From Interior to Southeast, Alaska mining a bright spot


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The Fort Knox mine near Fairbanks as seen from the air. The mine will be growing production in 2013 with an expanded heap leach facility.

Photo/Kinross Corp./Judy Patrick

If there is one industry doing well in Alaska it is mining, and 2013 looks to be a repeat, and possibly better, than 2012. Development of new gold deposits near the existing Pogo gold mine near Delta will continue, as well expansion of the large Fort Knox gold mine near Fairbanks.

International Tower Hills is continuing development work on its Livengood gold project also near Fairbanks, and Barrick Gold and NovaGold Resources, in the Donlin Gold joint-venture, are now engaged in permitting for a mine near Crooked Creek, on the Kuskokwim River.

Both would be large surface mines, if they are built.

From a “grass roots” exploration standpoint, some of the most exciting developments for 2013 will be in the Ambler Mining District and Bornite regions of the western Brooks Range.

NovaCopper, a Vancouver-based “junior” exploration company working in partnership with NANA Regional Corp., has made a discovery of a new copper ore body at Bornite, on the upper Kobuk River, and is continuing its exploration at the Arctic deposit, a few miles away.

Not too far away Andover Resources is also as work on its Smucker deposit, and has also reported high copper values from 2012 drilling.

Transportation access and affordable energy the key challenges facing mines in these remote areas, but the State of Alaska is working on plans for an industrial road that would connect the area with the Dalton Highway, the north-south road artery that connects the North Slope oil fields with Interior Alaska.

NovaCopper President Rick Van Nieuwenhuyse believes the mineral values in the ore bodies being found at Ambler and Bornite may be rich enough to support long-distance trucking of ore.

The value of the ore is critical. Many mineral deposits are lower-value and require large transportation systems like railroads to get costs low enough to make shipping affordable. But if the ore has enough value it can be trucked, as is the case at the Red Dog lead-zinc mine north of Kotzebue. Red Dog ore is among the richest in the world in terms of zinc and lead metal content.

Mines in Yukon Territory also truck ore for long distances, for example to a marine ore terminal at Skagway, in northern Southeast Alaska, via the Klondike Highway.

Road access would also simplify the supply of fuel to mines in the area. One interesting new possibility is the trucking of liquefied natural gas from the North Slope if a plan for a small LNG plant at Prudhoe Bay is built.

Golden Valley Electric Association of Fairbanks, Flint Hills Resources and Fairbanks Natural Gas LLC have all been working of plans for a small plant to supply LNG to Fairbanks, but Van Nieuwenhuyse told the board of the Alaska Industrial Development and Export Authority recently that an LNG trucking operation could supply mines in the Interior as well.

If the road were built, the distance to the Ambler Mining District would be about the same, or a little shorter, than to Fairbanks.

Exploration for copper and other minerals has been under way for decades in the Ambler and Bornite areas and discoveries were made years ago as well.

What may turn the corner on development of mines is the real possibility of the state building a road to the area and the richness of the new discoveries, possibly with enough value to support trucking.

Another new aspect is that development in the region, and road access from the east, is no longer opposed by local communities, as has been the case in the past. The cost of living and the cost of fuel has become such a burden for small Kobuk River communities that residents there are more open to a road.

In the past there have been worries that a road that is open to public access would increase nonresident hunting and fishing, and put pressure on local subsistence resources. What is being discussed with the Ambler road, however, is a “public/private” partnership on the road between AIDEA, the state development agency, and mining companies working in the area.

Such joint-venture financing would allow for controls on public access that might not be available if a road were financed traditionally with all state or federal funds.

Niblack; Bokan Mountain rare earths

Meanwhile, another mine development to watch in 2013 is the continued progress on two potential new underground mines on Prince of Wales Island in Southeast Alaska.

Both are at tidewater locations that allow easy ocean access, a big plus. Both are also in areas that have long traditions of mining in previous years, and where local communities are supportive.

In Alaska, local community support and involvement can go a long way to defuse opposition to permits and litigation by out-of-state environmental groups.

The Niblack mine on Prince of Wales Island would be a multi-metal underground mine very similar to the Greens Creek Mine now operating on Admiralty Island near Juneau. It is now is an advanced stage of exploration and development planning.

An important aspect to Niblack is that its developer, Heatherdale Resources, is considering construction of an ore process plant at Ketchikan, about 27 miles away, to take advantage of less expensive hydro power that is available there. The alternative is costly on-site power generation with diesel.

Heatherdale has now identified about 9 million tons of ore at Niblack and hopes to add an additional 1 million to 2 million tons. It is possible that construction of the mine could begin in 2015, Heatherdale has said. In production the mine would employ about 130, with an additional 65 workers at the processing mill near Ketchikan.

Another project moving forward on Prince of Wales Island is the proposed Bokan Mountain rare earths mine, being developed by Ucore Rare Earths, a Canadian junior explorer. Rare earth minerals are important for advanced technology, telecommunications and defense industries and there has been increasing concern of the dominance of China as a source of much of the world’s supply and processing capacity for these important minerals.

Bokan Mountain is one of the largest known accumulations of heavy rare earths, a particularly valuable set of minerals.

An interesting development at Bokan Mountain is that Ucore is planning an ore processing procedure that would eventually result in all of the waste rock being stored underground and not at the surface, which happens at most mines.

Also, Ucore is working on a new processing technology that would allow for the manufacture of rare earth solutions at the site of the mine, so that the concentrates of these elements would not have to be shipped out of state, or even to China, for final processing.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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