Major mining projects on Alaska’s horizon

By Marleanna Hall

Stan Foo, RDC board member and General Manager of Donlin Gold LLC, a partnership between Barrick Gold US and NovaGold, presented at the Alaska Resources conference on a panel titled “Major Alaska Mining Projects: 2013 and Beyond.”

Foo described Donlin as being 275 miles west of Anchorage, and situated on land owned by the Calista Corporation (subsurface) and The Kuskokwim Corporation (surface).

The prospect contains over 33 million ounces of gold, and will be an open pit mine with a mill expected to process 59,000 tons of rock per day.

Infrastructure needs include a 314 mile buried natural gas pipeline from Cook Inlet to the region, two river ports (one in Bethel and one in the Crooked Creek area), a 30-mile access road, a 5,000 foot runway, and a camp for 600 employees.

The mine life expectancy is at least 27 years, employing 600- 1,400 people with an annual payroll of $97 million. Local hire and dissemination of project information is important to Donlin, which has committed to local hire throughout the mine life, Foo said.

Additionally, the project will pay royalties to Calista Corporation, which will then distribute payments to other regional and village corporations through the Alaska Native Claims Settlement Act 7(i) and 7(j) provisions.

Donlin began the permitting process in July, and will work with agencies to acquire approximately 100 permits before operations begin. Construction of the mine will take three to four years, and will create approximately 3,000 jobs with an annual payroll of $375 million. The overall project is estimated to cost $6.7 billion.

Karl Hanneman, RDC board member and Alaska General Manager, Tower Hill Mines, Inc., continued the panel with a description of the Livengood Gold Project.

Hanneman noted the Livengood project is 70 miles north of Fairbanks and is fortunate to be near highway infrastructure and a fiber optic cable.

Hanneman described the history of the area, noting placer gold was discovered there in 1914. The nearby road was built in response to petitions by miners in the area in the 1930s. The land in the area was selected by the Alaska Mental Health Trust Authority in the 1990s. As a result, the Mental Health Trust authority will benefit from production, once it begins.

Hanneman explained the project is farther behind in the process than Donlin, but the group is working on a feasibility study.

Metallurgical test work is underway, as well as mine, mill and process designs and alternative studies. Infrastructure site selection and design is being developed, including tailing storage sites, water supply, camp location, a power transmission line, and roads.

Livengood is in its fourth year of environmental base line studies.

Tower Hill Mines anticipates completing a feasibility study by mid-2013. Tower Hill Mines has spent approximately $200 million on the Livengood project thus far. In 2012, over 80 people were employed at the site.

Livengood has a substantial proven gold resource, and expects to provide up to 1,000 jobs during the two-year construction period, with about 500 jobs during the 20-plus years of the mine life.

Hanneman noted Livengood faces challenges such as high-energy costs. He noted the project is an opportunity to demonstrate that Tower Hill can safely develop natural resources in Alaska.

Another large mining prospect in Alaska is the Pebble Project. Mike Heatwole, Vice President, Public Affairs, Pebble Partnership presented updates on Pebble, a prospect about 200 miles Southwest of Anchorage.

The prospect is a world-class mineral discovery of copper, gold, and molybdenum on State of Alaska land that has been designated for mining.

Heatwole noted Pebble is in advanced exploration of the project, with ongoing engineering and advanced baseline studies.

Pebble is reviewing multiple scenarios for the best way to get the resources out of the ground and to the market while protecting the environment, meeting the high expectations of local stakeholders and Alaskans, and coexisting with fisheries, Heatwole explained.

The project employed about 130 people from the region in 2012, and achieved one million feet of core drilled.

Heatwole noted Pebble began environmental studies in 2004, and publicly released the first five years in early 2012. The 27,000 page document is heavily focused on fish and water studies.

Unfortunately, the studies have been attacked, but Pebble lauds the integrity of the Alaskan firms who completed the solid work, he added.

Looking to the region, Heatwole noted communities are in decline, some due to the challenges facing the area, such as high cost of living and the lack of well-paying jobs.

The Pebble Project faces similar challenges to those of Donlin and Livengood, such as location, access, and energy. Additionally, Pebble faces potential federal overreach by agencies like the Environmental Protection Agency – in advance of applying for a permit.

The EPA’s actions could set a dangerous precedent for projects in Alaska, Heatwole added.

Alaskans have high standards to responsibly develop their resources to promote jobs and grow Alaska’s economy, the process is rigorous and science based, Heatwole said.

To view these and all presentations at the Alaska Resources conference, visit akrdc.org.

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