Ongoing test drilling operations at Northern Dynasty Minerals' Pebble Mine project north of Lake Iliamna have revealed what the company is calling a substantial, new higher-grade gold, copper and molybdenum zone on the east side of the Pebble deposit.
"This discovery, which demonstrates that there are multiple sources of mineralization, has significant implications for the deposit model and mine operations planned," said company President and CEO Ronald Thiessen in a press release Monday.
Northern Dynasty, which is planning a large-scale open pit mining operation, was conducting drilling, engineering and environmental studies for an upcoming feasibility study and environmental impact statement when the discovery was made.
According to Thiessen, cores drilled on the eastern side of the Pebble deposit intersected "previously unrecognized, vertically and laterally extensive gold-copper-molybdenum mineralization," in an area called the East Zone. Test holes bottomed out in deposits showing a general strengthening of molybdenum content to the east.
"It does look really good," said Melanee Henderson of Northern Dynasty's investor relations department. "We have no complaints about that."
Just how good will have to await results from more drilling and a full assay report due out in January, she said.
Essentially, Henderson said, the company has good indicators of a richer deposit of molybdenum at the drilling depth. That could be good news financially. Molybdenum is used primarily in the manufacture of high-strength alloys and high-temperature steel. Its heat-resistant quality makes it useful in aircraft and missile parts. The petroleum industry employs the mineral as a catalyst for removing organic sulfurs from petroleum products.
Exactly what lies between the apparently richer molybdenum deposit in the East Zone and the surface in terms of the other target minerals gold and copper will require further drilling to determine, Henderson said.
The favorable conditions found in the East Zone are deeper than the mineralization in the Central Zone of the Pebble Mine property. The East Zone deposits lie beneath a layer of unaltered Tertiary rocks that are not found to the west, the company survey showed.
According to the company, the Pebble property consists of what are called Resource Lands that host most of Pebble's currently known deposits. Surrounding that is an area dubbed Exploration Lands that also hold gold, copper and molybdenum deposits. The U.S. Geological Survey has listed the Pebble mineral system as the most extensive in the world, according to the company.
The press release said Northern Dynasty recently had exercised an option to acquire 80 percent of the Resource Lands from Teck Cominco American Inc. It also has exercised an option to acquire up to a 50-percent interest in the extensive surrounding Exploration Lands.
The company currently is studying at least three production scenarios that include processing rates ranging from 100,000 tons to 200,000 tons of material per day.
According to company estimates, at those rates the mine would be expected to produce between 256 million and 470 million pounds of copper, between 365,000 and 674,000 ounces of gold, between 8 million and 15 million pounds of molybdenum and between 1.4 million to 2.5 million ounces of silver annually during the initial decade of operations, according to company estimates released in early November.
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