percent of the Big Chunk andBonanza Hills properties from cash-strapped Liberty Star Uranium &Metals Corp. The Pebble partner paidC$1 million for the 60.7 square kilo-meters, or 23.4 square miles, ofprospective property and also agreed toloan Liberty Star C$3 million to besecured by the remaining 87 percent ofthe smaller junior’s land packages.

Big Chunk is porphyry copper-goldprospect that lies adjacent to Pebble tothe north and Bonanza Hills is a high-grade gold prospect located about 40miles, or 64 kilometers, northeast ofBig Chunk.

Northern Dynasty can earn a 60 per-cent interest in the Big Chunk andBonanza Hills projects by spendingC$10 million on those properties oversix years.

According to Mining News sources,these are held solely by NorthernDynasty but the Pebble Partnership has90 days to decide if it wants to consol-idate the claims into its land package.

Kennecott Exploration Inc., anothercompany with ties to Pebble, is con-ducting an exploration program at theGroundhog property about six miles, or10 kilometers, northeast of Pebble. TheRio Tinto subsidiary has optioned theporphyry copper-gold prospect fromAnchorage-based geological consult-ing firm Alaska Earth Sciences.

During a recent presentation held inthe community of Nondalton locatedabout 11 miles, or 18 kilometers, eastof the Groundhog project, KennecottExploration Manager Russ Franklinsaid the company is targeting deepmineralization with its first-pass geo-physical program at Groundhog.

Rio Tinto has nearly a 10 percentstake in Pebble through its 19.9 percentownership in Northern Dynasty.

There are also indications that FullMetal Minerals Ltd. has a prospectivepartner for its Pebble South project.

Pebble South borders the PebblePartnership’s property to the south andwest and the junior believes Pebble-style mineralization trends to the south-west onto its property. Geochemicaland geophysical surveys have delineat-ed 11 promising prospects on FullMetal’s property. �

“We’re finding that these volcanic andsedimentary rocks have great potential,from base metals and nickel through togold,” Hanmer said in May when the GEMprogram released a digital atlas reflectingwork on the Melville Peninsula so far.

Work on Cumberland PeninsulaAnother under-explored area of

Nunavut is the southern half of theCumberland Peninsula.

Mary Sanborn-Barrie, who heads theGEM team exploring this region, saidGeoscience Canada chose the area becauseit is very remote and rugged and it has notreceived much geoscience activity duringthe past 50 years.

“This area has not seen systematic map-ping since the 1970s and much of (that)mapping has not been published,” she said.

Until 2009, the only geophysics in thenorthern part of the Cumberland Peninsulawas analog data at 800-meter resolution. InApril, Sanborn-Barrie said GEMaddressed this knowledge gap by focusingon the southern part of the peninsula in2009 and would turn its attention to thenorthern Cumberland area in 2010.

Last summer, the team obtained aero-magnetic data never before available,including 62,000 line kilometers at 400- to600-meter resolution. GEM also producedthe first-ever surficial map of the regionand conducted ice flow studies.

She said geoscientist found less paleo-

Proterozoic super-crustal rocks than pre-ciously interpreted in the south and moretonalitic basement and super-crustal rocksof the Hoare Bay Group along with strandsof super-crustal silt of which some areArchean in age.

Results of 420 till samples and 64bedrock assays samples found significantpotential for gold, molybdenum, zinc, cop-per, nickel, chromium, PGE, uranium andREES.

Diamonds on Cumberland Peninsula?Perhaps one of GEM most exciting dis-

coveries was the similarity of some rockformations in the southern CumberlandPeninsula to geology across CumberlandSound at the Chidliak and Qilaq projectswhere Peregrine Diamonds Ltd. is explor-ing in partnership with BHP Billiton andsingly for diamonds.

In February, Peregrine was granted 119prospecting permits covering about 1.5million hectares, or 5,792 square miles, onthe Cumberland Peninsula. The newCumberland permit group has geologiccharacteristics that Peregrine said are sim-ilar to those at Qilaq and Chidliak. Thecenter of Cumberland is located about 200kilometers north of Chidliak and east ofthe community of Pangnirtung, Nunavut.During July and August of 2010,Peregrine said it plans to evaluateCumberland’s diamond potential by con-ducting a reconnaissance till samplingprogram with budgeted expenditures ofC$800,000 using Pangnirtung as a base. �

type portable drill and coring system. Based upon fieldwork completed on

areas of exposed outcrop on the property,REC said a number of anomalously highmagnetic areas were found to hostencouraging iron, manganese, and copperoxide and sulphide mineralization. Sixtychip samples were gathered over theshowing area in order to evaluate theextent and consistency of the observedmineralization. In addition, two drillholes, which tested this target area, recov-ered core intersections exhibiting similartypes of mineralization.

The exposed mineralization appears to

be open in at least two directions intooverburden covered areas.

REC believes that the observed miner-alization is consistent in terms of styleand setting to that of iron oxide coppergold deposition.

REC Chairman, President and CEOKabir Ahmed said the junior hopes theinitial exploration and drill program at theNorth Nonacho Property will lead to thediscovery of potentially significant cop-per and precious metal mineralization.

Depending on the geochemical analyt-ical results of the program, REC said itmay conduct a follow-up program ofground induced polarization (IP) surveysand diamond drilling of the mineralizedshowings and other favorable high mag-netic anomalies on the property. �


GEO-MAPPING



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PEBBLE STUDY

Pebble Partnership spokesman Mike Heatwole guides a July 18 tour of the highlypublicized Pebble deposit.

http://www.akfrontier.com/

mining news ebook: petroleum news 121403

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