stalled critical minerals bills get a push · contact north of 60 mining news: publisher: shane...

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PHOTO BY JUDY PATRICK, COURTESY OF SUMITOMO METAL MINING POGO Sumitomo Metal Mining Pogo, which is investing roughly US$17 million on exploration during 2014 at its high-grade gold mine located roughly 60 miles (100 kilometers) southeast of Fairbanks, leads a group of diverse global-scale mining companies hailing from Australia, Japan, and the United States that are quietly exploring Alaska’s Interior. Page 9. A special supplement to Petroleum News WEEK OF July 27, 2014 3 Critical minerals bills get a boost Private sector group “ready to help” send stuck legislation to White House 4 Less than average Pebble Mine? EPA proposes limiting footprint to smaller than a mid-sized porphyry mine 10 Tsilhqot’in FN prevails in high court “Ground breaking” ruling grants Aboriginal title on Crown lands in B.C.

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Page 1: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

PHOTO BY JUDY PATRICK, COURTESY OF SUMITOMO METAL MINING POGO

Sumitomo Metal Mining Pogo, which is investing roughly US$17 million onexploration during 2014 at its high-grade gold mine located roughly 60 miles(100 kilometers) southeast of Fairbanks, leads a group of diverse global-scalemining companies hailing from Australia, Japan, and the United States that arequietly exploring Alaska’s Interior. Page 9.

A special supplement to Petroleum NewsWEEK OF

July 27, 2014

3 Critical minerals bills get a boost Private sector group “ready to help” send stuck legislation to White House

4 Less than average Pebble Mine?EPA proposes limiting footprint to smaller than a mid-sized porphyry mine

10 Tsilhqot’in FN prevails in high court “Ground breaking” ruling grants Aboriginal title on Crown lands in B.C.

Page 2: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

2NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JULY 27, 2014

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Page 3: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

● C R I T I C A L M I N E R A L S

Stalled critical minerals bills get a pushPrivate sector coalition urges Capitol Hill lawmakers to move legislation meant to encourage domestic mining of vital minerals

BY SHANE LASLEYMining News

A coalition of 38 companies and

organizations, representing a broad

spectrum of America’s economy, is urg-

ing lawmakers on Capitol Hill to dust off

pending critical minerals legislation and

send a version to the White House for

President Barack Obama’s signature.

“Updating our geologic data, reducing

delays in permitting, bolstering research,

and encouraging efficient use can pay

dividends for future generations,”

explains the group pressing for critical

minerals legislation.

Two such bills aimed at reducing the

United States’ foreign reliance on miner-

als deemed critical

to the nation, both of

which have garnered

bi-partisan support,

have stalled in the

Senate.

The coalition of

38 – which is

Spearheaded by

Minerals Make Life,

an initiative of the

National Mining

Association, and includes a diverse group

of signatories that ranges from global cor-

porations such Dow Chemical Co. to

local civic groups such as Metropolitan

Milwaukee Association of Commerce – is

doing its part to get these bills moving

again.

In a letter addressed to leaders in both

the House and Senate, the group urged

U.S. lawmakers to pass legislation that

would encourage the domestic mining of

minerals that are critical to the United

States.

“Our organizations represent nearly

every sector of the American economy,

including defense, energy, transportation,

infrastructure, agriculture, technology,

academia, electronics, finance, and medi-

cine,” the group explained in its June let-

ter to Capitol Hill lawmakers. “From

exploration to recycling, we are active in

the supply chains for nearly every com-

modity. As a result, we have a unique per-

spective on the public policies needed for

reliable, affordable, and secure sources of

raw materials. Updating our geologic

data, reducing delays in permitting, bol-

stering research, and encouraging effi-

cient use can pay dividends for future

generations.”

According to the alliance, critical min-

erals legislation will bolster America’s

national and economic security, create

jobs, and reduce America’s reliance on

foreign countries. Urging bipartisan sup-

port, the letter said more timely permit-

ting can be achieved “that is consistent

with our nation’s environmental regula-

tions” and which will “allow the United

States to leverage its world-class mineral

reserves.”

Changing the dynamicU.S. Sen. Lisa Murkowski, R-Alaska,

welcomed the new and renewed support

for the passage of critical minerals legis-

lation.

“This letter puts nearly 40 groups and

organizations on record as supporting not

just their members, but our nation’s secu-

rity, competitiveness, and future growth,”

Murkowski said in a July 9 statement. “I

thank them for their support and com-

mend their continued engagement on this

issue.”

Among those that

signed on is the

Alaska Support

Industry Alliance, a

trade association

that strives to pro-

mote responsible

exploration, devel-

opment and produc-

tion of oil, gas and

mineral resources

for the benefit of

Sen. Murkowski’s home state.

Murkowski, the top Republican on the

Senate Energy and Natural Resources

Committee, introduced “The Critical

Minerals Policy Act of 2013” for Senate

consideration in October of last year.

“We have got to change the dynamic

here, in this country, with how we view

the importance of minerals to our nation,”

Murkowski told the mining community in

Alaska shortly after introducing this leg-

islation, S.B. 1600. “We can’t move for-

ward until Washington (D.C.) gets out of

our way.”

A bipartisan group of 18 senators – 10

Democrats and eight Republicans – have

signed on as cosponsors of S.B. 1600.

Sen. Ron Wyden, D-Ore., an original

S.B. 1600 co-sponsor, said, “So many

parts of our 21st Century economy

depend on critical minerals that it just

makes sense to bring federal policies up

to date. This bill creates a more secure

domestic supply chain for critical miner-

als, and makes sure that our country’s

national defense, high-tech jobs, energy

security and advanced medical care are

not held hostage by foreign suppliers.”

S.B. 1600 seeks to address the critical

minerals supply chain by establishing a

list of up to 20 minerals to be deemed

critical, streamlining the federal permit-

ting process, prioritizing workforce

development, and promoting alternatives

and recycling.

Instituting a list of minerals that is

widely accepted as critical to the United

States has proven to be a challenge – par-

tially because the list is dynamic, shifting

with changes on either the supply or

demand sides of the equation, and partial-

ly because of biases towards particular

sectors such as defense, energy or manu-

facturing.

Broadly speaking, a mineral is deemed

critical when it is both important to a

nation’s security or economy, and is at

risk of becoming unobtainable in the

quantities needed.

According to the United States

Geological Survey, during 2013, the

United States was 100 percent dependent

on foreign suppliers for 17 mineral com-

modities and more than 50 percent

dependent on foreign sources for at least

24 others.

Several of the minerals for which the

United States is heavily reliant on foreign

sources are not prospects for criticality

due to their scant use. Others, however,

are important ingredients to military

applications such as fighter jets, lasers

and radar systems and night vision equip-

ment; green technology applications such

as wind turbines, solar panels and hybrid

cars; and high-tech consumer goods like

mobile phones and iPads.

Almost everyone agrees that at least

some of the 17 rare earth elements should

be deemed critical due their importance

to the high tech, defense and clean energy

sectors. Dysprosium, terbium, europium,

yttrium and neodymium are among the

REEs that typically enter the critical min-

erals discussion. A study completed by

the U.S. Department of Energy in 2010

listed all of these rare earths as critical to

clean energy.

Less common than rare earths, indium

and gallium are also contenders for min-

erals deemed critical to the United States.

Other minerals that can be found in abun-

dance but are not mined in the U.S. and

often enter the critical mineral conversa-

tion are graphite and manganese.

If S.B. 1600 was to become law and

once a list of critical minerals is estab-

lished, this legislation lays out a compre-

hensive set of policies to address issues

associated with the discovery, production,

use, and re-use of the resources.

The United States is dependent on

China as a primary source of a number of

these high-tech metals.

“We don’t want to be sitting in a situa-

tion where the Chinese are making all of

the decisions as to what we are going to

3NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JULY 27, 2014

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)

Mary Mack CEO & GENERAL MANAGER

Susan Crane ADVERTISING DIRECTOR

Heather Yates BOOKKEEPER & CIRCULATION MANAGER

Bonnie Yonker AK / INTERNATIONAL ADVERTISING

Marti Reeve SPECIAL PUBLICATIONS DIRECTOR

Steven Merritt PRODUCTION DIRECTOR

Curt Freeman COLUMNIST

J.P. Tangen COLUMNIST

Judy Patrick Photography CONTRACT PHOTOGRAPHER

Forrest Crane CONTRACT PHOTOGRAPHER

Tom Kearney ADVERTISING DESIGN MANAGER

Renee Garbutt ADVERTISING ASSISTANT

Mapmakers Alaska CARTOGRAPHY

ADDRESSP.O. Box 231647Anchorage, AK 99523-1647

NEWS [email protected]

CIRCULATION 907.522.9469 [email protected]

ADVERTISING Susan Crane • [email protected]

Bonnie Yonker • [email protected]

FAX FOR ALL DEPARTMENTS907.522.9583

NORTH OF 60 MINING NEWS is a monthly supplement of Petroleum News,a weekly newspaper. To subscribe to Petroleum News and receive the monthly

mining supplement, call (907) 522-9469 or sign-up online atwww.PetroleumNews.com. The price in the U.S. is $98 per year, which includesonline access to past stories and early access to Petroleum News every week.(Canada/Mexico subscriptions are $185.95; overseas subscriptions are $220)Or, just purchase the online edition of Petroleum News, which also includesthe mining supplement and online access to past stories, for $69 per year.

Several of the individualslisted above are

independent contractors

Contact North of 60 Mining News:Publisher: Shane Lasley • e-mail: [email protected]

Phone: 907.229.6289 • Fax: 907.522.9583

see BILLS page 5

SEN. RON WYDEN SEN. LISAMURKOWSKI

“So many parts of our 21stCentury economy depend on

critical minerals that it just makessense to bring federal policies up

to date.” – Sen. Ron Wyden, Oregon

Page 4: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

4NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JULY 27, 2014

WHATEVER

WHENEVER

WHEREVER

judypatrickphotography.comCreative photography for the oil & gas industry.

907. 258.4704

● A L A S K A

EPA seeks to limit Pebble to below averageEnvironmental agency proposes footprint restrictions based on a hypothetical median-size porphyry mine; legal battle rages on

BY SHANE LASLEYMining news

T he U.S. Environmental Protection Agency has

offered the proposal of allowing the Pebble

Limited Partnership to apply for permits to develop a

less than average-size porphyry mine at the world’s

largest undeveloped copper-gold-molybdenum deposit.

Falling short of an outright ban of building a mine at

Pebble, the EPA is proposing Clean Water Act Section

404(c) permit restrictions aimed at limiting the footprint

of any mine allowed to be developed at the enormous

porphyry copper deposit in Southwest Alaska.

The limits proposed by EPA were hailed as a victory

by many of Pebble’s staunchest critics.

“Far from a pre-emptive veto, the EPA’s actions sim-

ply place an understandably high standard for any min-

ing company wishing to apply for permits in Bristol

Bay,” said Tim Bristol, director of Trout Unlimited’s

Alaska program. “These restrictions will ensure that no

unacceptable adverse impacts will occur from mining

development in Bristol Bay.”

While relieved that the EPA

fell short of proposing an out-

right ban on mining at its world-

class copper deposit, the Pebble

Partnership continues to believe

the EPA is stepping beyond the

bounds of its authority by

imposing any kind of restriction

prior to permitting.

“While today’s announce-

ment from the US Environmental Protection Agency

Region 10 is only a proposal at this time, we are pleased

to note the agency has rejected requests to preemptively

veto the Pebble Project in favor of imposing specific

conditions on future development,” said Pebble

Partnership CEO Tom Collier.

“That said, we believe that EPA

does not have the statutory authori-

ty to impose conditions on devel-

opment at Pebble, or any develop-

ment project anywhere in Alaska or

the U. S., prior to the submission of

a detailed development plan and its

thorough review by federal and

state agencies, including review

under the National Environmental

Policy Act.”

A growing number in Washington D.C. agree the

agency has stepped beyond the bounds of its authority,

and some say the agency has broken the law in its effort

to stop or restrict Pebble prior to permitting.

Less than averageDuring a July 18 announcement that marked the offi-

cial launch of a 60-day public comment phase of the

CWA Section 404(c) process, EPA unveiled a list of

parameters that it considers to be the upper end of

streams and wetlands that should

be allowed to be disturbed while

mining at Pebble.

The proposed determination

recommends that mining the

Pebble deposit should not be

allowed to result in:

The loss of five or more miles

of streams with documented

salmon occurrence;

Loss of 19 or more miles of streams where salmon are

not documented, but that are tributaries of streams with

documented salmon occurrence;

Loss of 1,100 or more acres of wetlands, lakes, and

ponds that connect with streams with documented

salmon occurrence or tributaries of

those streams; or

Stream-flow alterations greater

than 20 percent of daily flow in

nine or more linear miles of streams

with documented salmon occur-

rence.

These restrictions are predicated

on the disturbance EPA predicts the

development and operation of a

250,000-million-ton mine at the

Pebble deposit – along with the associated mill, tailings

storage and other on-site facilities – would create over a

predicted 20-year mine-life.

“It is up to the mining company to determine if it can

develop a mine that gets below the impact levels

expressed in the restrictions,” EPA Region 10

Administrator Dennis McLerran informed the media

July 18.

EPA derived its estimates of the footprint impacts

during a process of evaluating three hypothetical mine

scenarios as part of its Bristol Bay Assessment.

EPA said the 250,000-million-ton mine used to deter-

mine the maximum impacts that it thinks should be

allowable represents the average size of the world’s por-

phyry copper mines.

Two significantly larger scenarios considered – a 2-

billion-ton mine with a 25-year mine life and a 6.5-bil-

lion-ton mine with a 78-year mine-life – were modeled

after plans included in a preliminary economic assess-

ment completed for Northern Dynasty Minerals Ltd.,

majority owner of the Pebble Partnership, in 2011.

During a July 18 media briefing, EPA Region 10

Administrator McLerran repeatedly pointed to the PEA

derivation of the mining scenario as legitimizing the

see PEBBLE page 5

TOM COLLIER DENNIS MCLERRAN

“It is up to the mining company todetermine if it can develop a minethat gets below the impact levels

expressed in the restrictions.”– Dennis McLerran, Region 10 Administrator, U.S.

Environmental Protection Agency

Page 5: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

5NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JULY 27, 2014

be manufacturing – how, when and where

– because they have access to all the crit-

ical minerals,” Murkowski said. “We

have got them here; we just need the abil-

ity to develop them.”

Limiting delaysAnother piece of critical minerals leg-

islation, “National Strategic and Critical

Minerals Production Act of 2013,” gar-

nered wide support in the House before

getting bogged down alongside S.B. 1600

in the Senate.

Introduced by Rep. Mark Amodei, R-

Nevada, H.R. 761 aims to “enhance gov-

ernment coordination for the permitting

process by avoiding duplicative reviews,

minimizing paperwork and engaging

other agencies and stakeholders early in

the process” for strategic and critical min-

eral projects.

The bill defines strategic and critical

minerals as minerals necessary; for

national defense and security; for energy

infrastructure; to support domestic manu-

facturing, agriculture, housing, telecom-

munications, healthcare and transporta-

tion infrastructure; or for the economic

security of the United States.

To streamline the permitting process,

H.R. 761 would designate any proposed

mines that would produce strategic and

critical minerals as infrastructure projects

as described by Executive Order 13604,

“Improving Performance of Federal

Permitting and Review of Infrastructure

Projects,” signed by President Obama in

March 2012.

The infrastructure designation would

allow strategic and critical mineral proj-

ects to benefit from executive order

objective to “significantly reduce the

aggregate time required to make deci-

sions in the permitting and review of

infrastructure projects by the federal gov-

ernment, while improving environmental

and community outcomes.”

“What it simply says is this: ‘During

the permitting process, there has to be a

decision made within 30 days’,” Rep.

Doc Hastings, R-Wash. summarized dur-

ing a keynote speech at the Alaska Miners

Association 2013 Convention held in

Anchorage last November.

The legislation also attempts to limit

litigation delays by setting a 60-day time

limit to file legal challenges against a crit-

ical minerals project; limits injunctive

relief to what is necessary to correct the

violation of a legal requirement; and pro-

hibits the payment of attorney’s fees,

expenses and other costs by the U.S. tax-

payer.

H.R. 761 nabbed 57 co-sponsors and

passed the House 246-148. The legisla-

tion, however, has not moved since being

sent to the Senate in September of last

year.

“We have passed it out of the House,

and we are waiting for action in the

Senate. And, since I am a member of the

House, I can say we wait on the Senate a

lot,” quipped Hastings.

The group of businesses and organiza-

tions led by Minerals Make Life are

hopeful their letter will get critical miner-

als legislation moving again.

“Now is an opportune moment to

advance policies that benefit vast swaths

of the American economy and enjoy

broad support,” the coalition of 38 wrote

in their letter of support. “A great deal of

time and effort has been devoted to the

advancement of critical minerals legisla-

tion, a strong record has been built

reflecting the urgency of this challenge,

and the time has come to take next steps.”

“This is the perfect time to update our

nation’s mineral policies,” Murkowski

concurred. “We have bipartisan and cost-

neutral legislation that is ready to be con-

sidered. We have no reason to wait, or to

forgo the tremendous benefits that critical

minerals legislation would provide

throughout our economy.”

Murkowski and fellow lawmakers that

would like to see the United States adopt

critical minerals legislation now have pri-

vate sector help in making it happen.

“We remain hopeful that critical min-

erals legislation can be signed into law

soon and stand ready to help make it hap-

pen,” vowed the coalition of 38. ●

continued from page 3

BILLS

“A great deal of time and efforthas been devoted to the

advancement of critical mineralslegislation, a strong record has

been built reflecting the urgency ofthis challenge, and the time has

come to take next steps.” – Letterto Congress, Coalition of 38

assumptions made by his agency. The

scoping level study, however, was never

sanctioned by the Pebble Partnership and

was not intended to represent the mine

that would ultimately be proposed for

permitting.

This was addressed by the authors of

the PEA.

“It should be noted that the project

description the Pebble Partnership ulti-

mately elects to submit for permitting

under the U.S .National Environmental

Policy Act may differ from the develop-

ment cases presented in this preliminary

assessment,” cautioned Wardrop, the

engineering firm that completed the PEA.

While drawing PEA conclusions,

Wardrop said the Pebble Partnership's

ongoing engineering and stakeholder

engagement would influence the project

design ultimately submitted for permit-

ting..

“EPA’s proposal is based on a water-

shed assessment that its peer reviewers

found to be no better than a screening

document, and that EPA’s professionals

have recognized is missing the informa-

tion needed for a permitting decision,”

Collier commented on the conclusions

continued from page 4

PEBBLE

see PEBBLE page 6

Page 6: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

drawn. “EPA’s proposal is also based on

mining scenarios that are outdated and, in

any event, would never qualify for envi-

ronmental permits.”

Though not discussed in EPA’s assess-

ment or proposed determination, an

underground mine, by its very nature

would have a smaller footprint that could

conceivably fall inside the parameters

being put forward by EPA, while mining

a larger portion of the Pebble deposit.

During a 2008 presentation in

Fairbanks, Tom Albanese floated the idea

of developing an underground mine to

extract the higher-grade resource at

Pebble East. At the time Albanese was

CEO of Rio Tinto, which held a roughly

20 percent interest in Northern Dynasty

shares.

An underground

mine was briefly

discussed in the

2011 PEA prepared

for Northern

Dynasty as a poten-

tial scenario for

mining the deeper

higher-grade por-

tions of the deposit.

“A potential

underground mine

has not been considered as a primary case

in this study. Further assessment of this

option is warranted to evaluate method-

ologies of enhancing relative economics

of an underground mine and confirming

its performance,” Wardrop advised.

Litigation continuesThe Pebble Partnership, however, is

not yet ready to go underground. Instead,

the company is steadfast in its pursuit of

an injunction to stop the EPA from impos-

ing limitations on its proposal before the

company gets a fair hearing under the

established state and federal permitting

process.

“EPA’s attempt to preemptively

impose conditions on future development

at Pebble, in the absence of completing an

Environmental Impact Statement, as is

required of every major development

project in the United States, is causing

significant and even critical harm to our

business interests and our abilities to fair-

ly advance our project,” Collier decried in

response to EPA’s latest move. “For this

reason, we fully intend to continue our lit-

igation against EPA in order to halt the

pre-emptive and unprecedented regulato-

ry process under Section 404(c) of the

Clean Water Act, and invalidate the con-

ditions proposed by EPA Region 10.”

In the complaint filed in the U.S.

District Court for Alaska during May, the

Pebble Partnership asserts that, in the

absence of a permit application, EPA’s

action exceeds its authority under the

CWA and is contrary to the Alaska

Statehood Act, the Cook Inlet Exchange

legislation, and other federal laws.

“Litigation is necessary in order to get

the agency’s attention and bring some

rational perspective back to the U.S. per-

mitting process. While we would prefer to

avoid this lawsuit, we are fully prepared

to defend ourselves against the precedent-

setting, unlawful actions of this agency,”

Collier explained at the time of the filing.

“The correct, legal, and defensible

way forward is for EPA to suspend its pre-

emptive 404(c) process and allow us the

full opportunity to have our project

reviewed by federal and state regulatory

agencies, including EPA, under NEPA.

Until that happens we must defend our-

selves against actions by EPA that are

contrary to the law,”

he added.

The Pebble

Partnership points

out that there is no

environmental risks

associated with

allowing it to

advance the project

to permitting, a

process in which

EPA would hold

sway.

“Our legal action does not in any way

seek to diminish EPA’s legitimate role

under the CWA, or its right to participate

as a regulatory agency within the Clean

Water Act permitting process – including

a comprehensive review under the

National Environmental Policy Act,”

Collier explained.

The state of Alaska has intervened as

plaintiff in the case and the United Tribes

of Bristol Bay, which describes itself as a

consortium working for the protection of

the Bristol Bay watershed from large-

scale metallic sulfide mines, has inter-

vened as a defen-

dant.

The Alaska

Peninsula Corp., a

Native corporation

that owns surface

land rights in the

Bristol Bay region

near Pebble, is also a

plaintiff in the law-

suit against EPA.

D.C. weighs inAs the Pebble Partnership and state of

Alaska seek a court order to stop EPA

from pressing ahead with its attempt to

limit development at Pebble, a growing

number of officials in Washington D.C.

are questioning the legality of EPA’s

action related to Pebble, and the methods

the agency used to get to this point.

“It is important to remember that, in

addition to the lawsuit brought by Pebble

and the State of Alaska against EPA, there

are a number of investigations yet under-

way with respect to EPA’s Bristol Bay

Assessment and its pre-emptive regulato-

ry process – including one by the Office

of the EPA Inspector General and another

by the House Committee on Oversight

and Government Reform. There are also

two bi-partisan bills pending in the US

House and Senate seeking to clarify that

EPA does not have authority to preemp-

tively veto or otherwise restrict develop-

ment projects prior to the onset of federal

and state permitting.

The Regulatory Certainty Act, spon-

sored by Rep. Bob Gibbs, R-Ohio, the lat-

est such legislation, seeks to make it clear

when EPA does, and does not, have the

authority to prohibit or restrict a project

under section 404 of the Clean Water Act.

In short, H.R. 4854 would limit the

EPA’s right to exercise its 404(c) authori-

ty to the duration of the permitting

process, preventing the agency from sin-

gularly stopping or restricting a project

before developers have an opportunity to

apply for permits, or pull permits that

have already been granted but not violat-

ed.

The bill passed out of the House

Transportation and Infrastructure

Committee with a 33-22 vote.

“After three years of hearings in my

subcommittee, it is clear that U.S. EPA is

out of control and has disregarded the

intent of Congress and its longstanding

partnership with the states in administer-

ing the Clean Water Act,” said Gibbs,

who chairs the

Subcommittee on

Water Resources

and Environment.

“We all want to pro-

tect the environment

but EPA has attempt-

ed multiple power

grabs to unilaterally

expand its own juris-

diction and authority

over the states.”

Rep. Don Young, R-Alaska, blasted

the EPA for its attempt to restrict devel-

opment of Pebble, which is located on

lands selected by Alaska for it mineral

potential.

“For the EPA to put forward these

types of restrictions, prior to any permit

applications and without due process, is

alarming to say the least,” Alaska’s sole

congressman admonished. “As I’ve said

in the past, the EPA’s expansive, jurisdic-

tional power grab is a very serious threat

to Alaska’s sovereignty and the future of

any development on state, Alaska Native,

or privately owned lands both in Alaska

and across the United States.”

Sen. Lisa Murkowski, R-Alaska, had a

similar take on EPA’s determination.

“The EPA is being disingenuous in

saying that this deci-

sion is only going to

impact mining in a

particular area of

Alaska,” Murkowski

said. “The EPA is

setting a precedent

that strips Alaska

and all Alaskans of

the ability to make

decisions on how to

develop a healthy

economy on their

lands. This is a blue-

print that will be

used across the

country to stop eco-

nomic develop-

ment,” Murkowski

said.

Sen. Mark

Begich, D-Alaska,

was more measured

in his response, say-

ing EPA’s actions are

targeted at Pebble.

“As I’ve often stated, I believe Pebble

is the wrong mine in the wrong place.

However, I remain a strong supporter of

the mining industry and mines in other

regions of Alaska and remain committed

to ensuring that this process does not

allow any precedent to be set that could

restrict other responsible mining projects

in Alaska or the U.S.,” Begich said.

Already, the Chippewa Federation, a

group of six tribes, has petitioned the EPA

to use its CWA Section 404 authority to

protect the Bad River Watershed in the

Lake Superior region of northern

Wisconsin from exploration and potential

development of an iron project.

Wisconsin Public Radio News reports

the EPA has set a meeting with the

Chippewa Federation for Aug. 16, a day

after the agency has scheduled public

hearings to take public testimony on its

404(c) process at Pebble.

Unless the District Court judge grants

the Pebble Partnership its request for an

injunction, EPA plans to push ahead with

the 404(c) process.

As part of the 60-day comment period

that started on July 18, the environmental

agency has scheduled hearings to get

additional public input on its proposed

determination. These will start with a

hearing in Anchorage on Aug. 12, fol-

lowed by six hearings in Bristol Bay com-

munities over the ensuing three days.

Following the comment period, the

EPA Region 10 office has the choice of

withdrawing from the process or sending

a recommended determination to EPA

headquarters in Washington D.C. for a

final determination. The recommended

determination could mirror the July 18

proposed determination or be revised

based on review of public comments.

Either way, the Pebble Partnership and

Army Corps of Engineers will be afford-

ed one final opportunity to weigh in

before EPA posts a final determination. ●

6NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JULY 27, 2014

Toyo, Tsurumi, & Grindex submersible pumps

Pinch ValvesHose

American madeSchurco slurry pumps

Schurco parts to fit Weirpumps and applications.

WE KNOW MINING

Phone (907) 694-7583 Fax (907) 694-7584 [email protected] Box 771452, Eagle River, AK 99577

continued from page 5

PEBBLE

BOB GIBBS, R-OHIO

REP. DON YOUNG, |R-ALASKA

SEN. LISAMURKOWSKI, R-ALASKA

SEN. MARK BEGICH,D-ALASKA“After three years of hearings in

my subcommittee, it is clear thatU.S. EPA is out of control and hasdisregarded the intent of Congressand its longstanding partnershipwith the states in administering

the Clean Water Act.” – Rep. Bob Gibbs, R-Ohio

“For the EPA to put forward thesetypes of restrictions, prior to anypermit applications and withoutdue process, is alarming to say

the least.” – Rep. Don Young, Alaska

DON’T MISS ANOTHER ISSUE!

SUBSCRIBE TODAY

(907)

522-9469

Page 7: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

7NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JULY 27, 2014

● G U E S T C O L U M N

Worst of funding drought could be overRecent price volatility is making producers cautious about long-term capital investments, despite more upbeat industry sentiment

BY CURT FREEMANFor Mining News

A s is normally the case in high sum-

mer in Alaska, news has started to

trickle out of the hills on projects where

new work is being conducted, and several

properties have changed hands or are in

the process of changing hands as mining

deals are negotiated and announced

across the state. Alaska mines are enjoy-

ing slight upticks in metals prices, but

recent price volatility has left producers

cautious about making long-term capital

investments in new or existing projects.

Regardless of the micro- and macro-eco-

nomic details, there is a growing feeling

in the industry, coming from organiza-

tions small and large, that we have weath-

ered the worst and that market conditions

and public opinions are slowly but surely

improving. With that more upbeat senti-

ment comes a noticeable increase in inter-

est in mineral resources, Alaska’s includ-

ed. It’s about time!

WESTERN ALASKACongratulations are in order for part-

ners TECK RESOURCES and NANA

INC. on the 25th anniversary of the Red

Dog mine! It has been an amazing journey,

from the first mention of mineralization at

the site back in the 1960s, its turbulent

staking and exploration history in the

1970s and its attainment of production in

1989. We will hear a great deal more about

the life and times of this amazing mine as

the year goes on but the longevity of Red

Dog clearly proves that working at an

Alaska mine can be a career, not just a job.

Congratulations to everyone who helped

make and who is keeping Red Dog a shin-

ing example of how to do it right in

Alaska!

NOVAGOLD RESOURCE INC.

announced second-quarter 2014 financials

and a project update for its Donlin Gold

project, a 50:50 joint venture with

BARRICK GOLD CORP. During the

quarter, the U.S. Army Corps of

Engineers, the lead agency for the pro-

ject’s environmental impact statement, and

cooperating agencies, completed identifi-

cation of project alternatives, a major step

in the permitting process. The alternatives

comprise variations on certain mine site

facility designs, local transportation

options, and power supply options.

Preparations of the remaining components

of the preliminary draft EIS are well

underway and expected to be completed

over the next two quarters. This includes

the alternatives development and the

analysis of their potential environmental

impacts. The company’s share of expenses

for the project for the second quarter was

$3,131,000.

FIRE RIVER GOLD CORP.

announced that WATERTON GLOBAL

VALUE L.P. has taken full and unrestrict-

ed ownership of the Nixon Fork gold-cop-

per mine and MYSTERY CREEK

RESOURCES, INC., the U.S. corpora-

tion that owns the mine. This action is a

result of the default by Fire River on the

terms of a credit agreement with Waterton.

Fire River will deliver all rights, debts,

properties and obligations on the property

to Waterton and Waterton will accept such

as full and final satisfaction of the indebt-

edness due to Waterton under the credit

agreement. As part of the final settlement

agreement Waterton also agreed to pay to

Fire River approximately $250,000 in cash

and other obligations. Waterton’s immedi-

ate plans for Nixon Fork were not

released.

The U.S. Environmental Protection

Agency said it is endorsing its own analy-

sis that would place significant barriers to

development of Northern Dynasty’s

Pebble gold-copper-molybdenum project.

The company stated that “…we do not

accept that EPA has the statutory authority

to impose conditions on development at

Pebble, or any development project any-

where in Alaska or the US, prior to the

submission of a detailed development plan

and its thorough review by federal and

state agencies including review under the

National Environmental Policy Act.” The

EPA analysis, conducted before any per-

mits for mine construction have been

requested by the project owners, imply the

project would cause the loss of at least five

miles of streams with documented salmon

or loss of 1,100 or more acres of wetlands,

lakes and ponds that connect to salmon-

bearing streams or tributaries of those

streams. The EPA’s claim that their prece-

dent-setting proposal is specific to the

Pebble deposit and would not affect other

deposits or claims was met with immedi-

ate and extreme skepticism by mining

companies, mining advocacy groups and

natural resource industry representatives.

A public comment period on this decision

is open until Sept. 19 and public meetings

are planned at several Alaska locations. To

learn more about the decision and the com-

ment period, please see

http://www2.epa.gov/bristolbay/public-

i n v o l v e m e n t - b r i s t o l - b a y - 4 0 4 c -

process#comments

MILLROCK RESOURCES INC.

announced completion of geophysical sur-

veying on its Alaska Peninsula project.

The survey included 1,140 line kilometers

of high-resolution airborne magnetic and

radiometric data collected over three

prospects of interest: Bee Creek, Mallard

Duck Bay, and Kawisgag. The completed

work was the first of a two-phase summer

program, which is being funded by FIRST

QUANTUM MINERALS LTD. The sec-

ond phase is planned to start in mid-July

and will consist of a geological mapping

and geochemical sampling program and

will focus on the geophysically surveyed

areas, where known porphyry copper

prospects occur.

REDSTAR GOLD CORP announced

commencement of field work program at

its Unga gold project. The phase one field

program is designed to complete detailed

field mapping and sampling of high-grade

gold-silver vein systems in preparation for

diamond drilling. The field program will

examine the highest-priority targets, such

as the Shumagin Vein, where historic shal-

low drilling in the 1980’s intersected sig-

nificant high-grade mineralization which

was confirmed by the company’s 2011

drill program. The vein remains open at

depth and along strike. Other high-priority

targets include the Apollo-Sitka and

Aquila vein systems. Veins will be mapped

in detail and sampled with a focus on

extending known mineralization along

strike, determining the distribution of min-

eralization within vein systems and assess-

ing the geologic structural controls to min-

eralization.

INTERIOR ALASKAFREEGOLD VENTURES LTD.

reported initial results from metallurgical

testing at its Golden Summit project near

Fairbanks. A series of composite samples

from the various areas from the

Dolphin/Cleary resource area were sub-

mitted to SGS CANADA INC. A total of

279 samples of drill core assay rejects

which represented the different areas of

the resource were composited to form 5

sample types: oxide, transition, hornfels-

sulfide, intrusive-sulfide and schist-sul-

fide. Overall gold recoveries were

obtained from standard 48-our bottle roll

tests and 120-hour intermittent agitation

leach tests. Oxide material averaged 88

percent recovery, Transition material aver-

aged 57 percent, Intrusive material aver-

aged 56 percent, and Hornfels-Sulfide

material averaged 45

percent. Standard

bottle roll test work

was carried out on a

variety of grind sizes

however recoveries

did not increase sub-

stantially with finer

grinds, with the

exception of the

transition material

which showed

recoveries of greater

than 70 percent are achievable at a 75

micron grind size. In addition a series of

tests using a variety of methods were com-

pleted, including direct carbon-in-leach,

pressure oxidation - carbon-in-leach, flota-

tion - carbon-in-leach, and flotation- pres-

sure oxidation - carbon-in-leach. The high-

est overall recovery was achieved by pres-

sure oxidation - carbon-in-leach with

recoveries greater than 94.3 percent, and

averaging 98.1 percent under best condi-

tions tested. The combination of flotation –

pressure oxidation – carbon-in-leach

resulted in recoveries of 92 percent.

Although lower recovery than whole ore

pressure oxidation, a significant advantage

would be a much smaller quantity of mate-

rial would need to be treated (approxi-

mately 10 percent would be subject to

pressure oxidation). Cyanide consumption

was lowest under pressure oxidation - car-

bon-in-leach requiring 0.5-0.7 kilograms

of sodium cyanide per tonne. All other

processes averaged one to four kilograms

of sodium cyanide per tonne. Additional

metallurgical testing is planned for the

project, including a series of column tests,

partial oxidation and heap leach amenabil-

ity investigations.

SUMITOMO METAL MINING (85

percent) and SUMITOMO CORP. (15

percent) recently updated future plans for

their Pogo gold mine. In 2013 the mine

produced 10.5 metric tons of gold (about

337,500 ounces), and the partners are pro-

jecting 2014 production of roughly 10.7

metric tons of gold (344,000 oz). The part-

ners also indicated that commencement of

production from the East Deep zone was

planned for the first quarter of this year.

The year-end 2013 resource/reserve esti-

mates at Pogo total 59 metric tons of

reserve and an additional 85 metric tons in

resource for a total of 144 metric tons of

gold (approximately 4.629 million ounces)

in the Liese and East Deep zones. Total

production from commencement of com-

mercial production to year-end 2013 is

2,472,632 ounces of gold at average head

grades of 13-17 grams per metric ton gold

(0.38 to 0.49 oz per short ton gold).

Average mill recovery over life of mine to

date is approximately 87 percent.

BLUESTONE RESOURCES INC.

announced that it had defaulted on a previ-

ously arranged loan with John Robins, the

company’s president and CEO. Both par-

ties have now agreed that the company can

extinguish the debt by transferring to

Robins 100 percent interest in the compa-

ny’s Richardson gold project in the

Richardson Mining District, Alaska.

Immediate plans for the project were not

released.

Freegold Ventures Ltd. announced that

is has acquired the Shorty Creek copper

gold porphyry project from Fairbanks-

based Gold Range Limited. Under the

terms of the 10-year lease, Freegold has

agreed to issue 750,000 common shares to

Gold Range as con-

sideration. Gold

Range will be

responsible for the

annual State of

Alaska mining claim

rents after which

point Freegold will

be responsible. Gold

Range will retain a 2

percent net smelter

returns royalty on

production from the

project. The proper-

ty is located in the Livengood-Tolovana

Mining District approximately 100 road

kilometers (62 miles) northwest of

Fairbanks and 4 kilometers (2.5 miles)

south of all-weather paved Elliott

Highway. Total recorded production from

the district though is approximately

540,000 oz gold. The property was origi-

nally staked as an antimony prospect in the

1970s but was drilled as a copper-molyb-

denum show a few years later. In the mid-

1980s soil sampling identified significant

gold, copper and pathfinder elements.

Limited shallow drilling (6,843 feet in 20

holes) was completed in 1989 and 1990.

Significant drill intercepts include 220 feet

grading 1.22 g/t gold in hole RH89-08

beginning at surface, including 25 feet

grading 4.59 g/t gold and 55 feet grading

1.03 g/t gold in hole RH90-19. A small soil

and rock sampling program (566 soil sam-

ples and 21 rock samples) was completed

in 2005. Shorty Creek bears similarities to

other Tertiary age gold-enriched porphyry

copper deposits in eastern Interior Alaska

and western Yukon Territory. In addition

to the geochemical signature, widespread

alteration and hornfels development with

the occurrence of small bodies of biotite

granodiorite, quartz porphyry and aplite

are present throughout the property.

Freegold is planning a ground geophysical

program in order to evaluate the project

see FREEMAN page 8

TheauthorThe author

Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMANJuly 21. Freeman can be reached by mailat P.O. Box 80268, Fairbanks, AK 99708.His work phone number at AvalonDevelopment is (907) 457-5159 and hisfax is (907) 455-8069. His email is [email protected] and his website iswww.avalonalaska.com.

Regardless of the micro- andmacro-economic details, there is a

growing feeling in the industry,coming from organizations small

and large, that we have weatheredthe worst and that market

conditions and public opinions areslowly but surely improving.

– Curt Freeman, guest columnist

Page 8: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

during the current field season.

UCORE RARE METALS INC.

announced that it has commenced a field

program on its Ray Mountains rare earths

and tin multi-metal property. The company

plans to complete the resampling and

assay testing of key locations recently

reported by the Alaska Geological Survey,

and earlier U. S. Bureau of Mines work in

the area, and examine the geological set-

ting of the Kilolitna River Basin. A number

of samples collected during this effort will

be processed for lab testing in the coming

weeks. Rare earths and associated metals

such as tin have been found to occur in the

alluvial outwash of the Ruby granitic

batholith located in the area. The target

metals are contained in heavy minerals

such as monazite, xenotime, cassiterite,

wolframite and zircon, which are wide-

spread throughout the region.

NORTHERN ALASKANOVACOPPER INC. announced sec-

ond-quarter 2014 financials and a project

update for its Bornite deposit at its Upper

Kobuk Mineral Projects in the Ambler

District. The company’s 2014 field pro-

gram will consist of a re-logging and re-

assaying program of between 10,000 and

13,000 meters of historical drill core from

Bornite. Targeted historical holes are locat-

ed within the extensions of the Upper and

Lower Reef mineralization captured in the

open pit resource estimate released earlier

this year and the up dip portion of South

Reef zone. This effort is a continuation of

last year’s program of re-sampling and re-

assaying which targeted 33 drill holes

comprising 11,067 meters of core original-

ly drilled between 1957 and 1975 and only

selectively sampled by subsidiaries of

Kennecott, the former owner of the prop-

erty. The company also indicated that dur-

ing the first half of 2014, it had focused

efforts on supporting the Alaska Industrial

Development Export Authority in initiat-

ing the permitting process on the Ambler

Mining District Industrial Access Road

which is expected to provide access to

Upper Kobuk Mineral Projects. In late

April 2014, AIDEA’s board of directors

approved a resolution authorizing AIDEA

to proceed with an application for the

Ambler road to the federal agencies that

have jurisdiction over the Ambler road

project and to engage a firm to prepare the

environmental impact statement for the

project under the direction of the federal

agencies. The State of Alaska approved

$8.5 million for use by AIDEA for this

purpose during the 2015 fiscal year.

SOUTHEAST ALASKACOEUR MINING INC. reported sec-

ond-quarter production results from its

Kensington gold mine near Juneau.

Second quarter production is estimated at

28,089 oz of gold, a significant increase

over the 23,162 oz of gold produced in the

second quarter of 2013. The mine

processed 163,749 tons of ore grading 0.18

oz per ton gold during the quarter. Average

recovery was 94.5 percent. Mill through-

put was steady at 1,800 tons per day aver-

age. The increased production was the

result of a 10 percent higher gold grade

during the quarter, including an average

grade of 0.22 oz/t gold during June.

Estimated 2014 total production from

Kensington is 105,000 to 112,000 oz of

gold.

UCORE RARE METALS announced

updated plans for 2014 exploration at its

Bokan – Dotson Ridge rare earth element

project on Prince of Wales Island. The

fully permitted $2.5 million, 5,000-meter

diamond drilling program consists of

2,500 meters of infill drilling; 1,500 meters

of deep targeted drilling to expand the

resource at depth; and 1,000 meters of

geotechnical and groundwater drilling to

support environmental analysis and

planned permitting. ●

WE’RE NOT AFRAID TO GET OUR HANDS DIRTY.

Order now!Available now at the low price of $98.00 for print or $69.00 for online.

907-522-9469 | www.miningnewsnorth.com | [email protected]

8NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JULY 27, 2014

continued from page 7

FEREEMAN

● G U E S T C O L U M N

We cannot hold our breath over Prop OneIn the short run, the measure is about oil taxes; but in the long run, its passage would affect every aspect of Alaska’s future.

BY J. P. TANGENSpecial to Mining News

I have long mused over the difference

in how people solve problems. Every

time we are confronted with an election,

the debate resurfaces. One would sup-

pose that individuals trained in analytical

thinking would be inclined to reach con-

clusions lineally, consistent with the

Socratic syllogism in which conclusions

are based upon facts. In the course of my

career, I have long dealt with individuals

who are trained in the “hard” sciences,

such as geologists and engineers. They

tend to base their judgments on the the-

sis that “if you knew the facts as I know

the facts, you would come to the same

conclusion that I have come to.” This,

of course overlooks the reality that the

vast percentage of the electorate vote,

and act, on the theory that facts are con-

fusing, and are totally irrelevant to the

decision-making process.

It is often said that the optimist sees

the glass as half full, the pessimist sees

the glass as half empty and the engineer

sees the glass as too big for the job. The

point being that all see the same glass,

and all are correct in our conclusions, but

the perspective leads to a vastly different

perception.

I was recently struck by the report

from a legislative candidate who, in

going door-to-door, was told by a con-

stituent that he did not apply for

Permanent Fund dividends, because oil

companies “pillage” Alaska. Clearly,

there are many sound arguments for

declining a PFD – it is an entitlement pro-

gram that is not needs-based, for instance

– and there are arguments to support the

PFD – it keeps the management of state

money on the radar screen of the citizen-

ry; however, it is a long stretch to get

from pillage to an annual check. The div-

idend, is based on the earnings of the

Permanent Fund and is at least one step

away from anything the oil companies

do, and of course, the oil companies are

simply not allowed to pillage.

Globally speaking, Europe is in crisis

(again) because the would-be Tsar of

modern Russia is using his hand on the

oil spigot to deter sanctions over the

devolution of Ukraine. Arguably,

America could soon become the energy

source that protects millions of central

Europeans from re-emergent tyranny.

In recent years, through evolving tech-

nological developments, the United

States has slowed

its slide toward

dependence on for-

eign oil sources.

Alaska, however, is

always out of step

with the rest of the

nation, as illustrated

by the pending bal-

lot on Proposition

One. This measure

would cause the

state to revert to the

ACES tax prescrip-

tion which demonstrably inhibited oil

exploration while it was in effect; unfor-

tunately, odds favor this measure passing

narrowly.

In order to support Proposition One or

any other attack on Alaska oil production,

a person has to be deaf, dumb and blind to

the fact that oil production emoluments

pay the bulk of Alaska’s bills and the

availability of Alaska oil in the future

conceivably may have implications for

our free-world allies.

Passage of Proposition One undoubt-

edly will lead to reduced oil production in

Alaska, less tax revenue, fewer public

services and most significantly to some of

us who are interested in mining, the cost

of delivering energy to remote projects

increasing, making those projects less

attractive.

Chaos theory

teaches us that one

cannot capture a

butterfly without

putting the whole

world at risk of

some unintended

consequence. For

our dear friend who

is concerned about

oil companies pil-

laging Alaska, per-

haps his glass just

isn’t the right size. Every breath he takes

results in carbon dioxide entering into the

atmosphere, contributing to the green-

house effect and ultimately global warm-

ing. Should the oil industry be driven out

of Alaska by unbearable taxes, we may all

be grateful for his incremental contribu-

tion toward a warmer climate, lest we

freeze in the dark. ●

Passage of Proposition Oneundoubtedly will lead to reducedoil production in Alaska, less tax

revenue, fewer public services andmost significantly to some of us

who are interested in mining, thecost of delivering energy to remoteprojects increasing, making those

projects less attractive. – J.P. Tangen, guest columnist

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.

Page 9: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

● A L A S K A

Global miners explore Alaska’s InteriorAs Sumitomo, Newmont search for gold near Pogo, MMG seeks nickel in the Wrangellia and a mystery metal north of the Yukon River

BY SHANE LASLEYMining News

A group of diverse global-scale mining

companies hailing from Australia,

Japan, and the United States are quietly

exploring a relatively small region of

Alaska’s Interior.

Two of these international players –

Sumitomo Metal Mining and Newmont

Mining Corp. – are seeking gold in the

Pogo region of the Tintina Gold Belt.

Melbourne-based MMG Ltd., on the other

hand, is seeking nickel in the Wrangellia

Terrane, a promising band of rocks imme-

diately south of the legendary gold

province.

Together, these companies accounted

for more than US$15.5 million of explo-

ration in 2013 and are whispered to be car-

rying out programs topping US$20 million

this year.

Exploring East DeepThe largest and most widely known of

these exploration programs is being con-

ducted by Sumitomo Metal Mining Pogo

LLC – a joint venture between Japanese

firms Sumitomo Metal Mining Company

(85 percent) and Sumitomo Corp. (15 per-

cent) – on the Pogo Mine property located

roughly 60 miles (100 kilometers) south-

east of Fairbanks.

With a budget of US$17 million, the

Pogo program is not only the largest in this

region of Alaska, but will likely be the

largest exploration spend in the Far North

State during 2013.

In recent years, the Tokyo-based owners

of Pogo have had great success in finding

new deposits of high-grade gold in the

shadow of the mill at the underground

operation.

The most significant of these finds is

East Deep, a zone of high-grade gold min-

eralization immediately northeast of the

processing facilities at Pogo.

First drilled in 2010, East Deep has been

the target of increasingly expansive drill

programs at Pogo in the ensuing years.

Since mining began at Pogo in 2006, the

Liese zone – three flat-lying, parallel quartz

veins that carry high-grade gold – has been

the primary source of ore for the mill.

East Deep is believed to be an extension

of the Liese zone that was separated by a

gold-barren diorite roughly 95 million

years ago.

In 2012, Sumitomo drove two drifts

through some 300 meters of diorite wedged

between these now separate zones. The

drifts were used to complete 24,596 feet of

definition drilling at East Deep.

In addition to providing a platform for

underground drilling, these drifts provided

access for a 12,000-ton bulk sample of East

Deep ore that was processed during the

third quarter of 2013.

To mine the high-grade gold at East

Deep, Sumitomo developed the 2150 por-

tal. This year, ore from East Deep makes up

a portion of the feed for the mill at Pogo.

Expanding East Deep northwest toward

the North Zone, a group of higher grade

vertical veins that are believed to be feed-

ers that provided a conduit to deliver gold

mineralized fluids to the Liese and East

Deep zones, was a primary objective of the

2013 surface drill program at Pogo.

In addition to expanding East Deep to

the hypothesized source of gold-bearing

fluids, this drilling discovered two new

North Zone veins, NZ3 and NZ4.

Focusing on North ZoneSMM Pogo told Mining News that the

expansion of these newly found North

Zone veins is the primary focus of current

drilling at the project.

“These veins are significant and are

most likely the feeder zones for the main

ore body and probably continue down for

considerable depth. In addition, drilling

this year continues to expand these vein

resources along their strike length,” Lorna

Shaw, spokeswoman for SMM Pogo,

explained in a recent email. “The continu-

ity of the North Zone mineralization is suf-

ficient that part of the resource will most

likely become part of the reserve at the end

of the year.”

Roughly US$5 million of the 2014

exploration budget at Pogo is being invest-

ed in driving two drifts from the under-

ground workings at East Deep to the North

Zone. These exploration drives will pro-

vide a better angle for drill the vertical

North Zone veins as well as provide a plat-

form for defining the northwest expansion

area of the East Deep zone.

While northerly expansion of East Deep

continues, a large focus of this year’s sur-

face drilling is on the expansion of Pogo

South, an exploration target located imme-

diately south of the Liese zone.

“There are two helicopter fly rigs

drilling at South Pogo for the entire field

season. This is augmented by another drill

rig drilling from underground in the most

southerly drift inside the mine,” explained

Shaw. “So far, we have defined three sepa-

rate veins in this area that appear to be

extensions of the Liese veins in the mine.

This drilling will add to the resource at

South Pogo and part of this resource may

be converted to reserve by the end of year.

The 4021 zone, a known gold deposit

located roughly 2.5 miles (four kilometers)

southeast of Liese, furthers the southward

expansion potential.

During the spring Alaska Miners

Association convention in Fairbanks,

SMM Pogo General Manager Chris

Kennedy explained that 4021 has shifted to

the east along a major fault separating it

from the Liese zones. If the geological

units are lined up to their original positions,

4021 is on strike with the Liese zone. This

opens up the prospect of gold mineraliza-

tion between these two known zones.

For right now, however, the Pogo explo-

ration team has plenty of promising

deposits surrounding the mill to follow up

on.

“The resource at 4021 stands like a bea-

con on the horizon and serves as an indica-

tor that the mineralization extends out at

least that far. Eventually, we will get there

as we systematically expand the main Pogo

deposit in that direction,” explains Shaw.

“In the end, we are assuming that we

can replace the number of ounces going

through the mill each year by finding new

reserves and converting known resource

into reserves by additional drilling,” she

added.

Beyond PogoA few miles beyond the southeastern

exploration horizon of Pogo proper, sub-

sidiaries of Sumitomo Metal Mining (95

percent) and Sumitomo Corp. (5 percent)

continue a broader search for high-grade

gold on a group of claims that are part of

the Stone Boy project.

The Stone Boy partners have been

exploring the larger Pogo district since

1991. This includes recent drilling on the

Monte Cristo property, located roughly 40

miles (65 kilometers) west of Pogo, and the

Ink claims situated a few miles southeast of

the mine.

Under contract with the Stone Boy part-

ners, Pathfinder Mineral Services managed

a US$2 million exploration program on the

Stone Boy project that included 18,447 feet

of drilling in 21 holes on these properties;

as well as rock and soil sampling.

Roughly US$429,000 of the 2013 pro-

gram was allocated to ongoing exploration

at Monte Cristo.

The Naosi Zone, a gold-silver-antimony

prospect within the larger Monte Cristo

properties had previously been one of the

primary exploration targets of the Stone

Boy project. In 2011, the partners released

results from drilling Naosi, including drill

intercepts of 7.8 grams per metric ton gold,

19.7 g/t silver and 0.1 percent antimony

over 7.92 meters; and 22.83 meters grading

4.2 g/t gold, 48 g/t silver and 0.17 percent

antimony.

Last November, however, Sumitomo

Metal Mining and Sumitomo Corp. said

they have decided to put exploration at

Naosi on hold in favor of other prospects at

the Monte Cristo property as well as other

properties that make up the district-scale

Stone Boy project.

The Ink claims, located about 15 miles

(24 kilometers) southeast of Pogo, were the

9NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JULY 27, 2014

see GLOBAL page 11

To mine the high-grade gold at East Deep, Sumitomo Metal Mining Pogo has developedthe 2150 portal. This year, ore from the new zone makes up a portion of the feed for themill at Pogo.

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Page 10: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

● C A N A D A

High court weighs in on aboriginal claimTitle declared in “Tsilhqot’in Nation v. British Columbia” on tract of Crown lands in western province has nationwide implications

BY ROSE RAGSDALEFor Mining News

T he Supreme Court of Canada June

26 released its highly anticipated

decision in “Tsilhqot’in Nation v. British

Columbia.”

Called “ground-breaking” by

observers, the judgment by Canada’s

highest court granted a declaration of

Aboriginal title over a tract of Crown

lands to the Tsilhqot’in Nation of the west

central interior of British Columbia. It is

the first time in Canadian history that

Aboriginal title has been definitively

established and affirmed.

The civil action claim asserted by the

Tsilhqot’in First Nation in 2002 involves

lands in central British Columbia west of

Williams Lake. At a lengthy hearing of

339 days over five years, the key issue

was whether the Tsilhqot’in First Nation

was entitled to Aboriginal title to all or

part of the claim area.

Justice Vickers of the British

Columbia Supreme Court found that

because the Tsilhqot’in asserted an “all or

nothing” title claim, a declaration of title

could not be granted, as they exclusively

occupied some areas but not others. The

findings were without prejudice to the

Tsilhqot’in First Nation’s ability to pur-

sue specific title claims at a later date.

The trial court also held that, to the

extent Aboriginal title was established,

British Columbia no longer had jurisdic-

tion under the Forests Act and related leg-

islation to grant harvesting rights and

other authorizations, under the doctrine

of inter-jurisdictional immunity.

The key difference, attorneys say,

between the BC court decisions was the

extent to which the First Nation claimants

need to establish continuous and exclu-

sive occupation over defined areas of

land. The trial decision, recognizing the

nomadic nature of this First Nation’s

existence over time and the seasonal

aspects of some of the land’s uses, adopt-

ed what was considered a more flexible

approach to the test for establishing

Aboriginal title. By contrast, the BC

Court of Appeal suggested the test

required a higher threshold of continuous

and exclusive physical occupancy of

defined areas in order to prove a claim,

describing the requirement as “intensive

presence at a particular site.” It explicitly

rejected a broad “territorial” approach to

Aboriginal title, finding it would be “anti-

thetical to the goal of reconciliation.”

The Supreme Court favored the BC

court’s reasoning and granted the declara-

tion of Aboriginal title to the broader ter-

ritory asserted by the Tsilhqot’in. As did

the trial court, the

Supreme Court clari-

fied the test set out in

its 1997 Delgamuukw

ruling, which held

that Aboriginal title

can be found if the

Aboriginal group

proves sufficient,

continuous, and

exclusive occupation.

Sufficiency entails regular use of territo-

ries. Continuity is relevant when present

occupation is relied on as proof of pre-

sovereignty occupation. Exclusivity

involves an intention and capacity to con-

trol the land.

The Supreme Court’s approach high-

lighted how the characteristics of the par-

ticular claimant group and the land

claimed could affect the existence of title.

Despite post-Delgamuukw jurisprudence

suggesting the need for a site-specific

approach to determining “Aboriginal

Rights,” the Supreme Court preferred a

broad “territorial” approach to determin-

ing title.The Supreme Court clarified that

Aboriginal title is an independent, benefi-

cial legal interest, giving rise to a fiduci-

ary duty on the part of the Crown. A dec-

laration of Aboriginal title confers the

right to use and control the land and to

reap the benefits flowing from its

resources. It allows for the use of the land

in a way that benefits the collective as a

whole, including future generations.

In allowing the appeal of the

Tsilhqot’in from the decision of the

British Columbia Court of Appeal in

William v. British Columbia,2 the

Supreme Court has: (a) clarified the law

as it pertains to the establishment of

Aboriginal title and the nature of such

title; (b) addressed how the establishment

of Aboriginal title affects the Crown’s

duty to consult with Aboriginal peoples;

and (c) clarified how provincial (and fed-

eral) legislation may apply to lands sub-

ject to Aboriginal title, and if necessary,

infringements may be justified.

Tsilhqot’in is a decision with potential

implications for all parties involved in

resource development

in British Columbia

and across Canada:

Aboriginal groups,

governments and pro-

ponents. Tsilhqot’in

does not alter the

Crown’s duty to con-

sult and accommo-

date, which continues

to apply wherever the

Crown contemplates conduct that might

adversely affect potential or existing

Aboriginal rights or title. However, as a

practical matter, provincial and federal

governments will need to dedicate greater

resources to assist them in determining

the strength of Aboriginal claims to title

when carrying out consultation.

Transparency and sharing of information

among Aboriginal groups, governments

and proponents will be key to assessing

the potential impacts of project activities

to Aboriginal title and ensuring that the

Crown’s obligations to Aboriginal groups

are met. Where a project may infringe on

Aboriginal title, governments and propo-

nents will be motivated to reach agree-

ments with potentially impacted

Aboriginal groups in order to secure cer-

tainty around the land base for the devel-

opment of resource projects.

20 years of litigationThe litigation concerns the

Tsilhqot’in’s claims for Aboriginal rights

and title in two areas known as

Tachelach’ed and the Trapline Territory

(Claim Area), stemming from decisions

of the Provincial Crown to grant a forest

license under the Forest Act in 1983 and

a cutting permit in 1989 to Carrier

Lumber Ltd. to log in the Trapline

Territory. The Claim Area was confined

to a sparsely populated area that consti-

tuted about five percent (a total of about

3,000 people) of the Tsilhqot’in’s asserted

traditional territory.

In brief, at the trial level, Justice

Vickers of the BC court was tasked with

considering whether:

The Tsilhqot’in held Aboriginal title

and/or Aboriginal rights to all or part of

the claim area;

The provincial Forest Act applied to

Aboriginal title lands; and

The issuance of forest licenses and

other authorizations unjustifiably

infringed the Tsilhqot’in’s rights in the

claim area.

The BC Supreme Court found that

there was sufficient evidence of occupa-

tion by the Tsilhqot’in to support a claim

for Aboriginal title in certain parts of the

claim Area, but refrained from granting a

declaration of Aboriginal title as a matter

of procedural fairness.

The BC Court of Appeal upheld the

lower court’s decision and dismissed the

plaintiff’s claims for Aboriginal title,

finding that a “territorial claim” was not a

viable foundation for a claim of

Aboriginal title. In considering whether

Aboriginal title was made out on the pres-

ent facts, the appeals court applied a nar-

rower test based on site-specific occupa-

tion of lands, requiring proof of intensive

use of definite tracts of land within rea-

sonably defined boundaries at the time of

European sovereignty.

The Court of Appeal concluded that

there was insufficient evidence of a regu-

lar presence or intensive occupation of

specific tracts of land in the claim area

and declined to make a declaration of

Aboriginal title in respect of the claim

area or any specific sites within the claim

area. The appeals court was of the view

that the Tsilhqot’in’s culture and tradi-

tions could still be fully respected without

recognizing Aboriginal title over the

claim area, and affirmed the Aboriginal

rights of the Tsilhqot’in in the area.

A different viewThe Supreme Court of Canada

allowed the Tsilhqot’in’s appeal and

made a declaration of Aboriginal title

over the claim area, finding that the trial

court had correctly applied the test for

Aboriginal title and correctly found that,

on the evidence, the Tsilhqot’in had

established Aboriginal title over the claim

area. Canada’s high court noted that the

procedural reasons that had originally

precluded a declaration of title at the trial

level were no longer relied on by the

province and were not at issue. The

Supreme Court further declared that

British Columbia had breached its duty to

consult with the Tsilhqot’in in respect of

the issuance of logging licenses under the

Forest Act.

In concluding that the test for

Aboriginal title was met, the high court

also clarified the test based on the princi-

ples it had set out in its 1997 decision,

“Delgamuukw v. British Columbia.” In

summary, “Delgamuukw” established

that Aboriginal title to land is based on

“occupation” of such lands prior to the

10NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JULY 27, 2014

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Page 11: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

target of the remaining $1.6 million of

exploration on the Stone Boy Project. The

program included 16,210 feet of drilling in

12 holes, resulting in 2,129 core samples. In

addition to drilling, 787 soil samples and 48

rock samples were collected on the Ink

claims during 2013.

Though precise quantities of gold dis-

covered have not been disclosed, assess-

ment reports state that results from the

drilling indicate the presence of gold and

pathfinder minerals associated with quartz

veins cutting fine-grained granodiorite

intrusive rocks.

Going forward, the Sumitomo partners

intend to continue exploration activities in

the Stone Boy project in a quest to discover

a new gold mine to follow operations at

Pogo. This includes a robust exploration

program in 2014.

Sumitomo, however, is not the only

global mining company that is interested in

this segment of the Tintina Gold Belt that

trends southeast from Pogo Mine.

Over the course of 2012 and 2013,

Newmont Mining Corp. staked two blocks

of claims – Healy and Healy River – imme-

diately south of Stone Boy’s Ink property.

Newmont North America Exploration

Ltd., the North American exploration arm

of the Colorado-based global gold miner,

completed at least $470,000 of early stage

exploration on its Healy claims.

This reconnaissance-stage program

included geological mapping and a geo-

chemical program of 4,306 soil and 326

rock chip samples.

Mining News was unable to confirm

whether Newmont is conducting explo-

ration at Healy this year, but the fresh

claims staked in 2013 indicate the company

has plans to continue its investigation of this

region.

Nikolai nickelAs part of its global search for base

metal deposits, MMG Ltd., owner of the

famed Century zinc mine in Australia, has

been quietly seeking nickel in Alaska. This

includes more than US$2 million spent on

exploration in 2013 and a follow-up pro-

gram this year.

Headquartered in Melbourne and listed

on the Hong Kong Stock Exchange, MMG

is looking beyond exploration at and around

its mines in Australia, Asia and Africa.

“In general, 2013 saw a shift of focus

from mine district exploration centered on

MMG’s operating assets with increasing

exploration maturity, to new discovery

exploration targeting transformational dis-

covery,” the company explained in its annu-

al report.

Toward this end, MMG USA

Exploration LLC, a subsidiary of Australia-

based MMG Ltd., invested roughly

US$1.58 million on nickel exploration on

three large blocks of state of Alaska mining

claims that follow an arc south of the Alaska

Range. These claim groups include

Amphitheater, which borders Pure Nickel’s

Man property to the south and west; Butte

Creek, located about 40 miles (65 kilome-

ters) southwest of Amphitheater; and

Talkeetna, a block of claims roughly 30

miles (about 48 kilometers) further along

this arc that coincides with the Wrangellia

Terrane, a band of rocks known to host

nickel-platinum group metal deposits that

arcs from Southcentral Alaska through

southern Yukon Territory and along the

coast of British Columbia.

The 2013 program at MGM’s properties

in the Alaska portion of Wrangellia, collec-

tively known as the Nikolai project, includ-

ed geophysical surveys, mapping, rock

sampling and 1,188 meters of core drilling

in six holes.

The Talkeetna property accounted for

roughly half of MMG’s reported 2013

Nikolai project expenditures. The work at

this property located about 100 miles north-

west of Anchorage involved an early-staged

program of compiling geological informa-

tion on the property, mapping and rock sam-

pling.

In addition to a similar reconnaissance

level mapping and sampling program, the

company commissioned a 1,817-line-kilo-

meter helicopter-borne versatile time-

domain electromagnetic (VTEM) geophys-

ical survey for Amphitheater, the claims

bordering the Man nickel-PGM-copper

property.

Bluff, a block of claims that blankets a

roughly 13-mile by five-mile (21 kilometers

by eight kilometers)section of mountains

stretching southwest of the Denali

Highway, was the target of drilling last year.

Beyond seeking nickel along the south-

ern slopes of the Alaska Range, MMG

invested at least US$550,000 on early-stage

exploration on its Twenty Mile and Squaw

Creek projects in the Rampart Mining

District, some 100 miles (160 kilometers)

northwest of Fairbanks.

Though the Rampart region is not

renowned for its nickel potential, placer

gold and tin have been mined from area

streams since Alaska’s gold rush days at the

dawn of the 20th Century. More recently,

geologists have been investigating the rare

earth element potential of this section of

Interior Alaska.

The 2013 program on these claims locat-

ed north of the Yukon River included a

2,396-line-kilometer helicopter-borne ver-

satile time-domain electromagnetic survey,

mapping and rock sampling.

MMG continues exploration at its

Nikolai project in 2014. ●

11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JULY 27, 2014

continued from page 9

GLOBAL

assertion of European sovereignty. The Aboriginal

claimant must successfully demonstrate that such occu-

pation possesses three characteristics: The occupation

must be sufficient (at the time of European sovereignty),

continuous (where present occupation is relied upon),

and exclusive (historically).

The Supreme Court of Canada disagreed with the

Court of Appeal’s views that occupation sufficient to

ground Aboriginal title should be confined to specific

settlement sites, and further disagreed that evidence of

intensive use of a definite tract of land was required.

Rather, the high court held that Aboriginal title may

extend to tracts of land that were regularly used for hunt-

ing, fishing, trapping or foraging and over which the

Aboriginal group exercised effective control at the time

of European sovereignty. The high court held that the

narrow approach put forth by the Court of Appeal would

be inconsistent with the reality of the semi-nomadic

lifestyle of groups like the Tsilhqot’in.

The Supreme Court of Canada held that an assess-

ment of the sufficiency of occupation is a context-spe-

cific inquiry that requires a culturally sensitive approach.

It must be approached from both the common law per-

spective (e.g. concepts of possession and control) and the

Aboriginal perspective (including the laws, practices,

customs and traditions of the Aboriginal group). The

Aboriginal group must demonstrate that it has historical-

ly acted in a way that would communicate to third par-

ties that it held the land for its own purposes, and provide

evidence of a “strong presence on or over the land

claimed” indicating that the land was controlled by, or

under the exclusive stewardship of the Aboriginal group.

The Supreme Court noted that

continuity of occupation between

present and pre-sovereignty occu-

pation does not require proof of an

unbroken chain of continuity

between present and past prac-

tices, but rather that the present

occupation must be rooted in pre-

sovereignty times. This is deter-

mined on the facts. Exclusivity of

occupation requires proof that the

Aboriginal group had the “inten-

tion and capacity to retain exclusive control” over the

lands, and this also must be approached from the com-

mon law and Aboriginal perspective.

Aboriginal rights?The Supreme Court concluded that, “Aboriginal title

is what it is — the unique product of the historic rela-

tionship between the Crown and the Aboriginal group in

question.” Aboriginal title is a burden on the underlying

title asserted by the Crown at sovereignty, giving rise to

a fiduciary duty on the part of the Crown. While other

forms of property ownership (e.g. fee simple) may assist

in understanding aspects of Aboriginal title, they do not

dictate precisely the nature of Aboriginal title.

The high court held that Aboriginal title is a beneficial

interest in the land, and confers on the Aboriginal group

holding it rights that are similar to those associated with

fee simple ownership: Rights to determine how the land

is used, enjoyment and occupancy, possession, the right

to the economic benefit of such uses, and the right to pro-

actively manage the land.

However, there are also limits on

such protected uses of Aboriginal

title lands. As a result of the col-

lective nature of Aboriginal title,

use of the land must be consistent

with the nature of the group’s

attachment to the land and lands

must not be encumbered in ways

that would deprive future genera-

tions of the Aboriginal group

from enjoying the benefit of the

land. Further, Aboriginal title lands cannot be alienated

except to the Crown, which maintains underlying title to

the land.

The Supreme Court of Canada distinguished between

the obligations of the Crown towards Aboriginal groups

before and after Aboriginal title has been established.

Prior to the establishment of Aboriginal title, the well-

known principles of consultation and accommodation of

Aboriginal interests set down by the Supreme Court in

“Haida Nation” continue to apply. Where the Crown has

real or constructive knowledge of the potential existence

of Aboriginal title, and contemplates conduct that might

adversely affect it, the Crown must consult with the

Aboriginal group, and where appropriate, accommodate

the Aboriginal group. Since Aboriginal title is the

strongest form of right, a strong claim of Aboriginal title

continued from page 10

COURT

see COURT page 12

“Once title is established, it may benecessary for the Crown to reassess

prior conduct in light of the newreality in order to faithfully

discharge its fiduciary duty to thetitle-holding group going forward.”

– “Tsilhqot’in Nation v. British Columbia,”Supreme Court of Canada

Page 12: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

12NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JULY 27, 2014

Fort Knox and Sam Kirstein, the director of Fairbanks Community Food Bank, are partners in improving our community.

At Fort Knox, stewardship means helping our neighbors and community, and protecting our land and water resources, too. That’s why we’re committed to the food bank.

Sam modestly says, “Good happens in the community, and I get to see it happen.” We like to think that Sam is one of the many generous individuals in the community out there making good things happen every day.

And we’re mighty glad she does.

Fort KnoxOur People. Our Community.

Fairbanks Gold Mining Inc.A Kinross company

may attract more stringent duties on the part of the

Crown.

However, once Aboriginal title has been proven, the

Supreme Court held that given the exclusive rights con-

ferred to an Aboriginal group by Aboriginal title, “gov-

ernments and others seeking to use the land must obtain

the consent of the Aboriginal title holders” in order to

proceed with development. If the Aboriginal group does

not consent, the government’s only recourse is to estab-

lish that the proposed incursion on the land is justified

under section 35 of the Constitution Act, 1982, on the

basis of the broader public good. In order to do so, the

Crown must demonstrate

that:

It discharged its procedur-

al duty to consult and accom-

modate;

Its actions were backed by

a compelling and substantial

objective; and

The governmental action

is consistent with the

Crown’s fiduciary obligation

to the Aboriginal group.

The Supreme Court of

Canada adopted the observa-

tions of Lamer C.J. in

Delgamuukw regarding the types of compelling and sub-

stantive legislative objectives that might justify the

infringement of Aboriginal title, namely: “The develop-

ment of agriculture, forestry, mining, and hydroelectric

power, the general economic development of the interior

of British Columbia, protection of the environment or

endangered species, the building of infrastructure and

the settlement of foreign populations to support those

aims...” The high court noted that justification must be

considered from both the Aboriginal perspective as well

as the broader public perspective, consistent with the

goal of reconciliation.

Resource development projects are routinely faced

with asserted but unproven Aboriginal title claims. The

Supreme Court noted that as a practical matter, as the

strength of a claim increases, the required level of con-

sultation and accommodation will correspondingly

increase. Further, the high court noted that:

“Once title is established, it may be necessary for the

Crown to reassess prior conduct in light of the new real-

ity in order to faithfully discharge its fiduciary duty to

the title-holding group going forward. For example, if

the Crown begins a project without consent prior to

Aboriginal title being established, it may be required to

cancel the project upon establishment of the title if con-

tinuation of the project would be unjustifiably infringing.

Similarly, if legislation was validly enacted before title

was established, such legislation may be rendered inap-

plicable going forward to the extent that it unjustifiably

infringes Aboriginal title.”

The Supreme Court further

commented that governments

and individuals proposing to

use or exploit land can avoid a

charge of infringement or fail-

ure to adequately consult by

obtaining the consent of the

interested Aboriginal group.

The Supreme Court

acknowledged that up to this

point, the law had been

unclear regarding whether a

valid provincial law could

ever justifiably infringe an

Aboriginal right, or whether

such justification was reserved for the federal govern-

ment due to its constitutional jurisdiction. Canada’s high

court also noted inconsistencies between earlier judg-

ments and the fact that this issue had never been explic-

itly resolved. In Tsilhqot’in, however, the Supreme Court

has now provided a clear test to be applied to all govern-

ment action (both federal and provincial) that may

infringe Aboriginal rights or title.

ImplicationsObservers say this decision represents an important

step in the development of Aboriginal rights litigation in

Canada. While the decision is a significant victory for

Aboriginal groups, it does not fundamentally alter the

law in Canada. Since the Supreme Court of Canada’s

1973 decision in ‘Calder,’ the law has recognized the

possibility of Aboriginal title. It has long been a question

of when, not if, an Aboriginal group would be successful

in proving Aboriginal title.

It is important to note that there remains a high thresh-

old to meet the test to establish Aboriginal title.

Moreover, once Aboriginal title is established, it does not

create a blanket prohibition on the government from

using the land, provided that the government can justify

the incursion. The Supreme Court’s adoption of Lamer

C.J.’s observations in “Delgamuukw” regarding the

types of uses that may be justified should be a positive

sign for industry proponents.

From a practical perspective, proponents of resource

projects can expect an increased focus by governments

on the strength of an Aboriginal claim to title as part of

the consultation process. For projects on lands subject to

a strong case for Aboriginal title, governments are likely

to seek to further insulate their decisions by carrying out

more extensive consultation and accommodation discus-

sions with Aboriginal groups. There will almost certain-

ly be increased pressure on both governments and pro-

ponents to reach agreements on resource projects that

may infringe on Aboriginal title. Where an agreement

cannot be reached, proponents can expect governments

to engage in a much more deliberate balancing of the

public policy rationale for pursuing resource develop-

ment.

“While questions remain, this decision provides addi-

tional clarity in a critical area of law. It affirms the scope

of provincial jurisdiction and resolves a long-standing

question about the circumstances in which government

can justifiably infringe Aboriginal title. Finally, the deci-

sion provides further guidance to government,

Aboriginal groups and proponents at an important time

for the development of natural resources in Canada,”

attorneys say.

The Supreme Court’s decision will create challenges

for governments and proponents seeking to authorize

development projects on Aboriginal lands. It clarifies, if

continued from page 11

COURT

see COURT page 19

Government has the duty to consult withFirst Nations, but members of AME BC

recognize that respectfully engaging withFirst Nations early and often creates

mutual understanding, trust and respect.We have seen that mutual benefits can

often occur when this approach is taken byeveryone involved, including industry, First

Nations and government.” –David McLelland, chairman, Association for Mineral

Exploration British Columbia

Page 13: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

13NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JULY 27, 2014

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14NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JULY 27, 2014

● A L A S K A

Ucore advances Bokan, eyes Ray MountainsAs the SE Alaska rare earths project closes in on permitting, Ucore begins to explore a placer REE-tin property in the Interior

BY SHANE LASLEYMining News

U core Rare Metals Inc. has field programs under-

way at both the Bokan-Dotson Ridge rare earth

elements project in Southeast Alaska and its Ray

Mountain REE-tin project in the Interior region of the

state.

Work at Bokan Mountain is focused on collecting the

last bits of information needed to complete a plan of

operation that can be submitted for permitting and final-

ize a feasibility study sched-

uled for delivery in 2015.

As a potential domestic

source of a suite of heavy rare

earth elements that many con-

sider minerals critical to the

United States, including dys-

prosium, terbium, yttrium and

europium, Ucore’s Bokan

Mountain project in Southeast Alaska has garnered

attention from officials on both the state and national

level.

The most recent expression of this government sup-

port is Senate Bill 99, legislation that authorizes the

Alaska Industrial Development and Export Authority to

issue up to US$145 million in bonds to fund infrastruc-

ture and construction at Ucore Rare Metals’ Bokan

Mountain.

“Bokan represents an unsurpassed opportunity for

Alaska to furnish materials of critical importance to

American national defense, energy consumption and

competitiveness in high-tech applications at a world

level, and Alaska lawmakers have recognized this,”

Ucore President and CEO Jim McKenzie said as the bill

was wending its way through the Legislature.

During a June ceremony held in Ketchikan, Alaska

Gov. Sean Parnell endorsed the legislation by signing it

into law.

“The official signing of SB99 is an important mile-

stone for our company and for the people of Alaska,”

said McKenzie. “Bokan will advance Alaska’s econom-

ic agenda, and ensure a secure domestic supply line of

rare earth metals for the American market.”

Before AIDEA is willing to offer up any funding

under the provisions provided

by the legislation, Ucore must

convince the quasi-state-

owned agency that developing

a mine at Bokan and building

an associated REE processing

facility will pay dividends on

the capital investment.

In mid-July, Ucore kicked

off a 5,000-meter drill program that aims to gather the

final bits of geological and geotechnical data needed for

an upcoming feasibility study, just the level of analysis

needed for the AIDEA board of directors to undertake its

due diligence on the viability of investing in the REE

project.

“It’s great to see this program get underway as one of

the final steps required to trigger our forthcoming feasi-

bility study,” said Ucore COO Ken Collison.

Feasibility studiesIn its trek to get Bokan in operation as early as possi-

ble, Ucore has hired SRK Consulting to compile baseline

data and qualitative results from ongoing engineering

studies to produce a formal plan of operations for the

rare earths project. This plan will be submitted to the

U.S. Forest Service to facilitate delivery of an

Environmental Impact Statement and initiate the review

process set out in the National Environmental Policy

Act.

This work includes:

The continued collection of baseline water samples,

which began in 2012;

Construction of a meteorological station to collect

weather data required for the permitting process;

Kinetic testing of representative samples of drill core

required to support state and federal permitting initia-

tives; and

Barrel tests containing samples of sorted rock to

assess water quality runoff for the planned rock manage-

ment facility, which will contain rock rejected from the

x-ray sorting equipment planned for the Bokan opera-

tion.

This summer’s work also will inform the upcoming

feasibility study, which builds upon a 2012 preliminary

economic assessment that anticipates an underground

mine feeding 1,500 tons of ore to a 750-metric-tons-per-

day mill and a state-of-the-art processing facility at

Bokan Mountain.

This operation is anticipated to produce 2,250 metric

tons of rare earth oxides per year during the first five

years of full production; including an annual output of

95 metric tons of dysprosium oxide, 14 metric tons of

terbium oxide, and 515 metric tons of yttrium oxide.

The ability to run a mill half the size of the ore being

mined is due to an x-ray sorter that will reject half the

feed as REE-barren waste prior to milling. By halving

“Ucore is increasingly a standalone storyas the prospective go-to for super-metalscritically required in U.S. military, green-

tech and high tech arenas.” – Jim McKenzie, president and CEO, Ucore Rare Metals Inc.

see BOKAN page 18

A preliminary assessment completed in 2012 anticipates the Bokan Mountain project in Southeast Alaska will produce 2,250 metric tons of rare earth oxides per year during the first fiveyears of full production; including an annual output of 95 metric tons of dysprosium oxide, 14 metric tons of terbium oxide, and 515 metric tons of yttrium oxide.

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Page 15: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

15NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JULY 27, 2014

mining newsI would like to introduce you to North of 60 Mining News, a monthly

supplement to Anchorage-based Petroleum News. North of 60 Mining News covers the mining industry in the Arctic, focusing onAlaska and northern Canada. It is inserted in Petroleum News the

fourth week of every month.

Mining News carries the latest news in the industry, as well as features on the most important projects and issues, such as new

technology, environmental policy, aboriginal rights and mining legislation. It is the only newspaper that covers this far northernregion in such depth, and our reporters frequently travel to see

mining projects for themselves and to attend major mining conferences.

In addition to news and features, we publish regular columns byFairbanks geologist Curt Freeman and Anchorage attorney J.P.Tangen, a specialist in mineral law. A subscription to the paperincludes access to the online archive of thousands of mining and

petroleum articles from past years.

The most recent addition to North of 60 Mining News is the weeklyonline newsletter, keeping you up to date on the most important

news affecting the industry.

North of 60 Mining News is a newspaper that no company involved inthis region’s mining industry should be without. It’s your paper, for

your industry. We would like to hear from you!

If you have any questions about advertising, subscribing, or if would like additional information please contact:

Shane at (907) 522-9469, [email protected] Susan at (907) 770-5592, [email protected]

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Page 16: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

Mining Companies

Kinross Fort Knox/Fairbanks Gold Mining Inc.Fairbanks, AK 99707Contact: Anna Atchison, Manager, Community and Government RelationsPhone: (907) 490-2218 Fax: (907) 490-2290E-mail: [email protected]: www.kinross.comLocated 25 miles northeast of Fairbanks, Fort Knox isAlaska’s largest producing gold mine; during 2011,Fort Knox achieved 5 million ounces of gold pro-duced, a modern record in Alaska mining.

Usibelli Coal MineFairbanks, AK 99701Contact: Bill Brophy, VP Customer RelationsPhone: (907) 452-2625 • Fax: (907) 451-6543Email: [email protected]: www.usibelli.comOther Office

PO Box 1000Healy, AK 99743Phone: (907) 683-2226Usibelli Coal Mine is headquartered in Healy, Alaskaand has 700 million tons of coal reserves. UCM pro-duces an average of 2 million tons of sub-bituminouscoal each year.

Service, Supply & Equipment

Alaska Air Cargo • Horizon Air CargoP.O. Box 68900 SEAFZSeattle, WA 98168Contact: Joe Sprague, Vice President of CargoPhone: (206) 392-2705 or 800-2ALASKAFax: (206) 392-2641E-mail: [email protected]: www.alaskacargo.comAward winning cargo services to more places, moreoften, with more lift to, from, and within the state ofAlaska.

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.

Alaska Steel Co.6180 Electron DriveAnchorage, AK 99518Contact: Joe Pavlas, outside sales managerPhone: (907) 561-1188Toll free: (800) 770-0969 (AK only)Fax: (907) 561-2935E-mail: [email protected] Full-line steel and aluminum distributor. Completeprocessing capabilities, statewide service. Specializingin low temperature steel and wear plate.

Companies involved in Alaska andnorthwestern Canada’s mining industry

D I R E C T O R Y

The Red Dog mine in northwest Alaska.

Page 17: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

17NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JULY 27, 2014

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 commitment tosafety and unmatched customer service.

Calista Corp.301 Calista Court, Suite AAnchorage, AK 99518Phone: (907) 279-5516 • Fax: (907) 272-5060Web site: www.calistacorp.com

Construction Machinery Industrial, LLC5400 Homer DriveAnchorage, AK 99518Contact: Robert Fairbanks, Sales ManagerPhone: (907) 563-3822Fax: (907) 563-1381Email: [email protected]: www.cmiak.com

Delta P Pump & EquipmentPO Box 771452Eagle River, AK 99577Contact: Sue Ahrens, OwnerPhone: (907) 694-7583Fax: (907) 694-7584E-mail: [email protected]: www.deltappump.comDelta P Pumps and Equipment is a full line distribu-tor for pumps, pump parts, and related equipment.We also handle system design, complete fabrication,installation assistance, and some repairs. Delta PPump and Equipment is a woman owned Alaskanbusiness established in 2000.

GCI Industrial TelecomAnchorage:11260 Old Seward Highway Ste. 105Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528Toll free: (877) 411-1484Web site: www.GCI-IndustrialTelecom.comRick Hansen, [email protected] Johnson, Business Development [email protected]:Aurora Hotel #205Deadhorse, Alaska 99734Phone: (907) 771-1090Mike Stanford, Senior Manager North [email protected], Texas:8588 Katy Freeway, Suite 226Houston, Texas 77024Phone: (713) 589-4456Hillary McIntosh, Account [email protected] Industrial Telecom provides innovative solutionsto the most complex communication issues facingindustrial clientele. We deliver competitive services,reputable expertise and safely operate under themost severe working conditions for the oil, gas andnatural resource industries. GCI-your best choice forfull life cycle, expert, proven, industrial communica-tions.

HDR Alaska Inc. 2525 C St., Ste 305Anchorage, AK 99503Contact: Jaci Mellott, Marketing CoordinatorPhone: (907) 644-2091Fax: (907) 644-2022Email: [email protected]: www.hdrinc.comHDR Alaska provides engineering, environmental, plan-ning, and consultation services for mining and mineralexploration clients. Services include: biological studies;cultural resources; project permitting; NEPA; stakehold-er outreach; agency consultation; and environmental,civil, transportation, energy, and heavy structural engi-neering.

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 extreme

weather.

Judy Patrick Photography511 W. 41st Ave, Suite 101Anchorage, AK 99503Contact: Judy PatrickPhone: (907) 258-4704Fax: (907) 258-4706E-mail: [email protected]: www.judypatrickphotography.comCreative images for the resource development industry.

Keller Williams Commercial101 West Benson, Ste. 503Contact: Stewart Smith, Associate BrokerAnchorage, AK 99503Phone: (907) 865-6505Cell: (907) 727-8686Email: [email protected]: Mollie Smith, Commercial AssociateCell: (907) 229-1384Email: [email protected] site: www.stusell.com;www.AKMiningClaims.comMining Claims to buy, sell, or lease, call the Alaskaprofessionals. We provide real estate brokerage serv-ice to the mining industry, with over 35 years of com-mercial experience. Call for a list of our featuredproperties.

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 companiesincludes truckload and less-than-truckload highwayconnections, scheduled barges, intermodal bulkchemical hauls, scheduled and chartered airfreighters, domestic and international air forwarding

and international sea forwarding services.

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 almost 50years, NAC is the states largest all cargo carrier movingnearly 100 million pounds of cargo on scheduled flightsto 17 of Alaska’s busiest airports. NAC’s fleet of DC-6,B-727, and ATR-42 aircraft are available for charters toremote sites and flag stops to 44 additional communi-ties.

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.

Pebble Partnership3201 C St., Suite 604Anchorage, AK 99503Phone: 907-339-2600www.pebblepartnership.com

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.

TTT Environmental LLC 4201 “B” St.Anchorage, AK 99503Contact: Tom Tompkins, general managerPhone: 907-770-9041 • Fax: 907-770-9046Email: [email protected]: www.tttenviro.comAlaska’s preferred source for instrument rentals, sales,service and supplies. We supply equipment for airmonitoring, water sampling, field screening, PPE andmore.

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.

Total Safety U.S. Inc.209 E. 51st Ave.Anchorage, AK 99503Contact: Tyler Zollinger, District Manager.Phone: (907) 743-9871Fax: (907) 743-9872E-mail: [email protected]: www.totalsafety.comA full service safety company specializing in RemoteMedical Services, H2S Services, Industrial Hygiene, andSafety Consultants. Total Safety provides Service,Rental, or Sales of Safe Breathing Air, Gas Detection,and Technical Safety Equipment.

URS Corp.700 G Street, Suite 500Anchorage, AK 99501Contact: Joe Hegna, Alaska Vice President/AlaskaOperations ManagerPhone: (907) 562-3366 • Fax: (907) 562-1297E-mail: [email protected]: www.urscorp.comProvide engineering, construction and technical serv-ices with capabilities to support all stages of projectlife cycle. We offer a full range of program manage-ment; planning, design and engineering; constructionand construction management; operations and main-tenance; and decommissioning and closure services.

Advertiser IndexAlaska Airlines Cargo

Alaska Analytical Laboratory

Alaska Dreams

Alaska Steel Co.

Austin Powder Co. . . . . . . . . . . . . . . . . . . . . . . . . . 18

Calista Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Constantine Metal Resources

Construction Machinery . . . . . . . . . . . . . . . . . . . . . 20

Delta P Pump . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Fairbanks Gold Mining/Fort Knox Gold Mine. . . 12

GCI Industrial Telecom . . . . . . . . . . . . . . . . . . . . . . . 9

Greer Tank Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

IFR Workwear Inc.

Judy Patrick Photography . . . . . . . . . . . . . . . . . . . . 4

Keller Williams Commercial

Last Frontier Air Ventures. . . . . . . . . . . . . . . . . . . . . 3

Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Nature Conservancy, The

Northern Air Cargo

Pacific Rim Geological Consulting . . . . . . . . . . . . . . 5

Pebble Partnership

PND Engineers Inc.

Salt+Light Creative

Sourdough Express Inc.

Taiga Ventures/PacWest Drilling Supply . . . . . . . 10

Total Safety

URS Corp.

Usibelli Coal Mine

Page 18: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

the material, the sorter is essentially dou-

bling the mill head grade. Another 50 per-

cent of the material is slated to be

removed via magnetic separation between

the mill and leaching circuit.

“So we are going to have 1,500 tpd

coming out of the mine, but we are going

to have a 750-tpd grinding circuit and

then the leaching circuit, which is exten-

sive, is only 375 tons per day,” summa-

rized Collison.

In addition to the economic advantages

associated with purchasing and operating

a smaller mill, this setup provides envi-

ronmental rewards.

While the PEA envisions a small, tem-

porary facility to store tailings during the

early stages of development, at a certain

point the mine will consume all of the

tailings produced to fill underground

voids.

“A zero tailings footprint is a unique

environmental objective, and we are

aware of no other mine, rare earth or oth-

erwise, that has accomplished such a

design feature,” said McKenzie.

In the latter half of 2013, Ucore con-

tinued testing this cutting-edge technique.

A 22-ton sample tested by a company in

Germany rejected 52 percent of the feed

while retaining 96.3 percent of the rare

earths in the material that would report to

the mill.

This resulted in an output grade from

the sorter of 1.56 TREO, compared with

0.77 percent TREO in the original sam-

ple. In the fall of 2013, Ucore sent a 33-

ton sample of Dotson Ridge material to

Germany for further x-ray sorter testing.

The output from this sample will pro-

vide feed for a pilot plant for Bokan, the

final stage of bulk-scale testing of the

production circuit prior to the release of a

bankable feasibility study. Rather than an

onsite, scaled-down version of the facili-

ty, the pilot plant will involve up-scale

bench testing of the various components

planned for the cutting-edge operation.

The XRT sorting is one portion of the

pilot plant; the testing of a state-of-the-art

technique that utilizes nanotechnology to

separate the 16 different rare earth ele-

ments found in the Dotson Ridge deposit

at Bokan is another.

Metallurgical testing currently under-

way at Hazen Research of Denver aims to

optimize the process flow-sheet already

set out in Ucore’s preliminary economic

assessment.

The finalized flow-sheet will form the

basis of the Bokan pilot plant scheduled

for later this year.

Ucore is working with Montana-based

IntelliMet LLC to pioneer an REE-pro-

cessing technique known as solid-phase

extraction, a nanotechnology process that

is expected to result in a smaller and more

efficient facility for transforming Bokan

Mountain concentrates into rare earth

oxides.

The results of the pilot-plant testing,

together with a 5,000-meter drill pro-

gram, will be incorporated into the Bokan

feasibility study, scheduled for delivery in

2015.

“Very few heavy rare earth projects in

the world are undertaking such an

advanced level of development, permit-

ting and field operations in 2014,” touted

McKenzie. “Ucore is increasingly a

standalone story as the prospective go-to

for super-metals critically required in

U.S. military, green-tech and high tech

18NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JULY 27, 2014

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continued from page 14

BOKAN

see BOKAN page 19

The 2014 field program at the Bokan Mountain rare earths project is expected to provide the last bits of information needed to finalize a feasibility study scheduled for delivery in 2015.

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19NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF JULY 27, 2014

not introduces, a significant new type of leverage –

focusing on property rights – available to Aboriginal

groups. Future Aboriginal litigation may increasingly be

about proving title, as opposed to alleged deficiencies

over the adequacy of consultation.

The decision may reduce certainty about resource

projects in areas of the country where Aboriginal title is

or could become an issue, which includes almost all of

British Columbia, much of Atlantic Canada, parts of

Ontario and Québec and some of the North. The decision

will also be attractive for those First Nations who assert

that treaties did not extinguish title but were merely

peace treaties.

The Supreme Court’s suggestion that projects

approved by the Crown before the declaration of title

may need to be re-assessed or even canceled once title is

declared could raise potential concerns over some proj-

ects in Canada.

Justification for infringing Aboriginal title will

arguably require more proactive attention by the Crown.

That is, the federal and provincial governments will need

to adopt a more systematic approach to consulting with

Aboriginal groups (as opposed to merely delegating con-

sultation to proponents) and rationalizing any infringe-

ment in a transparent and principled way.

Attorneys say the decision also raises the question of

how Aboriginal title will be proven going forward. This

decision was a result of a very long and expensive civil

action. Will the courts continue to require that title be

proven only in a civil action, or can it be proven in, for

example, a judicial review or a tribunal proceeding?

And, will the Crown, to discharge its duty of honor after

this decision, create processes that provide timely oppor-

tunities for determining Aboriginal title?

Finally, that the provinces can continue to regulate

land subject to Aboriginal title claims and title determi-

nations should be a welcome relief to many and will

allow for consistent regulation across each province.

Some legal observers say concerns over widespread

development restrictions resulting from this decision are

likely premature.

On the issue of what public benefit objectives could

justify infringement on Aboriginal title, the Supreme

Court confirmed its decision in “Delgamuukw” that the

development of agriculture, forestry, mining, hydroelec-

tric power and infrastructure could be compelling and

substantial, but would have to be considered on a case-

by-case basis. In this case, the enactment and application

of British Columbia’s forestry management and harvest-

ing regime to the Aboriginal title lands of the Tsilhqot’in

Nation failed to meet this test. The findings of the lower

court were upheld as to the limited public benefit (eco-

nomic or ecological) of the forestry regime, and it was

determined that undue hardship and denial of rights of

the Tsilhqot’in Nation would result, according to the

court.

“What perhaps should be given more attention is the

assertion by the SCC that the Aboriginal title holder and

any government authorizing development on the lands

must ensure that such development does not deprive

future Aboriginal generations of the control and benefit

of the lands,” some attorneys say. “We can expect that

the exhaustion of particular resources and the footprint

of proposed developments will be given significant

scrutiny.”

After 20 years in the courts, the success of the

Tsilhqot’in Nation in this case has ushered in another

phase of Aboriginal rights recognition in Canada and

provides important guidance on how the concepts of suf-

ficiency, continuity and exclusivity will be applied to

Aboriginal title claims across Canada. Resource devel-

opment in areas where Aboriginal title remains an issue

(predominantly British Columbia and Eastern Canada

but also parts of Ontario, Quebec and the North) will

require enhanced Aboriginal engagement, clear public

benefit and protection of future Aboriginal use.

Duty to consultKarina Briño, president and CEO of the Mining

Association of B.C., issued a statement June 26 in

response to the Tsilhqot’in decision.

Briño said the trade group, which represents the inter-

ests of B.C.’s mining industry, is reviewing the Supreme

Court of Canada’s decision on “Tsilhqot’in Nation v.

British Columbia.”

She said the decision confirms that resource develop-

ment over land where Aboriginal title is asserted must,

by law, be preceded by meaningful consultation. It fur-

ther reinforces that industry’s commitment to meaning-

ful consultation and engagement with First Nations will

continue to position British Columbia as an attractive

jurisdiction in which to mine. The decision provides cer-

tainty and clarification around aboriginal title and the

application of provincial law and regulation on the land

base, Briño added.

The Association for Mineral Exploration British

Columbia also responded to the Supreme Court of

Canada’s judgment.

“While this is a complex and precedent-setting case

that will require further review, we at AME BC know

that the path forward is for the federal and provincial

governments to continue consulting with the Tsilhqot’in

Nation,” AME BC Gavin C. Dirom President & CEO

said. “The outcome of such consultation will enable fur-

ther investment from the mineral exploration and devel-

opment industry that will create jobs and shared eco-

nomic opportunity for all British Columbians, including

the people of the Tsilhqot’in Nation. Improved certainty

about title, consistent decision making processes and the

application of predictable and reasonable laws and regu-

lations are critical to successfully attracting investment

to British Columbia.”

AME BC Chairman David McLelland said, “It is

important to recognize that the Supreme Court of Canada

confirmed that provincial laws and regulations will con-

tinue to apply in the Tsilhqot’in Nation Aboriginal title

area, subject to section 35 of the Constitution Act.

Government has the duty to consult with First Nations,

but members of AME BC recognize that respectfully

engaging with First Nations early and often creates

mutual understanding, trust and respect. We have seen

that mutual benefits can often occur when this approach

is taken by everyone involved, including industry, First

Nations and government,” he added. ●

continued from page 12

COURT

arenas.”

Upgrading, expanding resourceThe 2012 PEA was based on an inferred resource of

5.3 million metric tons averaging 0.65 percent total rare

earth oxides, which has since been updated.

This updated resource estimate, published by Ucore

last October, outlines an indicated resource of 2.9 mil-

lion metric tons averaging 0.614 percent (39.7 million

metric tons) total rare earth oxides and an inferred

resource of 2 million metric tons averaging 0.605 per-

cent (26.6 million pounds) TREOs.

Roughly 40 percent of the TREOs are the higher val-

ued heavy rare earths, many of which are considered crit-

ical to the green energy, defense and high-technology

sectors.

A C$7.8-million private placement completed in

April, along with C$2.8 million of working capital Ucore

had on the books at the end of March, is anticipated to

provide ample funds to meet Ucore’s needs during the

next 12 months, including the C$2.5-million drill pro-

gram currently underway at the Southeast Alaska REE

project.

The smaller of two rigs drilling at Bokan Mountain is

focused on upgrading inferred resources to the indicated

category by infill drilling of the rare earths deposit.

The larger rig is drilling multiple deep holes with the

goal of expanding the resource to depth, as well as com-

pleting a number of geotechnical holes and groundwater

monitoring wells to obtain supplementary data for use in

the engineering and permitting of the project.

This program is expected to provide engineers with

the data needed to complete a plan of operations for min-

ing the heavy rare earth element-enriched deposit at

Bokan Mountain.

“I am very pleased to see our Bokan project moving

forward according to plan,” said Ucore President and

CEO Jim McKenzie. “We look forward to working in the

field once again with Aurora Geosciences and our other

consultants to advance this strategically important proj-

ect. The list of pre-construction deliverables continues to

shorten, and Bokan aims to be the first primarily heavy

enriched rare earth mine to achieve production on U.S.

soil.”

Ray MountainsAs Ucore presses ahead at Bokan, the company has

dispatched crews for a summer field program on its

REE-tin property located roughly 110 miles (175 kilo-

meters) northwest of Fairbanks.

The company said this program will include re-sam-

pling and assay testing of key locations recently report-

ed by the Alaska Geological Survey, and other earlier

U.S. Bureau of Mines work in the area, and examine the

geological setting of the Kilolitna River Basin.

Ucore said its Ray Mountains claim block is aligned

with major alluvial features of the Ray Mountains

region.

Rare earths and associated metals such as tin have

been found to occur in the alluvial outwash of the Ruby

granitic batholith located in the area. The target metals

are contained in heavy minerals such as monazite, xeno-

time, cassiterite, wolframite and zircon, which are wide-

spread throughout the region.

When Ucore staked the Ray Mountain claims in 2011,

it noted that the prospective heavy mineral placers found

there can be effectively concentrated via conventional

gravity separation and processing methods using only

water as the separation medium. The company also

pointed out that the technology to process a monazite-

xenotime placer concentrate for contained REEs has

long been known elsewhere in the world and poses no

new metallurgical challenges.

“The Ray Mountains region offers excellent access to

established transportation routes, making these claims a

potential source of heavy REEs for the processing facil-

ity currently being planned at the Bokan-Dotson Ridge

deposit to the south,” said McKenzie. “With an extensive

drilling program commencing at our Bokan property,

and the sampling work at Ray Mountains, it’s a busy and

exciting time for Ucore.” ●

continued from page 18

BOKAN

The stark contrast between rare earth-bearing veins and barren rock is allowing Ucore to test the implementation of an x-ray sorter prior to the mill as it prepares an operational plan for its Bokan Mountain project in Southeast Alaska.

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Page 20: Stalled critical minerals bills get a push · Contact North of 60 Mining News: Publisher: Shane Lasley † e-mail: publisher@MiningNewsNorth.com Phone: 907.229.6289 † Fax: 907.522.9583

20 NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JUNE 29, 2014

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