Pebble resource gets a boost

Vancouver An independent resource estimate tabled by Northern Dynasty Minerals (NDM-V) has enhanced the economic potential of the Pebble gold-copper-molybdenum project in southwestern Alaska.

The study, completed by Australian-based Snowden Mining Industry Consultants, nearly triples the tonnage in the higher-grade core of the deposit to 141 million tonnes grading 0.48% copper and 0.67 grams gold per tonne from the previous 1990’s estimate of 54 million tonnes grading 0.54% copper and 0.46 gram gold.

Overall, using a 0.3% copper equivalent cut off grade and metal prices of US$0.80 per lb. copper, US$350 per oz gold and US$4.50 per lb. molybdenum, the inferred mineral resource tallies 1 billion tonnes grading 0.3% copper and 0.4 gram gold per tonne, generally in line with the earlier resource of 1 billion tonnes grading 0.3% copper and 0.34 gram gold per tonne.

"Snowden’s resource estimate has demonstrated the Pebble deposit hosts dramatically more good-grade resources than previously recognized," says Northern Dynasty’s Co-Chairman Robert Dickinson, "and we now plan to move the project rapidly towards prefeasibility for a large-scale mining venture."

Situated 380 km southwest of Anchorage, the Pebble deposit was discovered by Cominco, now part of Teck Cominco (TEK-T), in the late 1980s. The major initially set its sights on the gold potential of the area, but a review of regional geochemical results indicated greater prospects for “copper porphyry”-style mineralization.

In 2000, the management team behind the Hunter-Dickinson (HD) group of companies recognized the prospects for additional discoveries within the large alteration system associated with the Pebble deposit and inked a deal with Cominco. The group then staked additional ground southwest of the original claims and ran a geophysical survey, which expanded the existing anomaly to a 21-by-9 km area. The accumulated data enabled company geologists to define six large coincidental geochemical and geophysical target areas over the 258-sq.-km project. Pebble marks the largest and northernmost anomaly. With the ground tied up and the targets in place, HD assigned the project to Northern Dynasty late in 2001.

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. Once the purchase is complete, the junior can earn a half-interest 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. In Dec. 2002, the junior issued 200,000 shares to the major in exchange for a one-year extension on the purchase agreement to Nov. 30, 2004.

Last year, the HD-led junior sunk 68 holes totaling 11,300 metres into the 89-sq.-km alteration system. This drilling lead to the discovery of three new distinct types of potentially economic mineralization south of the historic deposit.

The first new discovery lies 12-km southwest south of the Pebble deposit, where hole 34 cut 64 metres grading 0.3% copper and 0.2 gram gold per tonne at a down-hole depth of 21.3 metres. Moving 450 metres to the north, hole 38 hit 160 metres grading 0.32% copper and 0.33 gram gold at 35.4 metres down-hole. Subsequent drilling outlined a mineralized zone some 1 km long and up to 600 metres wide with the zone still open along strike and at depth. All 16 holes drilled into the new find show classic copper-gold-molybdenum porphyry-style mineralization but lack the sills and dykes commonly observed in the Pebble deposit.

Moving 5 km west of hole 38, hole 37 tested a 1-km-long gold-copper soil geochemical anomaly and cut a broad zone of chalcopyrite-pyrrhotite skarn-style mineralization, yielding 0.4% copper and 1 gram gold over 79 metres at 14.9 metres down-hole. Included in this section was a higher-grade portion running 1.7% copper and 3.6 grams gold over 6.5 metres. Moving 1.5-to-2 km north, four scout holes returned narrow sections of up to 0.7% copper and 5.2 grams gold.

Some 5-km southwest of the Pebble deposit, hole 25 tested an 800-by-800 metre gold-in-soil anomaly and returned an impressive 28.9 grams gold over 6.1 metres. The mineralization is hosted in a biotitic pyroxenite and lies 350 metres southwest of a previous Cominco hole, which returned 33.9 grams gold over 1.5 metres. Additional drilling returned 15.3 grams gold over 3.1 metres in hole 62. The mineralization is structurally controlled and is located within a separate hydrothermal centre from the Pebble deposit.

All three styles of mineralization occur within a 22-by-6-km multi-phase intrusive corridor at the southeastern edge of the Kaskanak batholith and are associated with a late Cretaceous intrusive complex.

This year, Northern Dynasty aims to expand and delineate the higher-grade core of the Pebble deposit and to further test the new discoveries with additional drilling.