American Pacific boosts copper resource at Palmer project in Alaska

American Pacific Mining (CSE: USGD) has updated the mineral resource estimate (MRE) for its 100%-owned Palmer volcanogenic massive sulphide project located in southeast Alaska, showing a sizeable increase in contained copper over the previous estimate from June 2019.

The new MRE has 4.77 million indicated tonnes at 1.69% copper, 5.17% zinc, 0.14% lead, 28.4 g/t silver, 0.29 g/t gold and 20.6% barite, for 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. The contained copper count represents a 16% increase (24 million lb.), owing to a 14% increase in grade.

The MRE also has 12 million inferred tonnes at 0.57% copper, 3.92% zinc, 0.47% lead, 66.3 g/t silver, 0.33 g/t gold and 25.5% barite, for 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 contained copper in this category increased by 22% (28 million lb.).

American Pacific CEO Warwick Smith said the updated MRE marks a “major project milestone” for the company now that it has secured 100% ownership of the Palmer project.

In late 2024, American Pacific took full control of the project after agreeing to provide Dowa Metals & Mining, its joint venture partner who held a 55% stake, an option to buy half of the future zinc concentrate production from Palmer.

Infill drilling success

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

“Infill and geotechnical drilling over the last several years has been successful in increasing our confidence in the known deposits and we are thrilled to see significant increases in the in-situ copper estimate, in addition to an overall increase in contained tonnes for the project,” said Smith.

In an emailed statement to Mining.com, he emphasized that the vast bulk of the drilling was infill drilling, where typically “you’d be happy to keep 75-80% of your existing tonnes (both indicated and inferred) when updating an MRE.”

“In this case, we saw a significant increase. Certainly, we also see that the copper at Palmer becoming more dominant – which is now 51 million new lb. of copper,” Smith noted.

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 MRE. The mineralization for the estimate 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 currently 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 $266 million and a 21% internal rate of return.

Shares of American Pacific Mining were up 2.3% by 11:30 a.m. ET, trading at the midpoint of its 52-week range at C$0.22 apiece. The company’s market capitalization is approximately C$47.4 million.