AIDEA assistance in hand, Niblack mine owner seeks partner
Heatherdale Resources is continuing to look for a partner in the company’s Niblack minerals project on southern Prince of Wales Island, and Gov. Sean Parnell’s recent approval of a bill authorizing state financial aid to the project will be a big boost.
Senate Bill 99, signed by Parnell on June 17, authorizes the Alaska Industrial Development and Export Authority, or AIDEA, to finance up to $125 million in development costs.
“What’s really important about this is that the bill pre-authorizes AIDEA to make the investment,” without further legislative approval, said Heatherdale CEO Patrick Smith.
The authority normally has a limit in project financing, above which it would have to have approval by lawmakers.
A Niblack investment or loan would still be subject to AIDEA’s due diligence, which is stringent, but SB 99 speeds things up because a financing package wouldn’t be delayed until the Legislature convenes in January, Smith said.
With the prospect of AIDEA financing in hand Heatherdale hopes to secure a partner in the near term.
“We have a data room open (a place where confidential information can be reviewed) and we have several interested parties,” Smith said.
Capital cost estimates for Niblack are still confidential but Smith said they range between $175 million and $250 million. The company is studying options of a mine producing 1,000 to 2,000 tons per day with most of the work focused on 1,500 tons per day. That’s similar in size to Greens Creek and Kensington.
Niblack would be an underground mine also similar to Greens Creek and Kensington mines, both near Juneau. Niblack would produce an ore containing copper, gold, zinc and silver, and two mineral concentrates, a zinc concentrate and a copper concentrate would be made for shipping the minerals.
Heatherdale’s preferred site for an ore processing plant is on Gravina Island near Ketchikan at a site formerly used for a lumber mill.
“This is a perfect site for us,” Smith said, although no commitments to use it have been made.
The key advantage is that the plant would be able to draw reasonably priced hydropower from Ketchikan’s city utility, which would be less expensive than diesel.
The processing plant would require four to six megawatts of power, Smith said. A concern is whether Ketchikan will have enough surplus hydropower to supply the mill, but there are proposals to expand the hydro facilities that now supply Ketchikan, he said.
However, ore from the mine would also have to be barged to Ketchikan to the processing plant, a distance of about 27 miles.
Smith said another advantage for Niblack is that the mine can take advantage of existing ore ships that call at Greens Creek, near Juneau, and at Skagway, where ore concentrates from Yukon Territory mines are stored for export.
“We could batch our concentrates together with Greens Creek and Skagway,” which will improve the economics for shipping all mineral concentrates from Southeast, he said.