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Alaska 2014 mining in review.

The news from Alaska's mining industry in 2014 was decidedly mixed, with most operating mines doing well on softer but still reasonable metals prices. The Fort Knox mine poured its 6 millionth ounce of gold in late 2013 while Red Dog is celebrating 25 years of continuous production (1989-2014). New mine development expenditures were down significantly in 2014 while Alaska's mineral exploration industry experienced its third consecutive year of declining expenditures with total exploration spending likely falling to the lowest level in a decade. The exploration turn-around that was being predicted in early 2014 did not materialize, leaving only a few projects with budgets above the maintenance level. This mixed bag of fruit also was present on the regulatory front with EPA's heavy-handed regulatory threats at Pebble in stark contrast to the State of Alaska's progressive infrastructure support for projects like Bornite, Niblack, and Bokan-Dotson Ridge and the steady permitting progress enjoyed by the Donlin project over the course of the last year.

WESTERN ALASKA

Teck Resources Ltd. and partner NANA Inc. announced year-end 2013 and first half 2014 results from its Red Dog mine. For 2013 the mine produced 504,100 tonnes of zinc in concentrate. Zinc ore grade for the year was 17.0% and mill recoveries were up slightly to 84%. The mine also produced 96,700 tonnes of lead in concentrate for the year, levels that were up over full year 2012 production. Lead ore grade for the year decreased to 3.96% while mill recoveries increased slightly to 64.9% compared to 2012. Operating profit after depreciation, amortization, and price adjustments for 2013 was $364 million, compared with $384 million in 2012. Mill throughput for 2013 was a record 3,850,000 tonnes due in part to softer ore, which also contributed to the better recoveries for zinc and lead. During the first half of 2014 the mine produced 293,200 tonnes of zinc in concentrate. Zinc ore grade decreased slightly to 16.7% while mill recoveries were down slightly to 82.9%. The mine also produced 56,100 tonnes of lead in concentrate. Lead ore grade increased to 4.3% while mill recoveries decreased significantly to 61.2%. The mine posted a $168 million operating profit for the first half, up significantly from the $127 million profit in the year previous period, partly due to rising zinc and lead prices. Zinc and lead production in the second quarter increased 2% and 7%, respectively, due to the processing of softer ores, which substantially increased tonnes milled in the period. These items were partially offset by lower zinc ore grades and recoveries. The mine plans to ship 996.000 tonnes of zinc concentrate and 184.000 tonnes of lead concentrate from the port facility during the 2014 shipping season. Congratulations are also in to partners Teck Resources and NANA Inc. on the 25th anniversary of operations at Red Dog!

Zazu Metals Corporation announced positive results from the Preliminary Economic Analysis (PEA) completed at its Lik property approximately 22 kilometers from Teck/ NANA's Red Dog mine. At $0.92 cent zinc average price and an 8% interest rate, the post-tax internal rate of return was 9.7% with a net present value of $25 million. The study shows that the deposit's economics is sensitive to the price of zinc: an average zinc price of $1.00 more than triples the net present value and pushes the internal rate of return to 13.4%. As modeled, an open pit operation at Lik South would have average annual production of 234,000 dry tonnes of zinc concentrate and 55,800 dry tonnes of lead concentrate. In total, 17.1 million tonnes of ore would be milled at a rate of 5,500 tonnes per day at an average grade of 7.7% zinc, 2.6% lead and 47 grams of silver per tonne. The study estimated a total capital cost of $352 million including a 20% contingency for a 2 million tonne-per-year mine and mill with an initial 9 year mine life.

Graphite One Resources Inc. announced commencement of drilling at its Graphite Creek property. The company plans to conduct infill drilling at approximately 50 meter spaced centers, with the goal being to convert a portion of the industry compliant inferred resource of 284.71 million tonnes at 4.5% graphite to the indicated and/or measured category. The resource represents drilling along 4.8 kilometers of an 18 kilometer long conductor. The 2014 drilling is designed to continue to demonstrate the continuity of the mineralization both along strike and down dip. The company also plans to collect a small metallurgical bulk sample from both surface exposures and existing drill core. Previous mineral beneficiation tests using a leaching process yielded results exceeding 99.9% carbon from a rough concentrate produced from floatation which had an initial 92% carbon head grade. Mineralization on the property is characterized by coarse crystalline graphite (greater than 80 mesh) within graphite-bearing schists.

Fire River Gold Corp. announced that Waterton Global Value, LP has taken full and unrestricted ownership of the Nixon Fork gold-copper mine due to a default by Fire River on the terms of a credit agreement with Waterton. Waterton will accept all rights to the property as full and final satisfaction of the indebtedness. As part of the final settlement agreement Waterton also agreed to pay to Fire River approximately $250,000. Waterton's immediate plans for Nixon Fork were not released.

NovaGold Resource Inc. and 50:50 joint venture with Barrick Gold Corp. made significant permitting progress at their Donlin Gold project over the last 12 months. The company has held public scoping meetings in various Yukon-Kuskokwim villages and has continued its workforce initiatives, community outreach, and social engagement efforts throughout the region. In 2013, project expenditures were $29.2 million compared to $33.9 million in 2012. During the first half of 2014 the US Army Corps of Engineers, and cooperating agencies, completed identification of project alternatives, including variations on certain mine site facility de signs, local transportation options, and power supply options. Preparations of the remaining components of the preliminary draft EIS are expected to be completed over the next two quarters. The partners also submitted a right-of-way lease application for a proposed liquefied natural gas pipeline to the site of the proposed Donlin mine project. The 14-inch diameter pipeline would originate at the west end of the Beluga natural gas field approximately 30 miles northwest of Anchorage and run 315 miles to the proposed mine site. The planned pipeline will cross a variety of lands, with about 207 miles located on State of Alaska lands. A feasibility study completed in 2011 envisions a 53,500-metric-ton-per-day mill producing an average of 1.1 million ounces of gold annually at a cash cost of $585 per ounce for 27 years. The mine would consume roughly 85 megawatts of electricity, enough power for a city of around 120,000 people. The partners expect to spend approximately $24 million at Donlin in 2014 for agency review and in preparation for issuance of the draft EIS for public review in 2015.

Southern Crown Minerals Ltd., an Alaska newcomer, announced acquisition of the Luna-Quicksilver, Kisa, and Chilly goldsilver copper projects near Bethel. The company was planning a 1,200 meter drilling program for fall 2014 to follow up ground geophysical surveys completed earlier in the year. The key Luna-Quicksilver prospect contains two large un-drilled outcropping semi-massive sulfide stockworks 1.2 kilometers distant from each other. Rock chip and channel sampling of Luna stockwork outcrop has returned up to 64.7 grams of gold per tonne and 74 grams of silver per tonne. Rock chip and channel sampling of Luna East sulfide outcrop has returned up to 1.2% copper and 90 grams of silver per tonne. The Luna-Quicksilver veins are hosted in quartz-carbonate stockwork veins in altered sediments and intrusive with anomalous gold, silver, antimony, bismuth, arsenic, molybdenum, tellurium, and tin with Luna East also highly anomalous in copper with values up to 1.2%. Kisa, drilled with 6 holes by Gold Crest Mines in 2007, intersected gold in a breccia pipe with best intercept of 126 meters grading 0.65 grams of gold per tonne from hole K07-05. Chilly hosts a 500 meter long gold anomaly (>100 part per million gold) with a larger coincident arsenic anomaly (>250 parts per million arsenic).

Northern Dynasty's Pebble gold-copper-molybdenum project has been in the news all year as they continue their battle with the US Environmental Protection Agency's (EPA) planned, precedent-setting, preemptive, pre-permit prohibition of the porphyry project. The EPA's actions were predicated on their flawed Bristol Bay Watershed Assessment (BBWA), an initiative launched by the EPA in February 2011 to assess the effects of current and potential future development on the natural resources of Bristol Bay. EPA released their final product to widespread criticism about the report's flawed methodology and findings. Joining Northern Dynasty in condemning the report and the planned actions were the State of Alaska, Alaska Native groups, and expert Peer Reviewers commissioned by the federal agency. The EPA's claim that their precedent-setting proposal is specific to the Pebble deposit and would not affect other deposits or claims was met with immediate and extreme skepticism by mining companies, mining advocacy groups, and natural resource industry representatives. EPA's credibility in this matter was further damaged when the Washington Times reported that internal EPA memos dating back to at least 2008 were urging this never-before attempted pre-emptive veto of Northern Dynasty's right to develop Pebble. The EPA did not announce their review of the Bristol Bay watershed until 2011. The Washington Post reported that, despite EPA's claim that the Bristol Bay watershed study was prompted by requests from Alaska tribal entities, internal EPA memos that long pre-date the study showed that "EPA officials had regular contacts with potential opponents of the mining project, coordinating activities with environmentalists and even coaching local tribes on how they could strengthen their case opposing the project."

Millrock Resources Inc. and funding partner First Quantum Minerals Ltd. announced completion of the field exploration work on its Alaska Peninsula project. Initial work consisted of 1,140 line kilometers of high-resolution airborne magnetic and radiometric data collected over the Bee Creek, Mallard Duck Bay, and Kawisgag prospects. The second phase consisted of geological mapping along with rock and a soil geochemical sampling. Combined results from the $600,000 effort will be utilized to outline and prioritize drilling targets for 2015. First Quantum retains an option to earn up to an 80% joint venture interest in the property through a two-stage option agreement. The project is comprised of mineral lands owned by and leased from Bristol Bay Native Corporation. Welcome to Alaska First Quantum Minerals Ltd!

Redstar Gold Corp. had a busy year at its flagship Unga gold project near Sand Point. The company announced that it has completed purchase of a 100% ownership Shumagin property from Magnum Hunter Exploration. It then acquired the remainder of the property rights from Full Metal Minerals Ltd. by assuming its Full Metal's obligations on its Option to Lease with the Aleut Corporation, an Alaska Native-owned Regional Corporation. Redstar is the first company to consolidate land holdings at Unga, a volcanic-hosted, intermediate-sulfidation epithermal vein system with over 22 kilometers of documented mineralization on two parallel gold trends. Past production from the Apollo and Sitka vein systems from 1891 to 1922 is estimated at 150,000 ounces of gold at an average grade of 10.3 grams of gold per tonne. The company then launched a two month 2014 surface mapping and sampling program that includes select, continuous-chip, and gridded rock sampling along the project's two principal mineralized structural trends, Shumagin and Apollo. The overall objective of the 2014 surface program will be to delineate diamond drilling targets with the potential to host high-grade underground mineable gold bearing structures.

Full Metal Minerals Ltd. announced early in 2014 that it had re-acquired 100% interest in the Pyramid copper-molybdenum-gold porphyry project by acquiring Antofagasta Minerals S.A.'s 51% interest in in the project by paying an aggregate $5.5 million over time. Full Metal then entered into a tripartite letter of intent with International Enexco Inc. and Choice Gold Corp. to consolidate the Contact copper project in Nevada and the Pyramid copper project in Alaska. The Full Metal shareholders are expected to own approximately 19% of the combined company, which is expected to be renamed CopperBank Resources Corp. with the shareholders of Choice, Enexco and the subscribers to the private placement owning approximately 6%, 60%, and 16% of CopperBank, respectively. It is also anticipated that CopperBank will complete a five for one share consolidation upon closing of the transaction. Full Metal's contribution to this transaction is only contemplated to include the subsidiary holding the Pyramid copper project. The immediate impact to the Pyramid copper project was not discussed. The inferred resource for Pyramid now stands at 173 million tonnes grading 0.35% copper, 0.02% molybdenum and 0.088 grams of gold per tonne.

INTERIOR ALASKA

Kinross Gold announced year-end 2013 and first half 2014 results from the Fort Knox mine near Fairbanks. Total 2013 production was up significantly over 2012 totals. The mine produced 421,641 ounces of gold at a cost of $561 per ounce versus 359,948 ounces of gold produced at a cost of $663 per ounce in 2012. During 2013 the mill processed 21,634,000 tonnes of ore grading 0.82 grams of gold per tonne. Mill recoveries were 83.7% for the year. During 2013 the mine placed 29,751,000 tonnes of ore grading 0.29 grams of gold per tonne on the valley leach facility. The 17% increase in total production was due primarily to higher mill head-grades and an increase in ounces recovered from the leach pad as a result of the commissioning and ramp-up of the second carbon-in-column plant, partially offset by a decrease in tonnes of ore processed. In a fitting end to a stellar 2013, the company announced that the mine pored its 6 millionth ounce of gold on December 18! When the mine poured its first ounce of gold, in late 1996, the deposit had a little over 4 million ounces of gold in its total resource. Of that, a little less than 3.5 million ounces was expected to be recoverable over its 10-year mine life. So here they were, 17 years down the road, pouring ounce number 6 million. Congratulations to all the employees and contractors that made it happen! For the first half of 2014 the mine produced 174,904 ounces of gold at a cost of $684 per ounce in the second quarter versus 195,992 ounces of gold at a cost of $566 per ounce in the year previous period. In the first quarter of 2014 the mill treated 3,307,000 tonnes of ore grading 0.66 grams of gold per tonne with a mill recovery of 84%. The valley leach saw additions of 2,790,000 tonnes of ore grading 0.27 grams of gold per tonne. During the second quarter the mine milled 3,241,000 tonnes of ore grading 0.50 grams of gold per tonne and processed an additional 6,638,000 tonnes of ore grading 0.29 grams of gold per tonne via valley leach. Gold recovery in the mill averaged 84%. Gold recovery on the heap leach pad was not released. The mine's production decline and cost increases are primarily due to lower ore grades.

Freegold Ventures Limited announced that it has engaged Tetra Tech Inc. to complete its initial Preliminary Economic Assessment (PEA) on its Golden Summit project located near Fairbanks. The PEA will examine potential for a standalone heap leach operation in the current Dolphin-Cleary Hill resource area and will also include a comprehensive review of the current sulfide resource using different cut off grades. Currently industry compliant indicated resources at Dolphin-Cleary Hill are 79,800,000 tonnes averaging 0.66 grams of gold per tonne for 1,683,000 ounces, and an inferred resource of 248,060,000 tonnes averaging 0.61 grams of gold per tonne for 4,841,000 ounces using 0.3 grams of gold per tonne as a possible open pit cut off. Since 2011, Freegold has increased indicated resources by 867% and inferred resources by 820%. Overall discovery costs since 2011 are estimated to be under $2.00 per ounce of gold in the Dolphin-Cleary Hill resource area. The company also announced initial cyanide leach results from metallurgical tests indicating that oxide material averaged 88% recovery, transition material averaged 57%, intrusive material averaged 56%, and hornfels-sulfide material averaged 45%. In addition a series of tests using a variety of methods were completed with the highest overall recovery coming from pressure oxidation-carbon-in-leach, with recoveries greater than 94.3%, and averaging 98.1%. Cyanide consumption was lowest under pressure oxidation- carbon-in-leach requiring 0.5 to 0.7 kilograms of sodium cyanide per tonne.

International Tower Hill Mines Ltd. announced that it continues to investigate a number of opportunities for optimization and cost reduction for the Livengood project. The mine plan outlined by its 2013 feasibility study was reviewed and modified to include changing pit slope designs, improvement of scheduling ore release, waste mining, and stockpile management. The metallurgical test work was reviewed to identify opportunities for optimization that may be confirmed by additional test work. Power supply alternatives were reviewed to determine how changing energy supply dynamics might impact the project assumptions regarding electrical generation. Construction and operations camp alternatives were reviewed to better define the costs of supporting the manpower requirements for the project. Environmental baseline efforts are continuing in order to prevent any significant delays in future permitting. The company also indicated that it remains open to a strategic alliance to help support the future development of the project, while it considers all other appropriate financing options.

Sumitomo Metal Mining (85%) and Sumitomo Corp. (15%) recently updated future plans for their Pogo gold mine. In 2013 the mine produced 10.5 tonnes of gold (approximately 337,500 ounces) and the partners are projecting 2014 production of approximately 10.7 tonnes of gold (344,000 ounces). The partners also indicated that commencement of production from the East Deep zone was planned for the first quarter of this year. The year-end 2013 resource/reserve estimates at Pogo total 59 tonnes of reserve and an additional 85 tonnes in resource for a total of 144 tonnes of gold (approximately 4.629 million ounces) in the Liese Zone and East Deep zones. Total production from commencement of commercial production to year-end 2013 is 2,472,632 ounces of gold at average head grades of 13 to 17 grams of gold per tonne (0.38 to 0.49 ounces of gold per ton). Average mill recovery over life of mine to date is approximately 87%. Earlier in 2014 the mine released a socioeconomic impact study of the mine that indicated the mine employed 329 workers in 2012, 70% of which were local residents. Average salary of these workers was $116,916, more than twice the State-wide average salary. The mine generated another 335 induced and indirect jobs, 215 of which were in the local area. These jobs contributed an additional $26 million to the Alaska economy. The mine spent $127.2 million with 290 Alaska-based vendors and contractors. The mine paid $24.3 million in taxes to State government, including $5.9 million for the Alaska Mining License Tax and $4.8 million in Alaska Production Royalty payments. The mine also contributed $811,000 to 40 Alaskan nonprofit organizations, $353,000 to the University of Alaska's Mining Engineering Research Endowment, and $300,000 to the city of Delta for various capital and special projects.

Freegold Ventures Limited announced that it acquired the Shorty Creek copper gold porphyry project from Fairbanks-based Gold Range Limited. In the mid 1980's soil sampling identified significant gold, copper, and pathfinder elements. Limited shallow drilling (6,843 feet in 20 holes) was completed in 1989 and 1990. Significant drill intercepts include 220 feet grading 1.22 grams of gold per tonne in hole RH89-08, including 25 feet grading 4.59 grams of gold per tonne and 55 feet grading 1.03 grams of gold per tonne in hole RH90-19. A small soil and rock sampling program was completed in 2005. In addition to the geochemical signature, widespread alteration is associated with small bodies of biotite granodiorite, quartz porphyry, and aplite are present throughout the property. An area of extensive alteration associated with quartz porphyry and granodiorite porphyry intrusives was previously identified over a 4 kilometer by 4 kilometer area. The best exposure of the altered intrusive rocks is reported to be in the middle reaches of Shorty Creek 835 feet below mineralized outcrops on Hill 1835 and 335 feet below the bottom of the deepest drill hole on the property. The company recently completed a ground geophysics program on the project.

Contango ORE Inc. announced its first resource estimate at Alaska's newest gold discovery, the Peak zone, on its Tetlin gold project. At a 0.5 grams of gold per tonne cutoff, initial indicated resources came in at 5,970,000 tonnes grading 3.46 grams of gold per tonne, 11.0 grams of silver per tonne, and 0.25% copper. Using the same cutoff, initial inferred resources came in at 3,850,000 tonnes grading 2.07 grams of gold per tonne, 14.28 grams of silver per tonne, and 0.235% copper. Significant drill results were also released in late 2013 included 84.43 meters grading 4.988 grams of gold per tonne, 16.7 grams of silver per tonne, and 0.167% copper in hole TET13098; 95.92 meters grading 5.748 grams of gold per tonne, 6.9 grams of silver per tonne and 0.140% copper in hole TET13100; 159.25 meters grading 7.010 grams of gold per tonne, 6.6 grams of silver per tonne, and 0.102% copper in hole TET13107; 96.93 meters grading 9.060 grams of gold per tonne, 4.3 grams of silver per tonne, and 0.093% copper in hole TET13110; and 134.83 meters grading 4.848 grams of gold per tonne, 2.9 grams of silver per tonne, and 0.084% copper in hole TET13117. Initial metallurgical test results released in 2014 indicate that both gold and sulfide minerals respond to standard gravity and froth flotation treatment and that gold is not refractory in nature. The company has been reviewing acquisition offers since early 2014.

ALASKA RANGE

Usibelli Coal Mine released some interesting information during 2014. The mine has been in continuous operation since 1943 and currently produces about 2 million tons of coal per year using an employee base of 130 people. Approximately one-half of its production is exported to Chile, South Korea and Japan. About 30% of the employee work force is second, third and fourth generation employees. An analysis that looked at eliminating coal from Interior Alaska's electrical generation facilities indicated that eliminating coal, currently our lowest cost energy producer, would result in Interior rate payers absorbing an additional $200 million per year in new energy costs. On a per Btu basis, coal is half the cost of natural gas, one-third the cost of naphtha, and one-sixth the cost of diesel. Coal accounts for 85% of the energy generated by the University of Alaska but only 44% of the university's annual energy costs. If the military facilities in Interior Alaska switched from coal to natural gas for energy generation, their energy costs would rise by at least 250%. For the months November through March, Usibelli accounts for one-sixth of the entire employment base of the Denali Borough. In 2012, Usibelli spent $72 million with 400 different organizations in Alaska. Interior Alaska enjoys 577 jobs and $44 million in annual payroll as a result of the mining, distribution, and consumption of coal from the mine.

Pure Nickel Inc. announced that partner ITOCHU Corporation has withdrawn from the MAN project joint venture after contributing over $23 million to exploration on the project over the last five years. The company indicated that it has retained 100% interest in the project. The company also announced results for a nickel deportment study completed for the Eureka Zone occurrence. The results indicate that the 73.5% of the nickel in the Eureka Zone mineralization is hosted by potentially recoverable nickel-iron sulfides (63%) and nickel-iron alloys (12.3%). Only 20% of the nickel is unrecoverable in silicate mineral hosts, primarily olivine and serpentine. The 126.6 meter long composite sample was collected from hole PNI-13-069 and averaged 30 parts per billion gold, 50 parts per billion platinum, 150 parts per billion palladium, 0.28% nickel, 0.12% copper, and 0.5 grams of silver per tonne. The central 5.7 kilometer-long portion of the 15 kilometer-long Eureka zone grades 0.23% nickel, 0.08% copper, 0.02% cobalt, 170 parts per billion gold + platinum + palladium, and 0.51 grams of silver per tonne over 203 meters.

Miranda Gold Corp. announced in late 2013 that it had signed an agreement with Alaska Hardrock Inc. on the Willow Creek project in the Willow Creek District near Anchorage. Historic production from land now controlled by Miranda is estimated at 500,000 ounces of gold. In 2014 the company announced that it has signed a Tetter of Intent on the project with Alaska-newcomer Gold Torrent, Inc. Gold Torrent plans to develop a small scale-underground mine operation and to bring the currently known mineralization into production, funded by its initial $10 million contribution. After adequate access has been developed underground, expansion and exploration drilling will be conducted to expand mineralization beyond the current levels. The company also announced an initial resource from historic drilling on the Coleman zone, which included measured and indicated resource of 62,100 ounces of gold contained in 78,700 tonnes grading 24.6 grams of gold per tonne using a cutoff of 7.0 grams of gold per tonne. An additional 4,100 ounces of inferred resources at the same cutoff are contained in 5,300 tonnes grading 24.2 grams of gold per tonne. The Coleman resource is characterized by a central quartz vein and several subsidiary hanging wall and footwall sub-parallel shallowly dipping, northwest striking quartz veins hosted within a quartz diorite intrusion. The veins intercepted by drilling average less than a meter thick and can be separated by up to 20 meters and tend to merge and splay. Disseminated native gold, tetrahedrite, telluride minerals, pyrite, arsenopyrite, and chalcopyrite are the primary metallic minerals in the veins. Welcome to Alaska Gold Torrent, Inc.!

WestMountain Gold, Inc. provided an update on its high-grade Terra project in western Alaska Range. Surface trench work and bulk sampling at the rate of 5 to 10 tons on the Ben and Fish veins has extended the strike length of both veins. This work follows on the company's 2013 bulk sample program which netted 275 ounces of gold from a 75-ton bulk averaging 5 ounces of gold per ton. In 2014 the company plans to collar an adit below the Ben vein, process a 2,000 ton bulk sample, complete mill and access/infrastructure upgrades, complete an airborne aeromagnetic survey over the project, and continue exploration of the Ben vein and other known veins. The company also announced that it acquired 100% ownership of the Terra gold project from Corvus Gold Inc. for $1.8 million in cash and 200,000 shares of WestMountain Gold.

NORTHERN ALASKA

NovaCopper Inc. in a bell weather announcement that went virtually unnoticed by the financial markets, announced an updated resource estimate at its Bornite deposit on its Upper Kobuk Mineral project, a partnership with NANA, Inc. The new resource estimate incorporates results from 216 diamond drill holes including 17 new holes totaling 8,142 meters drilled by the company during the $14.4 million 2013 program, as well new assays from 42 historical Kennecott drill holes comprising 14,457 meters that could not be used until re-assayed in 2013. The deposit now contains 5.7 billion pounds of copper in the Inferred category and 334 million pounds of copper in the Indicated category. In-Pit Indicated Resources include 14.1 million tonnes at an average grade of 1.08% copper containing 334 million pounds of copper at a 0.5% copper cutoff. In-Pit Inferred Resources include 109.6 million tonnes at an average grade of 0.94% copper containing 2.3 billion pounds of copper at a 0.5% copper cutoff. Below-Pit Inferred Resources include 55.6 million tonnes at an average grade of 2.81% copper containing 3.4 billion pounds of copper at a 1.5% copper cutoff. The partners are in the process of re-logging and assaying 12,918 meters of historic drill core from the prospect. The company also indicated that the Alaska Industrial Development Export Authority (AIDEA) was continuing to engage with the communities in the vicinity of the Ambler Mining District Industrial Access Road project. In late April 2014, AIDEA's board of directors approved a resolution authorizing AIDEA to proceed with an application for the Ambler road to the federal agencies that have jurisdiction over the Ambler road project and to engage a firm to prepare the environmental impact statement for the project. The State of Alaska approved $8.5 million for use by AIDEA for this purpose during the 2015 fiscal year. In addition, AIDEA has made significant progress on the Interior Energy Project which would involve the production, transportation and distribution of liquefied natural gas (LNG) from the North Slope of Alaska to end users in Fairbanks and possibly the Upper Kobuk Mineral project. AIDEA and its contractors are finalizing the estimated costs of the Interior Energy Project and expect first delivery of trucked LNG to end users commencing before the end of 2016.

Goldrich Mining Company and partner NyacAU, LLC provided a summary of 2013 results and a 2014 update on its 50/50 placer gold mining joint venture on the Chandalar project in the Brooks Range. In 2013 placer gold mining operations began in May and gold production commenced in late August. The partnership produced approximately 680 ounces of gold after 330 hours of plant operation at an average processing rate of 125 cubic yards per hour. Approximately 40,000 cubic yards were processed through the plant and 540,000 cubic yards were stripped or moved for construction during the 2013 mining system. The overall estimated stripping ratio for life of mine is 0.89:1 with over-all recovered grade of 0.017 ounces of gold per cubic yard (approximately $22/cubic yard at $1,300 per ounce gold prices). During 2014 the primary piece of equipment delivered to the mine site was a feeder for an expanded wash plant, to be completed in stages through 2016. The upgrade will take the plant capacity from 125 to 600 loose cubic yards per hour. The partners indicated that they will focus on plant construction in this year and do not intend to mine new gravels until 2015. All-in development costs incurred to the end of 2013 total about $13.7 million and the forecasted investment for 2014 is estimated to be about $4.5 million.

SOUTHEAST ALASKA

Hecla Mining announced year-end 2013 and first-half 2014 production results from the Greens Creek mine on Admiralty Island. The total cash cost per ounce of silver produced for 2013 was $4.42 per ounce versus $2.70 per ounce in 2012. The average grade of ore mined during the year was 13.04 ounces of silver per ton, up significantly from the average grade of 11.13 ounces per ton in the year previous. For the year the mine produced 7,448,347 ounces of silver, 57,457 ounces of gold, 20,114 tons of lead, and 57,614 tons of zinc. The mill operated at an average of 2,206 tons per day in 2013, which is the highest daily average since the mine began operations in 1989. The year-end 2013 reserves and resources for the mine included proven and probable reserves of 7,797,000 tons grading 11.9 ounces of silver per ton, 0.09 ounces of gold per ton, 3.3% lead, and 8.7% zinc. In addition, the mine contains measured and indicated resources of 767,000 tons of indicated resources grading 12.2 ounces of silver per ton, 0.09 ounces of gold per ton, 3.3% lead, and 7.3% zinc. The mine also reported inferred resources of 2,385,000 tons grading 13.3 ounces of silver per ton, 0.09 ounces of gold per ton, 2.7% lead, and 6.5% zinc. For the first half of 2014, the total cash cost per ounce of silver produced at Greens Creek was $2.52 per ounce versus $3.79 per ounce in the year previous period. Mining costs per ton were up slightly compared to the same period in 2013, and were partially offset by lower milling costs. The average grade of ore mined during the first half of 2014 was 12.24 ounces of silver per ton, down significantly from the average grade of 13.24 ounces per ton that was mined in the first half of 2013. During the first half of 2014 the mine produced 3,476,320 ounces of silver, 29,940 ounces of gold, 9,869 tons of lead, and 30,329 tons of zinc. The mill processed 403,861 tons of ore during the quarter, down from 409,578 tons milled in the year-previous period. Definition and pre-production drilling continued to upgrade the 5250, West Wall, and Deep Southwest resources. Drilling of the Deep 200 South confirmed the resource model provided some impressive intercepts, including 85.1 ounces of silver per ton, 0.18 ounces of gold per ton, 10.2% zinc, and 4.8% lead over 12.9 feet, and 44.3 ounces of silver per ton, 0.40 ounces of gold per ton, 23.1% zinc, and 12.4% lead over 3.2 feet.

Coeur Mining, Inc. announced full-year 2013 and first-half 2014 results the Kensington mine. For the full year 2013, the mine processed 553,717 tons of ore grading 0.21 ounces per ton with an average recovery of 96.6%. The mine was forecasting 2014 production of 105,000 to 112,000 ounces of gold. In early 2014 the mine announced updated resource estimates including proven and probable reserves of 6,016,000 tons grading 0.163 ounces of gold per ton (981,000 ounces), additional measured and indicated resources of 2,686,000 tons grading 0.211 ounces of gold per ton (566,000 ounces), and additional inferred resources of 1,014,000 tons grading 0.259 ounces of gold per ton (263,000 ounces). For the first quarter 2014 the mill processed 159,697 tons, or nearly 1,800 tons per day, a significant increase over previous quarters. The mine produced 25,428 ounces of gold grading 0.17 ounces of gold per ton with an average recovery of 94.5%. All-in sustaining cost of production was $1,005 per ounce compared to $667 per ounce cost in the year previous period, due to lower gold grades and production levels. For the second quarter of 2014 was 28,089 ounces of gold, a significant increase over the 23,162 ounces of gold produced in the second quarter of 2013. The mine processed 163,749 tons of ore grading 0.18 ounces of gold per ton during the quarter. Average recovery was 94.5%. Mill throughput was steady at 1,800 tons per day average. The increased production was the result of a 10% higher gold grade during the quarter, including an average grade of 0.22 ounces of gold per ton during June. Exploration efforts in 2014 included expanded drilling at the Jualin mine area, which is located south of the Kensington mine. Drilling targeted the Number 4 vein, one of several, discrete gold-bearing zones at Jualin. Consistent with historic results, occurrences of visible gold and high-grade mineralized intervals were intersected with the first five holes completed this year. Significant results include 1.4 meters grading 40.5 grams of gold per tonne and 1.4 meters grading 53.9 grams of gold per tonne. Underground drilling was conducted on the new Ann zone situated less than 200 feet to the east of the main Kensington deposit. Significant intercepts in this zone include 0.85 meters grading 76.5 grams of gold per tonne. Exploration to define and expand known mineralization on the southern margins of upper Zone 10 and Zone 20 in main Kensington returned 4.4 meters grading 41.5 grams of gold per tonne and 0.64 meters grading 66.9 grams of gold per tonne with mineralization remaining open to the south. Estimated 2014 total production from Kensington is 105,000 to 112,000 ounces of gold.

Constantine Metal Resources Ltd. and funding partner Dowa Metals and Mining Company Ltd. announced initial results from a 10,000 meter, $6.2 million 2014 drilling program on its Palmer volcanogenic massive sulfide project near Haines. The initial 2014 drilling has intersected a thick lens of high-grade massive sulfide 150 meters down dip of the lower edge of the South Wall Zone. Drill hole CMR14-54 returned 22.1 meters grading 2.48 percent copper, 4.05 percent zinc, 24.0 grams of silver per tonne, and 0.39 grams of gold per tonne. The intersection represents a significant expansion of the zone to depth. The hole was designed to test a large conductive geophysical target projected to be southwest of and down dip of the existing deposit. CMR14-54 confirms that the conductive zone is associated with significant grade massive sulfide which has now been defined over a vertical distance of over 600 meters and remains open to expansion at depth and along strike. This promising new intercept has caused the company to re-prioritize drilling on its $6.2 million program in order to rapidly assess the size and grade potential of the South Wall zone. Shortly after these results were released, the company announced that Japan Oil, Gas and Metals National Corporation (JOGMEC) has entered into a funding agreement with Dowa that would allow JOGMEC to fund up to 45% of Dowa's required earn-in amount to earn 45% of Dowa's interest in the project. Dowa can earn 49% in the Palmer project by making aggregate expenditures of $22 million over four years. Constantine's right to retain 51% majority interest in the Palmer project remains unaffected by JOGMEC's participation in the project. The project currently hosts a drill inferred resource of 4.75 million tonnes grading 1.84% copper, 4.57% zinc, 0.28 grams of gold per tonne, and 29 grams of silver per tonne.

Heatherdale Resources Ltd. announced Alaska Governor Sean Parnell has signed into law a bill authorizing the Alaska Industrial Development and Export Authority to provide up to $125 million in financing for infrastructure and construction costs at the Niblack volcanogenic massive sulfide project on Prince of Wales Island. The bill allows the Alaska Industrial Development and Export Authority to issue bonds to help finance the cost of constructing key infrastructure, including facilities at the project site on Prince of Wales Island as well as a mineral processing mill and an associated dock, loading, and related infrastructure facilities at the Gravina Island Industrial Complex near Ketchikan. The passage of the bill does not commit Alaska Industrial Development and Export Authority or the State of Alaska to any action. Alaska Industrial Development and Export Authority must still go through its conventional project evaluation and due diligence process prior to authorizing infrastructure financing for the project. Since 2009, the company has invested some $37 million and drilled more than 200,000 feet of core to define 5.6 million tonnes of indicated and 3.4 million tonnes of inferred mineral resources at Niblack. While possessing significant potential for expansion, the known mineral resources provide a solid basis for the initiation of engineering, environmental baseline, and other technical studies necessary for project planning and permitting.

Pure Nickel Inc. announced results from their 9-hole, 1700-meter drilling program at the North Pole Hill prospect on their Salt Chuck copper-gold-silver-palladium project. The program is designed to test the continuity of high grade gold-copper mineralization encountered in 2013 when drill hole NPH-12-04 intersected 29.1 grams of gold per tonne, 14.1 grams of silver per tonnes, and 0.79% copper over 2.58 meters. Best results came from 4 step-out holes around NPH-12-04, including hole NPH-14-07 which intersected 14.1 grams of gold per tonne and 0.74% copper over 0.5 meters apparent width, hole NPH-14-05 which intersected 1.3 grams of gold per tonne over 1.1 meters apparent width, and NPH-14-10 which intersected 1.3 grams of gold per tonne over 1.0 meters apparent width.

Ucore Rare Metals announced a progress report for its 2014 exploration at its Bokan--Dotson Ridge rare earth element project on Prince of Wales Island. The company has contracted with SRK Consulting to compile baseline data and qualitative results from ongoing engineering studies to produce a formal Plan of Operations for the project. The Plan of Operations will be submitted to the United States Forest Service to facilitate delivery of an Environmental Impact Statement and initiate the review process set out in the National Environmental Policy Act. The company also reported that two drills are operating, one focused on infill drilling for the purpose of upgrading the existing inferred resource to the indicated category. The other drill rig is testing multiple targets with the goal of expanding the existing resource at depth. This rig will also drill a number of geotechnical holes and groundwater monitoring wells to obtain supplementary data for use in the engineering and permitting of the project. The company also announced that Alaska Governor Sean Parnell has signed into law a bill authorizing the Alaska Industrial Development and Export Authority to provide up to $145 million in financing for surface infrastructure and construction costs at the project. The Bokan provision of the bill authorizes Alaska Industrial Development and Export Authority to issue bonds to finance the construction of key infrastructure for the project, including processing and above ground facilities. The company indicated that the funding arrangement would shift almost two-thirds of the project's capital costs off the company's books and into an 11 -year pay-back period, thereby improving short and long-term project economics. The passage of the bill does not commit Alaska Industrial Development and Export Authority or the State of Alaska to any action. Alaska Industrial Development and Export Authority must still go through its conventional project evaluation and due diligence process prior to authorizing infrastructure financing for the project. The company also announced an upgraded resource estimate for the project. Using a total rare earth oxide cut-off of 0.4%, the revised estimates include an Inferred Mineral Resource of 2.0 million tonnes grading 0.61% total rare earth oxide and an Indicated Mineral Resource of 2.9 million tonnes grading 0.61% total rare earth oxide. The ratio of heavy rare earth oxide to light rare earth oxides is 60:40. The resource update is based on a database of 80 diamond drill holes totaling 16,000 meters and 56 surface channels totaling 200 meters. The company plans to incorporate the results of this upgraded resource estimate, together with additional resource modeling, in a Feasibility Study to be released in late 2014.

Curtis J. Freeman, CPC #6901, is head of Avalon Development Corporation, PO Box 80268, Fairbanks, AK 99708. Phone: 907-457-5159. Fax: 907-4558069. Fie can also be contacted by email at avalon@alaska.net or found online at avalonalaksa.com.
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Title Annotation:SPECIAL SECTION: Mining
Comment:Alaska 2014 mining in review.(SPECIAL SECTION: Mining)
Author:Freeman, Curtis J.
Publication:Alaska Business Monthly
Date:Nov 1, 2014
Words:7324
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