By Hal Spence
Peninsula Clarion/Morris News Service-Alaska

KENAI —ÊMetal deposits in the eastern zone of the Pebble project northwest of Iliamna are proving even richer than earlier estimates suggested.

Drilling operations conducted throughout 2006 have provided increasingly good evidence that deposits, especially in a section called Pebble East, will exceed prior estimates, the project's owner, Northern Dynasty Minerals Ltd., announced in late January. The Canadian company operates the project through its subsidiary Northern Dynasty Mines Inc. based in Anchorage.

In a Jan. 23 press release, Northern Dynasty Minerals chief executive officer Ronald Thiessen said exploratory drilling during 2006 meant to assess the extent and richness of Pebble deposits had been highly successful. Drilling operations attempted to measure the boundaries of the deposits, the grade distribution of target metals and geometry of the world-class Pebble East discovery.

“Drill holes intersected long intervals of high-grade copper-gold-molybdenum mineralization, substantially expanding the Pebble East deposit beyond the boundaries of the previously announced 1.8 billion ton inferred mineral resource,” Thiessen said in the press release.

The core samples from 19 holes are being analyzed and a new resource estimate is expected sometime this month.

The drill tests show consistent high grades of mineralization across an area 7,000 feet north to south by 4,000 feet east to west, with the northern and southern boundaries of the ore body still “open,” meaning that the edge of the reserve has not yet been located. Some of the drills penetrated more than 2,000 feet of ore with grades above 1 percent copper-gold equivalent, the press release said.

The eastern ore body is deeper than the western ore zone and would be mined by underground mining methods, Northern Dynasty said. The shallower western ore zone would be mined by open-pit means.

A new season of test drilling is scheduled to commence in the first half of February, beginning with four drill rigs, and ramping up to eight by early April. Drilling will aim at extending the Pebble East deposit to the north and south while defining its east-west limits. Meanwhile, “infill” drilling, basically drilling between holes already drilled, will focus on confirming the amount of copper, gold and molybdenum in the Pebble East deposit.

Key engineering tasks for 2007, NDM said, include collecting additional geotechnical data to support ongoing mine design work; completing prefeasibility level metallurgical test work on Pebble East; continuing to assess the major infrastructure elements — access road, port and power — to establish alternatives and designs for those components; and developing overall project mine plan.

Originally, the company was focused on an area now called Pebble West, initially expecting to complete a feasibility study for an open-pit mine by early last year. When new and even richer deposits were discovered to the east, focus shifted to what is now called Pebble East and the deadline for completing an ongoing mine feasibility study was pushed back. A target date for its completion is hard to pin down at this point because Pebble East is proving so large, said Bruce Jenkins, chief operating officer of Northern Dynasty Mines Inc.

“The answer is Ôtarget year,' and it's at least a couple of years away,” 2008 or 2009 at the earliest, he said.

Northern Dynasty Mines Inc. will spend the next year or more defining Pebble East and preparing a development plan. It is expected that Pebble West, if permitted, will be operated as an open pit mine, while Pebble East, where deposits are deeper, will be operated as an underground block cave mine.

“We are pleased by the project to date,” Jenkins said. Though recent discoveries have created much more work, NDM is “in it for the long haul” and “up to the challenge,” he said.