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Weekly UpdatesThe future looked dim in 1999 for the future of the Nixon Fork gold and copper mine, a remote underground hard-rock operation located about 35 miles northeast of McGrath in western Interior Alaska.
Back then, amid dropping gold and copper prices, the mine was put into care and maintenance by operator Real del Monte Mining Corp., which had acquired Nixon Fork the previous year from Nevada Consolidated, a company that first opened the hard-rock mine in 1995.
Eventually, Nixon Fork's underground mine and aboveground mill facilities were abandoned by trustees in a bankruptcy court case and the mining leases reverted back to original property owners-McGrath-area miners with historical ties to the property starting in the 1920s.
$10 MILLION INVESTED
Three years ago, the abandoned mine property and mining claims were acquired by Denver-based Mystery Creek Resources, a wholly owned subsidiary of publicly-traded, Toronto-based St. Andrew Goldfields Ltd.
Since then, as metal prices have continued to climb, Mystery Creek has conducted substantial exploration and development work, with the goal of restarting gold and copper production at Nixon Fork. Announcing plans earlier this year to spend up to $10 million on the shuttered property, Mystery Creek moved into the construction phase this past summer, after receiving state and federal permits to refurbish the facility and to restart underground mining.
In early September, Paul Jones, president of Mystery Creek, described work on-site as "hectic," with the goal of starting production in the last half of October.
"We've got a lot of development work going on underground and have started bringing out some ore," Jones said on Sept. 8. "The mill is still in reconstruction and we're picking up to a pretty high rate."
WORKERS ON-SITE
A work force of about 50 people are onsite at the remote operation, with about half of those construction workers and the other half new mine and mill employees. Once complete, Jones expects Nixon Fork to employ a crew of about 40 workers, working 12-hour shifts.
Ore at Nixon Fork averages a little more than one ounce of gold per ton of rock, and also contains significant amounts of copper and a small amount of silver. Silver content is roughly one ounce of silver for every ounce of gold, Jones said. The average estimated copper content in Nixon Fork ore has not been publicly revealed, although current plans call for an estimated 2,500 tons of copper concentrate to be generated annually, Jones said.
Mine crews will remove the high-grade underground ore and process it, producing gold dore bars and a copper concentrate on-site, both of which will be shipped out via air freight, similar to past operations at Nixon Fork.
Based on current geological estimates, drilling work has identified enough ore for a three- to four-year mine life, based on production of 150 tonnes of ore per day and a resource of 126,400 tonnes, containing an estimated 131,500 ounces of gold.
Nearby geological targets have received some attention, prospecting work that will resume after the mine restarts production, Jones said. "We've been focused on the immediate goal of mining ... we think we've got potential (to extend the mine life)."
An additional 30,000 ounces of gold is believed to be contained in tailings generated by previous operators at Nixon Fork. Mystery Creek plans to begin reprocessing those tailings through a cyanide leaching circuit to extract gold, a project originally planned to begin this summer, prior to production start of mine ore later this year.
THE WAITING GAME
But the company "missed the window of opportunity for reprocessing of tailings, "Jones said, and will wait until next summer to start that work. "The tailings average about one-quarter-ounce (of gold) per ton, and that's good ore in a lot of mines."
The existing gold resource at Nixon Fork includes some mineralization that lies below the existing water table, about 1,000 feet down from the mine's surface level. Accessing that ore is a technical issue the company is still working to resolve, which includes testing work that is in the process, Jones said.
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