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Alaska Range Miner

Molybdenum Mine Questions

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 So I have the chance to acquire some claims that have Molybdenum, Copper, Silver and Gold reserves on them. I have some of the drill log information and I would like to hear other opinions on the value of these claims. The drilling was done down a long ridge and into the bedrock. Depths from 50 to 300 feet. 22 diamond drill hole collars and 42 rotary drill holes were drilled.

 In one area there are a group of drill holes that average .09% Molybdenum for 536 feet. Other drill holes show Gold at 0.39 oz/ton over a 10 foot interval. These same holes also show copper at .23% and silver at .11 oz/ton. The reports say that the Molybdenum and Copper values are associated with a quarts vein stockwork peripheral to the stock. And the Gold occurs in the metasediments and intrusive and peripherial to the stockwork zone. My experience is with placer gold. If I could get .39 oz/ton of gold on a placer operation I could do real well but does the same hold true for hardrock? I don't know if these samples were fire assayed or not. I realize that just because a fire assay shows a high gold content that does not mean that I can recover all that gold in my plant. Is it the same for hardrock mining or is the recovery rate higher?  Does anyone have any thoughts on whether these claims would be of interest to a large mining company. Someone that could mine all of the minerals on a large scale perhaps. There are about 8000 acres that I am looking at. Any thoughts and information is greatly appreciated.

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ARM - That's a challenging question to have to put a value on something like that but for what it's worth, we ( Forum Members ) all might be able to break it down somewhat to try and simplify the numbers so let's start throwing some ideas around.

Firstly, the current Owners have clearly spent a lot of money. From that Drilling Data there must have been at least some preliminary Resource estimates. i.e. X Tonnage at Y Grade / % for the respective Minerals. Some Companies even calculate Resources as an Eq ( Equivalent ) of the main / primary / economic Mineral. For example, if it was the Molybdenum which existed as the main target then the Copper / Gold / Silver become Credits to the Molybdenum and the overall Resource is then calculated in X Tonnes of Y % Molybdenum Equivalent. Make any sense ? Without knowing the Tonnage involved, we can only estimate the scope of the Project on the limited info. but what I can say for certain is that the price of Molybdenum has been coming down quite a bit over recent times. Over the past 7 years or so it has fallen from above $40.00 / lb to today's price of around $10.50 / lb.

Separating out the individual Minerals, what I would say at the very least is that at .09 % Molybdenum, you're going to want a lot of Tonnage. The reason I described the Molybdenum above as an Equivalent % is because in my humble experience, the Grades of both the Copper and Silver are a bit too lean so those two could probably only be regarded as " Credits " and I very much doubt those Grades would support any sort of Economic Project on their own, even if you had Tens of Millions of Tonnes. The bigger Copper Mines in Chile and Peru for example generally use a Cut-off Grade of .5 % Copper and they can only go that low because their Resources, in most cases, are measured in Hundreds of Millions and in some cases Billions of Tonnes.

So what about the Gold ? I love Gold. If we could all be Mining .39 oz / Tonne / CuYd on a Placer Job then yes, I'd be ordering a new ZL1 Camaro with Gold-Plated Rims tomorrow. But seriously, .39 Oz / Tonne over 10ft. just needs a bit more detail. Such as - a) What is the True Width and Strike extent of the Gold-Bearing Ore if known ? B) From what Depth did that intersection come from ? It could possibly be Economic to Mine the Gold alone if it wasn't too deep. I'd prefer a higher Grade though if I was going Underground for it but wouldn't we all prefer a higher Grade ? As for Recovery, something like this will require Metallurgical testing. Probably something along the lines of a Pilot Plant and not forgetting, Hardrock has to be Crushed and Milled.

Would it be of interest to a large Mining Company ? I couldn't really say without having all the details but from what I have estimated, there probably wouldn't be the Tonnage ( or Grade ) to interest a Major just yet unless you can expand on those numbers with more Drilling. For example, is the Mineralization open in any direction or at Depth ? My main concern though, irrespective of Tonnage, would be the overall Grade. You'll need to consult an Experienced Geologist to get some better advice but to even try and interest a Junior Mining Company, there still seems to be a lot of work required to remove some of the variables and that work is going to cost some serious money.

8,000 Acres is a fair chunk of dirt. Any Placer on it ? I don't know how well you know the Owner or if perhaps there is a time limit within which a decision is required but if you think it is worth more investigation then perhaps the safest way to go might be to consider an Option on the property subject to a more detailed analysis and verification ( By your Geo ) of all the available Data. I'm sorry that I can't actually put a value on it as I don't have that sort of experience but what I would say is that Due Diligence is an absolute must even moreso these days as the US Dollar stages a comeback. It's not just Gold, it's any Commodity ( including Copper ) priced in USD that will take a hit and that includes Molybdenum. Good luck with it.

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Hard rock is a lot more difficult than placer, because in placer, nature has already done all the hard work for you by mining and eroding off the ore, then breaking it down to releasing the gold. The numbers you cited seem awfully low. only the gold shows anything.. One 10 foot interval of 0.39 does not indicate much. You cant assume that there is huge amounts of 0.39 based on one drill hole.

 

As far as other metals - you have about $2 per ton of silver, less than a buck a ton of copper, maybe a buck of moly - thats just not much. You cant possibly extract the stuff for that kind of price.

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ARM - Setting aside the Technical details for a moment, let's now take a quick look at the Logic.

1/. The Owner of the Claims you are looking at acquiring is selling the Claims after having just spent a considerable amount of money doing some serious evaluation. They have obviously come to the conclusion that they would be better off selling out. Sorry, but no prize for asking the obvious question - WHY ?

2/. If the preliminary Exploration and Drilling Program was encouraging, they would move on to the next stage, not sell it.

3/. If the preliminary Exploration and Drilling Program was encouraging but they have simply run out of money to advance it, they would be out in the Market either trying to raise more Funds or find themselves a Mining Company interested in farming-in for a share of the Project, not sell it.

4/. If you thought you were sitting on Millions of Dollars of profit, would you sell it ?

I'm not trying to rain on anybody's parade here. I normally look for the positive aspects of something and not try and focus on the negatives too much but the reality here is that the negatives appear to far outweigh the positives. Be very careful. If you look at the bigger picture, I think there is going to be a lot of opportunities coming on to the Market in the near future. It might pay to keep your power dry for the time being.

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OK here's the deal. These claims have been owned by the same large Canadian mining corporation since 1983. This corporation has mines all over the world. The drill reports I have are from the late 1980s. In 2008 they came in and built a large man camp and did a large scale drilling program. They were supposedly coming back the following year to start mining. We have never seen them since.  In 2012 these claims changed hands to a partner company with a different name. The proper paper work was not done and the claims recently became open so I went out and staked the claims but have not filed on them yet. I live a long ways from the recorders office and I am going in on Tuesday to file on the claims.  The thing is the cost of 8000+ acres initially and then the yearly costs are enough to make me want other opinions. The original claim holder has filed on the claims again but I would be senior claim holder and they also made another error so their new claim will be returned. I am looking at this as an investment. Something to sell someday maybe when Moly is back up in price. Chris's information really makes me have second thoughts on the value of the claims, but I also don't have the information from the drilling done in 2008.  I may end up reducing the amount of area I claim, just cant make up my mind. :rolleyes: 

 Thanks for your thoughts gentlemen. They are always appreciated.

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I wish you good luck. I live south of the range by 100 or so miles.

 

Over the years, the only ground I have seen that has real potential in the range and east of the Su is Clearwater Mountains, Rainy Mountain/Broxson Gulch area and the headwaters of the Chisto. Last I saw, the Rainy area was under Pure Nickel Corp. The headwaters of the Chisto have been in placer production off and on since 1898-99. And word has it the Clearwater area is under claim.

 

If the area you are interested in is between the Su and the Tok Cut-off, but not in the areas I mentioned, there is probably a good reason they were dropped. But there are folks claiming worked out and/or marginal placer ground such as the Ahtell/Porcupine Creeks area. And there were a string of claims in the mountains surrounding those creeks. I'm betting those will be dropped probably sooner than later. I sure hope you aren't looking at the old Kathleen-Margret / West Fork area. The assay numbers (moly especially) are sure similar.

 

I contend that if a Junior can't make money on it or attract a major to invest just a little into exploration,  the odds are a private individual is wasting their time and money on it. That is unless your primary business is selling claims. Caveat emptor.

 

Admittedly I have little experience and only minor research into the geology of the north side of the range. Same goes for west of the Su.

eric

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 I just came in from my claims for a few days and got online and see that the Canadian company has paid the penalty and back payments for all of the claims they had.  I ended up only claiming ten 160 acre claims in what I thought was the best spot. It was the area where the most recent drilling and trenching had been done. Right down the ridgeline. Maybe someday I can sell the claims to help out with the retirement fund.

 Eric you should give the Butte Creek area a try. The bottom 4 miles are state select only and there is some nice gold to be found. If you cross the creek be very careful the water is low enough. There have been a couple of drownings recently when ATVs didn't make it across.

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