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Modern day gold prospector Jeff Pontius is building the "perfect storm" to discover Alaska's next major mineral deposit.
As president of a well-funded junior exploration company that has hired experienced geologists known for finding gold, and holds 10 high-quality properties located in Central Alaska in various stages of exploration--Pontius appears to be sailing toward a mother lode.
The question is--which property will elevate his company, publicly traded International Tower Hill Mines Ltd. and its wholly owned subsidiary, Talon Gold, to a major discovery and possibly development status?
Pontius leans toward the company's Livengood property, which is the most advanced of the Alaska projects in terms of the quantity of geological work completed.
"Livengood is ITH's anchor project," Pontius said, during a tour of three of the company's Interior Alaska properties in mid-August. "A lot of groups have come out and looked at what we've got here."
Part of the interest in Livengood is a well-defined mineralized zone in a historically producing mining district, located on the road system about 60 miles north of Fairbanks.
Also interesting is a new discovery International Tower geologists have made on their project--a new style of sediment-hosted mineralization that is "substantially higher grade than anything else to date (often greater than .32 ounces of gold per ton of rock) and has the potential to dramatically enhance the economics of the Livengood deposit," the company said in its briefing booklet for the tour.
Another property that easily could slingshot International Tower into producer status is a high-grade gold prospect called Terra, located in the southwestern part of the Alaska Range, near the Rainy Pass area.
Fine gold is contained in quartz veins on the side of steeply sloping mountains at Terra, mineralization so rich that the claim's original staker continues to hack out ore by hand for his summer prospecting work.
The third property visited during the August tour is a grassroots Alaska Range prospect that Pontius staked in the Chisna area in 2006 and 2007, east of Paxson. Located 105 miles northwest of the Kennecott copper mine, Chisna has produced surface soil samples and rock-chip sampling, indicating a large, new copper and gold-bearing porphyry-hydrothermal system, according to the company's September 2007 press release.
Airborne surveys and ground geological work recently completed identified multiple targets of copper and gold mineralization over the company's 96.5-square-mile claim in the mountainous region.
Any of these projects, as well as the company's eight other Central Alaska properties, could be the next major newsmaker in the state's mining industry.
PONTIUS-RIDGE RUNNING TO CEO
During a flight from Terra back to Fairbanks in mid-August, Pontius pointed out various spots of interest in the mountainous region.
"There's nothing more I'd rather be doing than going out with a pack, walking the ridgeline for days, just looking at rocks," said the geologist, who cut his teeth professionally in Alaska, working for Resource Associates in the late 1970s.
Interest and ability to work at higher elevations seems to have suited him. After moving up the geological corporate ladder, working for a variety of firms, Pontius hit pay dirt in Colorado, at the Cripple Creek operation. He was credited with discovering more than 5 million ounces of gold there, and the property was acquired and developed by the Anglo group, beginning in 1993.
Pontius came to serve AngloGold as the company's North American exploration manager. In 2000, AngloGold decided to prospect in Alaska and Pontius began a five-year process of sorting through and evaluating available properties, as well as staking hundreds of claims for the company.
AngloGold's work initially centered in an area near the Pogo mine being developed by Teck Cominco and its Japan-based partners, Sumitomo Metal Mining. Those prospects include LMS, West Pogo and Gilles. AngloGold's interest broadened, as Pontius put together deals to acquire leases and mining claims at Livengood and at Terra.
In 2006, the company decided to pull back from exploration in North America, leaving a substantial program of work with several promising projects in Alaska.
Rather than drop those projects altogether, AngloGold announced a deal in June 2006 to vend the properties to International Tower Hill Mines Ltd., a Canadian junior exploration company.
AngloGold received 5.9 million shares of International Tower Hill, or nearly 20 percent of the then-issued stock, and Pontius moved to ITH. He now serves as president and CEO of ITH and its wholly owned subsidiaries, Talon Gold Alaska Inc. and Talon Gold (U.S.) LLC, which are responsible for overseeing the company's exploration work in Alaska.
Two other AngloGold exploration employees came with Pontius to the junior company, a move that will allow the three to use their geological talents in a more aggressive exploration corporate setting.
"We're explorers--ore deposit finders ... it's what we do best, our strength. We also have a regional strength in Alaska, so this is an exceptional opportunity for us to achieve our goal of finding major ore deposits," Pontius said.
Also involved in the deal was the management of Cardero Resources Corp., another Canadian junior explorer, which currently holds about 7.8 percent of International Tower's issued shares.
Cardero management helped with the company's initial fundraising in 2006, which netted about $10 million in working capital for International Tower. Additional financing offers in 2007 yielded another $17 million, which means the company has enough funding to conduct exploration work at current levels for three years.
SPENDING $7.5 MILLION IN ALASKA
Pontius and his crew at International Tower hit the ground running hard last year, spending about $3.5 million on the Alaska properties. Major programs included drilling work at Livengood, Terra and the company's prospects near Pogo.
This year, International Tower more than doubled its spending on exploration projects in Alaska, with a budget nearing $7.5 million. Another $1 million was spent on two gold projects in Nevada. In 2007, International Tower will complete about 35,000 feet of drilling in Alaska at five properties.
The most advanced of International Tower's projects in Alaska is Livengood, with drilling work starting on the prospect under AngloGold back in 2003. Accessible via the Elliott Highway, Livengood consists of leased mining claims covering a 17-square-mile area. Past and present placer gold production in the Livengood district is about 500,000 ounces.
Initially targeting a gold anomaly identified by surface soil samples over a 1.2-mile by 1.8-mile swath, early drilling by AngloGold discovered mineralization hosted in volcanic rock. Drilling of that gold mineralization has indicated contiguous intervals averaging about 240 feet in thickness with an average gold grade ranging from .016 to .048 ounces of gold per ton, according to International Tower's briefing. The best intervals include 311 feet grading .051 ounces of gold per ton and 257 feet averaging .035 ounces per ton. International Tower has targeted this zone as a potential bulk-tonnage deposit.
In addition, in 2007 geologists found a new style of sediment-hosted high-grade gold mineralization at Livengood, believed to be the first of its kind discovered in Alaska, according to the company. The new style of mineralization overlies the mineralized lower grade volcanic units. The best intersections include two, 29-foot intersections grading more than .289 ounces per ton of rock, according to the company's tour briefing.
"It's a big, dynamic system," Pontius said. "We're working to put the deposit together, to identify a 100-plus million ton mineable deposit with possibly 3-plus million ounces. We're going in that direction, possibly bigger."
At the end of this exploration season after completing 26,240-feet of drilling, International Tower should have data from about 40 holes, enough to calculate an inferred resource at Livengood, Pontius said.
BONANZA GRADES AT TERRA
The company also focused considerable work at the Terra project, located about 125 miles west-northwest of Anchorage. Access is by air--fixed-wing aircraft that can handle the gravel, 2,100-foot airstrip built on glacial-deposited rock near the Hartman River.
Including leased and staked land, International Tower currently holds 45.5 square miles of land in the Terra block, centered on a series of gold-bearing bonanza quartz veins initially discovered by outcrops.
International Tower is earning a 60 percent share of the Terra project from AngloGold, by spending a total of $3 million on the property. That spending is nearly complete, Pontius said, thanks in part to expensive operation requiring helicopters to access the mountainside drilling prospects.
AngloGold acquired the Terra property in 2004 from a former Kennecott geologist, Ben Porterfield, who had acquired the mining claims in 2000 when Kennecott Exploration terminated its Alaska program. Kennecott began reconnaissance sampling in the region in 1997, focusing on the Hartman and Fish Creek drainages and discovering the outcropping gold veins.
Under the property acquisition agreement, Porterfield and his partner, Gary Courtney, continue to prospect at Terra during summer, digging out the outcrop using hand tools, breaking up and transporting the rock down the mountainside in rain gutters duct-tapped together.
International Tower's budget for this year's summer exploration work at Terra was $2.2 million, which included two core drill rigs to follow up testing the Ben Vein system and to also drill nearby targets, including the Ice prospect. A total of 15 drill holes were put in at Terra in 2007 and results released in late September "confirm the extensive nature of the gold mineralization, with every hole intersecting the main vein and many intersecting multiple subsidiary gold-bearing veins," the company said.
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