Vancouver — Large copper-gold porphyry intrusions typically occur in clusters, and
Cominco, now part of
The major began exploring the region by targeting gold-bearing quartz veins several kilometres from the eventual discovery. Drilling and sampling proved unsatisfactory. However, a review of regional geochemical results indicated nearby copper values in soils. An induced-polarization survey subsequently outlined an anomaly that suggested potential for a copper-bearing porphyry. Although no outcrops were found, sulphide mineralization was discovered in a few frost boils, and then, in 1989, the last drill hole of the program cut copper-gold mineralization.
“This entirely new discovery was made through sound grassroots exploration, and the geologists are to be congratulated for their efforts,” said Owen Owens, Cominco’s vice-president of exploration at the time.
Attracted by the moderate terrain and reasonable accessibility (only 95 km from Alaskan coastal waters), Cominco forged ahead with a widely spaced drill program over the Pebble prospect from 1990 and 1992. The encouraging results led to preliminary metallurgical tests, which indicated copper-gold porphyry recovery rates of up to 94% for copper, 84% for gold and 78% for molybdenum. The mineralization proved to be amenable to conventional flotation.
The company then went on to complete preliminary design and engineering work, which entailed identifying sites for processing facilities, accommodation and tailings storage. Power requirements could be served by nearby supplies of natural gas and coal.
In 1993, the company drilled four holes about 6 km south of the discovery, cutting widespread porphyry-style alteration. Five years later, as a result of geophysical work, Cominco had outlined a 55-sq-km anomaly, while, at the same time, tabling an inferred resource, for the Pebble deposit of 1 billion tonnes grading 0.3% copper and 0.34 gram gold per tonne, based on 110 drill holes. Within this deposit is a higher-grade core containing 54 million tonnes of 0.54% copper and 0.46 gram gold.
“We are interested in the core zone of the Pebble deposit,” says Robert Dickinson, co-chairman of the Hunter-Dickinson (HD) group, which inked a purchase agreement for the Pebble deposit earlier this year. “But our focus is really on finding deposits down the belt within the extensive geophysical anomaly.”
Encouraged by the size of the sulphide system, HD staked additional ground southwest of the original claims and ran a geophysical survey, which expanded the anomaly to 89 sq. km. The accumulated data enabled company geologists to define six large coincidental geochemical and geophysical target areas over the 258-sq.-km project. Pebble is the largest and northernmost anomaly. With the ground tied up and the targets in place, HD assigned the project to Northern Dynasty in early November.
Under the deal, the junior can purchase the 36 claims covering the Pebble deposit by paying Teck Cominco US$10 million in cash or stock by Nov. 30, 2003, and purchasing HD’s 20% interest in shares at its independently appraised value. The first payment of US$250,000, plus 500,000 two-year warrants exercisable at 75 each, is due to Teck Cominco by year-end.
Extension
Once the purchase is complete, the junior can earn a 50% stake in the surrounding property by completing 18,290 metres of drilling before Nov. 30, 2004. A 2-year extension is available at a cost of 100,000 shares per year. At that time, Teck Cominco can elect to enter into a 50-50 joint venture or sell its remaining half-interest to Northern Dynasty for US$4 million and a 5% net profits interest.
“Not many people are aware of Alaska’s porphyry potential,” Northern Dynasty’s exploration manager, Mark Rebagliati, tells The Northern Miner, “but the Pebble deposit lines right up on the Circum-Pacific porphyry belt, which hosts most of the world-class copper-gold deposits.”
The property covers a 22-by-6-km multi-phase intrusive corridor at the southeastern edge of the Kaskanak batholith. Copper-gold mineralization is centred on a late Cretaceous intrusive complex containing biotite, diorite, porphyritic granodiorite and intrusive breccias. The stocks, dykes and sills intrude Jurassic-to-Cretaceous sedimentary rocks, which are also well-mineralized and host a large portion of the Pebble deposit. Mineralization occurs as pyrite, chalcopyrite, bornite and molybdenum in fracture fillings, veins, veinlets and disseminations. A supergene cap of covellite with lesser amounts of chalcocite occurs over a section of the Pebble deposit. Overburden cover is generally limited to less than 15 metres, with the gentle topography resulting in an overall stripping ratio of 0.24-to-1. Mapping, combined with geochemical and geophysical surveys, indicates that the Pebble deposit forms only a small part of a larger series of hydrothermal sulphide systems over an area measuring 21 by 9 km.
“There are more than 8,000 geochemical samples, which define a number of overlapping copper, gold and molybdenum hot spots that correspond to the cores of the geophysical anomalies,” adds Rebagliati. “We have the complete porphyry signature, and each one needs to be drill-tested.”
Comparable size
The size of the Pebble sulphide system compares favourably with other major copper-producing centres on the Pacific coast. The largest copper-producing sulphide system is at Collahuasi in Chile, where four major deposits — Quebrada Blanca, Rosario, Profunda and Ujina — occur 10-20 km apart in a 20-by-5-km zone of alteration.
“The whole industry has been consolidating, and the major copper producers are all looking for the same beast — a world-class deposit,” states Dickinson. “Finding 300-million-tonne deposits won’t work anymore; companies need to explore big sulphide systems that hold the potential for big orebodies.”
Cominco determined that, in order for development to proceed, the Pebble project requires a reserve of 200 million tonnes grading 0.54% copper and 0.46 grams gold per tonne.
“Our economic modelling showed that 180 million tonnes of material grading the same as the Pebble core zone would generate a positive return,” states a smiling Dickinson. “The initial focus is to find one or two additional high-grade cores, and then the Pebble deposit becomes very valuable by adding up to 50 years of production life from its 1 billion tonnes of ore.”
Although Pebble is not its initial target, Northern Dynasty says additional drilling could increase the high-grade core zone to about 80 million tonnes from the current 54 million tonnes.
“The deposit is wide open,” says Rebagliati. “There are drill holes outside the resource that exceed the average grade of the deposit, and there could be more than one higher-grade zone.”
Northern Dynasty has spotted 40 drill holes over a 20-km portion of the property. Only three of the holes are collared in the Pebble resource area; the remainder will test the five other anomalies. Drilling is slated to start in May 2002.
Northern Dynasty has $3 million in working capital and 7.2 million outstanding shares (12.8 million shares fully diluted).
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