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KAMINAK GOLD CORP.
Kaminak Gold Corp. geologist inspects core from CFD-001, the first hole drilled at the company’s CoffeeProject in the Yukon Territory. Drilled into the SupremoZone, hole 1 intersected 15.5 meters averaging 17.07grams per metric ton gold.
A special supplement to Petroleum NewsWEEK OF
November 21, 2010
A special supplement to Petroleum News
3 Capital REE potential in Alaska Lifton urges swift development of critical HREE-enriched Bokan Mountain
10 D.C. analyst makes case for Pebble May: Anti-mining forces must wake up to crying need for domestic copper
12 Training turns out Yukon miners Alexco lauds safety emphasis in YMTA training; hires grads at Bellekeno
By SHANE LASLEYMining News
The swift development of Ucore RareMetals Inc.’s Bokan-Dotson Ridge
deposit in Southeast Alaska is vital toproviding the United States with a domes-tic supply of critical rare earth elements.This is the message world-renown REEexpert Jack Lifton delivered to attendeesof the Alaska Miners Association 2010annual convention in Anchorage.
Beyond just mining the heavy rareearth element-rich ore at Bokan, the tech-nological metal consultant advised theState of Alaska to invest in value-addedREE processing and refinement and themanufacturing of the magnets in otherproducts made from the technologicalmetals.
“For the future of this country, thisdevelopment in Alaska is very important.I am hoping it comes to the attention ofthe national government,” Lifton said.
REEs gain notoriety on China quotasREEs are a group of 17 previously
obscure metals that include scandium,yttrium and the 15 lanthanides. They arewidely used in green technology such aswind turbines and hybrid cars; high-techconsumer goods like mobile phones andiPods; and military applications such asguided missiles, lasers, radar systems andnight vision equipment.
The technological metals emerged into
the mainstream when China, which minesaround 97 percent of the global supply ofREEs, dramatically reduced its exports ofthese minerals.
The Far East country has been cuttingREE exports since 2005. In July of thisyear, the Ministry of Commerce of thePeople’s Republic of China unveiled plansto cap its REE exports for the second halfof 2010 at 7,976 metric tons, a 72 percentdecrease from the 28,417 metric tonsallowed during the same period a yearago. A further reduction of 30 percent for2011 has been reported by Chinese
media. Though China officials dispute theamount reported in the press, they admitthat further reductions in REE exportsmay be necessary.
The news agency AFP reported Nov.12 that the China Ministry of Commercehas published new rules that “strictly reg-ulate rare earth exporters.” The ministrywill cancel export licenses for companiesfound to have violated rules on quotas or
3NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
North of 60 Mining News is a monthly supplement of the weeklynewspaper, Petroleum News. It will be published in the fourth orfifth week of every month.
Shane Lasley PUBLISHER & NEWS EDITOR
Rose Ragsdale EDITOR-IN-CHIEF (contractor)
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Clint Lasley GM & CIRCULATION DIRECTOR
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NORTH OF 60 MINING NEWS is a monthly supplement of Petroleum News,a weekly newspaper. To subscribe to Petroleum News and receive the monthly
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Good employers attract good employees.And good employees stay working for good employers.
That’s been Nik’s experience.He started at Fort Knox Gold Mine as a twenty-something, and has earned increasing responsibilities over the last decade. Now he’s Heap Leach General Foreman at the mine.Nik appreciates the benefits and opportunities Fort Knox offers. He is proud of what he does - working for a local employer with a bright future that values people and gives them a chance to broaden their horizons and achieve their potential.As an employer, Fort Knox has earned Nik’s hard work and his loyalty.It’s a relationship that works well for Nik and for us, too.
kinross.com
Our PeopleOur Community
� A L A S K A
Alaska could become US REE capitalTech-metals expert Lifton declares HREE-enriched Bokan most important domestic REE deposit; urges Alaska to invest in supply chain
see REE CAPITAL page 4
www.techmetalsresearch.com
The chart, at left, created by Technology MetalsResearch, ranks 14 rare earth element depositsbased on a method created by Dr. Vladimir Seredin.All the deposits on the graph, with the exceptionof Dotson Ridge, have a mineral resource that iscompliant with NI 43-101 (Canada) or JORC(Australia) guidelines, and/or have been historicallymined and have reliable associated data.
The projects are: • Bear Lodge (Bull Hill Zone), Wyoming, UnitedStates – operated by Rare Element Resources Ltd• Bokan Mountain (Dotson Ridge), Alaska, UnitedStates – operated by Ucore Rare Metals Inc • Dubbo, New South Wales, Australia – operatedby Alkane Resources Ltd• Hoidas Lake, Saskatchewan, Canada – operatedby Great Western Minerals Group Ltd• Kutessay II, Chui, Kyrgyzstan – operated byStans Energy Corp • Kvanefjeld, Kujalleq, Greenland – operated byGreenland Minerals and Energy Ltd • Mount Weld, Western Australia, Australia –operated by Lynas Corporation Ltd • Mountain Pass, California, United States – oper-ated by Molycorp Inc• Nechalacho (Thor Lake Basal Zone), NorthwestTerritories, Canada – operated by Avalon RareMetals Inc • Nolans Bore, Northern Territory, Australia –operated by Arafura Resources Ltd • Steenkampskraal, Western Cape, South Africa –operated by Great Western Minerals Group Ltd.in association with Rare Earth ExtractionCompany • Strange Lake (B Zone), Quebec, Canada – oper-ated by Quest Rare Minerals Ltd • Zandkopsdrift, Northern Cape, South Africa –operated by Frontier Rare Earths Ltd • Zeus (Kipawa), Quebec, Canada - operated byMatamec Explorations Inc
4NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
Government
Visit us on: November 1 to 7, 2010 at the Alaska Miners Association 2010 Annual Convention and Trade Show in Anchorage, Alaska.
November 21 to 24, 2010 at the 38th Yukon Geoscience Forum and Trade Show in Whitehorse, Yukon.
January 23 & 24, 2011 at the Cambridge House Investment Conference in Vancouver, BC.
January 24 to 27, 2011 at the Mineral Exploration Roundup 2011 in Vancouver, BC.
March 6 to 9, 2011 at the PDAC 2011 International Convention,
Trade Show & Investors Exchange in Toronto, Ontario.
MiningYukon.com
We support our thriving minerals industrywith a dependable and responsive governmentwith a competitive and innovative business climate
And we have the ground to back it up.
to have failed to follow industry policies or comply withenvironmental protection rules.
Japan’s high-tech industry is the world’s largest con-sumer of REEs, and the country has been the hardest hitby China’s constrained exports of the metals. Japan offi-cials told reporters at the November G20 summit inSeoul that the country has not received shipments ofREEs since September.
Though China officials deny that they have embar-goed REE shipments to neighboring Japan, the flow ofthe high-tech metals stopped after a run-in between aChinese fishing boat and the Japanese Coast Guard off adisputed island in the South China Sea.
According to a Nov. 13 Reuters report, a meetingbetween Prime Minister Naoto Kan and ChinesePresident Hu Jintao at an Asia-Pacific summit inYokohama, Japan, has signaled a cooling of tensionsbetween the Asian neighbors.
Japanese Trade Minister Akihiro Ohata told reportersat the summit he has received assurance from ChinaNational Development and Reform CommissionChairman Zhang Ping that customs issues that havestalled REE exports should be resolved soon.
The European Union and the United States are alsoreporting significant decreases in shipments of the met-als over recent months.
Though nearly all of the global supply or REEs aremined in China and the country produces some 80 per-cent of dense rare earth magnets, most of the high-enddevises made from the unique minerals are not manufac-tured there.
If REEs are not mined and refined outside of China,companies that need these metals to manufacture theirproducts may be forced to consider moving productionfacilities to the country that produces the needed metals.
“I don’t know how you are going to accomplish this,but unless you develop this deposit (Bokan-DotsonRidge) right now, then you had better start learningMandarin, because that will be the instructions you geton your high-tech devises. We won’t be making themanymore, it is as simple as that,” Lifton warned.
Why Bokan?The Dotson Ridge deposit at Ucore’s Bokan Mountain
project is not a particularly high-grade or large rare earthdeposit, so why does Lifton – who specializes in the mar-ket fundamentals and end-use trends of rare metals –insist that the project is key to reducing the UnitedStates’ reliance on China for the technology-centric met-als.
The answer lies in the difficulty of separating REEsfrom each other and the ratio of the critical heavy rareearth elements to total rare earth elements at theSoutheast Alaska deposit.
“What deposit has the correct ratio of the importantrare earths? Therefore, that is the one I want to go after,”Lifton said. “Because of its proportion of heavy rareearths, (Bokan) is the most desirable deposit to be devel-oped in the United States.”
Lifton, who is a geochemist, said the economicimportance of having the correct proportions of the crit-ical REEs is related to the difficulty in separating thevarious metals in a deposit.
“The big problem with the rare earths is real simple –they are too much alike. So, if you find a rare earthdeposit, it always contains all of the rare earths,” Liftonexplained. “You mine this undifferentiated material – ithas 14 rare earth elements and usually scandium, yttri-um, thorium, uranium, zirconium.”
Once a mine produces a concentrate, the difficultprocess of separating these with similar propertiesbegins.
“The metallurgy of this is amongst the most strenuousin the world. Separation plants for rare earths are acresand they have hundreds and thousands of solvent extrac-
tion cycles to take advantage of tiny differences in thesolubility of rare earth compounds,” the REE expertexplained.
Due to the difficulty of disconnecting each individualmetal from all others during the separation and refiningprocesses, having the correct proportions of metals playsa vital role in the economics of a project. A mine notwell-aligned with demand will produce an overabun-dance of less sought-after REEs, while falling short offilling the need for the critical metals.
“In the United States, this (Bokan-Dotson Ridge) isthe most important deposit of rare earths. Why? Becausewhen you concentrate, separate (and) refine, you windup with 40 percent heavy rare earths,” Lifton said.
Critical REEsThe terms heavy rare earth elements and light rare
earth elements are misnomers. HREEs do not necessari-ly weigh more than LREEs. The distinction is related towhere the elements fall on the periodic table of elements.Likewise, REEs that fall into the heavy category are notnecessarily more important than those that precede themon the chart.
Dr. Vladimir Seredin – who published a papertitled “A New Method for Primary Evaluation of theOutlook for Rare Earth Element Ores” – has proposednew categories for evaluating REEs.
The Russian scientist argues that those REEs withfuture demand that is likely to outstrip supply be referredto as critical REEs, and those REEs with future supplythat is likely to be in excess of demand be referred to asexcessive REEs. The balance would fall between thesegroups into a category referred to as non-critical REEs.
Dr. Seredin classifies neodymium, europium, ter-bium, dysprosium, erbium and yttrium as critical REEs,while cerium, holmium, thulium, ytterbium and lutetiumfall into the excessive REE category.
With this classification system, the Russian scientistevaluated 40 deposits around the world by the ratios ofcritical REEs to total REEs and excessive REEs to totalREEs.
Using the matrix created by Seredin, Lifton furtherrefined the list by evaluating the 13 most advanced rare-
continued from page 3
REE CAPITAL
see REE CAPITAL page 5
“I don’t know how you are going to accomplishthis, but unless you develop this deposit
(Bokan-Dotson Ridge) right now then you hadbetter start learning Mandarin, because thatwill be the instructions you get on your high-
tech devises. We won’t be making themanymore; it is as simple as that.”
—Technology Metals Research co-founder Jack Lifton
earth projects currently underway (i.e.those with a mineral resource definitionthat is compliant with NI 43-101(Canadian) or JORC (Australian) indus-try guidelines and/or which have beenhistorically mined and have reliable asso-ciated data.
The two most advanced U.S. REEassets, Mountain Pass in California andBear Lodge in Montana, ranked at thebottom of the list – each with a proportionof critical rare earth elements of less than15 percent.
When Lifton added Bokan – whichdoes not yet have a NI 43-101-compliantresource – to the list, the Southeast Alaskaproject ranked at the top with a criticalREE to total REE ratio of around 50 per-cent.
Ucore President and CEO JimMcKenzie said, “Bokan represents thelargest and most accessible historicallyestimated HREE resource in the UnitedStates. What’s more, upon the delivery ofour resource calculation in the near term,Bokan will be the only primarily HREE-enriched deposit on U.S. soil with a fullydocumented NI 43-101-compliantresource. It’s a unique position, whichplaces Bokan as an alternative and com-plementary bookend to Rare ElementResources Ltd.’s primarily LREE-orient-ed deposit in Wyoming and MolycorpMinerals’ primarily LREE-orienteddeposit in California.”
An NI 43-101-compliant resource esti-mate currently being calculated for theDotson and I&L zones at BokanMountain is expected to be completed bythe end of 2010.
Metal of the centuryOne of the things that set Bokan
Mountain apart from its peers is the pro-portion of dysprosium found in thedeposit.
Dysprosium is becoming an increas-ingly important ingredient in magnetsused in automobiles. Internal combustionengines run more efficiently at highertemperatures. One of the limits is that themultitude of magnets found under thehood of a modern automobile reach theirCurie point, or loses their magnetism tothe high heat.
“Researchers found that when theyadded dysprosium to the magnet, theCurie point was moved hundreds of
degrees higher,” Lifton explained. “Thisis the standard for high temperature gen-erators and motors today – the neodymi-um-dysprosium magnet.”
Lifton told the Alaska miners thatChina has produced all of the dysprosiumin the world to date. The Far East country,which is expected to manufacture 17 mil-lion automobiles this year, announcedthat its demand for dysprosium is on thebrink of outpacing supply, and it will notbe exporting any more of the criticalREE.
This has western manufacturers suchas General Motors, General Electric andHitachi worried about where they aregoing to source this important ingredientof high-temperature magnets.
“Dysprosium is the metal of the centu-ry, in my opinion,” Lifton said.
In addition to the “metal of the centu-ry,” Bokan has healthy portions of thecritical REEs terbium, neodymium, yttri-um and europium.
Resource calculation pendingIn 1989, a U.S. Bureau of Mines study
estimated that the greater Bokan area con-tains 37.8 million tons grading 0.5 per-cent total rare earth oxides.
“As always, our objective has been toverify the historical resource for this areaas set out by the U.S. Geological Survey(formerly the US Bureau of Mines;USBM OFR 33-89), converting theseexpectations to NI 43-101 compliance,before embarking on an aggressive minefeasibility and development schedule in2011,” McKenzie said.
A conceptual estimate released byUcore in October approximates that thedeposit areas drilled over the past twoyears contain 3.5 to 6.5 million metrictons grading between 0.76 percent and1.42 percent total rare earth oxides, 40percent of which are the coveted heavyREEs.
The Ucore president said, “The skewtowards HREE content for the depositremains exceptionally strong, and placesBokan amongst the highest known HREEskews in the world. Together, theincreased grade and tonnage figures rep-resent a deposit sufficient to meet U.S.heavy rare earth needs for decades.”
In tandem with the resource calcula-tion, Hazen Research Inc. is conductingmineralogical and metallurgical studieson bulk samples take from the Bokan-Dotson Ridge project. Results from thiswork are anticipated to coincide with the
resource calculation.
Lifton urges investmentin supply chain
Even if Ucore Rare Metals can fast-track Bokan Mountain into production,the United States is bereft of a domesticsupply chain capable of converting themined concentrates into high-tech prod-ucts.
“Alaska holds a solution to a currentproblem,” Lifton told the mining commu-nity in Anchorage. “The problem is; nomatter what you do, when you mine rareearths you wind up with a concentratethat has the least value.”
“With rare earths this is an exceptionalproblem. First, I have to extract themfrom the concentrate; second, I have toseparate them from each other; and thencontinue refining – which means continu-ing separation,” he added.
The tech-metal expert’s solution is forthe state to invest in building the neededsupply chain in Alaska.
“Bring the supply chain up here. Bringa company that separates the rare earths,refines them, makes the metals, makesthe magnets,” Lifton urged. “I think forUS$100 million Alaska could become theUnited States’ center of heavy rare earthproduction.” �
5NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
continued from page 4
REE CAPITAL
� A L A S K A
AMA serves surf and turf at 2010 meetingPresenters feed mining industry healthy portions of Alaska fish data alongside usual fare of geological, mining project updates
By SHANE LASLEYMining News
M iners, explorers, suppliers and others interested inAlaska’s mining industry got a generous helping of
surf and turf during the AlaskaMiners Association 2010 AnnualConvention and Trade Show, heldthe first week of November at theSheraton Anchorage Hotel.
Mining and Fisheries, the themeof this year’s convention, also wasthe subject of a two-day course heldNov. 1-2. The class provided minerswith information on the importanceof the fishing industry to the econo-my and culture of Alaska and onfish; water quality; baseline studies and permitting.
Alongside the fish was a course and presentation onrare earth elements, prepared by two of the world’s leading
REE experts. Geosciences technical sessions, highlightsand updates from Alaska’s operating mines and explorationprojects as well as information on issues affecting Alaskaminers rounded out the menu.
Invaluable fishGreystar Pacific Seafood Ltd. President Steve
Grabacki, who coordinated the Mining and Fisheries shortcourse, also talked to the mining community about theimportance of fish in Alaska.
“Alaska produces more seafood than the rest of the 49states combined,” said the fisheries consultant.
In addition to Alaska’s commercial fishing industry,worth US$2 billion in export value in 2009, sport and sub-sistence fishing are also important economic drivers in thestate.
The fisheries consultant explained that while an esti-mated cash value of some US$250 million can be put onthe 53 million pounds of subsistence fish and game meatharvested in Alaska annually, a dollar value cannot be
placed on the family traditions; self-reliance; and culturalsignificance associated with the millennia-long practice ofhunting and fishing in Alaska.
“Subsistence is by no means an alternative to shoppingin a store – subsistence is the store, Grabacki explained.“That is where Native peoples have gotten their food for10,000 years.”
Habitat plays key roleThe Alaska Department of Fish and Game, Division of
Habitat is charged with the difficult task of making certain
see AMA CONVENTION page 6
STEVE GRABACKI
“Subsistence is by no means an alternative toshopping in a store – subsistence is the store.
That is where Native peoples have gotten theirfood for 10,000 years.” –Greystar Pacific Seafood Ltd.
President Steve Grabacki
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that mining and other development projectsare built and operated in such a way as toprotect fish and their environment.
ADF&G, Division of Habitat BiologistRon Benkert said,“Our goal is to ensurethat any type of a proj-ect is properlydesigned and con-structed, and is donein such a way as tominimize any kind ofimpacts to the fishresources of thisstate.”
“Our No. 1 goal isto avoid an impact if at all possible, and thenthe next step is to minimize and then afterthat, its mitigation,” he added.
Benkert, who is the large project coordi-nator for Southcentral and Southwest Alaska,explained that Habitat becomes involvedwith mining projects from their inceptionphase, assisting mining companies and envi-ronmental consultants with determiningwhat extent of baseline information will beneeded to permit a project.
The Habitat biologist said identifying fishspecies, populations and available habitats inareas where disturbances from mining andassociated infrastructure are proposed to take
place are some of the key baseline datarequired to permit a mine.
“It is really a matter of scale as to howmuch information needs to be collected sothat we can adequately analyze the impacts ofthe project,” Benkert explained. “Somethingon the scope of a Pebble project – they havebeen collecting data out there for years andyears, and we have a huge amount of baselinedata associated with that project.”
Habitat’s involvement does not end whenthe project is permitted.
“We do monitoring at a lot of the largemines in the state. We monitor at Fort Knox,Red Dog, and Greens Creek (and) we juststarted doing some monitoring out at Pebblethis year,” Benkert said.
Dam design?The Pebble project in the Bristol Bay
region of Southwest Alaska is ground zerofor the ‘mining versus fishing’ debate inAlaska. Pebble opposition contends thatmining the enormous copper-gold-molyb-denum deposit poses too great a risk to theworld -class salmon fisheries in the region,while project proponents assert that it is tooearly to make that judgment.
Pebble partners Anglo American plc andNorthern Dynasty Minerals Ltd. have yet topresent a design for a proposed mine at thecontroversial deposit and are hesitant to saywhen or if they will begin permitting.
Outgoing Alaska Department of NaturalResources Commissioner Tom Irwin
expressed his ire at anti-Pebble advertise-ments that depict a massive mine withcolossal tailings impoundment dams.
“Frankly, on Pebble, I don’t have a damdesign. So, I am not sure how these adshave pictures; and we certainly don’t designdams this day and age as I see in those ads,”Irwin told attendees of a Nov. 3 luncheon atthe AMA convention.
Irwin, who will hand his post as DNRcommissioner over to the current AttorneyGeneral Dan Sullivan when Gov. SeanParnell begins his first full term inDecember, commended the environmentaland safety record of Alaska’s six operatinglarge-scale mines and urged the industry toremain diligent.
“We cannot compromise on the require-ments of the law, and we can not compro-mise on the protection of the environment,”Irwin said. “We have got to correctly designthese facilities. We can’t cut corners, or weare exposing everyone in this room to beingshut down.”
“The convention theme is fisheries andmining. Done correctly, we can and musthave both, and I propose that no one in theState of Alaska cares more about mining
and fishing than the people in this room,”the DNR commissioner concluded.
Fishermen on handWhile the convention was designed to
educate miners about fisheries, it alsoafforded fishermen an opportunity to learnabout mining. Representatives from UnitedFisherman of Alaska attended the final dayof the event.
UFA President Arni Thomson, VicePresident Bruce Wallace and ExecutiveDirector Mark Vinsel were introduced at aNov. 5 luncheon. UFA represents 37 com-mercial fishing organizations from fish-eries across Alaska.
During his presentation, Grabackiaddressed the importance of creating dia-logue between the two long-lived and cher-ished Alaska industries.
“I want to thank you, the mining indus-try. We are absolutely thrilled that you areallowing us to take this much time to hearabout fisheries and how important theyare. The more we understand about eachother’s industries, each other’s points ofview; the less fear, the less anxiety, andthe less anger we will have,” he added. �
6NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
continued from page 5
AMA CONVENTION
TOM IRWIN
� G U E S T C O L U M N
Alaska faces tough road on global stageCNBC report ranks state last in terms of cost of doing business and as having the worst transportation system in the United States
By CURT FREEMANFor Mining News
A laska’s mining industry is enteringthe final lap for what has turned out
to be a more robust than expected year forexploration, development and production.Strong worldwide demand for mined prod-ucts has certainly helped push metallic andenergy minerals prices up, but all is notrosy for Alaska’s mineral industry.
A recent CNBC report placed Alaskadead last of all the states in terms of over-all business attractiveness. We were a dis-mal 46th of 50 in terms of cost of doingbusiness. The survey indicated that onlyHawaii, New York, California andConnecticut were more costly places towork than Alaska. Not surprisingly,Alaska was rated as having the worsttransportation system of all the states.
Since we live in a world where perceptionis reality, Alaska has a tough road aheadof it when competing on the world stage.
Western AlaskaTECK RESOURCES LTD. announced
third-quarter 2010 results from its RedDog Mine which turned in operating prof-its of US$199 million, versus an operat-ing profit of US$138 million in the sameperiod in 2009. The mine generated137,000 metric tons of zinc and 26,300metric tons of lead in concentrate duringthe quarter, versus 150,800 and 31,800metric tons of zinc and lead, respectively,in the third quarter of 2009. The minesold 169,900 metric tons of zinc and86,300 metric tons of lead during the lat-est three-month period. Average zinc andlead grades mined were 17.2 percent and4.9 percent respectively, versus 20.6 and5.8 percent in the third quarter of 2009.Mill throughput of 959,000 metric tons inthe third quarter was up from the 890,000
metric tons milled in the third quarter ayear ago. During the mid-July to lateOctober shipping season, Red Dogshipped a total of 1.035Mt of zinc con-centrate and 235,000 metric tons of leadconcentrate. The mine also paid outUS$89 million in royalties to the State ofAlaska and its partner, NANAREGIONAL CORP. during the period.Profits rose significantly due to highermetals prices and sales. Zinc ore gradesfell 17 percent in the third quarter com-pared with average grades during thesame period a year ago as recent mininghas been taking place at the edges of themain pit. The company expects the aver-age zinc ore grade to improve to 19.8 per-cent in 2011. Ore from Aqqaluk, the oredeposit adjacent to Main pit at Red Dog,will account for approximately 65 percent
TheauthorThe author
Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMANNov. 15. Freeman can be reached bymail at P.O. Box 80268, Fairbanks, AK99708. His work phone number atAvalon Development is (907) 457-5159and his fax is (907) 455-8069. His emailis [email protected] and his web site iswww.avalonalaska.com.
see FREEMAN page 7
“Frankly, on Pebble, I don’t have a dam design. So, I am not sure howthese ads have pictures; and we certainly don’t design dams this day and
age as I see in those ads.” —Tom Irwin, commissioner, Alaska Department of Natural Resources
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of total throughput in 2011.FREEGOLD VENTURES LTD.
announced drill results from its Vinasalegold project near McGrath. The programwas aimed at expanding the knownresources as well as testing weaker geo-physical anomalies to the northeast ofknown mineralization. Significant resultsinclude 71.3 meters grading 1.52 gramsper metric ton gold in hole VM10-01 andmultiple mineralized intervals in holeVM10-02, including 6.1 meters grading5.34 g/t gold, 56.1 meters grading 2.58 g/tgold and 55.9 meters grading 1.58 g/tgold. Hole VM10-6 returned 36.1 metersgrading 2.33 g/t gold and 16.2 metersgrading 1.28 g/t gold. Hole VM10-01 isthe northern most hole drilled in theCentral Zone. The drill hole intersectedmineralization approximately 100 meterswest and at least 350 feet deeper than pre-viously known mineralization. HoleVM10-02 was collared approximately 60meters southwest of hole VM 10-01. Thehole extended mineralization approxi-mately 300 feet deeper than previouslyintercepted mineralization. An historicalresource of 925,000 ounces of gold(14.5Mt grading 1.95 g/t gold) was esti-mated for the Central Zone.
Interior AlaskaKINROSS GOLD CORP. announced
third-quarter 2010 production results fromits Fort Knox Mine near Fairbanks. Themine produced 108,680 ounces of goldversus 60,629 ounces produced in the thirdquarter of 2009. Cash costs were US$501per ounce versus US$591 per ounce in thethird quarter a year ago. The mineprocessed 7,655,000 metric tons of oregrading 0.96 g/t gold. Recovery from themill for the quarter was 82 percent.Production and costs improved significant-ly in the third quarter, with a 26 percentincrease in gold equivalent production anda 22 percent reduction in per-ounce cost ofsales compared with results in the secondquarter of 2010. The improvements werelargely the result of increased millthroughput, higher grades, and lower re-agent costs. On a year-over-year basis, newproduction from the heap leach con-tributed to a 79 percent increase in produc-tion and a reduction in cost of sales pergold equivalent ounce of 15 percent com-pared with third quarter 2009 results.
SILVERADO GOLD MINES LTD. pro-vided an update on its Eagle Creek gold-antimony project in the Fairbanks MiningDistrict. The Scrafford structure on theEagle Creek property was once the sec-ond-largest producer of antimony inAlaska. During previous mining operationsfor antimony, gold credits associated withthe sale of the antimony ore averaged 0.18ounces per metric ton gold. Both high-grade vein and fault-host mineralization aswell as lower grade intrusive-hosted miner-alization is possible on the project.Geochemical assay results are pending
from work conducted earlier in the year. FIRST STAR RESOURCES INC. pro-
vided an exploration update on its WestPogo gold project under option fromInternational Tower Hill Gold Mines in theGoodpaster District. Chip sampling onthree traverses over a 40-meter wide zoneof mineralized rubble crop returned 6.53g/t gold and 0.73 grams per metric ton sil-ver over 6 meters, 3.79 g/t gold and 13.05g/t silver over 6 meters and 3.84 g/t goldand 4.86 g/t silver over 6 meters. Rocksamples collected by previous explorationcampaigns returned gold values of up to118.5 g/t gold from sericite altered graniteand quartz vein material. Dominant struc-tures on the property are east-west shearzones related to northwest and northeasttrending fault zones.
TRI-VALLEY announced that its whol-ly-owned minerals subsidiary, SELECTRESOURCES CORP., has initiated effortsto attract a joint venture partner to assist inthe exploration and development of itsShorty Creek copper-gold-molybdenumproject in the Livengood District. Thecompany released data indicating that theproperty may host a porphyry copper-gold-molybdenum system up to 8 miles indiameter. Previous shallow drilling waslimited in scope but recent work by theAlaska Division of Geological andGeophysical Surveys has confirmed thepresence of replacement-style alterationand mineralization on the Hill 1835prospect. Mineralization at Hill 1835 ishosted by structurally and possibly strati-graphically controlled, polyphase, grain-supported and matrix-supported silicifiedbreccias. Intense flood silicification occursin matrix-supported breccias and is oftenaccompanied by arsenopyrite-quartz vein-lets and disseminated pyrite and arsenopy-rite. Drill results indicate that deeper por-tions of the system contain arsenopyrite-pyrite-chalcopyrite stockwork veinletsalong with local disseminated pyrite, chal-copyrite and rare bornite. Gold values tendto be higher near the top of the drill holes.Widespread pervasive sericite or clay alter-ation appears to overprint all other alter-ation and mineralization styles, resulting ina pale yellow to tan “bleached” appearancein altered host lithologies. Outcrops ofmatrix supported breccia often are restrict-ed to one or more mappable lithologichorizon, indicating possible stratigraphiccontrol of at least a portion of the goldmineralization present. Significant drillintercepts include 220 feet grading 1.216g/t gold in hole RH8908, including 25 feetgrading 4.577 g/t gold, 60 feet grading0.800 g/t gold in hole RH9016, 25 feetgrading 1.707 g/t gold in hole RH9017and 55 feet grading 1.035 g/t gold in holeRH9019.
Alaska RangeUSIBELLI COAL MINES reported that
for 2010 its Healy coal mine will produce2 million short tons of coal.Approximately 1 million tons of that pro-duction will be supplied to six Alaskapower plants and the other 1 million tonswas exported to Pacific Rim destinations.
The mine currently employs 130 full-timeworkers.
KISKA METALS CORP. reported addi-tional drilling and metallurgical work atthe Island Mountain prospect at itsWhistler project. Hole IM10-013 was col-lared 110 meters northwest of the discov-ery hole and intersected 252.0 meters of0.707 g/t gold, 2.6 g/t silver and 0.15 per-cent copper beginning at a depth of 42.0meters depth and includes a higher gradeinterval which returned 114.9 meters of1.251 g/t gold, 4.0 grams of silver and 0.23percent copper (1.74 g/t gold equivalent).This hole marks the first intersection ofclassic porphyry-style gold and coppermineralization at Island Mountain. Thebulk of this interval is diorite with dissemi-nated chalcopyrite + pyrrhotite in associa-tion with potassic alteration marked bypotassium feldspar and biotite. Additionaldrilling is planned for 2011.
Southeast AlaskaHECLA MINING PLC announced
third-quarter production results from itsGreens Creek mine on Admiralty Island.The cash cost per ounce of silver for thequarter was a negative US$3.05 comparedto a negative US48 cents in the third quar-ter of 2009. The average grade of oremined during the quarter was 12.76 ouncesof silver per ton compared with 12.63 ozs/tsilver in the year-previous period. Duringthe third quarter, the mine produced1,852,250 ounces of silver, 17,985 ouncesof gold, 6,738 tons of lead and 18,777 tonsof zinc. Total production costs for thequarter averaged US$4.09/oz silver, a sig-nificant decrease from US$7.08/oz aver-age costs in the third quarter of 2009. Thetotal cash cost per ounce of silver waslower in the third quarter of 2010 com-pared with the same period in 2009, pri-marily because of higher by-product cred-its, higher average realized prices for zinc,lead and gold, combined with higher zincand lead ore grades. The impact of theseimprovements was partially offset by high-er production, treatment and freight costs.Exploration activities continued withdrilling to define high-grade resources atthe Northwest West zone along two newlydefined limbs below the current workingsand along strike for at least 400 feet.Within this more typically base metal-richarea, there are distinct lenses that areenriched in precious metals. Significantresults from this zone include 41 feet grad-ing 0.3 ozs/t gold, 33 ozs/t silver, 4.1 per-cent zinc and 10.9 percent lead and 15.1feet grading 0.2 ozs/t gold, 20.6 ozs/t sil-ver, 8 percent zinc and 24.3 percent lead.Definition and exploration holes continueto refine and expand the 200 South zone.Recent drilling continues to intersect min-eralized intervals from 12 to 30 feet wideof mixed white siliceous ore and bariticores. Significant results from this zoneinclude 13.3 feet grading 0.8 oz/t gold, 106ozs/t silver, 4.5 percent zinc and 1.6 per-cent lead and 12.8 feet grading 0.2 ozs/tgold, 10.6 ozs/t silver, 6.9 percent zinc and3.7 percent lead. In a bit of understatednew, surface and underground drilling con-
tinue to define the NE contact which rep-resents a continuation of the favorableGreens Creek mine contact. This contacthas been folded underneath the currentworkings and to the east. Recent drillinghas defined mineralized intervals alongthis contact which has a folded strikelength of over 5,000 feet and down dipextension of 3,000 feet. Keep your eye onthis area!
COEUR D’ALENE MINES reportedthird quarter production results fromAlaska’s newest mine, the Kensingtonmine. During the third quarter the mineproduced 15,155 ounces of gold at a cashoperating cost of US$1,199 per ounce. Themine processed 90,254 tons of ore grading0.19 ounces of gold per ton. Average millrecovery was 87.7 percent. The mineexpects to produce 125,000 ounces of goldduring 2011, its first full year of produc-tion.
NIBLACK MINERALDEVELOPMENT INC. and joint venturepartner Heatherdale Resources todayannounced new drill results from 22underground holes completed at theNiblack volcanogenic massive sulfideproject on Prince of Wales Island.Significant results include 28.4 feet grad-ing 2.12 percent copper, 1.49 g/t gold, 2.01percent zinc and 16 g/t silver in holeU064, 12.8 feet grading 2.64 percent cop-per, 4.51 g/t gold, 2.95 percent zinc and 43g/t silver in hole U072, 6.6 feet grading2.36 percent copper, 5.88 g/t gold, 1.29percent zinc and 83 g/t silver in holeU078, 60.8 feet grading 1.26 percent cop-per, 1.94 g/t gold, 1.28 percent zinc and 38g/t silver in hole U081and 47 feet grading1.74 percent copper, 3.73 g/t gold, 2.47percent zinc and 75 g/t silver in holeU083. Two underground drill rigs are cur-rently working in the Lookout Zone toexpand the precious metals-enriched min-eralized body to the south and southwest.Since October 2009 the joint venture hascompleted 62,500 feet of drilling in 56drill holes. �
7NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
Palmer Copper-Zinc Project
TSX.V: CEM
Growing a New VMS Resource in SE Alaska
continued from page 6
FREEMAN
By J. P. TANGEN For Mining News
There is a story that circulated aroundD.C. a number of years ago about
the traditional little old lady in tennisshoes who approached her congressmanand demanded he do something aboutsome environmental cause or another.The congressman responded: “ButMadam, we passed legislation last year tosolve that very problem.” She replied, “Iknow, I promised to lobby for it last yearbut couldn’t because I was sick.”
When it comes to legislation andadministrative action by the governmentwith regard to the domestic miningindustry, over and over, we are encoun-tering this very situation. Critics of themining industry are strident in theirinsistence on regulating problems thathave already been cured. Mining is thesecond-largest industry in Alaska,although it is dwarfed by oil and gas.Number three, by any measure, is fish-ing. Environmental and health and safetyconcerns are justifiably high priorities inboth oil and gas and in mining; however,
both health and safety seem to get amajor pass when it comes to fishing. Interms of the fishing industry, the dangerand risk is somehow still a gloriousadventure. Television shows romanticizethe dangers of fishing in a way that has-n’t happened to the mining industry fordecades. When I was a kid, songs like“Sixteen Tons” and “Big John” were partof the daily fare.
Going down to the sea in a ship is notunlike going down into a mine, at leastin terms of leaving one’s comfort zone.
There can be no doubt that mining oncewas a lot more dangerous than it istoday. But that is yesterday’s news.
Today, the talk around the circuit isconsistently critical of the Mine Safetyand Health Administration. This agencyhas the goal of protecting mine workers,but has taken its mandate a bridge toofar. Enforcement inspectors are obligedto make unannounced visits to minelocations and issue citations. Failure toissue a sufficient number of citations canresult in internal disciplinary actionagainst the inspector. Failure of the mineoperator to contest a questionable cita-tion results in the operator being deemedto have a “pattern of violations,” whichaggravates the associated sanctions.Contests, therefore, are necessary; how-ever, the agency cannot expeditiouslyadjudicate them and backlogs are accu-mulating.
Alaska’s mines are safe. Fort Knoxhas had over 3 million man hours with-out a lost-time accident. It is axiomaticthat Alaska miners driving home fromwork are at greater risk on the highwaythan at the mine site. Few can disparagethe objectives of MSHA, but the meansof achieving them are ripe for criticalreview. Hardly an operator in the statelacks anecdotes of abuse by MSHAinspectors; although, virtually no onewants to bring the focus on their opera-tion by visibly complaining.
The new Congress seems poised toinquire into such matters. InappropriateDraconian law enforcement, amongother things, is a total waste of taxpayermoney. Certainly it precipitates a wasteof mine operator money if an inspectoris pursuing “fixes” that are unwarrantedby conditions.
Government, of course, does a reallylousy job of governing. The efficacy ofoversight is inversely proportional to thelayers of bureaucracy. Our form of gov-ernment may well be far better than anyidentifiable alternative, but it is broadlydeficient. We bargained for hope andchange in 2008 and we got it. The econo-my has tanked, unemployment is high,manufacturing capacity is fleeing ourshores and the currency is being aggres-sively devalued. Those who believe, how-ever, that “it’s the economy, stupid” arebeing shortsighted. The economy is sim-ply the tip of a much larger iceberg. Theremay be some things that government cando better than the private sector, but thelist is short. When it comes to regulationof industry, the balance must be struckwith a clear understanding of the contem-porary reality. Building health and safetyregulations on conditions that do not per-sist are inapposite and should bereviewed. The viability of the domesticmining industry may be contingent, atleast in part, on modernization of this cor-ner of the regulatory world. �
8NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
� G U E S T C O L U M N
The lights are on but nobody’s homeFederal agency has goal of protecting mine workers, but draconian measures and unwarranted citations is taking its mandate too far
Mining & thelaw
The author,J.P. Tangen hasbeen practicingmining law in J.P. TANGENAlaska since 1975. He can be reached [email protected] or visit his Web site atwww.jptangen.com. His opinions do notnecessarily reflect those of the publishersof Mining News and Petroleum News.
9NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
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� G U E S T C O L U M N
A wake up call to anti-mining forcesColumnist: “We need copper” for green technologies, energy independence and a strong economy as well as host of traditional uses
By CAROLINE MAYFor Mining News
President Barack Obama heralds green renewables askey to a strong economy and energy independence, but
without vigorous domestic copper production, his goals willbe difficult to reach.
Copper, the world’s preeminent electricity and heat con-ductor, is a necessity. The average American home containsan estimated 400 pounds of copper in wire, plumbing, andfixtures; the average automobile requires 50 pounds. TheNorthwest Mining Association estimates that a typical childborn today will use 1,500 pounds of copper throughout thecourse of his or her lifetime.
The United States is one of the most copper-rich coun-tries in the world, second only to Chile. America sits on anestimated 550 million tons of copper and presently is self-sufficient in the material.
Copper is becoming increasingly important as technolog-ical advancements and “green” technologies demand moreof this metal and its byproducts. Hybrid cars, for example,use double the copper of their fossil fuel predecessors. Windenergy turbines require over a ton of copper each, and thenew transmission lines needed to deliver renewable energyto our homes will require millions of pounds of copper.
China, the world’s largest copper consumer andAmerica’s best copper customer, has long recognized thefuture indispensability of the material. China has in recentyears been buying up the metal in quantities that exceed itscurrent need.
Nobu Su, CEO of eastern shipping giant Taiwan MarineTransport, explained the strategy to the UK Telegraph:“China has woken up… the next industrial revolution isgoing to be led by hybrid cars, and that needs copper. Youcan see the subtle way that China is moving into 30 or 40countries with resources.”
America’s copper production should keep up not onlywith domestic demand, but world demand. Furthermore,increased U.S. copper exports could help reduce America’scurrent trade imbalance with China.
The Congressional Research Service in 2007 reportedthat the “U.S. trade deficit with China is large and grow-ing… from the U.S. perspective, its bilateral trade deficitwith China more than trebled in value over the last eightyears, from just over US$83 billion in 2001 to over US$266billion in 2008.”
In 2009, the most recent annual statistic, America’s tradedeficit with China was US$226.8 billion. (The reduction in2009 was largely attributed to the reduction in imports dueto the economic downturn.)
Although copper is 100 percent recyclable, there is still
not enough market-ready copper to meet growing demand. Despite copper’s undeniable value, its promising environ-
mental qualities, and the dangers of further trade imbalanceswith China, the very organizations and individuals promot-ing the carbon-free technologies that require copper are hin-dering domestic production.
Environmentalists and special interests in Alaska, forexample, are currently trying to block development ofPebble Mine, which could become one of the largest coppermines in the world. They claim the mine represents a threatto the region’s ecosystem. They say this despite the fact thata mine site plan has yet to be developed.
In addition to raising their voices, Pebble Mine opponentshave been creative in their obstructionism. In 2007 themovement pushed two pieces of state legislation designed tohalt the project: Senate Bill 67, or “The Jay Hammond StateGame Refuge Act,” which sought to block off the area fromresource development by establishing a state fish and gamerefuge, as well as House Bill 134, “An act relating to con-servation and protection of wild salmon production indrainages affecting the Bristol Bay Fisheries Reserve.” Bothlost momentum and died with the end of the 25th AlaskaLegislature.
Pebble Mine opponents then got an initiative known asBallot Measure 4, or the “Alaska Clean Water Initiative,” onthe 2008 ballot. The initiative would have imposed debilitat-ing regulations on mines in Alaska, but was soundly defeat-ed.
Opponents then turned to the state Legislature, promot-ing another antagonistic piece of legislation: House Bill 242or “An Act relating to the protection of wild salmon, wildlife,water, and other resources in or near the Bristol BayFisheries Reserve and to large-scale mining in the headwa-ters of the Reserve.” They also are asking the federalEnvironmental Protection Agency to block development ofthe mine under Section 404 of the Clean Water Act.Apparently to this end, EPA Administrator Lisa Jackson vis-ited the area in July 2010.
Environmentalists also have taken the matter to thecourts. Our Bristol Bay, an online clearinghouse for PebbleMine opposition, highlights the legal challenges facing themine: “Pebble Limited Partnership will need to secure regu-latory approval for an estimated 60 permits from a variety offederal, state, and local permitting authorities. Furthermore,pending state legislation and numerous legal challenges mayincrease regulatory requirements for Pebble, or precludedevelopment altogether.”
Acutely aware of the long permitting processes PebblePartnership (a joint venture owned by Anglo-American PLCand Northern Dynasty) must endure, hostile groups alsohave filed numerous lawsuits challenging the issuance ofPebble’s exploration permits, water rights, and land-useplans.
Pebble Partnership has spent the last eight years and overUS$132 million conducting an extensive range of environ-mental and socio economic impact studies of the site.
Cynthia Carroll, CEO of Pebble Partnership’s Anglo-American Plc, has asserted, “We will not be associated withthe development of a mine that damages Alaska’s fisheriesand wildlife … If the mine cannot be planned in a way thatprovides proper protections, it will not be built.”
The partnership has – at least so far – been backing thesewords up with action.
To minimize its footprint, the partnership has committedto using helicopters while conducting a series of studies todetermine environmental baselines, including “Fisheries,and Aquatic and Marine Habitat, Surface and GroundwaterQuality, Terrestrial Wildlife/Habitat, Wetlands, Climate(Meteorology) and Air Quality, Soil and Rock Geochemistryand Trace Elements,” and “Socioeconomic considerations,including Recreation, Subsistence, and Cultural Resources.”It has made its data available to the public online, providingan extraordinary level of transparency.
With its estimated 80 billion pounds of copper, 100 mil-lion ounces of gold, and 5.6 billion pounds of molybdenum,the Pebble Mine “has the potential to be one of the greatmetal producers of the 21st century,” said Northern DynastyCEO Ron Thiessen.
Despite the wealth of this green energy necessity, envi-ronmentalists remain steadfast in their opposition.
Copper is essential not only to today’s economy andAmerica’s competitive edge over China, but also to therenewable future environmentalists envision. Mines suchas Pebble ought not to be impeded by self-defeating envi-ronmentalists in constant search of a corporate interest todecry. �
Caroline May is a policy analyst at the National Centerfor Public Policy Research in Washington, D.C.
“Pebble Limited Partnership will need tosecure regulatory approval for an estimated 60
permits from a variety of federal, state, andlocal permitting authorities. Furthermore,
pending state legislation and numerous legalchallenges may increase regulatory
requirements for Pebble, or precludedevelopment altogether.”
–Our Bristol Bay, online clearinghouse for Pebble Mine opposition
By ROSE RAGSDALEFor Mining News
As mining heats up in Yukon Territory, professionalsfrom around the globe are finding new roles in the
region and employing a host of unique experiences and per-spectives in pursuit of exploration, development and pro-duction of the territory’s minerals.
This growing international contingent covers the industryspectrum and hails from around the globe. Their presence ismost evident in exploration camps scattered across theYukon; however, the new manager of Yukon’s sole producer,Capstone Mining Corp.’s Minto Mine, is a native of Chile.
Jaime Delgado, mine manager and acting general man-ager for Minto Explorations Ltd. at the Minto Mine, wastrained in geology and rock mechanic engineering in Chile.Minto Explorations is a subsidiary of Capstone.
After working 10 years as exploration geologist, geotech-nical geologist and mine geologist at mines in Chile,Delgado was transferred eight years ago by Placer DomeInc. to serve as senior planner and rock mechanical engineerat the Campbell Mine located in the Red Lake Area ofNorthwest Ontario. Since then, he has served as senior plan-ner for the Red Lake Gold Mines, project engineer andsuperintendent at the Snap Lake Diamond Mine inNorthwest Territories and project engineer for an under-ground potash mine in Esterhazy, Sask.
Delgado and his wife andtwo daughters moved toVancouver four years ago,and he took up his currentassignment at the Minto Minein August 2009.
“My wife is Chilean aswell; she is civil engineer andworks for a mining and tun-neling contractor company inBurnaby, B.C.,” he said in arecent e-mail. “We have twodaughters, one 22 years old,just graduated in kinesiologyat the University of WesternOntario, and now she is pur-suing a master’s in biome-chanics at Western, too, inLondon, Ont. My seconddaughter is 11 years old and isdoing really well at school,piano lessons, choir, etc.
“We feel so fortunate forour lives, family, professionsand thankful for living in thisgreat country!” he added.
In his job at Minto, Delgado not only faces challengesrunning the open pit mine and mill operation, he is also con-tributing to planning for new underground mining opera-tions that will allow access to deeper copper and gold min-eralization.
During 2010, a property-wide, deep penetrating geo-physical survey not only detected all the known mineraldeposits at Minto, but also outlined 73 additional targets, 19of which were deemed high priority. Following up on one ofthe geophysical targets led to discovery of the shallower“Wildfire” zone and a significant expansion of the deeper“Copper Keel” zone. The company reported a 44 percentincrease in measured and indicated mineral resources con-tained in the undeveloped deposits (i.e. excluding the“Main” deposit currently being mined) based on drilling upto the end of April 2010.
Drilling of the Minto East deposit also defined a high-grade, thick core that tapers out to lower grade and thinneredges.
A “Kiwi” at KaminakWhile a number of mining professionals from Australia
have found their way to the Yukon, some of the miners fromDown Under come from New Zealand.
Tim Smith, exploration manager for Kaminak GoldCorp.’s Coffee Project in the emerging White Gold Districtof west-central Yukon, graduated with a master’s degree ingeology in 1994 from the University of Canterbury in NewZealand. Smith moved his family to the Vancouver area afterlanding the job with Kaminak in 2009.
Smith spent the first part of his career with a major goldminer in the Archean Yilgarn Craton of Western Australia
where he was part of a team that discovered anddeveloped two standalone gold mines in thegreenstone belts of the Eastern Goldfields.
In 2000, he moved into the junior explo-ration sector with Tanami Gold NL. Startingas project geologist, Smith worked his way upto geology manager, and headed up all geo-logical functions across the company. In thisrole, he was responsible for the exploration ofa major landholding (up to 70,000 squarekilometers), and the resource developmentand eventual mine geology of the CoyoteGold Project, which is now Australia’s mostremote operating open cut and undergroundgold mine.
As an offshoot to Tanami Gold, Smith alsoled the geology team for Jabiru Metals Ltd.during the bankable feasibility study into theVHMS copper-zinc-silver Jaguar deposit,also now an operating underground mine.
At Kaminak, Smith heads the explorationprogram on the highly prospective CoffeeGold Project where his experience in leadinggeological teams from initial discoverythrough resource extension, definition andfeasibility to eventual mining, will be invalu-
able, according to the company. The primary target at Coffee is a near-surface, bulk-ton-
nage gold deposit analogous to the White Gold Projectwhere the Golden Saddle deposit discovery in 2009 yieldeda resource exceeding 1 million ounces of gold for
Underworld Resources Inc. (Kinross Gold Corp. acquiredthe White Gold Project in June.)
The Coffee property is located 30 kilometers, or 19 miles,south of the Golden Saddle deposit. Work to date at Coffeestrongly suggests the presence of Golden Saddle-style min-eralization.
In the spring of 2010, Kaminak conducted the first -everdrill program at Coffee, and two major gold discoveries weremade at the Supremo and Latte zones. Located 1 kilometer,or five-eighths of 1 mile, apart, and on two separate struc-tures, both these discoveries is open at depth and alongstrike. Currently, eight gold zones have been identified onthe property through soil-sampling, but only 7 percent of theproperty has been soil sampled. An extensive soil samplingprogram and additional drilling was carried out during the2010 season.
A view from YugoslaviaMiners from Russia, countries of the former Soviet
Union and Eastern Europe are securing Yukon jobs ingreater numbers. Konstantin Lesnikov, for example, is proj-ect geologist for the giant Casino copper-gold-molybdenum-silver project in west-central Yukon. A native of Yugoslaviawhere he earned a bachelor’s degree in geology at theUniversity of Belgrade, Lesnikov has worked in Canada andPeru for more than 15 years as a mineral exploration geolo-gist. Formerly project geologist for Pacific Booker Minerals,Manhattan Minerals and Archer, Cathro & Associates,Lesnikov has developed considerable expertise in copperexploration. He became a Canadian citizen in 2001 andjoined Western Copper Corp. in 2007.
Western Copper Nov. 1 reported a 90 percent jump in itsresource estimate for the near-surface supergene sulphidezone at Casino to 252 million metric tons. The calculationincludes measured, indicated and inferred resources. The
10NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
� Y U K O N T E R R I T O R Y
Yukon’s mining talent spans the globeInternational faces at Minto Mine, various exploration projects reflect territory’s growing allure as work environment for miners
see TALENT page 11
Tim Smith, exploration manager forKaminak Gold Corp.’s Coffee Project in theemerging White Gold District of west-cen-tral Yukon Territory, is a native of NewZealand and among professionals fromother countries who are joining the mod-ern-day Yukon minerals exploration rush.
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Konstantin Lesnikov, project geologist for the giant Casinocopper-gold-molybdenum-silver project in west-centralYukon Territory, is a native of Yugoslavia who became aCanadian citizen in 2001.
junior also said its estimate for measured andindicated resources in both the supergeneand the deeper hypogene mineralization, at a0.25 percent copper equivalent cut-off, onCasino totaled 1.06 billion metric tons, con-taining 1.4 billion pounds copper, 2 millionounces old, 117 million pounds molybde-num and nearly 15 million ounces of silver.The explorer’s estimate of the inferredresource in the mineralization, at a 0.25 per-cent copper equivalent cutoff, jumped six-fold to 1.7 billion metric tons. The resultsadded 7.4 million ounces of gold, 4.4 billionpounds of copper, and 615 million pounds ofmolybdenum to the resource at the inferredlevel.
Lesnikov said the new calculation bringsCasino’s resource estimate up to NI 43-101standards. It also incorporates the 26,000meters of drilling conducted by WesternCopper during the past three years.
In addition to the new drilling, the newresource estimate incorporates a re-interpre-tation of the geology of the deposit, whichincluded re-logging 90,000 meters of coreunder the direction of Western CopperConsulting Geologist Jack McClintock.
Calling the resource upgrade at Casino“remarkable,” Western Copper Chairmanand CEO Dale Corman said the newresource estimated will be included in arevised pre-feasibility study of the projectscheduled for completion in early 2011.”
Gold Dome challengesKarin Fecova is another geologist origi-
nally from Eastern Europe who has madeher way to Yukon Territory. Fecova is a mem-ber of the exploration team at GoldenPredator Corp.’s huge 170 square-kilometer,or 65.6-square-mile, Gold (Scheelite) DomeProject in east-central Yukon. Gold Dome’sgeology team is headed by an American, JeffCary.
Golden Predator Chairman WilliamSheriff has said he expects 200,000 peopleto come to Yukon Territory in the nextdecade as mining activity intensifies. Nodoubt many of them will hail from othercountries.
Gold Dome hosts one of the largest gold-arsenic-bismuth soil anomalies in the territo-ry. Discovered in 1979 by Cominco, theproject had 48 historical drill holes andevery one of them encountered gold.
“One of the problems we’ve been havingis trying to figure out where to concentrateour drilling,” said Sheriff during an inter-view in August.
“This property has 16 different targetswith known mineralization, and that wasbefore I did some research last week whichshowed that Kennecott drilled some holes 7kilometers away that got gold, down in thevalley where there is no sign of anything,” hesaid. “We drilled 18 holes last year, and wegot a discovery of 25 meters with 11 gramsstarting at 10 meters. We’ve been followingup on that and some other stuff this year.”
Sheriff said the Gold Dome Project hasthe potential to host at least 5 million to 10million ounces of gold and is so large thatGolden Predator eventually will need a part-ner to develop it. Several majors havealready expressed interest in reviewing theproject’s particulars, he added.
Following up on samples showing low-grade gold mineralization, Fecova said shewas able to find some high-grade gold inter-sections at Gold Dome.
Cary, who signed on as project geologistin August, lives in Colorado. With extensiveexperience in the Nevada gold fields, hedeveloped expertise in reverse circulationdrilling.
Cary said Sheriff favors RC drillingbecause the bigger the sample taken, the bet-
ter the chances for finding gold, and RC rigstake much larger samples than core rigs.
Sheriff said he sent for Cary because theCanadian drillers at Gold Dome encoun-tered significant problems with RC drilling.
Cary said the RC drilling proved prob-lematic at Gold Dome because the rocksthere are broken up down hole.
Cary advised the drillers to orient the RCholes to be drilled vertically or on a slightincline “so the drill hole stays open better”and to use “a conventional hammer bitinstead of a face-return bit.” He also sug-gested that switching from dry drilling towet drilling might improve the RC drillingprocess.
The changes resulted in fewer problemswith the drilling and the Gold Dome teamresumed its push to complete a C$1.6 mil-lion to C$1.7 million exploration program in2010 with 9,000 meters in a combination of60 to 70 diamond core and RC holes.
Long-distance relationshipsMiners in other lands are also making an
impact on Yukon mining from a distance. AtNorthern Freegold Inc.’s Freegold MountainProject, for example, Swiss consultant PaoloConstantini worked with the explorer’s geol-ogists and geophysicists to help unravel themysteries of the Nucleus gold deposit andthe much larger and adjacent Revenue cop-per-gold deposit.
In 2009, Northern Freegold alsoemployed Italian geologist FabrizioColombo as exploration manager for theFreegold Mountain program.
“Paolo is a geophysicist who workedwith Fabrizio,” said project manager DebbieJames. But instead of just working with geo-physical maps, Constantini worked with theactual rocks. “He worked with the geologyand geophysics and made the two mesh, a lotmore,” said James.
In 2007, Northern Freegold employed aRussian-trained geologist and in 2006, ageologist from the Philippines.
“As the Yukon mining industry has gottenbigger, the companies have brought in morepeople from other countries in the ‘battle fortalent’,” James observed.
In mid-September, the junior reportedinitial results for its 2010 exploration pro-gram at Freegold Mountain. Phase 1 of theprogram included 11 diamond and 5 reversecirculation step-out drill holes in the Nucleuszone, 40 RC holes in the Revenue zone, anda 60 line-kilometer Titan Deep IP survey.
Significant results were intersected instep-out holes from historical hole DD 91-1,which returned 80 meters of 0.87 grams permetric ton gold and 3,243 parts per millioncopper (1.74 g/t gold equivalent). This holewas re-logged and re-assayed to include sil-ver, molybdenum and tungsten in 2010 andreturned 89 meters of 0.73 g/t gold, 9.96 g/tsilver, 3,062 ppm copper (1.72 g/t goldequivalent). This interval also ran 179.3 ppmmolybdenum and 326.9 ppm tungsten. Alsoof note is a sample collected from RC 10-20,which returned values of 48 g/t gold, 9.90 g/tsilver and 2,660 parts per million copper.
The 2010 program, designed to test thebroader mineralized system in the Revenuezone, was successful in identifying signifi-cant gold, silver, copper system which maylead to additional resources at FreegoldMountain, and a significant mineralized 800meters by150 meters x 150 meters zoneidentified in Discovery Target
“We believe the Revenue zone has greatpotential for us to add resources to theFreegold Project,” said Northern FreegoldChairman and COO Bill Harris. “We haveseen indications of significant mineraliza-tion in RC drilling at Revenue this season,so we are excited to be able to get a diamonddrill rig into the area to help us test thepotential of this large-scale porphyry sys-tem. The Titan Survey combined with thereconnaissance RC and diamond drillingwill help develop an overall picture of thelarge-scale mineralized system to depth.” �
11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
JANUARY 24 27 2011
continued from page 10
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Chilean Jaime Delgado who is mine manag-er and acting general manager for MintoExplorations Ltd. at the Minto Mine in cen-tral Yukon Territory, worked for the PlacerDome Group in Antofagasta, Chile beforehe was transferred to Canada in 2002.
Karin Fecova, an eastern European, and JeffCary, an American are members of GoldenPredator Corp.’s exploration team at theGold Dome Project in central Yukon Territory.Formerly known as Scheelite Dome, thehuge, mountainous property offers numer-ous geological and logistical challenges.
By ROSE RAGSDALEFor Mining News
As more mine projects in YukonTerritory move through develop-
ment, the Yukon Mine TrainingAssociation is coming into its own as agood source of well-trained mine workersrecruited from local communities.
Not only has the YMTA become fullyoperational in the past two years, it alsohas honed a strong reputation for provid-ing a wide range of training opportunitiesfor Yukoners. The four-year-old associa-tion is an uncommon network of partner-ships between 19 companies, five educa-tional institutions and 11 First Nations. Inall, 44 training projects have been fundedthrough YMTA partnerships.
During the current fiscal year, it madetraining available in 11 different skill setsto more than 400 trainees through thesepartnerships.
Long-standing YMTA offerings suchas the First Nation Wage SubsidyProgram and
Work experience training continued in2009-2010, and more than 200 YMTAtrainees landed jobs as a result of the
training they received through the associ-ation’s programs, according to TracyThomas, YMTA’s executive director.
“Our organization has establisheditself as a resource for First Nations,industry and Yukoners seeking training
and organizations with mandates similarto our own across Canada,” Thomaswrote in YMTA’s 2010 annual report.
“Our partners provide funding fortraining, space for training courses, train-ers and mentors, and opportunities for ourtrainees to gain work experience in thefield. These courses change the lives ofour trainees; in 2009-10 alone, 221 peo-ple were able to move from YMTA train-ing directly to work in the mining andresource-related industries,” said Thomas.“That’s something that YMTA can cele-brate.”
Underground minersLast spring, 11 students graduated
from the four-week classroom componentof YMTA’s underground mine trainingcourse, and eight of the 11 successfullycompleted a four-week hands-on compo-nent of the course. The students gainedexperience and learned the skills neces-sary to obtain work as entry-level under-ground miners by gaining hands-on expe-rience at Alexco Resource Corp.’sBellekeno Mine.
Funded by YMTA, Alexco and theGovernment of Canada, the undergroundmine training course used a classroom
curriculum developed by theSaskatchewan Institute of AppliedScience and Technology to teach studentshow to work safely and effectively in anunderground mine.
“The success of the students in theunderground mine training just goes toshow how industry and Yukoners canwork together to create opportunities forworkers in the Yukon,” said YMTAExecutive Director Tracy Thomas. “Alleleven graduates studied how to worksafely in Yukon mines, and the top eightwere able to apply their new knowledgeimmediately with the hands-on trainingunderground – you can’t ask for a bettertraining experience for a person interest-ed in a career in the mining industry,” shecontinued.
The SIAST curriculum includes safetyprocedures and work techniques neededin underground mining work, includingmine ventilation, ground control, riggingand staging, manual drilling, muck han-dling and shaft operations.
“Alexco is especially happy with theway this course has been taught. As soonas the students were well-grounded in thetheory of underground mining, they wereable to put their new knowledge intoaction in a real-life mining situation,” saidYMTA Underground Mine TrainingProject Manager, Bill Dunn. “It’s wonder-ful to see workers in the Yukon getting thetraining they need to succeed.”
Simon Mervyn Sr., chief of the NachoNyak Dunn First Nation, said YMTA hascome a long way in the 10 years since hehelped draft a structure for the organiza-tion which then was just a concept.
“We’ve very supportive of that projectand they are on a roll,” Mervyn said, whoalso observed that two of the undergroundminers trained to work at Alexco’s nearbyBellekeno Mine ware Nacho Nyak DunFirst Nation members.
Safety focus importantAlexco hired four of the eight top
graduates of the program, including twoyoung men from the nearby communityof Mayo, Yukon.
“The program was a good thing,” saidRob McIntyre, Alexco’s vice president forbusiness development. “YMTA was ableto hire an underground miner from theCantung Mine to teach the course, and itworked great.”
Cantung, operated by North AmericanTungsten Corp. Ltd., is a long-runningtungsten mining operation that lies justacross the border in NorthwestTerritories. It shut down production inlate 2009 due to low tungsten prices butresumed operations in early October.
Part of the success of the YMTA train-ing for Alexco was the strong emphasis itplaced on safety, McIntyre said. “Wewere happy to get that safety focus in thetraining at YMTA. We have our daily tool-box safety meetings, and we can see itworked into every component of minelife.”
He said a big part of mine safety, espe-cially in underground operations, isfocusing on little things to prevent moreserious accidents.
“If you see a few finger bangs, we seethose as incidents and as a sign thatmaybe the focus on safety isn’t there, andit could trend into something major,”explained.
� Y U K O N T E R R I T O R Y
Partnership delivers underground minersAlexco Resource applauds association’s training program as YMTA expands curricula, purchases heavy equipment, safety simulators
12NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
A recent graduate of the Yukon Mine Training Association’s underground mine training pro-gram drives a piece of heavy equipment in a tunnel of the Bellekeno Mine that AlexcoResource Corp. is commissioning for silver-lead-zinc production in central Yukon Territory.
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McIntyre said the new miners fromYMTA have become valuable additions toBellekeno’s work force. The mine andmill operations will employ about 120people and are expected to directly investmore than C$25 million annually forlabor, materials and supplies in the Yukon.
Bellekeno Mine Manager Tim Hallsaid Steve Taylor, the underground minetrainer from Cantung, did an excellentjob, along with Underground MineTraining Manager Bill Dunn and some ofthe miners and supervisors who work forthe mine’s contractor Procon Miners Inc.
The YMTA grads also have becomeinformal ambassadors for mining, show-ing their communities the benefits of ahaving a mine, McIntyre said.
In addition to the miners from Mayo,Hall said the other new hires areWhitehorse residents, though one is orig-inally from Haines Junction.
“These young men are walking with aspring in their step and a sparkle in theireye,” McIntyre said. “It actually givesthem a leg up. It gives them a future. Noteverybody is suited for sitting behind acomputer. These guys just love it.”
The 400 metric-ton-per-day BellekenoMine is currently being commissioned tobegin production of silver-lead-zinc con-centrates at an initial rate of 250 tpd.
In early November, McIntyre saidstartup of production was “imminent.”
He also said he envisions Alexco hir-ing more YMTA mining grads. “I can seeus doing that every year or maybe twice ayear,” he added.
Hall said he would “possibly hireanother two trainees for undergroundmining down the road depending on attri-tion or if Alexco goes to self-mining ver-sus working with a contractor.”
Training simulatorsYMTA, meanwhile, is expanding the
scope of its services by bringing trainingequipment to Yukon Territory. This year, theassociation purchased two mine trainingsimulators. The machines will allowtrainees to try operating virtual surface andsubsurface heavy equipment, practice safe-ty procedures and difficult techniques inthe simulators, and prepare for the chal-lenges they might meet in the field.
The association is also adding a newcurriculum for training heavy equipmentoperators in an initiative funded byCanadian Northern EconomicDevelopment Agency’s CommunityAdjustment Fund. The 12-week course isrecognized by the Alberta Government andwill be presented by Northern SafetyNetwork Yukon.
The course focuses on skills buildingand includes classroom work, basic equip-ment care and maintenance, and hands-ontraining for equipment including backhoeloaders. During the course, trainees willmaster industry tasks like sloping, riggingand cutting grade.
“The course teaches the basic tech-niques needed for heavy equipment opera-tion, and gives students a chance to developexpertise and experience operating heavyequipment in a theoretical and hands-onenvironment,” according to Sheila Sergy,executive director of the Northern SafetyNetwork. “Once trainees have achievedcertification in basic skills and safety pro-cedures, they are able to perform moresafely and efficiently. The delivery of thiscourse in the Yukon will increase skill lev-els in the territory, build capacity in ourcommunities and create a safer environ-ment on our work sites,” she added.
“The purchase of this and other curricu-
la means that training can be delivered inYukon at any time,” said Thomas. “YMTAis delighted to have had the funding to beable to purchase these much-needed pro-grams for Yukon and to potentially be avail-able as a funding source to help cover thetuition of this training.”
More offerings, staffAs for 2010–11, Thomas said the asso-
ciation plans to offer 27 training courses
and add new staff to meet increaseddemand for the organization’s services. “Itpromises to be another exciting year as weexpand our program of work with Yukoncommunities by adding an YMTA repre-sentative stationed in the western Yukon,”she said.
Currently, YMTA has three training liai-son workers, or TLWs, stationed in com-munities across the Yukon in Teslin,Carmacks and Watson Lake. TLWs meet
with First Nation governments, industryrepresentatives and potential trainees tohelp identify training needs, offer informa-tion about careers, assist in developingprojects and proposals, or help with refer-rals. The association will expand its staff ofTLWs and station a worker in one ofYukon’s western communities. Until now,people from the western region seekinginformation from YMTA have worked withthe head office. �
13NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
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TRAINING PROGRAM
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Members of the Yukon Mine Training Association’s underground mine training team gather outside the adit portal of the Bellekeno Minein central Yukon Territory.
By ROSE RAGSDALEFor Mining News
Williams Creek Explorations Ltd., a Vancouver, B.C.-based junior, and its investment advisor, Interinvest,
have purchased significant equity positions in TyheeDevelopment Corp., a junior focused on developing theYellowknife Gold Project in Northwest Territories.Moreover, Williams Creek Chairman and CEO MichaelSonnenreich joined Tyhee’s board of directors.
Williams Creek, which owns 28 Crown-granted mineralclaims in its Westport gold project in the Barkerville goldcamp of the Cariboo Mining Division and three Crown-granted mineral claims in its Kamloops gold project near theAfton mine in the Kamloops Mining Division of southernBritish Columbia as well as a 30 percent interest in the ATWdiamond property in the MacKenzie Mining District of theNorthwest Territories, has set its mission as participatingbroadly in the natural resources sector, with an emphasis onthe gold sub-sector, through exploration, joint ventures orother equity investments.
Flush with more than C$5 million in cash and modestliabilities, Williams Creek subscribed to 10 million newlyissued common shares of Tyhee at a cost of C10 cents ashare, or C$1 million, plus 5 million warrants entitlingWilliams Creek to purchase an additional 5 million newlyissued shares in Tyhee at a price of C12.5 cents per sharewithin the next 24 months.
Interinvest, an asset management company with officesin Boston and Montreal, purchased another 20 million unitsoffered in the same private placement. Sonnenreich andInterinvest chairman Hans P. Black participated directly inthe Interinvest portion of the private placement as individu-als.
If the warrants are exercised, the purchases would repre-sent about 17.5 percent of Tyhee’s 256.8 million outstandingfully diluted common shares. The investments are part of aninitial C$5 million private placement that Tyhee reported inSeptember before increasing its size to C$6.5 million andrevising its terms in late October. Tyhee reported closing aninitial C$4.76 million of the financing Nov. 1.
“Williams Creek has made a meaningful investment inTyhee, and I intend to work with Tyhee’s management andboard to advance our mutual interest in the success ofTyhee,” Sonnenreich said in a statement Nov. 4.
Tyhee Chairman Denis Taschuk said Sonnenreich’s expe-rience in law, finance and in corporate governance willassist the board and management of Tyhee to move theYellowknife gold project forward towards production.
Development updateThe show of confidence in Tyhee’s future by another jun-
ior reflects the size, quality and extent of the measured, indi-cated and inferred gold resources in the Yellowknife project,said Sonnenreich. “Tyhee has discovered substantialamounts of gold, which can be economically mined in anaccessible and geopolitically stable location.”
Tyhee’s most recent estimates for the Yellowknife goldproject include 1.95 million ounces of gold in measured andindicated resources, which are in part inclusive of 811,200ounces of gold in proven and probable reserves. The projectalso hosts 269,000 ounces of inferred gold and is located inthe historic Yellowknife gold camp, which has producedover 14.5 million ounces of gold in the past.
Resources at the Yellowknife project occur in five goldzones, which are all open to depth, two of which are alsoopen along strike.
Engineering and permitting work for the project is ongo-ing. A preliminary feasibility study completed this summershows the project to have a positive net present value andinternal rate of return under base case conditions (US$950gold). Initial capital costs are estimated to total C$170 mil-lion with a C$20 million contingency to construct a 3,000metric-ton-per-day mine and mill complex producing anaverage of 108,000 ounces per year at cash costs of US$541per ounce.
The preliminary feasibility study recommended initiat-ing a feasibility study of the Yellowknife project to examinein detail the resource, and recommend mining methods,metallurgical processing, site infrastructure including powerneeds, tailings containment, and environmental considera-tions. A financial model would be developed using thisinformation, including engineered operating costs and capi-
tal costs based on new equipment. Power costs will focus ondiscussions with the utility company operating in theYellowknife Gold Project area.
Mine developments in the Northwest Territories are gov-erned by the Mackenzie Valley Land and Water Act. This actsaw the development of two boards that oversee Tyhee’sactivities: the Mackenzie Valley Land and Water Board,which is charged with reviewing all developments, and theMackenzie Valley Environmental Impact Review Board,which is charged with reviewing developments that havebeen determined by the MVLWB to have the potential tohave a significant impact on the environment. Tyhee said itsubmitted a project description report to the MackenzieValley Land and Water Board in July 2008, which wasreferred to the Mackenzie Valley Environmental ImpactReview Board in September 2008. The company receivedits final terms of reference and work plan in May 2009, anda developer’s assessment report is currently be prepared forsubmission in early 2011. It will be followed by a technicalreview of the report by the MVEIRB.
New gold discoveriesOngoing exploration has enabled Tyhee to expand
known mineralization and identify new areas of mineraliza-tion. The Clan Lake Main Zone was expanded to the south-east by nearly 400 meters during the 2010 campaign of 20diamond drill holes. In addition, two new gold zones, thebear and Spud zones, were discovered, one on either side ofthe Main zone.
The Yellowknife project had a pre-tax internal rate ofreturn of 16.2 percent and a net present value of C$71.3 mil-lion. All cost estimates were at +/- 30 percent for accuracy.Minor changes in the capital and operating costs may occurprior to filing.
The Ormsby open pit mine will produce 5.2 million met-ric tons of ore grading 3.20 grams per metric ton with anoverall strip ratio of 14.2:1. The Nicholas Lake undergroundmine will produce 975,000 metric tons grading 4.36 gramsper metric ton concurrent with the Ormsby open pit.Underground operations at the Ormsby Zone will produce976,000 metric tons grading 5.60 g/t and commence uponcompletion of the Nicholas Lake component. Mining atClan Lake will produce 441,000 metric tons of ore grading2.95 g/t from an open pit and commence near to the com-pletion of the Ormsby open pit.
All ores are non-refractory and will be processed at aconventional crusher and grinding mill with separation uti-lizing gravity, flotation of the gravity tails, regrind of theflotation concentrate and cyanidation with Merrill Crowerecovery enabling doré bars to be poured on site. Goldrecoveries of 92 percent for Ormsby and Clan Lake ores and90 percent for Nicholas Lake ores were established.
Diamond drill results from the Clan Lake Main zonehave extended the Main zone laterally to the southeast.Further drilling will be planned based upon these results.Additionally, the new Spud and Bear zones were identifiedby prospectors and subsequently confirmed by mapping andsampling. The new zones are close to and parallel to both the
Main zone and the 330 zone. Tyhee said it is significant that, if warranted, pits mod-
eled on these zones are so close together that waste from onepit could affect the economics of an adjacent pit, therebypotentially reducing the effective strip ratios and permittingdeeper mining of these adjacent zones. It is conceivable thata series of pits could coalesce into a single “super pit” underthis scenario.
Tyhee said in August that it intended to spend the nextfew months improving aspects of the project. This includedrefining some of the input costs, optimizing some of themining plans, as well as adding resources to the project thatcan be quickly and easily accessed.
In November, the junior said future diamond drilling willinitially focus on the newly discovered Spud zone which islocated 200 meters west of Clan Lake’s Main zone. Drillingshould start by mid-November and will continue until theChristmas break. The Spud zone has been traced on surfacefor 600 meters and has returned significant gold values fromgrab samples. Tyhee also proposes additional drilling on the330, Bear and Morel zones as well as the strike extensionsof the Main zone.
A gold bargainTyhee President and CEO Dave Webb told Mining News
Nov. 12 that Williams Creek’s investment reflects thatjunior’s belief that there are opportunities to participate inundervalued, advanced stage precious metals properties.
“They identified Tyhee as a company where they couldacquire measured and indicated resources of gold in a safepolitical jurisdiction for a price of around $10 perounce. This is one of the least expensive gold projects inCanada,” Webb said.
Sonnenreich observed that the purchase of equity inter-est in Tyhee and the accompanying warrants is a good exam-ple of the second component of Williams Creek’s three-partstrategy of exploring existing holdings, participating inequity and joint venture agreements, and engaging in royal-ty and finance agreements.
“Williams Creek’s rationale in helping to capitalizeTyhee is to facilitate Tyhee’s continuing exploration anddevelopment of its Yellowknife project,” added Sonnenreich.“As well, we intend for the capital to be used for Tyhee toproceed with its ongoing demonstration of the economicviability of that project.”
For Tyhee, the investments provide additional funds toadvance the Yellowknife project, one which has seen morethan C$50 million in investment to date, Webb said.
“The next steps to start production are well laid out anddo not require exploration success or wishes or dreams. Theplan is defined and engineered. It would be very profitableunder today’s price environment, Webb said.
“Williams Creek shares this vision and can participatefurther through their warrants to see further progress,” hesaid “Michael Sonnenreich understands risk, and under-stands project finance and development. His contributionsare well received.” �
14NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
� N O R T H W E S T T E R R I T O R I E S
Investors grab shares of NWT gold minerShow of confidence reflects discovery of new zones and extent of mineralization at Tyhee Development Corp.’s Yellowknife project
Tyhee Development Corp. found visible gold in a quartz vein intersected in drill hole CL101 on the Clan Lake Property at89.25 meters downhole. The host rock had minor pyrrhotite and arsenopyrite.
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By SHANE LASLEYMining News
G lobal demand for thermal coal is fore-cast to rise by 170 million tons a year
by 2015, a niche PacRim Coal would like tohelp fill with the 300 million tons of ultra-low-sulfur, sub-bituminous coal sitting neartidewater at its Chuitna coal project on thewest side of Cook Inlet in SouthcentralAlaska.
Chuitna was originally evaluatedthrough an environmental impact statementand nearly permitted in the 1990s, but a coalmine was never developed. With theincreased demand and price of steam coal,PacRim has put the project back on the reg-ulatory track.
Over the past two years, the Chuitnadeveloper has made several modificationsto the project design aimed at reducing theenvironmental impact of the proposed mine.
“Our main focus has been on reducingimpacts of the project, Chuitna ProjectManager Dan Graham informed attendeesof the Alaska Miners Association 2010Annual Convention. “Those changes havebeen wrapped up and we are re-entering theEIS process in earnest.”
Innovative conveyorAn agreement struck with Tyonek Native
Corp. in March allows for easement acrossthe Alaska Native village corporation landslying between the mine and Cook Inletabout eight miles southeast. This access hasallowed PacRim to make changes in theproposed infrastructure alignment thatcould significantly reduce the environmen-tal footprint of the project.
Originally, the company proposed totransport the coal from the mine to ship-loading facilities via a 12-mile conventionalconveyor system that skirted Tyonek lands.With the access between mine and the load-ing facilities, PacRim can utilize an innova-tive conveyor that is suspended from widelyspaced towers. This new system provides amultitude of advantages.
One of the primary advantages of theproposed transportation system is that itwould reduce total ground disturbancesfrom 400 acres to 100 acres, and wetlandsfrom 100 acres to about 25 acres. One of thereasons this system reduces the environ-mental footprint is it is maintained andrepaired from a car that travels above thebelt, eliminating the need for a service road.
Having the coal fully covered during
transport and a beltthat flips after dump-ing its payload, allow-ing the dirty side ofthe belt to always befacing up, are addi-tional features thatmake the suspendedconveyor more desir-able.
“It is reallyintriguing technology for us. It comes at acost, but in this situation, we feel it’s worthit,” Graham explained.
A second suspended conveyor will beused to load ships nearly two miles offshorein Cook Inlet, where water depths of 65 feetallow the loading of cape-size vessels. Theconveyor, which would require nine towersto span the 10,000 feet between land andship-loader, would require 40 percent of thepiles that would be needed for a conven-tional pier. This is an important reduction ofbarriers in an area considered critical habi-tat to beluga whales.
Water and fishGraham said the company also has made
changes to the mine area, primarily focusedon water management and fish protection.
The project manager explained thatwhile the company will need to contendwith groundwater and runoff from precipi-tation, water will not be needed to processthe coal at the proposed mine.
“We are not an operation that requires awash plant, we don’t have processing – theonly thing in our mill is crushing the coaldown to a 2-inch-size – so there are no tail-ings impoundments or that sort of thing,”Graham told the audience.
PacRim has two aquifers to consider; thegroundwater in the gravels above the fourcoal seams the company proposes to mineand an aquifer below the coal. Any of theflows in the upper gravels, which currentlydo not meet water quality standards butreflect the water quality in the area streams,encountered by operations may need to betreated or mixed before being discharged.The company will only need to releaseenough pressure off the lower aquifer to pre-vent it from flooding the pit.
One salmon-bearing stream winds itsway up into the Chuitna mine area. To miti-gate disturbances to this anadramous water-way, PacRim proposes to build side-streamhabitat below the mine area for the Cohosalmon.
Graham provided examples of where
this technique has successfully beenemployed.
Other mitigation measures being consid-ered are adding nutritional supplements forthe salmon and a salmon egg fertilizationsystem developed by Wrangell-basedAlaska Resource & EconomicDevelopment Inc.
The ARED system harvests eggs fromwild salmon native to the stream, fertilizesthem, protects them in an onsite incubatorand once the eggs reach a stage of resilien-cy injects them into the bed of the waterway.
“By utilizing those extra eggs that natureprovides, we increase the yield of emergingwild salmon from their natural spawninggrounds. The salmon hatch in their naturalenvironment and continue their life-cycle,”according to the ARED Website.
“We are not proposing this as our center-piece, but it is a tool that is available. If ourplanned mitigation does not meet expecta-tions, there are tools we can add to it,”Graham said.
Looking aheadDue to these design alterations as well as
changes in coal regulations, the U.S.Environmental Protection Agency is requir-ing that PacRim complete a supplementalEIS for the coal project.
On Nov. 1, EPA relinquished its role asthe lead agency for the Chuitna SEIS to theU.S. Army Corps of Engineers. This transi-tion is primarily a result of the State ofAlaska gaining primacy of mining waste-
water permits in the state.The Chuitna Project Manager said
PacRim has filed the SEIS applications, andthe company is now working on updatingthe individual permit applications to reflectthe redesigned project.
The SEIS and permitting process forChuitna is expected to take at least 18 to 24months, if the permits are approved by stateand federal agencies, the company willevaluate market conditions and make adecision whether to proceed with develop-ment.
China and India demand are expected todrive strong growth in the Pacific Rimseaborne thermal coal market, increasingsupply deficits and prices.
“By 2015, growth in Indian thermalpower generation capacity should raiseimport volumes close to 115 million metrictons annually, a level that would match theanticipated size of the Chinese and Japanesemarkets at that time. Because of thesedevelopments and continued infrastructure-related supply constraints in theAsia/Pacific market, we are forecastingannual deficits in the seaborne market out to2014,” said Morgan Stanley researchers.
By 2015 demand for thermal coal inAsia is expected to be around 647 millionmetric tons, a 35 percent increase from the477 million metric tons expected to beneeded there in 2010.
“The coal market is doing unbelievableon a worldwide scale. The demand is up andthe prices are up; and they have been forseveral years now,” Graham said. �
15NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
� A L A S K A
Permitting resumes for Chuitna coal Modifications aimed at reducing environmental impact will be reflected in new review; PacRim hopes Asia coal markets remain strong
DAN GRAHAM
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Fairbanks Gold Mining/Fort Knox Gold MineFairbanks, AK 99707Contact: Lorna Shaw, community affairs directorPhone: (907) 488-4653 • Fax: (907) 490-2250Email: [email protected] • Web site: www.kinross.comLocated 25 miles northeast of Fairbanks, Fort Knox isAlaska’s largest operating gold mine, producing340,000 ounces of gold in 2004.
Kiska MetalsSuite 1350, 650 West Georgia St.Vancouver, BC V6B 4N9 CanadaContact: Jason WeberPhone: (604) 669-6660Fax: (604) 669-0898Email: [email protected]: www.kiskametals.comGold and copper projects in Alaska, Yukon, BC,Australia and Mexico. Preferred partner of seniormining firms.
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3M Alaska11151 Calaska CircleAnchorage, AK 99515Contact: Paul Sander, managerPhone: (907) 522-5200 • Fax: (907) 522-1645Email: [email protected]: www.3m.comServing Alaska for over 34 years, 3M Alaska offers total
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Alaska Analytical Laboratory1956 Richardson HighwayNorth Pole, AK 99705Phone: (907) 488-1266 • Fax: (907) 488-077E-mail: [email protected] analytical soil testing for GRO, DRO,RRO, and UTEX. Field screening and phase 1 and 2site assessments also available.
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Alaska Frontier ConstructorsP.O. Box 224889Anchorage, AK 99522-4889Contact: John Ellsworth, PresidentPhone: (907) 562-5303 • Fax: (907) 562-5309Email: [email protected] heavy civil construction company specializing inArctic and remote site development with the experi-ence, equipment and personnel to safely and efficientlycomplete your project.
Alaska Interstate Construction601 W. 5th Avenue, Suite 400
Anchorage, AK 99501Contact: David GonzalezPhone: (907) 562-2792 • Fax: (907) 562-4179E-mail: [email protected] site: www.aicllc.comAIC provides cost-effective solutions to resourcedevelopment industries. We provide innovative ideasto meet each requirement through the provision ofbest-in-class people and equipment coupled withexceptional performance.
Alaska Steel Co.1200 W. DowlingAnchorage, AK 99518Contact: Joe Pavlas, outside sales managerPhone: (907) 561-1188Toll free: (800) 770-0969 (AK only)Fax: (907) 561-2935E-mail: [email protected] Fairbanks Office:2800 South CushmanContact: Dan Socha, branch mgr.Phone: (907) 456-2719 • Fax: (907) 451-0449Kenai Office:205 Trading Bay Rd.Contact: Will Bolz, branch mgr.Phone: (907) 283-3880 • Fax: (907) 283-3759Rebar Division1200 W. DowlingAnchorage, AK 99518Contact: Mike Galyon, rebar mgr.Phone: (907) 561-1188 • Fax: (907) 562-7518Full-line steel, aluminum, and rebar distributor.Complete processing capabilities, statewide service.Specializing in low temperature steel and wear plate.
Alaska Telecom6623 Brayton Dr.Anchorage, AK 99507Contact: Kevin Gray or Martin StewartPhone: (907) 344-1223Fax: (907) 344-1612E-mail: [email protected] or [email protected]: www.alaskatelecom.comProviding telecommunications support to oil explo-
Companies involved in Alaska andnorthwestern Canada’s mining industry
D I R E C T O R Y
see next page
The Red Dog mine in northwest Alaska.
17NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
ration and production companies and contractors.Satellite communications, voice, data, microwave,VHF/UHF radio, engineering and installation.
AmerCable Inc.350 Bailey RoadEl Dorado, Arkansas 71730Contact: Russ Van Wyck, senior sales rep/AlaskaPhone: (713) 305-3315 Fax: (870) 862-8659E-mail: [email protected] site: www.amercable.comAmerCable’s Tiger ©Brand mining cables aredesigned for Alaska’s harshest operating environ-ments. Surface/open pit or underground, we have amining cable productivity solution for you.
Arctic FoundationsAnchorage, AK 99518-1667Contact: Ed YarmakPhone: (907) 562-2741 • Fax: (907) 562-0153Email: [email protected]: www.arcticfoundations.comSoil stabilization – frozen barrier and frozen core damsto control hazardous waste and water movement.Foundations – maintain permafrost for durable highcapacity foundations.
Austin Powder CompanyP.O. Box 8236Ketchikan, AK 99901Contact: Tony Barajas, alaska managerPhone: (907) 225-8236 • Fax: (907) 225-8237E-mail: [email protected] site: www.austinpowder.comIn business since 1833, Austin Powder providesstatewide prepackaged and onsite manufacturedexplosives and drilling supplies with a commitmentto safety and unmatched customer service.
Calista Corp.301 Calista Court, Suite AAnchorage, AK 99518Phone: (907) 279-5516 • Fax: (907) 272-5060Web site: www.calistacorp.com
Chiulista Services Inc.6613 Brayton Dr., Ste. CContact: Joe Obrochta, presidentContact: Monique Henriksen, VPPhone: (907) 278-2208 Fax: (907) 677-7261Email: [email protected] 100 percent Alaska Native owned and operatedcatering company at the Donlin Creek Prospect andwith North Slope experience, catering and house-keeping to your tastes, not ours; providing opera-tions and camp maintenance.
Construction Machinery5400 Homer Dr.Anchorage, AK 99518Contact: Ron Allen, Sales ManagerPhone: (907) 563-3822 • Fax: (907) 563-1381Email: [email protected] • Web site: www.cmiak.comOther Offices: Fairbanks officePhone: 907-455-9600 • Fax: 907-455-9700Juneau officePhone: 907-780-4030 • Fax: 907-780-4800Ketchican officePhone: 907-247-2228 • Fax: 907-247-2228Wasilla OfficePhone: 907-376-7991 • Fax: 907-376-7971
Fairweather, LLC9525 King St. Anchorage, AK 99515Contact: Jenna Kroll, medical administrationPhone: 907 346-3247 Fax: 907 349-1920 Email: [email protected]: www.fariweather.comFairweather, LLC is an Alaska-based company provid-ing a multifaceted program of support services forthe mining industry specializing in paramedic andphysician assistant staffed remote medical services,weather forecasting, airport equipment, bear guardsand expediting.
GCI Industrial TelecomAnchorage:800 East Dimond Boulevard, Suite 3-565Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528Toll free: (877) 411-1484Web site: www.GCI-IndustrialTelecom.comRick Hansen, [email protected] Johnson, Account [email protected]:Aurora Hotel #205Deadhorse, Alaska 99734Phone: (907) 771-1090
Mike Stanford, Senior Manager North [email protected]:8588 Katy Freeway, Suite 245Houston, Texas 77024Phone: (713) 589-4456Hillary McIntosh, Account [email protected] innovative solutions to the most complexcommunication issues facing industrialclientele. We deliver competitive services, reputableexpertise and safely operate under themost severe working conditions for the oil, gasand natural resource industries. GCI-your bestchoice for full life cycle, expert, proven, industrialcommunications.
Gold Canyon Mining1075 S. Idaho Road, Ste. 104Apache Junction, AZ 85119Contact: David FortnerPhone: (480) 302-4790Fax: (480) 671-5368Website: www.gcmining.comSpecializing in mine site development, contract min-ing, and final mine closure. With a solid reputationfor proficiency, productivity and safety, ready to takeon both your large and small projects.
Jackovich Industrial & Construction SupplyFairbanks, AK 99707Contact: Buz JackovichPhone: (907) 456-4414 • Fax: (907) 452-4846Anchorage officePhone: (907) 277-1406 • Fax: (907) 258-170024- hour emergency service. With 30 years of experi-ence, we’re experts on arctic conditions and extremeweather.
Judy Patrick PhotographyAnchorage, AK 99501Contact: Judy PatrickPhone: (907) 258-4704 • Fax: (907) 258-4706Email: [email protected]: JudyPatrickPhotography.comCreative images for the resource development industry.
Last Frontier Air Ventures39901 N. Glenn Hwy. Sutton, AK 99674Contact: Dave King, ownerPhone: (907) 745-5701Fax: (907) 745-5711E-mail: [email protected] Base (907) 272-8300Web site: www.LFAV.comHelicopter support statewide for mineral exploration,
survey research and development, slung cargo,video/film projects, telecom support, tours, crewtransport, heli skiing. Short and long term contracts.
LyndenAlaska Marine Lines • Alaska Railbelt MarineAlaska West Express • Lynden Air CargoLynden Air Freight • Lynden InternationalLynden Logistics • Lynden TransportAnchorage, AK 99502Contact: Jeanine St. JohnPhone: (907) 245-1544 • Fax: (907) 245-1744Email: [email protected] combined scope of the Lynden companies includestruckload and less-than-truckload highway connections,scheduled barges, intermodal bulk chemical hauls,scheduled and chartered air freighters, domestic andinternational air forwarding and international sea for-warding services.
MRO SalesAnchorage, AK 99518Contact: Don PowellPhone: (907) 248-8808 • Fax: (907) 248-8878Email: [email protected]: www.mrosalesinc.comMRO Sales offers products and services that can helpsolve the time problem on hard to find items.
Northern Air Cargo3900 W. International Airport Rd. Anchorage, AK 99502Contact: Mark Liland, acct. mgr. Anch./Prudhoe BayPhone: (907) 249-5149 • Fax: (907) 249-5194Email: [email protected] • Website: www.nac.aeroServing the aviation needs of rural Alaska for almost50 years, NAC is the states largest all cargo carriermoving nearly 100 million pounds of cargo on sched-uled flights to 17 of Alaska’s busiest airports. NAC’sfleet of DC-6, B-727, and ATR-42 aircraft are availablefor charters to remote sites and flag stops to 44 addi-tional communities.
Oxford Assaying & Refining Corp. 3406 Arctic Blvd Anchorage, AK 99503Contact: Gene Pool, managerPhone: (907) 561-5237 Fax: (907) 563-8547E-mail: [email protected] have offered full service assaying & refining serv-ice to Alaska’s gold miners for over 28 years. We alsobuy sell and trade gold silver & platinum.
Pacific Rim Geological ConsultingFairbanks, AK 99708Contact: Thomas Bundtzen, presidentPhone: (907) 458-8951Fax: (907) 458-8511Email: [email protected] mapping, metallic minerals exploration andindustrial minerals analysis or assessment.
PND Engineers Inc.1506 W. 36th Ave. Anchorage, AK 99503Phone: (907) 561-1011Fax: (907) 563-4220Website: www.pndengineers.comFull-service engineering firm providing civil, structur-al, and geotechnical engineering, including miningsupport, resource development, permitting, marineand coastal engineering, transportation engineering,hydrology, site remediation, and project manage-ment.
Taiga Ventures2700 S. CushmanFairbanks, AK 99701Mike Tolbert - presidentPhone: 907-452-6631 • Fax: 907-451-8632Other offices:Airport Business Park2000 W. International Airport Rd, #D-2Anchorage, AK 99502Phone: 907-245-3123Email: [email protected] site: www.taigaventures.comRemote site logistics firm specializing in turnkeyportable shelter camps – all seasons.
URS Corp.560 E. 34th St., Suite 100Anchorage, AK 99503Contact: Jon Isaacs, Alaska vice presidentPhone: (907) 562-3366 • Fax: (907) 562-1297E-mail: [email protected]: www.urscorp.comURS Corporation provides comprehensive integratedservices to the petroleum industry, including NEPA per-mitting support and regulatory compliance, engineer-ing design and construction management, field studies,environmental monitoring and contaminated sitecleanup.
Advertiser Index3M AlaskaAir LiquideAlaska Analytical Laboratory. . . . . . . . . . . . . . . . . 15Alaska DreamsAlaska Earth Sciences . . . . . . . . . . . . . . . . . . . . . . . . 8Alaska Frontier Constructors . . . . . . . . . . . . . . . . . . 9Alaska Interstate Construction (AIC). . . . . . . . . . . 13Alaska Steel Co.Alaska TelecomAmerCable Inc.Arctic FoundationsAustin Powder Co.Calista Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Chiulista Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Constantine Metal Resources . . . . . . . . . . . . . . . . . 7Construction Machinery . . . . . . . . . . . . . . . . . . . . . 20Fairbanks Gold Mining/Fort Knox Gold Mine . . . . 3Fairweather LLCGCI Industrial TelecomGold Canyon MiningJackovich Industrial & Construction Supply. . . . . 10Judy Patrick PhotographyKiska MetalsLast Frontier Air Ventures. . . . . . . . . . . . . . . . . . . . . 8Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2MRO SalesNature Conservancy, TheNorthern Air CargoOxford Assaying & Refining Corp. . . . . . . . . . . . . . 5Pacific Rim Geological Consulting. . . . . . . . . . . . . 18PND Engineers Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 8Salt+Light Creative . . . . . . . . . . . . . . . . . . . . . . . . . 12Taiga Ventures/PacWest Drilling Supply . . . . . . . . 7URS Corp.Usibelli Coal Mine . . . . . . . . . . . . . . . . . . . . . . . . . . 15
By SHANE LASLEY Mining News
Under the leadership of Gov. SeanParnell, the Alaska Department of
Law has not hesitated in taking up casesimportant to the responsible developmentof the state’s natural resources. Parnell,who assumed Alaska’s top position whenformer Gov. Sarah Palin stepped downfrom the position in July 2009, recentlywon election to his first full term as gover-nor with landslide margins during the 2010general elections.
“Alaskans have just overwhelminglyelected a governor who, I can assure you, isvery focused on the importance of resourcedevelopment for the state and its future.And also, very importantly, he is willing tofight for it,” Alaska Attorney General DanSullivan told delegates to the AlaskaMiners Association 2010 annual conven-tion in Anchorage.
As part of his transition into his first fullterm as governor, Parnell has appointedAlaska’s top attorney as the state’s newDepartment of Natural Resources commis-sioner. The governor announced theappointment Nov. 18 during a presentationto the Resource Development Council’sannual conference in Anchorage.
Parnell has directed state attorneys tofend off federal agencies and environmen-tal groups overstepping their legal boundsto delay or stop resource development inAlaska.
“One of the challenges we see is we areunder an unprecedented assault by federalagencies and environmental groups to lockup Alaska’s resources,” Parnell said duringa speech in October. “Yes, we have filed alot of lawsuits, and I don’t apologize forany of them.”
Though state attorneys frequently findthemselves in the courtroom, theDepartment of Law’s strategy emphasizes
reaching an amicable solution before pur-suing litigation.
“We will continue to work cooperative-ly with those who have different views, andif we need to, we will litigate to ensure theinterest of Alaskans and our economy isprotected.” Sullivan told the crowd.
A win in the Ninth CircuitShortly before taking the lectern to
address the AMA audience Nov. 4, Sullivanreceived word that the State of Alaskachalked up a win against environmentalgroups in the U.S. Ninth Circuit Court ofAppeals.
“I was literally walking out the door thismorning to give these remarks, and I got anemail saying we just won this big case inthe Ninth Circuit,” Sullivan said.
The big case to which he referred is atwo-to-one decision by a three-judge circuitcourt panel that upheld the transfer of thepermitting program for discharges underthe federal Clean Water Act from the U.S.Environmental Protection Agency to theAlaska Department of EnvironmentalConservation.
The EPA approved the state’s applica-tion in 2008, triggering a four-phase trans-fer of its authority under the NationalPollutant Discharge Elimination Systemprogram to DEC.
Several environmental groups chal-lenged the transfer. Alaska intervened inthe case against the federal government,resulting in the Ninth Circuit affirming that
the state had met all the criteria to assumethe wastewater permitting authority.
The court win came just four days afterphase-3 of the transfer, which gives the per-mitting authority over mining wastewaterdischarges to the ADEC.
“This victory shows why it is importantfor the state to intervene in litigation thataffects Alaska’s interests,” said Sullivan.
The “Hail Mary” pass Alaska attorneys under Sullivan are not
only having success in the Ninth Circuitcourt, but also have marked at least oneU.S. Supreme Court case in the win col-umn.
That case involved a challenge to a per-mit issued to Coeur d’Alene Mines Corp.by the U.S. Army Corps of Engineers thatallows the company to dispose of wasterock from the Kensington gold mine in anearby lake.
The State of Alaska stood alongsideCoeur throughout a protracted legal battleto retain the Corps permit for tailings dis-posal in the lake. The state’s lawyers arebelieved to have played an instrumentalrole in convincing the high court to take upthe case.
Sullivan compared the odds of the U.S.Supreme Court Justices hearing the case tothose of a “Hail Mary” pass.
“A lot of attorneys in the Department ofLaw take a lot of pride in this case,”Sullivan said. “The U.S. Supreme Courtgets about 8,000 petitions for review a year,they take about 80 of them; so getting any-thing in front of the Supreme Court is along shot. If it is a federal issue, involvinga federal regulation, by a federal agencyand that agency is not requesting theSupreme Court review it, the chances goway further down.”
Not only did the attorneys for Alaskaand Coeur get their case heard, the HighCourt Justices ruled 6-3 to uphold the tail-ings disposal permit for the gold mine near
Juneau.In June Coeur put the Southeast Alaska
mine in production. “The opening of the Kensington mine,
with the creation of hundreds of well-com-pensated jobs, demonstrates why the Stateof Alaska should not hesitate to intervenein cases that threaten our ability to developour resources responsibly,” Sullivan saidduring an opening ceremony held atKensington in September. “When the statebrings its legal expertise to bear on theseimportant matters, we often prevail.”
Sullivan described the Kensington eventas one of his best days on the job asAlaska’s attorney general.
“It is one thing to work on these legalbriefs and write about tailings ponds andthings, and yet you are a little bit removed.It is quite another thing to go and see theresult of the case and the legal work, andsee that there are 200 people working in aworld-class mine – in part because you hadsome good lawyers on the back sidedefending their interest and throwing a‘Hail Mary’ pass with one second left, andit was caught.”
Winning … a lotSullivan said the Department of Law is
fending off litigation on multiple fronts thatthreaten Alaska’s sovereignty and chal-lenges the state’s constitutional obligationto develop its resources in a responsibleand sustainable manner.
“We share the belief that responsibleresource development and protection of theenvironment can and do happen together inAlaska. As a state official, it is our consti-tutional duty to try and do both,” the attor-ney general said.
Though the state is taking up litigationin a lot of cases, Sullivan points out that thestate’s legal arguments are not obstruction-ist, but, conversely, are built on a stronglegal foundation.
“They are not frivolous at all. We arewinning, a lot, in the courtroom,” he said.
The attorney general only needed togo back to his department’s win in theNinth Circuit Court earlier that day tofind an example of the quality of thearguments being put forward by his legalteam.
“That is a tough circuit to win theseenvironmental cases, so when you arewinning there, you know you are doingsomething right,” he added. �
18NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
301 Calista Court, Suite A, Anchorage, AK 99518 t: (907) 279-5516 f: (907) 272-5060 [email protected]
Calista Corporation is the second largest of the 13 Alaska Native Regional Corporations.
We are dedicated to our Shareholders, our customers, and our mission. Pride, respect and diversity guide us, and our business, in all that we do.
Delivering excellence in the projects we build, the services we offer, and the jobs we provide.
YOU KNOW US, BUT DO YOU KNOW ALL THAT WE DO?
� A L A S K A
Alaska lawyers fend off enviros, fedsAttorney general informs miners of law department’s strategy to protect responsible development of state’s natural resources
DAN SULLIVAN SEAN PARNELL
“We share the belief thatresponsible resource developmentand protection of the environment
can and do happen together inAlaska. As a state official, it is ourconstitutional duty to try and do
both.” –Alaska Attorney General Dan Sullivan
SHA
NE
LASL
EY
By ROSE RAGSDALEFor Mining News
The Government of Yukon reported Nov.5 that it has transferred a C$5.9 million
royalty payment received from MintoExplorations Ltd. to the Selkirk First Nationgovernment. It was calculated from produc-tion profits from the Minto Mine during2009 and transferred to the Selkirk FirstNation as the owner of the mineral rights.
The Yukon government administers themineral rights at the Minto Mine under pro-visions of the Quartz Mining Act and theSelkirk First Nation Final Agreement.
The Selkirk First Nation is located at thevillage of Pelly Crossing on the KlondikeHighway in central Yukon Territory. Onceknown as the Department of Indian AffairsPelly Band, the Selkirk First Nation becameself-governing in July 1997. Currently, theSelkirk First Nation has about 483 regis-tered members of whom some 200 reside inother communities. It owns about 4,740square kilometers, 1,830 square miles, ofsettlement land and is receivingC$16,604,860 in settlement funds over 15years.
The high-grade copper-gold-silver MintoMine is one of the few mines in Canadaoperating on lands where a First Nation gov-ernment owns both surface and mineralrights, classified as Category A SettlementLand in Yukon. Mining royalties are a shareof profits from a mine paid to the owner ofthe mineral rights for permitting and extrac-tion of mineral resources. Royalties are paid
every year in which the operating minereturns a profit.
The Minto/Selkirk First NationCooperation Agreement also covers envi-ronmental issues.
The mine and the Selkirk First Nationnegotiated a 0.5 percent net smelter royaltyon mine production, and entered into acooperation agreement that ensures localemployment and contracting opportunitiesfor First Nation businesses, as well as train-ing on construction, mining, and processingplant jobs. About 35 percent of the MintoMine’s work force is First Nations members,
of which about half are Selkirk FN mem-bers, according to Jaime Delgado, Minto’smine manager and acting general manager.Mine services are also provided by a num-ber of local contractors, including at leastone that is owned by the Selkirk FirstNation.
Second royalty paymentThe 2010 royalty payment is the second
of its kind to be paid to the Selkirk FirstNation government since the startup of cop-per-gold-silver production at the MintoMine in 2007.
In 2009, Minto Explorations, a sub-sidiary of Capstone Mining Corp., made itsfirst royalty payment of C$1.5 million to theSelkirk First Nation for the 2008 royaltyyear, said Jesse DeVost, a spokesman for theGovernment of Yukon’s Ministry of Energy,Mines and Resources.
In addition to the second royalty pay-ment, the Yukon government approvedMinto Explorations’ plan to fund C$1.4 mil-lion for construction and operation of anearly childhood development center in PellyCrossing under the new CommunityEconomic Development ExpenseAllowance.
DeVost said the allowance provision wasincluded in new Yukon royalty regulationslast spring when the government updated itsroyalty provisions to facilitate investment incommunity infrastructure by the miningindustry.
Yukon is only the second jurisdiction inCanada to include this type of provision in aroyalty regulation and the Minto allowanceis the first use of the development expenseprovision.
DeVost said the allowance is classified asan expense, and it lowers the amount of roy-alties that a company is required to pay. �
19NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
� Y U K O N T E R R I T O R Y
Minto pays C$5.9 million NSR to SelkirkCopper-gold-silver mine owner also pledges $1.4 million in support for early childhood development center in nearby Pelly Crossing
In the three years since it started production of copper, gold and silver, the Minto the open-pit mine in central Yukon Territory has paid a total of C$7.3 million in royalties to the SelkirkFirst Nation.
RO
SE R
AG
SDA
LE
The 2010 royalty payment is thesecond of its kind to be paid the toSelkirk First Nation governmentsince the startup of copper-gold-silver production at the Minto
Mine in 2007.
20NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF NOVEMBER 21, 2010
