Remote gold operations pick up pace

  • By Tim Bradner
  • Thursday, November 15, 2012 2:48pm
  • NewsBusiness

High gold prices have stimulated Alaska mining projects including several in remote areas.

The small Nixon Fork underground gold and copper mine near McGrath on the upper Kuskokwim River continued operations in 2012, according to its owner, Canada-based Fire River Gold Corp.

In late October, the mine was producing 3,800 tons of ore daily, twice the rate from earlier in the year, and had reached a stable production rate, according to Fire River spokeswoman Kimberly Ann.

What is encouraging is the performance of the ore mill at the mine, which is now achieving about 85 percent recovery of gold, she said.

Nixon Fork produces both a gold concentrate and gold bars, with the copper as a byproduct.

Concentrates and gold bars are flown from the remote site.

Fire River began operations at Nixon Fork in mid-2011. The mine had produced previously, but there was a history of operating problems.

The target rate for gold production is 30,000 ounces by the end of 2012, according to information on Fire River’s website, with a projected increase to 40,000 ounces in 2013 and 50,000 ounces in 2015.

The company will attempt to replace reserves that are mined with new resources added by exploration drilling, extending the life of the mine. There are now two drill rigs working on exploration drilling at the mine, on underground as well as above-ground targets, Ann said.

Nixon Fork has a long history. The mine was previously owned by Nevada Goldfields Inc., from 1993 to 1999, and St. Andrew Goldfields until 2008.

From 2004 through 2008 the previous owners spent more than $50 million in upgrades to processing facilities, mine infrastructure, permits and bonding.

Fire River Gold purchased the project in 2009 for $3.1 million in cash and shares. The company moved to reevaluate 9,381 meters of definition drilling that had been done in 2007 and 2008, but which was never fully evaluated.

The property encompasses 11,000 acres. The land, facilities and infrastructure have an approximate replacement value of $150 million, Fire River said on its website.

 

Terra could produce 1M ounces

Another remote gold mine project in Interior Alaska is in advanced exploration. WestMountain Gold Inc. of Denver reported it has concluded its summer 2012 exploration program at the company’s Terra Gold project in Alaska, with four diamond-drill holes involving 3,782 feet of core drilling.

The project is about 125 miles northwest of Anchorage in the Alaska Range.

“The Terra project continues to produce bonanza gold intercepts and we are confident that the resource will reach 1 million ounces. We are also enthusiastic about the positive gold intercepts and the completion of the on-site gold plant,” WestMountain CEO Greg Schifrin said in an Oct. 25 press release.

The drilling has extended the known vein system 200 meters north, WestMountain said.

The company also said a bulk sample mill at the site is now operational and that concentrates were produced in a one-week test run this summer.

Production of bulk samples will be expanded next summer with ore from several vein systems at the deposit, Schifrin said. Bulk concentrate samples will be flown from the site from an airstrip that has been constructed.

In other developments, Gustavson & Assoc., a consulting firm, will complete a third-party independent technical report on the project when assay work from 2012 drilling is completed. The report will include an updated resource estimate.

The Terra Gold project is being developed in a partnership with Corvus Gold, Inc. Terra Gold has the right to earn 51 percent of the project by spending $6 million on exploration and related work by December 2013.

Tim Bradner is a reporter for the Alaska Journal of Commerce.

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