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Alaska Department of Commerce and Economic Development

November 1985

n H 1

ALASKA-MINING

Logging Core Green's Cree]< Core Shed

Noranda and Anacunda Personnel

Office of Mineral l)pw•loprnent, John 3ims, Director Alaska Department of Commerce and Economic Development, Pouch D, Juneau, Alaska 99811.

Bill Sheffield Governor

November, 1985

Loren H. Lounsbury Commissioner

' ~... . !."

A Message

1 he Alaska mining industry wil1 experience dramatic 'Change over the next few years. From an industry with a gross annual value of $300 million in which the mining of con­struction materials for in-state usc and small scale gold placer mining are the major s<•gmcnts, emphasis will shift to coal, base and alloy metals, industrial minerals and hard rock pndous mPtal mining.

Sn·eral nu\ior projects arc moving tm'v'ards production and will lead the minerals in­dustry expansion. Alaska's mineral industry could, within two decades, become a $3 billion a ycar .;egment of the state's economy, placing it second only to oil and gas in terms of emnomit: importance.

Since much of Alaska's mintt.~ral production will be exponed to Pacific Rim and world markets, there will be a !!ignificant trade benefit to the United States. Also, Ahska,s goals of economic diversific:Hion and employment will be met during a period of declin­ing oil production.

You are invited to share in this exciting emergence of a strong Alaskan mining industry. Al:xska welcomes your intefcst, investment and participation in its minerals future.

Loren H. Lounsbury Commissioner Departmwt of Commerce and Economi~; Development

CONSTITUTION OF ALASKA ARTICLE VIII

Section 1.

STATE~ENT OF POLICY: It is the policy of the State to encourage the settle­:ne11t of Its land .and development of its resources by making them available for maxi­Imum use consistent with the public interest.

ALASKA MINING A PROFILE

CONTENTS

2 5 5 9

13 17

Alasi<a Land Ownership Investment Opportunities Coal Precious Metals Base and Alloy Metals Industrial Minerals

ALASKA LAND OWNERSHIP

Alaska, with 375 million acres, is the larg7st state in America. The Federal government . ?25 million acres in Alaska and Is the largest landowner, followed by the state

manages- · I d · AI k 145 '11' . ·ent which owns 10-1- million acres. Pnvate an s m as ·a tC'1ta mt 1011 acres go,ernm . · 1

• ~f which 44 millio · acres are owned by Nattve regwna corporatiOns.

State Lands Of the state's 104 million acres, over 70 million acres are open to :!1incral cle\·elopment. The state's lands are managed by the Department of Natural Resour;es, .a?~ minin~ ~n state lan?s .is administered by the Departments Dl\'ls!On ofMmmg. Also wtthm the Department of:'Jatural R~sourc~s is ~he Divi.sion ofGe~logi~al and Geophysical Suryeys whtch mamtams detailed geologtcal m­formation on Alaska's mineral rec;ources.

The Office of ~1ineral Development, within the state's Depart­ment of Commerce and Economic Development, serves to pro­mote Alaska's mineral industry and acts as a liaison between go,·ernment and private mining companies and investors.

Contacts: John Sims, Director Office of Mineral Development Department of Commerce and Economic Development

675 7th Avenue, Station A Fairbanks, Alaska 99701 Telephone (907) 452·7164

Pedr<i Denton, Director Division of Mining Department of Natural k.esources Pm;ch /-Anchorage, Alaska 99510 Telephone: (907) 276-2653

Ross Schaff, Director DiYision of Geological & Geophysical Surveys Department of Natural Resources Pouch 7-028 Anchorage, Alaska 99510 Telephone: (907) 561-2020

2

Federal Lands

Native Corporation Lands

Contacts:

The Federal government is the largest landowner in the State of Alaska. However, much of the federal land is managed for parks, wildlife refuges and other purposes for which mining is largely excluded. Of the 225 million acres, 43 million acres are open to mineral entry while another 14 million are available for restricted mineral leasing. Federal lands available to mineral dev~lopme.nt administered by the Burean of Land Management and also by: the U.S. Forest Service. The Federal Bureau of Mines maintains detailed geological information on Alaakan mineral resources.

Contacts: Michael J. Penfold State Director Bureau of Land Management 701 "C" Street P. 0. Box 13 Anchorage, Alaska 99513 T,.Jephone: (907) 271-5076

Don Blasko Chief, Alaska Field Operation Center U. S. Bureau of Mines 201 E. 9th A,·enue, Suite 101 Anchorage, Alaska 99501 Telephone: (907) 261~2455

Michael A. Barton Regional Forester U.S. Forest Service P.O. Box 1628 Juneau, Alaska 99802 "J'elephone: (907) 586-8863

As a result of the 1971 Alaska Native Claims Settlement Act, 12 regional Native corporations were lormed and were granted selec­tion rights to 44 million acres of Alaskan land. Many ofthe Nati\Ve corporations selected much of their land entitlement on the basis of mineral potential and are presently looking to mineral develop­ment to provide. jobs, revenues and a local economic base within their regions.

Larry Merculieff Chairman of the Board Aleut Corporation

Noble Dick President Bristol Bay Native Corporation P. 0. Box 100220 4000 Old Seward Highway

# 1 Aleut Plaza, Suite 300 Anchorage, Alaska 99503-6028 Telephone: (907) 561-4300

3

Anchorage, Alaska 99510 Telephone: (907) 278-3602

A Message

The Alaska mining industry will experience dramatic change over the next few years. From an industry with a gross annual value of $300 million in which the mining of con­struction materials for in-state use and small scale gold placer mining are the major segments, emphasis will shift to coal, base and alloy metals, industrial minerals and hard rock precious metal mining.

Several major projects are moving towards production and will lead the min<'rals in­dustry .<'xpansion. Alaska's mineral industry could, within two decades, become a $3 billion a year segment of the state's economy, placing it second only to oil and gas in terms of economk importance.

Since much uf Alaska's mineral production will be exported to Pacific Rim and world markets, there will be a significant trade benefit to the United States. Also, Alaska's goals of economic diversification and employment will be met during a period of declin­ing oil production.

You are invited to share in this exciting emergence of a strong Alaskan mining industry. Alaska welcomes your interest, investment and participation in its. minerals future.

~.;.·

Loren H. Lounsbury Commissioner Department of Commerce and Economic Development

CONSTITUTION OF ALASKA !.. It TICLE VIII

Section 1.

STATEMENT OF POLICY: It is the policy 01 ;..t.e State to encourage the settle­ment of its land and development of its resources by making them available for max­imum use consistent with the public interest.

ALASI(A MINING A PROFILE

CONTENTS

2 Alaska Land Ownership 5 Investment Opportunities 5 Coal 9 Precious Metals

13 Base and Alloy Metals 17 Industrial Minerals

ALASKA LAND OWNERSHIP

Alaska, with 375 million acres is the largest state in America. The Federal government manages 225 million acres in Alaska and is the largest landowner, followed by the state government which uwns 1 tH million acres. !>rivate lands in Alaska total45 million acres ~f which 44 million acn.:s art' owned by Native regional wrporations.

State Lands Of the stat<''s 104 million acres, over 70 mil.lion acres are open to mineral development. The state's lands are managed by the Department of Natural Resources, and mining on state lands is admmistcred by the Department's DiYision of Mining. Also within the Department ofNatural Resources is the Div1:.~on ofGeologir.al and Geophysical Surveys which maintains detailed geologica! in­formation on Alaska's mineral resources.

The Office of Mincn'll Development, within the state's Depart­ment of Commerce and Economic Development, serves to pro­mote Alaska's mineral industry and acts as a liaison between government and private mining companies and investors.

Contacts: John Sims, Director Office of Mineral Development Department of Commerce and Economic Development

675 7th Avenue, Station A Fairbanks, Alaska 99701 Telephone (907) 452-7464

Pedro Denton, Director Division of Mining Department of Natural Resources Pouch 7-016 Anchorage, Alaska 99510 Telephone: (907) 276-2653

Ross Schaff, Director Division of Geological & Geophysical Surveys Department of Natural Resources Pouch 7-028 Anchorage, Alaska 99510 Telephone: (907) 561-2020

2

Federal Lands

Native Corporation Lands

Contacts:

The Federal government is the largest landowner in the State of Alaska. However, much of ihe federal land is managed for parks, wildlife refuges and other purposes for which mining is largely excluded. Of the 225 million acres, 43 million acres are open to mineral entry while another 14 million are available for t"'' .r1cted mineral leasing. Federal lands available to mineral development administered by the Bureau of Land Management and also by the U.S. Forest Service. The Federal Bureau of Mines maintains detailed geological information on Alaskan mineral resou11ces.

Contacts: Michael]. Penfold State Director Bureau of Land Management 701 "C'~ Street P. 0. Box 13 Anchorage, Alaska 99513 Telephone: (907) 271-5076

Don Blasko Chief, Alaska Field Operation Center U. S. Bureau of Mines 201 E. 9th Avenue, Suite 101 Anchorage, Alaska 99501 Telephm~e: (907) 261-2455

Michael A. Barton Regional Forester U.S. Forest Service P.O. Box 1628 .Juneau, Alaska 99802 Telephone: (907) 586-8863

As a result of the 1971 Alaska Native Claims Settlement Act, 12 regional Native corporations were formed and were granted selec­tion rights to 44 million acres of Alaskan land. Many of the Native corporations selected much of their land entitlement on the basis of mineral potential and are presently looking to mineral develop­ment to provide jobs, revenues and a local economic base within their regions.

Larry Merculieff Chairman of the Board Aleut Corporation

Noble Dick President Bristol Bay Native Corporation P. 0. Box 100220 4000 Old Seward Hiehway

# 1 Aleut Plaza, Suite 300 Anchorage 1 Alaska 99503-6028 Telephone: (907) 561-4300

3

Anchorage, Alaska 99510 Telephone: (907) 278-3602

~elson Angapak President Calista Corporation 516 Denali Street Anchorage, Alaska 99501 Telephone: (907) 279-5516

~Iarchell Espe President Chugach-Alaska, Inc. 3000 A Street, Suite 400 Anchorage. Alaska 99503 Telephone: (907) 563-8866

Rt1y M. Huhndorf President Cook Inlet Region, Inc. P. 0. Box 4~ Anchorage, Alaska 99509-6014 Tclt~phone: (907) 274-8638

\Villie Hensley President ~ANA Regional Corporation, Inc. P.O. Box 49 Kotzebue, Alaska 997 52 Telephone: (907) 442-3301

Bvron :viallott P~esidcnt Sealaska Corporation One Sealaska Plaza, Suite 400 Jun!.'au, Alaska 99801 Telephone: (907} 586-1512

, ___ -· ---------

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Morris Thompson President Doyon Limited 201 1st Avenue Fairbanks, Alaska 99701 Telephone: (907) 452-4755

Dan Fondell President Bering Straits Native Corporation P. 0. Box 1008 Nome, Alaska 99762 Telephone: '(907) 443-5252

Roy Ewan President AHTNA, Inc. Drawer G Copper Center, Alaska 99573 Telephone: (907) 2i4-7662

Edward Hopson, Sr. Chairman of the Board Arctic Slope Regional Corporation P.O. Box 129 Barrow, Alaska 99723 Telephone: (907) 852-8633

Frank Pagano President Ko:1iag, Inc. 201 Kashaveroff, Suite #6 Kodiak, Alaska 99615 Telephone: (907) 486-4147

INVEST1\t1ENT OPPORTUNITIES

A spectrum of opportunity in Alaska's minerai industry is available to foreign com­panies. Investors can participate through:

• independent exploration, mineral rights aquisition and mine development

• joint venture exploration agreements with Native regional corporations on Native lands

• joint venture exploration agreements with private companies on public lands

11 equity participation in the development of a mine

• participation in mine development through project financing, engineering design, equip­ment manufacture and facilities construction

• procurement contracts for the supply of Alaskan mineral commodities

• development of an Alaskan mineral refining and fabricating industry utilizing clean, state~of-the-art technology and taking advantage of Alaska's r;;~.w mineral wealth, its strategic location on the Pacific Rim, ru!d its abundant energy resources.

COAL

Coal was first commercially mined in Alaska in 1855 from the Kenai Peninsula ·by the Russian-Amedcan Company, which hoped to export the coal to California. Though the export venture never succeeded, the mine produced small amounts of coal for local and maritime markets, like many other small mines that operated at various times up until World War II. Steam powered whalers and revenue cutters refueled from coastline out­crops in Cook Inlet, the Alaskan Peninsula, the Seward P'=':tinsula and as far north as Cape Sabine on the Arctic coast . .Paddle wheel riverboats t.ook on coal mined [;:-om up to sixteen small deposits along the' Yukon River.

The construction of the Alaska Railroad to the Matanuska and Nenana coal fields created the transportation necessary for large scale mine development. Mines in the Matanuska field fueled municipal and military power stations in the Anchorage area until the con­version to natural gas from Cook Inlet wells closed the last of the mines by 1968. The mines in the Nenana field were consolidated into the Usibelli Mine which continu~s to fuel power stations in the Interior of Alaska, and whiich exports sterun coal to Korea as well.

Coal is perhaps the most abundant of Alaska's eJi1ergy resources which include oil and gas, as well as geothermal and hydroelectric po1Wer. Policy makers in Alaska face an embarrassmemt of choice with respect to domestirc energy development. With regard tp energy export potcn:tial, the situation is simpler- and expectations are that Alaska will supply, to the industrial nations of the Pacific Rim, a signifticant part of their coal, gas and possibly oil r~quircments far in!tO the future.

5

ST. lAWRENCE

ISL~

Alaska Coalfields and ·Majer Projects

RAMPART a:>

Falr!'anks {'~

Ef.IGLE

NENANA~

LITTLE -.;;_ TOLZONA@ UslbellfMlne

~~~~~¢'() WISHBONF;, HILL .;:,~'..._o 0 o.-

o;; .; •Anchorage Bering Development PJa~erU.S. ~;. ~ -/~ ..,..

~amondChultna...-: · +'<-~~ ·~~

1 <() ~~-_/ \y..\ ~>-'~- ~~··

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For coal. this is not an extravagant claim when i:; is estimated that Alaska may contain as much as 50 percent of the entire United States' coal resource base. Currently, from this enormous coal resource, Alaska produce·~ only 0.2 percent of total U.S. coal production.

:\luch of Alaska's easily accessible coal is close to tidewater in the vicinity of Anchorage or dose to the rail link between Anchorage ar:.d Fairbanks. Generally, the coal in these areas is low-rank steam coal which only now is becoming a significant component of the intl·rnational coal market. Used mainly for power generation and cement produc­tion, utilization of this coal requires the construction of new boilers or the retrofitting nf l'Xisting units dedicated to its use.

Alaska coal t)'pically contains very low levels of sulphur. Processes to reduce the moisture rontt·nt and increase heat \'alue of the t·oal prior to shipm(•nt may enhance marketabili­ty. Although much of Alaska's most read;t, accessible and pr?ducible coal is of thermal gradt·. there an• known deposits of high(; .·mk coals, including anthracite, that arc good prospet·ts for deYelopmcnt.

Alaska's present commercial production of coal comes almost entirely from the Usibelli ~lim· whkh is locat<.'d approximately 110 miles southwest of Fairbanks. In-state use for power g(•twration consumes about 800,000 tons per year ti·om the mine with an addi­tional800.000 tons per year satisfying a 15 year export contract with the Korea Electric l' JWt•r Company (KEPCO). Shipments of .Jal to Korea began early in 1985 via the Prm of St•ward.

6

This export project, modest by wollld standards, shows that Alaska can deliver its minerals to international markets. Alaska •co;.. ·NiH becomre a reliable, competitive energy source for Pacific Rim countries in the short, medium1 and long term.

Alaska Coal

Projects

U sibelli Mine

Alaska'·s only major produtcer, the mine currently produces about 1.5 minion tons per year and has a. total capacity of 2.0 million tons per year. The mine'r- reserve base is greater than 200 million tons.

Contact: Joe Usibelli President Pouch 1, Healy, Alaska 99743 Telephone; (907) 683-2226

Chuitna Project

Diamo11d Alaska, :a subsidiary of Diamond Shamrock, plans a multimillion ton per year strip mine to supply steam cnal to Pacific Rim markets. The lease area is close to tidewater in the Beluga coal field on the west side of Cook Inlet. Some 350 million tons of coal have been proven by drilling in the initial mining unit. A three part feasibility study undertaken jointly with EPDC is near­ing completion. Total capital investment could exceed $500 million and would include a maj01· port facility.

Contact: Robert Stiles, Vice President of Operations and Coal

Diamond Alaska Coal Company Suite 1900, Enserch Building 550 West Seventh Avenue Anchorage, Alaska 99501 Telephone: (907) 276-6868

Placer US, Inr.

Placer's present focus is on a 1 million ton per year operation in the Beluga coal field which could be developed on a "fast track" at a capital cost approximating $35 million. The project wo· .ld adapt components of existing infrastructure. The leases contain a very large proven reserve.

Contact: Cole McFarland Vice President of Operations Placer US One California Building, Suite 2500 San Francisco, California 94111 Telephone: (415) 986-074G

7

/

Wishbone Hill

A joint venture, headed by .tZccky Mountain Energy Corporation, is engaged in a feasibility examination for a coal mine in the Matanuska Valley. Productiom would supply a mine mouth power plant with surplus capacity available for export. Placer U.S. has additional reserves on an adjacent property. The coals of the Matanuska field are higher rank than the coals of the Nenana or Beluga fields.

Contact: Ed Gibbs Vice President. Coal Rocky Mountain Energy Corporation 10 Longs Peak Drive Box 2000 Broomfield, Colorado 80020 Telephone: (303) 469-8844

Bering Development Corporation

The corporation is a joint \'enture between Chugach Alaska Inc, a regional Native corporation and landowner, and Korea Al;1ska Development Company. High rank coai reserves occur in a com­plex geologkai environment in the Bering River coal field east of Cordova. A scenario ranging from 0.5 million tons to + 2 million tons per year of production for export is under consideration. Work to date comprises quantitative geological estimations of the resource and prefeasibility engineering and design.

Contact: Pio Park Manager of Exploration Chugach-Alaska, Inc. 3000 "AH Street, Suite 400 Anchorage, Alaska 99503 Telephone: (907) 563-8866

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t';

PRECIOUS METALS

Alaska has a unique history of precious metal mining. "·\>'1•ile the state ~.:l most famous for its gold rush stampede, Alaska has also ho~' ... d t\-,.'l 01 .:he only producing platinum mines in America.

The romance of the Alaskan gold rtleh. ~·;hi··;; bc.gan as a result of the Klondike gold discovery in neighboring Canarla. ir r, , ;, .. ·~. "•·orldwide.

Not as well known is that at th~ rime 01 ihe Jo!d rush, Alaska already had several major hard rock gold mines in pmJu . •n. In Juneau, the state's capital, the Treadwell Mine and the Alaska Juneau Mine were wor! I<"nDwned for their efficiency in mining large tonnages of low grade go!d orr .

The gold rush b uught miners and prospec(ors from around the world to try their luck in the placPr ge:,: ~amp• 1hat were springing up in virtually every region of ithe state. By the end of Wodd W · I, however, the rich, shallow, easily mined gold deposits that buH • .:ide' like Fatrbanh.& and Nome were being depleted.

Lar:gl.!r companies bought up individual mining claims and acquired large volumes of lower g1 ?de placer reserves and brought in bucketline dredges to mine them. The pro­fitable operat! m of the dredges was eventually interrupted by World War II. Though many of ;he dre£!ges resumed operating after the war, the combination of post war infla­tiOn t.:oup!etl with a fixed gold price closed the last dredge in the early 1960's.

However, the deregulation of the gold price in tht:' 1970's renewed the gold mining industry in Alaska. Many small miners began working placer reserves that were previously rmeconomical at a $35 gold price, and the Alaska Gold Company reactivated the dredging operation at Nome and Hog River.

In addition to a r~newal of placer activity, exploration for hard rock gold deposits began. Despite the existence of extensive placer deposits, early prospectors rarely located com­merciallode deposits. One problem in prospecting was the deep soil cover that concealed bedrock from the early pick and shovel prospectors.

However, modern exploration tools have helped the geologist locate buried deposits. Ex­citing discoveries were made in the 1970's and 1980's. The Fairbank~ area, historically the largest gold producing district in the state, has seen intensified hard rock exploration activities with one underground property, the Grant Mine, being developed and scheduled for production this year.

The success at this property, which was originally discovered in the 1930's and yet saw only minor production, highlights the potential for additional mines of this type being developed. While there arc several exploration projects evaluating historical mines and P' :>spects, there are literally hundreds of hard rock gold properties in Alaska which were dJscol·ered prior to '1\.'orld War II which have never been adequately explored.

9

lt.

In addition to seeking the vein gold deposits, modern exploration companies have also mounted extensive ~xploration efforts looking for gold associated with polymetallic ore bodies. Discoveries of polymetallic deposits in the Alaska Range and Southeast Alaska add to the din-rsity of Alaska's mineral wealth.

Alaska Precious Metal Projects

Greens Creek Project Discovered in 197i only 18 miles cast ofjuncau on Admiralty Island, present indicated reserves at Greens Creek arc 3.5 to 4·.0 million tons containing 0.09 ounces per ton gold, 10.3 ounces per ton silver, 6.4% zinc and 2.1% lead. An intensified exploration program to satisfy a congressionally mandated deadline has discovered what may prove to be the edge of a second major orebody. The project has completed Its permitting process and the decision to de,·elop c1 300 to 600 TPD mine by 1987-88 may be forthcoming.

Contact: Peter Richardson Noranda Mining Company 9000 Glacier Highway P. 0. Box 2277 J uncau, Alaska 99803 Telephone: (907) 789-4171

Grant Mine

The Grant Mine was discovered by early prospectors who sank a shaft to bedrock hoping to discover a hillside placer deposit but discovered a quartz vein system in the bedrock instead. A recent exploration venture consisting ofS;Jverado Mines, Tri-Con Mining and Aurex Inc., a subsidiary of the Marubeni American Corpora­tion, developed significant high grade reserves of over 1.2 million tons at 0.61 uunces per ton gold. The decision to develop the prop­erty was made in Februaty 1985 and the first gold bar was poured on November 5, 1985.

Contact: Gary Anselmo President Sih-erado Mines Ltd. Box 12542, Suite 2580 1066 W. Hasting:: Street Vancouver, BC V6E 3X2 Telephone: (604) 689-1535

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(!

Delta Project

Several poly'lletallic, massive sulfide deposits with precious metal credits were discovered in 1977 in the eastern Alaska Range near the headwaters of the Tok and Robertson Rivers. The NERCO Minerals Company began a program in 1984 to reevaluate the deposits focusing on precious metals. As a result of surface and assay work in 1984, the company expects a major exploration pro­gram in 1986. NERCO Minerals also has polymetallic precious metal pt•operties in the Fairbanks area, the Central Alaska Range, and the Alaska Peninsula.

Contact: Lonnie Heiner NERCO Minerals, Inc. 122 First Avenue Fairbanks, Alaska 99701 Telephone: (907) 456-8056

Goodnews Bay

Placer platinum was discovered at Goodnews Bay on the \"!estern coast of Alaska by a native prospector in 1926. A bucketline dredge was operated continuou ~1 i for some forty years and represented one of the only producing platinum mines in the United States. In recent years, the Hanson Mining Company has worked to establish a'cditional reserves and to refurbish the dredge, achiev­ing modest production during 1982-1984.

Contact: Ray Hanson Hanson Properties, Inc. P. 0. Box 7310 Spokane, Washington 99707 Telephone: (509) 838-2800

Johnson River Prospect

One of the most intensely explored deposits in Southcentral Alaska in recent years, the Johnson River gold discovery was made by the Anaconda Minerals Company in 1983 in joint venture with the Cook Inlet Regional Corporation. Up to 20,000 feet of drill­ing was performed. Published figures for one drill interception were 1.2 ounces per ton gold, 24.8% zinc, 2.8% lead and 1.7% cop­per. The deposit is on private lands owned by the Cook Inlet Regional Corporation, less than 15 miies from tidewater at Cook Inlet.

Contact: Roy M. Huhndorf President Cook Inlet Region, Inc. P.O. Box 4N Anchorage, Alaska 99509 Telephone: (907) 274-8638

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Southeastern Alaska

Prior to World War II, numerous lode gold mines operated throughout southeastern Alaska. With the revival of the gold price, many of these properties have been reexamined and are undergoing active exploration. Queenstake Resources is exploring, rehabilitating and doing underground work at the ChichagofGo!d Mine on Chichagof Island; Enserch is exploring the neighboring Hirst Chichagof Mine; the Kennecott Corporation is exploring the Jualin Mine in the Berners ;Jay area; Orbex Minerals con­tinues to explore the Salt-Chuck copper-platinum metals mine; and Echo Bay Mines is e\'aluating and exploring the Alaska Juneau and Treadwell Gold Mines in Juneau.

Some Alaska Mining Projects (Excluding Coal)

.LIK REDOOG• (zinc,lead,sllver)

{zinc, fead,sllver,barite) ~~BLERBELT • ~copper, zinc, lead, silver)

lOST RIVER • BORNITE (lin, tungsten,Uourlte,beryl!lum} (copper, silver, cobalt)

~ Fairbanks.

GRAN' MINE • ALASKA ASBESTOS PROJECT

(gold) ' (asbestos)

DELTA BE~ (gold, silver, zinc, lead, copper)

JOHNSON RIVER GOODNEWS BAY • (gold, zinc)

···~::;z (j c:::3l , ...

p>D·'-

BASE AND ALLOY METALS

Historical Production

Copper · Between 1900 and World War II, Alaska produced over 1 billion pounds of copper. Mining began on Prince of Wales Island in Southeast Alaska and by 1905 there were 10 copper mines in pro­duction in the area. The overall grade of the deposits was 3% cop­per with significant precious metal credits averaging 0.04 ounces per ton gold and 0.3 ounces per ton silver.

By 1914 production from the Prince William Sound region had surpassed the Southeastern mines with 1500 tons of ore per day coming from the B~atson Mine on Latouche Island. However, the Kennec0tt Mine in the Wrangell Mountains would overshadow all. The completion of the 186 mile Copper River and North­western Railroad in 1911 inaugurated production at the world famous Kennecott .ine which would produce 4.6 million tons of high grade ore averaging 13% copper until the time of its closure in 1938.

The Kennecott mine outlived all of the other Alaskan copper producers which closed in the early 1930's v.s a result of the world economic deoression and low copper prices.

Tin

While Alaska's historical production of 5 million pounds of tin is modest, the state holds America's primary source of tin reserves. The majority of tin production has been from placer mines on the Seward Peninsula and from the Manley district northwest of Fairbanks. Presently about 120,000 pounds of tin are produced annually from placer deposits.

The state's most significant hard rock tin reserve is found at the Lost River Mine on the Seward Peninsula. Government financed exploration began at Lost River during World War II but it was not until the Korean War that the mine was finally put into pro­duction. The mine closed in 1956 at the end of the war having produced 1.1 million pounds of tin from 51,000 tons of ore. In­ferred reserves at Lost River, based upon contemporary explora­tion, are 124 million pounds of tin.

Tungsten

Alaska has intermittently produced minor amounts of tungsten during periods of national emergency. Production cam~! from scuthcastem Alask..;., the Seward Peninsula and the Fairbanks area. In recent times significant tungsten resources have been identified in the Lost River tin deposit, while in the !:' i.rbanks District pro­mising tungsten exploration programs are ongoing.

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Modern Exploration

Alaska Base and Alloy Metal Projects

.l'llll ...... "~ :::-

Antimony

Production of antimony in Alaska has totalled 10.5 .million pounds and constitutes a'oout 8% of domestic U. S. production through the earlv 1970's. Production from a number of mines, many in the Kan,tishna and Fairbanks area, peaked during periods of high wartime dem:md. Occasional highs in antimony prices) as in 1984, spur sales of modest stOckpiles from small Alaskan mines.

Mercury

Over 3 million pounds or 4C,OOO flasks of mercury h:ave been pro­duced in Alaska, primarily from mines in an area in s~uthwestern Alaska stretching f~om Dillingham to McGrath. Durmg the high prices of the 1950/'s, the state produced between 10% anci 20% of the cmmtr>•'s mercury requirements.

The exploration of Alaska using modern geological methods 'Was stimulated by Kennecotes copper discoveries on the south side of the Brooks Range in the 1960's. The disco\·ery of the Bornite and Arctic deposits and several other prospects attracted other com­panies into the area, including Sunshine, Anaconda and Gamin­co. Exploration in the Ambler district of the Brooks Range in the 1970's eventnally txpanded westward where the zinc discoveries at Red Dog and Lik were made.

Modern exploration programs were initiated in many other areas of the state during the 70's including several programs in southeastern Alaska that resulted in the discovery of the Greens Creek silver-gold-zinc-lead deposit and th~ giant Quartz Hill molybdenum deposit.

Alaska has extensive, unexplored lands Hith favorable geologic terranes that will yield future discoveries. In addition to public state and federal lands, the state's Native corporations hold title to 44 million acres and will be seeking ways to explore and develop mineral resources on their land base.

Red Dog Discovered in the 1970's, Red Dog is the world's premier zinc-lead-silver deposit with 85 million tons of open .pit ore grading 17% zinc, 5% lead and 2.4 ounces per toil silver. The development of the mine will be accomplished through an agreement between the NANA Regiunal Corporation which owns the deposit, and Cominco Alaska, Inc. which will construct and operate the mine.

14

Cominco has already begun the design of the mine, as well as design of the 55 mile road and port f~cilities neces~ary to c~n~ect the mine to tidewater on the Chukcht Sea. All maJor permlttmg, including the completion of an environmental impact statement and provisions for a transportation corridor across the Krusenstern National Monument, have been accomplished.

In 1985, the Alaska legislature authorized the Alaska Indu~t~ial Development Autl.ority to provide financing for u~ to $175 million for the construction of the road and port. Completion of the fman­cing package in time for a construction start-up in 1986 would bring the mine into production in 1989.

At an initial mine rate of 3000 tons per day, the mine will pro­duce 350,000 tons of zinc, 79,000 tons of lead and 2.6 million ounces of silver per year.

Contact: Hank Giegerich

Lik

Prcsiden t & General Manager Cominco Alaska, Inc. 5660 "B" Street Anchorage, Alaska 99502 Telephone: (907) 563-3686

Only ten miles from the Red Dog deposit, the Lik deposit con­tains 24 million tons of ore at an average grade of9% zinc, 3.1% lead and 1.4 ounces per ton silver. Exploration drilling in 1984 discovered a second deposit which is believed to be a faulted off­set of the main orebody which has the potential to significantly increase reserves.

GCO Minerals, a subsidiary of International Paper Company presently shares a joint venture agreement with Noranda, who became the operator of the project in 1985.

Contact: Paul Glavinovich Noranda Exploration, Inc. 139 East 51st Avenue Anch<Yrage, Alaska 99503

Ambler District

Discovered by local prospectors in the 1950's, Kennecott's work on the Bornite property established reserves of 5 million tons of ore grading 4-12% copper with zinc and cobalt credits as well.

Subsequent exploration in the region to the north of Bornite rr:sulted in the discovery of a belt of rocks over one hundred miles long on the south flank of the Brooks Range which hosts numerous deposits of massive sulfides.

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The first major discovery in this geologic terrane known as the Ambler schist belt, also made by Kennecott, was the Arctic deposit. The Arctic deposit has dril! indicated reserves of 35-40 million tons grading 4% copper, 5.5% zinc, 1.6 ounces per ton silver and 0.02 ounces per ton gold. Exploration by Sunshine Mining Com­pany and Anaconda elsewhere in the belt resulted i~ the di~covery of the Sun and Smucker deposits. Numerous other d1scovenes were made for which detailed drilling and evaluation has not been performed.

While the known metal resen·es in the Ambler District are im­pressive, and the potential for additional major disco~·eries is widely recognized, the area remains undeveloped due to. its remoteness ii·om existing rail, road or tide,.,·ater transportatiOn.

Contact: Jay Hammitt Manager Kennecott Corporation 1111 Dowling Road Anchorage, Alaska 99502 Telephone: (907) 563-3225

Quartz Hill

The Quartz Hill molybdenum deposit was discovered as a result of a regional geochemical reconnaissance program carried out by the U.S. Borax Company in the early 1°70's. The deposit con­tains pro,·cn rcscn·e5 of 1.5 billion tons of open pit ore grading 0.14% molybdrnum with a high grade core zone of some 200 million tons grading better than 0.2% molybdenum.

vVork to date has included extensive drilling, the building of a 9 mile access road, the testing of a bulk sample, and detailed en­Yironmental studies. Th<' mine will initially process 40,000 tons of on· per day, {'\'entually increasing to 80,000 tons per day over an anticipatt·d mine life of 55 rears.

The pcrmitting for this massh·e project is on-going. The final cndronmcntal impact statement for the mine development is be­ing written at present and is expected to be complete inJ une 1986. The project must await the completion of thf' impact statement and, possibly, an imprm·ement in metal markets before construc­tion begins.

Contact: Robert Kendall Executive Vice President 1.:. S. Borax and Chemical Corporation 3075 Wilshire Boulevard Los Angeles, California 90010 Telephone: (213) 381-5311

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INDUSTRIAL MINERALS

Sand and gravel used for domestic construction currently constitutes the only significant production of industrial minerals in Alaska. Sand and gravel production peaked during construction of the Alaska Pipeline and, due to high demand in oil field construction and urban development, has remained the dominant component by value of Alaska's mineral industry. However, reserves of other industrial, non-metallic minerals are known and could be produced in Alaska for future export markets. These commodities, some of which have relatively high unit value, include crysotile asbestos, fluorite, barite, gypsum, zeolites, ceramic clays and refractory materials.

Historical production of industrial minerals for use in markets outside of Alaska has been H.nited to marble, gypsum and barite. Prior to World War II, quarries in Southeastern Alaska produced ornamental and structural grade marble for west coast builders and gypsum was mined on eastern Chichagof Island by the Pacific Coast Gypsum Company.

Starting in the 1960's barite for well drilling muds was mined by the Chromalloy Com­pany on Castle Island near Petersburg in Southeastern Alaska. On-shore mining began in 1963 on the island bu:t, since 1967, offshore reserves were drilled, blasted and then reco\·ered using a clam shell bucket. Though potentially large tonnages of barite remain underwater at Castle Island, the high cost of offshore recovery lead to the closure of the operation in 1980.

Exploration for industrial minerals has been limited in Alaska and the potential exists for the discovery of major commercial deposits. This includes the development of deposits of semi-precious and precious gemstones as highlighted by the limited production ofjade in Northwestern Alaska and the possible occurrence of diamonds in placer grav.els in Interior Alaska.

Alaska Industrial Mineral Projects

Red Dog The massive Red Dog zinc-lead-silver deposit i-:1 Northwest Alaska hosts a large reserve of barite. Though not formally included in mine feasibility studies performed by Cominco, the recovery and concentration of the barite could become a significant byproduct of the Red Dog mine if the quality of barite is suitable and an export market exists.

Contact: Hank Giegerich President & General Manager Cominco Alaska, Inc. 5660 "B" Street Anchorage, Alaska 99502

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Alaska Asbestos

One of the largest knO\<rn asbestos reserves in the world has been extensively explored and bulk sampled by the Alaska Asbestos Partnership, a joint venture between the Tanana Asbestos Cor­poration, a wholly owned subsidiary of Doyon Ltd. (one of 12 regional native corporations) and GCO Minerals Company, a sub­sidiary of the International Paper Company. Located on Doyon land in Interior Alaska, the indicated reserves are at least 60 million tons of asbestos ore grading 5-6% in high quality chrysotile fiber. Surrounding lands owned by Doyon will provide an access cor­ridor to the existing road netWrJrk when demand and other fac­tors justify development of the project.

Contact~ ~forris Thompson President Doyon Ltd. 201 1st Avenut' Fairbanks. Alaska 99701 Telephone: {907) 452-4-755

Other Deposits

Other known deposits of industrial minerals include fluorite as~ociated with the Lost Rh·cr deposit on the Seward Peninsula; g~psum i~ the !\1atanuska Valley and at Haines: garnets near \\ rangell m Southeastern Alaska; and deposits of zeolites on the Alaska Peninsula.

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John Sims, Direet'l1r

vember 1985

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