Niblack Goes Underground to Decode Vms Showings

SITE VISIT

Ketchikan, Alaska — The float plane skims along the water, delivering visitors to the rugged shores of Prince of Wales Island. Steep, thickly forested hills rise up out of the tidewater inlet, hills that Niblack Mining (NIB-V, NBLKF-O) is showing are laced with gold, silver, copper and zinc.

And “laced” is indeed the term: the volcanogenic massive sulphide mineralization appears to weave its way through the mountain, bending back on itself, crossing faults and popping out on a cliff-face 2 km distant. Several companies have tried to figure out how the metals move through the mountain, but many ended up with barren drill core.

Niblack took over its namesake project in 2005 and handed that task to vice-president of exploration Darwin Green. Green, who studied a similar VMS deposit for his graduate degree, immediately started to focus on the details.

“Our hit ratio is dramatically better because we used small-scale faulting in the drill core to chase the lenses,” Green says, comparing Niblack’s success to less impressive results from Abacus Mining & Exploration (AME-V, ABCFF-O), which owned and explored the site from 1995 to 2005. In 2005, Abacus spun off Niblack Mining with the Niblack property as its sole asset.

Two years later, Niblack has developed a mineralization model. Green thinks the steep hills of the property host multiple stacked massive sulphide lenses hosted by a thick sequence of variably deformed, felsic volcanic host rhyolite. The rhyolite is sandwiched between mafic hangingwall rocks and mafic-felsic footwall rocks.

There are six major massive sulphide showings on the project, five of which are perched on the side of a mountain. At first, Green only knew that the lenses were linear bodies with short strike lengths but long down-plunge extents. Now he believes the showings belong to as many as four stacked lenses cutting through the mountain, born from numerous large-scale folds in the same rhyolite-hosted layer.

In essence, Green and his team think the rhyolite lies within the mountain in the shape of an M with the top corners cut off. The middle V of the shape plunges down and into the hillside, making it difficult to trace from surface without very deep drilling. That realization led to an expensive decision to start an underground exploration program.

“We’ve really spent our time trying to define resources in the upper reaches of the zones for the past few years — we haven’t been trying to go that deep because we knew we were going underground,” Green explains, walking up the newly built 1,500 metres of road leading to the portal face.

The underground program will explore at depth the zones Niblack has been investigating from surface. The company’s main focus is the Lookout zone, perched on the peak of the mountain. More specifically, Lookout sits on the overturned limb of a large southwest-plunging syncline. The most developed zone on the project, Lookout has seen 140 surface drill holes that have outlined a mineralized massive sulphide lens 120 metres wide, up to 60 metres thick, and thus far to 500 metres depth.

Through the first 70 metres, the rock is oxidized and carries higher-grade precious metals. The oxide portion has returned 27 metres of 3.12 grams gold and 14 grams silver per tonne from hole 175, and then 30 metres of 7.94 grams gold and 42 grams silver from hole 177. Niblack president Paddy Nichol says mining the gold-silver-rich oxide portion first could fund subsequent underground operations.

Below the oxide zone, the rhyolite plunges down and into the mountain, and drilling has returned strong intervals from depth. Hole 188 cut 24.4 metres of 3.63 grams gold, 37 grams silver, 1.59% copper, and 0.5% zinc from 284 metres depth.

The underground exploration plan is to expand the Lookout mineralization at depth while also clearing a path to explore other zones difficult to access from surface. The zones surface on hillsides so steep that drilling access roads is out of the question; all surface drilling has to be helicopter supported. Moreover, although the island does not get a lot of snow, wintertime helicopter operations are impossible due to the wind and fog.

“With the helicopters and the depth of drilling we’re at now, it’s actually cheaper to go underground,” Green says.

The main tunnel will extend almost 1,000 metres into the hillside, entering just above sea level and intersecting the deepest surface drill holes from Lookout. The company is also planning almost 1,000 metres of drifts.

At the end of the tunnel, a drift into the footwall rocks will allow drills to probe the downward extension of the Lookout zone. Green predicts the Lookout massive sulphide lens extends to a depth of 1,200 metres, where the lens folds almost in half and starts heading back up, towards the mouth of the portal. Drilling from the footwall drift will also probe the fold, which Green has labelled the Hinge zone.

“There’s not a lot of potential for remobilization of sulphides but if it did remobilize, that’s where it would gather, so we’re going to look,” he says.

Near the middle of the crosscut, a drift into the hangingwall rocks will provide a drill pad to explore the North Limb target, which is simply the extension of the lens past the Hinge towards surface. And a third drift not far from the portal will explore the Mammoth zone, a showing explored in the past as a separate mineral occurrence, but which Niblack geologists now believe is the same lens as Lookout, folded at depth and reappearing.

“All of these showings are significant — we’re not talking chips or boulder occurrences,” Green says. “That’s why we think there’s this camp-scale potential here.”

Development

The project is located at the head of a deep, tidewater inlet on Prince of Wales Island, near Ketchikan on the Alaskan Panhandle. The ease of access is hard to believe — barges can be brought right to the head of the inlet, and Ketchikan is 15 minutes away by float plane.

Niblack owns the mineral rights, as well as the majority of the 11.3-sq.-km parcel of land, which Nicol says has helped move the project along.

“We still have to do what’s required, of course, but ownership has really sped up the process of getting to where we are today,” he says.

Niblack was mined for five years during the early 1900s — 50,000 tonnes of ore grading roughly 5% copper were loaded onto barges and shipped away. Slumping metal prices and subsequent litigation meant the project was dropped in 1908.

It was 1974 before the site again saw action. In the next 20 years, companies including Teck Cominco (TCK.B-T, TCK-N) predecessor Cominco, Anaconda Mining (anx-t, anxgf-o), Noranda (now part of Xstrata [XSRAF-O, XTA-L]), and Lac Minerals (now part of Barrick Gold [ABX-T, ABX-N]), drilled a total of 59 holes in the area. In 1993, Lac Minerals intersected 62.8 ft. of mineralization grading 0.04 oz. gold per ton, 1.55 oz. silver, 6.42% copper and 3.21% zinc in what became the Dama zone.

Abacus bought Niblack from Lac and Noranda in 1995. Within two years, Abacus had drilled 101 holes, discovering the Lookout zone and expanding known mineralization at the historic mine site. Failing metal prices again brought the project to a halt.

In the two years since Abacus spun out Niblack, the company has made considerable progress in terms of infrastructure and permitting, and spent $22 million doing so. In April 2006, Niblack hired the Alaskan government to co-ordinate the underground exploration permit process, and within 14 months had the permits in hand.

Rather than using the small amount of level ground on the project to build a camp, the company brought in a barge to serve as the living quarters, kitchen, and office. This summer the barge was expanded, with an extension built to house a lab and a bigger office.

The $120,000 lab is a key aspect of tunnel development. The mafic hangingwall and mafic-felsic footwall rock is carbonate rich and therefore non-a
cid generating, whereas the rhyolites that host the mineralization have the potential to generate acid runoff. In boring the tunnel, the company expects 77% of the 46,600 cubic metres of waste rock to be non-acid generating and 23% potentially acid generating.

Thus, Niblack has developed two tailings sites. For the time being, the non-acid generating rock will be dumped in a cleared area; Nichols is trying to arrange to donate the rock to the town of Ketchikan, where it is needed to build roads. The potentially acid-generating rock, characterized by having more than 0.22% sulphide, will be stored in a lined, ditched facility, along with the wastewater from the adit. The wastewater and runoff will be treated and then discharged.

To ascertain which rock they are in, Niblack is testing the rock’s sulphide content every 10 metres using X-ray fluorescence (XRF) analysis. A crusher grinds the rock, and then presses it into pellets that are fed into the $85,000 XRF machine.

“It’s a spendy piece of equipment, but it’s the way to do it right,” Nichol says. As well, closely analyzing the rock encountered as the tunnel is bored will give Niblack a strong hold on the rock characteristics — important information in developing an underground mining plan.

Henry Bogert, Niblack’s underground operations manager, says from what he’s seen so far, the rock mass is generally very good and would support just about any type of mining. Assays to date have shown clean mineralization — no arsenic, antimony or mercury. Lead is also hard to find, even when the core returns high-grade zinc.

As for the adit, at presstime Niblack was 30 metres into the tunnel. Nichol says progress was slow during the first few weeks because the company grouted the walls. Now that the adit is drying out, the pace has quickened, and workers are able to advance some 6 metres a day.

“We’re really looking forward to getting to the first drift area,” Nichol says. “We should be there by the end of November, and start underground drilling as soon as possible.”

And though the Niblack property is keeping the company more than busy right now, Niblack owns two other properties on Prince of Wales. The Ruby Tuesday property sits 20 km northwest of Niblack, also on a deep tidewater inlet, and the Cayenne property is 5 km northwest of that. Ruby Tuesday has seen 13 diamond drill holes over the past 15 years, 12 of which hit VMS mineralization, and Niblack conducted a small geophysics survey at Cayenne this summer.

“The whole area is extremely underexplored,” Green says. “Projects in this area died with copper prices in the 1990s and after that never got the attention they deserved. Both sites are definitely attractive. They’re our farm team prospects.”