A zinc district potentially richer than any other in the world is emerging in northwestern Alaska, as evident by last year’s discovery of significant new zinc-lead mineralization 10 km north of
Although drilling is preliminary and widely spaced, the new underground deposit, dubbed Anarraaq, contains mineralized sections that are slightly higher in grade than those of the main Red Dog deposit. Based on early interpretations, Cominco envisages a 12-million-tonne resource grading 18% zinc and 5% lead, plus 90 grams silver per tonne, at a depth of about 650 metres.
Red Dog proper constitutes four deposits: Main, Hilltop, Aqqaluk and Paalaaq. Combined, these contain reserves and resources of 142 million tonnes averaging 15.8% zinc, 4.3% lead and 83 grams silver. A fifth, deeper zone, Paalaaq North, lies beneath and west of Paalaaq at more than 600 metres below surface. One of three holes that intercepted Paalaaq North in 1998 returned 9% zinc over 36 metres.
The distribution of the four deposits and the deeper zone is controlled by a series of low-angle, post-mineral thrust faults.
Also, a lower-grade deposit, known as Su-Lik, lies a further 19 km northwest of the mine and contains approximately 34 million tonnes of mineralized material grading 8% zinc, 2% lead and 30 grams silver.
“The discovery of Anarraaq is particularly significant because it demonstrates for the first time that high-grade deposits are present in the camp beyond the mineral system at Red Dog itself,” says George Cole, vice-president of exploration for Cominco’s wholly owned U.S. subsidiary.
A total of nine holes was completed, with only one miss, before last year’s exploration drilling was brought to a halt by the onset of winter weather. Two additional holes were stopped short of their targeted depth and will be completed when drilling resumes. The Anarraaq deposit remains open to the north and to the east.
The Red Dog mine is 600 miles northwest of Anchorage and 90 miles north of the village of Kotzebue at the western end of the Brooks Range in the Noatak mineral district. The deposits are hosted by a sequence of Mississippian-age deep-water black shale, chert and carbonate turbidite, which was deposited over Devonian shallow-water clastic sediment in an extensional basin.
The Mississippian black shale sequence is overlain by Pennsylvanian-to-Jurassic shale and chert. Cretaceous greywacke unconformably overlies the entire package.
The Main and Hilltop deposits were found and drilled more than 20 years ago. All of Red Dog’s current production is mined from an open pit on the Main deposit, host to proven and probable reserves of 46.4 million tonnes grading 19% zinc, 5.2% lead and 101 grams silver at a stripping ratio of less than 1-to-1. The Hilltop deposit sits half a mile to the south and contains an indicated resource of 9.6 million tonnes grading 17.8% zinc, 5.5% lead and 117 grams silver.
Aqqaluk and the two Paalaaq deposits were found in the past five years. It was Aqqaluk’s discovery, in 1995, that led to a different appreciation of the geologic model and the subsequent discoveries of Paalaaq and Paalaaq North, culminating in last season’s discovery of the Anarraaq deposit.
Aqqaluk, just north of the main deposit, hosts a possible reserve of 72.9 million tonnes grading 13.6% zinc, 3.7% lead and 65 grams silver at a projected stripping ratio of 1.3-to-1. In addition, there are about 30 million tonnes of lower-grade mineralization grading less than 5% zinc.
The Paalaaq deposit lies north of, and structurally below, Aqqaluk and contains an inferred resource of 13 million tonnes grading 15% zinc, 4% lead and 90 grams silver. The reserves and resources at Red Dog will provide a further 40 years of life at current operating rates.
The discovery of Anarraaq was the result of an integrated effort on the part of Cominco’s geologists and geophysicists, who employed new interpretations of structure, mineralization styles and both conventional and innovative geophysical surveys. The discovery team was led by Scott Jennings and included geologists Jeff Clark, Lorne Young and geophysicist Lou O’Conner from the Spokane office, as well as Ugur Kiziltepe of Turkey and Diego Fernandez of Mexico.
Their efforts led to the first high-grade discovery outside of the Red Dog mineral system.
Surface showings of sulphides were first discovered in the creeks in the Anarraaq area more than 20 years ago. The showings were drill-tested in the late 1970s and early 1980s, resulting in the recognition of an open-ended but sub-economic mineral system. In 1997, Cominco targeted the area with gravity geophysical surveys, beginning in the vicinity of the showings and gradually extending the coverage westward. By early last year, the geophysical coverage included the area of the Anarraaq discovery, where a large gravity anomaly had been identified.
However, before this anomaly was fully defined, drilling had begun to advance westward, downdip from the showings, opposite the direction of thrusting and guided by the recognition of more proximal mineral styles and the need for structural preservation of higher-grade mineralization.
By the time the gravity anomaly was delineated, three drill holes on the outer edge of the anomaly had all encountered barite, the probable cause of the anomaly. Moreover, one of the holes intersected a thin zone of proximal-type massive sulphides just above the structural footwall.
Structural correlation between the holes indicated a local steepening of the basal thrust. It is Cominco’s interpretation that the deposit is preserved behind a ramp on the basal thrust fault. Downhole geophysics were then used to provide the final geologic vector. The discovery hole intersected 16.2 metres grading 30% zinc, 6% lead and 150 grams silver at a depth of 679 metres. To date, eight holes have been drilled into the deposit, with the best hole intersecting 73.2 metres grading 20% zinc, 5% lead and 113 grams silver.
The mineralized intercepts drilled to date are summarized in the accompanying table.
The newly discovered Anarraaq mineralization is stratabound and hosted in the Ikalukrok unit of the Kuna Formation. Most of the resource is contained in banded-to-massive sphalerite, galena and pyrite bodies at a depth of 650 metres below surface. A large barite body, 60-100 metres thick and containing a possible 1 billion tonnes, lies above the sulphides. The barite and the sulphides are separated by a thrust fault and 90 metres of barren shale. Barite is intimately associated with the Red Dog deposits.
The sphalerite in the massive sulphide is reddish in colour and relatively coarse-grained. Cole says this is an important ore type at both Anarraaq and Red Dog. Veins of coarse red sphalerite are also observed in drill holes proximal to Anarraaq and are a significant characteristic of the ore at Red Dog.
The mineral system comprises an extensive, widespread, 10-to-13-sq.-km area of low-grade, sub-economic zinc-lead mineralization, which is exposed in the sulphide showings. The mineralization is described as light-coloured, fine-grained, laminated sphalerite with pyrite.
The mineral system is still open, and Cole is confident further discoveries will be made. “I think that we can reasonably expect more successes as our program continues,” states Cole. Gravity work has outlined several anomalies comparable in size to Anarraaq, as well as several smaller, intense anomalies. In 1999, Cominco expanded its land position in the Red Dog area by staking more than 980 sq. km of state land to hold more than 1,580 sq. km.
Says Cole: “After five years of consistent success — which has included Aqqaluk, the two Paalaaq deposits and now Anarraaq — we have every reason to believe that our exploration approach will produce more discoveries and thereby provide the opportunity for future expansions and cost reductions.”
Cominco has budgeted $9 million towards exploration at Red Dog this year. Geophysical gravity surveys are already under way and drilling is to begin in late May.
Red Dog marked its tenth anniversary in 1999, having produced a record 943,500 dry tonnes of zinc concentrate and 152,000 tonnes of lead concentrate. This is equivalent to 521,000 tonnes of contained zinc and 88,900 tonnes of contained lead, based on an average concentrate grade of 55.2% for lead and 58.5% for lead. Milled ore totalled almost 3 million tonnes averaging 20.8% zinc, 5.2% lead and 91 grams silver. Recoveries averaged 84% for zinc, 59% for lead and 70% for silver.
Red Dog’s operating profit doubled to $123 million in 1999, while unit operating costs fell by 9%. The increase in profit over 1998 was mainly due to an 18% increase in zinc concentrate production and higher zinc prices, which averaged US49 per lb. in 1999, compared with US46 in the previous year. On-site costs were less than US9 per lb. zinc, whereas total mine-to-metal cash costs were under US35 per lb. In its annual report, Cominco says “Red Dog’s cost structure places it in the bottom quartile on the global zinc cost curve.”
Mining and milling are carried out year-round. Concentrates are trucked to a port site on the Chukchi Sea, 52 miles from the mine site, and stored until the 3-month summer shipping season, during which time the sea is free of ice. Last year, despite a late start to the shipping season, a record 1.1 million dry tonnes of zinc and lead concentrates were shipped in a 110-day period to the end of October.
Cominco and the U.S. Army Corps of Engineers are funding a 2-year study to determine the viability of upgrading the existing shipping facility into a deep-water port. The study will address the feasibility of dredging a deep channel through the shallow coastal waters to the shoreline in order to accommodate ocean-going vessels. Under the present system, concentrate is loaded on to barges and transferred to large-capacity vessels anchored 5 km offshore.
In February, Cominco announced it was proceeding with a US$90-million mill optimization project designed to improve the quality of concentrate, increase recoveries and increase annual production capacity to 1.1 million dry tonnes of zinc concentrate with a silica content of less than 3%. This will represent a 20% increase above the present design level. The primary project is to install more flotation capacity to match the current grinding capacity.
Red Dog operates under an advanced royalty agreement with the Northwest Alaska Native Association Regional Corp. (NANA), on whose land the mine sits. NANA is paid a 4.5% net smelter return royalty, or US$1 million. After Cominco recovers certain capital expenditures, NANA will receive 25% of the net proceeds of production, increasing by 5% every fifth year to a maximum of 50%.
HoleIntervalZincLeadSilver
(m)(%)(%)(g/t)
8067.61063
16.2306150
80861553
80948.71853
81073.2205113
81121.913351
8125.8298255
81334.71063
9.417234
8144.31146
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