American Pacific boosts copper at Palmer in Alaska

American Pacific Mining (CSE: USGD; US-OTC: USGDF) says a new report increases the copper resource at the Palmer project in southeast Alaska by double-digit percentages compared with 2019 estimates. 

The contained copper in the project’s indicated tonnage rose 16% (24 million lb.), owing to a 14% increase in grade, American Pacific said. In the inferred category, copper grew 22% (28 million lb.), it said. 

“We saw a significant increase,” CEO Warwick Smith said in an emailed reply to questions on Monday. “Certainly, we also see that the copper at Palmer is becoming more dominant, which is now 51 million new lb. of copper.” 

Shares in American Pacific Mining gained 2.3% by late afternoon trading Monday at 22¢ apiece. The company’s market capitalization is approximately $47.4 million. The stock has ranged from 10¢ to 34¢ over the past 52 weeks. 

The volcanogenic massive sulphide project now has 4.77 million indicated tonnes at 1.69% copper, 5.17% zinc, 0.14% lead, 28.4 grams silver per tonne, 0.29 gram gold and 20.6% barite, the company said.

It contains 178 million lb. of copper, 543 million lb. of zinc, 14.2 million lb. of lead, 4.4 million oz. of silver, 43,900 oz. of gold and 980,400 tonnes of barite. 

Full ownership

The updated estimate marks a “major project milestone” for the company since it  secured full ownership of Palmer late last year, Smith said.

“Infill and geotechnical drilling over the last several years has been successful in increasing our confidence in the known deposits,” Smith said. 

The vast bulk of the drilling was infill, where typically “you’d be happy to keep 75-80% of your existing tonnes (both indicated and inferred) when updating” a mineral resource, the CEO said. 

American Pacific took full control of the project after agreeing to provide Japan’s Dowa Metals & Mining, its joint venture partner who holds a 55% stake, an option to buy half of the future zinc concentrate production from Palmer.

Dowa, owner of Japan’s largest zinc smelter, has been funding work on the Palmer project in the lead-up to the updated estimate, including the US$20-million resource definition and geotechnical program in 2023. By the end of that year, the Palmer project had seen over US$100 million in total spending, with another $12.8 million earmarked for 2024.

Inferred tonnes

The estimate for the project also has 12 million inferred tonnes at 0.57% copper, 3.92% zinc, 0.47% lead, 66.3 grams silver, 0.33 gram gold and 25.5% barite.

That provides contained metal of 151.5 million lb. of copper, 1.04 billion lb. of zinc, 125.2 million lb. of lead, 25.6 million oz. of silver, 128,100 oz. of gold and 3.05 million tonnes of barite. 

The new resource is calculated from a database of 284 diamond drill holes for a total of 96,485 metres of drilling, of which 241 holes (82,132 metres) are within the mineralized boundaries prepared for the updated estimate. The mineralization was defined in three main domains, including the South Wall (SW) and RW domains (Palmer deposit) and the AG domains (AG deposit).

The Palmer and AG deposits anchor the project’s 2019 preliminary economic assessment, which found that the copper-zinc resource could support an 11-year mine (plus a two-year pre-production period). It has a post-tax net present value (at a 7% discount) of US$266 million and a 21% internal rate of return.