Exploration, expansion strategy at Pogo will extend mine life

The Pogo gold mine, near Delta east of Fairbanks, keeps growing. More gold is being found, and it’s sufficient to replace what is being produced each year.

“Our strategy is based on steady production and sustainability,” said Lorna Shaw, spokeswoman for owner and operator Sumitomo Metal Mining Pogo.

So far there seems no limit to how far gold-bearing quartz veins might extend around the present mine. The company keeps finding more gold.

“The current mine life is planned through the first quarter of 2019 but we are confident that will be extended,” she said.

The company is a venture of two Japanese companies, Sumitomo Metal Mining Co., at 85 percent, and Sumitomo Corp., at 15 percent.

The mine is about 85 miles east of Fairbanks and is northeast of Delta, with 50-mile private road connecting Pogo with the Alaska Highway. Sumitomo Metal Mining operates and maintains the road. 

Pogo produced 337,393 troy ounces of gold in 2012. Production in 2014 is expected to be about the same, Shaw said.  In 2012, the mine reserves were listed at 13.6 million short tons of ore with an average gold grade of 0.366 ounces per short ton, with an estimated gold content of 4.97 million ounces.

The mine began producing from the Leise zone, the first ore zone developed, in 2008, and from a second nearby deposit, East Deep, in 2013.

This year another ore deposit, North Zone, is being explored although it is not yet producing. Two exploration “drifts” or tunnels, have been built into the North Zone to allow its deeper sections to be explored, and also to explore for gold mineralization between East Deep and North Zone.

The drifts provide access and serve as a platform for exploration drilling done underground.

Additional gold veins are being discovered, and explored, at North Zone and it is possible that this gold, now classed as “resources” could become “reserves,” a more strictly-defined category, by the end of the year, according to information provided by the company.

Pogo is spending $17 million on exploration this year although $5 million of that is for the two underground drifts for North Zone and the North Zone-East Deep connection, Shaw said. The company’s overall 2014 capital budget is more than $30 million, including improvements to surface facilities as well as the exploration.

Pogo is also exploring “South Pogo,” a mineralized area south of the ore zones now producing. A drift, or tunnel, has been built to South Pogo to support the underground exploration drilling there and two helicopter-supported drill rigs are conducting surface drilling this year.

Gold resources at South Pogo are likely to be converted to reserves by the end of 2014, just as at North Zone, the company said.

Another nearby deposit of gold mineralization, the “4021 area” has also been identified although it is some distance from the areas now being produced. The company not doing exploration this year so as to focus efforts on targets nearer the existing production, but the presence of 4021 indicates that the mineralization extends at least that far.

“Eventually we will get there as we expand in that direction,” Shaw said.

Pogo has an active construction program this year including an expansion of the mine water treatment plant and construction of a new underground adit, the “2150” that will provide additional ventilation to the underground mining areas as well as an alternative for vehicle access.

The “portal” or entrance has been completed and work on the adit has been advanced 2,200 feet to date, Shaw said.

“It is not yet connected to the existing tunnels, but it is getting close,” she said.

On the water treatment plant, the excavation is completed and contractors have done the back-fill.

“Currently we have permits that allow us to process up to 600 gallons per minute but our existing plants don’t allow us to treat more than 540 gallons per minute,” Shaw said.

The expansion, which will span two years, will provide additional capacity.

Rainy weather in Interior Alaska this summer has slowed some of the surface construction work, Shaw said. The general contractor on the project is M2C1 of Delta with several subcontractors including T&D, of Fairbanks.

The company currently employs 314 with about 100 seasonal contractors.

Although Pogo is not within a municipality it regularly makes donations to the nearby City of Delta, including $360,000 volunteered in June to help the city purchase new fire-fighting equipment, Shaw said.

Fifteen of Pogo’s employees live in Deta and four live in Tok. Two hundred and twenty seven of Pogo’s 314 employees live in 24 Alaska communities, Shaw said.

11/21/2016 - 5:26pm