Alaska is enjoying an unheralded exploration boom, partly fueled by the discovery of the high-grade Pogo gold deposit, which has captured the imagination of both juniors and seniors alike. Since the beginning of the year, more than 46,000 claims have been staked on state-owned land, with another 7,000 claims staked on federally owned land.
The state has typically averaged 10,000 newly staked claims per year. Indeed, the region is attracting an average of one new company per month, and more than half of those are Canadian juniors, according to Curtis Freeman, a consulting geologist and president of Alaskan-based Avalon Developments, who spoke with The Northern Miner during a recent swing tour of Fairbanks district.
“Part of the reason for the activity, not just from the juniors but from the major companies, is that you’re looking at occurrences of 4 or 5 multi-million-ounce [deposits] sitting in a belt of rocks,” said Freeman. “These occurrences have produced 20 million oz. and, over the past 50 years, have received virtually no exploration.”
Exploration expenditures in Alaska in 1997 totalled US$57.3 million — an increase of 28% over the previous year. Expenditures in 1998 are expected to be about the same as in 1997.
The Tintina gold trend is an arcuate belt extending from southwestern Alaska into the Yukon Territory. Freeman estimates that this belt is host to in excess of 39 million oz. in current resources. Occurrences exceeding 1 million oz. include Fort Knox, Pogo, Donlin and True North.
The belt is bounded by two continental-scale structures, the Tintina-Kaltag fault on the north, and the Denali fault on the south. “You will see rocks in the eastern interior of Alaska that are offset 400 km from things over in the central Yukon,” explained Freeman. “It’s been a very active system.” Those two offsets have created a structural setting that controls the gold mineralization. A conjugate set of northeasterly- and northwesterly-trending structures are seen throughout the belt. The ages on mineralization vary from 90 to 95 million years in the eastern half of the belt and from 50 to 60 million years in the southwest.
The Pogo deposit occurs in the far-northwestern corner of the Stoneboy property, 90 miles east-southeast of Fairbanks and 40 miles north of the town of Delta Junction in the Goodpaster district of east-central Alaska. The property is accessible by helicopter and small fixed-wing aircraft, with road access limited to winter months.
The terrain consists of rolling, tundra-covered and lightly timbered hills, with a vertical relief of about 3,000 ft. The property boundaries enclose about 72 sq. miles.
This year, Teck completed a $5.5-million program of surface exploration consisting of 91,000 ft. of delineation and stepout drilling in 97 core holes.
The net effect of the 1998 program is an increase in the geological resource to 5.2 million ounces contained in 10 million tons at an average grade of 0.52 oz. gold per ton, based on a cutoff grade of 0.1 oz. According to project geologist Moira Smith, this is a conservative estimate and is probably closer to an undiluted reserve.
Pogo is an unusual deposit in that it is characterized by two or more, tabular, gently dipping subparallel quartz bodies hosted by Proterozoic-to-early-Paleozoic gneisses of the Tanana terrain. The property lies along the southern margin of a mid-Cretaceous intrusive batholith suite.
Pogo is divided into an upper and a lower zone. The upper is referred to as the Main Liese, or L1; the lower, as the Lower Liese, or L2. The two zones are spaced about 500 ft. apart.
The bodies range in thickness from 1 to over 70 ft., the average being 20 ft. The main L1 zone is 4,500 ft. long and 2,000 ft. wide. “It may get bigger with further drilling,” said Smith. The deposit is still open to the southeast and the northwest. This summer’s drilling identified another high-grade cluster, to the southeast.
In addition, a possible third zone has been intersected by two deep drill holes 400 ft. below the Lower Liese. Last year’s hole 71 intercepted 42.7 ft. of 0.58 oz., whereas this year’s hole 124, which was drilled 200 ft. from hole 71, cut 19.2 ft. of 0.75 oz.
Limited drilling has identified a zone lying above the main L1 body, but it is discontinuous.
The Pogo deposit is divided along a flecture point, where half the deposit dips to the northwest and the other half dips to the north.
The zones are composed of approximately 3% sulphides, with pyrrhotite, pyrite and arsenopyrite being the dominant sulphides; there are lesser amounts of bismuthinite and chalcopyrite. The gold is uniformly fine-grained. “You generally have to squint really hard with a 20 power hand lens to see it,” said Smith.
The zones show evidence of both vein and replacement-type textures, and it would appear they were replaced along low-angle structures. The associated alteration consists of biotite, sericite and dolomite.
“The alteration and other clues tell us that it was emplaced fairly deep in the crust and under pretty high temperatures,” said Smith. “It has a strong lithophile affinity and geochemistry, which means it looks as if the fluids came from the Cretaceous intrusive rocks in the area.”
Structures in the area are hard to trace because of poor outcrop, but there are northwesterly trending structures that are parallel to the Tintina fault system, as well as northeasterly trending structures.
In 1998, Teck undertook several baseline studies, including fisheries, wetlands, weather, cultural resources and air quality. “The place was crawling with consultants this summer,” Smith recalled. A lot of time has been spent looking at the hydrogeology and ground water in the area, one of the concerns being how to dispose of water coming from future underground workings.
Ongoing metallurgical testing is showing 92-94% gold recoveries using conventional flotation and cyanidation of the sulphide concentrate.
Pogo was discovered by the Alaskan subsidiary of Watts Griffis & McOuat (WGM), which, in 1981, conducted stream-sediment sampling. The firm found that Pogo Creek (and, to a lesser extent, Liese Creek) returned pronounced gold and multi-element anomalies. Follow-up work found some gold-mineralized quartz float.
Working on behalf of Sumitomo, WGM didn’t return to the area until 10 years later, in 1991, when a grid soil sampling program identified a 1-sq.-mile gold anomaly with greater than 100 parts per billion gold. In 1994, three holes were drilled, followed by 13 more in the following year. “This was enough to establish that there was something in this area,” said Smith. “But it looked as if it could be either a high-angle set of veins or a low angle set; the latter proved to be true.”
Teck signed a letter-of-intent in June 1997 and concluded a deal in the latter part of the year. To date, about 200 holes have been drilled in the immediate area, of which 170 are in the Liese zone.
Teck has carried out geophysical work on the Liese zone. “You could argue one way or another how effective that has been,” said Smith. “What is really effective, I would say, was the geochemical sampling.”
Drilling has focused on a limited 1-sq.-mile portion of property, leaving 71 sq. miles still to be explored. Regional work has identified an 8-mile-long trend of anomalous rocks and soils, extending to the southeast. In particular, quartz boulder trains, found in four separate areas, have yielded multi-ounce gold numbers, including 13-oz. and 28-oz. grabs from Tan Creek Ridge and 3 oz. from Sonora Creek Ridge. “We’re quite encouraged, not only by the Liese zone but by the exploration potential in the rest of the property,” said Smith.
In addition to further infill and stepout drilling, Teck intends to go underground at Pogo in 1999 with an underground exploration program, the purpose bei
ng to obtain geotechnical data, test the continuity of the veins for mining, and obtain a bulk sample for metallurgical testwork.
An initial draft application to go underground has been made, and Teck hopes to be permitted by the end of February. That would lead to the collaring of a portal in March or April. Baseline studies will be ongoing during 1999.
A prefeasibility study is expected by the fall of 1999, with a full feasibility scheduled for 2000.
The discovery of the Pogo deposit in an area where little exploration has been carried out over the past 70 years is capturing the attention of numerous companies. Since July, the number of claims in the Goodpaster area has quadrupled to 4,000, and these now cover a 1,600-sq.-km area.
Western Keltic Mines (WKM-V) , in partnership with Rimfire Minerals, a private British Columbia company, has staked ground contiguous with the eastern boundary of the Stoneboy property. The ground is divided into three properties — California, Surf and Boogie — for a total of 912 mining claims. Western Keltic holds a half interest in each property, with the option of earning an additional 20% in California and Surf.Hyder Gold (HGI-V) has signed a letter-of-understanding with Rimfire Minerals to acquire up to a 70% interest in five claim blocks near the Stoneboy property. Two of the blocks, the Ogo and Fire claims, consist of 242 units and tie directly on to the northwestern corner of Stoneboy. The BOU and Top claims, consisting of 216 units, lie 19 miles to the southeast, whereas the fifth block, the Eagle claims, consists of 106 units 25 miles southwest of the Pogo deposit.Hyder can earn an initial 51% interest by spending $1.3 million and making total payments of $230,000 in cash and 200,000 shares before Dec. 31, 2001. The junior will have the right to increase its interest to 70% by paying a further $1 million in cash.
Fairfield Minerals (FFD-T) acquired, by staking, two claim blocks in the Goodpaster district. The Shawnee block, covering 4,480 acres, adjoins the northern boundary of the Stoneboy project, whereas the Rock Creek block lies 4 miles farther northeast.- Last year, Teck signed an agreement with New Jersey-based
Ventures Resources (VRS-V) to provide up to $7.6 million funding on the 1-million-acre Veta property, 18 miles east of Stoneboy.
Teck initially invested $4.1 million in Ventures by purchasing 3.7 million shares at $1.10 each in December 1997. In addition, Teck was granted 1.4 million share purchase warrants exercisable at $1.25 for one year and 1.3 million warrants exercisable at $1.40 for two years. The funds are to be used exclusively to explore the Veta block, which adjoins the western edge of ground held by Sumitomo.
An agreement that provided Teck the right to select one target on the Veta property and earn a 60% interest by completing a feasibility study was recently extended for a further year in exchange for delaying Ventures’ funding obligations until 2001.
Ventures controls the mineral rights to six large property blocks comprising more than 3 million acres through an exclusive agreement with Doyon, an Alaskan native corporation. The agreement, which was recently extended by two years to 2003, calls for annual payments to Doyon of US$250,000 and annual exploration expenditures of US$1.5 million. Once a discovery is made, Ventures will have a further 15 years to construct a mine.
In return for extending the exploration period, Ventures granted Doyon a 3% net smelter return royalty (NSR) on 25,000 acres of land in the Flat property area, including the Donlin North claims, and an additional payment of US$150,000 in 2001 and 2002. Doyon is already entitled to a 2% NSR royalty during the payback period of any commercial operation and a 5% NSR thereafter.
Since entering into the agreement in 1996, Ventures has spent more than $7 million on the Doyon properties.
Exploration is being conducted by WGM under the guidance of Ventures. WGM is also supervising work for Sumitomo in the immediate area of the Veta property.
Ventures budgeted US$2.6 million for its Alaskan exploration program this year and says it has received encouraging results from the Carrie Creek prospect on the western edge of the Veta property. Several chip samples yielded values greater than 1 oz. gold. Results from limited drilling are expected shortly.
Besides Veta, this year’s activities have been focused on the Flat gold project in the southwestern part of the state, just north of
Five of the seven holes encountered intercepts ranging from 5 ft. of 0.066 oz. in hole 7 to 25 ft. averaging 0.1 oz. (including 5 ft. of 0.44 oz.) in hole 5.
Ventures has about US$1 million in cash and 55 million shares outstanding
- The Donlin Creek project of Placer Dome is 240 miles west of Anchorage and 12 miles north of the village of Crooked Creek. The 27-sq.-mile land package is controlled by Placer under a lease agreement with Calista, an Alaskan native company. Calista can earn up to a 15% participating interest in the project on completion of a positive feasibility study by Placer.
Previous work by West Gold (1989-1992) and Teck (1993-1994) identified a small 300,000-oz. resource. Placer optioned the property in late 1994 and completed a 36-hole program in 1995, which indicated the potential for a multi-million-ounce deposit.
Placer carried out more drilling 1998 using three rigs to expand and upgrade the resource of the open-pit prospect. The measured, indicated and inferred resource is expected to rise above the last estimate of 6.7 million oz. contained in 67.2 million tons grading 0.1 oz., based on a cutoff grade of 0.058 oz.
Crews have been drill-testing the ACMA target, a shallow, high-grade portion of the mineralized system that shows potential as an early-payback starter pit.
The geology of the Donlin Creek area consists of northeasterly and northwesterly trending Tertiary-age felsic dykes cutting Cretaceous sediments. Gold mineralization occurs over a 3.7-mile strike length and is associated with disseminated sulphides, sulphide veinlets and quartz-carbonate-sulphide veining in both altered intrusive rocks and adjacent sediments.
The bulk of the mineralization is refractory, associated primarily with arsenopyrite. Metallurgical tests show that the sulphide mineralization forms a good float concentrate and is amenable to pressure oxidation (autoclave) technologies.
Placer plans to begin a prefeasibility study on the Donlin Creek project in early 1999.
- Placer Dome has an option to purchase the 20-sq.-mile Ester Dome project from
Silverado Gold Mines (GOLDF-OTC) , just west of Fairbanks. Placer can earn an initial 51% interest by spending $10 million on exploration over five years and buying 4 million Silverado shares for US$5.4 million over a 4-year period.Placer carried out an initial phase of trenching and drilling on the Silver Dollar and Ready Bullion prospects this past summer. Drill intercepts were as high as 0.17 oz. over 20 ft., while trenching yielded values as much as 0.18 oz. over 6.6 ft.
In related news, Placer has entered into an option agreement with California-based Tri-Valley on a portion of that company’s 51-sq.-mile claim block at Richardson. The major must spend US$6.5 million over five years to earn a 51% interest in 600 mining claims. By completing a bankable feasibility study, Placer can increase its interest to 80%.
Exploration next year is expected to focus on auger soil sampling and ground geophysics.
- In September, Nova Scotia-based
NovaGold Resources (NRI-T) acquired a 49% interest in the Shotgun and Sleitat claims in southwestern Alaska from Enstar for the sum of US$900,000.Cominco (CLT-T) holds the remaining interest. NovaGold subsequently entered into a joint-venture agreement with Cominco on the Shotgun claims and the peripheral claims, formerly owned entirely by Cominco.
NovaGold will have an initial ownership of 47.5% in the venture; Cominco, 52.5%. By spending US$4 million on exploration over five years, NovaGold can earn up to a 70% interest in the joint venture, and can earn an additional 20% by spending a further US$4 million on exploration.
Cominco retains a back-in right to a 51% interest in the project between the time when NovaGold earns its 70-90% interest by committing to spend 250% of NovaGold’s expenditures and completing a feasibility study.
The Shotgun property consists of 54 state claims, 130 km south of the small town of Aniak. Past drilling by Cominco in the Mose target area intercepted a near-surface porphyry stockwork of gold mineralization. Highlights of drilling in 1984 included 106 ft. averaging 0.035 oz. in hole 1, 98.1 ft. averaging 0.07 oz. in hole 3, and 227.3 ft. averaging 0.034 oz. in hole 5.
This year, NovaGold drilled 19 diamond drill holes for a total of 3,100 metres on the Mose prospect. Highlights included: 557.4 ft. averaging 0.036 oz. (including 232.9 ft. averaging 0.064 oz., starting from surface) in hole 7; 157.5 ft. averaging 0.075 oz., beginning at surface in hole 8; 121.5 ft. averaging 0.041 oz. in hole 9; 304.3 ft. averaging 0.043 oz. in hole 18; and 291.8 ft. averaging 0.055 oz. (including 42.6 ft. of 0.13 oz.) in hole 19.
Based on the drill results, NovaGold has estimated an inferred resource of 12.8 million tons grading 0.042 oz., equivalent to 539,000 contained ounces, based on a cutoff grade of 0.029 oz. By lowering the cutoff to 0.015 oz., the resource increases to 980,000 oz. contained in 36.1 million tons grading 0.027 oz.
The junior is encouraged by preliminary metallurgical work, which shows recoveries in excess of 90% using cyanide leaching. Further studies, including bottle-roll tests, are under way.
- If Donlin Creek and Pogo are the bookends of Alaska gold exploration, the Fairbanks district sits in the dead centre of the Tintina belt and is host to
Kinross Gold ‘s (K-T) Fort Knox gold mine,La Teko Resources ‘ (LAO-T) True North project andInternational Freegold Mineral Development ‘s (ITF-T) Golden Summit project.Fort Knox is an open-pit mine and milling operation, situated just outside Fairbanks, that entered commercial production in March 1997. Over its first 10 months, Fort Knox produced 320,522 oz. at a total cash cost of US$170 per oz. Mine construction was completed at a capital cost of US$373 million, which included US$28 million in capitalized interest.
In early June of this year, Kinross acquired Fort Knox by merging with Colorado-based Amax Gold.
Fort Knox contains proven and probable gold reserves of 170.2 million tons grading 0.024 oz., equivalent to 4.1 million contained ounces. The mine life is pegged at 12 years. In 1998, production is expected to reach 380,000 oz. at a total cash cost of US$175 per oz. Production has averaged more than 40,000 tons per day and has reached 51,000 tons per day through a gravity and standard cyanide vat leaching circuit.
In the third quarter of 1998, Fort Knox produced 86,344 oz. at a cash cost of US$194 per oz.
Gold mineralization is hosted in a Cretaceous-age polyphase intrusive complex cut by northeasterly and northwesterly trending shear zones.
Kinross recently announced a proposed merger with La Teko whereby shareholders of La Teko would receive one Kinross share for every 2.65 shares held. The deal is subject to approval by La Teko’s shareholders.
- La Teko’s flagship property is its joint-ventured True North project, 10 miles from the Fort Knox mine.
Newmont Mining (NEM-N) , the project operator, can earn a 65% interest in True North by spending US$27 million on exploration and development. As of Dec. 31, 1997, the Denver-based major had spent US$10.5 million and paid La Teko US$6 million. Newmont’s 1998 budget of US$3.6 million for True North was earmarked for prefeasibility studies, metallurgical testwork and further exploration work involving mainly geochemical auger sampling.La Teko recently announced Newmont had put all development efforts at True North on indefinite hold; as a result, the planned prefeasibility study is not proceeding.
At the end of 1997, Newmont reported a resource at True North of 10.2 million tons grading 0.078 oz., equivalent to just under 800,000 contained ounces. La Teko reports that the total inventory stands at 18.2 million tons grading 0.072 oz., equivalent to 1.3 million contained ounces. About 80% of the resource is oxidized to a depth of 250 ft. and amenable to heap-leach extraction.
Metallurgical tests on bulk surface and large-diameter core samples collected from the Hindenburg and Shepard zones demonstrated that oxide material can be readily leached and that high gold recoveries can be anticipated from non-sulphide coarse material. The 50-ton Hindenburg surface bulk sample, with a grade of 0.09 oz., yielded a recovery in the order 95%. The Shepard sample, with a grade of 0.12 oz, showed gold recoveries in the range of 84-90%.
Exploration activities during the summer consisted mainly of auger soil sampling on the 7,400 acres newly acquired by the joint venture earlier this year. Of particular interest is a 400-by-1,000-ft. gold-arsenic-antimony anomaly southwest of the True North trend.
- La Teko’s other advanced project is the past-producing Ryan Lode deposit, 8 miles west of Fairbanks. Proven and probable reserves for Ryan and the adjacent Curlew shear are estimated at 14.5 million tons grading 0.056 oz. at a stripping ratio of 3.8-to-1; this is equivalent to 822,200 contained ounces.
La Teko also controls more than 75,000 acres of early-to-mid-stage gold exploration properties in and around the Fairbanks district and in the Yukon. In addition, the company holds ground contiguous to the northern border of the Pogo project.
Camnor Resources (CMB-V) can earn a 51% interest from La Teko in the Discovery Gulch property in the Circle Mining district, near the small town of Central. In return, Camnor is required to complete exploration expenditures of US$800,000 and make payments totalling US$215,000 over a four-year period.Previous work by La Teko has identified two significant gold-in-soil anomalies. Camnor recently completed a limited follow-up program of mechanical trenching on one of the anomalies. Hindered by deep overburden and permafrost, only three of the six trenches excavated along a 820-ft.-long portion of the Switch grid anomaly reached substantial bedrock.
Highlights from channel and chip sampling included 150 ft. averaging 0.016 oz. (including 20 ft. of 0.044 oz.) in trench 1 and 170 ft. averaging 0.01 oz. in trench 2. Grab samples collected elsewhere returned values of up to 0.052 oz.
- The Golden Summit project of International Freegold has a rich history of placer production and high-grade underground mining. More than 6.5 million oz. have been recovered from prominent streams draining the project area, and underground mining, up until the Second World War, resulted in 535,000 oz.
The 22,000-acre property, situated 20 miles north of Fairbanks, is being explored by Freegold through a US$10-million equity financing that was arranged in 1997 with
Barrick Gold (ABX-T) . Barrick committed itself to a second year on the project by taking down 1.2 million Freegold shares at $1.25 and a further 1.1 million shares at 95 cents in 1998.Barrick can elect to buy more tranches of 1.7 million shares at $1.75 before March 1, 1999, and 1.2 million shares at $2.50 by March 1, 2000. In return, the major will have the right to earn up to a 70% interest by advancing the project to commercial production.
Freegold has carried out a multi-phase drill program to flush out potential multi-million-ounce, bulk-tonnage targets. The $2.5-million program is being managed by geological consulting fir
m Avalon Development.More than 20,000 ft. of reverse-circulation (RC) drilling and 3,000 ft. of core drilling are expected to be completed by year-end. During the program’s first phase, 8,700 ft. of drilling tested geochemical targets in the eastern half of the project. Highlights included 60 ft. of 0.026 oz. at the Iowa target, 100 ft. of 0.016 oz. from the Creeks area, and 35 ft. of 0.023 oz. at Cleary Hill.
A second phase of drilling tested Tamarak and Goose Creek prospects in the western half of the property. Of the 25 RC holes drilled, only six encountered significant intercepts. Tamarak, which was drilled for the first time this year, yielded 25 ft. of 0.055 oz., 50 ft. of 0.1 oz. and 427 ft. averaging 0.02 oz (including 35 ft. Of 0.075 oz.). The Goose Creek target returned 60 ft. of 0.11 oz. (including 15 ft. of 0.35 oz.), 15 ft. of 0.045 oz., and 95 ft. averaging 0.02 oz.
A third phase of drilling is following up on both Tamarak and Goose Creek. Additional assays are pending for core drilling on the Cleary Hill and Dolphin zone; the latter has been defined by 26 RC holes along a 1,000-by-1,500-ft. footprint. Freegold estimates the Dolphin zone contains a resource of 30.6 million tons at an average grade of 0.02 oz., eqivalent to 611,000 contained ounces.
- If Donlin Creek and Pogo are the bookends of Alaska gold exploration, the Fairbanks district sits in the dead centre of the Tintina belt and is host to
Be the first to comment on "EXPLORATION — Pogo adds fuel to Alaskan exploration boom"