A Canadian mining company has opted to surrender its rights to explore for coal in the Chickaloon area of the Matanuska-Susitna Borough.
The plan by Full Metal Minerals Ltd. to mine coal on Alaska Mental Health Trust land was scrapped in the face of community opposition and geological problems, a spokesman said April 26.
Rob McLeod, vice president of exploration for Full Metal Minerals, said the exploration company gave its required 90-day notice to the Alaska Mental Health Trust on April 25. McLeod said the company will not receive any refund on the $90,000 it spent on the lease, which would have allowed for the company to do exploration until a determination was made on whether there was enough coal for a mine.
McLeod said the decision was made at a board meeting last week, based on feedback from residents of Chickaloon.
McLeod said residents expressed concern about the impact of a large industrial development on the environment and groundwater.
“We consider ourselves a progressive company,” McLeod said. “We listen to concerns of the locals.” There were also geological issues, including brittle faults, which move rocks around and would have made it more complex to mine, if the project advanced to that stage, he said.
“We were fully aware that it was at the exploration stage and would take at least a couple of years to know if it had a shot at the development project,” he said.
Wendy Woolf, acting executive director for the Alaska Mental Health Trust land office, said the trust was disappointed by the Canadian firm's decision. “This is a very valuable asset to the trust,” Woolf said April 27.
“Our understanding is that the coal is of a very high quality and would generate significant revenues to the trust.”
Woolf said the trust would now evaluate how and when it would put the land back out for bid.
Afognak Native Corp., with offices in Kodiak and Anchorage, had considered participating in the exploration, but decided at the end of March to opt out, said spokeswoman Sarah Lukin.
“If Afognak had exercised our option, we would have invested $600,000 in the first year of exploration, and after that initial exploration, we would have analyzed the results of core samples to decide whether to continue (investing),” she said. “It would have been several years, several phases of the project.”
Lukin said Afognak's board decided not to participate for several reasons, “the necessary commitment, should we move forward; potential returns to our shareholders; as well as economic sensitivities and the potential impact to the local community.”
Full Metal Minerals also is engaged in several other mining projects in Alaska which will continue, McLeod said.
One project, a joint venture with Metallica Resources of Colorado, involves exploration for copper and gold in Southwest Alaska on lands owned by Bristol Bay Native Corp. Another, also with Metallica, is exploring for copper and gold on lands owned by the Aleut Corp.
A third venture, with Triex Minerals of Vancouver, British Columbia, is exploring for uranium on the Seward Peninsula, and a fourth, with First Factor, also of Vancouver, is exploring for lead, zinc and gold on the Seward Peninsula, he said.
Chickaloon, which is accessible by highway, has a population of 282 residents. Local employers include a lodge, a general store, the Chickaloon Post Office, a trading post and a bed and breakfast. There are also outfitters, river guides and others who cater to a variety of recreational clients in the area.
Margaret Bauman can be reached at margie.bauman@alaska
journal.com.
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