Heatherdale Proves Up Alaska’s Niblack
By Ted Niles
With nearly all of Alaska’s forests now protected by federal law, its timber industry is in a state of extreme decline. The industry employed about 5,000 people in 1990. Now? Ten percent of that. So the opportunity presented by a company like Heatherdale Resources, with its Niblack copper-gold-zinc-silver project, located on Prince of Wales Island, has been of considerable interest to Alaskans. Heatherdale’s President and CEO Pat Smith reports, “In the last two weeks I’ve been around southeast Alaska, and I’ve talked to the Alaska Delegation, to the regulators, to Sealaska Native Corp and various other stakeholder groups. Everyone is extremely supportive of this project. It’s just unbelievable.”
Heatherdale—a Hunter Dickinson company—entered into a joint venture with Niblack Mineral Development on the Niblack project in 2009. Heatherdale is the project operator and has spent $10 million to earn its initial 51% of the property. “We have the ability to earn 60% by spending another $10 million on the initial $15 million,” Smith explains, “and we’re just reaching that threshold. That’ll be coming around the corner in August. We’ll have the option to increase that to 70% by bringing the project to feasibility.”
The project is located at the southern end of the Alaska panhandle and comprises 2,600 hectares of patented land and state mineral claims. It consists of six deposits—Lookout, Trio, Mammoth, Dama, Lindsy and Niblack. Drilling has focused on Lookout and Trio. Based on drilling up to December 2010, the estimated resource for Lookout and Trio is 103 million pounds copper, 308,000 ounces gold, 207 million pounds zinc and 5.1 million ounces silver, all in the indicated category. The two deposits also contain 67 million pounds copper, 142,000 ounces gold, 126 million pounds zinc and 2.1 million ounces silver in inferred resources.
Smith remarks, “We’ve reached what we consider to be a threshold amount of mineralization at this point. It allows us to advance the engineering and economic evaluation at the deposit. We will move toward the Preliminary Economic Assessment this year. All things positive of course, we’ll take that into prefeasibility in 2012 and then move into feasibility and the initiation of project permitting in late 2012 or early 2013. That’s our objective.”
And Heatherdale will continue to build on the current resource throughout 2011. “We’ve got two rigs underground going full time,” Smith says. “One is focused on incrementally increasing the resource at Lookout and at Trio. The other drill rig is branching out and doing more exploration from underground.”
We’ve reached what we consider to be a threshold amount of mineralization at this point. It allows us to advance the engineering and economic evaluation at the deposit —Patrick Smith
July 28 Niblack project assays include 19.51 grams per tonne gold, 263 g/t silver, 1.67% copper and 3.32% zinc over 2.4 metres, 1.66 g/t gold, 31 g/t silver, 1.06% copper and 1.85% zinc over 13.7 metres (including 3.12 g/t gold, 57 g/t silver, 1.9% copper and 1.6% zinc over 5.8 metres) and 2.23 g/t gold, 40 g/t silver, 0.99% copper and 1.68% zinc over 2.4 metres. “We’ve come up with a nice zone around the Mammoth area,” Smith comments, “which is new to us and to the resource. The other area that really kind of surprised us (but this play is always surprising us) is the area between Lookout and Trio, which we didn’t connect before. We’re seeing a ballooning out, if you will, of the existing resource and a little bit of a different zone further into the hanging wall.”
Smith compares Niblack to Hecla Mining’s Greens Creek Mine near Juneau—which produced 7.5 million ounces of silver, 67,278 ounces gold, 70,379 tons zinc and 22,254 tons lead in 2009. As to when production might begin at Niblack, he acknowledges that in environmentally-sensitive Alaska, “The permitting end of it is the unknown in terms of a time frame. But we would anticipate 18 months to two years for that. So, optimistically, 2015 or so for production.”
Smith concludes, “I’ve spent probably 17 years of my 30-some years in Alaska with Rio Tinto, Kennecott Exploration and so forth. I enjoy working there. The jobs in southeast Alaska’s timber industry have been devastated over the last 10 years, so they understand the year-round jobs that come with mining at Greens Creek, and [Coeur d'Alene's] new Kensington Mine up near Juneau. We would have a large impact in the Ketchikan area and on Prince of Wales Island.”
Heatherdale has also begun drilling its Delta project in east-central Alaska, which it acquired in February. Delta has an inferred mineral resource estimate of 15.4 million tonnes grading 0.60% copper, 1.7% lead, 3.8% zinc, 62 g/t silver and 1.7 g/t gold.
Heatherdale has 69.1 million shares trading at $0.74 for a market cap of $51.1 million.