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30 SEG NEWSLETTER No 91 • OCTOBER 2012 ... from 29 Exploration Reviews (Continued) EXPLORATION REVIEWS heavy summer rains but should be re - versed by increasing gold output from a number of current and new gold mining operations. The most significant will be the opening of Newcrest’s Cadia East underground mine, which is scheduled to commence production at the end of 2012 and will boost the combined Cadia operation’s output to an annual rate of 700–800 koz of gold and 100 kt of copper. The mine will be the deepest panel cave operation in the world and Australia’s largest underground mine. In addition, gold production will increase during the year when a number of copper-gold operations start up. These include the Sandfire Resources new DeGrussa mine in WA, and Ivanhoe Australia re-commencing production at its Osborne/Kulthor operation in NW Queensland. MEXICO Regional Correspondent: Erme Enriquez MSc, CPG (SEG 1984 F) Minera Canasil, S.A. de C.V. Alheli No. 142, Fracc. Jardines de Dgo Durango, DGO 34200, Mexico E-mail: eenriquez@canasil.com.mx MEXICO’S EXPLORATION TRENDS Mexico’s exploration expenditures are the highest in Latin America, reaching a record of almost US$1 billion in 2011, according to the latest report released by the Metals Economics Group (MEG), a think-tank based in Halifax, Canada. According to “Corporate exploration strategies” (CES), Mexico accounted for 23% of total nonferrous exploration budgets for the Latin American region and 6% of the overall global budget allocation for 2011. MEG estimates that the total 2011 worldwide exploration budget reached $18.2 billion. Since 2003, exploration spending grew faster than the world average, improving Mexico’s global rank from eighth to fourth place. MEG attributes much of this accelerated growth to increased spending by Canadian junior explorers. In terms of the types of companies exploring in Mexico, 80% of the active explorers tracked are juniors and the majority of them are based in Canada. Despite increased volatility in recent months, MEG concludes that metal prices—the primary driver of exploration spending—remained relatively strong through most of 2012. As a result, exploration budgets were up 50% from 2010, settiing a new all-time high. NORTHERN EURASIA Regional Correspondent: Alexander Yakubchuk (SEG 1999 F) Orsu Metals Corp, London, UK E-mail: ayakubchuk@orsumetals.com Detailed information can be found at http://gold.prime-tass.ru NORTHERN EURASIA GENERAL Russian President Vladimir Putin confirmed that the Russian state must fund exploration, emphasizing that it cannot be fully delegated to private companies. He also called for more efficiency in this area and for the allocation of more funds. The Russian Ministry of Natural Resources proposed a draft law to in - crease the maximum allowed foreign participation from 10 to 25% by companies working on licences of federal importance. There is also a shift to increase the threshold for strategic gold deposits (also limiting foreign participation) from 50 tonnes (t) of contained gold to 250 t. Another potentially important development is the award of two licences for development of nickel and PGM deposits in the Voronezh region in European Russia and Taimyr region in the Siberian part of Russia to companies that are not related to Norilsk Nickel, which controls up to 95% of Russian production of these metals. This can be viewed as an attempt to break a monopoly. Presi - dent Putin has also recently called to end the long-lasting corporate conflict inside Norilsk Nickel. In the Taimyr region, a licence for development of the southern part of Norilsk-1 deposit was awarded to Artel Amur, part of Russ - kaya Platina Group. Amur is mining platinum at the Kondyor placer deposit in Khabarovsk region in the Russian Far East. This may create a conflict of interest and infrastructural challenges within Norilsk Nickel, which is mining the northern part of Norilsk-1 deposit. The auction for the western flank of the Oktyabrskoye deposit (part of huge Talnakh deposit) did not take place because all applications were made from Norilsk Nickel. The potential licence would cover 50 km 2 . The forecast re - sources of this area in the P2 category are 9.6 Mt ore with 74.9 kt Ni and 135 kt Cu. Nordgold (formerly part of Severstal) provided an additional update on combined JORC compliant proved and probable ore reserves of 12.7 Moz for its deposits in the former Soviet Union and Africa. The company’s total JORC compliant mineral resources are 29.5 Moz gold (up 30% from 22.7 Moz in June 2011) of which 16.7 Moz are measured and indicated resources (up 39% from 12.0 Moz) and 12.7 Moz are in ferred resources (up 20% from 10.6 Moz). The average gold grade in ore reserves shows a decrease from an average of 1.30 to 1.15 g/t since the last update, owing to inclusion of the resource base at Gross (see detailed reviews for this low-grade, robust heap leach project in Russia with low stripping ratio and high recoveries) in the company’s reserves. Excluding the Gross project, average reserve grade has increased from 1.30 to 1.59 g/t. Russia continues its attempts to de - velop several major copper projects. The media have it rumored that Millhouse Group is running negotiations with BHP Billiton to develop the Peschanka porphyry copper deposit in the Baimka district in Chukotka, seeking $750 M payment. Millhouse won a license for this area back in 2008 by paying ca. $35 M. The licence covers 1,300 km 2 . The estimated resources of Peschanka are 7.9 Mt Cu and 450 t Au. The potential upside is 27 Mt of contained Cu and 1,600 t Au. On the processing side, some analysts acknowledged that pressure oxidation technology is becoming popular in Russia for treatment of refractory gold ores. Petropavlovsk plc and Polymetal International have independently commissioned POX plants, albeit technologically different, in Russia over the last 2 years. The Kazakhstan government declared the beginning of construction of a re - finery plant in Astana, with capacity of 25 t of gold and 50 t of silver. Currently, all locally produced gold is being sold unrefined or in concentrate. The commissioning of the plant is scheduled for 2013. The president of Kazakhstan called for increase of annual gold production to 70 t by 2015.
OCTOBER 2012 • No 91 SEG NEWSLETTER 31 CONTIGUOUS UNITED STATES Regional Correspondent: Roger C. Steininger (SEG 1978) COO & Director, Acquisitions & Exploration NuLegacy Gold Corp. 4790 Caughlin Parkway #765 Reno, NV 89519-0907 Tel. 1-775-742-6333 E-mail: audoctor@aol.com You know investors’ wallets have closed and exploration activities have slowed when . . . • Drilling companies that wouldn’t give you the time of day last year are calling to buy you lunch; • Assay turnaround time is now within the same year the samples are submitted; • There is a constant flow of property submittals, some of that even have potential; • The weekly emails from GSN announcing job openings have ceased and recruiters have stopped calling; • To keep people interested in Junior exploration companies, the flow of news releases has increased. Most of which are of little importance, such as-Golden Fleece is now leaving the office to commence field work, or they are thinking of drilling a hole once money is available; • Stocks that were selling for over a dollar recently are now $0.15 (U.S. or Canadian, it doesn’t matter); • Management and directors are being “retired.” You can now trade a CEO for a fifth round draft pick at most graduate schools; • Graduates are not being given “signing bonuses,” even if they can find a job. I just attended the reopening of the Climax mine, where I started my career. With a new mill in operation and trucks in the pit it was great to see the mine back in production. Even during these difficult times, several companies believe in the future. Barrick Gold has 50 drills operating in Nevada, 12 of which are at Goldrush deposit, Eureka County, Nevada. The Barrick news release states that the limits of Goldrush have not been identified in most directions and that a “significant increase” in the resource estimate is expected by year’s end. Have we entered an era of high-grade gold discoveries? Or is that all that is worth reporting? There has been a substantial increase in the number of SEG at GSA 2012 GSA Annual Meeting & Exposition GEOSCIENCES: INVESTING IN THE FUTURE Charlotte, North Carolina, USA – November 4–7, 2012 reported “high-grade” intercepts. Admit tedly, some are calling 1–2 g/t “high-grade,” but who am I to criticize? Evolving Gold and Gold Standard have reported high-grade intercepts in the southern Carlin Trend. Canamax re - ported 360 feet (118.1 meters) of 0.119 opt Au (4.08 g/t) at Bruner in Nye County, Nevada. Even Yukon-Nevada is getting into the act, reporting several high-grade gold intercepts at the Smith mine, Jarritt Canyon, Elko County, Nevada. An interesting report recently landed on my desk (it is a mystery how these things appear), which lists the 439 worldwide gold deposits that contain at least 1 Moz of gold. Slightly more than 10% occur in the United States, mostly in Nevada and Alaska, with Nevada having about 7% of the total. Admittedly, several of these may never be mined and there is some grouping into units such as in the Carlin Trend, and Pipeline- Cortez Hills, which if reported separately would expand the list. It does point out that Nevada and Alaska (that is another column) are great geological environments for gold deposit exploration. Adding in a few of the smaller deposits there are at least 200 Moz of in situ gold known in Nevada, and growing. 1 SEG Meeting Coordinator: Jim A. Saunders Email: saundja@auburn.edu GSA Conference Website: www.geosociety.org/meetings/2012 EXPLORATION REVIEWS T36. Geology and Mineral Resources of the Carolina Slate Belt: A Tribute to Robert Carpenter James A. Saunders (SEG 1981 F), Jeffrey C. Reid, Doug Crowe (SEG 1986 F) The Carolina Slate belt is an accreted Cambrian island arc terrane with significant past mining history, and a modern-day gold rush ongoing. T38. Subduction-Related Mantle Preparation and Subsequent Magmatism and Ore Genesis James A. Saunders (SEG 1981 F), Jeremy P. Richards (SEG 1985 F), Matthew Brueseke (SEG 2008) This session explores how subduction at convergent plate boundaries enriches the overlying lithospheric mantle with volatiles and metal(loids)that are easily incorporated into late- or post-subduction magma- and ore-forming processes. T39. Weathering of Mineral Deposits in Semi-Tropical and Tropical Climates James A. Saunders (SEG 1981 F), Dennis LaPoint (SEG 1983 F), J. Richard Kyle (SEG 1983 F) Weathering can upgrade the value of mineral resources, allows for geochemical exploration for them, can lead to the formation of new (secondary) mineral resources, and also can cause substantial environmental problems.
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